Earnings call transcript Q4 2022

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Operator

Hello everyone and welcome to the Ameris Bancorp fourth quarter 2022 conference call, and thank you for standing by. My name is Daisy and I will be coordinating your call today.

If you would like to register a question, please press star followed by one on your telephone keypad.

I’ll now hand over to your host, Nicole Stokes, Chief Financial Officer to begin. Nicole, please go ahead.

Nicole Stokes

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

call, will on the financial section During we our highlights and press of that the release are at available website the Relations be Investor amerisbank.com. referencing the

by I today CEO, our details results our will Credit discuss Proctor, our some opening before and begin financial up Palmer the will Palmer with Edwards, for we comments Chief joined I’m Jon Officer. and Q&A. open then of

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

measures these our in see GAAP presentation. You can the our measures and to reconciliation of appendix financial

With over that, I’ll to turn it Palmer.

Palmer Proctor

I Thank to you everyone. Nicole. Good the appreciate time taking today. you morning join our call

financial some view, some the reported I’m strategic also and gets of into results in excited our yesterday, very able details. were of we We be to with Nicole the share financial pleased addition before to the overall highlights to

basis of million expansion quarter to our had and diluted just income X%, share. diluted net then earned million we or or interest six For we $X.XX over points over where improved of another per $XXX.X income per income increased year the quarter, $XX.X by margin X%. margin the fourth net for and our of share, reported net We $X.XX

in growth our from industry the than is XXXX. metrics and XXXX, year and was refi over $XXX from revenue income we really million income full proud the the of in experienced the we’re the net PPP XXXX of that of more decline for and interest One boom replaced mortgage

company, a in year. resulted revenue expense PPNR in overall with for This from XXXX control This $XXX.X disciplined increased million ROA our to this XX.X% XX.X% and As pre-tax, X.XX% the million in in XXXX. our of to our XX.X% a $XXX.X growth XXXX X.XX% pre-provision for improved operating efficiency compared quarter and XXXX.

our remains capital for As position strong. capital,

ratio which to we’re year, PPE book end and focused is shareholder said tangible value share. this year end value, grew Our $XX.XX driver at by a for XX.X% tangible was and the at X.XX building per we’ve of we on value consistently growth the we book believe main

loan our with we’re quarter, includes the our of sheet pleased deposit On billion value side an things, Loans as of balance purchase as grew $XXX insurance-secured loans. cash balances. life million during over which approximately asset of the a well growth dollars

for XX% growth fourth quarter. purchase, organic was $XXX this loan annualized or Excluding million the

XX%. or year loan billion growth was full organic Our $X.X XXXX

in anticipate growth single but growth moderate to though, loan XXXX XXXX. mid still continue guiding, We for to loan the are digit

total deposits total deposits. ended compared our last of and deposits quarter billion to total XX% flat non-interest The about $XX.X and $XX.X for represent relatively at year, were billion still our the bearing

X% these We’re and deposits relationships, less going still broker work or brokered to to protect in CDs. than we continue have diligently to

our loan growth strong. On quarter and due $XX overall updated the expense this We provision and credit remains quality million none credit of to forecast, economic was deterioration. to recorded due provisioning a this expense side,

XX a for basis assets points as guaranteed assets excluding percent our the to Mae the of total the improved was ratio and charge-off non-performing year, Ginnie net points. annualized quarter X loans basis of loans Our total only and

coverage ratio to unfunded improved excluding year. of allowance at the end Our X.XX% the commitments

we’re for I outlook and summarize, strong got economic reasons. fundamentals daily, while seems and the change say XXXX, to this we’ve prepared To for several

First, balance next going that’s when and help margin few have us the throughout protect the slightly you sheet protect a to asset Fed we sensitive look, hikes.

have a We strong deposit base. also core

As lot a you as efficiency of to of expense this We’ve ratio. a in above our and know, and pre-provision with range it continue culture. What are and than drives greater X.XX X.XX the ROTCE ROA deposit control we’re modeled, expect mentioned maintain got we’re to a than strong this ROA an was going betas earlier, projecting X.X% to sub-XX as XX%. culture an is better a to also target year, pre-tax, X%, I

got bankers, least, diverse book income net with at continue and accrete lines tangible we’re among bank of what core there’s our over XX% can’t and achieve stream why double-digit reason going business revenue other coming growth. we of positioned to geography have to mentioned. of to how terms and look you We’ve a the when I value experienced capital our segment, expect markets but Last no just from not in we our we’re and

over stop results detail. her Nicole I’ll it let more turn to and in and there financial discuss the

Nicole Stokes

Palmer. you thank Great,

basis for $X.XX we’re MSR gain, $XX.X As when earned million million per you diluted you fourth $XX.X the reporting $X.XX quarter net or per diluted mentioned, On an we exclude share. share. of income or adjusted the

on fourth the X.XX on our common quarter tangible and XX.XX. in adjusted return Our was assets adjusted equity return was

X.XX or XX.XX reporting per we ’XX, On basis, year. For ROTCE the $X.XX full full net share, diluted our year the of an million our or and $XXX.X that ROA million adjusted brings per for income diluted share. earned to $XXX.X $X.XX we’re to and year

- year. the value the XX%, and an tangible or quarter this grew period $XX.XX and that’s of end book of $XX.XX $X.XX value quarter, at we share We at the the for started the $XX.XX we ended by year-to-date ended mentioned. with the per as $X.XX at increase beginning book Palmer year of tangible at We almost of

$XX income compare compared you and quarter the to last when our year. interest the of increased fourth $XX interest comparison, for quarter to to our margin, $XX quarter compared last million increased and and when compared million fourth year. income interest quarter, In quarter of million quarter million net onto only this $XX Moving last just expense increased third

year had the so our full increased $XX net interest or million, increase year-over-year. in $XXX million a just we only our increased interest income of expense while $XXX million over ’XX, interest XX% For about net income

asset the there important segment, the year. core when really at of core have net expansion. run-off, that That $XXX.X that margin bank bank or both so and this to our attributable was interest look included income headwind What’s million the increased is to remember XX.X% we the you PPP growth in to

expansion, points last quarter basis margin X increased from quarter. X.XX% the On this we X.XX% this quarter to

deposits of modeled we’re increased on Due XX pressure, still rates increased this yield earning our points. we while raising been more have basis assets below Our to quarter XX our total basis competitive points deposit betas. aggressive but by only cost with

Our cumulative XX% has deposit beta of original XX%. been this an compared about to year model beta

be sensitive X% asset XXX interest We up updated increasing NII an environment, the on we’ve continue in about rate and with Slide information to XX. sensitivity

revenue expenses the of for Expenses Once the there. and did the declined great represent the group $XX.X by million our division mortgage mortgage that again, XX% quarter back. expenses in due decline reducing Non-interest variable in was a as and decreased mortgage to $X.X their $XX job division. about of million, pulled the million production income

Purchase at prepared of we pre-pandemic, success levels. really activity, business for this continued historic stabilized XX% pre-refi levels the to total [indiscernible] closer boom and year are

non-interest our Total quarter. the operating We efficiency. million in remain focused expense decreased on $X.X fourth really do

XX.XX% quarter XX.XX% XX.XX% to adjusted year. from year efficiency to compared full the for this ratio ratio was improved efficiency Our quarter, last and XX% last our

opportunities, an the continue look even XXs We non-interest increases. efficiency bump, ratio in we is although low next for to cyclical year, maintain and quarter always these expense first there believe can still with we slight reduction expense a

billion for to the be We digits balance mid assets the year flow that year. the annualized XXXX year--that’s pleased and year the we and to or and billion sheet total for anticipate quarter year. in billion last of last $XX.X XX% the $XX.X for loan growth On billion were was for compared XXXX. $XX.X XX.XX% with year, $X.X do growth the full with $XXX.X million this quarter, next [indiscernible] or We ended unit side, of single

we’ve were X% non-rate over sensitive total over got are and our our billion non-interest $XX.X represent include of flat Then at than we Palmer quarter, XX% exact. deposits and bearing XX% deposits relatively mentioned bearing still total brokered. our for they be deposits, our minimal--less Total now represent the deposits, earlier, savings, our deposits of deposits, non-interest as XX.XX% to in of

wrap the and With up Daisy the that, group. to it any from I for over back call will questions turn

Operator

[Operator instructions]

go please Whitman is Our Piper line first Casey Casey, comes question from open. today from your ahead, Sandler.

Casey Whitman

Hey, good morning.

Nicole Stokes

morning Casey. Good

Casey Whitman

a grow think that next deposit I the your expectation the model. quarters few it Is starting, Maybe guess, versus towards in at longer the you or mentioned, first over Nicole, your will beta cumulative beta that not. of outlook on I if term the kind has, gone XX% over XX%, costs Maybe end your just up meaningfully beta were touch they the were bit? deposits versus a or quarter quarter, where where come of that’s XX%

Nicole Stokes

model model about beta about to was the you cycle, so that our and XX look that. so and yes, is a below including so model compared current in, that’s we at--and were our for original so our current XX%. bearing original is non-interest XX again, beta is about a interest about all and and modeled that Sure, bearing, beta at When and we’re XX, XX%

rate asset pressure moves that, that we to Fed beta our that and peak still guide is peaking I competitive moves, would the deposits. every margins with be two near about seen--definitely to now. to peaking are guide sensitive, be or the hike, We this margin the say beta, asset market, and or if protect really that what but is stabilizing point at we extra they able sensitive, we or have and though sensitive, are we more would so have seen even X%; We week one the would that next in have slightly asset catch-up

Casey Whitman

Mm-hmm.

Nicole Stokes

to on I end with Then at Casey. you spot deposit get costs for one, the might that the back of quarter, need

Casey Whitman

Okay.

Nicole Stokes

costs were for at money the and with and total we fairly end spot mean, move reported our for in of X%, the I a of X.XX%. consistent our will are with the money overall the that [indiscernible] about year those what for costs--so it’s markets costs the be that about now going there, about of but market they’re costs--I quarter, all CDs, spot say think latest CD I our our to CD

Casey Whitman

this purchase also Okay, it I deposits kind growth funding deposit appreciate guess, costs, the costs for of just the just loan more broadly that. broker versus appetite Maybe how walk I guide and and with and, talk the strategy also applies FHLB loan quarter. FHLB borrowings and us your about through total versus to

Nicole Stokes

so wholesale some into cash credit Sure, fund like was modeled purchased which really when that which at loan least we like portfolio ROA. The we at we of you that rate, so funding, X.X when that, and is we of we--going we portfolio, that and like with this, the we the at third year, that model accretive temporarily. borrowings and our a end at the value that the FHLB fact to look we--when purchase, to that surrender

looking our a we sorry, we made the do FHLB really, But advances, done brokered FHLB grown if had decision X%, from as instead about have wanted ROA lock borrowings, we deposits--I’m were would profitability, ratio had had so margin because those the doing instead from borrowing, would deposits from in $X that to broker, a billion standpoint. than of denominator. been that longevity advances, had brokered we we a and booked that which So room that at that were to profitability than of doing profitability [indiscernible], that because is the at we if and we rate less XX% deposit We really to our and less FHLB timing an our a look loan of and really we brokers instead of have and remaining that perspective.

Casey Whitman

Mm-hmm, okay.

[indiscernible] loan Just the credit. purchase, obviously the you with with

is more one-time more and of transactions? to kind sort what of to that in yields book, or this are plan the is add that Just

Nicole Stokes

converted of it all complements existing We core to value This X% the yielding of is we system, to so like so surrender no--very one-time that very Right and purchased had. to portfolio that minimal really transaction, already we our cash overhead now piece and credit, We already over that risk, the secured. the a continue little there’s offer, like it already have--that’s a it it’s that, really but acquired it accretive ROA. rate the to was product with low product. we variable it’s credit product, we is so

Casey Whitman

great Okay, thanks for taking my questions, and quarter.

Nicole Stokes

Casey. Great, thank you

Operator

very much. Thank you

KBW. question is Gailey Our open. Brady line from ahead, go your from comes today Brady, please next

Brady Gailey

guys. Hey thanks, morning good

Palmer Proctor

morning. Good

Brady Gailey

I you of way gain incredibly here a in points perspective? a forecast, - wanted a to But any to in I is XXXX XXX like down think and sale could XQ. helping sale mortgage step know it’s on what start mortgage know, about not volume with mortgage another gain in to you. look revenue from and basis hard on

Palmer Proctor

tell - sale Brady you kick in I’ll and kind Nicole of of the portion I’ll then the gain what, I’ll talk it. of off terms on let Yes, on outlook,

into I all is as the back rates of and find but think higher board that we really more has pre-boon, is seasonality everything is mortgage level kind seasonality to accustomed frankly, experiencing we’re there’s which quite where going to. pattern obviously industry industry, the the across so year-over-year, what that were you’re moved in an think shift, nice I more were a to to be we space what it’s because pre-pandemic, set a of going of reset

of First your each is there. season, quarter third continue quarter, that typically then improvement and and quarter, is quarter, always picks of rates we’ll highest spring see then second kind generally typically quarter fourth then and up the to selling of assuming because year some quarter weaker moderate,

long long the and XXXX. moderating probably term kind X.X, X% Fannie We have products X.XX steady for to of think a Fed in Freddie-type rates term XX-year, rates the into will around bringing

seasonality. market, right so just more glad of we’re and kind all positive the to getting some now I I we’re what pattern it’s which think that’s pretty going think for of to XXXX outlook housing into actually is the back experience, see, in moderation that

Nicole, the to In sale, you talk gain do that? want terms of about on

Nicole Stokes

Sure, between we’ll mention cyclicality quarter, of originally and stabilize. quarter, - at but I feel certainly much don’t on back have but and which good is know quarter. Fidelity a when quarter this a should it’s to that’s--we so XXXX, We’ve do you’ve quarter I up a our about also don’t ’XX, feel There’s said--we and we that X.XX, quarter that in some details there, go Fidelity, really like that’s gain and when X.XX definitely going mortgage. on was that little said been X like interesting to sale got of you pre-COVID, noise ’XX, wanted it’s fourth fourth and comparison so and kind so fourth ’XX post it’s so look fourth pre-boon, post it’s it’s a the that get

this to at they’ve that efficient. with When XX% because this you had that, the become refi XX% quarter our sorry, learned more quarter and of look quarter down the our group that improved, fourth things to is did all lot greatly over--I’m a boon, they is over has do profitability but during and production that so about mortgage ’XX, of definitely

so they’re to they contribution their this to so loss at and able and net of quarter net continue they up company XX% just continue comes to gravy efficient if that our projection us. about look were of you stay and gain when XX% for gain going income, when the our about for be be monitor on make kind be income, of that, to ’XX, back, in Then they to they of sale sale, of on on all that it’s can and

that’s and I to that year, quarter then about would third, $X billion in $X.X and production and billion $X.X about--between the of in model When to for and next second we probably billion mid-$X.X $X $X production. gets billion the fourth think billion you first in production, so about quarter about billion

would back I think tell would really hope range a safe don’t see come of I that the into in until year. would we X kind it you that market coming next back X% I really X.XX, a and to X.XX back but that gain. bit year, hate to would see would that But to it be stabilizes. project it this little come model that I for

Brady Gailey

Okay, all right. helpful. That’s

on little know things a office. us are is there? A, you talk billion. any give and $X.X other a that seeing Any investor-free about you there’s you - Any real focus office some which can on CRE? over commercial office weakness about is your specifically of Class B, in good estate, Then I portfolio, give Class that you lot stats updates can guys

Jon Edwards

you I a bit. give little can Yes,

portfolio needs a for office of that Our is headquarter or three three kind the portfolio. stuff. that We kind a lines, categories mentioned lot on medical office, for primarily--we of it or but company categories, center really credit on CBD essential focus sort call of and offices really you’d that a the tenant. I really We along guess slide, kind meaning of generic, those a just them: don’t building use, or those have something of to facility call and/or try not really storey three two

see points, of of level second can is we portfolio. out there’s quarter far that, XX you the anything on As of kind in continuing. is that sort one we’re developed that broke continuing that that are a in but but in really thus been work as would that cracks loan have tell that strategy XXXX any slide, to on widespread you as I not and It far NPAs there of of basis

Brady Gailey

down. Then this If was that X% time. cash I for Okay, I all think cash to at continue earning come levels That’s helpful. today, last right. about finally look me, to XX% back it’s assets, average year at

deposits the in the does keep about bond starting think know, for about here, being potentially cash longer what you Should shrink think floor, term, we bond Just implications that should what’s and to still want have book book? with about--you the to growing where like talk do XXXX? we then you loans guys flat and

Nicole Stokes

Great question, Brady.

and remember $XXX X.X% would and been of--we cash we’ve that of It X%. is In it’s AOCI about very XX% assets, portfolio consider because been portfolio our capital run a bond the and bought so fourth our bonds. we cash in growing so a about take that loss assets, we buying question, bond X%, and as liquidity portfolio XX% range, that normally all of so to our have we percentage in earning programmatically ratio into with to quarter, your to our X% investment our Our bond impact have, in so that to that bond kind peers unrealized we really month, of don’t million That ties that because portfolio. ratio, our our in little portfolio have sellable our regulatory some and and the are to the XX%. liquidity securities we position, so keep able cash, we

If those to that’s of are. two, between there, we XX% is where ask you minimum our where XX%, kind that it’s so

think of much to it X%, to growing X% would with kind what portfolio, bond that would at market I cash expect see and depending there’s kind possibly stay but today. uncertainty market in X%, the that I in of then, staying does on the the so

thing portfolio, it kind to deposit to think there, point maybe if I asset the investment have at that ratio loans people and for investments, a [indiscernible] our is add AOCI and of we is I as don’t us. because take loan our out that But elevated. wanted to XXX about liquid you here, I One dilution, plus just wanted see that

they bond loan offset of them bond so have together. AOCI really Where because that very realized right can’t of deposits, portfolio, so of loans that our loans capital, and the low we to sell in view investments some some some peer. and used are we impact line take our with affects to the our their have becomes purchases portfolios regulatory plus you peers we yielding, If are

source outlier. earlier, brokered on Then to and the - X%, but already gone liquidity than really be probably not XX% perspective room and had on side, think our side, than twice, have money X%, and I quite from have less manage brokered deposit if are we But said minimal perspective. we’ve again, CDs, so than would funding and that less route it’s less ROA borrowings wouldn’t like loan margin ratio FHLB and liquidity the the we a profitability our done we the I we funding it said FHLB we instead, advances that brokered and had it be deposit the

Brady Gailey

makes that Thanks Okay, sense. guys.

Operator

you. Thank

on to our remind please press by take your would we like keypad. question, I telephone everyone, star next Before a to question, just register followed one

from is go Christopher, question please Montgomery line open. next Christopher Marinac Janney ahead, from Our is Scott. your

Christopher Marinac

is good securities points from Thanks, internally of you Nicole, morning. you just flow do just can from of your that alone? kind portfolio, continue on the to the how what same much cash making, were and funding the

Nicole Stokes

one second. me Give

my the you for apologize. the giving I second. silence to wrong Sorry had here at I I you--. don’t that. a I’ll I get want want I to sure right it back dead so for give Chris, make with on thought and number, I’m you fingertips,

portfolio, I say bond that would this at that’s consider still flows off cash at the of anything reinvesting bond But keep I it would X%. that portfolio point kind to the that into

Christopher Marinac

Okay, that’s helpful.

Nicole Stokes

of assets back because last and than not to moved over as months, portfolio cash flow X% to Yes, is the expect. less portfolio our added that really bond that on aggressive you eight bond we’ve as had in might and the down six we

Christopher Marinac

a that, helpful. not for problem. Thank you Okay, that’s

purchase-- the of outside Then

Nicole Stokes

about years. three mention, the Sorry, portfolio on the going duration is I was to

Christopher Marinac

Good, okay. Perfect.

is sources, what that so Then similar saw had this want to be loans, would loan just and year a going year the on quarter, Balboa You very organic if to all or may outside if fourth kind down. the portfolio that or slow is other purchase to successful pace similar different? expansion the last the of in understand of pace we be it of from commercial

Nicole Stokes

opportunities growth verticals well our really as CRE diversified growth Sure, split. still premium the our it of finance, C&I, as we I so have all as we as well FDA. the and consider among mean, of across We category in there. see would kind

Palmer Proctor

half want this on more all pulled full, put do have it of when all a CRE. obviously limiting and look you you much cycle, Chris, how from back is selective, have after. what in what at banks certain you and you’ve step asset of benefit it be us and kind we that you allowed know, intentionally they’re want one But kind going use And powder on back, to if glass allows to is to it’s classes, got--you’re focus to banks look to

kind more Our I but too, good is on strong a of C&I you’ll that growth of C&I we’re importantly of C&I, there continued front, focus opportunities getting continue addition activities. on on growth see finance organic think of core type in obviously deposits, the lot kind really so to on to the equivalent

We’re really encouraged by that.

benefit bringing treasury The of doing our a you these other side that, that’s been reason well the front, That’s deposit really so bright companies which the deposits and deposit it excited management the of lot we’re a spot. services, is so operating to includes bank, as know, in are really the over from of material all about it, because focus.

that have fortunately the We’ve of They’ve company for board one XX% pillars new, funding kind nothing reflect to had focused always level. deposits-deposits-deposits, intense a incentive have result that’s the and been of we’re at that component, on core got is deposit adjusted for we across with really but the our that being which all DDA. a first plans more three on, that XXXX our

to experience. remainder C&I us serve focuses we of XXXX. is on then small focused through next business that’s for the going really the third customer main Then of our the well three second thing year, the navigate and I as are more and is think Those growth,

Christopher Marinac

grow It just like follow-up that it answered think organically to was which question. sounds I you mostly year, they will. deposits Great, this my confirm can

Palmer Proctor

we’re be have through have, obviously, we at we the to one got growth lot organic what a banking bright and that’s It’s and of the the going C&I Yes, efforts, because going we’ve aspect. probably through be but to challenging, what business time protect the same spots. predominantly supplementing of to

Christopher Marinac

the and thank Great, this background information morning. for both you

Palmer Proctor

bet. You

Nicole Stokes

you Chris. Thank

Operator

Thank the I Palmer today, back would you. like is for questions so any now closing This all Proctor to have to remarks. hand we

Palmer Proctor

year everybody the think quarter XXXX is ourselves, The I’m the I year, and well Ameris our importance continue the this Once allowing their you for of and of discipline deliver forward, fourth we move want we us and assure call. move and as for thank we of positioned for time to XXXX class again, going we’ve teamwork and of and our into you to into listening performance. I year a I in discipline full the remain Thank their that everybody type to stay all remainder to to big and so momentum every Daisy. the and can bode I last earnings give team as ability want day to shout-out us reminded will and thank Ameris. results for top that to to entire of interest of that this focused year, work want hard again committed and

Operator

Thank today’s you everyone for joining call.

You may now disconnect your lines and have day. a lovely

Ameris Bancorp (ABCB) 28 Jan 232022 Q4 Earnings call transcript