Ameris Bancorp

Good morning and welcome to the Ameris Bank Q4 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Nicole Stokes, Chief Financial Officer. Please go ahead.

Thank you, Grant, and thank you to all who have joined our call today. During the call, we will be referencing the press release and the financial highlights that are available on the investor relations section of our website at amerisbank.com. I'm joined today by Palmer Proctor, our CEO, and John Edwards, our Chief Credit Officer. Palmer will begin with some opening general comments and then I will discuss the details of our financial results before we open up for Q&A. Before we begin, I'll remind you that our comments may include forward-looking statements. These statements are subject to risks and uncertainties. The actual results could vary materially. We list some of the factors that might cause results to differ in our press release and in our SEC filings, which are available on our website. We do not assume any obligation to update any forward-looking statements as a result of new information, early developments, or otherwise, except as required by law. also during the call we will discuss certain non-GAAP financial measures in reference to the company's performance you can see our reconciliation of these measures and GAAP financial measures in the appendix to our presentation and with that I'll turn it over to Palmer for opening comments thank you Nicole and good morning to everyone 2020 certainly provided all of us a lesson in humility for humanity and I'd like to begin by thanking all of my Ameris teammates

and all of our stakeholders for their continued commitment, their loyalty and the great flexibility they all demonstrated during this unprecedented year. And what a year it's been. I mean, while 2020 was not what we had anticipated, I'm proud of our team because they adapted quickly and remained disciplined and focused on the results. And Nicole's going to update you on the detailed financials in a few minutes. But before we get there, I did want to share a few highlights about the quarter and the year. and then spend some time discussing the plan and opportunities we have going into 2021. For the quarter we earned $102 million or $1.47 per diluted share on an adjusted basis, which is up over 53% compared to fourth quarter last year. This represents a 2.04% return on average assets and a 25.04% return on tangible equity. As expected, our efficiency ratio increased slightly to 52.67%, which is right within the guidelines that we had given in terms of 52 to 55% in terms of our guidance earlier in the year. For the year 2020, we earned $300.5 million, or 4.33 cents per diluted share on an adjusted basis, which is up 14% over the 2019 results. This represents a year-to-date ROA of 156 and a year-to-date return on average tangible equity of 1977. Our efficiency ratio improved during the year from over 55.67% last year to 52.17% this year. On the balance sheet side of things, I said last quarter that we anticipated some seasonal loan runoff in the fourth quarter that would bring our loan growth closer to our original estimates as we said throughout the year in terms of mid-single digits. for a full year of 2020, and that's exactly what happened. We ended the year with a solid 6.5% loan growth, and that's exclusive of the PPP growth. We continue to see strong deposit growth, and our total deposits are now almost $17 billion, with non-interest-bearing deposits now accounting for over 36% of total deposits. As for capital, we remain focused on capital preservation and growth in TCE, intangible book value, During the fourth quarter, we grew tangible book value by over 5% and over 13% for the year-to-date period, which is very meaningful. As reported last quarter, we do have a share repurchase program in place that's good through October 31st of this year. We don't anticipate buying any purchases in the near future, nor do we buy any in the fourth quarter, but we do like having the option to repurchase if the right opportunity presents itself. As for the dividend, we remain comfortable with where our dividends are today and do not anticipate any reduction at this time. Moving on to credit, John Edwards, our Chief Credit Officer, is with us today and is available to take any credit questions after our prepared remarks, but I did want to hit a few highlights in terms of credit. During the fourth quarter, we opportunistically and selectively sold approximately $87 million of hotel loans, which greatly reduced our hospitality exposure, and as a result of that, we incurred a $17.2 million net charge-off. And as far as the remaining reserve, we continue to believe all the heavy lifting has taken place and been completed, barring any further economic downturn or deterioration in specific credits. So this brings our allowance coverage ratio excluding unfunded commitments to 1.46% net of our PPP loans. Our annualized net charge-off ratio was 31 basis points of total loans compared to 10 basis points in 2019. Exclusive of the hotel note sale, the year-to-date annualized net charge-off ratio was 18 basis points of total loans. Our non-performing assets as a percentage of total assets decreased to 48 basis points compared to 82 basis points last quarter, and mostly due to the $24 million decrease in non-accrual hotel loans that I referenced earlier that were included in that note sale. 32 million of mortgage loans reported as non-accrual in the third quarter have now been placed on the new CARES Act deferral programs and the net decrease in REO of $6 million. And finally, the loans that remain on deferral at the end of the year were approximately 2.9% of total loans, which is down from approximately 19% of total loans at the end of the second quarter of 2020. Quick update on COVID and PPP. I said on the last call that we had opened up about half our branches in the lobbies in the third quarter with minimal disruption but unfortunately with the rise in cases we closed those lobbies again before the end of the year and we really don't anticipate having them open until March or we start seeing some positive swings in the cases but we've done a wonderful job of continuing to be able to serve the customers through the drive-throughs and digital channels or in the branch by appointment and that being said we are extremely pleased to be in the southeast because I can tell you many businesses here are back open. Restaurants, retail, shopping, and certainly the traffic continues to pick up every day. So that's encouraging to see. But we all still need to remain diligent and careful. Quick update on PPP. During the fourth quarter, we started to see forgiveness and our PPP loans decreased by about $238 million. On the new round of PPP, our portal is open and so far we've received about 2,000 applications for approximately $220 million just as an update. So approximately 80% of that is second draw request from customers who were also participants in the first round and 20% of applications are from new applicants. So our average loan size request has been around $130,000 for second request and $30,000 for the first request and this is obviously smaller than the first round as expected in terms of the loan amounts. Now I'd like to talk briefly about the future and why our optimism is justified. When you look at the challenges we all faced in 2020, and then you consider the success that Ameris had, it really makes me proud of the company and our teammates. And this year was certainly not anticipated, but we were able to overcome the challenges and adapt and improvise on our plans. And more importantly, we successfully delivered on top financial results. And as typical in the first quarter, we spent time in our board retreats, actually virtual this time, but that's always an energizing program and process for us because it allows us to kind of reflect on our markets and our strategies and our talent and our goals and as I mentioned earlier, we're fortunate being some of the highest growth markets throughout the Southeast. We've got incredible talent and we've got good core strength of our more rural markets too and this balance is really what allowed us to continue to grow safely and securely and most importantly in a low-cost deposit environment as far as funding is concerned. So we continue to look for cost-saving measures to be able to fund the needed technology resources, which are imminent. And we're already reaping the benefits from a lot of the investments we made in 2020 from our reallocation of expenses. But we remain focused on core deposit and loan growth, asset quality, operating efficiencies, and capital preservation. And these are the strategies that you will see will continue to drive the shareholder value. I'll stop there and turn it over to Nicole to discuss our financial results.