Ameris Bancorp (ABCB) 26 Jul 242024 Q2 Earnings call transcript

Good day, and welcome to the Ameris Bancorp Second Quarter Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Nicole Stokes, Chief Financial Officer. Please go ahead.

Thank you, Alan, and thank you to all who have joined our call today.

amerisbank.com. I'm will that the Investor Doug are of website we the release Relations Strange, call, Palmer our highlights by Officer. financial available at our the Chief be CEO; press referencing and section Proctor, Credit During our today and joined on the general with we I open for and Q&A. will financial discuss Palmer will comments, our before begin the results some opening then details of up

subject forward-looking I'll We obligation begin, our you new risks statements. any actual result These The by remind SEC in are which will the as list the certain factors materially. a early to include information, law. Also we statements Before we that results discuss comments results are except statements financial on press assume our non-GAAP filings, update might during website. in that available forward-looking in as release of our or to We developments company's measures of vary our otherwise, uncertainties. and do cause may could differ call, performance. and required to to the any reference some not

presentation. And can over that, You reconciliation measures our these GAAP I'll measures our in opening to appendix turn of financial it comments. for to the Palmer and see with

second for Thank year-to-date outstanding X the highlight strong join quarter good taking really our financial our yesterday successes you, you we well pleased morning, I to as the Nicole, performance quarter. and the want call very major time everyone. appreciate I with today. as metrics. I'm to reported

at million broker the or time. First, over we X% deposits $XXX grew reducing deposits same by while

on not These that long-term all this by shareholder are of X assets while show focus grew expanding value. growing franchise but we earning XX%. did margin. over of to and a And components reflective discipline our continues we Second, least, last

core our us sets Southeastern top-tier is apart. of and our sheet strong the balance really profitability, strength Our markets what

$X.XX per million diluted income $X.XX we PPNR X.XX%. an the ROA of of a share. reported and quarter, over represents net over second This or $XX For of ROA

and by X.XX% interest to million expanded increased net our for this income margin $XX Our quarter, the quarter. over

portfolio million growth Our includes strong $XXX XX% strong balance healthy of with over core diversified reserves cyclical by approximately Loans deposits. with mortgage warehouse grew that a funded in lines. sheet loan

continues attractive the levels, markets some opportunity as the expected is said robust I X% X% the fund us located, we give our the capital earlier, to grew our loans X evidenced grow national organically CRE at deposits deposits. and growth, included in without Southeastern X.Xx to to $XXX core increasing in As average. million most ratio continue industry-leading loan the you of the These approximately XXX% per allowance quarter's by second markets quarter. Ameris of down bank state which We to our concentration to a over healthy remains ratio at was tangible for TCE ratio. XXX share, and the and of at end know, footprint approximately with book strong to represents nationwide credit to grow X.XX% deposits. to core the increasing losses with to Capital annualized at our $XX.XX both be growth coverage value broker

listing on our well-established companies moved our in our listing New believe presence for Given helps XX. also the of shares success reputation elevate we Tuesday, over exchange's to Stock listing years, marketplace. to like and the York growth the We Exchange and the our July

our our it future want the remain and over more to turn ability positive on summarize shareholder I details to I value. Before return to why for I on Nicole financials,

share tangible annualized this value First, our per book growth rate we growing book focused by remain is on which quarter. tangible XX% evidenced and value, over

core ROA over of PPNR an X%. have Next, profitability above peer we with average

and Southeast, assets balance in capitalized losses in well we have for to Our absorb allowance is earning economic diversified with potential strongest healthy challenges. sheet a strong the the credit markets

deposits of look level If have base, and and granular culture control. our at very above-average it's funding you a we expense proven noninterest-bearing of

All drive optimism stop of into over remainder discuss discipline there the what of and turn our along our XXXX our results and with in are for Nicole focus these on it financial more to detail. to XXXX. I'll components,

you, Thank Great. Palmer.

As for you $XX.X reporting or the mentioned, $X.XX share. diluted we're of million quarter, second net income per

revenue portion a During on for MSR $X.X portfolio And the Visa gain additional transaction we MSR ability reduced lost from strategically We restructure offset shares. forward. more of sold quarter, revenue the will BOLI that and million B than BOLI in some to have we a used Class our a sale gain. These sensitivity down going our asset investments. $XX.X million MSR the a we the conversion the environment. our of also recorded The of regenerate capital then to our also

per these $X.XX or adjusted Excluding our income items, share. $XX.X net diluted million was

XX.XX%. Our value. shareholder adjusted focused our equity We return to on return growing assets X.XX% improved common on on improved to adjusted remain tangible and

ended of quarter we tangible remaining book price $XX.XX, mentioned, Palmer the common repurchased of and $XX.X $XX.XX $X at this XX.X% which the have approximately of $X.XX million during average through quarter. an stock approximately value of we increase an end of quarter We As million October. was annualized with or the

interest $XX.X million. income our our increased side, revenue the the interest million, only for expense $X.X and On increased quarter

basis from the basis with onetime to X.XX%, the right $XX.X is expanded some was million. change. allowed quarter increase income payoffs and this The the by details bond early income to of interest million margin would the X.XX% Included related inflation that positive. X-point which with X.XX% X-basis quarter, bond for income was points some $X.X income then our in bonds. We in few X really basis our were also positive have from onetime our on accelerated So the more to quarter. to on on adjustments tip's quarter. our accretion bond net excluding pleased interest X It income of this guidance expansion. A line lift been points X margin of quick point previous points But last X

sensitivity catch-up point basis were changes and basis asset of by change. points then deposit and X mix those X asset offset positive were and points mix of X basis Our beta

$XX During the loans our while let of recorded quarter, coverage credit, XXX% just losses, mostly X.XX real last million quick, points, NPLs. second at I'm and just $X.X the production. ratio provision our bringing the on Ginnie XX basis XX mention improved noninterest increased of for Mae, NPA And just basis division me XX in excluding we up points due the and portfolio credit to ratio our income basis quarter. Adjusted to to million, to mortgage compared increase in charge-offs points a

finance and evenly some increases The banking to in production, increased of unit from losses. expense mostly business. deposit strategic total division, increased split and less the Our a expenses lines for between adjusted the our noninterest increases campaign fraud million, were related marketing costs new comp $XX.X in deferred equipment variable

XX%. was the ratio adjusted our was XX.XX% for Our and efficiency quarter, ratio efficiency

expect We adjusted efficiency downward moderate for the the of back ratio the remainder to year.

On $XXX quarter $XX.X with the $XX.X at the $XX.X the with end sheet assets million compared side, balance billion. earning of the billion total we to year, ended at billion assets increased end total of and

basis third annualized. bonds. Loans increased higher new bond increased annual $XXX.X $XXX.X We half have million about those X.X% and of XXX for to points quarter. of bonds prefunded at million sale loans we soon-to-be-maturing The about than roughly profit approximately the Portfolio maturing this quarter. increased due in the And in or or maturities million the came $XXX seasonality. X.X% million held summer $XXX

still noninterest-bearing of this million healthy Our actually XX% brokered deposits represent CDs and our a quarter. deposits, total $X.X declined

loan mid-single-digit, from in anticipate we continue the and governor the on and to and loan XXXX wrap to growth turn deposit questions the I'll to over deposit group. We it with call continue growth. And back the any that, for growth will be the Alan up expect

Instructions]. [Operator

Catherine question from comes Mealor KBW. Our of first

for outlook Really back us I see for you expansion margin. start this seeing wanted quarter. want nice of I half the to with what kind you're give the if could of margin the year. to an

Sure. I our model quarter. margin be still agree slightly really asset to of We you. with this sensitive. to want We're proud

were said where came thought X X.XX% our around of that in And deposit up side based at a of the that's on We really we that points, so is of really, that costs. positive quarter to X kind down lot when and last guidance or that. we we basis X.XX% on bouncing

So low points single-digit, basis same or X X that saying expansion are to maybe still compression. we

So -- for the kind half of next is hanging the where in that back X.XX% to the quarters of X.XX% for back we range or the X the year anticipate. of half

maybe cuts, back it Or have what's even expand Okay. stable? And bring, bring we cuts. just don't the it deal we costs higher or expected, of it say I just would the half case in year, the more just have stay continue to wouldn't -- would lower? kind [ let's don't of if that why what than more deposit mean is ]

Yes.

But expansion kind of of So you the tell out, does when model that we're interest to do it I the way. that income net you it growth the and I'll is things focused on think just not of ratio. one stable that look

going And the governor growth. our loan is deposit so growth to be that we've said on

protect have And that core deposit up and loans. and a would little grow then grow our base, our to to on to margin so our the that to to be to give if we deposits continue base do -- grow bit able deposit use we

able to low NIM, deposit net grow to fund or stable interest use we some be to while see would might expansion So maybe to a that we the income. cost but

helpful. you're That's story the Great. for a just mortgage year. a there in one other what -- just of really year? seeing Can first been and maybe the you for nice then bit rest your about talk you outlook And very little the half on of has the

in big the a to this certainly and mind, there's the mortgage, with housing seasonality half environment think it year. it Keeping pertains us historically market. I of obviously, a as year, in for the today's first performer too, lot been of has

they're see now mortgage in seasonality the the seasonality given end kicking quarter I think in really will be a the major just I But the still at and between a business. third the contributor for of year environment cylinders. production Mortgage of because the fourth same just that on the start and will So all us we're performing in surge don't and time, given in

question The next Partners. from Marinac FIG comes Christopher of

not sort quarter of too the maybe Is Palmer each that as forward. of in a wanted kind to manage or too you to ask each much you capital going just of retention about continue there's how there much, I sort year. Nicole, but do build capital, where of point,

gives environment end environment, your and Chris. question. move of the the the anything type great Yes. the we how There's given would now in, think between capital I a this and it lot feel now, good gives see Obviously, the in right very feel Thank tell we're of But go-forward you it comfortable I place. environment dividend. also forward we're basis of and the in the very in But as get changing offensive certainly optionality. we positioned. of in, things given us that's to revisit we're XXXX. on in us stabilize the an if a you, position you, now, if right we don't into year, I we buybacks capital volatility us about opportunity once have we're

both next see Great. quarter, on the the Is year, that changes maturity anything be this other just just there of that kind equipment And there challenging or finance. in marketplace. and the one just into it's side you in out criticized credit even Good results whether question. on would

no, we Chris, don't. actually,

in terms mentioned You finance. quarter their of had equipment good charge-offs. They really a

charge-offs overall on normalize to the low basis you net charge-off at number we a slide, that the expect can of would terms points on and In provided bit see the a that's watermark slide probably XX forward. quarter, going for

King Brandon Truist. of from comes question next The

credit. So on a follow-up

ACO ] lower. their to basis, you're a Your on a lot other of ACO higher, continues ] [ creep percentage seeing [ banks but see move

is seeing So and through modeling the differently or CECL your you're to you just square how could potentially the reserve? disconnect is what flowing what maybe

downside XX% came higher-for-longer was you. a thank more it we've to part that we for Brandon, in now We reflective rates, of quarter. in We've blending approach mindset of a blend did felt had that interest maintained that in our this the downside Yes, that the and year. better when always Moody's modeling

impact And But So some rates, have into as increase company. portfolio. the some on the higher our portfolio. is consider material not losses, that interest in reserve a but more translate for certainly longer stress nothing of could the the sign going that you to that's at point, a would weakness in on

rates that Is or Okay. short on predicated the curve? entire more

I think that's on rates. predicated more short the

Okay.

you range. third kind in ] seasonally mid-XX% production continue we Should ratio quarters quarter. improvement to Okay. quarters, ] regards looks the And to in then guess, expect the strong continued it second mortgage, have like and I if in improved efficiency of at [ the [ strong

characterize it would a I stabilization. kind as Well, of more

which of I improve a of you One a we of the beyond still that has on don't we is continued to it's at gain But lot see as above margin, can today. look where sale contributor. things lift strong and stabilize. and are see,

in, seasonality, in is do said efficient. increases leverage You quarter, get got and this comes earlier, very as that I the as production but up. as operation the place we the infrastructure in in to Obviously, we've already saw

we end positioned So it a pull think and when to very feel back I are that about and and opportunity, the positioning, if looking crystal our there rates kicking is ride of between in wave terms the start I in of out of good capitalize will now year, it. our we well still and start refinance between on and to of year, it will strong. seasonality But now finish and the the terms but end in the think ball

question of next comes Our from Russell Stephens. Gunther

First me question the ratio. concentration was CRE for on

out that move to pointed today. XXX% guys lower continues around You

you terms current to the where out? lower? we in that comfort level? of Or we could, you'd Just to should a sense, around us that work shake give like expect to continue Are if

say we below it everything will can keep do will We to XXX%. we that

spot below of is close for that. for middle in kind somewhere spot certainly -- XXX% we're a XXX%, is of So some us. feel a us. kind of good like that XXX% to good that XXX% around We to we're

flows you then a And could the the next follow-up loan side the securities Great. going margin the I forward, opportunity the on over fixed us cash of appreciate is commentary discussion. quarters? on and the remind around impact Okay. just couple what repricing

Sure.

loans year. -- are So And of repricing part we've in to then question? that XX% there the got a second about our that was next

to what versus the be helpful a potential maturing sense be just get pickup in for rate. It'd would yields the loan

second. X me Give Yes.

premium got next next got in coming that, included $X.X we've after XXX off quarter, XX% off remember, we've XXX And at about So some coming ]. [ that's -- at fixed are large people have -- got as then average about though mortgage we've [ that when finance, every of also production finance, because you maturity. increase even our why included that in at an XX-month isn't the have months, ]. an XX XX-month reprice and warehouse look and in And those is billion a premium the X questioned days. And they then they or our rate,

repriced think So is up. But then the question and already a those coming answers back coming they're maybe similar. I of lot on. where where Very again -- that have off the so repricing about

put That's color? within but understand to then terms great. positive, pickup I in taken in be And on additional actions but strategic MSR a Understood. BOLI, a the revenue any servicing finer of possible would income fee on net lost point it the

Yes, absolutely.

$X.X on a and for restructure lost and gain a just that took the our million little million we $X.X is then the revenue year. over where about on So we And gain that transaction took used $X to the million BOLI. MSR the MSR the

BOLI, That of we restructured current million at BOLI. which the million Our yield X.XX% a $X.X was and about $XXX X.XX% in we income. gives of are about us reinvesting yield, that a

income, noninterest tax. that match. The So come BOLI not came they did perfect through are a restructure almost through

income looking MSR the BOLI swap really what risk-weighted statement, were each were Visa was did those noninterest Visa when offset the sheet through out -- sorry, we But in line. MSR noninterest XXX% was in income tax at assets. So perfectly. other but the the and the the I'm And then both or almost income, gain and you're balance and the sale the

part change of payoff we So so of other or capital. And the then at down modeling ALM volatile modeling, some of the up is picked those, the in our MSR. the valuation our the early regulatory was and you look And scenario, ALM the some thing a repricing those. when most

we've sensitivity environment, So and a helped ALM down out. in got also rate our impacted us us really

assets help of to the ALM do going forward. being to kind no statement the being that with the able the help risk-weighted able are those modeling, income and So impact of benefits to

the have last great. in mentioned, then Would rates that's dollar trends Super forward? your Nicole, charge-offs this portfolio And quarter. Balboa It appreciate one No, you clarification. the did, for and loss then Okay. as improved helpful. the for me. I just within that quarter expectations going

a compared We over million. do expect -- products changes the going The And we of 'XX. $X charge-off to the to made overall, lot second decline for it's little fashion. in necessarily a linear throughout credit don't a to be for nice quarter were Balboa charge-offs box we to was Balboa for XXXX. think We

little So time. in could that number bit. are decline the But bounce to long around haul, certainly, going over a those

Davidson. comes Navas from question next of The Manuel D.A.

Can little coming are into And of on? What a is of deposits what like new NIM I cost kind right dig marginal the now? your bit more. loan yields

Sure.

consistent loan our That month. June with the So for a production was was about previous new XX.XX%.

right around deposit So both month came June production right May June at and then of in at X.X%. the And were our for XX%.

you Is maybe the the -- pressures are deposit more deposit be about out, continues just Is to costs deposits to need but right way that loan leveling growth -- cost your as competition if is think kind is of to so way right it? might strong. frame the it

our more right. certainly margin, base. want And protect But customer the importantly, are we protect we we wanted exactly our pleased to with and That's to margin.

our We deposit proud are of really well. base as

will loan that. loan that be governor said deposit our the to going was growth. we've then we so And protect growth growth -- And on certainly

few to little X.XX% at to be margin net feel portfolio a on the up giving income. I loan able up we and when above points on margin growing NII. interest still that be grow basis efficiency, So to the able accretive of ROA, other a a if is like we're we these bit things give end grow be to what's grow NII, up to EPS, by that's really peer, if to going all

little growth, feel even we and give that. like we that our a use up can bit So to protect if we do

commercial to That's has that shifted thinking to mix rate great. thoughts the Any updated mix of currently? as from? of I all? growth get appreciate is we loan Just that. going through now? stand cut, at a pipeline that closer where come Where do kind kind on What's

Sure.

second think loan I And it of XX% mortgage look when so the that's about lines. of growth, was valid kind quarter at a point you warehouse

And came talked concentration you our that so -- actually When payoff. and came you we CRE then of because about was CRE see can and down, some the look quarter. at down this of that chart,

one that's balance we So we like things sheet diversified of how the our that is about are.

feel So Premium like and our division, lot core but going just opportunities, the division, to by that finance lines bank, and we growth then equipment be Finance of forward between a typical warehouse warehouse going the have year, diversified. will loan do between think we cyclicality mortgage C&I, a the come of between mortgage is it. end the the CRE, We down back of

so diversified mid-single categories. still the of out we kind growth will the And among be that feel it like but end of we'll by blend to loan year,

that. appreciate I

there. strong. banking, in are Or seems quarter-over-quarter. gain confirm The where Just I like wanted And the through on it. to of Just the did run geography was one that it there MSR is speaking quarter. line? of other? follow-up just next pipeline stability up It really more kind you're mortgage fees

quarter. have The little a strongest we mortgage third line quarter, quarter our bit. Yes. typically decline typically and in other. And MSR is does then Fourth second

cyclicality. normal believe don't year. reason have won't And happen this any that's we to that So cyclicality

question next David comes of Feaster from James. The Raymond

in things so quarter the going What's impressive a of quarter you the most just some you trends NIB Could touch bit driving be to growth. NIB the of allowing successful and on was you what's the how the that? One and think about forward? throughout

Yes.

and always for obviously it's forecasting. and years. pretty our shifted, incentive a on has everything deposits, mindset I that, high in budgeting that's David, mean from put Our value our we've not plans and to emphasis consistent on on reflected been

of I the happened have -- over a lot year or what of and beginning think initiatives. terms since treasury that seeing the the development business we're now of efforts of So results the is last in

year on mentioned couple in back have overhead investments this expense calls of We treasury. we've a made primarily been and on the focused how

the see that we're funding, really initiatives where between lift seeing that so C&I hope the on And that's treasury to our and biggest we and core continue. initiatives,

marketing you So efforts we're very as have expenses paid some quarter. that associated did with pleased obviously they've see it. We some with this can that off, with

results, the we've end trend hope and now continue very will So that of and the been with happy the between year.

I as some then there opportunities outlook other opportunities And whether Curious think or great. it's We whether a at to there? on even that credit potentially wanted that box. expand and that group? That's about segment like strength whether anything take how there's in know drive the it, Okay. or to look higher the just seeing do any the you're there's then don't Balboa. touch classes about tightening platform? deposits growth you And talked maybe from that asset that you different

Yes. know, Balboa great we a and you incur general, higher opportunity it's but do finance obviously higher equipment a It's much too. for losses, as just you've yields, us. all got, in No, is great

box, we we beyond the with told business most kind profitable have is -- balance net-net tweaking have terms now. the in. right think sheet After of you in you not credit X.X% internally. They're because be balance moderated will to transportation. On XX% an at sheet, of I additional the extremely it's So we capped growth of about issues see

So too, paper. don't But expect opportunity balance the surge big growth. remains sheet securitize a and there, the to sell that in

didn't and the balance the because they and they is loan obviously what historically in is sheet to a market back could which volume assuming So that appetite have securitizations, bank way, sales you crank potentially the up increase past. there the did

go-forward see basis. is as that we catalyst real that on an upside initiative So a a to our

we increase long the paper. ] the well one you [ when the sell want conduits and at actually production you look So keep running great have as the ability we as And to generates where income, as could engine fee that that's and for too, production tailwinds, know.

me. And last Yes. That's for then one terrific. just

historically had for appetite be potentially of market lot in recruiting expansion, given seeing you're front just what growing, on presence a right somewhat high-quality for business lot producers You've I'm or where to while here, interested deepen that you're hiring and curious the your still a talent. of now? others looking you'd success and maybe open are constrained your

Yes.

hires lot Our to to focus have important focus there for said have incredible is some that's happens another see think we've now, certainly talent we that. person will than focus that -- been that the the our you treasury we I the very C&I we but because be in don't We're thing companies right certainly and here talent. worst in budget the But an that meet attraction fortunate out quarter, is we and initiatives. as and their thing able go probably because we The talent and expectations. certainly do of internally the a available, certainly of to on to quarter company. lose have made -- pursue have retention opportunistic And talent more paid remains on off to on and retention hire out our after if

time, And you the as an expense and we here out at we're do aggressively We very terms know, the to that in So expense. same company. But don't right we don't will to that. now, hire need at teams, to opportunity. need going of up pass not conscious incur trying

in than look So I or as XXXX, lifting to in huge surge a selectively. or I out out expense don't bringing other XXXX see additional

for I over question-and-answer to This remarks. our conference Mr. closing turn back Palmer to Proctor the session. like concludes would any

your We Great. our results sharing call, appreciate participation in today's we you to next forward quarter. look Thank you. and with

us we Our strategies, in well look execute strength positioned markets as and sheet want you and infrastructure on Ameris. the and the balance and to discipline our as and I talent our profitability certainly metrics your credit had top-of-class extremely well the place, the remain and the deposits into loans, we core again We've in in stable time future. to committed as creating interest for to on capital results. has thank

now for has you conference concluded. The today's Thank attending presentation.

now may disconnect. You