Ameris Bank Loses $79 Million Jury Verdict in Whistleblower Suit
Litigation Loss
Company Background
Ameris Bancorp is the Atlanta-based holding company for Ameris Bank, a state-chartered institution operating 163 financial centers across the Southeast with $28.1 billion in total assets as of March 31, 2026. The company runs several specialty lending and fee-generating businesses alongside its core banking division, including a retail mortgage division, premium finance operation, warehouse lending, and an equipment finance division.
Financially, Ameris has been in a sustained period of strong performance. Net income for the first quarter of 2026 was $110.5 million, or $1.63 per diluted share, with a return on assets of 1.62%. Full-year 2025 net income was $412.2 million, up 15% from 2024. Tangible common equity to tangible assets stood at 11.15% and the CET1 ratio was estimated at 13.0% as of March 31, 2026, both well above regulatory minimums.
The equipment finance division, the business at the center of the lawsuit, contributes fee income disclosed separately in Ameris's financial statements—approximately $9 million per quarter in recent periods—and is part of the banking division segment that generated $88.5 million in net income in Q1 2026.
What Was Disclosed
A federal jury in the U.S. District Court for the Central District of California returned a verdict on June 12, 2026 against Ameris Bank on all counts in a lawsuit brought by Patrick Byrne, who served as chief executive officer of the bank's equipment finance division from December 2021 through June 2024. The jury awarded Byrne $16.525 million in economic and non-economic damages, plus associated statutory penalties, and approximately $62.9 million in punitive damages.
Byrne had filed the complaint on September 16, 2024, alleging wrongful termination, violations of whistleblower protection laws, nonpayment of wages and related penalties, and breach of contract. The complaint was subsequently amended with leave of the court during trial. The jury trial commenced June 1, 2026.
Ameris stated it disagrees with the verdict and believes it is not supported by the facts or applicable law, and intends to appeal. The company said it is evaluating the potential impact of the verdict, including whether an accrual is required for financial reporting purposes and the amount thereof, and acknowledged that the final resolution of the matter could have a material adverse effect on results of operations, financial condition, and liquidity.
Why It Matters
At roughly $79 million before statutory penalties, the verdict represents approximately 71% of a single quarter's net income for a company currently earning about $110 million per quarter. Under ASC 450, Ameris must accrue for a loss contingency if the outcome is probable and the amount can be reasonably estimated. Having lost on every count at trial, the company faces meaningful pressure to establish a reserve in its Q2 2026 financial statements, with the precise amount and timing contingent on management's assessment and any post-trial motions. No accrual has been disclosed to date.
The punitive award of approximately $62.9 million—nearly four times the compensatory amount of $16.525 million—indicates the jury found the bank's conduct particularly egregious. That ratio is within the range courts have upheld under constitutional due process review, though California state courts and federal courts applying California law have at times reduced large punitive awards on post-trial or appellate review. Ameris will have the opportunity to challenge the verdict through post-trial motions and, if necessary, an appeal to the Ninth Circuit.
The whistleblower allegations are also notable from a governance standpoint, as the complaint asserts Byrne was retaliated against for protected reporting activity. The filing does not identify what Byrne allegedly reported internally, and that information has not been publicly disclosed. The equipment finance division he led continues to operate as a going business, generating fee income reported in Ameris's quarterly financial statements.
