ABCB - Earnings call transcript Q3 2021

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Operator

Good morning or good afternoon, all and welcome to the Ameris Bank Third Quarter Earnings Conference Call. My name is Adam and I will be your operator today. [Operator Instructions] I will now hand over to Nicole Stokes, Chief Financial Officer to begin.

So, Nicole, please go ahead when you are ready.

Nicole Stokes

Great. Adam. you, Thank to you have our joined And all today. call thank who

for of Relations referencing the we are that results and our release new Investor obligation release measures do Proctor, website our call, our differ by the Jon we to developments Credit results joined the amerisbank.com. Palmer the will available of on to I'm any details cause risks press as at discuss except I'll factors forward-looking certain in The or will call, will then to before the statements open that CEO; any may and we We that During I'll Palmer highlights Officer. our website. be begin press before company's with performance. result today the These update to available include our in comments some Q&A. not reference required financial which law. could are non-GAAP uncertainties. the assume financial Also it you filings, remind some forward-looking and up our information, on discuss Edwards, otherwise, we our during early and section vary begin, statements opening our SEC in as and results might Chief the by subject financial But general list of actual materially. a comments We'll of are statements.

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

Palmer Proctor

the I few successes, did results. morning our very for that time as results join you a few we our a growth with XXXX call. want third some good loan on impact us but the and and this highlights the financial have momentum as were positively I few go everyone. we of Nicole, thank to taking to for the as going other the Nicole a want to in with quarter which We all the the forward. production, quarter detailed minutes, hit earnings and third morning is pleased for you, to outlook quarter, update Thank you well

For $XX.X per basis. return XX.XX% tangible an X.XX% And million earned the a quarter, share and return equity. we on $X.XX represented average diluted or this assets adjusted on a on

last results the the increase basis, year-to-date adjusted earned significant X.XX% For represent million we tangible a which in share XX.XX%. year-to-date or period, $X.XX year-to-date per on from $X.XX a ROA of the XXXX equity $XXX.X year. is The on same period of reported diluted the an average return and

efficiency due ratio year-to-date quarter of said and the increase year. And the deposit our adjusted our year-to-date in and year upper on We PPP from pipelines certain mid remain year loan our PPP opportunities this single million XX.XX%. over non-recurring at within on PPP markets. loan XX% And see last during the It excluding leaves runoff. should expect during XX.XX% annualized still annualized quarter. is $XXX of to X% to exclusive encouraged Our return below organic digit runoff the both XX.XX%, growth grew and side growth, that our growth growth the the that by including efficiency our for loans We an was and X.X% quarter. the quarter by loan expenses to ratio very or runoff X.X%, based end

discuss the continued Nicole the is obviously lot a going there a did total side, few deposit continue to On there success to in which our minutes, XX% growing but of mention bearing we of non-interest front. our it and account impact, margin for the the deposits, on and liquidity to want in I now we detail see deposit excess over has the on more have success deposits.

share strong. position was said per rate the $X no almost that meaningful. annualized over the value alone. for grew this happy sheet, tangible to grown book is capital different. And balance I'm very tangible value, we're We've quarter consistently so our very during and X.X% year the growth, or by the report. side capital book of value We tangible value equates $X.XX third this to On book by we'd and And or quarter tangible remained which focused book XX% XX% far. over growth on

of sheet, exclude increased ratio well you liquidity TCE TCE very goal. XX%. balance $X over on would X.X%, billion excess our to been ratio to the the close And if Our our X% have

So, ample and have transactions. consider support clearly, growth initiatives opportunistic capital we our

focused of capital program have executing remain left anticipate itself. approved the as don't the we million this X.X the of While leaves on our extending release seen repurchase on We repurchase did of having while program. next many the our presents that year. in announce we that may like during opportunity share we that you right XXst quarter. remainder through And preservation, million third that approximately Board do on we did optionality October XXXX, during XX And our

Credit credit But As is today, remarks. our to hit our a and available our to questions wanted few certainly very highlights dividend, terms any I where after comfortable take prepared we our remain dividends with of are credit. still Jon Chief he's in today. Officer Edwards, with us

the For $XXX,XXX. we of had quarter, recoveries net

charge-offs quarter charge-off zero X.X million ratio to of compared basis last the points. net seven So

quarter same end of time total total total year. last X.X% as at assets this loans with of Loans down was of quarter points. Our the non-performing on deferral percentage which from a approximately X.X% loans, assets remain approximately basis XX consistent of were last the that

year unfunded deliver really months over last our any to talent of economy the that or see has and hires commitments last and on us remainder in X.XX%, growth the growth that's further and And now platform. dependency to quarter. solid recent was in we our eliminate there continue still incremental asset investments despite growth that's helps at for certainly this meaningful we in you, over to But Our and detail. the to to our strong of markets and Nicole of more turn results ratio, for And XX our there, tell the our the us coverage excluding loans helped made in I'll I'll the that And very targets. quality both hires stop leverage discuss allowance opportunities future PPP financial net technology continue our company. out a and distinction the year to end propel our uncertainty,

Nicole Stokes

you, Great. Palmer. Thank

on $X.XX of adjusted basis. the an per the earned share or when premises the $XX.X quarter, impairment, on the exclude charges. you for $XX.X third per So, diluted net we're asset reporting merger or and We $X.XX million income share bank loss servicing million diluted

or year-to-date We the we an million earned operating reporting pleased $XXX.X just diluted share on exclude We For per ratios. net share I when $X.XX per adjusted mentioned. are income items our you those basis. with period, diluted $XXX of million $X.XX were or same

Our was on assets in the quarter X.XX%. return adjusted our adjusted third ROA And was X.XX%. year-to-date

equity period. for Our quarter was for adjusted year-to-date tangible the XX.XX% return the and XX.XX% on common

at the $X.XX Palmer $XX.XX That this As end $XX.XX quarter. the by from X.X%. quarter end tangible increased to or book of of at mentioned, the second value was

book comparing XX% time share increased from or For year September value year. $X had last last over XX our to the year-over-year this $XX.XX tangible XX per year, September this

equity year tangible our increased ratio addition, points This over last points the five X.XX% XX In past X.XX% this increased million. basis time common basis to from year.

impacted that this negatively liquidity $X of on sheet, We our ratio excess have basis XXX and balance million approximately points. by

would ratio was So, X%. cash our been at well if XX.XX% end, out stated you took our TCE quarter that our target have of assets, about above of which

feel our and We ratios. continue dividend to comfortable be and well capitalized, capital with we

net and margin. income our onto the interest Moving

eight, of, you million interest last fairly slide real can people million last over that has shows and stable But as runs positive interest we're since you income, if last $X.X wondered of this our really over And this off. at net and that income a this quarter increased thing getting our when year. As $X.X NII, PPP look have happens core trend remained see exclusive year. proud PPP time kind quarter on accretion quarter what the the -- that it of to last net

margin from X.XX% basis to XX declined by quarter X.XX%. interest points net this Our

basis Our funding earning but the XX look we have When we costs points. assets basis two yield four declined our at really points, by helped on offset margin, that factors.

decline from the squeeze basis this the came then $X was So to decline. related PPP from decline eight basis our or income compression another from basis -- of three three from points came the excess our came points points there of income, accretion and basis about the continued margin compression quarter, to that of in liquidity three points million add

funding XX basis of the of by points costs. about basis in improvement that's And so offset compression our asset two points

declined to from eight, accounts the the billion to negative three the points attributable of of about there the our excess about four and ratio. excess excluding all ago. is only to slide $X for one left, liquidity, liquidity the the PPP it's accretion total quarter. year margin basis to point decline. that what for points you And can of our see So is, the on table XX Also and the would compression done It margin basis have

to the have So, grind deposit continue we still We costs, we improvement and real for driver is work. focused CD to excess an that improving but putting margin liquidity in our the on portfolio, down. remain them room some to

is billion the growth about become to other X% range, to next billion which to And PTP $X.X begin investments deposit activity net in of loan about net digits, and also high available. $X.X continue of We investments year leaves for fund anticipate of cash billion $X if to runoff. to opportunistic to of That that X% then kind loan our growth. buying excess prepare single

reversed an growth. improved CRE in We was home offset of with quarter, million specifically really need about the prices the due Palmer that and expense helped and mentioned recovery our the then charge-offs credit to own economy, provision. quality our versus onto that on provisions for the and index Moving for provision quarter, $X.X the this additional improvement loan

loan allowance due million compared our ending mortgage credit end credit in $XXX.X the for was quarter. including reserve $XXX.X the allowance at $XX.X banking activity. and other the losses quarter income for allowance $XXX.X for losses, this And million Non-interest total last decreases unfunded to million to million was quarter-end. Our of at declined losses commitment

million retail for the sale increased on quarter. $X.X to retail or X% non-interest to compared about quarter. the mortgage quarter about last the to -- in shown third was of second third -- at non-interest the originations $X.X open from down on that As the XX, expenses Production quarter. quarter, charges, of compared now $XXX year. the group last billion time quarter. in expense this non-interest the increased income retail is million and for million pretax to quarter, mortgage $X.X end open on million Total pipeline for from declined of average And encouraging And last similar XX% our billion X.XX% But $X.X by pipeline $XXX.X to the was X.XX% bank gain declined XX% the the declined XX% our end expenses The represent mortgage actually merger billion to the premises the the this excluding at and the slide loss this quarter pre-provision last quarter $XXX,XXX. the division. the $X.X

A versus increases mortgage during increases and those of are quarter, in efficiency ratio adjusted but legal return staff. expected $X.X savings expenses, enterprise-wide not fees it including -- under by XX% were we offset other these to non-recurring about expect areas, quarter million last quarter, and to of mentioned, for by Because expenses XX.XX% and recurring. increased those but majority net XX.X% were lot of the that one-time the was the services related increases revenue the I our declined end support that professional expenses -- mortgage year. will those to of other do As the be

which with really of is quarter. million balance On above third We were had XX, organic $XXX we see the declined loans we as side, X% with $XXX $XX.X for million $XX finance $XX.X growth billion of in of residential. $XXX slide million. last end ended C&I, the and premium against loan But pleased the growth declined of PPP $XX.X to quarter million assets CRE, sheet million, you our indirect and quarter. the on can at headwind billion compared loans

runoff, PPP about X% was that loan excluding growth So, annualized. our

$XXX about We loans have left, loans of million have $XXX million about we PPP left. indirect of and

So, the in portfolios we really of these next both year. subside anticipate runoff to the headwind early from

balance balance billion a forgiveness over While the at on there we in round PPP $X about the And I'm received balance quarter I'm balance sorry average -- million The there. the was average then second round on the compared a second just third one, TPP, leaving quarter of million. $XXX -- have million. $XXX quick two, $XXX just outstanding update of to in payments million. loans just We've in and of of the an quarter $XX

left million the $XX.X the PPT loan, we into about have income deferred of anticipate income We fee which, amortizing quarters. next three over again, on

discussed interest assets and sheet other in $XXX due earning that deposits our key Deposits excess the bearing is can real saw million, the growth decreased we non-interest million. see our we $XXX already $XX quarter. So, tremendous balance that about liquidity here to the grew on the deposit this million. But bearing you grew

just are grow do that bearing normal as really rates deposit non-interest mentioned, runoff as our growth. future life Palmer post-pandemic starts of as I This fund back to to said have bearing last continued to now quarter, And total some our anticipate potentially XX% is deposits get we bankers our to non-interest rise. and key over As deposits.

over So Adam will with that, the for I from wrap any it call turn group. back everyone's to time I want today. appreciate up. to the questions I

Operator

today Thank from please Brady, Our Gailey ahead. Brady KBW. from comes first you. [Operator question go Instructions]

Brady Gailey

guys. morning, Good Thanks. Hey.

Palmer Proctor

morning, Good Brady.

Brady Gailey

I mortgage just fees. wanted to start with

If MSR, more linked-quarter, about which down the would the back mortgage were out related fees XX% is to little than they a thought I be. you noise

I just a surprise head are know of on about maybe comment tough XXXX? predict. that as So, it it's thinking guys? decline? thing we And kind how Did into to mortgage you you any

Nicole Stokes

a conference Sure, Freddy with learning -- system the sorry on new our Brady. The that. We're about end -- call.

So, Brady. up round name, I the picked sorry,

in do has and production the the So, timing on sales the we had and in that to of some quarter. second large a mortgage second revenue of acceleration quarter side, lot the with the that

that not did necessarily drive quarter so It's quarter third a affected it the timing down second the was So quarter that elevated, the little third bit. -- because issue.

as do again that about of said, XX%, -- we some was timing So was the down production revenue down and was the I XX% issue. but

So, that next discussed release should we rebound. that a and back in to pair-off little it quarter, the anticipate up go we bit press

Palmer Proctor

margin I everybody there. back think the X.XX%, bounced we And X%, Brady, think, more importantly, down too, That quarter. the were to saw at improvement in I over last

and impacted fourth mortgage, the sales you and margin, second very lot between is we that about of timing, to of a have meaningful quarter. in end we know, So, terms opportunity feel the as production all had positive quarter obviously but of some third the mortgages, about at the quarter

Brady Gailey

That's then, All expenses $X quarter? anything there about million Was I noticed that up in right. And linked-quarter. this other were helpful. Nicole, other notable expenses

Nicole Stokes

some we had what settled We did. expenses. legal We We our suit. one-time, one-time old an call

related the fees we then So that some had and professional additional settlement. to

state increased And -- also you just to the one-time so, had those the then, liability. then to as That's and getting tax, this And to that that also out we don't a due tax slightly of. That about expect back talked we like notice some we recur. expense that we're if quarter. we lease expect And was our a tax state well. thing go rate --

Brady Gailey

head right. thinking Okay. the as into we XX% last then, ratio guys. we've you're talked I about to for the All still know me. that about of one way Is XX% it an for And you efficiency XXXX?

Nicole Stokes

It is.

targeting still below XX%. are We

Brady Gailey

Great. guys. Okay. Thanks

Palmer Proctor

Thank you.

Operator

of is Our open. go is Piper from Sandler. line next ahead. Please Whitman question Casey Casey, your

Casey Whitman

morning. Good

Palmer Proctor

Good morning, Casey.

Nicole Stokes

Casey. morning, Good

Casey Whitman

Good morning.

-- you your interest look without the and reasonable loan growth see if of outlook could that for in Just we next accretion, sort we what income without -- we net income kind sort of year, wondering, of for think too and at core just growth is Is it how what's that maybe us Or growth given year? core digits? interest next give of if single a low? outlook can net should sort about PPP mid

Nicole Stokes

thank So, you, Casey.

quarter you quick going bankers when are the talk if PPP things that just That's have tremendous to of -- our think that able lot I that of see been one to we've grow see I'm actually And real of and -- this a that and done kind accretion, you flat. excluding job. a our NII. rates

do a room little have deposit more on side. bit So, the we

This more from defense of We points basis quarter, bit we deposit a room NIM there still coming about CD side. mostly saw two little the the have on side.

So that side. the compression should see from help stabilize of we some that loan might the

see -- the we and upward there. So, start some and when movement to maybe the you or steepening yield tightening, think curve about Fed

We are that way. asset positioned and sensitive we've ourselves

again, move of So, million XXX point $XX for basis NII increase is about us. about

that we we'll XX at to movement in well. yield when we the really our basis say to the between some Fed bump start in point as get seeing improvement So, about basis when and increased move see of NII really start you start XX is curve the can XX with points on as

Casey Whitman

Thanks. to guide, to kind just And year? is year the about that upper -- loan to this Understood. potentially upper X% the X% to and Okay. Is a then of getting I mid mid a thinking Just range range. then up to and to clear. heard for X% tighten you're closer growth to for next be X% that how to

Nicole Stokes

And indirect That's the headwind is range and a that of exactly is then of year to is right. lot that kind coming the PPP. X% right. that This X% of next X% because That's and in in to year the X%. of

Casey Whitman

am Thanks. else move year. some out [ph]. next one I assuming I'll let

Nicole Stokes

Thank Great. you, Casey.

Operator

please from Kevin from question go next Kevin, Our D.A. Davidson. Fitzsimmons comes ahead.

Kevin Fitzsimmons

Hey. Good morning, everyone.

Nicole Stokes

morning, Kevin. Good

Palmer Proctor

Kevin. morning, Good

Kevin Fitzsimmons

you in can margin, you it, to and drivers into I next out reported core what you're I into obviously, it, a then, then the looking and fourth you liquidity -- quarter talked very characterize missed with I margin about want margin a however bit and for you Anything would if it. important apologies wondering guess, could And that, the was how -- year? if quite I -- you the it. Nicole, part of of -- and is excess over terms if do

maybe a you into waiting securities? Or come? So, tangential aggressive little plan kind are coming, Thanks. more it you get this do that is, to for growth content a more to on deploying loan see question if you of with

Nicole Stokes

Sure.

liquidity. quarter. far basis have XX did we it, look at this of you the the comes as compression So, as have eight really points basis But from when you margin, points

-- really the then then so, points all by accretion but income our came remaining two basis loan And was it came the on PPP income, down it offset basis four side, the down the was basis accretion six normal just points and points. that

So, when keeping in know you which is to next do again look able that huge run at quarter, don't we the core margin win. that we're rate, successful to of I going flat kind were think I quarter. be for a a that

could I on offset think on side deposit one few to the we have basis a potentially that loan two basis points side. another the points

points. rates really go said, So, like I we to XX to up need XX basis

Our coming rates our lower on are margins. than

bit So we to a can defend but now, doing deposit drain the we're on side that. there a little right of is everything

as that the did buy portfolio, we liquidity, it there any deposit to start quarter, out of to about far be for prepared year. opportunities we've second for about runoff. And excess see next then, in in X.X loan as We've us $XXX in As got be other BOLI. to if well earmarked million ready about the X.X we there the to into excess was come bond That as $X gives one to deploying billion of liquidity. growth

go doesn't the go it margin, into income. non-interest While does it into

it portfolio. some to investment. could that cautious We to hold in investments to some off type CRA continuing type -- the health did We use on maturity the of be transactions, on any start bond but So being are our liquidity. those us buy of in really for bucket, to really opportunistic of held

when we don't -- that a we OCI. something today months to Just to big do want different, from now are in six impact have rates

liquidity know And through if NII the costs that diligent just remember that and that and control the to disciplined can that on we trying excess really the loan to and deposit be focus we're through watching the margin grow and NII we growth just there. and we continue ratio the number growth our there. can So,

Kevin Fitzsimmons

and get if given interested a banks Palmer, generators, M&A. do just Great. important, of One lot That on get we've bank question. sense. strategic your excess out M&A maybe by lift -- And and do I hires. perfect -- still environment, can more you to liquidity. is additional updated What wanted bolting if your in differentiate this as can you or asset in thoughts seen on if out makes non-bank, maybe and team the go

on Just thoughts wondering what latest that are. your Thanks, Thanks. Palmer.

Palmer Proctor

to line importance business We're ourselves really forward said, I take as But in look You make is you your we speaks fee of here, And do benefits can that optionality, we're is that a at Because to have wording. look out we're certainly -- particular that And one to somewhere, in, finance we got bet. margin, income business answer to things it's which the pretty see piece you that a that's the whether and answer our advantage sense or able and dilution. critical, one is to profile. of further at specifically, know, if company not on and being that the SBA It's we've well we're as dependency would both will of or of or to the go kind of all sensitive the of here as just very mortgage. it. think opportunities. positioned banking question premium disciplined more having the entertain we I When do But we'd lines to looked non-bank. our well. the of

do both non-bank think the potentially and for in opportunities lines addition other those to bank to fee on further we finding I existing So, things could side. income

Kevin Fitzsimmons

you. Thank Great.

Palmer Proctor

bet. You

Operator

Instructions] go David David, Raymond from next Our please is from James. question [Operator ahead. Feaster

David Feaster

Hey. Good morning, both.

Nicole Stokes

morning, Good David.

David Feaster

million a the about guys help? to Does do have hires couple side. there quarters. upstream? we've in guess, of just I Is forward? going curious job on that just about talked wanted you I new appetite done you a production to -- of the ability steady, production, $XXX production how think it move the talked in about? the good past your Overall Just is start you to increased maybe Or accelerate north and about that that production. thoughts held potentially on past really

Palmer Proctor

would David. Yeah. way, answer it I this

We are on fortunate the in months, with right the over I that very on that markets. some little very betting we've for the the because investments earlier fortunate XX there's on and and got last the we're be touched comp high-growth future dependency very made we've resources in place, to

So, of the when year ever been. look and you growth pipelines into as and at they've still for incremental remainder year, this are the next

lines feel very all encouraged loan both particularly, deposit from in a in, of that's a we're of And So, in the a the new across more and and production business. lot standpoint. I markets board

hitting a So, others, you while I stride. were run we coming unlike is that back And made ramp-up you of not we ramp-up think Because in. big a period distinction, the when from be at a know, know that heavy period. rate, for got we're a look already make us, markets the there's many investments -- as for growth new and especially already when pretty exactly we've that that talent, some production investments you period. us will much a I the And where think in

to the has our headwinds. and in. operate talent and lot A a as to do feel political in to ability driven growth with the markets it obviously now, lot to confident and very continue happens for grow, do of a touched right But I that it with what we the has that with lot the anticipation by terms So, of is Nicole economy in growth. on our

David Feaster

bit -- helpful. loan That's curious on of maybe landscape seems your a structure on thoughts on a -- landscape. Do Obviously, come standpoint. you pricing But front, it lot the on competition from then, side. intensified We do And guess, do competitive on you just just the a the like touching pricing the at there's both And yields have hear down. think more competitive I a variable then pricing think the and that's side. new all? you pressure

is the we Just the all be helping curve at might of steepening troughing. pricing curious that whether new

Palmer Proctor

Yeah.

pricing think challenge. to I a to is going be continue

know, In good you, see all on terms that's reaching I compromising quality, products asset peer thing, road. anybody the don't major our tell of down I can in quality because structure, lead to of group as asset a in which will terms is we

periods from seen see anybody The more What lines of do quality. So, seeing along the see there deals. same compromising sponsors lot non-recourse, or the at some seeing don't non-recourse, I've there, I more a but that going on what interest-only out offered. are reaching you're behind being you're those much time asset deals you are equity basically extended into and on structure, stronger

not and a very competitive So, relationship a involved. pricing there's think way simply mitigants some I if there's transaction, that's The there. we to be very If different. look at is we're there's going

is have due depend for The I'm growing indirect for relationships -- they glad distinction other portfolios, into don't ability When a we that, bridge and that a think, can to a is to to lot a can and strategy, big on, just thing, there these I not we people of strategy our organically. that think I are to become us, dependency grow participations. have on third-party situation. permanent dependency a want That and get something ourselves a

side in seeing terms interest on you're interest-only is going compromise that right C&I fight But competitive in said, have we side. then pricing, on for look be CRE structure and both being and non-recourse. rate only business. I'm the of really as risk you then now the the may periods taking be to So, And to continue forward, very we'll to that the

David Feaster

then, matchmaker. And on helpful. lot That's there's Okay. I up mean the playing a of of discussions Everybody's there. M&A out just kind following commentary.

need coming those. transformative think Just do don't Just of you are your appetite from of those guys to something. that what's about this for and guess, versus type curious opportunistic maybe a more appreciate deals? more standpoint I how you bolt-on acquisition at an type some

Palmer Proctor

against not over in larger been we to but I a Well, here, tell difficult NOE transaction, they're disciplined point, very through we've to can having implement your been our you just extremely are approach. And an type time.

And so, to be challenges. for those have you prepared

lines, something at we're have So, as know. start us be very dilution, those to you along a that would lot for -- it you And would get into of when and sensitive to boxes. check looking

when partner we're keeping they that that go against being have in that going it's to be hard not so, our And transactions, you path, to said, a to larger But certainly oftentimes find here. but be would regard. down disciplines in with

David Feaster

Nicole, you just And give us could expense going -- Maybe core one more quantify in. appreciate run one-time on Okay. just squeeze the Could you any thoughts rate Thank the expenses. commentary I good those? if a on you. forward? Could

Nicole Stokes

Yes.

piece the So, million. $X of about then the was the one-time tax other $X.XX million. another kind to were about And expenses $X

David Feaster

Okay. Thank you.

Operator

Scott. your Our Marinac Montgomery next comes from from question Christopher is Janney Christopher, line open.

Christopher Marinac

can morning. commercial, in talk Just both Nicole, future? new hires and of in the mortgage changes all Hey, wealth staffing Good Palmer, new -- about the on you thanks. kind channels? of curious

Palmer Proctor

I've got that question. for fortunate are we Yeah. need. growth. our in hit to current everybody you, for sense The -- Chris, mentioned we before, the We've as Thank the projections

Tampa. of bankers, about incremental that across to anybody growth hired terms the we kind And Greenville talent the there. was Jacksonville in quarter, commercial evenly -- terms a of and third of add way folks commercial we and from board dispersed Atlanta, is in So, talent. front, now anything in five It of

think fee made that We we're grow be other and well, some into constantly and department bank, to there. as continues recent in expand area especially wealth will income Mortgage, meaningful hires have great I that as the we hiring opportunity for the markets. the

hires from of that larger the active. the primarily we're majority seeing, now, so the the And regional is the But banker the we're in seeing most which coming banks is of that's front. talent -- right or on always commercial

And some to We're of markets. in in talent and the some are seeing the Charlottes, our newer the there those in markets, add Atlanta supplemental Greenville, good some Jacksonville opportunities addition Tampa.

Christopher Marinac

this efficiencies you in mortgage, kind kind how then that as business. And just will a some year? what's I gain play was evolution multi-quarter the this sale And there? of better a Great. know quarter, mortgage on out that but progress Okay. the on of the of I next follow-up disclosed. know it's on the

Nicole Stokes

Sure.

to group. revenues. to think go you look side mortgage mortgage expenses that with ratio can the So, on the efficiency that the see down added our I we we in the continue at continue And --

so, but And of quarter had pair-off are they of we expenses. because XX% about did this -- fees, those variable -- have we our -- our still

any in areas change the of for what to efficiency. continue then mortgage we that to efficiencies. look And other kind some will find And drive within production is so

Christopher Marinac

Okay.

Palmer Proctor

through just find But opposed as like we here too, we big driver looking and for for through hit as and then pandemic. ours We forward, opportunities in which start how also and we helped got us type to last go more included. a continue companies produce. that at propel as more opportunities more a opportunities terms technology of Chris, the of that being -- retail opportunity mortgage to exist said, that, we've on really the capturing big talked efficiency us the just network. all mortgage And is feel we quarter on good a during online

Christopher Marinac

Nicole's just Great. on point. expand And to

you there's purely if slightly to quarter margin not better, a get have efficiencies. those or opportunities a just expanding, So, the is production where year still

Nicole Stokes

say opportunity you not efficiency but gain production. on margin, there the is on When the sale margin is so necessarily, for the an based

Christopher Marinac

separate? Two Okay.

Nicole Stokes

That's right.

so got you sale. you've about got revenue, drivers, you've on really, mortgage think and gain two production when And

sale. is on necessarily a the so based of production and on expense And lot the gain structure not on the

-- goes gain down, gain the that. have up as you or But driver goes where production moving sale better. that But down, will stabilize necessarily on expenses on the if on line ratio not up, the goes the if the obviously, in expense with to side there's So, get it. sale efficiency

So, driven it's certainly far side downward by improvement the the as production ratio. an efficiency of as

Christopher Marinac

I Got that. clarifying it. it. for Thanks appreciate

Nicole Stokes

Sure.

Operator

ahead. is Our Inc. Brody Brody, please next Preston question Stephens from from go

Brody Preston

good everyone. Hey, morning,

Nicole Stokes

morning, Brody. Good

Brody Preston

in Nicole, a caught my to the release of it as there eye. relates is that kind line press mortgage

charged reduction in compared mortgage they to of mortgage other loans million You the fees those fees agreements. second fulfill the noted of their sellers pair-off an of to kind And quarter. that was are typically $XX.X if don't there

what Like you fees buyer for you those -- of loans for pair-off And all? mortgage before securitization is what are so, are the a all purposes?

Nicole Stokes

Sure.

timing had quarter of do quarter, we of so are to last some. in And able buyer selling fulfill we that second some compare the of the loans it's what a because and overall were a quarter it last no, to And And issue. really we those. the over not is production, received of accelerated because some and we that outs excess,

coming which last And down quarter. so, drives of this that that quarter, we've really is got benefits that the of

necessarily it's or quarter. we quarter. penalized that were some that had It's excess additional we last some this just So, not

Brody Preston

of from that And Okay. margin quarter? Got gain excluded that the in on is last was sale Or it. any that?

Nicole Stokes

from that. excluded It's

Brody Preston

maybe Okay. this for Understood. margin just the Maybe a Understood. that. different front, try on Thanks in way.

look $XX about this income impacts PPP. I XQ at period. million, quarter relatively when stripped new all And $XXX the over and down are you I I you million about $XXX out million but versus core loan Year-over-year, the that that loans of all HFI know in production the are quarter. X% to accounting purchase X.X% and grown the So, about challenging, yields have

least division at change look help I mid-fives range. know Ameris, for guess, book, the to be of that And standalone kind yields loan to income I when in forward, the banking XXXX Lion on loans maybe I fours bit But me of about on the guess, a high the XXXX, lower. trajectory, seem in putting back post I and some new at as especially So, [ph]. of was coming production think going

seems like challenging for a ramp just income despite outlook strong here. from it So, loan a growth

that? think So, about how we do

Nicole Stokes

And definitely curve, just right. example don't any of rate said, the if job, is No, especially battle, you're you like it's tremendous that. bankers this our mean, there if done but or have that I a take Fed exactly uphill an quarter great a projections our -- steepening I think I out --

and continue growth we to in coming loan side, on the below we we current our coming have do to rate the to squeeze while on continue see that. the see that margin, So, offset of some

versus up revenue, -- So, that make make you volume you some of rate. lost it on some the up of

And over the rate coming fixed few continue on production it's our last fairly that. variable production And our It's look interesting you rate been do that so, stable that's quarters. kind we of lower. rates, to at has when

sensitivity start will us us so help in move help the as side that to portfolio well helped environment. asset will us move, when that rates that do And and on and will that so piece the of

Brody Preston

side, you that $X.X recoveries noted all that only Thank a specific there gross notice there it. the charge-offs was decrease for you million And CECL net quarter all the there on then Got reserves. on -- in were And million. that. you were and $X.X

Just related what think that wanted I I a hotel there it So, that? this it reduction was that? exposure to happened for what get sense a quarter. in the drove ask, was to to Was there. wanted

Palmer Proctor

That's exactly what happened there.

further were removed impact, As or and behind ahead quarter, the the through they were loans COVID we of XXXX hotel hotels off -- push showing of improvement certain the list.

Brody Preston

Got it.

some -- a you where kind think Okay. where forward? going pretty there weaker I as think work it the those -- still the was of that with was good to loans exiting are of earmarked that list. And year. did of natural of watch borrowers? for job something kind I guys exposure that $XX.X on is mature million runoff they Or that Is those relationships something you you've last the hotel continue Is

Palmer Proctor

heal hotels reflection Well, of what really, that were faster than is to some is more others. a

good sustainable. performance of kind until we're and list. financial the We've -- get watch them of post-COVID, And they're the so, left pretty on clarity we better

operating is to but those bank, not home. time what sort yet the they're but of of a saying that is, to over really really hotel necessarily or little results, better extra reach we'll the that get take to look loans remnants of continuing the So that just to have breakeven out push just

Brody Preston

it. Got

it one pair-off fairly -- Okay. I And be something to more circle production question I Should more. lumpy could the those basis yearly fees I like rate, from idiosyncratic those some Or had quarter-to-quarter? and going a to is that fees just that I run forward? is tied that excess shouldn't modeled those Nicole, quarter, expect just the pair-off back to we of a on then, had to someone. be if should in

Nicole Stokes

latter. The

the You're exactly right. in sales second quarter to do accelerate quarter. it really that to push some And had with the second in

it's as so, typically not lumpy. And

Brody Preston

appreciate Got you for it. taking very Thank Everyone questions. it. my much I

Nicole Stokes

Brody. Thanks,

Operator

This concludes today's session. Q&A

any Palmer So, now back remarks. hand Proctor closing to for I'll

Palmer Proctor

grow for growth efficiencies and for results. into opportunities XXXX. and everybody forward the as on XXXX franchise. and we excited remainder really future Thank And listening you, to our and we remain the the thank stay operating Adam. Great. And third I'd we to quarter again as well-positioned like remain about XXXX earnings disciplined to We go focused of

for again Bank. Ameris all in your you thank So, interest

Operator

This today's call. very for much you concludes your Thank attendance.

your disconnect now lines. may You

Ameris Bancorp (ABCB) 29 Oct 212021 Q3 Earnings call transcript