Earnings call transcript Q1 2023

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Operator

Hello, everyone, and welcome to the Ameris Bancorp First Quarter Earnings Conference Call. My name is Bruno, and I'll be the operator of today. [Operator Instructions].

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

Nicole Stokes

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

we referencing Edwards, Treasurer. the will and call, Proctor, Spingler, amerisbank.com. the During be our by today Credit highlights of website Palmer are Officer; I'm section Mike joined the CEO; the that available Chief Relations on Jon Investor our our at our financial release press and

comments, before and of Palmer open then will opening will begin details results with discuss Q&A. our for general financial we some up the I

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

discuss the non-GAAP during will to certain performance. we call, reference financial measures the company's Also in

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

to over for And I'll turn with that, it opening comments. Palmer

Palmer Proctor

also our Good disruption, how Ameris. Thank the deposit banking importance really value discipline balance today. to core importance join has focused On the to relationships you been positioned the everyone. our weeks couldn't mention morning, we you, more everyone, the our have core taking of here timely of that banking X ability really and Nicole. stable later, proven well call ages at I message of and call, our stay appreciate just faced I the sheet are XXXX for on remind fundamentals time where teamwork last and us earnings

March the the XX actually grow end We through of deposits from saw quarter.

share. $X.XX million reported income For of we diluted the first per $XX.X or net quarter,

earnings the $XX primary CRE our to forecast, a which are due to build to losses, we few the and for which million loss provision for underlying the is over which were our drivers declines price in indices quarters, CECL home proud to ability reserve, in the strong have Included this model. next reflects credit specifically economic use

But that driven I to think, our important any deterioration not provision in model note our was related it's and by this credit portfolio. loan forecast to

losses, represented credit provision After and this which ratio loans. and our fact, a was by list our lower metrics net In evidenced this XXX% actually the improved a coverage of healthy commitments stable excluding watch unfunded for credit ratio quarter, quarter, reserve NPA NPAs. XXX%

target the in ROA from Our quarter, X% once first the for above improvement our pretax pre-provision last X.XX% the was quarter of again PPNR of X.XX% and year. ROA

margin mention XX%. you going X.XX%, our I to ratio details, want we the minute, to above top did discipline is are talk allowed about of that expenses a Nicole adjusted efficiency a to here peer operate still at and us at around remaining less in than to but up

XX% annualized tangible position end $XX.XX again this to We share. remains book by over Our capital value of grew strong. per quarter

of ourselves control. ability to on of discipline we importance can focused constantly reminding We're remain the and things the

and we you XX.X%. is future, bank we franchise this, deposit the low take of uncollateralized the core main of level because for of being, among from drivers look have the with business diversification the some prepared core value, the solid base XX% And feel with our also when which at income net at a and that funding, of a we have with geography uninsured lines our coming

positions. solid and culture liquidity expense prudent and capital of And then, we've clearly got a control

confidence, as us year. where when in allows and this to top the lot through in move next remainder markets, southeastern with we're importantly, positioned of we look of most the bankers into itself, And you year that, at have of our and a

there stop to detail. in financial discuss our Nicole more to results it turn and I'll over now,

Nicole Stokes

you, Thank Palmer. Great.

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

adjusted proceeds exclude or BOLI this our basis, earned on share. $XX.X million you we when an quarter, diluted gain $X.XX On per

Our in points, expense. million on equity XX after the return these and XX.XX%. tangible our adjusted adjusted ROA was the common first $XX.X quarter was both remember, And provision basis are

PPNR So above as ROA. were X.XX% Palmer mentioned, we basis, PPNR at on X% a

had impacted about ratio at the cash our our Our of of at X.XX% excess quarter. of But XX was equity about by tangible end end TCE the and in basis. that balance $XXX common negatively the sheet the million we quarter,

cash, excess the that of $XXX during first million. without April, of been an it excess that were million. average weeks have of $XXX cash off to about pay FHLB advances those few used would rate So million and We've at already $XXX

increased to Our million $XX.X $XX to million net $XXX sorry, million the compared last compared last at interest quarter quarter it to million $XX the and over increased expense from interest this you income then first quarter -- year. of when our last quarter for million quarter, last In comparison the compare quarter I'm first of $XX year.

net strong interest X.XX%. remained margin So at our

earning XX on basis basis points, while yield XX increased increased our points. funding cost assets by Our total

really factors So X margin declined basis and our there. XX contributing points, was there

near compression points transitioning basis that points higher XX catch-up of kind were those interest-bearing. to First, was of negative beta end we X balances. negatives and basis to mix of due had the points by of cycle. We had basis in then, yields X and of that's typical non about because of offset interest-bearing when average XX And expansion loan deposit the the the you

and pressures this competitive rates the been deposit to quarter. raising we've with the more March, aggressive in event banking turmoil Due

has when line cycle at exactly XX%, with beta, which looking how and modeled the cumulative still our However, we XX%. it, at is started in been it deposit we

this than started cycle be we balance sensitive X% been to with environment, sheet a neutral. active about And repositioning sensitivity. in We programmatically NII with we've less slightly XXX than as asset continue increasing X% remember, our closer

we've sensitivity information rate interest So we've XX. updated on there. definitely the to Slide worked neutral to get And closer

expense contribution. and Total which quarter, cyclical in of noninterest $X.X increased to payroll the XXX(k) million due matching all first was taxes

in great watching job an efficiency expenses, resulting of XX.XX%. a did ratio team Our adjusted

continue look reduction ratio believe expense we XX% year, efficiency below into can still We this and to XXXX. opportunities, an maintain and for we

already about. X.X% growth to the was with of balance we $XXX.X liquidity ratio cash sheet then, that for loan about of billion of That That an billion, total assets million end $X the million. annualized compared $XXX represents side, year. quarter loan ended growth the the we $XX.X of On spoke growth to billion $XX.X of really quarter. due on at of the And

growth to deposit mid-single-digit to we and governor expectations low as on our And growth. plan use growth, to we loan are slowing growth, our loan

billion X.X% the grew year. end deposits or Our last million about of to $XX.X $XXX.X ending billion compared $XX.X at at annualized,

Excluding in growth $X.X deposits the CDs, were brokered reduced billion about by million. $XXX

million and usual lot about and within ebbs the always we first have $XXX that expected And while and a really, there that, that cyclical municipal quarter. in flows are had of with of ag outflows we

remaining about were the businesses $XXX the deposits just that to really something business. was then, million were normal the happened of And sold, business or

accounts. higher where of $XX million investment only they of So brokerage mostly going deposits out, going declines rates, about had we've were type to of really

really majority the their to from some some of customers and an internal rate. the noninterest-bearing noninterest-bearing interest-bearing quarter sparked banking movement of look -- of The this at decline turmoil deposit was in the

deposits represent actually [indiscernible] XX% total our deposits noninterest-bearing Bank. still And movement total little our very about saw of We noninterest-bearing deposits.

is base over of and no well X% single deposit represents diversified, Our deposits. depositor

uncollateralized just at under uninsured XX.X% deposits. stable our improved XX% And this accounts have of they total and actually remain quarter to

up it turn wrap the and group. over I'll that, any with for So call the to Bruno questions from back

Operator

Instructions]. [Operator

question first Casey Sandler. our from from have We Piper Whitman

Casey Whitman

Maybe the can ended of we so And March quarter margin very margins a if sense of walk sort you at of just, get for out margin. the have could either through maybe us in we're where the the month at it? second with of by Can least, or start sort where starting or we just quarter? the you end, sort

Nicole Stokes

Sure.

So of mid-XXXs, month X.XX%. the for were kind of in March, about we the

the that want everybody mix and margin So if make at guiding margin, is deposits. of biggest to contributor sure I'm this to I realizes point the

so, say card of this. the in the -- And kind that's wild

But slowed. shift interest-bearing so assuming that maintain and can to the slowed, noninterest-bearing has mix, we and has it our from

the can have that second would So -- compression looking stays in a assuming deposits at XX be that basis about keep assuming today. that, the assuming flat we margin we the to at March, mix from mix, that and quarter, -- point XX we remain to XX same

Casey Whitman

do Okay. think, you that half And maybe Or even should sort from is we of could the the there? assumption that assume compression of year? more the hold you back

Nicole Stokes

going get to And pressure holds just we're think, that customers to that been on that the margin point. see is -- just are deposit I think, because longer pricing. going tighter the the it's more I great the talking to Fed that about So the we've deposit continue a

fighting is the for everybody same today. mean deposits I

I that the a I think kind but for compression. third if of So, some we fourth going additional think room have do longer Fed, on of the depends into lot the and they it quarter could hold,

Casey Whitman

to big loan growth that -- equipment updated of that you finance group? sort sort new sort much growth of of let remind particular come would can can gave? applies loan gears, Switching for you threshold how -- us you just the you Understood. your would and how of out book that guide just get how

Palmer Proctor

we've balance XX% never sheet. said we've than beginning What Yes. our very is from the exceed of more

her in across is allow other is But one not comments deposit things the to board going of too, growth touched we're that we're on to outpace the growth. Nicole thing, all that looking at the that loan

forward. be So our governor that will going

there's it. mean, have we strength though necessarily to to that deposit even to we go to XX% if So capacity support would additional the there up get doesn't don't XX%,

Operator

next ahead. Scott. Please comes from from Montgomery Marinac Christopher Our go Janney question

Christopher Marinac

to help back you [indiscernible] been all? more asked. much to longer were Or add lately. rate what funds I tied Does just second back which ago? Fed to and at intermediate term the off, that the that Nicole Casey and If it rates a is want Palmer, given just they saying on question have

Nicole Stokes

is the options. No, the Fed those rate, really is it of two latter funds

Christopher Marinac

it. Got

Equipment area, that area? a a this we that's And rate back saw that, driving Okay. I the And then loss charge-off to bit would change be Finance of little what from presume the good quarter?

Palmer Proctor

of we in in at this somewhat diligence we had, for are that hammered little But did overall, rate period I due getting had was the light-duty due are had was indicative purpose. the that Xs. increase just quarter this over high The sort some period looked forecast we when quarter. we that did loss of -- bit marketplace. the their the think we in It specifically trucks losses some that rates, predominant charge-offs an a loss of the we our in collateral The diligence,

modeled just some charge-offs that how expected was in because increase we so, And we it.

Just division continues at the remember perform to end pre-provision. of that the pretax higher the contribution

for positive pretty bank still is overall. spread net the that of kind So

Christopher Marinac

going Great. Or kind was up portfolio? the Yes, spreads with that that my going rationing overall the you're general, portfolio? faster And -- loan to the is happy new with the loan is so there. than Ameris overall question, on other be up going in even it yield of

Palmer Proctor

flow does put we on that the quality digits been depending in but there, quarter. It it's the ebb kind double remained of and throughout it's -- first in

the rest Ameris, outpacing it's So necessarily but of market. certainly not it's with the keeping pace

Christopher Marinac

then the quarter? question. has you've this reserves in given do allowance. flexibility past on grown just Great. feel build to the And you last do lot, provision From with This just there's a here, the that

Nicole Stokes

Sure. I'll take that one.

within and a thing the at added to a quarter quarter index fell we at look was CRE you the model. the had pricing home we rolling of used the is CRE we that quarter that forecast. added really index model, the And you when -- look good And that not good. what this pricing quarter off happened do, pricing when our So

same next So, -- has with it's do it to really anomaly. the the kind of

we same that happen anticipate you're I next as being think now, And do right severe. is what going asking anomaly the quarter. not to

that further, obviously, update further, forecast would then. that complete. doesn't that, But is assuming between index doesn't now CRE will Moody's or build reserve expect Now I that fall fall pricing fairly the the and for forecast

Operator

Brady Our from comes from question KBW. next Gailey

Brady Gailey

Was build. at look asset I that reserve reserve in mean, anything quarter. One when drove Ameris' more results growth? the I question it looked the in there on the fine quality, your

to cautious So there here? more the anything seeing you reserve is that you're makes that build

Palmer Proctor

that. move the pretty there's What this there. seeing That we're driven part, our think, in not. I question. and of credit prudent nothing in what a And by your see than No, is you model our was, results on answers more reflective

Brady Gailey

forward, the Yes. the low well on to mean, growth. deposit And level loan I growth, low to as going we side then, expect growth guided on governor you with deposits of mid-single-digit to mid-single that being same Should loan digits?

Nicole Stokes

projections Obviously, grow think Yes, specifically that X% but more this goals X% and noninterest-bearing, would that, our that to than of we internal to point, at I kind X% X%. love deposits to are

Brady Gailey

That in then And for me, gain Any sale bounced thoughts last the revenue right. the margin year? your of low. a All on on mortgage it's on I quarter. although mortgage. recovered, back for just know, rest little the the still bit forecast for pretty

Palmer Proctor

income Yes. on outside on is we're this through highlight noninterest our right of what And areas this quarter, other I come finance up. back seeing this solid. company, like But are may pretty reverting we're traditionally, through seasonality of kind you that's would at season, margin, that's when quarter you compression that right spring and margins pretty economic mortgage. issues The to now, areas said pipelines last We to any is that is to there premium improving. business. is tell ability this really are bullish now, which too, generate the the like for of thing look

It of benefit the you just shows diversification. actual

lot a generated it So, offset lot of we we us fees of this quarter that is to decline saw. mortgage that a allowing that

least continue saw you pretty mortgage future for quarter. this with think, will I to at what immediate be So consistent the

Operator

next comes David Our James. Feaster from question Raymond from

David Feaster

growth the on up following just again. Maybe side

First maybe if seeing growth at And are, where curious of exclude -- then, yields we new you by? expect to Where risk-adjusted Balboa. point? just where driven you are all, good be do I'm returns this loan I'm

Palmer Proctor

a But you, terms as different the still our obviously C&I of in different seeing some growth equipment I in a [indiscernible] the on. Well, would commercial touched we're is you opportunities meaningful opportunities, book tell finance and -- book.

The terms and what and the equity it with to all now banks we're seeing pricing competition that from we're in upside of a selective for to from hearing able and little is be and deposits. expectations more

deposits commercial in especially meaningful plus, that if so on the seeing deposits. rates the very most associated are coming book there of is And that X% which we're are see, to encouraging with

spoiled there. that's really we cautious, activity we see things forward. and of People growth more because that that's additional of is in the when where still the the look opportunity, go at being out with, there's Georgia we more actually are you but Carolinas, Florida see are So and And opportunities. one the really Southeastern where markets we as being

Nicole Stokes

excluding variable on first the X.XX%, of kind -- then lines those of Balboa rate at production those the in fixed coming was was David, of rates X.XX%. kind And business, on total the the and split, coming was X.XX% in rates quarter rate on and about that was

David Feaster

that That's Balboa? or helpful. And that's including Balboa X.XX%, that's excluding

Nicole Stokes

Equipment excluding That's the Finance.

David Feaster

Wow. Okay.

And just put point, focus LTVs of on what all that in those you've low that of standards, kind guys to hyper there's you the kind at got Obviously, color a CRE obviously, and slide seeing I'd I get book? you Okay. love things. in deck. underwriting all this this tied then appreciate are

that side, you're or avoiding create watching? seeing, are anything out, that there the curious, other as and -- I of maybe is maybe and you're lot just there? a power you on tightening or standards banks Are pricing opportunity some back, you all, look more an And totally does for give other you I'm you But mean, opportunities? as segments

Palmer Proctor

or growth our Well, by perspective governed the as the the ability opportunities for Nicole from deposit of mentioned, mean, I will loan be -- opportunities, growth.

is the So seeing we short -- are answer yes, opportunities.

tightening necessarily not requiring parameters. any pullback that that it's or Some of change you underwriting to us mentioned

at have rate a things got . a you've that been that going It's to again of a just or acceptable rightsize in to rate in in, environment the of tightening because we're at somewhat natural may rate,

just of underwriting the self environment. the done being in tightening kind of because some that So that's of rate is

to call something our you slides anything in is, for on. necessarily But, I good already think portfolio in And it's you we're in but away out We that the a our shying do think, us don't right and -- marketplace. for necessarily not looking saw owner-occupied, also. out from new not see that's office they more responded I sort put folks now, we of and our shape, business

to lines winter several got this that help on CRE. of of in we've have to kind CRE projects rely So us not

to to growth, loans. having but that So us not come see help continue from will it overall CRE loan necessarily with

David Feaster

touching And noninterest-bearing maybe commentary a being it That's on really line Okay. front. deposit I then just here. helpful. the the on appreciate migration

that any We're a a it's not think or higher-cost I'm can second -- seeing start seen curious, mid-XX% are And realm? NIB migration down early in of you that quarter? with quarter here, then, of bit still the to weak in seasonally floating cash customer things. debt? kinds NIB attrition just anything. kind pay stabilize But rate or maybe to have mid-XX clients composition here Obviously, of utilizing hold seeing you and that But those you realm, do taxes balances

Nicole Stokes

pressure customers? think, to doing those And retain is the Has slowed? deposits. Absolutely, Yes. having there, with conversations yes. everything I we are the the pressure we're it still still is And but there. we can

I I when Finance. I that correct gave those rates, to did David, Equipment need the include something said, that you

you looked So and bank rate, chart, variable with I apologize X.XX% give I need apologize. the all wrong only for with to X.XX%, Fixed the I was at I X.XX%. in that.

Palmer Proctor

[indiscernible] borrowing that with their people a too. excess balances money lot X-plus% There is rates, rather of are a good cash which than are at own utilizing one. the cash

lot So as to the industry. I of forward pressure going that think see going an we're a

yields already excess people I higher place on cash. taken think, looking for a has lot of the for movement

being excess to to to use opposed But their borrowings. see a also, going as on rates you're higher that of paying put lot cash

the front. in the especially be will we'll to obviously commercial challenge that out that a -- new face have So there on

Operator

[Operator Instructions].

comes next Stephens. Gunther from from Russell question Our

Russell Gunther

results quarter. this expense non-interest really On good side,

about there. talked intense pretty focus guys You

forward? rate could around share going expectations So run thoughts you some

Nicole Stokes

Sure.

salaries expense. mostly things the at. benefits look really expense continuation including at, And slight So of section. to look just discipline. we we the in expect categories we do travel, to a that have do very tight looking every other some we are But and continue There's control at leases, including increases,

and a deciding projects maybe versus at a versus and months. can want, what X Looking X wait need be what is to done to needs what

certainly that. to do are we So continuing

third I say second in the taking that some prefacing normal say So up potentially ramp from -- when or ramp as slight I'm would there. obviously, increased out and up to from expect because, I that, mortgage We'll cyclicality. production commissions could quarter have mortgage the

everything outside increase. mortgage, low of variable a of costs, for but else Some it's their X%-ish

Russell Gunther

Okay. one core. last then, That's really helpful the just in And me. for

You guys a TCE levels well. on have really as solid capital basis

thoughts on Just the here. getting buyback more And active.

Palmer Proctor

are something Yes, we that's at have to, that of in arrow this kind tempting it's certainly an quiver, price, next certainly where consideration give today. and awfully in this currency quarter. it's And we'll we our

Operator

no have currently questions. We further

So, I remarks. to would for Please to like Mr. hand back ahead. go closing Palmer

Palmer Proctor

to thank results like Great. earnings Thank you you, to for everybody call. again our Bruno. first I'd XXXX quarter listening

in Our for streams positioned discipline diversification franchise, our has both deposit and well in creating the us revenue as the well future. loan as

balance and deposits to stable losses, credit strong a top-of-class well-designed produce for results. this, stable reserve core Our really And with well-capitalized a of us healthy remains sheet liquidity all allows financial plan.

and Ameris you interest for your again Bank. Thank time in

Operator

joining. concludes you today's Ladies call. gentlemen, and for this Thank

now Thank may your You disconnect you. lines.

Ameris Bancorp (ABCB) 28 Apr 232023 Q1 Earnings call transcript