Ameris Bancorp Q2 FY2025 earnings call

• Palmer Proctor highlighted that second quarter results beat expectations, with improvements in return on assets, return on tangible common equity, and efficiency ratio. - The bank saw 20-plus percent annualized revenue growth, which outpaced expense growth. - Margin continued to expand, loans grew 6.5% annualized, and capital ratios strengthened. - Focus on enhancing revenue generation, positive operating leverage, and maintaining a strong deposit base. - Active in stock repurchasing, with $12.8 million bought back in the quarter, and tangible book value per share passing $41.

In the second quarter, Ameris Bancorp saw loan growth of 6.5% annualized, with C&I loans driving the increase. Net interest margin (NIM) was 3.77%, well above most peer levels, thanks to a strong 31% level of noninterest-bearing deposits. Noninterest income increased by about $4.9 million, mostly from better mortgage production. The efficiency ratio improved to below 52%. Loan growth was within mid-single-digit guidance, and capital ratios grew, with common equity Tier 1 at 13% and tangible common equity over 11%. Tangible book value per share increased to $41.32, and the bank repurchased $12.8 million in common stock during the quarter.

• Management expects loan and deposit growth in the mid-single-digit range. - Margin is expected to normalize above the 3.60%-3.65% range over the next few quarters due to deposit pressure from loan growth. - Willing to give up some margin for growth, focused on organic growth, with stock buybacks and dividend still options. - Anticipates continued growth in the back half of 2025, benefiting from a robust margin, solid noninterest-bearing deposit base, and diversified revenue stream.

• Competition in the southeastern markets, which could impact pricing and market share. - Potential deposit cost pressure as loan growth picks up and competition for deposits increases. - Impact of Federal Reserve rate changes on margins and deposit costs.

Q: On loan growth trends and mortgage warehouse lending, what's the outlook?

A: Palmer Proctor noted seasonality in mortgage warehouse lending, with a strong quarter, and resurgence of activity in other loan lines, expecting third quarter to be similar to second unless unforeseen events occur.

Q: Regarding margin and balance sheet, what's the view on the bond book?

A: Nicole Stokes said the bank has optionality in the bond book, could add more to reach historical levels, and is capitalizing on higher-yielding bonds maturing out at lower rates.

Q: On growth and competition, how is the competitive landscape?

A: Palmer Proctor mentioned more activity across business lines, competition going beyond pricing with structural changes, and focus on treasury management for deposit growth.