ABCB - Earnings call transcript Q3 2020

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Operator

Good morning. And welcome to the Ameris Bancorp Third Quarter 2020 Financial Results Call. All participants will be in listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. Instructions]. [Operator event this being is note recorded. Please now Nicole Stokes, would like to to over conference the Chief turn I Financial Officer. Please go ahead.

Nicole Stokes

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

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

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

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

Palmer Proctor

a with for quarter closed and there go the to few to later call share our as the bit reflect about Back quarter today. I forward. detailed highlights got some to news recently we’ve had We’ve commitment. Nicole and before and quarter’s talk get marketing Together Thank from results other results call impact third Business we minute, campaign you I some which our little some more going morning. update thank everybody speak you we that think who’s as did new financial as you, I want our themselves in joined to Nicole, this positively exciting a a on well but is successes to outlook last

quarter, the XX.XX% to share an per year. equity. third return which This quarter tangible is on XX% basis, adjusted or million over diluted earned $X.XX up on For assets the return average X.XX% represents $XXX.X a and we compared last on a

to Our efficiency under ratio which XX.XX% an in is improved basis. adjusted first down our the XX%, time history, on

adjusted with we period being million The $X.XX For an $X.XX earned which is the provided on for year-to-date $XXX.X consistent the reported or also year we've period, big basis, diluted same this difference share per year. last the that's million and the ROA than the results of to we to XXX XXX on note. XX.XX%. year. average tangible XXXX last return important more equity of loss did year-to-date over reserve loan represented And The year-to-date

including the side. in our year loans estimates that's growth and original and excluding XX.X% with to quarter the XX%, that's mid-single loan the and seasonal anticipated that for of growth and loans. have over PPP during quarter both digits on bring closer pleased year-to-date organic We’re that or million XXXX. our loan runoff the PPP the the growth our do full We will fourth at XX.X%, Loans and grew annualized third leaves loan XXX annualized and the loan deposit of

– accounts non-interest to deposit success there deposits, the bearing continue bearing growing lot accounts remains XX% of that we and a non-interest our is where to of total see equate now have we in On over side, deposits. which focus

value. growth growth quarters in in book As TCE for focused capital, on we've tangible preservation, said for we're that and several capital

TCE quarter, which X%, over very is book and third tangible grew the by During we meaningful. both value

and X.XX% of this sub successfully capital rate we this will total ratios quarter by our know, million points. XX XXX issued approximately the impact basis you positively As of debt, risk-based low

we remain year. we Board did that this release repurchase our approve our next focused extending October morning preservation, announced program in on of through capital XX While our share

don't of shares on XXXX, remainder presents this anticipate like having repurchase to right the the the option do executing if we itself. we during our opportunity While

for is remain at comfortable dividend, with time. anticipate As any this our and where we not do dividend our today change

with provision to few after We Chief do credit, in Credit on Jon believe our net brings terms any of highlights our additional unfunded specific heavy any I expense lifting to ratio, further of questions the allowance PPP would barring prepared of Moving today now, related complete want downturn be and commitments, to remarks. deterioration Edwards, economic us including X.XX% coverage loans. take to reserve hit our solely and a in Officer available to This the he's But credit. is that credits. is did the

loans net total of was Our annualized charge-off that last quarter. basis ratio and XX points basis XX to points compares

of had around XXXX second to quarter, XXXX. non-accrual success finally, approximately financial XX announced of several basis Outside strong of are last We a company. compared quarter key third of our loans and markets. XX points commercial approximately end a estate and existing hires to we've our down estate due And real and lot NPA real which results, categories. other of X.X% the increased total XX% quarter assets loans loan in the of on that to remain the new of loans mostly Our end points of at basis treasury residential total the percent commercial as at is the increased loans total deferral of

position. able from excited promoted for In to addition that this to team within that, identify within we talent diversity/inclusion We're leadership announced be our new officer. organization the to

presence digital lobbies to COVID, to is and of return fortunate is, third definitely the to our staff remote a rotational half such and all several have That this there minimal channels the strong I we we customers, digital experience way to optimization, work banking make perspective. to others, initiatives also Branch on that on on underway our say a to better just in embrace a our are a customers last have with basis. disruption around we have touched many all the beginning safely continue for operation. eight a earlier. really We is lot for reallocate and Support mobile And quarter on like new about I innovation can mentioned branches closed learned in the resources We to of the As us this opened allowed branches to Southeast. is October what's that for time. hires the retail pay X.

additional We closure branches. XXX pro would in bring That count from forma pre-Fidelity total the of branch process. acquisition have our XXX down to one branch

financial been expeditious and our over we I'll but been yet well and continue to It's it discuss cost turn very thoughtful, save initiatives So these with initiatives, Nicole like many there. others, have now results. our to executed. stop

Nicole Stokes

you, Thank Great. Palmer.

the For impairment, of and million XXX.X per servicing million XXX.X you or These when quarter, third bank expenses, restructuring exclude XX% share earned increase reporting $X.XX a per income quarter we’re or $X.XX fees results premises. charges, share. legal diluted XXXX certain gain net financial we asset over on adjusted represent basis, third diluted COVID-XX sale On merger and a adjusted of an earnings.

last and was the XX $X.XX in X.XX, ROA from of year. which points quarter an third increase quarter adjusted last basis reported reported quarter the in the was Our third

of equity tangible third last and quarter on XX.XX XX.XX return year. last quarter third common the adjusted XX.XX this of in quarter in year the to was Our compared

affected loans credit adjusted X.XX for XXXX the to is also the also by hotel to the And last commercial ROA. XX.X are of improvement last the related increased negatively adjusted losses decrease driven For by of this of factors offset PPP million the recorded compared in as year. provisions portfolios. Both provision This XX.XX for is in period, our quarter well estate XX.X our compared million XX.XX provision economic to real is qualitative real TCE in higher year-to-date the year for X.XX our year-to-date credit year-to-date. residential We losses ROA compared decreases last our estate, third these primarily recorded to as and forecast quarter.

we've the months to the period, last million of first time million recorded period year. in year-to-date expense XXX.X the in same provision nine compared XX.X For

end book grew end X.X% the value from quarter, at we the third XX.XX quarter this the second During at of by of to XX.XX tangible the quarter.

X.XX points of from points. a PPP asset around quarter. from XX loans increased last And growth asset ratio basis impacted negatively basis common the the Our this – X.XX XX equity end tangible ratio that by reminder to at that

So PPP have that TCE the would our excluding from September loans at ratio, been XX. X.XX

be well capitalized strong. and we to continue capital We our our comfortable position with liquidity levels and remains feel

Moving margin. on to

margin experience this was unexpected. did compression not While it quarter, we

in was we not costs expanded expected quarters. The accretion If compression. net mid-single or you quarters, digits this margin The that basis compression the was related margin seen low Comparing to projected the interest actually of due declined from to low call exactly first margin this to of basis income quarter. had third third digit our forward. deposit remember X which quarter was quarter and from to excess reduced first occur this X.XX, expected. in X point per in year, to of half of in the the quarter XX basis in X.XX line points the second spread X said our we over second to points XX basis cash. quarter non-recurring in year future going first the quarter this X.XX we basis margin And mid-single the those compression accretion quarter, that PPP previously of quarter X loans, we two attributed And and remaining quarter. with margin compression to the increased basis over saw projections back points the for that points X quarter quarter of margin, points from per And in in X.XX the the

quarter but quarter, by earning declined first XX the basis funding the period, basis by our yield third points. time on XX assets points, same that During costs to our decreased

growing deposits said, PPP of million grew of last for total yields against deposits our that Non-interest this And less bearing. X% loan And these year. now production proceeds bearing, XX% as we than related deposits have declined – loan side, a PPP stickier continue non-interest proceeds, core to and Palmer XX.X% deposit expected. XX% non-interest while XX.X% we time loan than of X.XX% see to over to been on in those growth deposits first that quarter. deposits, such to Our compared last portion are represents our the quarter XXX was success total bearing the in

Approximately related mentioned, recorded for third was and million then expense was unfunded was to commitments. $XX As previously I other million losses credit previously for million recorded X reported about losses, provision XX quarter our million. reversed loan XX we

and commitment net XX the was loss loan quarter the quarter million XXX.X was unfunded non-interest the So million our of the the quarter. was total quarter charge-offs XX to year. net approximately allowance at total million and had Including million. for allowance million of Growth in of X.X the compared our ending million We XXX year. expense the with million end during income June last the million XX end at the and our second at of compared third XXX.X at reserve, our during breaking XXX record was XX.X end

Our we retail normal quarter, pipeline do levels to the from Total remains back quarter $XX million and sale our earnings the just mortgage to to production, at in the expense rate sale anticipate expect record income hit on up quarter. last environment. for group levels Net level XXX.X billion quarter. strong this range. X.XX, declined X% gain for while interest Mortgage to to of over increased gain and record that and on decrease the XXX.X to due the not to non-interest going in had X.X increased the into new from quarter continue. efficiency mortgage X.XX We production the for revenue fourth mortgage

XXX However, of earnings, when merger and expense certain on COVID up last you non-interest branches remove million quarter. that is adjust the million loss our for from $X totaled legal which sale fees we restructuring, expenses, the adjusted

increased expenses with by costs However, to million segment mortgage the more variable offset retail X.X the in of revenue. the are the million XX.X than due increased associated increased and volume

expense have core our a functions, other All SBA led of be our finance non-interest efficiency administrative segments, pleased quarter. and us including the reduction This improved the premium efficiency quarter. during the extremely ratio of bank, this to and with

future XX.XX level and this significantly Our the is back do additional last going efficiency in XX.XX we adjusted mortgage division ratio, mortgage ratio don’t to to efficiency quarters The compared to XX% revenue and in mortgage and efficiency to ratio the in improved gained be quarter. believe we sustainable. XX% impacted as the revenue of the increase the range to anticipate

annualized Loan year growth On the related we That or warehouse and and including balance excluding to X.X brings but and growth billion, on XXX PPP. was growth to cautious loan XX% in or deposits. mortgage. million loan sheet for XX% lines billion solid the half PPP, the about side, growth annualized, that had organic X.X was both of

we the ag warehouse line several Palmer such cyclical seasonality As indirect runoff. payoff, fourth have as mentioned, well headwinds as into quarter, coming as

So bearing. back XXXX loan in of for estimates come growth increased details XXX in I line our was of quarter the during as investor we be year million XXXX. mentioned, deposits And original presentation. which will found believe XXX production by can our full mid-single million our More non-interest in our with total digits of the

any from to and With XX%, growth at consistent last questions I'll which was it ratio stable deposit for group. keep what helped quarter. that, loan – to our loan that loan was So the deposit turn it Aileen with over to deposit

Operator

session. [Operator the We Instructions]. will question-and-answer begin now

today with Sandler. question comes Whitman Piper Casey first Our from

Casey Whitman

Hi. Good morning.

Nicole Stokes

Casey. morning, Good

Casey Whitman

guess segment, which the expenses very controlled start Great quarter. quarter. thinking just banking well I within maybe were this I'd about

you Just or as to on share segment further whether mind update support closures the any trend or rationalization? there's here, could you hires made expect not us within wondering to how if branch your expansion, thoughts keeping for potential all maybe your and that to you've from expenses in

Nicole Stokes

a question. Casey, Sure. that's great

of So a we calling we're and for is find innovation when – way new the the mentioned we resources to new that of for that of we that are doing. we're it a to on one internally, hires pay look and some trying really several pay in we've been quarters these reallocation focused at things

We October previously in – closed June, do we have branch closing branches are as that closures. we have So, mentioned, actually some eight we X.

So numbers closing saves announced not additional in yet. have that's process. branch It's those is are cost these And been we in in and one process.

saves will any into So help fourth cost in the offset expenses. and come then the quarter, additional growth those will of that

But executive and And trying through trying to know best. and our really additional certain some non-interest So no keep stable those to we our possible of we are costs. saying forward is to as I tired efficiencies things. find for trying me getting pay the going team internally to of as technology ways expense are

Casey Whitman

Okay.

Nicole Stokes

So it’s somewhat flat. guess I

Casey Whitman

That's you. very helpful. Thank definitely

were the quarter? deferral I thinking maybe mortgage particular had about expired the rather this what's you think of you borrowers than Okay. us on programs, in small so that on And uptick – that and able the not to just in some or basket to give the and movement keep make furloughs on then problem going borrowers and color non-accruals? assets extending payments more these bucket. non-accrual the just moving Can of sort within residential noted majority the

Jon Edwards

I yes, little the a right, opportunity on to color appreciate All provide that.

all let COVID. here, I change changes really virtually, all me address residential and really say say me not three the really just Let things NPA ones. But of to related of the was the

to those the that two while commercial real were look at side, were One came the really watch loan larger is collateral to and pretty going be So their really concentrated are changes have decided at estate. we there of hotel in it's really list, of in restaurant the that for But highly like we process important any a that and the – the see on confident changes a changes. borrowers. the hotels loss least each feel close those. have liquidating really saying in significant was I other in that. and hotel We've NPA won't that side, commercial was only position I from the been to a any things know surprises so didn't and PVRs in out in that that we of issue,

an that so residential XXX we size loans average saw the was Specifically, question $XXX,XXX. and side, to XXX the on think of list. added portfolio in about that on loans the we residential I increase side, your non-performing The was

borrowers represents not had the intentions It's might we of that to to that diversified. one us resumed a what confirmed for and back loan well out has. but yet not really us. options go loss CARES payments another is several it's any that's that going look deferral But our or or told CARES that Act on come not of So the program, be their into Act their – had significant that at either

So of program. take payments middle they knowing in we were CARES up to were this point going resume whether not another Act or

we position And going. took call that such as which the so the non-accrual time in would settled direction were we those in were until we they

Some CARES those a of Act. that may I do portion stay enter a non-accrual. believe will

a longer period that they have there's programs you As know, available. term

options. So there they into, are programs again, that different enter several can

may a in the was And those settle I nonperformers. of was but so nonetheless felt approach NPA those and but a appropriate, – out the bucket, come to fourth it conservative quarter a portion of very consider it

Palmer Proctor

Palmer. is this Casey,

easily well, heard [indiscernible] is saw to their if programs. have because it to these ahead it's as calling The the other months entitled what said, individuals could another six very And a conservative trying they payments we think and more and if different it. got approach, we've through way them, I six take But it. were approach note from thing we to the haven't they've months on majority are this, of declared do said, conservative these were all we Jon we not a that, extend to another going

consequential thing loans charge other could up, off made if earnings note with hit had and to all the those is The still meaningful consensus you wrap and we quarter, quarter. one some we too money loans this those wanted every be we really to of this if

Casey Whitman

Okay.

yet actually these which haven't thing, we'll a payment and and missed this ones kind just it timing of a is So like sounds see -- loans

Palmer Proctor

just deferments, Jon approach. them they that loan. we your to of thought of of option said, the either the loan a in lot fashion not come conservative that it to or terms either a take make – bringing you we'd had here. Yes, went current or end ahead a of tack But intent that they of But we like the the and will then but lot And responded just additional a on time, if people the back payments there, they of conservative not sudden have payments all and tacking and in their still such Yes, non-accrual. on until to there's have be entitled took these this off approach. they're

Casey Whitman

big wise? how referenced, you dollar loans XXX the And is bucket that Okay.

Palmer Proctor

XX million. XX.X million.

Casey Whitman

Okay, makes sense.

Okay. one. And then one just quick other

larger non-accrual or that the was referenced and TDRs big loan. to into one of moved You hotel Is on that? that the kind how

Jon Edwards

little than It XX.X was – sorry, It less also a deck. what quote on that, the It TDR. created was is XX I'm we non-accrual. a slide

our in TDR category. table. on non-performing it's So earnings the It's

Casey Whitman

Okay. And the of maybe too? quarter, hotel to movement performing this just category broadly, can into the that you TDR speak loans maybe

Jon Edwards

I sort And the we of over – numbers the XX% being that’s TDRs hotels. general, newly created is we the we $XXX payment been the hotels last to And that for on quarter watch of the of other mid-September will put would list. deferrals. worth think out that two though in phase only just can. of were had and XXX million I noted in side say been have in still of deck slide about the were TDRs I added

significant But was our and of reasons I that I didn't I that of they would. runway. hotel whole the a folks think that of And I XX – going that there in to and was days. of longer another And loans days. hotel it's told want that so last did XX group, wanted locations, for to do didn’t resume just we a heal portion this expected of sector variety variety really like to needed that payments bucket, group a

of really the weren't to I them So something it through if we going that worth do wasn't next told it. year, middle

So certainly tried normalcy. to the taking would back stance, time we with customers the we would to them best level get work of created have of some our give a but that length TDR to opportunity to that

Casey Whitman

you Thank you guys. all Understood. great for and answers quarter the

Palmer Proctor

you. Thank

Operator

from comes with David question next Our James. Feaster Raymond

David Feaster

everybody. Good morning, Hi.

Palmer Proctor

Good morning.

David Feaster

current on and quick And allocation any then coverage just you based you follow to Again, metrics to the up hotel stellar portfolio? the real reserve a on portfolio. congratulations LTV hotel maybe that valuations? updated on have quarter. Do service I forecasts wanted debt have ratio do or

Jon Edwards

needed really as a As but really is the far don't would were this I of cover that hotel we've made short-term in the think before, if that. longer of we sector hotel well didn't models remember concerned, reserve just determined kind improvement than forecast lot versus the that is comment I sector the is that because we using the what

that key at that hotels in of normal established the real in and and and of So own deferrals reserve on. a perspective, it list its commercial loans category level of we overlay looked group quarter the also just the out separate for from and did the new the watch and estate so because the factor

Honestly, the didn't we did think and said mid-XXs occupancies, and started good a part stabilized. and hotel pre-COVID From come treat date should of just And and The materially reappraised. the that the through category. mid-XXs. that that you get I in out was all time before, overall go are say factor going portfolio they did Clearly, this I as to that get overall kind that about The is, were different. LTV an So, hovering our valuations I've – separate that's hotels XX%. down. or is thinking I around valuations of you're those perspective, we to of weren't take

or to that a we XX%, XX% to or revaluation have say only LTV. and see capacity So overall stretch even XX at XX portfolio the have

from I So, I'm worried the about it's am getting portfolio as just perspective, collateral not losses sector hotel the and healed. a about as good

David Feaster

terrific the XXXX? new loan as Great see got the hires had of then That but hitting. in we've I obviously on growth, guess, how economic guys growth do the to backdrop, fourth appreciate the the think quarter, enter makes hires the seasonality pace tailwind color the organic the we recently. I growth. you new sense. to about gears And you loan have switching just through

growth we you organic enter Just XXXX? as curious how about think

Palmer Proctor

tell lot that it a we're pace also that lot the new other hires, way. as banks. I of contributing of is, measured. be And on to taking growth going had a are those just going a the we've significant in type to front, will tell of individuals be a C&I you and the from I'll of earlier, lot the especially mentioned be Yes. you having meaningful business of would growth you that’s

So going past, it's, as it's more said in to not aggressive, just be I more to going be the active. it's

I And the that's lot for us as opportunity a of get so we why see forward.

David Feaster

them? Okay. And be you – then think just from just defensive is tremendous able but has – middle more of off pandemic, like? when what's from do to that footprint, hires [ph] about the guys pipeline for new to think starting done new across new in there to more to given continue market be markets. your have share pick how gaining guys you're new just the even a hiring been going able for these the hires? and a in kind look You and And What you to job do Truist bit lenders pipeline

Palmer Proctor

good a question. Yes,

I think of take defensive posture a the the or a COVID. luxury to is able banks has been have lot of

I because here we in associated mentioned to my expenses also the being being improve. are having think remarks, in of and – strong to at exciting the fortunate that's an be in because in business layering said, candidates Southeast, we terms is the we to cost and as have of Southeast the mindful I've least are presence just continues with opportunities that. in the prepare new are a those coming but and to end measured That pipeline there, of

the – be from they've new cover robust to But So bring will loyal to potential pipeline overhead I so we that to new a layer as pipeline in a from you – got to lot will fact continues the have, when influencers made continue has a following that and that come hires. having that of the saves expense continue talent it. of from them pretty the with our call we've that expenses lot is talent on in themselves, of other institutions, new talent up obviously got the, do we

David Feaster

Thanks, a quarter. right. great congrats guys. All Again, on

Palmer Proctor

Thank you.

Operator

from Our Gailey Brady with next question KBW. comes

Brady Gailey

guys. morning, Good Thanks. Hi.

Palmer Proctor

Good morning, Brady.

Nicole Stokes

Good morning.

Brady Gailey

the mid-single stable at So you of good job all a NIM which is relatively kind digit to a this holding talked I about you've lot decline better than did pretty per know quarter, do think low peers. what the close think Nicole, is to bottom to think about we or at a going do you we've next NIM for continue so? shrinkage or seen. you X.XX year should here forward margin the year-to-date

Nicole Stokes

a that's the think as think yet. I as to be Brady, don't And question. that great it's I I much want there bottom, at it

competitive available really and been deposit and the deposit competition we you side, don't been model as out the which can very cycle it reduce so we this have aggressive and of that the everybody we So on side. is tell has on side, I'll on one any that we things see be the made there, deposit aggressive crazy out which has

opportunities basis basis but to the next X on So quarters, still compression X digit see points look I for continue side, two we at of $XXX least do single at X.XX over between the points the that that's deposit we reprice low for currently at When two have year. portfolio, still end and our will look now the about quarters. million CD to you

basis production Our in was the rates third quarter points. XX

if room there XX is points, some it So will at much over our weighted a as not down XXXX then to That's room get but And reprice rate. biggest one we and at we come can billion X.X that fourth million basis actually down reprice quarter. of will the for be X.XX that about a at so have wins for XXX that another significantly, lower average to there that's as of well.

really don't and fighters side we street one kind to will basis on compete said deposit necessarily looking other point the other we basis and have point point is We look X on for internally go. have we've on of said – compare we XX just And every the the to increment. is that basis can not continue We the deposit that we're products. then that side thing

bankers have our job. we I of been little bottom great we that So done very the and see do successful can margin, anything do before doing compression a But They've that. a very, that more very cognizant to in bit out. protect

Brady Gailey

on extension date. I then the of And the the saw buyback, Okay.

You to cheap And that have about tangible? the active XX near the at or million term on on be left in in near buyback the still you is Is the that pretty something authorization. plan you think not [ph] one-three Do times yet? term? in stock act you'll

Palmer Proctor

Not yet.

want readily between have that the any said, I I and we available end so. year. in there of do now that don't As the event anticipate But to the we really to – did activity choose it's

Brady Gailey

talented finally it's then to I quarter. Maybe little that see to the more M&A all related on Palmer, you on these that me, last me non-organic on felt year. call a side, this the like upbeat you've got it hires to M&A, for great were And know

just on So about how update M&A going an kind of forward? thinking you're

Palmer Proctor

the that I'll at important you think and I can and focused regardless positioned the control we things M&A, well for thrown a growth organic of or is And on most whether be as what growth position we I then way. we're things like to gets mitigate Well, opportunity us the to look But and controlled in along. control. we can't like the and to be be good focus if on tell said, of our offense, we thing comes measured just M&A right

really industry. my think quarter the to pertained last comments So I

frankly we as lot of some end going several last the M&A this you're bottled activity has for a get think that activity pandemic. is that to see quite up been the quarters. of And I significant to

see So I think sudden a surge in activity. you'll M&A

we’re earn-back us company opportunities in to sense they're consider allow currency in able the needs – along growing where to accretive will and that. certainly the if makes be organically. the be on is M&A we to to focused come that it are We M&A, and participate But

Brady Gailey

Okay, great Thanks, guys.

Nicole Stokes

Brady. Thanks,

Operator

next with Our Kevin D.A. from question comes Davidson. Fitzsimmons

Kevin Fitzsimmons

Hi. Good morning, everybody.

Nicole Stokes

Good morning, Kevin.

Kevin Fitzsimmons

Nicole, follow up I margin on to just outlook. wanted the

got we've roughly the the same to with to about is to some per margin is the as talking low then but the way within the So you're this that compression range think mid-single about core PAA quarter? quarter-to-quarter, can about the way that as quarter what more think digit and staying swing

Nicole Stokes

That’s right.

right. it got You exactly

Kevin Fitzsimmons

Got it.

mostly be the first of a Okay. know thinking about And it, it I mostly loan the now we last later quarter in into TPP. margin through if the up happening the But the the pushing in then SBA starts origination to fees fourth if reacting to juice heat I is if of end first target quarter would up assuming quarter? that it. bulk flow we're forgiveness is moving terms the that the that it's reasonable quarter, but were just quarter, could how of payments this in ask to

Nicole Stokes

amortization. of in? continued forgiveness that normal the we think forgiveness is take model when just they with day that get have and and start when So off the loans the – when granting I do those when do I those that do question do paid to

And guidance. do that have tailwind, potential so of my into that I not of any built headwind sorry, potential any – tailwind

assume I start early kind So kind that of would having as that and income, and tailwind analysis of of I've we possibly assumed do some and also we an analysts the exclude of that. street payoff get that

fast that come quarter, I So, I fast first so work quarter million see three-quarter that SBA certainly of as a forgiven, – that's as those first quarter, say don't quarter, compression. through revenue in we're And think that built But discretion fees quarter, the still as I have any I fourth But as as timing, they as probably those. certainly to know window. they're when second in to it of starting or going margin. really of fourth are have how the knowing just your will kind to help come as far $XX of that would in deferred the we in margin that comes

Kevin Fitzsimmons

for know the makes industry-wide broadly. I about risk, so. the for and exposure the if commercial into the issues much there hotel would you're what what Palmer, at your expectations been And like appropriately you Southeast where quite on look been time New with. estate point And see so have more or pockets the the more what But spills weakness But there's that's some focus on on on that. you feel distinctive are open you I just certain and urban I assume And observations well based made that and concern investors close real and benefiting real areas keeping subject? it's it today a are you comfortable and more York what very really that Okay. they're doing today? and think over earlier – eye when that dealing economic more I think gives it's more banks, is City

Palmer Proctor

each how keep I and we of Office, as much there and market in terms with on from, there dealing of a that looking down. large centers broader office the on his of get moving of estate are retail lot we commercial and way nor think an impact And the our of there. that break business each do lot is, versus credit on the hospitality performed. job footage, portfolio. more extremely data of our The while individual certainly that dependent in and amazing And specific are Jon – what firms Retail, they're each an is lot You're granular need, excellent square industrial. basis at industrial impacted. specifically, office to around have – it lot real seeing they a a and a don't not line look we people you we exactly defaults, eye think I robust. in a It's vertical. they Southeast Obviously, We getting on have it at strong the where that's of terms kind team well is of right. versus the see throughout

one of than retail shopping for different ours that's a anchor are, If you've an in and more suburban that's tenant center type instance, a lot tenant, a credit like a public of very got center. a scenario or

so And credits, the look on footprint. other different that are close a you when Most those. Southeast, experiencing. said, you at as overall, a in very of But are banks of lot keep know, it's a we Southeastern I our well the market than eye like

ahead But Jon we're think from retail is which we've we is where ordinary, gets the see being in address got is go the we're But terms instance, we've certainly, in right I right right terms conservative that impressive. the if collection going to anything now running regularly a focus payment for And very a out landlords. on looks of of optimistic. a rate better, got to cautiously side, it. the now now, report of or So pretty tenants still which credit lot XX% and the our – said, the around, of that filter here. And what,

to probably the cautiously so way feel And we it. put is best optimistic

Kevin Fitzsimmons

Thanks Okay. much. very

Operator

comes Marinac next Christopher Our question from with Janney.

Christopher Marinac

Good And flows there? Palmer, Thanks. morning. Hi. additional should expect we the us you update on can initiative? new Augusta and business hires

Palmer Proctor

bright going spot is for look XXXX. Augusta at to be when you a us Yes.

Somebody earlier asked growth. about had

all in he know, we Augusta-Savannah, us kind take well us And the and he's will that Remer coast you of additional and there. some As market Brinson to covering known there is joined of hires for definitely opportunity. that meaningful advantage have the

amount got in frankly, a tremendous think of overlooked banking. at market. It's on oftentimes I vibrant to is have focus tendency terms Augusta a many Augusta look is it's of And Georgia I underserved a Atlanta. when so you because quite people think opportunity. But

advantage that talent. advantage going take So take full we're Remer and is to of his full of going to

market. that that the be So in to is, will there yes, additional hires answer

Christopher Marinac

the Okay, issue it general. Should half that. bottom a it's of rising and you of of it just think the more little mortgage the or you that great. for we coming Thank is in sensitive the business And an where bit? back business the that's still as year? do started How it mortgage off think to XX-year then is to

Palmer Proctor

quickly I rates pullback. levels people magnitude today. I low to depending impetus so and a out kind more so you is of think think the create of and and it – But get now, are does the home that rises, a that inventory there an are purchase shock that on go rising, low Well, how kind have of of for right

So And And of look I into fallout pipeline I it's lot the pull-through pipeline. quarter, the to when encouraging I fourth look at and even see at a [indiscernible] very don't lot that lot see. off a of the rapid and escalation continue. people to rates fence I do get XX-year the I shock a lot if a we immediately. But there, had think think will have you the had

you'd quite then a frankly, So probably a and you you'd pullback. see probably somewhat – see of spike

Christopher Marinac

Got it, additional Thank the color. you it. Palmer. appreciate I for

Palmer Proctor

You bet.

Operator

comes Our Inc. Brody from next Preston Stephens with question

Brody Preston

Good everyone. morning,

Palmer Proctor

Good morning.

Nicole Stokes

morning. Good

Brody Preston

the there question. in wanted I to production. I you slide a appreciate the just on ask CRE guys put

LTV or have bit like maybe an conservative so gotten Just ask, wanted to perspective. a last quarter looks it all you over little more from the

numbers? that know if or Just the just out it how wanted if was to worked that's on intentional

Palmer Proctor

up, Well, somewhat because that's been intentional. it appreciate a it bringing and really has great I question you

a we made I beyond think get take of us I more COVID. equity at of what reserves was to thought a changes a on would was mentioned as came place to we little to COVID the that our payment time And and looking lot of things underwriting. those that kind cases one we trying out few were us in for a that

So do yes, us intentional. intentional that. for It to it was was somewhat

Brody Preston

just ratios assuming given that I'm values then and And flows. are based being coverage current are that. underwritten on cash are debt at for you Thank Okay. service that LTVs those new originations and those

the sense of classes to you wanted values course could if over just for so last have changed similar better how a And understand for asset give the us year?

Palmer Proctor

question. to Well, the mentioning our looking is I everybody that's underwrite hotel footprint new economics, not earlier it a a good in especially was loan. And four-state have –

So – to the haven't impacted what year. into been not sectors underwriting we're are would still that had – expect really you minor that enough coming valuations from in where last are

a change in up So seen to they've have haven't and less stick just we well we been impacted material held sectors fairly valuations there. that and those

Brody Preston

bit. LTV just collateral. on current Those topic. above the one just I performing, know around And Okay, a more guess based of sort the but which I their great. they notice, XXX% then up that are loans, grade X have did I ticked LTVs are

just sense any class had a I if if that's loans drove and it? there of drove if And asset started to wanted those was so specific you get And if some what that the increase? so, reappraising

Palmer Proctor

was quarter that That's the And a in risk the what loans X. There we reflection reasons that grade of loan rate during change were question. was are would the beyond that honestly, of still majority of the those several deferral. good a

a problems. the if potentially borrower that going – Grade that they grade had we but be, the So on is I were on problem see to may fine or something felt X we as best primarily evaluations, out were what worse at that we would we happen. other second end see yes, to whether Xs, in that did phase, like whether we do on a just fact updates a to on you come certainly clarity few that until they potential got would entered that going loans,

Brody Preston

of And the some earlier on idiosyncratic. relatively you was out into that like gave color that rolled guys NPA. It portfolios seems and mortgage deferral good Okay. pretty

They not And fair? – there assuming been kind that normal haven't and payment. Is so out have classes is that into I'm rolled that started NPA. there other just asset of of immediately deferral resuming

Palmer Proctor

a That's the side not rolled have mentioned fair. the commercial continue capacity I needed Obviously, third. out deferral the on loans two and and to did of

the It like not It we so put was widespread. just And non-accrual. that was nothing those of on But loan-by-loan. side. sort residential

Brody Preston

Okay. loan couple on portfolio. of I the a – just clarification some had

installment? to that. that that then sorry consumer And I do be missed and portfolio you auto completely much do runoff, how of drove understand you quarterly wanted if $XXX to decrease what expect I'm of runoff to million runoff? better indirect sort expect the the Just when in

Palmer Proctor

one good a is loans million – because think and consumer the that's of XX decrease same question. that's about of decrease Actually, was a for sale? bit the held reclass portion million a it the – answer, in little XX I or into Yes, a

Nicole Stokes

XX million.

Palmer Proctor

But indirect of reclass was sale. the amortization held to held for quarter. $XXX million million for investment $XX about from for portfolio

really hit the So of consumer that majority portfolio. the

in I decline think that. primarily is the

the few has the last and would the As been over amount fairly that amortization that to quarters. consistent runoff, it remaining balance

on duration just we'll you that that I kind see remaining of couple years. of it. the of have think It's next So the can probably sort over

Brody Preston

Okay.

Jon Edwards

felt in down slowed very the obviously this the to well has downturn, little a up bit one. – portfolio there have clockwork similar We held it extremely during credit and last like just

Brody Preston

I on SBA. have do the Yes, understood. question a

refocusing that had sale noted team gain the that of for your sort increased on post-PPP. You with

out is given right is we're And then a understand, is to big environment? on wanted interest forward? paper moving pricing a that now Just sort of zero and of the still that rate and recession pipeline where how coming repeatable

Palmer Proctor

the are right still favorably premiums Yes, pricing now. very

the X.XX and looking above. You're at

much I'm still a to attractive obviously cycle, more we us the as the it. can't as this build And think very option I that's sell meaningful. important so But rebuilding guaranteed portion. for it's that – concerned, pipeline. It build even that is are during far the to because And enough fast paper continue very to

So origination. to supplement it but our also focus SBA close PPP where help hope where normal organic obviously find the see is We used be, back from new to getting that's originators to that has grow. And growth. some to pipeline that to an continue to to moved back we area hope

Brody Preston

sense And is simply that about you next are best-in-class line a And business think for then if help volume had then me one on you made the with last to additional you more the sort get less? hires that obviously or want at doing the to XX%. of that. year, just with as Thank seen from mortgage just efficiency you've probably we ratio

of banking I stick a some to revenue expenses around bit? as kind and be of those expect – so mortgage as the to is declines, dollar-for-dollar the expenses with of originations And or going revenue should little it kind

Palmer Proctor

versus be tell you production, But increase a effect. business business absorb to increase. a is moved purchase be lag is new And premature, that's forward me. refi do don't reflective I a to great really teams continue rate earlier but any equally in now. added your not the as as move a pipeline you encouraging purchase have now, question, of And love to right to seeing – be eliminate This amount and very to be just have added of business. would you you we have we see the and and quickly run to scalable And to well. answer always our going have that quickly adapt we going have to as not additional as – have all we do to teams. meaningful on we that's There's right the they're No. And to existing I will with production consequential. the continue expense. But

this do come to business see and about And a But proven think up that And have at you is of seeing kind higher earlier, of kind they and we're mortgage accordingly more the rate little expect Marinac that I that. as it that that the we XX-XX. a to view like even low efficiency bit. maintain even to I'd because willing mentioned scalable, will, on positive. the that start we up ratios we're cut still if get leadership But in running that there side, environment, So I purchase rates able immediately company. has in react to got the to are said, a and to being as

Brody Preston

my for Awesome. Well, I taking the thank questions. appreciate time you everyone.

Palmer Proctor

Thank you.

Operator

Our next question with comes from Jennifer Demba SunTrust.

Brandon King

Jenny. is Brandon Hi. This for King on

Palmer Proctor

Hi, Brandon.

Brandon King

have question. instance, there to for just has potential consideration hotel any bulk I in on of one want the any book, that. I been Well, sales loans, there of Is color just your know problem considered?

Palmer Proctor

Brandon, option certainly would As consider. that's an that we forward, we look

in that driven what obviously have So we we're pricing the much pricing market of and of kind accept. and willing what by to is

do if appropriate quiver, keep So will certainly our so. in that's an arrow we it's to

be – out with to would have comfortable sale possibilities, I happen. realm of price that it's it tell the we you have of feel to for wouldn't So the to but

Brandon King

all That's had. Thanks. I Okay.

Nicole Stokes

Great. Thank you.

Operator

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

Palmer Proctor

in the for progress that as behind us. once know of It's all share integrations, in future we've you our with you the all and everybody I'll closing, Ameris. our at thanking you. that can got Thank by I here all excited will about conversions, this again listening wrap extremely is to morning. And nice we're tell

are on So as can that sounds we're and we're we in of our the well to you, team of strange, the these And remains times, operator. we focused Thank but we everybody of want for on we ahead things We're uncertain control. focused during And are participating front disciplined see a extremely once control. again going lot things earlier, But us. that just are at full and the in that strong, preparing future, we mentioned morning. still can't disciplined upside terms positioned. speed I focused we're opportunities feel the thank and Ameris forward even for and like I and this we

Operator

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

disconnect. now may You

Ameris Bancorp (ABCB) 23 Oct 202020 Q3 Earnings call transcript