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Ameris Bancorp(ABCB) - 2025 Q1 - Earnings Call Transcript
ABCBAmeris Bancorp(ABCB)2025-04-29 17:48

Financial Data and Key Metrics Changes - The company reported net income of 87.9millionor87.9 million or 1.27 per diluted share, a 17% increase compared to the first quarter of the previous year [12] - Net interest income increased by 20million,whileprovisionandnon−interestexpenseremainedrelativelyflat[12]−Theefficiencyratioimprovedto52.8320 million, while provision and non-interest expense remained relatively flat [12] - The efficiency ratio improved to 52.83% from 55.64% year-over-year [13] - Return on assets (ROA) remained strong at 1.36%, with PPNR ROA at 2.08% and adjusted return on tangible common equity at 13.16% [13][12] - Tangible book value per share grew by 1.19 to 39.78,andthetangiblecommonequityratioincreasedto39.78, and the tangible common equity ratio increased to 10.78 [13] Business Line Data and Key Metrics Changes - Loan balances were stable during the quarter, with total loan production at 1.5billion,slightlydownfromthepreviousquarterbuthigherthantheyear−agolevel[19]−Non−interestbearingdepositsgrewata151.5 billion, slightly down from the previous quarter but higher than the year-ago level [19] - Non-interest bearing deposits grew at a 15% annualized rate, representing 30.8% of total deposits [18] - Non-interest income decreased by 4.9 million, primarily due to reduced gains on the sale of SBA loans and a decline in mortgage division revenue [16] Market Data and Key Metrics Changes - The company experienced a 4% annualized growth in deposits, with total deposits increasing by 190million[17]−Interest−bearingdepositsfellslightly,whilenon−interestbearingdepositsincreasedsignificantly[18]−Thecompanyanticipatesmid−single−digitloananddepositgrowthfor2025[20]CompanyStrategyandDevelopmentDirection−Thecompanyfocusesonmaintainingtop−tierprofitability,enhancingrevenuegeneration,andsustainingastrongcapitalposition[5][8]−Thereisastrategicemphasisonoptimizingmarginsratherthandrivinggrowthinuncertaineconomicconditions[6]−ThecompanyplanstoleveragegrowthopportunitieswithinitsSoutheasternfootprintwhentheeconomicenvironmentallows[9][10]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedoptimismaboutthecompany′spositioningfortheremainderof2025,despitemacroeconomicuncertainties[10]−Thecompanyispreparedtocapitalizeongrowthopportunitieswithasolidcoredepositbaseandstrongcapitalandliquiditypositions[9][10]−Managementindicatedthatthesecondhalfof2025isexpectedtopresentmoregrowthopportunitiesthanthefirsthalf[9]OtherImportantInformation−Thecompanyrepurchasedapproximately190 million [17] - Interest-bearing deposits fell slightly, while non-interest bearing deposits increased significantly [18] - The company anticipates mid-single-digit loan and deposit growth for 2025 [20] Company Strategy and Development Direction - The company focuses on maintaining top-tier profitability, enhancing revenue generation, and sustaining a strong capital position [5][8] - There is a strategic emphasis on optimizing margins rather than driving growth in uncertain economic conditions [6] - The company plans to leverage growth opportunities within its Southeastern footprint when the economic environment allows [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's positioning for the remainder of 2025, despite macroeconomic uncertainties [10] - The company is prepared to capitalize on growth opportunities with a solid core deposit base and strong capital and liquidity positions [9][10] - Management indicated that the second half of 2025 is expected to present more growth opportunities than the first half [9] Other Important Information - The company repurchased approximately 15 million of common stock during the first quarter, with $85 million remaining available for buybacks [14] - The reserve for credit losses increased to 1.67% of loans, influenced by economic forecasts [16][42] Q&A Session Summary Question: What is driving the resilience in loan yields? - Loan production for the quarter averaged around 6.86%, with the core bank at about 8%, contributing to strong loan yields [25] Question: How does the company balance economic uncertainty with growth desires? - The company plans to be measured rather than aggressive in the current environment, focusing on capital and liquidity to capitalize on opportunities [36] Question: What is the outlook for expenses moving forward? - The company experienced strong expense control this quarter, and while merit increases will occur, the overall expense guidance remains aligned with expectations [40] Question: Why did the reserve increase despite strong underlying metrics? - The reserve build was model-driven, influenced by economic forecasts, and not due to asset quality deterioration [42] Question: What is the expectation for loan growth and related balance sheet growth? - The company expects loan growth in the mid-single digits, with Balboa tracking in line with overall company growth [46]