Understanding Ameris Bancorp Common Stock and Preferred Stock

Are you considering investing in Ameris Bancorp but are unsure about the differences between its common stock and preferred stock? Look no further! In this article, we'll delve into the nuances of these two investment options to help you make an informed decision.

What is Ameris Bancorp?

Ameris Bancorp is a financial holding company based in Columbus, Georgia. The company operates through its banking subsidiary, Ameris Bank, which provides a range of financial services to individuals, businesses, and communities across the Southeastern United States.

Common Stock: The Basics

Common stock represents ownership in a company. When you purchase common stock, you become a shareholder and have the potential to receive dividends and capital gains if the company performs well. However, common stockholders are the last to receive distributions in the event of bankruptcy or liquidation.

Key Features of Ameris Bancorp Common Stock:

• Dividends: Common stockholders are eligible to receive dividends, but these payments are not guaranteed and can fluctuate based on the company's profitability.
• Voting Rights: Common stockholders have voting rights, allowing them to participate in company decisions, such as electing the board of directors.
• Capital Gains: If the company's stock price increases, common stockholders can benefit from capital gains when they sell their shares.

Preferred Stock: A Different Approach

Preferred stock is a hybrid security that combines features of both common stock and bonds. It offers fixed dividends and is typically more senior in terms of claim on assets and earnings than common stock. However, preferred stockholders usually do not have voting rights.

Key Features of Ameris Bancorp Preferred Stock:

• Fixed Dividends: Preferred stockholders receive fixed dividends, which are paid out before common stock dividends.
• Seniority: In the event of bankruptcy or liquidation, preferred stockholders have a higher claim on assets and earnings than common stockholders.
• Lack of Voting Rights: Preferred stockholders typically do not have voting rights, as their primary focus is on receiving fixed dividends.

Case Study: Ameris Bancorp Common Stock vs. Preferred Stock

Let's consider a hypothetical scenario to illustrate the differences between Ameris Bancorp common stock and preferred stock. Suppose you have $10,000 to invest in Ameris Bancorp.

• Common Stock: You could purchase 1,000 shares of common stock at 10 per share. If the company's stock price increases to 15 per share, you would have a capital gain of 5,000. Additionally, if the company pays a dividend of 1 per share, you would receive $1,000 in dividends.
• Preferred Stock: You could purchase 1,000 shares of preferred stock at 10 per share. If the company pays a fixed dividend of 1 per share, you would receive $1,000 in dividends. However, you would not have voting rights or the potential for capital gains.

In this example, the common stock offers the potential for capital gains and voting rights, while the preferred stock provides a fixed dividend and seniority in the event of bankruptcy or liquidation.

Conclusion

Understanding the differences between Ameris Bancorp common stock and preferred stock is crucial for investors looking to diversify their portfolios. By weighing the potential benefits and risks of each investment option, you can make an informed decision that aligns with your financial goals and risk tolerance.