Ameris Bancorp

Good day and welcome to the NRA's Bank Second Quarter Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star 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 a touch-tone phone. To withdraw a 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. Please go ahead.

Great. Thank you, Vaish. 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 it up for Q&A. But 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 will 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 our appendix to our presentation. And with that, I'll turn it over to Palmer for opening comments.

Thank you, Nicole, and thank you to everyone who's joined our call today. I'm excited to share with you our second quarter results. In fact, I was actually more impressed with our team's results this quarter than the record earnings we posted in the first quarter, and here's why. One of the big questions and a very legitimate question for many of our ABCD stockholders and stakeholders was what happens when mortgage revenue normalizes for the bank. And this quarter shows you exactly what happens when mortgage revenue moderates. This quarter reflects the purposeful and deliberate actions the mayor's teammates have taken to reduce expenses associated with the decline in mortgage revenue. It's also very reflective of the investments we made in top talent in many of our other core lending areas of the company and also reflects the meaningful pipeline and relationships we continue to build which results in really strong second quarter results as we're reporting net income of $88 million or $1.25 per diluted share on an adjusted basis and this represents a 163 return on average assets and a 19.46 return on tangible equity. Our adjusted efficiency ratio actually improved from the first quarter to 54.62%, reporting the first quarter to this quarter 54.07%. As you may recall, we reversed $28.6 million of provision for loan loss expense last quarter. In this quarter, we had just a minimal provision expense due to the positive loan growth we'll talk about. Speaking of loan growth, it was an incredible quarter that we had. When you look at our annualized net loan growth, it was right at 5% for the quarter, net of PPP and our indirect runoff. We still expect to deliver on mid to upper single digit loan growth for the year as we look at our pipelines and the opportunities in all of our growth markets. The area I was most excited about was the $100 million of growth we had in CNI. You'll be able to see this on our slide deck on page 16. and Nicole is going to discuss the excess liquidity and the impact to our margin in more details in a few minutes. But I did want to mention the continued deposit growth for this quarter too. Our growth in non-interest-bearing deposits continued to outpace the growth of total deposits and they're now approaching 40% of total deposits, which is very impressive. And I emphasize this because when rates start moving back up and some of the excess liquidity runs off, I think that's the time you're going to find out from the real leaders or who the real leaders are in our industry in terms of who took the opportunity to grow core funding during this time. And we'll certainly be a standout there. On the capital side of the balance sheet, our capital position remains strong. We've consistently said we're focused on growing tangible book and that's exactly what we did this quarter. We saw growth in both TCE and tangible book value. We grew tangible book value by $1.18 per share or 4.7% during the second quarter. We've also grown tangible book value by $2.76, or over 11% for the year so far. And this equates to over 20% annualized growth for tangible book value. Our TCE ratio increased to 8.83%, which is very close to our 9% goal. And if you exclude the $2.5 billion of excess liquidity on our balance sheet, the TCE ratio would have been over 10%. We clearly have the capital to support our growth initiatives and to consider opportunistic transactions as we go forward. John Edwards, our Chief Credit Officer, is with us today and he's available to take any questions after our prepared remarks, but I did want to hit a few highlights in terms of credit. Our non-performing assets as a percent of total assets improved to 32 basis points compared to 40 basis points last quarter and 59 basis points last year. Loans that remain on deferral at the end of the quarter were approximately 1.2% of total loans, which is down from approximately 19% of total loans this time last year. Our allowance coverage ratio of excluding unfunded commitments was 1.23% net of our PPP loans at the end of the quarter. In terms of COVID, quick update here. July 6th was our official back-to-the-office date. All of our branches are open and all of our staff, including support administrative staff, are back to the office. Some of that's in a new hybrid approach, but we're adapting well and our teams are really excited to have a new sense of normalcy. As I mentioned last quarter, most businesses are back open. Traffic jams are back to normal and restaurants and wait times and new restaurants are actually opening. So things are definitely getting back to normal in the southeast and we certainly expect to benefit and capitalize from that. A quick update on PPP. We continue to see forgiveness in Round 1 during the quarter, and we started receiving forgiveness funds on Round 2 in June. We've got approximately $126 million left of the $1.1 billion that we loaned out in Round 1, and we have about $362 million left of the $409 million from Round 2. There's about $22 million of deferred revenue remaining on PPP for us. and one last comment I wanted to make. I'm very proud to announce that we published our first corporate social responsibility report in May, which was in accordance with the Sustainability Accounting Standards Board and the Task Force on Climate-Related Financial Disclosures. And a shout out to our entire team. There's a lot of thought and a lot of actions and hard work that went into this report, and I'm really pleased and proud of the way it came out, and I hope you'll all take a minute to look at it. But I'll stop there now and turn it over to Nicole to discuss our financial results in more detail.