##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-Q





(Mark One)



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2011

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

Commission File Number: 001-13901





LOGO

AMERIS BANCORP

(Exact name of registrant as specified in its charter)







|                         |  |                      
|------------------------ |  | ---------------------
|GEORGIA                  |  | 58-1456434           
|(State of incorporation) |  | (IRS Employer ID No.)

310 FIRST STREET, S.E., MOULTRIE, GA 31768

(Address of principal executive offices)

(229) 890-1111

(Registrants telephone number)





Indicate by
check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

Indicate by check mark whether the Registrant has submitted electronically and
posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and
post such files).    Yes   ̈    No   ̈

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 definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Securities Exchange Act. (Check one):



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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange
Act).    Yes   ̈    No  x

There were 23,766,044 shares of Common Stock outstanding as of April 30, 2011.









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##### Table of Contents

AMERIS BANCORP

TABLE OF CONTENTS



|                               |  |                                                                                                                                 |  |  |    | 
|------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------- |  |  | -- | 
|PART I - FINANCIAL INFORMATION |  | Page                                                                                                                            | 
|                               |  |                                                                                                                                
|Item 1.                        |  | Financial Statements.                                                                                                           |  |  |    | 
|                               |  |                                                                                                                                
|                               |  | Consolidated Balance Sheets at March 31, 2011, December 31, 2010 and March 31, 2010                                             |  |  | 3  | 
|                               |  |                                                                                                                                
|                               |  | Consolidated Statements of Operations and Comprehensive Income/(Loss) 
for the Three Month Period Ended March 31, 2011 and 2010 |  |  | 4  | 
|                               |  |                                                                                                                                
|                               |  | Consolidated Statements of Changes in Stockholders Equity for the Three Months Ended March 31, 2011 and
 2010                  |  |  | 5  | 
|                               |  |                                                                                                                                
|                               |  | Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2011 and
2010                                        |  |  | 6  | 
|                               |  |                                                                                                                                
|                               |  | Notes to Consolidated Financial Statements                                                                                      |  |  | 7  | 
|                               |  |                                                                                                                                
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of
Operations.                                          |  |  | 27 | 
|                               |  |                                                                                                                                
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk.                                                                     |  |  | 37 | 
|                               |  |                                                                                                                                
|Item 4.                        |  | Controls and Procedures.                                                                                                        |  |  | 37 | 
|                               | 
|PART II  OTHER INFORMATION    |  |                                                                                                                                 |  | 
|                               |  |                                                                                                                                
|Item 1.                        |  | Legal Proceedings.                                                                                                              |  |  | 38 | 
|                               |  |                                                                                                                                
|Item 1A.                       |  | Risk Factors.                                                                                                                   |  |  | 38 | 
|                               |  |                                                                                                                                
|Item 2.                        |  | Unregistered Sales of Equity Securities and Use of Proceeds.                                                                    |  |  | 38 | 
|                               |  |                                                                                                                                
|Item 3.                        |  | Defaults Upon Senior Securities.                                                                                                |  |  | 38 | 
|                               |  |                                                                                                                                
|Item 4.                        |  | (Removed and Reserved).                                                                                                         |  |  | 38 | 
|                               |  |                                                                                                                                
|Item 5.                        |  | Other Information.                                                                                                              |  |  | 38 | 
|                               |  |                                                                                                                                
|Item 6.                        |  | Exhibits.                                                                                                                       |  |  | 38 | 
|                               |  |                                                                                                                                
|Signatures                     |  |                                                                                                                                 |  |  | 39 | 



2



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##### Table of Contents

|Item 1. | Financial Statements
|------- | --------------------

AMERIS BANCORP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)



|                                                                                                        |  |               |           |   |                  |   |           |               |  |   |           |  
|------------------------------------------------------------------------------------------------------- |  | ------------- | --------- | - | ---------------- | - | --------- | ------------- |  | - | --------- | -
|                                                                                                        |  | March 31,2011 |           |   | December 31,2010 |   |           | March 31,2010 | 
|                                                                                                        |  | (Unaudited)   |           |   | (Audited)        |   |           | (Unaudited)   | 
|Assets                                                                                                  |  |               |           |   |                  |   |           |               |  |   |           |  
|Cash and due from banks                                                                                 |  | $             | 88,386    |   |                  | $ | 74,326    |               |  | $ | 68,851    |  
|Federal funds sold and interest bearing accounts                                                        |  |               | 264,508   |   |                  |   | 261,262   |               |  |   | 200,942   |  
|Investment securities available for sale, at fair value                                                 |  |               | 305,620   |   |                  |   | 322,581   |               |  |   | 248,013   |  
|Other investments                                                                                       |  |               | 12,436    |   |                  |   | 12,440    |               |  |   | 7,260     |  
|                                                                                                        |  |               |          
|Loans                                                                                                   |  |               | 1,345,981 |   |                  |   | 1,374,757 |               |  |   | 1,536,528 |  
|Covered loans                                                                                           |  |               | 526,012   |   |                  |   | 554,991   |               |  |   | 120,364   |  
|Less: allowance for loan losses                                                                         |  |               | 35,443    |   |                  |   | 34,576    |               |  |   | 33,563    |  
|                                                                                                        |  |               |           |   |                  |   |           |               |  |   |           |  
|Loans, net                                                                                              |  |               | 1,836,550 |   |                  |   | 1,895,172 |               |  |   | 1,623,329 |  
|                                                                                                        |  |               |           |   |                  |   |           |               |  |   |           |  
|                                                                                                        |  |               |          
|Other real estate owned                                                                                 |  |               | 62,258    |   |                  |   | 57,915    |               |  |   | 34,683    |  
|Covered other real estate owned                                                                         |  |               | 59,757    |   |                  |   | 54,931    |               |  |   | 17,863    |  
|                                                                                                        |  |               |           |   |                  |   |           |               |  |   |           |  
|Total other real estate owned                                                                           |  |               | 122,015   |   |                  |   | 112,846   |               |  |   | 52,546    |  
|                                                                                                        |  |               |           |   |                  |   |           |               |  |   |           |  
|                                                                                                        |  |               |          
|Premises and equipment, net                                                                             |  |               | 66,359    |   |                  |   | 66,589    |               |  |   | 66,523    |  
|FDIC loss-share receivable                                                                              |  |               | 167,176   |   |                  |   | 177,187   |               |  |   | 45,827    |  
|Intangible assets                                                                                       |  |               | 3,973     |   |                  |   | 4,261     |               |  |   | 3,364     |  
|Goodwill                                                                                                |  |               | 956       |   |                  |   | 956       |               |  |   |          |  
|Other assets                                                                                            |  |               | 50,444    |   |                  |   | 44,548    |               |  |   | 34,995    |  
|                                                                                                        |  |               |           |   |                  |   |           |               |  |   |           |  
|Total assets                                                                                            |  | $             | 2,918,423 |   |                  | $ | 2,972,168 |               |  | $ | 2,351,650 |  
|                                                                                                        |  |               |           |   |                  |   |           |               |  |   |           |  
|                                                                                                        |  |               |          
|Liabilities and Stockholders Equity                                                                    |  |               |           |   |                  |   |           |               |  |   |           |  
|Liabilities                                                                                             |  |               |           |   |                  |   |           |               |  |   |           |  
|Deposits:                                                                                               |  |               |           |   |                  |   |           |               |  |   |           |  
|Noninterest-bearing                                                                                     |  | $             | 316,060   |   |                  | $ | 301,971   |               |  | $ | 222,454   |  
|Interest-bearing                                                                                        |  |               | 2,256,629 |   |                  |   | 2,233,455 |               |  |   | 1,865,852 |  
|                                                                                                        |  |               |           |   |                  |   |           |               |  |   |           |  
|Total deposits                                                                                          |  |               | 2,572,689 |   |                  |   | 2,535,426 |               |  |   | 2,088,306 |  
|Securities sold under agreements to repurchase                                                          |  |               | 20,257    |   |                  |   | 68,184    |               |  |   | 20,640    |  
|Other borrowings                                                                                        |  |               |          |   |                  |   | 43,495    |               |  |   | 2,000     |  
|Other liabilities                                                                                       |  |               | 9,351     |   |                  |   | 9,387     |               |  |   | 5,082     |  
|Subordinated deferrable interest debentures                                                             |  |               | 42,269    |   |                  |   | 42,269    |               |  |   | 42,269    |  
|                                                                                                        |  |               |           |   |                  |   |           |               |  |   |           |  
|Total liabilities                                                                                       |  |               | 2,644,566 |   |                  |   | 2,698,761 |               |  |   | 2,158,297 |  
|                                                                                                        |  |               |           |   |                  |   |           |               |  |   |           |  
|Commitments and contingencies                                                                           |  |               |           |   |                  |   |           |               |  |   |           |  
|                                                                                                        |  |               |          
|Stockholders Equity                                                                                    |  |               |           |   |                  |   |           |               |  |   |           |  
|Preferred stock, stated value $1,000; 5,000,000 shares authorized; 52,000 shares issued and outstanding |  |               | 50,269    |   |                  |   | 50,121    |               |  |   | 49,691    |  
|Common stock, par value $1; 30,000,000 shares authorized; 25,102,218, 24,982,911 and 15,486,187 issued  |  |               | 25,102    |   |                  |   | 24,983    |               |  |   | 15,486    |  
|Capital surplus                                                                                         |  |               | 165,995   |   |                  |   | 165,930   |               |  |   | 89,419    |  
|Retained earnings                                                                                       |  |               | 37,580    |   |                  |   | 37,000    |               |  |   | 41,893    |  
|Accumulated other comprehensive income                                                                  |  |               | 5,742     |   |                  |   | 6,204     |               |  |   | 7,676     |  
|Treasury stock, at cost, 1,336,174, 1,336,174 and 1,334,234 shares                                      |  |               | (10,831   | ) |                  |   | (10,831   | )             |  |   | (10,812   | )
|                                                                                                        |  |               |           |   |                  |   |           |               |  |   |           |  
|Total stockholders equity                                                                              |  |               | 273,857   |   |                  |   | 273,407   |               |  |   | 193,353   |  
|                                                                                                        |  |               |           |   |                  |   |           |               |  |   |           |  
|Total liabilities and stockholders equity                                                              |  | $             | 2,918,423 |   |                  | $ | 2,972,168 |               |  | $ | 2,351,650 |  
|                                                                                                        |  |               |           |   |                  |   |           |               |  |   |           |  

See notes to unaudited consolidated financial statements



3



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##### Table of Contents

AMERIS BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)

(dollars in thousands, except per share data)

(Unaudited)



|                                                                                                             |  |                             |        |   |      |   |        |  
|------------------------------------------------------------------------------------------------------------ |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                                             |  | Three Months EndedMarch 31, |       
|                                                                                                             |  | 2011                        |        |   | 2010 |  
|Interest income                                                                                              |  |                             |        |   |      |   |        |  
|Interest and fees on loans                                                                                   |  | $                           | 28,971 |   |      | $ | 25,156 |  
|Interest on taxable securities                                                                               |  |                             | 2,658  |   |      |   | 2,462  |  
|Interest on nontaxable securities                                                                            |  |                             | 320    |   |      |   | 304    |  
|Interest on deposits in other banks                                                                          |  |                             | 175    |   |      |   | 57     |  
|Interest on federal funds sold                                                                               |  |                             | 13     |   |      |   | 12     |  
|                                                                                                             |  |                             |        |   |      |   |        |  
|Total interest income                                                                                        |  |                             | 32,137 |   |      |   | 27,991 |  
|                                                                                                             |  |                             |        |   |      |   |        |  
|                                                                                                             |  |                            
|Interest expense                                                                                             |  |                             |        |   |      |   |        |  
|Interest on deposits                                                                                         |  |                             | 7,375  |   |      |   | 7,332  |  
|Interest on other borrowings                                                                                 |  |                             | 555    |   |      |   | 246    |  
|                                                                                                             |  |                             |        |   |      |   |        |  
|Total interest expense                                                                                       |  |                             | 7,930  |   |      |   | 7,578  |  
|                                                                                                             |  |                             |        |   |      |   |        |  
|                                                                                                             |  |                            
|Net interest income                                                                                          |  |                             | 24,207 |   |      |   | 20,413 |  
|Provision for loan losses                                                                                    |  |                             | 7,043  |   |      |   | 10,770 |  
|                                                                                                             |  |                             |        |   |      |   |        |  
|Net interest income after provision for loan losses                                                          |  |                             | 17,164 |   |      |   | 9,643  |  
|                                                                                                             |  |                             |        |   |      |   |        |  
|                                                                                                             |  |                            
|Noninterest income                                                                                           |  |                             |        |   |      |   |        |  
|Service charges on deposit accounts                                                                          |  |                             | 4,267  |   |      |   | 3,439  |  
|Mortgage origination fees                                                                                    |  |                             | 450    |   |      |   | 554    |  
|Other service charges, commissions and fees                                                                  |  |                             | 239    |   |      |   | 213    |  
|Gain on sale of securities                                                                                   |  |                             | 224    |   |      |   | 200    |  
|Other                                                                                                        |  |                             | 1,013  |   |      |   | 479    |  
|                                                                                                             |  |                             |        |   |      |   |        |  
|Total noninterest income                                                                                     |  |                             | 6,193  |   |      |   | 4,885  |  
|                                                                                                             |  |                             |        |   |      |   |        |  
|                                                                                                             |  |                            
|Noninterest expense                                                                                          |  |                             |        |   |      |   |        |  
|Salaries and employee benefits                                                                               |  |                             | 9,843  |   |      |   | 7,826  |  
|Occupancy and equipment expense                                                                              |  |                             | 2,730  |   |      |   | 2,027  |  
|Advertising and marketing expense                                                                            |  |                             | 163    |   |      |   | 159    |  
|Amortization of intangible assets                                                                            |  |                             | 263    |   |      |   | 271    |  
|Data processing and communications costs                                                                     |  |                             | 2,396  |   |      |   | 1,763  |  
|Other operating expenses                                                                                     |  |                             | 5,760  |   |      |   | 4,885  |  
|                                                                                                             |  |                             |        |   |      |   |        |  
|Total noninterest expense                                                                                    |  |                             | 21,155 |   |      |   | 16,931 |  
|                                                                                                             |  |                             |        |   |      |   |        |  
|                                                                                                             |  |                            
|Income (loss) before income tax expense (benefit)                                                            |  |                             | 2,202  |   |      |   | (2,403 | )
|Applicable income tax expense (benefit)                                                                      |  |                             | 824    |   |      |   | (869   | )
|                                                                                                             |  |                             |        |   |      |   |        |  
|Net income (loss)                                                                                            |  | $                           | 1,378  |   |      | $ | (1,534 | )
|                                                                                                             |  |                             |        |   |      |   |        |  
|Preferred stock dividends                                                                                    |  |                             | 798    |   |      |   | 796    |  
|                                                                                                             |  |                             |        |   |      |   |        |  
|Net income (loss) available to common stockholders                                                           |  | $                           | 580    |   |      | $ | (2,330 | )
|                                                                                                             |  |                             |        |   |      |   |        |  
|                                                                                                             |  |                            
|Other comprehensive income (loss)                                                                            |  |                             |        |   |      |   |        |  
|Unrealized holding gain/(loss) arising during period on investment securities available for sale, net of tax |  |                             | (262   | ) |      |   | 699    |  
|Unrealized loss on cash flow hedges arising during period , net of tax                                       |  |                             | (54    | ) |      |   | (133   | )
|Reclassification adjustment for gains included in net income, net of tax                                     |  |                             | (146   | ) |      |   | (130   | )
|                                                                                                             |  |                             |        |   |      |   |        |  
|Other comprehensive income (loss)                                                                            |  | $                           | (462   | ) |      | $ | 436    |  
|                                                                                                             |  |                             |        |   |      |   |        |  
|Comprehensive income (loss)                                                                                  |  | $                           | 118    |   |      | $ | (1,894 | )
|                                                                                                             |  |                             |        |   |      |   |        |  
|Basic and Diluted earnings/(loss) per share                                                                  |  | $                           | 0.02   |   |      | $ | (0.17  | )
|                                                                                                             |  |                             |        |   |      |   |        |  
|Weighted average common shares outstanding                                                                   |  |                             |        |   |      |   |        |  
|Basic                                                                                                        |  |                             | 23,440 |   |      |   | 13,840 |  
|Diluted                                                                                                      |  |                             | 23,474 |   |      |   | 13,840 |  

See notes to unaudited
consolidated financial statements



4



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##### Table of Contents

AMERIS BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

(dollars in thousands, except per share data)

(Unaudited)



|                                                          |  |                    |            |   |                    |   |         |        |  |  |            |   |  |   |         |  
|--------------------------------------------------------- |  | ------------------ | ---------- | - | ------------------ | - | ------- | ------ |  |  | ---------- | - |  | - | ------- | -
|                                                          |  | Three Months Ended |            |   | Three Months Ended |  
|                                                          |  | March 31, 2011     |            |   | March 31, 2010     |  
|                                                          |  | Shares             |            |   | Amount             |   |         | Shares |  |  | Amount     |  
|PREFERRED STOCK                                           |  |                    |            |   |                    |   |         |        |  |  |            |   |  |   |         |  
|Balance at beginning of period                            |  |                    | 52,000     |   |                    | $ | 50,121  |        |  |  | 52,000     |   |  | $ | 49,552  |  
|Accretion of fair value of warrant                        |  |                    |           |   |                    |   | 148     |        |  |  |           |   |  |   | 139     |  
|                                                          |  |                    |            |   |                    |   |         |        |  |  |            |   |  |   |         |  
|Balance at end of period                                  |  |                    | 52,000     |   |                    | $ | 50,269  |        |  |  | 52,000     |   |  | $ | 49,691  |  
|                                                          |  |                    |            |  
|COMMON STOCK                                              |  |                    |            |   |                    |   |         |        |  |  |            |   |  |   |         |  
|Balance at beginning of period                            |  |                    | 24,982,911 |   |                    | $ | 24,983  |        |  |  | 15,379,131 |   |  | $ | 15,379  |  
|Issuance of restricted shares                             |  |                    | 125,075    |   |                    |   | 125     |        |  |  | 113,800    |   |  |   | 114     |  
|Cancellation of restricted shares                         |  |                    | (7,000     | ) |                    |   | (7      | )      |  |  | (7,500     | ) |  |   | (8      | )
|Proceeds from exercise of stock options                   |  |                    | 1,232      |   |                    |   | 1       |        |  |  | 756        |   |  |   | 1       |  
|                                                          |  |                    |            |   |                    |   |         |        |  |  |            |   |  |   |         |  
|Balance at end of period                                  |  |                    | 25,102,218 |   |                    | $ | 25,102  |        |  |  | 15,486,187 |   |  | $ | 15,486  |  
|                                                          |  |                    |            |  
|CAPITAL SURPLUS                                           |  |                    |            |   |                    |   |         |        |  |  |            |   |  |   |         |  
|Balance at beginning of period                            |  |                    |            |   |                    | $ | 165,930 |        |  |  |            |   |  | $ | 89,389  |  
|Stock-based compensation                                  |  |                    |            |   |                    |   | 174     |        |  |  |            |   |  |   | 136     |  
|Proceeds from exercise of stock options                   |  |                    |            |   |                    |   | 9       |        |  |  |            |   |  |   |        |  
|Issuance of restricted shares                             |  |                    |            |   |                    |   | (125    | )      |  |  |            |   |  |   | (114    | )
|Cancellation of restricted shares                         |  |                    |            |   |                    |   | 7       |        |  |  |            |   |  |   | 8       |  
|                                                          |  |                    |            |   |                    |   |         |        |  |  |            |   |  |   |         |  
|Balance at end of period                                  |  |                    |            |   |                    | $ | 165,995 |        |  |  |            |   |  | $ | 89,419  |  
|                                                          |  |                    |            |  
|RETAINED EARNINGS                                         |  |                    |            |   |                    |   |         |        |  |  |            |   |  |   |         |  
|Balance at beginning of period                            |  |                    |            |   |                    | $ | 37,000  |        |  |  |            |   |  | $ | 44,216  |  
|Net income/(loss)                                         |  |                    |            |   |                    |   | 1,378   |        |  |  |            |   |  |   | (1,534  | )
|Dividends on preferred shares                             |  |                    |            |   |                    |   | (650    | )      |  |  |            |   |  |   | (650    | )
|Accretion of fair value warrant                           |  |                    |            |   |                    |   | (148    | )      |  |  |            |   |  |   | (139    | )
|                                                          |  |                    |            |   |                    |   |         |        |  |  |            |   |  |   |         |  
|Balance at end of period                                  |  |                    |            |   |                    | $ | 37,580  |        |  |  |            |   |  | $ | 41,893  |  
|                                                          |  |                    |            |  
|ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX |  |                    |            |   |                    |   |         |        |  |  |            |   |  |   |         |  
|Unrealized gains (losses) on securities and derivatives:  |  |                    |            |   |                    |   |         |        |  |  |            |   |  |   |         |  
|Balance at beginning of period                            |  |                    |            |   |                    | $ | 6,204   |        |  |  |            |   |  | $ | 7,240   |  
|Accumulated other comprehensive income                    |  |                    |            |   |                    |   | (462    | )      |  |  |            |   |  |   | 436     |  
|                                                          |  |                    |            |   |                    |   |         |        |  |  |            |   |  |   |         |  
|Balance at end of period                                  |  |                    |            |   |                    | $ | 5,742   |        |  |  |            |   |  | $ | 7,676   |  
|                                                          |  |                    |            |  
|TREASURY STOCK                                            |  |                    |            |   |                    |   |         |        |  |  |            |   |  |   |         |  
|Balance at beginning of period                            |  |                    |            |   |                    | $ | 10,831  |        |  |  |            |   |  | $ | 10,812  |  
|Purchase of treasury shares                               |  |                    |            |   |                    |   |        |        |  |  |            |   |  |   |        |  
|                                                          |  |                    |            |   |                    |   |         |        |  |  |            |   |  |   |         |  
|Balance at end of period                                  |  |                    |            |   |                    | $ | 10,831  |        |  |  |            |   |  | $ | 10,812  |  
|                                                          |  |                    |            |   |                    |   |         |        |  |  |            |   |  |   |         |  
|TOTAL STOCKHOLDERS EQUITY                                |  |                    |            |   |                    | $ | 273,857 |        |  |  |            |   |  | $ | 193,353 |  
|                                                          |  |                    |            |   |                    |   |         |        |  |  |            |   |  |   |         |  

See notes to unaudited consolidated financial statements.



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##### Table of Contents

AMERIS BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)



|                                                                               |  |                             |         |   |      |   |         |  
|------------------------------------------------------------------------------ |  | --------------------------- | ------- | - | ---- | - | ------- | -
|                                                                               |  | Three Months EndedMarch 31, |        
|                                                                               |  | 2011                        |         |   | 2010 |  
|Cash flows from operating activities:                                          |  |                             |         |   |      |   |         |  
|Net income (loss)                                                              |  | $                           | 1,378   |   |      | $ | (1,534  | )
|Adjustments reconciling net loss to net cash provided by operating activities: |  |                             |         |   |      |   |         |  
|Depreciation                                                                   |  |                             | 1,112   |   |      |   | 943     |  
|Net gains on sale or disposal of premises and equipment                        |  |                             | (189    | ) |      |   | (249    | )
|Net losses or write-downs on sale of other real estate owned                   |  |                             | 33      |   |      |   | 1,072   |  
|Provision for loan losses                                                      |  |                             | 7,043   |   |      |   | 10,770  |  
|Amortization of intangible assets                                              |  |                             | 288     |   |      |   | 222     |  
|Net gains on securities available for sale                                     |  |                             | (224    | ) |      |   | (200    | )
|Other prepaids, deferrals and accruals, net                                    |  |                             | (187    | ) |      |   | (2,156  | )
|                                                                               |  |                             |         |   |      |   |         |  
|Net cash provided by operating activities                                      |  |                             | 9,254   |   |      |   | 8,868   |  
|                                                                               |  |                             |         |   |      |   |         |  
|                                                                               |  |                            
|Cash flows from investing activities:                                          |  |                             |         |   |      |   |         |  
|Net (increase) decrease in federal funds sold and interest bearing deposits    |  |                             | (3,246  | ) |      |   | 19,421  |  
|Proceeds from maturities of securities available for sale                      |  |                             | 12,922  |   |      |   | 14,392  |  
|Purchase of securities available for sale                                      |  |                             | (19,869 | ) |      |   | (22,174 | )
|Proceeds from sales of securities available for sale                           |  |                             | 23,503  |   |      |   | 6,145   |  
|Net decrease in loans                                                          |  |                             | 37,682  |   |      |   | 26,540  |  
|Proceeds from sales of other real estate owned                                 |  |                             | 9,306   |   |      |   | 4,253   |  
|Proceeds from sales of premises and equipment                                  |  |                             | 344     |   |      |   | 772     |  
|Purchases of premises and equipment                                            |  |                             | (1,037  | ) |      |   | (352    | )
|                                                                               |  |                             |         |   |      |   |         |  
|Net cash provided by investing activities                                      |  |                             | 59,605  |   |      |   | 48,997  |  
|                                                                               |  |                             |         |   |      |   |         |  
|                                                                               |  |                            
|Cash Flows From Financing Activities:                                          |  |                             |         |   |      |   |         |  
|Net increase (decrease) in deposits                                            |  |                             | 37,263  |   |      |   | (34,810 | )
|Net increase (decrease) in securities sold under agreements to repurchase      |  |                             | (47,927 | ) |      |   | (34,614 | )
|Repayment of other borrowings                                                  |  |                             | (43,495 | ) |      |   |        |  
|Dividends paid - preferred stock                                               |  |                             | (650    | ) |      |   | (650    | )
|Proceeds from exercise of stock options                                        |  |                             | 10      |   |      |   |        |  
|                                                                               |  |                             |         |   |      |   |         |  
|Net cash used in financing activities                                          |  |                             | (54,799 | ) |      |   | (70,074 | )
|                                                                               |  |                             |         |   |      |   |         |  
|                                                                               |  |                            
|Net increase (decrease) in cash and due from banks                             |  | $                           | 14,060  |   |      | $ | (12,209 | )
|                                                                               |  |                            
|Cash and due from banks at beginning of period                                 |  |                             | 74,326  |   |      |   | 81,060  |  
|                                                                               |  |                             |         |   |      |   |         |  
|                                                                               |  |                            
|Cash and due from banks at end of period                                       |  | $                           | 88,386  |   |      | $ | 68,851  |  
|                                                                               |  |                             |         |   |      |   |         |  

See notes to unaudited consolidated financial statements



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AMERIS BANCORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2011

(Unaudited)

NOTE 1  BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Ameris Bancorp (the Company or Ameris) is a financial holding company headquartered in Moultrie, Georgia. Ameris conducts substantially all of its operations through its
wholly-owned banking subsidiary, Ameris Bank (the Bank). At March 31, 2011 the Bank operated 59 branches in select markets in Georgia, Alabama, Florida and South Carolina. Our business model capitalizes on the
efficiencies of a large financial services company while still providing the community with the personalized banking service expected by our customers. We manage our Bank through a balance of decentralized management responsibilities and
efficient centralized operating systems, products and loan underwriting standards. Ameris Board of Directors and senior managers establish corporate policy, strategy and administrative policies. Within Ameris established
guidelines and policies, the banker closest to the customer responds to the differing needs and demands of their unique market.

The
accompanying unaudited consolidated financial statements for Ameris have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and Regulation
S-X. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statement presentation. The interim
consolidated financial statements included herein are unaudited, but reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the consolidated financial position and results of operations for the interim
periods presented. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the period ended March 31, 2011 are not necessarily indicative of the results to be
expected for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto and the report of our registered independent public accounting firm included in the Companys Annual
Report on Form 10-K for the year ended December 31, 2010.

Certain amounts reported for the periods ended December 31,
2010 and March 31, 2010 have been reclassified to conform to the presentation as of March 31, 2011. These reclassifications had no effect on previously reported net income or stockholders equity.

Newly Adopted Accounting Pronouncements

ASU 2010-18  Effect of a Loan Modification When the Loan is Part of a Pool that is Accounted for as a Single Asset (ASU 2010-18). ASU 2010-18 provides guidance on the accounting
for loan modifications when the loan is part of a pool of loans accounted for as a single asset such as acquired loans that have evidence of credit deterioration upon acquisition that are accounted for under the guidance in ASC 310-30. ASU
2010-18 addresses diversity in practice on whether a loan that is part of a pool of loans accounted for as a single asset should be removed from that pool upon a modification that would constitute a troubled debt restructuring or remain in the pool
after modification. ASU 2010-18 clarifies that modifications of loans that are accounted for within a pool under ASC 310-30 do not result in the removal of those loans from the pool even if the modification of those loans would otherwise be
considered a troubled debt restructuring. An entity will continue to be required to consider whether the pool of assets in which the loan is included is impaired if the expected cash flows for the pool change. The amendments in this update
do not require any additional disclosures and are effective for modifications of loans accounted for within pools under ASC 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. ASU 2010-18 will not have
a material impact on the Companys results of operations, financial position or disclosures.

ASU 2010-20  Disclosures about the
Credit Quality of Financing Receivable and the Allowance for Credit Losses (ASU 2010-20). ASU 2010-20 amends existing disclosure guidance to require an entity to provide a greater level of disaggregated information about the credit
quality of its financing receivables and its allowance for credit losses. ASU 2010-20 is effective for fiscal and interim periods ending after December 15, 2010. ASU 2010-20 did not have a material impact on the Companys results of
operations or financial position but had a significant impact on the disclosures found in Note 3.



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ASU 2010-28  When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero
or Negative Carrying Amounts (ASU 2010-28). ASU 2010-28 requires entities with reporting units with zero or negative carrying amounts to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill
impairment exists. In doing so, entities should consider whether there are any adverse qualitative factors indicating that an impairment may exist. For public companies this guidance is effective for fiscal years, and interim periods within those
years, beginning after December 15, 2011. It is not expected to have a material impact on the Companys results of operations, financial position or disclosures.

ASU 2010-29  Disclosure of Supplementary Pro Forma Information for Business Combinations (ASU 2010-29). ASU 2010-29 specifies that if a public entity presents comparative
financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period
only. ASU 2010-29 is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. It is not expected to have a
material impact on the Companys results of operations, financial position or disclosures.

ASU 2011-01  Deferral of the
Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20 (ASU 2011-01). ASU 2011-01 temporarily delays the effective date of the disclosures surrounding troubled debt restructurings in Update
2010-20 for public companies. The FASB is deliberating on what constitutes a troubled debt restructuring and will coordinate that guidance with the effective date of the new disclosures, which is anticipated to be effective for interim and annual
periods ending after June 15, 2011. It is not expected to have a material impact on the Companys results of operations, financial position, or disclosures.

Fair Value of Financial Instruments

The fair value of a financial instrument is the
current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the
Companys various financial instruments. In cases where quoted market prices are not available, fair value is based on discounted cash flows or other valuation techniques. These techniques are significantly affected by the assumptions
used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The accounting standard for disclosures about fair value of
financial instruments excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of
the Company.

The fair value hierarchy describes three levels of inputs that may be used to measure fair value:

Level 1 -Quoted prices in active markets for identical assets or liabilities.

Level 2 -Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or
can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 -Unobservable
inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The
following methods and assumptions were used by the Company in estimating the fair value of its financial instruments and other accounts recorded based on their fair value:

Cash, Due From Banks, Interest-Bearing Deposits in Banks and Federal Funds Sold:The carrying amount of cash, due from banks and interest-bearing deposits in banks and federal funds sold
approximates fair value.

Investment Securities Available for Sale:The fair value of securities available for sale is determined
by various valuation methodologies. Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are
estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Level 2 securities include mortgage-backed securities issued by government sponsored enterprises and municipal
bonds. The level 2 fair value pricing is provided by an independent third-party and is based upon similar securities in an active market. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level
3 of the hierarchy and include certain residual municipal securities and other less liquid securities.



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Other Investments:Federal Home Loan Bank (FHLB) stock is included in other investment
securities at its original cost basis, as cost approximates fair value and there is no ready market for such investments.

Loans: The
carrying amount of variable-rate loans that reprice frequently and have no significant change in credit risk approximates fair value. The fair value of fixed-rate loans is estimated based on discounted contractual cash flows, using interest
rates currently being offered for loans with similar terms to borrowers with similar credit quality. The fair value of impaired loans is estimated based on discounted contractual cash flows or underlying collateral values, where
applicable. A loan is determined to be impaired if the Company believes it is probable that all principal and interest amounts due according to the terms of the note will not be collected as scheduled. The fair value of impaired loans is
determined in accordance with accounting standards and generally results in a specific reserve established through a charge to the provision for loan losses. Losses on impaired loans are charged to the allowance when management believes the
uncollectability of a loan is confirmed. Management has determined that the majority of impaired loans are Level 2 assets due to the extensive use of market appraisals. To the extent that market appraisals or other methods do not produce
reliable determinations of fair value, these assets are deemed to be Level 3.

Other Real Estate Owned:The fair value of other real
estate owned (OREO) is determined using certified appraisals that value the property at its highest and best uses by applying traditional valuation methods common to the industry. The Company does not hold any OREO for profit
purposes and all other real estate is actively marketed for sale. In most cases, management has determined that additional write-downs are required beyond what is calculable from the appraisal to carry the property at levels that would attract
buyers. Because this additional write-down is not based on observable inputs, management has determined that other real estate owned should be classified as Level 3.

Covered Assets: Covered assets include loans and other real estate owned on which the majority of losses would be covered by loss-sharing agreements with the Federal Deposit Insurance Corporation
(the FDIC). Management initially valued these assets at fair value using mostly unobservable inputs and, as such, has classified these assets as Level 3.

Intangible Assets and Goodwill:Intangible assets consist of core deposit premiums acquired in connection with business combinations and are based on the established value of acquired customer
deposits. The core deposit premium is initially recognized based on a valuation performed as of the consummation date and is amortized over an estimated useful life of three to ten years. Goodwill represents the excess of the purchase price
over the fair value of the net identifiable assets acquired in a business combination. Goodwill and other intangible assets deemed to have an indefinite useful life are not amortized but instead are subject to an annual review for impairment.

FDIC Loss-Share Receivable:Because the FDIC will reimburse the Company for certain acquired loans should the Company experience a
loss, an indemnification asset is recorded at fair value at the acquisition date. The indemnification asset is recognized at the same time as the indemnified loans, and measured on the same basis, subject to collectability or contractual
limitations. The shared loss agreements on the acquisition date reflect the reimbursements expected to be received from the FDIC, using an appropriate discount rate, which reflects counterparty credit risk and other uncertainties. The shared loss
agreements continue to be measured on the same basis as the related indemnified loans, and the loss share receivable is impacted by changes in estimated cash flows associated with these loans.

Deposits:The carrying amount of demand deposits, savings deposits and variable-rate certificates of deposit approximates fair
value. The fair value of fixed-rate certificates of deposit is estimated based on discounted contractual cash flows using interest rates currently offered for certificates with similar maturities.

Repurchase Agreements and/or Other Borrowings: The carrying amount of variable rate borrowings and securities sold under repurchase
agreements approximates fair value. The fair value of fixed rate other borrowings is estimated based on discounted contractual cash flows using the current incremental borrowing rates for similar type borrowing arrangements.

Subordinated Deferrable Interest Debentures:The carrying amount of the Companys variable rate trust preferred securities approximates fair
value.

Off-Balance-Sheet Instruments: Because commitments to extend credit and standby letters of credit are typically made using
variable rates and have short maturities, the carrying value and fair value are immaterial for disclosure.



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Derivatives:The Company has entered into derivative financial instruments to manage interest rate
risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivatives. This analysis reflects the contractual terms of the derivative,
including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair value of the derivatives are determined using the market standard methodology of netting the discounted
future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments are based on an expectation of future interest rates (forward curves derived from observable market interest rate curves).

The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterpartys
nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting any applicable credit enhancements such as collateral
postings, thresholds, mutual puts and guarantees.

Although the Company has determined that the majority of the inputs used to value its
derivative fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself or the
counterparty. However, as of March 31, 2011, December 31, 2010 and March 31, 2010, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions
and has determined that the credit valuation adjustment is not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuation in its entirety is classified in Level 2 of the fair value
hierarchy.

The carrying amount and estimated fair value of the Companys financial instruments, not shown elsewhere in these financial
instruments, were as follows:



|                       |  |                        |           |  |                   |   |           |                |  |   |           |  |  |                |           |  |           |   |           |  |  |   |           | 
|---------------------- |  | ---------------------- | --------- |  | ----------------- | - | --------- | -------------- |  | - | --------- |  |  | -------------- | --------- |  | --------- | - | --------- |  |  | - | --------- | 
|                       |  | March 31, 2011         |           |  | December 31, 2010 |   |           | March 31, 2010 | 
|                       |  | CarryingAmount         |           |  | FairValue         |   |           | CarryingAmount |  |   | FairValue |  |  | CarryingAmount |           |  | FairValue |  
|                       |  | (Dollars in Thousands) |          
|Financial assets:      |  |                        |           |  |                   |   |           |                |  |   |           |  |  |                |           |  |           |   |           |  |  |   |           | 
|Loans, net             |  | $                      | 1,836,550 |  |                   | $ | 1,845,963 |                |  | $ | 1,895,172 |  |  | $              | 1,905,346 |  |           | $ | 1,623,329 |  |  | $ | 1,633,788 | 
|                       |  |                        |           |  |                   |  
|Financial liabilities: |  |                        |           |  |                   |   |           |                |  |   |           |  |  |                |           |  |           |   |           |  |  |   |           | 
|Deposits               |  |                        | 2,572,689 |  |                   |   | 2,576,253 |                |  |   | 2,535,426 |  |  |                | 2,542,767 |  |           |   | 2,088,306 |  |  |   | 2,090,633 | 
|Other borrowings       |  |                        |          |  |                   |   |          |                |  |   | 43,495    |  |  |                | 43,685    |  |           |   | 2,000     |  |  |   | 2,012     | 



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##### Table of Contents

The following table presents the fair value measurements of assets and liabilities measured at fair value on
a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of March 31, 2011, December 31, 2010 and March 31, 2010 (dollars in thousands):



|                                       |  |                                                                  |         |  |                                                           |   |        |                                           |  |   |                                        |  |  |   |       | 
|-------------------------------------- |  | ---------------------------------------------------------------- | ------- |  | --------------------------------------------------------- | - | ------ | ----------------------------------------- |  | - | -------------------------------------- |  |  | - | ----- | 
|                                       |  | Fair Value Measurements on a Recurring BasisAs of March 31, 2011 |        
|                                       |  | Fair Value                                                       |         |  | Quoted Pricesin ActiveMarkets forIdenticalAssets(Level 1) |   |        | SignificantOtherObservableInputs(Level 2) |  |   | SignificantUnobservableInputs(Level 3) | 
|                                       |  |                                                                  |         | 
|U.S. government agencies               |  | $                                                                | 33,545  |  |                                                           | $ |       |                                           |  | $ | 33,545                                 |  |  | $ |      | 
|State, county and municipal securities |  |                                                                  | 56,898  |  |                                                           |   |       |                                           |  |   | 56,898                                 |  |  |   |      | 
|Corporate debt securities              |  |                                                                  | 9,749   |  |                                                           |   |       |                                           |  |   | 7,749                                  |  |  |   | 2,000 | 
|Mortgage-backed securities             |  |                                                                  | 205,428 |  |                                                           |   | 12,764 |                                           |  |   | 192,664                                |  |  |   |      | 
|Derivative financial instruments       |  |                                                                  | 598     |  |                                                           |   |       |                                           |  |   | 598                                    |  |  |   |      | 
|                                       |  |                                                                  |         |  |                                                           |   |        |                                           |  |   |                                        |  |  |   |       | 
|Total recurring assets at fair value   |  | $                                                                | 306,218 |  |                                                           | $ | 12,764 |                                           |  | $ | 291,454                                |  |  | $ | 2,000 | 
|                                       |  |                                                                  |         |  |                                                           |   |        |                                           |  |   |                                        |  |  |   |       | 



|                                       |  |                                                                     |         |  |                                                           |   |   |                                           |  |   |                                        |  |  |   |       | 
|-------------------------------------- |  | ------------------------------------------------------------------- | ------- |  | --------------------------------------------------------- | - | - | ----------------------------------------- |  | - | -------------------------------------- |  |  | - | ----- | 
|                                       |  | Fair Value Measurements on a Recurring BasisAs of December 31, 2010 |        
|                                       |  | Fair Value                                                          |         |  | Quoted Pricesin ActiveMarkets forIdenticalAssets(Level 1) |   |   | SignificantOtherObservableInputs(Level 2) |  |   | SignificantUnobservableInputs(Level 3) | 
|                                       |  |                                                                     |         | 
|U.S. government agencies               |  | $                                                                   | 35,468  |  |                                                           | $ |  |                                           |  | $ | 35,468                                 |  |  | $ |      | 
|State, county and municipal securities |  |                                                                     | 57,696  |  |                                                           |   |  |                                           |  |   | 54,951                                 |  |  |   | 2,745 | 
|Corporate debt securities              |  |                                                                     | 10,786  |  |                                                           |   |  |                                           |  |   | 8,786                                  |  |  |   | 2,000 | 
|Mortgage-backed securities             |  |                                                                     | 218,631 |  |                                                           |   |  |                                           |  |   | 218,631                                |  |  |   |      | 
|Derivative financial instruments       |  |                                                                     | 936     |  |                                                           |   |  |                                           |  |   | 936                                    |  |  |   |      | 
|                                       |  |                                                                     |         |  |                                                           |   |   |                                           |  |   |                                        |  |  |   |       | 
|Total recurring assets at fair value   |  | $                                                                   | 323,517 |  |                                                           | $ |  |                                           |  | $ | 318,772                                |  |  | $ | 4,745 | 
|                                       |  |                                                                     |         |  |                                                           |   |   |                                           |  |   |                                        |  |  |   |       | 



|                                       |  |                                                                  |         |  |                                                           |   |   |                                           |  |   |                                        |  |  |   |       | 
|-------------------------------------- |  | ---------------------------------------------------------------- | ------- |  | --------------------------------------------------------- | - | - | ----------------------------------------- |  | - | -------------------------------------- |  |  | - | ----- | 
|                                       |  | Fair Value Measurements on a Recurring BasisAs of March 31, 2010 |        
|                                       |  | Fair Value                                                       |         |  | Quoted Pricesin ActiveMarkets forIdenticalAssets(Level 1) |   |   | SignificantOtherObservableInputs(Level 2) |  |   | SignificantUnobservableInputs(Level 3) | 
|                                       |  |                                                                  |         | 
|U.S. government agencies               |  | $                                                                | 34,234  |  |                                                           | $ |  |                                           |  | $ | 34,234                                 |  |  | $ |      | 
|State, county and municipal securities |  |                                                                  | 42,314  |  |                                                           |   |  |                                           |  |   | 42,314                                 |  |  |   |      | 
|Corporate debt securities              |  |                                                                  | 9,133   |  |                                                           |   |  |                                           |  |   | 7,133                                  |  |  |   | 2,000 | 
|Mortgage-backed securities             |  |                                                                  | 162,332 |  |                                                           |   |  |                                           |  |   | 162,332                                |  |  |   |      | 
|Derivative financial instruments       |  |                                                                  | 1,758   |  |                                                           |   |  |                                           |  |   | 1,758                                  |  |  |   |      | 
|                                       |  |                                                                  |         |  |                                                           |   |   |                                           |  |   |                                        |  |  |   |       | 
|Total recurring assets at fair value   |  | $                                                                | 249,771 |  |                                                           | $ |  |                                           |  | $ | 247,771                                |  |  | $ | 2,000 | 
|                                       |  |                                                                  |         |  |                                                           |   |   |                                           |  |   |                                        |  |  |   |       | 



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##### Table of Contents

The following table is a description of the valuation methodologies used for instruments measured at fair
value on a nonrecurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy as of March 31, 2011, December 31, 2010 and March 31, 2010 (dollars in thousands):



|                                        |  |                                                                     |         |  |                                                          |   |   |                                           |  |   |                                         |  |  |   |         | 
|--------------------------------------- |  | ------------------------------------------------------------------- | ------- |  | -------------------------------------------------------- | - | - | ----------------------------------------- |  | - | --------------------------------------- |  |  | - | ------- | 
|                                        |  | Fair Value Measurements on a Nonrecurring BasisAs of March 31, 2011 |        
|                                        |  | FairValue                                                           |         |  | QuotedPricesin ActiveMarkets forIdenticalAssets(Level 1) |   |   | SignificantOtherObservableInputs(Level 2) |  |   | SignificantUnobservableInputs(Level
 3) | 
|                                        |  |                                                                     |         | 
|Impaired loans carried at fair value    |  | $                                                                   | 68,391  |  |                                                          | $ |  |                                           |  | $ | 68,391                                  |  |  | $ |        | 
|Other real estate owned                 |  |                                                                     | 62,258  |  |                                                          |   |  |                                           |  |   |                                        |  |  |   | 62,258  | 
|Covered loans                           |  |                                                                     | 524,105 |  |                                                          |   |  |                                           |  |   |                                        |  |  |   | 524,105 | 
|Covered other real estate owned         |  |                                                                     | 59,757  |  |                                                          |   |  |                                           |  |   |                                        |  |  |   | 59,757  | 
|                                        |  |                                                                     |         |  |                                                          |   |   |                                           |  |   |                                         |  |  |   |         | 
|Total nonrecurring assets at fair value |  | $                                                                   | 714,511 |  |                                                          | $ |  |                                           |  | $ | 68,391                                  |  |  | $ | 646,120 | 
|                                        |  |                                                                     |         |  |                                                          |   |   |                                           |  |   |                                         |  |  |   |         | 



|                                        |  |                                                                        |         |  |                                                          |   |   |                                           |  |   |                                         |  |  |   |         | 
|--------------------------------------- |  | ---------------------------------------------------------------------- | ------- |  | -------------------------------------------------------- | - | - | ----------------------------------------- |  | - | --------------------------------------- |  |  | - | ------- | 
|                                        |  | Fair Value Measurements on a Nonrecurring BasisAs of December 31, 2010 |        
|                                        |  | FairValue                                                              |         |  | QuotedPricesin ActiveMarkets forIdenticalAssets(Level 1) |   |   | SignificantOtherObservableInputs(Level 2) |  |   | SignificantUnobservableInputs(Level
 3) | 
|                                        |  |                                                                        |         | 
|Impaired loans carried at fair value    |  | $                                                                      | 79,289  |  |                                                          | $ |  |                                           |  | $ | 79,289                                  |  |  | $ |        | 
|Other real estate owned                 |  |                                                                        | 57,915  |  |                                                          |   |  |                                           |  |   |                                        |  |  |   | 57,915  | 
|Covered loans                           |  |                                                                        | 554,991 |  |                                                          |   |  |                                           |  |   |                                        |  |  |   | 554,991 | 
|Covered other real estate owned         |  |                                                                        | 54,931  |  |                                                          |   |  |                                           |  |   |                                        |  |  |   | 54,931  | 
|                                        |  |                                                                        |         |  |                                                          |   |   |                                           |  |   |                                         |  |  |   |         | 
|Total nonrecurring assets at fair value |  | $                                                                      | 747,126 |  |                                                          | $ |  |                                           |  | $ | 79,289                                  |  |  | $ | 667,837 | 
|                                        |  |                                                                        |         |  |                                                          |   |   |                                           |  |   |                                         |  |  |   |         | 



|                                        |  |                                                                     |         |  |                                                          |   |   |                                           |  |   |                                         |  |  |   |         | 
|--------------------------------------- |  | ------------------------------------------------------------------- | ------- |  | -------------------------------------------------------- | - | - | ----------------------------------------- |  | - | --------------------------------------- |  |  | - | ------- | 
|                                        |  | Fair Value Measurements on a Nonrecurring BasisAs of March 31, 2010 |        
|                                        |  | FairValue                                                           |         |  | QuotedPricesin ActiveMarkets forIdenticalAssets(Level 1) |   |   | SignificantOtherObservableInputs(Level 2) |  |   | SignificantUnobservableInputs(Level
 3) | 
|                                        |  |                                                                     |         | 
|Impaired loans carried at fair value    |  | $                                                                   | 89,649  |  |                                                          | $ |  |                                           |  | $ | 89,649                                  |  |  | $ |        | 
|Other real estate owned                 |  |                                                                     | 32,800  |  |                                                          |   |  |                                           |  |   |                                         |  |  |   | 32,800  | 
|Covered loans                           |  |                                                                     | 120,364 |  |                                                          |   |  |                                           |  |   |                                         |  |  |   | 120,364 | 
|Covered other real estate owned         |  |                                                                     | 17,863  |  |                                                          |   |  |                                           |  |   |                                        |  |  |   | 17,863  | 
|                                        |  |                                                                     |         |  |                                                          |   |   |                                           |  |   |                                         |  |  |   |         | 
|Total nonrecurring assets at fair value |  | $                                                                   | 260,676 |  |                                                          | $ |  |                                           |  | $ | 89,649                                  |  |  | $ | 171,027 | 
|                                        |  |                                                                     |         |  |                                                          |   |   |                                           |  |   |                                         |  |  |   |         | 



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##### Table of Contents

Below is the Companys reconciliation of Level 3 assets as of March 31, 2011. Gains or losses
on impaired loans are recorded in the provision for loan losses.



|                                                  |  |                                       |        |   |                       |   |        |              |  |   |                               |   |  |   |        | 
|------------------------------------------------- |  | ------------------------------------- | ------ | - | --------------------- | - | ------ | ------------ |  | - | ----------------------------- | - |  | - | ------ | 
|                                                  |  | InvestmentSecuritiesAvailablefor Sale |        |   | Other RealEstateOwned |   |        | CoveredLoans |  |   | Covered OtherReal EstateOwned |  
|                                                  |  |                                       |        |  
|Beginning balance January 1, 2011                 |  | $                                     | 4,745  |   |                       | $ | 57,915 |              |  | $ | 554,991                       |   |  | $ | 54,931 | 
|Total gains/(losses) included in net income       |  |                                       |       |   |                       |   | (2,325 | )            |  |   |                              |   |  |   | 2,292  | 
|Purchases, sales, issuances, and settlements, net |  |                                       |       |   |                       |   | (5,727 | )            |  |   | (29,384                       | ) |  |   | 1,032  | 
|Transfers in or out of Level 3                    |  |                                       | (2,745 | ) |                       |   | 12,395 |              |  |   | (1,502                        | ) |  |   | 1,502  | 
|                                                  |  |                                       |        |   |                       |   |        |              |  |   |                               |   |  |   |        | 
|Ending balance March 31, 2011                     |  | $                                     | 2,000  |   |                       | $ | 62,258 |              |  | $ | 524,105                       |   |  | $ | 59,757 | 
|                                                  |  |                                       |        |   |                       |   |        |              |  |   |                               |   |  |   |        | 

NOTE 2  INVESTMENT SECURITIES

Ameris investment policy blends the Companys liquidity needs and interest rate risk management with its desire to increase income and provide funds for expected growth in loans. The
investment securities portfolio consists primarily of U.S. government sponsored mortgage-backed securities and agencies, state, county and municipal securities and corporate debt securities. Ameris portfolio and investing philosophy
concentrate activities in obligations where the credit risk is limited. For the small portion of Ameris portfolio found to present credit risk, the Company has reviewed the investments and financial performance of the obligors
and believes the credit risk to be acceptable.

The amortized cost and estimated fair value of investment securities available for sale
at March 31, 2011, December 31, 2010 and March 31, 2010 are presented below:



|                                       |  |                        |         |  |                      |   |       |                       |  |   |           |   |  |   |         | 
|-------------------------------------- |  | ---------------------- | ------- |  | -------------------- | - | ----- | --------------------- |  | - | --------- | - |  | - | ------- | 
|                                       |  | AmortizedCost          |         |  | GrossUnrealizedGains |   |       | GrossUnrealizedLosses |  |   | FairValue |  
|                                       |  | (Dollars in Thousands) |        
|March 31, 2011:                        |  |                        |         |  |                      |   |       |                       |  |   |           |   |  |   |         | 
|U. S. government agencies              |  | $                      | 33,137  |  |                      | $ | 455   |                       |  | $ | (47       | ) |  | $ | 33,545  | 
|State, county and municipal securities |  |                        | 55,971  |  |                      |   | 1,310 |                       |  |   | (383      | ) |  |   | 56,898  | 
|Corporate debt securities              |  |                        | 12,150  |  |                      |   | 168   |                       |  |   | (2,569    | ) |  |   | 9,749   | 
|Mortgage-backed securities             |  |                        | 202,204 |  |                      |   | 5,143 |                       |  |   | (1,919    | ) |  |   | 205,428 | 
|                                       |  |                        |         |  |                      |   |       |                       |  |   |           |   |  |   |         | 
|Total debt securities                  |  | $                      | 303,462 |  |                      | $ | 7,076 |                       |  | $ | (4,918    | ) |  | $ | 305,620 | 
|                                       |  |                        |         |  |                      |   |       |                       |  |   |           |   |  |   |         | 
|                                       |  |                        |         | 
|December 31, 2010:                     |  |                        |         |  |                      |   |       |                       |  |   |           |   |  |   |         | 
|U. S. government agencies              |  | $                      | 35,128  |  |                      | $ | 448   |                       |  | $ | (108      | ) |  | $ | 35,468  | 
|State, county and municipal securities |  |                        | 57,385  |  |                      |   | 928   |                       |  |   | (617      | ) |  |   | 57,696  | 
|Corporate debt securities              |  |                        | 13,540  |  |                      |   | 123   |                       |  |   | (2,877    | ) |  |   | 10,786  | 
|Mortgage-backed securities             |  |                        | 213,737 |  |                      |   | 6,732 |                       |  |   | (1,838    | ) |  |   | 218,631 | 
|                                       |  |                        |         |  |                      |   |       |                       |  |   |           |   |  |   |         | 
|Total securities                       |  | $                      | 319,790 |  |                      | $ | 8,231 |                       |  | $ | (5,440    | ) |  | $ | 322,581 | 
|                                       |  |                        |         |  |                      |   |       |                       |  |   |           |   |  |   |         | 
|                                       |  |                        |         | 
|March 31, 2010:                        |  |                        |         |  |                      |   |       |                       |  |   |           |   |  |   |         | 
|U. S. government agencies              |  | $                      | 33,818  |  |                      | $ | 416   |                       |  | $ |          |   |  | $ | 34,234  | 
|State, county and municipal securities |  |                        | 41,060  |  |                      |   | 1,257 |                       |  |   | (3        | ) |  |   | 42,314  | 
|Corporate debt securities              |  |                        | 12,370  |  |                      |   | 67    |                       |  |   | (3,304    | ) |  |   | 9,133   | 
|Mortgage-backed securities             |  |                        | 154,926 |  |                      |   | 7,595 |                       |  |   | (189      | ) |  |   | 162,332 | 
|                                       |  |                        |         |  |                      |   |       |                       |  |   |           |   |  |   |         | 
|Total securities                       |  | $                      | 242,174 |  |                      | $ | 9,335 |                       |  | $ | (3,496    | ) |  | $ | 248,013 | 
|                                       |  |                        |         |  |                      |   |       |                       |  |   |           |   |  |   |         | 



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##### Table of Contents

The amortized cost and fair value of available-for-sale securities at March 31, 2011 by contractual
maturity are summarized in the table below. Expected maturities for mortgage-backed securities may differ from contractual maturities because in certain cases borrowers can prepay obligations without prepayment penalties. Therefore, these
securities are not included in the following maturity summary.



|                                |  |                        |         |  |           |   |         | 
|------------------------------- |  | ---------------------- | ------- |  | --------- | - | ------- | 
|                                |  | AmortizedCost          |         |  | FairValue |  
|                                |  | (Dollars in Thousands) |        
|                                |  |                       
|Due in one year or less         |  | $                      | 1,285   |  |           | $ | 1,296   | 
|Due from one year to five years |  |                        | 39,238  |  |           |   | 39,690  | 
|Due from five to ten years      |  |                        | 38,284  |  |           |   | 39,167  | 
|Due after ten years             |  |                        | 22,451  |  |           |   | 20,039  | 
|Mortgage-backed securities      |  |                        | 202,204 |  |           |   | 205,428 | 
|                                |  |                        |         |  |           |   |         | 
|                                |  | $                      | 303,462 |  |           | $ | 305,620 | 
|                                |  |                        |         |  |           |   |         | 

Securities with a carrying value of approximately $209.7 million serve as collateral to secure public deposits and
other purposes required or permitted by law at March 31, 2011.

The following table details the gross unrealized losses and fair value of
securities aggregated by category and duration of continuous unrealized loss position at March 31, 2011, December 31, 2010 and March 31, 2010.



|                                       |  |                        |         |  |                   |   |        |           |  |   |                  |  |  |           |        |   |                  |   |         |  |  |   |        |  
|-------------------------------------- |  | ---------------------- | ------- |  | ----------------- | - | ------ | --------- |  | - | ---------------- |  |  | --------- | ------ | - | ---------------- | - | ------- |  |  | - | ------ | -
|                                       |  | Less Than 12 Months    |         |  | 12 Months or More |   |        | Total     | 
|Description of Securities              |  | FairValue              |         |  | UnrealizedLosses  |   |        | FairValue |  |   | UnrealizedLosses |  |  | FairValue |        |   | UnrealizedLosses |  
|                                       |  | (Dollars in Thousands) |        
|March 31, 2011:                        |  |                        |         |  |                   |   |        |           |  |   |                  |  |  |           |        |   |                  |   |         |  |  |   |        |  
|U. S. government agencies              |  | $                      | 11,037  |  |                   | $ | (47    | )         |  | $ |                 |  |  | $         |       |   |                  | $ | 11,037  |  |  | $ | (47    | )
|State, county and municipal securities |  |                        | 12,171  |  |                   |   | (383   | )         |  |   |                 |  |  |           |       |   |                  |   | 12,171  |  |  |   | (383   | )
|Corporate debt securities              |  |                        | 413     |  |                   |   | (26    | )         |  |   | 5,067            |  |  |           | (2,543 | ) |                  |   | 5,480   |  |  |   | (2,569 | )
|Mortgage-backed securities             |  |                        | 75,721  |  |                   |   | (1,919 | )         |  |   |                 |  |  |           |       |   |                  |   | 75,721  |  |  |   | (1,919 | )
|                                       |  |                        |         |  |                   |   |        |           |  |   |                  |  |  |           |        |   |                  |   |         |  |  |   |        |  
|Total debt securities                  |  | $                      | 99,342  |  |                   | $ | (2,375 | )         |  | $ | 5,067            |  |  | $         | (2,543 | ) |                  | $ | 104,409 |  |  | $ | (4,918 | )
|                                       |  |                        |         |  |                   |   |        |           |  |   |                  |  |  |           |        |   |                  |   |         |  |  |   |        |  
|                                       |  |                        |         |  |                   |  
|December 31, 2010:                     |  |                        |         |  |                   |   |        |           |  |   |                  |  |  |           |        |   |                  |   |         |  |  |   |        |  
|U. S. government agencies              |  | $                      | 25,017  |  |                   | $ | (108   | )         |  | $ |                 |  |  | $         |       |   |                  | $ | 25,017  |  |  | $ | (108   | )
|State, county and municipal securities |  |                        | 17,563  |  |                   |   | (617   | )         |  |   |                 |  |  |           |       |   |                  |   | 17,563  |  |  |   | (617   | )
|Corporate debt securities              |  |                        | 1,048   |  |                   |   | (20    | )         |  |   | 5,078            |  |  |           | (2,857 | ) |                  |   | 6,126   |  |  |   | (2,877 | )
|Mortgage-backed securities             |  |                        | 64,549  |  |                   |   | (1,838 | )         |  |   | 15               |  |  |           |       |   |                  |   | 64,564  |  |  |   | (1,838 | )
|                                       |  |                        |         |  |                   |   |        |           |  |   |                  |  |  |           |        |   |                  |   |         |  |  |   |        |  
|Total debt securities                  |  | $                      | 108,177 |  |                   | $ | (2,583 | )         |  | $ | 5,093            |  |  | $         | (2,857 | ) |                  | $ | 113,270 |  |  | $ | (5,440 | )
|                                       |  |                        |         |  |                   |   |        |           |  |   |                  |  |  |           |        |   |                  |   |         |  |  |   |        |  
|                                       |  |                        |         |  |                   |  
|March 31, 2010:                        |  |                        |         |  |                   |   |        |           |  |   |                  |  |  |           |        |   |                  |   |         |  |  |   |        |  
|U. S. government agencies              |  | $                      |        |  |                   | $ |       |           |  | $ |                 |  |  | $         |       |   |                  | $ |        |  |  | $ |       |  
|State, county and municipal securities |  |                        | 1,132   |  |                   |   | (3     | )         |  |   |                 |  |  |           |       |   |                  |   | 1,132   |  |  |   | (3     | )
|Corporate debt securities              |  |                        | 870     |  |                   |   | (130   | )         |  |   | 4,935            |  |  |           | (3,174 | ) |                  |   | 5,805   |  |  |   | (3,304 | )
|Mortgage-backed securities             |  |                        | 3,249   |  |                   |   | (33    | )         |  |   | 1,417            |  |  |           | (156   | ) |                  |   | 4,666   |  |  |   | (189   | )
|                                       |  |                        |         |  |                   |   |        |           |  |   |                  |  |  |           |        |   |                  |   |         |  |  |   |        |  
|Total debt securities                  |  | $                      | 5,251   |  |                   | $ | (166   | )         |  | $ | 6,352            |  |  | $         | (3,330 | ) |                  | $ | 11,603  |  |  | $ | (3,496 | )
|                                       |  |                        |         |  |                   |   |        |           |  |   |                  |  |  |           |        |   |                  |   |         |  |  |   |        |  



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NOTE 3 - LOANS

The Company engages in a full complement of lending activities, including real estate-related loans, agriculture-related loans, commercial and financial loans and consumer installment loans. Ameris
concentrates the majority of its lending activities in real estate loans. While risk of loss in the Companys portfolio is primarily tied to the credit quality of the various borrowers, risk of loss may increase due to factors beyond
Ameris control, such as local, regional and/or national economic downturns. General conditions in the real estate market may also impact the relative risk in the real estate portfolio.

Loans are stated at unpaid balances, net of unearned income and deferred loan fees. Balances within the major loans receivable categories are presented
in the following table:



|                                           |  |               |           |  |                  |   |           |               |  |   |           | 
|------------------------------------------ |  | ------------- | --------- |  | ---------------- | - | --------- | ------------- |  | - | --------- | 
|(Dollars in Thousands)                     |  | March 31,2011 |           |  | December 31,2010 |   |           | March 31,2010 | 
|Commercial, financial and agricultural     |  | $             | 142,826   |  |                  | $ | 142,312   |               |  | $ | 166,470   | 
|Real estate  construction and development |  |               | 152,863   |  |                  |   | 162,594   |               |  |   | 214,410   | 
|Real estate  commercial and farmland      |  |               | 672,212   |  |                  |   | 683,974   |               |  |   | 738,232   | 
|Real estate  residential                  |  |               | 336,755   |  |                  |   | 344,830   |               |  |   | 371,427   | 
|Consumer installment                       |  |               | 33,698    |  |                  |   | 34,293    |               |  |   | 38,586    | 
|Other                                      |  |               | 7,627     |  |                  |   | 6,754     |               |  |   | 7,403     | 
|                                           |  |               |           |  |                  |   |           |               |  |   |           | 
|                                           |  | $             | 1,345,981 |  |                  | $ | 1,374,757 |               |  | $ | 1,536,528 | 
|                                           |  |               |           |  |                  |   |           |               |  |   |           | 

Covered loans are defined as loans that were acquired in FDIC-assisted transactions that are covered by a loss-sharing
agreement with the FDIC. Covered loans totaling $526.0 million, $555.0 million and $120.4 million at March 31, 2011, December 31, 2010 and March 31, 2010, respectively, are not included in the above schedule.

Covered loans are shown below according to loan type as of the end of the periods shown:



|                                           |  |               |         |  |                  |   |         |               |  |   |         | 
|------------------------------------------ |  | ------------- | ------- |  | ---------------- | - | ------- | ------------- |  | - | ------- | 
|(Dollars in Thousands)                     |  | March 31,2011 |         |  | December 31,2010 |   |         | March 31,2010 | 
|Commercial, financial and agricultural     |  | $             | 45,954  |  |                  | $ | 47,309  |               |  | $ | 18,923  | 
|Real estate  construction and development |  |               | 89,356  |  |                  |   | 89,781  |               |  |   | 19,057  | 
|Real estate  commercial and farmland      |  |               | 242,153 |  |                  |   | 257,428 |               |  |   | 54,044  | 
|Real estate  residential                  |  |               | 140,239 |  |                  |   | 149,226 |               |  |   | 22,306  | 
|Consumer installment                       |  |               | 8,310   |  |                  |   | 11,247  |               |  |   | 6,034   | 
|                                           |  |               |         |  |                  |   |         |               |  |   |         | 
|                                           |  | $             | 526,012 |  |                  | $ | 554,991 |               |  | $ | 120,364 | 
|                                           |  |               |         |  |                  |   |         |               |  |   |         | 

Nonaccrual and Past Due Loans

A loan is placed on nonaccrual status when, in managements judgment, the collection of the interest income appears doubtful. Interest receivable that has been accrued and is subsequently determined
to have doubtful collectability is charged to interest income. Interest on loans that are classified as non-accrual is recognized when received. Past due loans are loans whose principal or interest is past due 90 days or more. In some
cases, where borrowers are experiencing financial difficulties, loans may be restructured to provide terms significantly different from the original contractual terms.

The following table presents an analysis of loans accounted for on a nonaccrual basis.



|                                           |  |               |        |  |                  |   |        |               |  |   |        | 
|------------------------------------------ |  | ------------- | ------ |  | ---------------- | - | ------ | ------------- |  | - | ------ | 
|(Dollars in Thousands)                     |  | March 31,2011 |        |  | December 31,2010 |   |        | March 31,2010 | 
|Commercial, financial and agricultural     |  | $             | 5,966  |  |                  | $ | 8,648  |               |  | $ | 5,440  | 
|Real estate  construction and development |  |               | 17,893 |  |                  |   | 7,887  |               |  |   | 38,225 | 
|Real estate  commercial and farmland      |  |               | 28,313 |  |                  |   | 55,170 |               |  |   | 25,560 | 
|Real estate  residential                  |  |               | 15,557 |  |                  |   | 6,376  |               |  |   | 19,704 | 
|Consumer installment                       |  |               | 662    |  |                  |   | 1,208  |               |  |   | 720    | 
|                                           |  |               |        |  |                  |   |        |               |  |   |        | 
|                                           |  | $             | 68,391 |  |                  | $ | 79,289 |               |  | $ | 89,649 | 
|                                           |  |               |        |  |                  |   |        |               |  |   |        | 



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##### Table of Contents

The following table presents an analysis of past due loans as of March 31, 2011 and December 31,
2010.



|                                         |  |                        |        |  |                        |   |        |                             |  |   |                    |  |  |              |        |  |            |   |           |                                               |  |   |           |  |  |   |   | 
|---------------------------------------- |  | ---------------------- | ------ |  | ---------------------- | - | ------ | --------------------------- |  | - | ------------------ |  |  | ------------ | ------ |  | ---------- | - | --------- | --------------------------------------------- |  | - | --------- |  |  | - | - | 
|                                         |  | Loans30-59Days PastDue |        |  | Loans60-89DaysPast Due |   |        | Loans 90or MoreDays PastDue |  |   | TotalLoansPast Due |  |  | CurrentLoans |        |  | TotalLoans |   |           | Loans 90Days orMore 
PastDue andStillAccruing | 
|                                         |  | (Dollars in Thousands) |       
|As of March 31, 2011:                    |  |                        |        |  |                        |   |        |                             |  |   |                    |  |  |              |        |  |            |   |           |                                               |  |   |           |  |  |   |   | 
|Commercial, financial & agricultural     |  | $                      | 848    |  |                        | $ | 695    |                             |  | $ | 5,923              |  |  | $            | 7,466  |  |            | $ | 135,360   |                                               |  | $ | 142,826   |  |  | $ |  | 
|Real estate  construction & development |  |                        | 2,324  |  |                        |   | 1,864  |                             |  |   | 16,011             |  |  |              | 20,199 |  |            |   | 132,664   |                                               |  |   | 152,863   |  |  |   |  | 
|Real estate  commercial & farmland      |  |                        | 7,127  |  |                        |   | 7,315  |                             |  |   | 17,883             |  |  |              | 32,325 |  |            |   | 639,887   |                                               |  |   | 672,212   |  |  |   |  | 
|Real estate  residential                |  |                        | 4,314  |  |                        |   | 2,732  |                             |  |   | 13,480             |  |  |              | 20,526 |  |            |   | 316,229   |                                               |  |   | 336,755   |  |  |   |  | 
|Consumer installment loans               |  |                        | 409    |  |                        |   | 177    |                             |  |   | 444                |  |  |              | 1,030  |  |            |   | 32,668    |                                               |  |   | 33,698    |  |  |   |  | 
|Other                                    |  |                        |       |  |                        |   |       |                             |  |   |                   |  |  |              |       |  |            |   | 7,627     |                                               |  |   | 7,627     |  |  |   |  | 
|                                         |  |                        |        |  |                        |   |        |                             |  |   |                    |  |  |              |        |  |            |   |           |                                               |  |   |           |  |  |   |   | 
|Total                                    |  | $                      | 15,022 |  |                        | $ | 12,783 |                             |  | $ | 53,741             |  |  | $            | 81,546 |  |            | $ | 1,264,435 |                                               |  | $ | 1,345,981 |  |  | $ |  | 
|                                         |  |                        |        |  |                        |   |        |                             |  |   |                    |  |  |              |        |  |            |   |           |                                               |  |   |           |  |  |   |   | 
|                                         |  |                        |        |  |                        |   |       
|                                         |  | Loans30-59Days PastDue |        |  | Loans60-89DaysPast Due |   |        | Loans 90or MoreDays PastDue |  |   | TotalLoansPast Due |  |  | CurrentLoans |        |  | TotalLoans |   |           | Loans 90Days orMore PastDue andStillAccruing  | 
|                                         |  | (Dollars in Thousands) |       
|As of December 31, 2010:                 |  |                        |        |  |                        |   |        |                             |  |   |                    |  |  |              |        |  |            |   |           |                                               |  |   |           |  |  |   |   | 
|Commercial, financial & agricultural     |  | $                      | 898    |  |                        | $ | 120    |                             |  | $ | 6,746              |  |  | $            | 7,764  |  |            | $ | 134,548   |                                               |  | $ | 142,312   |  |  | $ |  | 
|Real estate  construction & development |  |                        | 2,121  |  |                        |   | 2,039  |                             |  |   | 19,458             |  |  |              | 23,618 |  |            |   | 138,976   |                                               |  |   | 162,594   |  |  |   |  | 
|Real estate  commercial & farmland      |  |                        | 1,740  |  |                        |   | 3,725  |                             |  |   | 25,914             |  |  |              | 31,379 |  |            |   | 652,595   |                                               |  |   | 683,974   |  |  |   |  | 
|Real estate  residential                |  |                        | 3,384  |  |                        |   | 3,066  |                             |  |   | 14,393             |  |  |              | 20,843 |  |            |   | 323,987   |                                               |  |   | 344,830   |  |  |   |  | 
|Consumer installment loans               |  |                        | 493    |  |                        |   | 142    |                             |  |   | 475                |  |  |              | 1,110  |  |            |   | 33,183    |                                               |  |   | 34,293    |  |  |   | 3 | 
|Other                                    |  |                        |       |  |                        |   |       |                             |  |   |                   |  |  |              |       |  |            |   | 6,754     |                                               |  |   | 6,754     |  |  |   |  | 
|                                         |  |                        |        |  |                        |   |        |                             |  |   |                    |  |  |              |        |  |            |   |           |                                               |  |   |           |  |  |   |   | 
|Total                                    |  | $                      | 8,636  |  |                        | $ | 9,092  |                             |  | $ | 66,986             |  |  | $            | 84,714 |  |            | $ | 1,290,043 |                                               |  | $ | 1,374,757 |  |  | $ | 3 | 
|                                         |  |                        |        |  |                        |   |        |                             |  |   |                    |  |  |              |        |  |            |   |           |                                               |  |   |           |  |  |   |   | 

There were no material amount of loans past due ninety days or more and still accruing interest at March 31, 2010.

Impaired Loans

Loans are
considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreements. Impaired loans include loans on
nonaccrual status and troubled debt restructurings. If a loan is deemed impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loans
existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in
which case interest is recognized on a cash basis.



16



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##### Table of Contents

The following is a summary of information pertaining to impaired loans:



|                                                 |  |                                |        |  |                  |   |         |               |  |   |         | 
|------------------------------------------------ |  | ------------------------------ | ------ |  | ---------------- | - | ------- | ------------- |  | - | ------- | 
|                                                 |  | As of and For the Period Ended |       
|                                                 |  | March 31,2011                  |        |  | December 31,2010 |   |         | March 31,2010 | 
|                                                 |  | (Dollars in Thousands)         |       
|Nonaccrual loans                                 |  | $                              | 68,391 |  |                  | $ | 79,289  |               |  | $ | 89,649  | 
|Troubled debt restructurings not included above  |  |                                | 25,832 |  |                  |   | 21,972  |               |  |   | 15,259  | 
|                                                 |  |                                |        |  |                  |   |         |               |  |   |         | 
|Total impaired loans                             |  | $                              | 94,223 |  |                  | $ | 101,261 |               |  | $ | 104,908 | 
|                                                 |  |                                |        |  |                  |   |         |               |  |   |         | 
|                                                 |  |                                |       
|Impaired loans not requiring a related allowance |  | $                              |       |  |                  | $ |        |               |  | $ |        | 
|                                                 |  |                                |        |  |                  |   |         |               |  |   |         | 
|Impaired loans requiring a related allowance     |  | $                              | 94,223 |  |                  | $ | 101,261 |               |  | $ | 104,908 | 
|                                                 |  |                                |        |  |                  |   |         |               |  |   |         | 
|Allowance related to impaired loans              |  | $                              | 16,821 |  |                  | $ | 16,688  |               |  | $ | 8,404   | 
|                                                 |  |                                |        |  |                  |   |         |               |  |   |         | 
|Average investment in impaired loans             |  | $                              | 88,761 |  |                  | $ | 86,849  |               |  | $ | 107,824 | 
|                                                 |  |                                |        |  |                  |   |         |               |  |   |         | 
|Interest income recognized on impaired loans     |  | $                              | 75     |  |                  | $ | 545     |               |  | $ | 22      | 
|                                                 |  |                                |        |  |                  |   |         |               |  |   |         | 
|Foregone interest income on impaired loans       |  | $                              | 389    |  |                  | $ | 3,828   |               |  | $ | 575     | 
|                                                 |  |                                |        |  |                  |   |         |               |  |   |         | 

The following table presents an analysis of information pertaining to impaired loans as of March 31, 2011 and
December 31, 2010.



|                                         |  |                                   |         |  |                                    |   |   |                                 |  |   |                         |  |  |                  |        |  |                           |   |        |  |  |   |        | 
|---------------------------------------- |  | --------------------------------- | ------- |  | ---------------------------------- | - | - | ------------------------------- |  | - | ----------------------- |  |  | ---------------- | ------ |  | ------------------------- | - | ------ |  |  | - | ------ | 
|                                         |  | UnpaidContractualPrincipalBalance |         |  | RecordedInvestmentWith NoAllowance |   |   | RecordedInvestmentWithAllowance |  |   | TotalRecordedInvestment |  |  | RelatedAllowance |        |  | AverageRecordedInvestment |  
|                                         |  | (Dollars in Thousands)            |        
|As of March 31, 2011:                    |  |                                   |         |  |                                    |   |   |                                 |  |   |                         |  |  |                  |        |  |                           |   |        |  |  |   |        | 
|Commercial, financial & agricultural     |  | $                                 | 9,419   |  |                                    | $ |  |                                 |  | $ | 3,972                   |  |  | $                | 3,972  |  |                           | $ | 2,425  |  |  | $ | 5,872  | 
|Real estate  construction & development |  |                                   | 33,590  |  |                                    |   |  |                                 |  |   | 16,547                  |  |  |                  | 16,547 |  |                           |   | 4,254  |  |  |   | 20,052 | 
|Real estate  commercial & farmland      |  |                                   | 51,874  |  |                                    |   |  |                                 |  |   | 40,147                  |  |  |                  | 40,147 |  |                           |   | 5,584  |  |  |   | 44,281 | 
|Real estate  residential                |  |                                   | 23,440  |  |                                    |   |  |                                 |  |   | 16,227                  |  |  |                  | 16,227 |  |                           |   | 4,405  |  |  |   | 18,026 | 
|Consumer installment loans               |  |                                   | 890     |  |                                    |   |  |                                 |  |   | 509                     |  |  |                  | 509    |  |                           |   | 153    |  |  |   | 530    | 
|                                         |  |                                   |         |  |                                    |   |   |                                 |  |   |                         |  |  |                  |        |  |                           |   |        |  |  |   |        | 
|Total                                    |  | $                                 | 119,213 |  |                                    | $ |  |                                 |  | $ | 77,402                  |  |  | $                | 77,402 |  |                           | $ | 16,821 |  |  | $ | 88,761 | 
|                                         |  |                                   |         |  |                                    |   |   |                                 |  |   |                         |  |  |                  |        |  |                           |   |        |  |  |   |        | 
|                                         |  |                                   |         |  |                                    |  
|                                         |  | UnpaidContractualPrincipalBalance |         |  | RecordedInvestmentWith NoAllowance |   |   | RecordedInvestmentWithAllowance |  |   | TotalRecordedInvestment |  |  | RelatedAllowance |        |  | AverageRecordedInvestment |  
|                                         |  | (Dollars in Thousands)            |        
|As of December 31, 2010:                 |  |                                   |         |  |                                    |   |   |                                 |  |   |                         |  |  |                  |        |  |                           |   |        |  |  |   |        | 
|Commercial, financial & agricultural     |  | $                                 | 9,983   |  |                                    | $ |  |                                 |  | $ | 5,336                   |  |  | $                | 5,336  |  |                           | $ | 1,649  |  |  | $ | 5,411  | 
|Real estate  construction & development |  |                                   | 38,060  |  |                                    |   |  |                                 |  |   | 19,462                  |  |  |                  | 19,462 |  |                           |   | 4,023  |  |  |   | 30,226 | 
|Real estate  commercial & farmland      |  |                                   | 57,224  |  |                                    |   |  |                                 |  |   | 43,831                  |  |  |                  | 43,831 |  |                           |   | 6,795  |  |  |   | 33,882 | 
|Real estate  residential                |  |                                   | 22,819  |  |                                    |   |  |                                 |  |   | 15,547                  |  |  |                  | 15,547 |  |                           |   | 4,085  |  |  |   | 16,785 | 
|Consumer installment loans               |  |                                   | 738     |  |                                    |   |  |                                 |  |   | 397                     |  |  |                  | 397    |  |                           |   | 136    |  |  |   | 545    | 
|                                         |  |                                   |         |  |                                    |   |   |                                 |  |   |                         |  |  |                  |        |  |                           |   |        |  |  |   |        | 
|Total                                    |  | $                                 | 128,824 |  |                                    | $ |  |                                 |  | $ | 84,573                  |  |  | $                | 84,573 |  |                           | $ | 16,688 |  |  | $ | 86,849 | 
|                                         |  |                                   |         |  |                                    |   |   |                                 |  |   |                         |  |  |                  |        |  |                           |   |        |  |  |   |        | 



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##### Table of Contents

Credit Quality Indicators

The Company uses a nine category risk grading system to assign a risk grade to each loan in the portfolio. Following is a description of the general characteristics of the grades:

Grade 10  Prime Credit This grade represents loans to the Companys most creditworthy borrowers or loans that are secured by
cash or cash equivalents.

Grade 15  Good Credit This grade includes loans that exhibit one or more characteristics
better than that of a Satisfactory Credit. Generally, debt service coverage and borrowers liquidity is materially better than required by the Companys loan policy.

Grade 20  Satisfactory Credit This grade is assigned to loans to borrowers who exhibit satisfactory credit histories, contain acceptable loan structures and demonstrate ability to
repay.

Grade 25  Minimum Acceptable Credit This grade includes loans which exhibit all the characteristics of a
Satisfactory Credit, but warrant more than normal level of banker supervision due to (i) circumstances which elevate the risks of performance (such as start-up operations, untested management, heavy leverage, interim losses);
(ii)adverse, extraordinary events that have affected, or could affect, the borrowers cash flow, financial condition, ability to continue operating profitability or refinancing (such as death of principal, fire, divorce); (iii) loans that
require more than the normal servicing requirements (such as any type of construction financing, acquisition and development loans, accounts receivable or inventory loans and floor plan loans); (iv) existing technical exceptions which raise
some doubts about the Banks perfection in its collateral position or the continued financial capacity of the borrower; or (v) improvements in formerly criticized borrowers, which may warrant banker supervision.

Grade 28  Performing, Under-Collateralized Credit This grade is assigned to loans that are currently performing and supported by
adequate financial information that reflects repayment capacity, but exhibits a loan-to-value ratio greater than 110%, based on a documented collateral valuation.

Grade 30  Other Asset Especially Mentioned This grade includes loans that exhibit potential weaknesses that deserve managements close attention. If left uncorrected, these
weaknesses may result in deterioration of the repayment prospects for the asset or in the Companys credit position at some future date.

Grade 40  Substandard This grade represents loans which are inadequately protected by the current sound worth and paying capacity of
the borrower or of the collateral pledged, if any. These assets exhibit a well-defined weakness or are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. These weaknesses may be
characterized by past due performance, operating losses or questionable collateral values.

Grade 50  Doubtful This grade
includes loans which exhibit all of the characteristics of a substandard loan with the added provision that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable
or improbable.

Grade 60  Loss This grade is assigned to loans which are considered uncollectible and of such little value
that their continuance as active assets of the Bank is not warranted. This classification does not mean that the loss has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing it off.



18



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##### Table of Contents

The following table presents the loan portfolio by risk grade as of March 31, 2011.



|           |  |                                    |         |  |                                        |   |         |                                   |  |   |                          |  |  |                           |         |  |       |   |        |       |  |   |       |  |  |   |           | 
|---------- |  | ---------------------------------- | ------- |  | -------------------------------------- | - | ------- | --------------------------------- |  | - | ------------------------ |  |  | ------------------------- | ------- |  | ----- | - | ------ | ----- |  | - | ----- |  |  | - | --------- | 
|Risk
Grade |  | Commercial,financial &agricultural |         |  | Real estate -construction &development |   |         | Real estate -commercial &farmland |  |   | Real estate -residential |  |  | Consumerinstallment loans |         |  | Other |   |        | Total | 
|           |  | (Dollars in Thousands)             |        
|10         |  | $                                  | 14,048  |  |                                        | $ | 220     |                                   |  | $ | 1,104                    |  |  | $                         | 111     |  |       | $ | 5,451  |       |  | $ |      |  |  | $ | 20,934    | 
|15         |  |                                    | 11,087  |  |                                        |   | 2,395   |                                   |  |   | 137,897                  |  |  |                           | 36,377  |  |       |   | 907    |       |  |   |      |  |  |   | 188,663   | 
|20         |  |                                    | 50,300  |  |                                        |   | 38,200  |                                   |  |   | 267,341                  |  |  |                           | 115,189 |  |       |   | 18,573 |       |  |   | 7,627 |  |  |   | 497,230   | 
|25         |  |                                    | 55,843  |  |                                        |   | 69,541  |                                   |  |   | 165,089                  |  |  |                           | 137,846 |  |       |   | 7,460  |       |  |   |      |  |  |   | 435,779   | 
|28         |  |                                    | 2,244   |  |                                        |   | 7,775   |                                   |  |   | 8,533                    |  |  |                           | 8,167   |  |       |   | 30     |       |  |   |      |  |  |   | 26,749    | 
|30         |  |                                    | 1,913   |  |                                        |   | 7,568   |                                   |  |   | 41,089                   |  |  |                           | 14,129  |  |       |   | 573    |       |  |   |      |  |  |   | 65,272    | 
|40         |  |                                    | 7,386   |  |                                        |   | 26,889  |                                   |  |   | 51,158                   |  |  |                           | 24,936  |  |       |   | 672    |       |  |   |      |  |  |   | 111,041   | 
|50         |  |                                    | 5       |  |                                        |   | 275     |                                   |  |   |                         |  |  |                           |        |  |       |   | 6      |       |  |   |      |  |  |   | 286       | 
|60         |  |                                    |        |  |                                        |   |        |                                   |  |   | 1                        |  |  |                           |        |  |       |   | 26     |       |  |   |      |  |  |   | 27        | 
|           |  |                                    |         |  |                                        |   |         |                                   |  |   |                          |  |  |                           |         |  |       |   |        |       |  |   |       |  |  |   |           | 
|Total      |  | $                                  | 142,826 |  |                                        | $ | 152,863 |                                   |  | $ | 672,212                  |  |  | $                         | 336,755 |  |       | $ | 33,698 |       |  | $ | 7,627 |  |  | $ | 1,345,981 | 
|           |  |                                    |         |  |                                        |   |         |                                   |  |   |                          |  |  |                           |         |  |       |   |        |       |  |   |       |  |  |   |           | 

The following table presents the loan portfolio by risk grade as of December 31, 2010.



|           |  |                                    |         |  |                                        |   |         |                                   |  |   |                          |  |  |                           |         |  |       |   |        |       |  |   |       |  |  |   |           | 
|---------- |  | ---------------------------------- | ------- |  | -------------------------------------- | - | ------- | --------------------------------- |  | - | ------------------------ |  |  | ------------------------- | ------- |  | ----- | - | ------ | ----- |  | - | ----- |  |  | - | --------- | 
|Risk
Grade |  | Commercial,financial &agricultural |         |  | Real estate -construction &development |   |         | Real estate -commercial &farmland |  |   | Real estate -residential |  |  | Consumerinstallment loans |         |  | Other |   |        | Total | 
|           |  | (Dollars in Thousands)             |        
|10         |  | $                                  | 17,739  |  |                                        | $ | 211     |                                   |  | $ | 1,109                    |  |  | $                         | 110     |  |       | $ | 5,507  |       |  | $ |      |  |  | $ | 24,676    | 
|15         |  |                                    | 11,191  |  |                                        |   | 3,006   |                                   |  |   | 145,376                  |  |  |                           | 40,783  |  |       |   | 858    |       |  |   |      |  |  |   | 201,214   | 
|20         |  |                                    | 48,738  |  |                                        |   | 39,407  |                                   |  |   | 274,817                  |  |  |                           | 118,179 |  |       |   | 18,566 |       |  |   | 6,754 |  |  |   | 506,461   | 
|25         |  |                                    | 53,957  |  |                                        |   | 73,589  |                                   |  |   | 168,273                  |  |  |                           | 137,416 |  |       |   | 8,261  |       |  |   |      |  |  |   | 441,496   | 
|28         |  |                                    | 2,246   |  |                                        |   | 7,696   |                                   |  |   | 9,159                    |  |  |                           | 6,197   |  |       |   | 31     |       |  |   |      |  |  |   | 25,329    | 
|30         |  |                                    | 998     |  |                                        |   | 6,437   |                                   |  |   | 29,029                   |  |  |                           | 17,069  |  |       |   | 273    |       |  |   |      |  |  |   | 53,806    | 
|40         |  |                                    | 6,633   |  |                                        |   | 32,009  |                                   |  |   | 56,090                   |  |  |                           | 25,076  |  |       |   | 791    |       |  |   |      |  |  |   | 120,599   | 
|50         |  |                                    | 810     |  |                                        |   | 239     |                                   |  |   | 120                      |  |  |                           |        |  |       |   | 6      |       |  |   |      |  |  |   | 1,175     | 
|60         |  |                                    |        |  |                                        |   |        |                                   |  |   | 1                        |  |  |                           |        |  |       |   |       |       |  |   |      |  |  |   | 1         | 
|           |  |                                    |         |  |                                        |   |         |                                   |  |   |                          |  |  |                           |         |  |       |   |        |       |  |   |       |  |  |   |           | 
|Total      |  | $                                  | 142,312 |  |                                        | $ | 162,594 |                                   |  | $ | 683,974                  |  |  | $                         | 344,830 |  |       | $ | 34,293 |       |  | $ | 6,754 |  |  | $ | 1,374,757 | 
|           |  |                                    |         |  |                                        |   |         |                                   |  |   |                          |  |  |                           |         |  |       |   |        |       |  |   |       |  |  |   |           | 

The allowance for loan losses represents a reserve for inherent losses in the loan portfolio. The adequacy of the allowance
for loan losses is evaluated periodically based on a review of all significant loans, with a particular emphasis on non-accruing, past due and other loans that management believes might be potentially impaired or warrant additional attention. The
Company segregates the loan portfolio by type of loan and utilizes this segregation in evaluating exposure to risks within the portfolio. In addition, based on internal reviews and external reviews performed by independent auditors and regulatory
authorities, the Company further segregates the loan portfolio by loan grades based on an assessment of risk for a particular loan or group of loans. Certain reviewed loans are assigned specific allowances when a review of relevant data determines
that a general allocation is not sufficient or when the review affords management the opportunity to fine tune the amount of exposure in a given credit. In establishing allowances, management considers historical loan loss experience but adjusts
this data with a significant emphasis on data such as current loan quality trends, current economic conditions and other factors in the markets where the Company operates. Factors considered include, among others, current valuations of real estate
in their markets, unemployment rates, the effect of weather conditions on agricultural related entities and other significant local economic events.



19



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##### Table of Contents

The Company has developed a methodology for determining the adequacy of the allowance for loan losses which
is monitored by the Companys Senior Credit Officer. Procedures provide for the assignment of a risk rating for every loan included in the total loan portfolio, with the exception of credit card receivables and overdraft protection loans which
are treated as pools for risk rating purposes. The risk rating schedule provides nine ratings of which five ratings are classified as pass ratings and four ratings are classified as criticized ratings. Each risk rating is assigned a percent factor
to be applied to the loan balance to determine the adequate amount of reserve. Many of the larger loans require an annual review by an independent loan officer or an independent third party loan review firm. As a result of these loan reviews,
certain loans may be assigned specific reserve allocations. Other loans that surface as problem loans may also be assigned specific reserves. Past due loans are assigned risk ratings based on the number of days past due. The calculation of the
allowance for loan losses, including underlying data and assumptions, is reviewed regularly by the Companys Chief Financial Officer and the Director of Internal Audit.

Activity in the allowance for loan losses for the three months ended March 31, 2011, for the year ended December 31, 2010 and for the three months ended March 31, 2010 is as
follows:



|                                             |  |               |        |   |                  |   |         |               |  |   |         |  
|-------------------------------------------- |  | ------------- | ------ | - | ---------------- | - | ------- | ------------- |  | - | ------- | -
|(Dollars in Thousands)                       |  | March 31,2011 |        |   | December 31,2010 |   |         | March 31,2010 | 
|Balance, January 1                           |  | $             | 34,576 |   |                  | $ | 35,762  |               |  | $ | 35,762  |  
|Provision for loan losses charged to expense |  |               | 7,092  |   |                  |   | 48,839  |               |  |   | 10,770  |  
|Loans charged off                            |  |               | (7,067 | ) |                  |   | (52,623 | )             |  |   | (13,246 | )
|Recoveries of loans previously charged off   |  |               | 842    |   |                  |   | 2,598   |               |  |   | 277     |  
|                                             |  |               |        |   |                  |   |         |               |  |   |         |  
|Ending balance                               |  | $             | 35,443 |   |                  | $ | 34,576  |               |  | $ | 33,563  |  
|                                             |  |               |        |   |                  |   |         |               |  |   |         |  

During the three months ended March 31, 2011 and the year ended December 31, 2010, the Company recorded provision
for loan loss expense of $76,000 and $1.7 million, respectively, to account for losses where the initial estimate of cash flows was found to be excessive on loans acquired in FDIC-assisted transactions. These amounts are excluded from the
rollforwards above and below but are reflected in the Companys Consolidated Statements of Operations.



20



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##### Table of Contents

The following table details activity in the allowance for loan losses by portfolio segment for the three
months ended March 31, 2011 and the year ended December 31, 2010. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.



|                                            |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  
|------------------------------------------- |  | ---------------------------------- | ------- | - | -------------------------------------- | - | ------- | --------------------------------- |  | - | ------------------------ | - |  | --------------------------------- | ------- | - | ----- | - | ------ | - |  | - | --------- | -
|                                            |  | Commercial,financial &agricultural |         |   | Real estate -construction &development |   |         | Real estate -commercial &farmland |  |   | Real estate -residential |   |  | Consumerinstallmentloans andOther |         |   | Total |  
|                                            |  | (Dollars in thousands)             |        
|Balance, January 1, 2011                    |  | $                                  | 2,779   |   |                                        | $ | 7,705   |                                   |  | $ | 14,971                   |   |  | $                                 | 8,664   |   |       | $ | 457    |   |  | $ | 34,576    |  
|Provision for loan losses                   |  |                                    | 2,078   |   |                                        |   | 1,477   |                                   |  |   | 2,387                    |   |  |                                   | 1,015   |   |       |   | 135    |   |  |   | 7,092     |  
|Loans charged off                           |  |                                    | (1,113  | ) |                                        |   | (2,425  | )                                 |  |   | (2,557                   | ) |  |                                   | (809    | ) |       |   | (163   | ) |  |   | (7,067    | )
|Recoveries of loans previously charged off  |  |                                    | 20      |   |                                        |   | 772     |                                   |  |   | 2                        |   |  |                                   | 14      |   |       |   | 34     |   |  |   | 842       |  
|                                            |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  
|Balance, March 31, 2011                     |  | $                                  | 3,764   |   |                                        | $ | 7,529   |                                   |  | $ | 14,803                   |   |  | $                                 | 8,884   |   |       | $ | 463    |   |  | $ | 35,443    |  
|                                            |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  
|                                            |  |                                    |         |   |                                        |  
|Period-end amount allocated to:             |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  
|Loans individually evaluated for impairment |  | $                                  | 2,012   |   |                                        | $ | 3,513   |                                   |  | $ | 6,282                    |   |  | $                                 | 2,484   |   |       | $ | 1      |   |  | $ | 14,292    |  
|Loans collectively evaluated for impairment |  |                                    | 1,752   |   |                                        |   | 4,016   |                                   |  |   | 8,521                    |   |  |                                   | 6,400   |   |       |   | 462    |   |  |   | 21,151    |  
|                                            |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  
|Ending balance                              |  | $                                  | 3,764   |   |                                        | $ | 7,529   |                                   |  | $ | 14,803                   |   |  | $                                 | 8,884   |   |       | $ | 463    |   |  | $ | 35,443    |  
|                                            |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  
|                                            |  |                                    |         |   |                                        |  
|Loans:                                      |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  
|Individually evaluated for impairment       |  | $                                  | 4,752   |   |                                        | $ | 18,054  |                                   |  | $ | 48,594                   |   |  | $                                 | 12,448  |   |       | $ | 18     |   |  | $ | 83,866    |  
|Collectively evaluated for impairment       |  |                                    | 138,074 |   |                                        |   | 134,809 |                                   |  |   | 623,618                  |   |  |                                   | 324,307 |   |       |   | 41,307 |   |  |   | 1,262,115 |  
|                                            |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  
|Ending balance                              |  | $                                  | 142,826 |   |                                        | $ | 152,863 |                                   |  | $ | 672,212                  |   |  | $                                 | 336,755 |   |       | $ | 41,325 |   |  | $ | 1,345,981 |  
|                                            |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  
|                                            |  |                                    |         |   |                                        |  
|                                            |  | Commercial,financial &agricultural |         |   | Real estate -construction &development |   |         | Real estate -commercial &farmland |  |   | Real estate -residential |   |  | Consumerinstallmentloans andOther |         |   | Total |  
|                                            |  | (Dollars in thousands)             |        
|Balance, January 1, 2010                    |  | $                                  | 3,428   |   |                                        | $ | 13,098  |                                   |  | $ | 11,296                   |   |  | $                                 | 7,391   |   |       | $ | 549    |   |  | $ | 35,762    |  
|Provision for loan losses                   |  |                                    | 4,265   |   |                                        |   | 13,776  |                                   |  |   | 18,937                   |   |  |                                   | 11,178  |   |       |   | 683    |   |  |   | 48,839    |  
|Loans charged off                           |  |                                    | (5,481  | ) |                                        |   | (19,853 | )                                 |  |   | (16,108                  | ) |  |                                   | (10,091 | ) |       |   | (1,090 | ) |  |   | (52,623   | )
|Recoveries of loans previously charged off  |  |                                    | 567     |   |                                        |   | 684     |                                   |  |   | 846                      |   |  |                                   | 186     |   |       |   | 315    |   |  |   | 2,598     |  
|                                            |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  
|Balance, December 31, 2010                  |  | $                                  | 2,779   |   |                                        | $ | 7,705   |                                   |  | $ | 14,971                   |   |  | $                                 | 8,664   |   |       | $ | 457    |   |  | $ | 34,576    |  
|                                            |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  
|                                            |  |                                    |         |   |                                        |  
|Period-end amount allocated to:             |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  
|Loans individually evaluated for impairment |  | $                                  | 677     |   |                                        | $ | 3,554   |                                   |  | $ | 6,300                    |   |  | $                                 | 2,554   |   |       | $ |       |   |  | $ | 13,085    |  
|Loans collectively evaluated for impairment |  |                                    | 2,102   |   |                                        |   | 4,151   |                                   |  |   | 8,671                    |   |  |                                   | 6,110   |   |       |   | 457    |   |  |   | 21,491    |  
|                                            |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  
|Ending balance                              |  | $                                  | 2,779   |   |                                        | $ | 7,705   |                                   |  | $ | 14,971                   |   |  | $                                 | 8,664   |   |       | $ | 457    |   |  | $ | 34,576    |  
|                                            |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  
|                                            |  |                                    |         |   |                                        |  
|Loans:                                      |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  
|Individually evaluated for impairment       |  | $                                  | 3,930   |   |                                        | $ | 22,838  |                                   |  | $ | 50,179                   |   |  | $                                 | 14,740  |   |       | $ |       |   |  | $ | 91,687    |  
|Collectively evaluated for impairment       |  |                                    | 138,382 |   |                                        |   | 139,756 |                                   |  |   | 633,795                  |   |  |                                   | 330,090 |   |       |   | 41,047 |   |  |   | 1,283,070 |  
|                                            |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  
|Ending balance                              |  | $                                  | 142,312 |   |                                        | $ | 162,594 |                                   |  | $ | 683,974                  |   |  | $                                 | 344,830 |   |       | $ | 41,047 |   |  | $ | 1,374,757 |  
|                                            |  |                                    |         |   |                                        |   |         |                                   |  |   |                          |   |  |                                   |         |   |       |   |        |   |  |   |           |  



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NOTE 4  ASSETS ACQUIRED IN FDIC-ASSISTED ACQUISITIONS

Since October 2009, the Company has participated in six FDIC-assisted acquisitions whereby the Company purchased certain failed institutions out of the
FDICs receivership. These institutions include:



|                                   |  |                    |  |           |  |                  
|---------------------------------- |  | ------------------ |  | --------- |  | -----------------
|Bank Acquired                      |  | Location:          |  | Branches: |  | Date Acquired    
|American United Bank (AUB)       |  | Lawrenceville, Ga. |  | 1         |  | October 23, 2009 
|United Security Bank (USB)       |  | Sparta, Ga.        |  | 2         |  | November 6, 2009 
|Satilla Community Bank (SCB)     |  | St. Marys, Ga.     |  | 1         |  | May 14, 2010     
|First Bank of Jacksonville (FBJ) |  | Jacksonville, Fl.  |  | 2         |  | October 22, 2010 
|Tifton Banking Company (TBC)     |  | Tifton, Ga.        |  | 1         |  | November 12, 2010
|Darby Bank & Trust (DBT)         |  | Vidalia, Ga.       |  | 7         |  | November 12, 2010

The determination
of the initial fair value of loans at the acquisition and the initial fair value of the related FDIC indemnification asset involves a high degree of judgment and complexity. The carrying values of the acquired loans and the FDIC indemnification
asset reflect managements best estimate of the fair value of each of these assets as of the date of acquisition. However, the amount that the Company realizes on these assets could differ materially from the carrying valuse reflected in these
financial statements, based upon the timing and amount of collections on the acquired loans in future periods. Because of the loss-sharing agreements with the FDIC on these assets, the Company does not expect to incur any significant
losses. To the extent the actual values realized for the acquired loans are different from the estimates, the indemnification asset will generally be affected in an offsetting manner due to the loss-sharing support from the FDIC.

FASB ASC 310  30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (ASC 310), applies to a loan with evidence
of deterioration of credit quality since origination, acquired by completion of a transfer for which it is probable, at acquisition, that the investor will be unable to collect all contractually required payments receivable. ASC 310 prohibits
carrying over or creating an allowance for loan losses upon initial recognition for loans which fall under the scope of this statement. At the acquisition dates, a majority of these loans were valued based on the liquidation value of the underlying
collateral because the future cash flows are primarily based on the liquidation of underlying collateral. There was no allowance for credit losses established related to these ASC 310 loans at the acquisition dates, based on the provisions of
this statement. Over the life of the acquired loans, the Company continues to estimate cash flows expected to be collected. If the expected cash flows expected to be collected increases, the Company adjusts the amount of accretable yield recognized
on a prospective basis over the loans remaining life. If the expected cash flows expected to be collected decreases, the Company records a provision for loan loss in its consolidated statement of operations. During the three months ended
March 31, 2011 and the year ended December 31, 2010, the Company recorded provision for loan loss expense of $76,000 and $1.7 million, respectively, to account for losses where the initial estimate of cash flows was found to be excessive
on loans acquired in FDIC-assisted transactions.

On the acquisition date, the preliminary estimates of the contractually required payments
receivable for all ASC 310 loans acquired in the acquisitions totaled $505.1 million and the estimated fair values of the loans totaled $273.1 million, net of an accretable yield of $38.8 million, the difference between the value of the loans on the
Companys balance sheet and the cash flows they are expected to produce. These amounts were determined based upon the estimated remaining life of the underlying loans, which includes the effects of estimated prepayments.



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The following table summarizes components of all covered assets at March 31, 2011 and December 31,
2010 and their origin:



|                                                |  |                        |        |  |     |   |        |     |  |   |         |  |  |     |         |  |     |   |        |       |  |   |        |  |  |   |         | 
|----------------------------------------------- |  | ---------------------- | ------ |  | --- | - | ------ | --- |  | - | ------- |  |  | --- | ------- |  | --- | - | ------ | ----- |  | - | ------ |  |  | - | ------- | 
|                                                |  | SCB                    |        |  | FBJ |   |        | TBC |  |   | DBT     |  |  | AUB |         |  | USB |   |        | Total | 
|                                                | 
|As of March 31, 2011:                           |  | (Dollars in thousands) |       
|                                                |  |                        |        |  |     |   |       
|Covered loans                                   |  | $                      | 68,655 |  |     | $ | 46,990 |     |  | $ | 107,458 |  |  | $   | 360,610 |  |     | $ | 51,845 |       |  | $ | 74,470 |  |  | $ | 710,028 | 
|                                                |  |                        |        |  |     |   |       
|Less adjustments related to credit risk         |  |                        | 7,177  |  |     |   | 9,847  |     |  |   | 25,456  |  |  |     | 128,975 |  |     |   | 4,332  |       |  |   | 5,609  |  |  |   | 181,396 | 
|                                                |  |                        |        |  |     |   |       
|Less adjustments related to liquidity and yield |  |                        | 464    |  |     |   | 135    |     |  |   | 398     |  |  |     | 1,075   |  |     |   | 150    |       |  |   | 398    |  |  |   | 2,620   | 
|                                                |  |                        |        |  |     |   |        |     |  |   |         |  |  |     |         |  |     |   |        |       |  |   |        |  |  |   |         | 
|                                                |  |                        |        |  |     |   |       
|Total Covered Loans                             |  | $                      | 61,014 |  |     | $ | 37,008 |     |  | $ | 81,604  |  |  | $   | 230,560 |  |     | $ | 47,363 |       |  | $ | 68,463 |  |  | $ | 526,012 | 
|                                                |  |                        |        |  |     |   |        |     |  |   |         |  |  |     |         |  |     |   |        |       |  |   |        |  |  |   |         | 
|                                                |  |                        |        |  |     |   |       
|OREO                                            |  | $                      | 7,700  |  |     | $ | 2,997  |     |  | $ | 4,151   |  |  | $   | 36,190  |  |     | $ | 12,816 |       |  | $ | 10,664 |  |  | $ | 74,518  | 
|                                                |  |                        |        |  |     |   |       
|Less fair value adjustments                     |  |                        | 550    |  |     |   | 1,616  |     |  |   | 1,281   |  |  |     | 11,101  |  |     |   | 139    |       |  |   | 74     |  |  |   | 14,761  | 
|                                                |  |                        |        |  |     |   |        |     |  |   |         |  |  |     |         |  |     |   |        |       |  |   |        |  |  |   |         | 
|                                                |  |                        |        |  |     |   |       
|Covered OREO                                    |  | $                      | 7,150  |  |     | $ | 1,381  |     |  | $ | 2,870   |  |  | $   | 25,089  |  |     | $ | 12,677 |       |  | $ | 10,590 |  |  | $ | 59,757  | 
|                                                |  |                        |        |  |     |   |        |     |  |   |         |  |  |     |         |  |     |   |        |       |  |   |        |  |  |   |         | 
|                                                |  |                        |        |  |     |   |       
|Total covered assets                            |  | $                      | 68,164 |  |     | $ | 38,389 |     |  | $ | 84,474  |  |  | $   | 255,649 |  |     | $ | 60,040 |       |  | $ | 79,053 |  |  | $ | 585,769 | 
|                                                |  |                        |        |  |     |   |        |     |  |   |         |  |  |     |         |  |     |   |        |       |  |   |        |  |  |   |         | 
|                                                |  |                        |        |  |     |   |       
|FDIC loss share receivable                      |  | $                      | 10,120 |  |     | $ | 10,839 |     |  | $ | 27,659  |  |  | $   | 108,091 |  |     | $ | 3,769  |       |  | $ | 6,698  |  |  | $ | 167,176 | 
|                                                |  |                        |        |  |     |   |        |     |  |   |         |  |  |     |         |  |     |   |        |       |  |   |        |  |  |   |         | 
|                                                |  |                        |        |  |     |   |       
|                                                |  | SCB                    |        |  | FBJ |   |        | TBC |  |   | DBT     |  |  | AUB |         |  | USB |   |        | Total | 
|                                                | 
|As of December 31, 2010:                        |  | (Dollars in thousands) |       
|                                                |  |                        |        |  |     |   |       
|Covered loans                                   |  | $                      | 76,472 |  |     | $ | 48,632 |     |  | $ | 113,283 |  |  | $   | 380,238 |  |     | $ | 53,203 |       |  | $ | 77,188 |  |  | $ | 749,016 | 
|                                                |  |                        |        |  |     |   |       
|Less adjustments related to credit risk         |  |                        | 12,336 |  |     |   | 10,532 |     |  |   | 25,388  |  |  |     | 130,769 |  |     |   | 4,332  |       |  |   | 7,593  |  |  |   | 190,950 | 
|                                                |  |                        |        |  |     |   |       
|Less adjustments related to liquidity and yield |  |                        | 506    |  |     |   | 151    |     |  |   | 458     |  |  |     | 1,199   |  |     |   | 214    |       |  |   | 547    |  |  |   | 3,075   | 
|                                                |  |                        |        |  |     |   |        |     |  |   |         |  |  |     |         |  |     |   |        |       |  |   |        |  |  |   |         | 
|                                                |  |                        |        |  |     |   |       
|Total Covered Loans                             |  | $                      | 63,630 |  |     | $ | 37,949 |     |  | $ | 87,437  |  |  | $   | 248,270 |  |     | $ | 48,657 |       |  | $ | 69,048 |  |  | $ | 554,991 | 
|                                                |  |                        |        |  |     |   |        |     |  |   |         |  |  |     |         |  |     |   |        |       |  |   |        |  |  |   |         | 
|                                                |  |                        |        |  |     |   |       
|OREO                                            |  | $                      | 8,311  |  |     | $ | 2,799  |     |  | $ | 4,178   |  |  | $   | 42,724  |  |     | $ | 13,207 |       |  | $ | 11,473 |  |  | $ | 82,692  | 
|                                                |  |                        |        |  |     |   |       
|Less fair value adjustments                     |  |                        | 1,373  |  |     |   | 2,500  |     |  |   | 2,031   |  |  |     | 21,000  |  |     |   | 783    |       |  |   | 74     |  |  |   | 27,761  | 
|                                                |  |                        |        |  |     |   |        |     |  |   |         |  |  |     |         |  |     |   |        |       |  |   |        |  |  |   |         | 
|                                                |  |                        |        |  |     |   |       
|Covered OREO                                    |  | $                      | 6,938  |  |     | $ | 299    |     |  | $ | 2,147   |  |  | $   | 21,724  |  |     | $ | 12,424 |       |  | $ | 11,399 |  |  | $ | 54,931  | 
|                                                |  |                        |        |  |     |   |        |     |  |   |         |  |  |     |         |  |     |   |        |       |  |   |        |  |  |   |         | 
|                                                |  |                        |        |  |     |   |       
|Total covered assets                            |  | $                      | 70,568 |  |     | $ | 38,248 |     |  | $ | 89,584  |  |  | $   | 269,994 |  |     | $ | 61,081 |       |  | $ | 80,447 |  |  | $ | 609,922 | 
|                                                |  |                        |        |  |     |   |        |     |  |   |         |  |  |     |         |  |     |   |        |       |  |   |        |  |  |   |         | 
|                                                |  |                        |        |  |     |   |       
|FDIC loss share receivable                      |  | $                      | 14,333 |  |     | $ | 11,944 |     |  | $ | 27,436  |  |  | $   | 112,404 |  |     | $ | 4,208  |       |  | $ | 6,862  |  |  | $ | 177,187 | 
|                                                |  |                        |        |  |     |   |        |     |  |   |         |  |  |     |         |  |     |   |        |       |  |   |        |  |  |   |         | 



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On the dates of acquisition, the Company estimated the future cash flows on each individual loan and made
the necessary adjustments to reflect the asset at fair value. At each quarter end subsequent to the acquisition dates, the Company revises the estimates of future cash flows based on current information and makes the necessary adjustments to
continue reflecting the assets at fair value. The adjustments to fair value are performed on a loan-by-loan basis and have resulted in the following:



|                                                                                                                                                                                 |  |                        |       |  |                  |   |        |               |  |   |   | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------- | ----- |  | ---------------- | - | ------ | ------------- |  | - | - | 
|Total Amounts                                                                                                                                                                    |  | March 31,
2011         |       |  | December 31,2010 |   |        | March 31,2010 | 
|                                                                                                                                                                                 |  | (Dollars in thousands) |      
|Adjustments needed where the Companys initial estimate of cash flows were underestimated: (recorded with a reclassification
from non-accretable difference to accretable yield) |  | $                      | 4,435 |  |                  | $ | 30,448 |               |  | $ |  | 
|                                                                                                                                                                                 |  |                        |      
|Adjustments needed where the Companys initial estimate of cash flows were overstated: (recorded through a provision for
loan losses)                                            |  |                        | 380   |  |                  |   | 8,410  |               |  |   |  | 
|                                                                                                                                                                                 |  |                        |      
|Amounts reflected in the Companys Statement of
Operations                                                                                                                       |  | March 31,2011          |       |  | December 31,2010 |   |        | March 31,2010 | 
|                                                                                                                                                                                 |  | (Dollars in thousands) |      
|Adjustments needed where the Companys initial estimate of cash flows were underestimated: (recorded with a reclassification
from non-accretable difference to accretable yield) |  | $                      | 848   |  |                  | $ | 4,245  |               |  | $ |  | 
|                                                                                                                                                                                 |  |                        |      
|Adjustments needed where the Companys initial estimate of cash flows were overstated: (recorded through a provision for
loan losses)                                            |  |                        | 76    |  |                  |   | 1,682  |               |  |   |  | 

A rollforward of acquired loans with
deterioration of credit quality for the three months ended March 31, 2011, the year ended December 31, 2010 and the three months ended March 31, 2010 is shown below:



|                                                                   |  |               |         |   |                  |   |         |               |  |   |        |  
|------------------------------------------------------------------ |  | ------------- | ------- | - | ---------------- | - | ------- | ------------- |  | - | ------ | -
|(Dollars in Thousands)                                             |  | March 31,2011 |         |   | December 31,2010 |   |         | March 31,2010 | 
|Balance, January 1                                                 |  | $             | 252,535 |   |                  | $ | 56,793  |               |  | $ | 56,793 |  
|Change in estimate of cash flows, net of charge-offs or recoveries |  |               | (2,092  | ) |                  |   | (8,081  | )             |  |   | (189   | )
|Additions due to acquisitions                                      |  |               |        |   |                  |   | 214,500 |               |  |   |       |  
|Other (loan payments, transfers, etc.)                             |  |               | (4,033  | ) |                  |   | (10,677 | )             |  |   | (1,214 | )
|                                                                   |  |               |         |   |                  |   |         |               |  |   |        |  
|Ending balance                                                     |  | $             | 246,410 |   |                  | $ | 252,535 |               |  | $ | 55,390 |  
|                                                                   |  |               |         |   |                  |   |         |               |  |   |        |  

The following is a summary of changes in the accretable yields of acquired loans during the three months ended
March 31, 2011, the year ended December 31, 2010 and the three months ended March 31, 2010.



|                                                            |  |               |        |   |                  |   |        |               |  |   |        |  
|----------------------------------------------------------- |  | ------------- | ------ | - | ---------------- | - | ------ | ------------- |  | - | ------ | -
|(Dollars in Thousands)                                      |  | March 31,2011 |        |   | December 31,2010 |   |        | March 31,2010 | 
|Balance, January 1                                          |  | $             | 37,383 |   |                  | $ | 3,550  |               |  | $ | 3,550  |  
|Additions due to acquisitions                               |  |               |       |   |                  |   | 35,245 |               |  |   |       |  
|Transfers from nonaccretable difference to accretable yield |  |               | 887    |   |                  |   | 6,090  |               |  |   |       |  
|Accretion                                                   |  |               | (4,454 | ) |                  |   | (7,502 | )             |  |   | (1,228 | )
|                                                            |  |               |        |   |                  |   |        |               |  |   |        |  
|Ending balance                                              |  | $             | 33,816 |   |                  | $ | 37,383 |               |  | $ | 2,322  |  
|                                                            |  |               |        |   |                  |   |        |               |  |   |        |  



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The loss-sharing agreements are subject to the servicing procedures as specified in the agreement with the
FDIC. The expected reimbursements under the loss-sharing agreements were recorded as an indemnification asset at their estimated fair value of $168.9 million and $45.8 million on the 2010 and 2009 acquisition dates, respectively. Changes in the FDIC
loss-share receivable for the three months ended March 31, 2011, for the year ended December 31, 2010 and for the three months ended March 31, 2010 are as follows:



|                                                          |  |               |         |   |                  |   |         |               |  |   |        |  
|--------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | ------------- |  | - | ------ | -
|(Dollars in Thousands)                                    |  | March 31,2011 |         |   | December 31,2010 |   |         | March 31,2010 | 
|Balance, January 1                                        |  | $             | 177,187 |   |                  | $ | 45,840  |               |  | $ | 45,840 |  
|Indemnification asset recorded in acquisitions            |  |               |        |   |                  |   | 168,918 |               |  |   |       |  
|Payments received from FDIC                               |  |               | (4,071  | ) |                  |   | (26,522 | )             |  |   |        |  
|Effect of change in expected cash flows on covered assets |  |               | (5,940  | ) |                  |   | (11,049 | )             |  |   | (13    | )
|                                                          |  |               |         |   |                  |   |         |               |  |   |        |  
|Ending balance                                            |  | $             | 167,176 |   |                  | $ | 177,187 |               |  | $ | 45,827 |  
|                                                          |  |               |         |   |                  |   |         |               |  |   |        |  

NOTE 5  WEIGHTED AVERAGE SHARES OUTSTANDING

Due to the net loss reported for the quarter ending March 31, 2010, the Company has excluded the effects of potential common shares as these would have been anti-dilutive. Earnings per
share have been computed based on the following weighted average number of common shares outstanding:



|                                           |  |                                    |        |  |      |  |        | 
|------------------------------------------ |  | ---------------------------------- | ------ |  | ---- |  | ------ | 
|                                           |  | For the ThreeMonthsEnded March 31, |       
|                                           |  | 2011                               |        |  | 2010 | 
|                                           |  | (share data inthousands)           |       
|Basic shares outstanding                   |  |                                    | 23,440 |  |      |  | 13,840 | 
|Plus: Dilutive effect of ISOs              |  |                                    | 34     |  |      |  |       | 
|Plus: Dilutive effect of Restricted Grants |  |                                    |       |  |      |  |       | 
|                                           |  |                                    |        |  |      |  |        | 
|Diluted shares outstanding                 |  |                                    | 23,474 |  |      |  | 13,840 | 
|                                           |  |                                    |        |  |      |  |        | 

NOTE 6  OTHER BORROWINGS

The Company has, from time to time, utilized certain borrowing arrangements with various financial institutions to fund growth in earning assets or provide additional liquidity when appropriate spreads
can be realized. At March 31, 2011, there were no outstanding borrowings with the Companys correspondent banks, compared to $43.5 million at December 31, 2010 and $2.0 million at March 31, 2010. The Companys
success with attracting and retaining retail deposits has allowed for very low dependence on more volatile non-deposit funding.



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NOTE 7  COMMITMENTS AND CONTINGENCIES

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its
customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated
balance sheets.

The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of
financial instruments. The Company uses the same credit policies in making commitments and conditional obligations as are used for on-balance-sheet instruments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or
other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

The Company issues standby letters of credit, which are conditional commitments issued to guarantee the performance of a customer to a third
party. Those guarantees are primarily issued to support public and private borrowing arrangements and expire in decreasing amounts with varying terms. The credit risk involved in issuing letters of credit is essentially the same as that
involved in extending loan facilities to customers. The Company holds various assets as collateral supporting those commitments for which collateral is deemed necessary.

The Company evaluates each customers creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on
managements credit evaluation of the borrower. Collateral held may include accounts receivable, inventory, property, plant and equipment, residential real estate, and income-producing commercial properties.

The Companys commitments to extend credit and standby letters of credit are presented in the following table:



|                             |  |                |         |  |                   |   |         |                |  |   |         | 
|---------------------------- |  | -------------- | ------- |  | ----------------- | - | ------- | -------------- |  | - | ------- | 
|(Dollars in Thousands)       |  | March 31, 2011 |         |  | December 31, 2010 |   |         | March 31, 2010 | 
|                             |  |                |        
|Commitments to extend credit |  | $              | 163,442 |  |                   | $ | 166,845 |                |  | $ | 149,613 | 
|                             |  |                |        
|Standby letters of credit    |  | $              | 7,531   |  |                   | $ | 7,874   |                |  | $ | 3,967   | 



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Certain of the statements made in this report are forward-looking statements within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations,
assumptions, estimates, intentions and future performance and involve known and unknown risks, uncertainties and other factors, many of which may be beyond our control and which may cause the actual results, performance or achievements of the
Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these
forward-looking statements through our use of words such as may, will, anticipate, assume, should, indicate, would, believe, contemplate,
expect, estimate, continue, plan, point to, project, predict, could, intend, target, potential and other similar
words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation, legislative and regulatory initiatives; additional competition in Ameris markets;
potential business strategies, including acquisitions or dispositions of assets or internal restructuring, that may be pursued by Ameris; state and federal banking regulations; changes in or application of environmental and other laws and
regulations to which Ameris is subject; political, legal and economic conditions and developments; financial market conditions and the results of financing efforts; changes in commodity prices and interest rates; weather, natural disasters and other
catastrophic events; and other factors discussed in Ameris filings with the SEC under the Exchange Act.

All written or oral
forward-looking statements that are made by or are attributable to us are expressly qualified in their entirety by this cautionary notice. Our forward-looking statements apply only as of the date of this report or the respective date of the
document from which they are incorporated herein by reference. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date of this report, or after the respective dates on which
such statements otherwise are made, whether as a result of new information, future events or otherwise.



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The following table sets forth unaudited selected financial data for the previous five quarters. This
data should be read in conjunction with the consolidated financial statements and the notes thereto and the information contained in this Item 2.



|                                                      |  |              |            |   |               |   |            |              |  |   |               |    |  |              |            |    |  |   |            |   
|----------------------------------------------------- |  | ------------ | ---------- | - | ------------- | - | ---------- | ------------ |  | - | ------------- | -- |  | ------------ | ---------- | -- |  | - | ---------- | --
|                                                      |  | 2011         |            |   | 2010          |  
|(in thousands, except share data, taxable equivalent) |  | FirstQuarter |            |   | FourthQuarter |   |            | ThirdQuarter |  |   | SecondQuarter |    |  | FirstQuarter |           
|Results of Operations:                                |  |              |            |   |               |   |            |              |  |   |               |    |  |              |            |    |  |   |            |   
|Net interest income                                   |  | $            | 24,207     |   |               | $ | 23,006     |              |  | $ | 21,999        |    |  | $            | 23,859     |    |  | $ | 20,413     |   
|Net interest income (tax equivalent)                  |  |              | 24,418     |   |               |   | 23,245     |              |  |   | 22,220        |    |  |              | 24,588     |    |  |   | 20,644     |   
|Provision for loan losses                             |  |              | 7,043      |   |               |   | 11,404     |              |  |   | 9,739         |    |  |              | 18,608     |    |  |   | 10,770     |   
|Non-interest income                                   |  |              | 6,193      |   |               |   | 12,303     |              |  |   | 5,011         |    |  |              | 13,049     |    |  |   | 4,885      |   
|Non-interest expense                                  |  |              | 21,155     |   |               |   | 21,946     |              |  |   | 18,928        |    |  |              | 23,383     |    |  |   | 16,931     |   
|Income tax (benefit)/expense                          |  |              | 824        |   |               |   | 98         |              |  |   | (760          | )  |  |              | (1,664     | )  |  |   | (869       | ) 
|Preferred stock dividends                             |  |              | 798        |   |               |   | 811        |              |  |   | 807           |    |  |              | 799        |    |  |   | 796        |   
|Net (loss)/income available to common Shareholders    |  |              | 580        |   |               |   | 1,050      |              |  |   | (1,704        | )  |  |              | (4,218     | )  |  |   | (2,330     | ) 
|Selected Average Balances:                            |  |              |            |   |               |   |            |              |  |   |               |    |  |              |            |    |  |   |            |   
|Loans, net of unearned income                         |  | $            | 1,361,964  |   |               | $ | 1,416,254  |              |  | $ | 1,503,149     |    |  | $            | 1,528,220  |    |  | $ | 1,563,307  |   
|Covered loans                                         |  |              | 540,127    |   |               |   | 374,282    |              |  |   | 187,556       |    |  |              | 155,302    |    |  |   | 120,211    |   
|Investment securities                                 |  |              | 301,572    |   |               |   | 284,066    |              |  |   | 235,057       |    |  |              | 245,182    |    |  |   | 245,895    |   
|Earning assets                                        |  |              | 2,453,040  |   |               |   | 2,378,065  |              |  |   | 2,184,676     |    |  |              | 2,223,743  |    |  |   | 2,133,864  |   
|Assets                                                |  |              | 2,949,943  |   |               |   | 2,872,207  |              |  |   | 2,429,709     |    |  |              | 2,444,425  |    |  |   | 2,377,348  |   
|Deposits                                              |  |              | 2,548,509  |   |               |   | 2,310,372  |              |  |   | 2,088,997     |    |  |              | 2,111,612  |    |  |   | 2,101,780  |   
|Shareholders equity                                  |  |              | 222,675    |   |               |   | 225,088    |              |  |   | 224,656       |    |  |              | 217,042    |    |  |   | 193,278    |   
|Period-End Balances:                                  |  |              |            |   |               |   |            |              |  |   |               |    |  |              |            |    |  |   |            |   
|Loans, net of unearned income                         |  | $            | 1,345,981  |   |               | $ | 1,374,757  |              |  | $ | 1,455,853     |    |  | $            | 1,493,126  |    |  | $ | 1,536,528  |   
|Covered loans                                         |  |              | 526,012    |   |               |   | 554,991    |              |  |   | 192,268       |    |  |              | 191,663    |    |  |   | 123,771    |   
|Earning assets                                        |  |              | 2,439,190  |   |               |   | 2,513,812  |              |  |   | 2,199,928     |    |  |              | 2,171,262  |    |  |   | 2,116,513  |   
|Total assets                                          |  |              | 2,918,423  |   |               |   | 2,972,168  |              |  |   | 2,434,703     |    |  |              | 2,421,910  |    |  |   | 2,351,658  |   
|Deposits                                              |  |              | 2,572,689  |   |               |   | 2,535,426  |              |  |   | 2,099,001     |    |  |              | 2,080,026  |    |  |   | 2,088,306  |   
|Common shareholders equity                           |  |              | 223,588    |   |               |   | 223,286    |              |  |   | 223,993       |    |  |              | 225,038    |    |  |   | 143,670    |   
|Per Common Share Data:                                |  |              |            |   |               |   |            |              |  |   |               |    |  |              |            |    |  |   |            |   
|Earnings per share  Basic                            |  | $            | 0.02       |   |               | $ | 0.04       |              |  | $ | (0.07         | )  |  | $            | (0.20      | )  |  | $ | (0.17      | ) 
|Earnings per share  Diluted                          |  |              | 0.02       |   |               |   | 0.04       |              |  |   | (0.07         | )  |  |              | (0.20      | )  |  |   | (0.17      | ) 
|Common book value per share                           |  |              | 9.41       |   |               |   | 9.44       |              |  |   | 9.48          |    |  |              | 9.57       |    |  |   | 10.23      |   
|End of period shares outstanding                      |  |              | 23,766,044 |   |               |   | 23,647,841 |              |  |   | 23,625,065    |    |  |              | 23,627,005 |    |  |   | 14,041,806 |   
|Weighted average shares outstanding                   |  |              |            |   |               |   |            |              |  |   |               |    |  |              |            |    |  |   |            |   
|Basic                                                 |  |              | 23,440,201 |   |               |   | 23,427,393 |              |  |   | 23,570,929    |    |  |              | 23,231,367 |    |  |   | 13,840,231 |   
|Diluted                                               |  |              | 23,474,424 |   |               |   | 23,579,205 |              |  |   | 23,570,929    |    |  |              | 21,231,367 |    |  |   | 13,840,231 |   
|Market Data:                                          |  |              |            |   |               |   |            |              |  |   |               |    |  |              |            |    |  |   |            |   
|High closing price                                    |  | $            | 11.10      |   |               | $ | 11.07      |              |  | $ | 10.49         |    |  | $            | 11.55      |    |  | $ | 10.32      |   
|Low closing price                                     |  |              | 9.32       |   |               |   | 8.73       |              |  |   | 7.83          |    |  |              | 9.00       |    |  |   | 7.36       |   
|Closing price for quarter                             |  |              | 10.16      |   |               |   | 10.54      |              |  |   | 9.35          |    |  |              | 9.66       |    |  |   | 9.03       |   
|Average daily trading volume                          |  |              | 46,618     |   |               |   | 55,281     |              |  |   | 75,573        |    |  |              | 205,388    |    |  |   | 37,715     |   
|Cash dividends per share                              |  |              |           |   |               |   |           |              |  |   |              |    |  |              |           |    |  |   |           |   
|Stock dividend                                        |  |              |           |   |               |   |           |              |  |   |              |    |  |              | 1 for 210  |    |  |   | 1 for 130  |   
|Price to earnings                                     |  |              | N/M        |   |               |   | N/M        |              |  |   | N/M           |    |  |              | N/M        |    |  |   | N/M        |   
|Closing price to book value                           |  |              | 1.09       |   |               |   | 1.12       |              |  |   | 0.99          |    |  |              | 1.01       |    |  |   | 0.88       |   
|Performance Ratios:                                   |  |              |            |   |               |   |            |              |  |   |               |    |  |              |            |    |  |   |            |   
|Return on average assets                              |  |              | 0.08       | % |               |   | 0.15       | %            |  |   | (0.28         | %) |  |              | (0.68      | %) |  |   | (0.26      | %)
|Return on average common equity                       |  |              | 1.06       | % |               |   | 1.85       | %            |  |   | (2.46         | %) |  |              | (6.34      | %) |  |   | (4.33      | %)
|Average loan to average deposits                      |  |              | 74.64      | % |               |   | 77.50      | %            |  |   | 80.93         | %  |  |              | 79.73      | %  |  |   | 74.86      | % 
|Average equity to average assets                      |  |              | 9.25       | % |               |   | 9.58       | %            |  |   | 11.25         | %  |  |              | 10.99      | %  |  |   | 8.13       | % 
|Net interest margin (tax equivalent)                  |  |              | 4.04       | % |               |   | 3.88       | %            |  |   | 4.04          | %  |  |              | 4.43       | %  |  |   | 3.92       | % 
|Efficiency ratio (tax equivalent)                     |  |              | 69.59      | % |               |   | 62.15      | %            |  |   | 70.08         | %  |  |              | 63.35      | %  |  |   | 66.93      | % 



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##### Table of Contents

Overview

The following is managements discussion and analysis of certain significant factors which have affected the financial condition and results of operations of the Company as reflected in the unaudited
consolidated balance sheet as of March 31, 2011 as compared to December 31, 2010 and operating results for the three month periods ended March 31, 2011 and 2010. These comments should be read in conjunction with the
Companys unaudited consolidated financial statements and accompanying notes appearing elsewhere herein.

Results of Operations for
the Three Months Ended March 31, 2011

Consolidated Earnings and Profitability

Ameris reported net income available to common shareholders of $580,000, or $0.02 per diluted share, for the quarter ended March 31, 2011, compared
to a net loss for the same quarter in 2010 of $2.3 million, or $0.17 per diluted share. The Companys return on average assets and average shareholders equity increased in the first quarter of 2011 to 0.08% and 1.06%,
respectively, compared to (0.26%) and (4.33%) in the first quarter of 2010. The increase in earnings and profitability during the quarter was primarily due to lower levels of loan loss provisions and increased net interest income.

Net Interest Income and Margins

On a tax equivalent basis, net interest income for the first quarter of 2011 was $24.2 million, an increase of $3.5 million compared to the same quarter in 2010. Significant increases in the
Companys net interest margin have been the result of flat yields on all classes of earning assets complemented by steady decreases in the Companys cost of funds. The Companys net interest margin increased during the first
quarter of 2011 to 4.00% compared to 3.92% during the first quarter of 2010. Increases in earning assets over the past year have been in covered loans with favorable yields compared to the Companys low cost of funds.

Total interest income during the first quarter of 2011 was $32.1 million compared to $28.0 million in the same quarter of 2010. Yields on earning
assets fell to 5.31% compared to 5.36% reported in the first quarter of 2010 due to higher levels of short-term assets at historically low rates. During the first quarter of 2011, short-term assets averaged 9.7% of total earning assets compared to
9.3% in the same quarter in 2010. Current opportunities to invest a portion of the short-term assets in the bond market have been limited by the Companys inability to maintain certain portfolio characteristics with current yields and
structures being offered. Efforts to increase lending activities have been slow to generate increases in outstanding loans due to the current economic conditions in the Companys markets. Management anticipates improving economic conditions and
increased loan demand will provide opportunities to invest a portion of the short-term assets at higher yields.

Total funding costs declined
to 1.22% in the first quarter of 2011 compared to 1.41% during the first quarter of 2010. Deposit costs decreased from 1.41% in the first quarter of 2010 to 1.17% in the first quarter of 2011. Ongoing efforts to maintain the percentage of
funding from transaction deposits have succeeded such that non-CD deposits averaged 58.6% of total deposits in the first quarter of 2011 compared to 58.3% during the first quarter of 2010. Local customer deposits in the first quarter of 2011
comprised 91.9% of total funding compared to 89.6% of total funding in the same quarter of 2010. Lower costs on deposits were realized due mostly to the lower rate environment and the Companys ability to be less competitive on higher priced
CDs due to its larger than normal position in short-term assets. Further opportunity to realize savings on deposits exists but may be limited due to current costs. Average balances of interest bearing deposits and their respective costs for the
first quarter of 2011 and 2010 are shown below:



|                          |  |                |           |  |                |  |      |                |  |   |             |  |  |  |      |  
|------------------------- |  | -------------- | --------- |  | -------------- |  | ---- | -------------- |  | - | ----------- |  |  |  | ---- | -
|(Dollars in Thousands)    |  | March 31, 2011 |           |  | March 31, 2010 | 
|                          |  | AverageBalance |           |  | AverageCost    |  |      | AverageBalance |  |   | AverageCost | 
|NOW                       |  | $              | 584,338   |  |                |  | 0.73 | %              |  | $ | 505,566     |  |  |  | 0.99 | %
|MMDA                      |  |                | 522,009   |  |                |  | 1.09 | %              |  |   | 424,913     |  |  |  | 1.42 | %
|Savings                   |  |                | 76,341    |  |                |  | 0.70 | %              |  |   | 63,436      |  |  |  | 0.58 | %
|Retail CDs < $100,000     |  |                | 427,143   |  |                |  | 1.66 | %              |  |   | 331,294     |  |  |  | 1.92 | %
|Retail CDs > $100,000     |  |                | 504,011   |  |                |  | 1.68 | %              |  |   | 393,473     |  |  |  | 1.94 | %
|Brokered CDs              |  |                | 124,441   |  |                |  | 3.09 | %              |  |   | 151,333     |  |  |  | 2.88 | %
|                          |  |                |           |  |                |  |      |                |  |   |             |  |  |  |      |  
|                          |  |                |           | 
|Interest bearing deposits |  | $              | 2,238,283 |  |                |  | 1.34 | %              |  | $ | 1,870,015   |  |  |  | 1.59 | %

Provision for Loan Losses and Credit
Quality

The Companys provision for loan losses during the first quarter of 2011 amounted to $7.0 million compared to $11.4
million in the fourth quarter of 2010 and to $10.8 million in the first quarter of 2010. Although the Company has experienced improving trends in criticized and classified assets for several quarters, provision for loan losses have still been
required to account for continued devaluation of real estate collateral. At March 31, 2011, classified loans still accruing totaled $46.8 million compared to $51.3 million at March 31, 2010. Non-accrual loans at March 31, 2011 totaled
$68.4 million, a 23.7% decrease from $89.6 million reported at the end of the first quarter of 2010.



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##### Table of Contents

At March 31, 2011, OREO (excluding covered OREO) totaled $62.3 million, compared to $34.7 million at
March 31, 2010. Management regularly assesses the valuation of OREO through periodic reappraisal and through inquiries received in the marketing process. The Company has found that with a marketing window of 3-6 months, the liquidation of
properties varies from 85% to 10% of current book value. Certain properties, mostly raw land and subdivision lots, have extended marketing periods because of excessive inventory and record low home building activity. At the end of the first quarter
of 2011, total non-performing assets decreased to 4.48% of total assets compared to 5.21% at March 31, 2010. Management continues to aggressively identify and resolve problem assets while seeking quality credits to grow the loan
portfolio.

Net charge-offs on loans during the first quarter of 2011 decreased to $6.2 million, or 1.88% of loans on an annualized basis,
compared to $12.9 million, or 3.12% of loans, in the first quarter of 2010. The Companys allowance for loan losses at March 31, 2011 was $35.4 million, or 2.63% of total loans, compared to $33.6 million, or 2.18% of total loans, at
March 31, 2010.

Non-interest Income

Total non-interest income for the first quarter of 2011 increased slightly to $6.2 million from $4.9 million in the first quarter of 2010. Service charges on deposit accounts in the first quarter of
2011 increased to $4.3 million, compared to $3.4 million in the first quarter of 2010. Increases in service charges related to the recently acquired deposits in FDIC-assisted transactions, along with increased retention of fees related to
insufficient funds were the primary reason for the increase over prior year levels. The accretion of the discount of the FDIC indemnification asset also attributed to the increase of non-interest income during the first quarter of 2011, compared to
the first quarter of 2010.

Non-interest Expense

Total non-interest expense for the first quarter of 2011 increased to $21.2 million, compared to $16.9 million at the same time in 2010. Salaries and employee benefits reflect the largest
increase of $2.0 million; however, this increase is in proportion to the Companys asset growth. Total assets per full-time-equivalent employee increased from $4.0 million at March 31, 2010 to $4.2 million per employee at March 31,
2011. Occupancy and equipment expenses for the first quarter of 2011 amounted to $2.7 million, representing an increase of $703,000 from the same quarter in 2010. Data processing and telecommunications expenses increased $633,000 to $2.4 million at
March 31, 2011 from $1.8 million at March 31, 2010. Both of these increases are directly correlated to the increase in the number of branch locations from the first quarter of 2010 to the first quarter of 2011. Other noninterest expenses
in the first quarter of 2011 increased $875,000 million to $5.8 million when compared to $4.9 million reported in the first quarter of 2010.

Income taxes

Income tax expense
is influenced by the amount of taxable income, the amount of tax-exempt income and the amount of non-deductible expenses. For the first quarter of 2011, the Company reported income tax expense of $824,000 compared to an income tax benefit of
$869,000 in the same period of 2010. The Companys effective tax rate for the three months ended March 31, 2011 and 2010 was 37.4% and 36.2%, respectively.

Balance Sheet Comparison

Securities

Debt securities with readily determinable fair values are classified as available for sale and recorded at fair value with unrealized gains and losses
excluded from earnings and reported in accumulated other comprehensive income, net of the related deferred tax effect. Equity securities, including restricted equity securities, are classified as other investment securities and are recorded at
their fair market value.

The amortization of premiums and accretion of discounts are recognized in interest income using methods
approximating the interest method over the life of the securities. Realized gains and losses, determined on the basis of the cost of specific securities sold, are included in earnings on the settlement date. Declines in the fair value of
securities below their cost that are deemed to be other-than-temporary are reflected in earnings as realized losses.

In determining whether
other-than-temporary impairment losses exist, management considers (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer and (3) the
intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Substantially all of
the unrealized losses on debt securities are related to changes in interest rates and do not affect the expected cash flows of the issuer or underlying collateral. All unrealized losses are considered temporary because each security carries an
acceptable investment grade and the Company has the intent and ability to hold to maturity. Therefore, at March 31, 2011, these investments are not considered impaired on an other-than temporary basis.



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The following table illustrates certain information regarding the Companys investment portfolio with
respect to yields, sensitivities and expected cash flows over the next twelve months assuming constant prepayments and maturities:



|                                       |  |                      |         |  |            |   |         |       |  |  |                  |   |  |                              |      |  |  |   |        | 
|-------------------------------------- |  | -------------------- | ------- |  | ---------- | - | ------- | ----- |  |  | ---------------- | - |  | ---------------------------- | ---- |  |  | - | ------ | 
|                                       |  | Book Value           |         |  | Fair Value |   |         | Yield |  |  | ModifiedDuration |   |  | EstimatedCash Flows12 months |     
|                                       |  | Dollars in Thousands |        
|March 31, 2011:                        |  |                      |         |  |            |   |         |       |  |  |                  |   |  |                              |      |  |  |   |        | 
|U.S. government agencies               |  | $                    | 33,137  |  |            | $ | 33,545  |       |  |  | 1.58             | % |  |                              | 2.16 |  |  | $ | 9,165  | 
|State, county and municipal securities |  | $                    | 55,971  |  |            | $ | 56,898  |       |  |  | 4.84             | % |  |                              | 5.65 |  |  | $ | 1,462  | 
|Corporate debt securities              |  | $                    | 12,150  |  |            | $ | 9,749   |       |  |  | 6.89             | % |  |                              | 6.33 |  |  | $ | 512    | 
|Mortgage-backed securities             |  | $                    | 202,204 |  |            | $ | 205,428 |       |  |  | 4.08             | % |  |                              | 3.72 |  |  | $ | 46,174 | 
|                                       |  |                      |         |  |            |   |         |       |  |  |                  |   |  |                              |      |  |  |   |        | 
|Total debt securities                  |  | $                    | 303,462 |  |            | $ | 305,620 |       |  |  | 4.06             | % |  |                              | 4.01 |  |  | $ | 57,313 | 
|                                       |  |                      |         |  |            |   |         |       |  |  |                  |   |  |                              |      |  |  |   |        | 
|                                       |  |                      |         |  |           
|March 31, 2010:                        |  |                      |         |  |            |   |         |       |  |  |                  |   |  |                              |      |  |  |   |        | 
|U.S. government agencies               |  | $                    | 33,818  |  |            | $ | 34,234  |       |  |  | 3.61             | % |  |                              | 2.01 |  |  | $ | 17,705 | 
|State, county and municipal securities |  | $                    | 41,060  |  |            | $ | 42,314  |       |  |  | 5.07             | % |  |                              | 5.72 |  |  | $ | 1,685  | 
|Corporate debt securities              |  | $                    | 12,370  |  |            | $ | 9,133   |       |  |  | 6.64             | % |  |                              | 7.15 |  |  | $ | 0      | 
|Mortgage-backed securities             |  | $                    | 154,926 |  |            | $ | 162,332 |       |  |  | 5.10             | % |  |                              | 2.74 |  |  | $ | 25,450 | 
|                                       |  |                      |         |  |            |   |         |       |  |  |                  |   |  |                              |      |  |  |   |        | 
|Total debt securities                  |  | $                    | 242,174 |  |            | $ | 248,013 |       |  |  | 4.84             | % |  |                              | 3.49 |  |  | $ | 44,840 | 
|                                       |  |                      |         |  |            |   |         |       |  |  |                  |   |  |                              |      |  |  |   |        | 

Loans and Allowance for Loan Losses

At March 31, 2011, gross loans outstanding (including covered loans) were $1.87 billion, an increase of $211.7 million, or 12.8%, compared to balances at March 31, 2010. Covered loans
increased $402.2 million, from $123.8 million at March 31, 2010 to $526.0 million at March 31, 2011. This increase in covered loans is due to the FDIC-assisted transactions completed during 2010. The Companys participation in
FDIC-assisted acquisitions was integral to being able to maintain a certain level of loans because management does not feel that enough loan opportunities with acceptable quality and profitability exist in our current market areas to stabilize and
increase. Decreases in non-covered loans over the past year reflect this trend, with non-covered loans decreasing by $190.5 million, or 12.4%, from $1.54 billion at March 31, 2010 to $1.35 billion at March 31, 2011.

The decline in loans also reflects managements focus on reducing higher risk loans within the Banks loan portfolio as well as the slower
economic environment that persisted throughout 2009 and 2010. The Company regularly monitors the composition of the loan portfolio to evaluate the adequacy of the allowance for loan losses in light of the impact that changes in the economic
environment may have on the loan portfolio.

The Company focuses on the following loan categories: (1) commercial, financial and
agricultural, (2) residential real estate, (3) commercial and farmland real estate, (4) construction and development related real estate, and (5) consumer. The Companys management has strategically located its branches
in select markets in south and southeast Georgia, north Florida, southeast Alabama and throughout South Carolina to take advantage of the growth in these areas.

The Companys risk management processes include a loan review program designed to evaluate the credit risk in the loan portfolio and ensure credit grade accuracy. Through the loan review
process, the Company conducts (1) a loan portfolio summary analysis, (2) charge-off and recovery analysis, (3) trends in accruing problem loan analysis, and (4) problem and past due loan analysis. This analysis process
serves as a tool to assist management in assessing the overall quality of the loan portfolio and the adequacy of the allowance for loan losses. Loans classified as substandard are loans which are inadequately protected by the
current sound worth and paying capacity of the borrower or of the collateral pledged. These assets exhibit a well-defined weakness or are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are
not corrected. These weaknesses may be characterized by past due performance, operating losses and/or questionable collateral values. Loans classified as doubtful are those loans that have characteristics similar to substandard
loans but have an increased risk of loss. Loans classified as loss are those loans which are considered uncollectible and are in the process of being charged-off.



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The allowance for loan losses is a reserve established through charges to earnings in the form of a
provision for loan losses. The provision for loan losses is based on managements evaluation of the size and composition of the loan portfolio, the level of non-performing and past due loans, historical trends of charged-off loans and
recoveries, prevailing economic conditions and other factors management deems appropriate. The Companys management has established an allowance for loan losses which it believes is adequate for the risk of loss inherent in the loan
portfolio. Based on a credit evaluation of the loan portfolio, management presents a monthly review of the allowance for loan losses to the Companys Board of Directors. The review that management has developed primarily focuses on
risk by evaluating individual loans in certain risk categories. These categories have also been established by management and take the form of loan grades. By grading the loan portfolio in this manner the Companys management is able
to effectively evaluate the portfolio by risk, which management believes is the most effective way to analyze the loan portfolio and thus analyze the adequacy of the allowance for loan losses.

The allowance for loan losses is established by examining (1) the large classified loans, nonaccrual loans and loans considered impaired and evaluating them individually to determine the specific
reserve allocation, and (2) the remainder of the loan portfolio to allocate a portion of the allowance based on past loss experience and the economic conditions for the particular loan category. The Company also considers other factors
such as changes in lending policies and procedures; changes in national, regional, and/or local economic and business conditions; changes in the nature and volume of the loan portfolio; changes in the experience, ability and depth of either the bank
president or lending staff; changes in the volume and severity of past due and classified loans; changes in the quality of the Companys corporate loan review system; and other factors management deems appropriate.

For the three month period ended March 31, 2011, the Company recorded net charge-offs totaling $6.2 million compared to $13.0 million for the
period ended March 31, 2010. The provision for loan losses for the three months ended March 31, 2011 decreased to $7.1 million compared to $10.8 million during the three month period ended March 31, 2010. At the end of the
first quarter of 2011, the allowance for loan losses totaled $35.4 million, or 2.63% of total loans, compared to $34.6 million, or 2.52% of total loans, at December 31, 2010 and $33.6 million, or 2.18% of total loans, at March 31, 2010.

The following table presents an analysis of the allowance for loan losses for the three month periods ended March 31, 2011 and
March 31, 2010:



|                                                                    |  |               |        |   |               |   |        |  
|------------------------------------------------------------------- |  | ------------- | ------ | - | ------------- | - | ------ | -
|(Dollars in Thousands)                                              |  | March 31,2011 |        |   | March 31,2010 |  
|Balance of allowance for loan losses at beginning of period         |  | $             | 34,576 |   |               | $ | 35,762 |  
|Provision charged to operating expense                              |  |               | 7,092  |   |               |   | 10,770 |  
|Charge-offs:                                                        |  |               |        |   |               |   |        |  
|Commercial, financial and agricultural                              |  |               | 1,113  |   |               |   | 2,008  |  
|Real estate  residential                                           |  |               | 809    |   |               |   | 924    |  
|Real estate  commercial and farmland                               |  |               | 2,557  |   |               |   | 4,593  |  
|Real estate  construction and development                          |  |               | 2,425  |   |               |   | 5,576  |  
|Consumer installment                                                |  |               | 163    |   |               |   | 145    |  
|Other                                                               |  |               |       |   |               |   |       |  
|                                                                    |  |               |        |   |               |   |        |  
|Total charge-offs                                                   |  |               | 7,067  |   |               |   | 13,246 |  
|                                                                    |  |               |        |   |               |   |        |  
|Recoveries:                                                         |  |               |        |   |               |   |        |  
|Commercial, financial and agricultural                              |  |               | 20     |   |               |   | 78     |  
|Real estate  residential                                           |  |               | 14     |   |               |   | 28     |  
|Real estate  commercial and farmland                               |  |               | 2      |   |               |   | 64     |  
|Real estate  construction and development                          |  |               | 772    |   |               |   | 64     |  
|Consumer installment                                                |  |               | 34     |   |               |   | 43     |  
|Other                                                               |  |               |       |   |               |   |       |  
|                                                                    |  |               |        |   |               |   |        |  
|Total recoveries                                                    |  |               | 842    |   |               |   | 277    |  
|                                                                    |  |               |        |   |               |   |        |  
|Net charge-offs                                                     |  |               | 6,225  |   |               |   | 12,969 |  
|                                                                    |  |               |        |   |               |   |        |  
|Balance of allowance for loan losses at end of period               |  | $             | 35,443 |   |               | $ | 33,563 |  
|                                                                    |  |               |        |   |               |   |        |  
|Net annualized charge-offs as a percentage of average loans         |  |               | 1.88   | % |               |   | 3.32   | %
|Allowance for loan losses as a percentage of loans at end of Period |  |               | 2.63   | % |               |   | 2.18   | %



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##### Table of Contents

Assets Covered by Loss-Sharing Agreements with the FDIC

Loans that were acquired in FDIC-assisted transactions that are covered by the loss-sharing agreements with the FDIC (covered loans) totaled
$526.0 million, $555.0 million and $120.4 million at March 31, 2011, December 31, 2010 and March 31, 2010, respectively. OREO that is covered by the loss- sharing agreements with the FDIC totaled $59.8 million, $54.9 million and
$17.9 million at March 31, 2011, December 31, 2010 and March 31, 2010, respectively. The loss-sharing agreements are subject to the servicing procedures as specified in the agreements with the FDIC. The expected reimbursements
under the loss-sharing agreements were recorded as an indemnification asset at their estimated fair value of $168.9 million and $45.8 million on the 2010 and 2009 acquisition dates, respectively. The FDIC loss-share receivable reported at
March 31, 2011, December 31, 2010 and March 31, 2010 was $167.2 million, $177.2 million and $47.6 million, respectively.

The Bank recorded the loans at their fair values, taking into consideration certain credit quality, risk and liquidity marks. The Company is confident in
its estimation of credit risk and its adjustments to the carrying balances of the acquired loans. If the Company determines that a loan or group of loans has deteriorated from its initial assessment of fair value, a reserve for loan losses will be
established to account for that difference. During the three months ended March 31, 2011 and the year ended December 31, 2010, the Company recorded provision for loan loss expense of $76,000 and $1.7 million, respectively, to account for
losses where the initial estimate of cash flows was found to be excessive on loans acquired in FDIC-assisted transactions. If the Company determines that a loan or group of loans has improved from its initial assessment of fair value, the increase
in cash flows over those expected at the acquisition date are recognized as interest income prospectively.

Covered loans are shown below
according to loan type as of the end of the periods shown:



|                                           |  |               |         |  |                  |   |         |               |  |   |         | 
|------------------------------------------ |  | ------------- | ------- |  | ---------------- | - | ------- | ------------- |  | - | ------- | 
|(Dollars in Thousands)                     |  | March 31,2011 |         |  | December 31,2010 |   |         | March 31,2010 | 
|Commercial, financial and agricultural     |  | $             | 45,954  |  |                  | $ | 47,309  |               |  | $ | 18,923  | 
|Real estate  construction and development |  |               | 89,356  |  |                  |   | 89,781  |               |  |   | 19,057  | 
|Real estate  commercial and farmland      |  |               | 242,153 |  |                  |   | 257,428 |               |  |   | 54,044  | 
|Real estate  residential                  |  |               | 140,239 |  |                  |   | 149,226 |               |  |   | 22,306  | 
|Consumer installment                       |  |               | 8,310   |  |                  |   | 11,247  |               |  |   | 6,034   | 
|                                           |  |               |         |  |                  |   |         |               |  |   |         | 
|                                           |  | $             | 526,012 |  |                  | $ | 554,991 |               |  | $ | 120,364 | 
|                                           |  |               |         |  |                  |   |         |               |  |   |         | 

Non-Performing Assets

Non-performing assets include nonaccrual loans, accruing loans contractually past due 90 days or more, repossessed personal property, and other real estate owned. Loans are placed on nonaccrual
status when management has concerns relating to the ability to collect the principal and interest and generally when such loans are 90 days or more past due. Management performs a detailed review and valuation assessment of impaired loans on a
quarterly basis and recognizes losses when impairment is identified. A loan is considered impaired when it is probable that not all principal and interest amounts will be collected according to the loan contract. When a loan is placed on
nonaccrual status, any interest previously accrued but not collected is reversed against current income.

For the quarter ended March 31,
2011, nonaccrual or impaired loans totaled $68.4 million, a decrease of approximately $10.9 million since December 31, 2010. The decrease in nonaccrual loans is due to success in the foreclosure and resolution process as well as a
significant slowdown in the formation of new problem credits. Non-performing assets as a percentage of total assets were 4.48%, 4.62% and 5.29% at March 31, 2011, December 31, 2010 and March 31, 2010, respectively.

Non-performing assets at March 31, 2011, December 31, 2010 and March 31, 2010 were as follows:



|                                                   |  |               |         |  |                  |   |         |               |  |   |         | 
|-------------------------------------------------- |  | ------------- | ------- |  | ---------------- | - | ------- | ------------- |  | - | ------- | 
|(Dollars in Thousands)                             |  | March 31,2011 |         |  | December 31,2010 |   |         | March 31,2010 | 
|Total nonaccrual loans                             |  | $             | 68,391  |  |                  | $ | 79,289  |               |  | $ | 89,649  | 
|Accruing loans delinquent 90 days or more          |  |               |        |  |                  |   |        |               |  |   |        | 
|Other real estate owned and repossessed collateral |  |               | 62,258  |  |                  |   | 57,916  |               |  |   | 34,683  | 
|                                                   |  |               |         |  |                  |   |         |               |  |   |         | 
|Total non-performing assets                        |  | $             | 130,649 |  |                  | $ | 137,205 |               |  | $ | 124,332 | 
|                                                   |  |               |         |  |                  |   |         |               |  |   |         | 



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##### Table of Contents

Commercial Lending Practices

On December 12, 2006, the Federal Bank Regulatory Agencies released guidance on Concentration in Commercial Real Estate Lending. This guidance defines commercial real estate
(CRE) loans as loans secured by raw land, land development and construction (including 1-4 family residential construction), multi-family property, and non-farm nonresidential property where the primary or a significant source of
repayment is derived from rental income associated with the property, excluding owner occupied properties (loans for which 50% or more of the source of repayment is derived from the ongoing operations and activities conducted by the party, or
affiliate of the party, who owns the property) or the proceeds of the sale, refinancing, or permanent financing of the property. Loans for owner occupied CRE are generally excluded from the CRE guidance.

The CRE guidance is applicable when either:



|(1) | total loans for construction, land development, and other land, net of owner occupied loans, represent 100% or more of a banks total risk-based capital;
or
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | total loans secured by multifamily and nonfarm nonresidential properties and loans for construction, land development, and other land, net of owner occupied
loans, represent 300% or more of a banks total risk-based capital.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Banks that are subject to the CRE
guidances criteria are required to implement enhanced strategic planning, CRE underwriting policies, risk management and internal controls, portfolio stress testing, risk exposure limits, and other policies, including management
compensation and incentives, to address the CRE risks. Higher allowances for loan losses and capital levels may also be appropriate.

As of
March 31, 2011, the Company exhibited a concentration in CRE loans based on Federal Reserve Call codes. The primary risks of CRE lending are:



|(1) | within CRE loans, construction and development loans are somewhat dependent upon continued strength in demand for residential real estate, which is
reliant on favorable real estate mortgage rates and changing population demographics;
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | on average, CRE loan sizes are generally larger than non-CRE loan types; and
|--- | ----------------------------------------------------------------------------



|(3) | certain construction and development loans may be less predictable and more difficult to evaluate and monitor.
|--- | --------------------------------------------------------------------------------------------------------------

The following table outlines CRE loan categories and CRE loans as a percentage of total loans as of March 31, 2011 and December 31,
2010. The loan categories and concentrations below are based on Federal Reserve Call codes and include covered loans.



|                                   |  |                |           |  |                   |  |     |         |  |   |                 |  |  |  |     |  
|---------------------------------- |  | -------------- | --------- |  | ----------------- |  | --- | ------- |  | - | --------------- |  |  |  | --- | -
|(Dollars in Thousands)             |  | March 31, 2011 |           |  | December 31, 2010 | 
|                                   |  | Balance        |           |  | % of TotalLoans   |  |     | Balance |  |   | % of TotalLoans | 
|Construction and development loans |  | $              | 242,218   |  |                   |  | 13  | %       |  | $ | 250,211         |  |  |  | 13  | %
|Multi-family loans                 |  |                | 56,137    |  |                   |  | 3   | %       |  |   | 55,121          |  |  |  | 3   | %
|Nonfarm non-residential loans      |  |                | 740,313   |  |                   |  | 39  | %       |  |   | 760,598         |  |  |  | 39  | %
|                                   |  |                |           |  |                   |  |     |         |  |   |                 |  |  |  |     |  
|Total CRE Loans                    |  | $              | 1,038,668 |  |                   |  | 55  | %       |  | $ | 1,065,930       |  |  |  | 55  | %
|All other loan types               |  |                | 833,325   |  |                   |  | 45  | %       |  |   | 863,818         |  |  |  | 45  | %
|                                   |  |                |           |  |                   |  |     |         |  |   |                 |  |  |  |     |  
|Total Loans                        |  | $              | 1,871,993 |  |                   |  | 100 | %       |  | $ | 1,929,748       |  |  |  | 100 | %
|                                   |  |                |           |  |                   |  |     |         |  |   |                 |  |  |  |     |  

The following table outlines the percent of total CRE loans, net owner occupied loans to total risk-based
capital, and the Companys internal concentration limits as of March 31, 2011 and December 31, 2010.



|                             |  |          |     |   |                |  |     |                   |  |  |     |  
|---------------------------- |  | -------- | --- | - | -------------- |  | --- | ----------------- |  |  | --- | -
|                             |  | Internal |     |   | March 31, 2011 |  |     | December 31, 2010 | 
|                             |  | Limit    |     |   | Actual         |  |     | Actual            | 
|Construction and development |  |          | 100 | % |                |  | 76  | %                 |  |  | 79  | %
|                             |  |          |    
|Commercial real estate       |  |          | 300 | % |                |  | 249 | %                 |  |  | 257 | %



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##### Table of Contents

Short-Term Investments

The Companys short-term investments are comprised of federal funds sold and interest bearing balances. At March 31, 2011, the Companys short-term investments were $264.5 million,
compared to $261.3 million and $200.9 million at December 31, 2010 and March 31, 2010, respectively. At March 31, 2011, approximately 89.2% of the balance was comprised of interest bearing balances, the majority of which were at the
FHLB.

Derivative Instruments and Hedging Activities

The Company had cash flow hedges with notional amounts totaling $35.0 million at March 31, 2011, December 31, 2010 and March 31, 2010, for the purpose of converting floating rate loans
to fixed rate. The Company had a cash flow hedge with notional amount of $37.1 million at March 31, 2011 and December 31, 2010 for the purpose of converting the variable rate on the junior subordinated debentures to fixed rate. The
fair value of these instruments amounted to approximately $598,000, $936,000 and $1.8 million as of March 31, 2011, December 31, 2010 and March 31, 2010, respectively, and was recorded as an asset. No hedge ineffectiveness
from cash flow hedges was recognized in the statement of operations. All components of each derivatives gain or loss are included in the assessment of hedge effectiveness.

Capital

Capital management consists of providing equity to support both current and
anticipated future operations. The Company is subject to capital adequacy requirements imposed by the Federal Reserve Board (the FRB) and the Georgia Department of Banking and Finance (the GDBF), and the Bank is
subject to capital adequacy requirements imposed by the FDIC and the GDBF.

The FRB, the FDIC and the GDBF have adopted risk-based
capital requirements for assessing bank holding company and bank capital adequacy. These standards define and establish minimum capital requirements in relation to assets and off-balance sheet exposure, adjusted for credit risk. The
risk-based capital standards currently in effect are designed to make regulatory capital requirements more sensitive to differences in risk profiles among bank holding companies and banks and to account for off-balance sheet exposure. The
regulatory capital standards are defined by three key measurements.

a) The Leverage Ratio is defined as Tier
1 capital to average assets. To be considered adequately capitalized under this measurement, a bank must maintain a leverage ratio greater than or equal to 4.00%. For a bank to be considered well capitalized, it
must maintain a leverage ratio greater than or equal to 5.00%.

b) The Core Capital Ratio is defined as Tier 1
capital to total risk weighted assets. To be considered adequately capitalized under this measurement, a bank must maintain a core capital ratio greater than or equal to 4.00%. For a bank to be considered well
capitalized, it must maintain a core capital ratio greater than or equal to 6.00%.

c) The Total Capital
Ratio is defined as total capital to total risk weighted assets. To be considered adequately capitalized under this measurement, a bank must maintain a total capital ratio greater than or equal to 8.00%. For a bank to be
considered well capitalized, it must maintain a total capital ratio greater than or equal to 10.00%.

As of March 31, 2011,
under the regulatory capital standards, the Bank was considered well capitalized under all capital measurements. The following table sets forth the regulatory capital ratios of Ameris at March 31, 2011, December 31,
2010 and March 31, 2010.



|                                                           |  |               |       |   |                  |  |       |               |  |  |       |  
|---------------------------------------------------------- |  | ------------- | ----- | - | ---------------- |  | ----- | ------------- |  |  | ----- | -
|                                                           |  | March 31,2011 |       |   | December 31,2010 |  |       | March 31,2010 | 
|Leverage Ratio(tier 1 capital to average assets)           |  |               |       |   |                  |  |       |               |  |  |       |  
|Consolidated                                               |  |               | 10.34 | % |                  |  | 11.34 | %             |  |  | 9.54  | %
|Ameris Bank                                                |  |               | 10.15 |   |                  |  | 11.05 |               |  |  | 9.26  |  
|Core Capital Ratio(tier 1 capital to risk weighted assets) |  |               |       |   |                  |  |       |               |  |  |       |  
|Consolidated                                               |  |               | 18.11 |   |                  |  | 18.19 |               |  |  | 13.83 |  
|Ameris Bank                                                |  |               | 17.69 |   |                  |  | 17.62 |               |  |  | 13.38 |  
|Total Capital Ratio(total capital to risk weighted assets) |  |               |       |   |                  |  |       |               |  |  |       |  
|Consolidated                                               |  |               | 19.37 |   |                  |  | 19.45 |               |  |  | 15.09 |  
|Ameris Bank                                                |  |               | 18.95 |   |                  |  | 18.88 |               |  |  | 14.64 |  



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##### Table of Contents

Capital Purchase Program

On November 21, 2008, the Company, elected to participate in the Capital Purchase Program (CPP) established under the Emergency Economic Stabilization Act of 2008
(EESA). Accordingly, on such date, the Company issued and sold to the United States Treasury (Treasury), for an aggregate cash purchase price of $52 million, (i) 52,000 shares (the Preferred Shares) of
the Companys fixed rate Cumulative Perpetual Preferred Stock, Series A, having a liquidation preference of $1,000 per share, and (ii) a ten-year warrant (the Warrant) to purchase up to 679,443 shares of the Companys
common stock, par value $1.00 per share (the Common Stock), at an exercise price of $11.48 per share. The issuance and sale of these securities was a private placement exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933, as amended.

Cumulative dividends on the Preferred Shares will accrue on the liquidation preference at a rate of
5% per annum for the first five years and at a rate of 9% per annum thereafter, but such dividends will be paid only if, as and when declared by the Companys Board of Directors. The Preferred Shares have no maturity date and
rank senior to the Common Stock (and pari passu with the Companys other authorized preferred stock, of which no shares are currently designated or outstanding) with respect to the payment of dividends and distributions and amounts payable upon
liquidation, dissolution and winding up of the Company. Subject to the approval of the Board of Governors of the Federal Reserve System, the Preferred Shares are redeemable at the option of the Company at 100% of their liquidation preference.

The Purchase Agreement pursuant to which the Preferred Shares and the Warrant were sold contains limitations on the payment of dividends on
the Common Stock (including with respect to the payment of cash dividends in excess of $0.05 per share, which was the amount of the last regular dividend declared by the Company prior to October 14, 2008) and on the Companys ability to
repurchase its Common Stock, and subjects the Company to certain of the executive compensation limitations included in the EESA.

Interest
Rate Sensitivity and Liquidity

The Companys primary market risk exposures are credit, interest rate risk, and to a lesser degree,
liquidity risk. The Bank operates under an Asset Liability Management Policy approved by the Companys Board of Directors and the Asset and Liability Committee (the ALCO Committee). The policy outlines limits on interest
rate risk in terms of changes in net interest income and changes in the net market values of assets and liabilities over certain changes in interest rate environments. These measurements are made through a simulation model which projects the
impact of changes in interest rates on the Banks assets and liabilities. The policy also outlines responsibility for monitoring interest rate risk, and the process for the approval, implementation and monitoring of interest rate risk
strategies to achieve the Banks interest rate risk objectives.

The ALCO Committee is comprised of senior officers of Ameris and
two outside members of the Companys Board of Directors. The ALCO Committee makes all strategic decisions with respect to the sources and uses of funds that may affect net interest income, including net interest spread and net interest
margin. The objective of the ALCO Committee is to identify the interest rate, liquidity and market value risks of the Companys balance sheet and use reasonable methods approved by the Companys board and executive management to
minimize those identified risks.

The normal course of business activity exposes the Company to interest rate risk. Interest rate risk is
managed within an overall asset and liability framework for the Company. The principal objectives of asset and liability management are to predict the sensitivity of net interest spreads to potential changes in interest rates, control risk and
enhance profitability. Funding positions are kept within predetermined limits designed to properly manage risk and liquidity. The Company employs sensitivity analysis in the form of a net interest income simulation to help characterize the
market risk arising from changes in interest rates. In addition, fluctuations in interest rates usually result in changes in the fair market value of the Companys financial instruments, cash flows and net interest income. The
Companys interest rate risk position is managed by the ALCO Committee.

The Company uses a simulation modeling process to measure
interest rate risk and evaluate potential strategies. Interest rate scenario models are prepared using software created and licensed from an outside vendor. The Companys simulation includes all financial assets and
liabilities. Simulation results quantify interest rate risk under various interest rate scenarios. Management then develops and implements appropriate strategies. ALCO has determined that an acceptable level of interest rate risk
would be for net interest income to decrease no more than 5.00% given a change in selected interest rates of 200 basis points over any 24-month period.

Liquidity management involves the matching of the cash flow requirements of customers, who may be either depositors desiring to withdraw funds or borrowers needing assurance that sufficient funds will be
available to meet their credit needs, and the ability of Ameris to manage those requirements. The Company strives to maintain an adequate liquidity position by managing the balances and maturities of interest-earning assets and interest-bearing
liabilities so that the balance it has in short-term investments at any given time will adequately cover any reasonably anticipated immediate need for funds. Additionally, the Bank maintains relationships with correspondent banks, which could
provide funds on short notice, if needed. The Company has invested in FHLB stock for the purpose of establishing credit lines with the FHLB. The credit availability to the Bank is equal to 20% of the Banks total assets as
reported on the most recent quarterly financial information submitted to the regulators subject to the pledging of sufficient collateral. At March 31, 2011, there were no outstanding borrowings with the Companys correspondent banks, compared
to $43.5 million at December 31, 2010 and $2.0 million at March 31, 2010.



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The following liquidity ratios compare certain assets and liabilities to total deposits or total assets:



|                                                           |  |               |       |   |                  |  |       |                   |  |  |              |   |  |               |       |   |  |  |       |  
|---------------------------------------------------------- |  | ------------- | ----- | - | ---------------- |  | ----- | ----------------- |  |  | ------------ | - |  | ------------- | ----- | - |  |  | ----- | -
|                                                           |  | March 31,2011 |       |   | December 31,2010 |  |       | September 30,2010 |  |  | June 30,2010 |   |  | March 31,2010 |      
|Investment securities available for sale to total deposits |  |               | 11.76 | % |                  |  | 12.72 | %                 |  |  | 11.25        | % |  |               | 11.44 | % |  |  | 11.88 | %
|Loans (net of unearned income) to total deposits(1)        |  |               | 52.32 | % |                  |  | 54.22 | %                 |  |  | 69.36        | % |  |               | 71.78 | % |  |  | 73.58 | %
|Interest-earning assets to total assets                    |  |               | 83.63 | % |                  |  | 84.57 | %                 |  |  | 89.99        | % |  |               | 89.30 | % |  |  | 89.74 | %
|Interest-bearing deposits to total deposits                |  |               | 87.71 | % |                  |  | 88.09 | %                 |  |  | 88.77        | % |  |               | 89.52 | % |  |  | 89.35 | %



|(1) | Loans exclude covered assets where appropriate
|--- | ----------------------------------------------

The liquidity resources of the Company are monitored continuously by the ALCO Committee and on a periodic basis by state and federal regulatory
authorities. As determined under guidelines established by these regulatory authorities, the Companys and the Banks liquidity ratios at March 31, 2011 were considered satisfactory. The Company is aware of no events or
trends likely to result in a material change in liquidity.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

The Company is exposed only to U.S. dollar interest rate changes, and, accordingly, the Company manages exposure by considering the possible changes in the net interest margin. The Company does not
have any trading instruments nor does it classify any portion of the investment portfolio as held for trading. The Companys hedging activities are limited to cash flow hedges and are part of the Companys program to manage interest
rate sensitivity. At March 31, 2011, the Company had one effective interest rate floor with a notional amount totaling $35 million and one effective LIBOR rate swap with a notional amount of $37.1 million. The floor is
a hedging specific cash flow associated with certain variable rate loans, has a strike rate of 7.00% and matures August 2011. The LIBOR rate swap exchanges fixed rate payments of 4.15% for floating rate payments based on the
three month LIBOR and matures December 2018. Finally, the Company has no exposure to foreign currency exchange rate risk, commodity price risk and other market risks.

Interest rates play a major part in the net interest income of a financial institution. The sensitivity to rate changes is known as interest rate risk. The repricing of interest-earning
assets and interest-bearing liabilities can influence the changes in net interest income. As part of the Companys asset/liability management program, the timing of repriced assets and liabilities is referred to as Gap
management.

The Company uses simulation analysis to monitor changes in net interest income due to changes in market interest
rates. The simulation of rising, declining and flat interest rate scenarios allows management to monitor and adjust interest rate sensitivity to minimize the impact of market interest rate swings. The analysis of the impact on net interest
income over a twelve-month period is subjected to a gradual 200 basis point increase or decrease in market rates on net interest income and is monitored on a quarterly basis.

Additional information required by Item 305 of Regulation S-K is set forth under Part I, Item 2 of this report.



|Item 4. | Controls and Procedures
|------- | -----------------------

The
Companys Chief Executive Officer and Chief Financial Officer have evaluated the Companys disclosure controls and procedures (as such term is defined in Rules 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act of 1934,
as amended (the Exchange Act)), as of the end of the period covered by this report, as required by paragraph (b) of Rules 13a-15 or 15d-15 of the Exchange Act. Based on such evaluation, such officers have concluded that, as of
the end of the period covered by this report, the Companys disclosure controls and procedures are effective.



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During the quarter ended March 31, 2011, there was no change in the Companys internal control
over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 of the Exchange Act that has materially affected, or is reasonably likely to materially affect, the Companys
internal control over financial reporting.

PART II - OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

Nothing to report with respect to the period covered by this report.



|Item 1A. | Risk Factors
|-------- | ------------

There have
been no material changes to the risk factors disclosed in Item 1A. of Part 1 in our Annual Report on Form 10-K for the year ended December 31, 2010.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

None.



|Item 3. | Defaults upon Senior Securities
|------- | -------------------------------

None.



|Item 4. | (Removed and Reserved)
|------- | ----------------------



|Item 5. | Other Information
|------- | -----------------

None.



|Item 6. | Exhibits
|------- | --------

The exhibits
required to be furnished with this report are listed on the exhibit index attached hereto.



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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



|                   |  |  |  |                                                                           
|------------------ |  |  |  | --------------------------------------------------------------------------
|                   |  |  |  | AMERIS BANCORP                                                            
|Date: May 10, 2011 |  |  |  |                                                                           
|                   |  |  |  | /s/ Dennis J. Zember Jr.                                                  
|                   |  |  |  | Dennis J. Zember Jr.,                                                     
|                   |  |  |  | Executive Vice President and Chief Financial Officer                      
|                   |  |  |  | (duly authorized signatory and principal accounting and financial officer)



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EXHIBIT INDEX



|           |  |                                                                                                                                                                                                                   
|---------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNo. |  | Description                                                                                                                                                                                                       
|           | 
|3.1        |  | Articles of Incorporation of Ameris Bancorp, as amended (incorporated by reference to Exhibit 2.1 to Ameris Bancorps Regulation A Offering Statement on Form 1-A filed
August 14, 1987).                         
|           | 
|3.2        |  | Amendment to Amended Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.1.1 to Ameris Bancorps Form 10-K filed March 28,
1996).                                                 
|           | 
|3.3        |  | Amendment to Amended Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 4.3 to Ameris Bancorps Registration Statement on Form S-4 filed
with the Commission on July 17, 1996).    
|           | 
|3.4        |  | Articles of Amendment to the Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.5 to Ameris Bancorps Annual Report on Form 10-K filed
with the Commission on March 25, 1998).   
|           | 
|3.5        |  | Articles of Amendment to the Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.7 to Ameris Bancorps Annual Report on Form 10-K filed with the
Commission on March 26, 1999).   
|           | 
|3.6        |  | Articles of Amendment to the Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.9 to Ameris Bancorps Annual Report on Form 10-K filed with the
Commission on March 31, 2003).   
|           | 
|3.7        |  | Articles of Amendment to the Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.1 to Ameris Bancorps Current Report on Form 8-K filed
with the Commission on December 1, 2005). 
|           | 
|3.8        |  | Articles of Amendment to the Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.1 to Ameris Bancorps Current Report on Form 8-K filed with the
Commission on November 21, 2008).
|           | 
|3.9        |  | Amended and Restated Bylaws of Ameris Bancorp (incorporated by reference to Exhibit 3.1 to Ameris Bancorps Current Report on Form 8-K filed with the Commission on
March 14, 2005).                              
|           | 
|31.1       |  | Rule 13a-14(a)/15d-14(a) Certification by the Companys Chief Executive Officer                                                                                                                                   
|           | 
|31.2       |  | Rule 13a-14(a)/15d-14(a) Certification by the Companys Chief Financial Officer                                                                                                                                   
|           | 
|32.1       |  | Section 1350 Certification by the Companys Chief Executive Officer                                                                                                                                               
|           | 
|32.2       |  | Section 1350 Certification by the Companys Chief Financial Officer                                                                                                                                               



40