Ameris Bancorp(ABCB)2024-10-25 16:15Financial Data and Key Metrics Changes - The company reported net income of $99.2 million or $1.44 per diluted share for Q3 2024, with adjusted net income of $95.2 million or $1.38 per diluted share after accounting for a $5.2 million gain on the sale of MSR portfolio and $150,000 in hurricane-related expenses [8][9] - The adjusted return on assets improved to 1.43% and the adjusted return on tangible common equity improved to 15% [9][12] - The tangible book value per share increased by $1.72, resulting in an annualized growth rate of approximately 19.1%, ending the quarter at $37.51 per share [9][10] - The total assets increased to $26.4 billion from $25.2 billion at the end of the previous year [13] Business Line Data and Key Metrics Changes - Adjusted non-interest income decreased by $6.7 million, primarily in the mortgage division due to decreased production and a reduced gain on sale margin [12] - Total loan production for the quarter was $509 million, the highest in the past four quarters, with a blended rate of just over 9% [13] - The average earning assets grew by 7.6% annualized in Q3 [7][13] Market Data and Key Metrics Changes - The company maintained a strong net interest margin of 3.51%, which is above peer levels, despite a slight margin compression of 3 basis points [6][11] - The loan-to-deposit ratio improved, with deposits increasing by $1.17 billion or 7.6% annualized year-to-date [14] Company Strategy and Development Direction - The company remains focused on growing tangible book value per share and exploring additional growth opportunities within its Southeastern footprint [5][6] - The management emphasized a disciplined approach to capital preservation while remaining open to future growth opportunities [20][54] - The company is committed to organic growth but is also open to M&A opportunities if they align with strategic goals [54] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for continued growth, citing strong fundamentals and a proven culture of expense control [4][7] - The impact of recent storms on operations was noted, but most locations did not experience significant damage, allowing for a quick recovery [7] - The company anticipates mid-single-digit loan and deposit growth for 2024, with deposit growth expected to govern loan growth [14] Other Important Information - The company executed its second MSR sale of the year, resulting in a pre-tax gain of over $5 million [6] - The allowance for credit losses remained stable, with a coverage ratio of 1.60% of loans and an improvement in non-performing assets [12] Q&A Session Summary Question: Margin outlook and NII growth - Management indicated that the guidance for margin remains around 3.50%, with a focus on growing net interest income despite slight margin compression [15][16][28] Question: Capital deployment strategy - Management confirmed a prudent approach to capital deployment, with a focus on organic growth while remaining open to M&A opportunities if they arise [19][54] Question: Trends in reserves and C&I losses - The reserve will be model-driven, and the C&I portfolio is diversified with minimal stress expected [23][24] Question: Mortgage segment capacity and outlook - Management expressed confidence in the mortgage segment's capacity to handle increased activity, supported by existing infrastructure and technology [34] Question: Deposit growth drivers - The company highlighted its relationship banking strategy as a key driver of organic deposit growth, with significant contributions from both commercial and retail sectors [39][41]