Ameris Bancorp Q4 FY2025 Earnings Call

Good day, and welcome to the Amherst Bancorp Fourth Quarter 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 1 on your telephone keypad. To withdraw your question, please press star, then 2. 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, Megan, 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 amarisbank.com. I'm joined today by Palmer Proctor, our CEO, and Doug Strange, our Chief Credit Officer. Palmer will begin, and then I will discuss the details of our financial results before we open 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 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.

Thank you, Nicole. Good morning, everyone. I appreciate you taking the time to join our call this morning. I'm proud of our fourth quarter performance and our record-setting results for the full year of 2025. We continue to operate at a high level of consistent core profitability while remaining focused on capital returns and accretive growth to enhance our shareholder value. We're positioned extremely well going into 2026, both from a growth and profitability level. Not only are we in the best southeastern markets that are growing faster than the national average, but we also have the best bankers who have focused on servicing our customers and growing our franchise organically. Nicole is going to talk about the details of our financials in just a minute, but I did want to give you just a few top-level comments about our core profitability. We reported record earnings for 2025 at over $412 million for the year, with our diluted EPS hitting $6 per share for the first time in our history. That's a 15% increase in EPS year over year, and we did it organically. Our PPNR ROA was consistently above 2% this year. Our margin expanded every quarter and our efficiency ratio improved throughout the year. We remain focused on generating revenue growth and positive operating leverage. We reported a 6% growth in revenue for the year, while our expenses declined by 1%. Combined, this positive operating leverage pushed our efficiency ratio to 50% for the year. This core profitability led to tangible book value growth of over 14% for this year. We remain diligent with our capital planning and are focused on generating shareholder returns. We paid off all of our sub-debt during 2025, and as a result, have a very simple common stock capital structure going forward. During the fourth quarter, we announced an increased share purchase repurchase program, and we were active in the fourth quarter buying back almost 1% of our stock at an average price of $72. For the year, we repurchased $77 million, or 2% of the company, at an average price under $67. Capital ratios remain strong, ending the year with common equity tier one at 13.2%, and tangible common equity ratio growing to 11.4%. Capital at this level positions us well for future growth expectations. On the growth front, we were very pleased with our asset generation during the fourth quarter, growing earning assets by almost 6%. We experienced unusually high payoffs in the CRE portfolio this quarter, which is indicative of a healthy economy but does affect our net loan growth. Notwithstanding, we grew loans almost 5% in the fourth quarter, even with the elevated CRE payoffs of over $500 million. Under normal CRE payoffs, our loan growth would have approached double digits. Our pipelines remain strong, and we saw the highest level of loan production since 2022. coming in at $2.4 billion for the quarter, which was a 16% increase above third quarter levels. Asset quality for the year remains strong with net charge-offs and NPAs improving from the prior year. Our allowance remains healthy at $162 of loans. CRE and construction concentrations were consistent at $262 and $43, respectively. On the funding side, we remain focused on core deposits and relationship banking. Our non-interest-bearing deposits represent a strong 29% of total deposits, even with typical seasonality of the fourth quarter. We're well-positioned for future growth, both from the strength of our balance sheet and our fundamental operating model. We have strong momentum into 2026 with our organic growth strategies, which will be complemented by the disruption with our growing southeastern markets. We have strong core profitability with diversified and durable revenue streams. These will continue to grow tangible book value, franchise value, and shareholder value in 2026 and beyond. I'll stop there and turn it over to Cole to discuss our financial results in more detail.

Thank you, Palmer. We reported net income of $108.4 million, or $1.59, per diluted share in the fourth quarter. Our return on assets was $157. Our PPNR ROA was $238. And our return on tangible common equity was $14.5 for the quarter. For the full year 2025, we reported record net income of $412.2 million, or $6 per deleted share. That brings our full-year ROA to a $154 compared to $138 last year. Our year-to-date PPNR ROA was $225 compared to $205 in 2024, and our full-year ROTC improved to $1451 from $1441 last year. Tangible book value increased by $1.28 during the fourth quarter to end at $44.18. For the full year, we grew tangible book value by $5.59 per share, or 14.5%. As Palmer mentioned, our capital levels remained strong. We were active in our buyback, buying back $40.8 million of common stock, or about 564,000 shares, at an average price of $72.36 during the quarter. Our remaining share repurchase authorization was $159.2 million at the end of the year. On the revenue side, our net interest income increased $7.3 million in the quarter, or 12.2% annualized. The core bank grew by about $8.7 million, while mortgage and premium finance both saw some seasonal declines in spread revenue. For the first time this year, we saw improvements on both components of spread revenue. not only did our interest income grow by $3 million, but our interest expense also improved by $4.3 million. Our net interest margin expanded five basis points to a robust $385 for the fourth quarter, and that expansion came from a 10 basis point positive impact on the funding side, more than offsetting the five basis point decline on the asset side. For the full year, net interest income increased $87.7 million, or 10.3% from 2024, and our margin expanded from $356 last year to $379 for the full year 25. Although we have positioned ourselves to be mostly neutral from an asset liability sensitivity perspective, we anticipate we could see some slight margin compression over the next few quarters due to the pressure on deposit costs. As we see loan growth increasing, we believe there will be additional deposit pressure as we fund that growth in 26. During the fourth quarter, we recorded $23 million of provision expense, with $6.3 million of that relating to reserves for unfunded commitments. That's a real positive signal for future loan growth. And our reserve remained strong at $162 of total loans, which was the same as last quarter. annualized net charge off this quarter normalized to 26 basis points for the full year net charge offs improved from 19 basis points down to 18 basis points we anticipate net charge off in the 20 to 25 basis point 20 to 25 basis point range in 2026 overall asset quality trends remain good with non-performing assets net charge off and both classifieds and criticized remaining low for the quarter. Moving on to non-interest income, adjusted non-interest income decreased $10.5 million this quarter, mostly from seasonal declines in mortgage. And for the full year 2025, adjusted non-interest income actually increased $1.4 million year over year. Total non-interest expense decreased $11.5 million in the quarter, mostly driven by lower compensation costs and also some lower marketing and advertising costs. For the full year 2025, our total non-interest expense declined $3.8 million, or almost 1% year over year. The majority of this decline is from the mortgage division, as variable costs declined with a decreased production due to the current interest rate environment. For the fourth quarter, our efficiency ratio improved to 46.6%, and for the full year 2025, our efficiency ratio was 50%, an improvement from the 53.2% reported last year. I do anticipate the efficiency ratio to return above 50% in the first quarter, especially when you consider our seasonally heavy first-quarter payroll taxes and 401K contributions. Looking at our balance sheet, we ended the quarter with $27.5 billion of total assets compared to $27.1 billion last quarter and $26.3 billion at the end of 2024. For the year, that reflects a 4.8 balance sheet growth, and we had a 5.5% earning asset growth. Profitability, looking at NII and EPS, they grew over 10 percent during that same time, really reinforcing our focus on profitable growth and positive operating leverage. Deposits increased to $148 million with strong seasonal growth in our public funds, partially offset by some usual seasonal outflows of mortgage-related escrow deposits that we'll fund back over the year. Because of this seasonality of deposits, our NIB to total deposit ratio is usually lowest at year-end, and this year it remains at a strong 28.7%. And then broker deposits were stable in the quarter, representing only 5% of total deposits at the end of the year. We continue to anticipate loan and deposit growth going forward in that mid-single-digit range and expect that longer-term deposit growth will be the governor of loan growth. And with that, I'm going to wrap it up and turn the call back over to Megan for any questions from the group. Megan, go ahead, please.

We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our answer. The first question comes from Steven Scouton with Piper Sandler. Please go ahead.

Yeah, good morning, everyone. Yes. Great quarter on loan production, obviously, and Palmer, you noted if payoffs had been more normal, you think loan growth could have been in the double-digit range. Can you talk about what sort of visibility you have into future payoffs and maybe how those are, maybe how they were surprisingly high this quarter and kind of what you're seeing as loans maybe mature and renew or those maturing and renewing at the same pace or kind of what caused some of the elevated pay downs and how we can think about the progression of that into the new year.

Yeah, two things there. Good morning, Stephen. We are encouraged by the pipeline. We continue to see building. And then more importantly, too, when you look at the payoffs, fourth quarter is typically, for us, one of the busier quarters in terms of payoffs, and I think that's reflective in a lot of banks that have reported. So we see that moderating as we move into the first quarter and second quarter of the So that's encouraging. I will tell you, activity continues to improve, and we like what we're seeing throughout the entire bank, not just in certain pipelines, but all the pipelines across the board. Now, mortgage, we'll see what happens there at the 10-year, but that could be a real tailwind for us, depending on what transpires. But all in all, we feel pretty bullish.

Okay. And with rates kind of – well, we'll see. If they continue to turn down, I guess, would you think that would accelerate paydowns even further, or would you be more excited about a further pickup in production and activity kind of to offset that potential phenomenon?

Yeah, I think for us where we are in our business development stage, I don't think the – I think the increase or decrease in rates would actually accelerate our opportunity. And in terms of payoffs, I don't see that causing any migration out to refinance elsewhere because most people are either – depending on the conditions of the loan or the terms of loans, they're locked in. And, you know, like a lot of banks, we've got prepayment penalties, refinance penalties, and so forth. So I don't see that being a big contributor to outward movement.

Makes sense. That's great. And then I guess in terms of thoughts around new hiring activity, I mean, this has come up on every earnings call. I think I've been on in the southeast this quarter, and people are calling it, you know, somewhat of a generational opportunity. I think your approach to it maybe has sounded different in terms of just improving your talent throughout the spectrum. of your bank, but maybe not adding just pure headcount quite as aggressively. Can you talk a little further about that if I'm hearing you right when I've summarized that and kind of how you're thinking about it in the new year with the opportunity set?

Yeah, I think ours is very different. And like we've said for several years, when I look at the budget and our expectations, we do not have the compulsion or the need to have to go out and hire massive amounts of people to accomplish what we want to do here. We've been very fortunate with the level of talent that we have. We've been very fortunate with retention, and we stay focused on that. But to put it in perspective, I mean, we hired 21 lenders this year, but net-net we were up three. So what we do a constant view of is looking at the talent, how it's progressing or not. And so what we've been able to do is upgrade talent on a consistent basis, thereby eliminating a lot of the churn and the constant need to have to add additional bankers. We've got great bankers, and they can help us deliver on what we need to deliver on. And that being said, we obviously will remain selective if there's opportunities out there. But in terms of having a need to drive up non-interest expense and add on a bunch of bankers each quarter, we're in a very fortunate position, which we don't have to do that.

Fantastic. We'll go ahead and step back. Thanks for all the information. You bet.

The next question comes from Catherine Mueller with KBW.

please go ahead. Thanks. Good morning. I wanted to ask about the margin. Nicole, appreciate your caution on just thinking that the margin will come down next year, just as deposit costs accelerate. But we're coming from such a higher level than maybe you're, historically, I think you've kind of talked about a margin in like a 360 to 365 range, but we're a lot higher than that today. So just kind of curious if you could put a range on your margin expectations for the year.

Thanks. Yep, absolutely. And I know this is yet another quarter of saying that it's going to go down and then it went up. But real quickly on that five basis points of expansion, two basis points of that expansion really came from our subdebt payoff. So really we only had kind of three basis points from both the loan and deposit side. So when I look out over the next few quarters, so much of our guidance is dependent on those deposit costs and the deposit pressure that we see as we see growth accelerating. So I feel like 5 to 10 basis points over the next few quarters. And then longer term, it's really going to depend kind of on growth and interest rate environment and where we are after that kind of one-year horizon. Okay, and that's

5 to 10 basis points from today's level or the

full year 25? That would be kind of where we are today.

Got it. Okay. Okay, great. And then maybe on expenses, I know there was a big reduction in expenses this quarter just from personnel. Can you help us get a range just for where a good starting point is for 1Q, just given the increase in payroll taxes and things like that?

So when you look at the fourth quarter and the first quarter, there's always some big swings. So when you look at the fourth quarter, the difference in payroll taxes and 401K match, we have a lot of that is kind of front-loaded in the first quarter. So that's about a $5 million swing that we expect to come back in in the first quarter. And then we also had some less incentive accrual in the fourth quarter based on chewing up all those accruals based on end-of-year numbers. So that's about another $2.5 million. So I know that the fourth quarter we were at $143 million. If you add back in that $7.5 million, you kind of get us back in that $150,000, $151,000 range. And then I think kind of a guide is probably for the year, I think consensus is really good. But I feel like maybe the first quarter might be a little bit heavy. So maybe the year-to-date consensus number is good, but it might be a little bit heavy in the first quarter. Some of it may come in later in the year as we see growth accelerate throughout the year. Some of those expenses, commissions, et cetera, could come in as well. So probably, you know, 154, somewhere between 154 and 155 is a good starting point.

Okay, great. Very helpful. Great quarter and year.

Thank you.

The next question comes from Russell Gunther with Stevens. Please go ahead.

Hey, good morning, guys. Wanted to start with just a margin follow-up, if I could. Nicole, could you give us a sense of where kind of new production is coming online relative to the incremental cost of deposits, and sort of along that question set, just the cadence of the fourth quarter margin over the course of that quarter, kind of where we exited?

Sure. So the fourth quarter, kind of when you look at loan production, it came in right at about 635 for the quarter. And that's with all divisions. That's with the bank, premium finance, warehouse, all of that kind of blended yield was about a 635. And that's compared to the deposit production, all deposits came in right around 2%. So we're looking at about a 435 spread on production, which is accretive to growth. I'm sorry, which growth is accretive to margin. However, if you look at that loan spread compared to the interest-bearing deposits only, it was a little bit dilutive. And so that really says where our focus continues to be on the growth in NIV and really those core deposit growth to be able to help with the interest-bearing spread that we see the pressure on. And then I think the second part of your question was kind of the quarter. We were very consistent, the 385 for the quarter. I mean, it was up or down each month by one or two basis points, but there were no significant swings over the quarter. Okay. Very helpful, Nicole. Thank you.

And then maybe just switching gears to capital, very robust position here. You've got reserve levels that are incredibly healthy. Just level set us in terms of your kind of CET1 bogey in order to get a sense of what you guys might consider excess. And then given how quickly you accrete capital, how do you guys plan to put a dent in that over the course of the year?

Your capital priorities have not changed. I mean, obviously, first and foremost, it's growing into it organically and levering it up. Then, as you saw, we were active in the buybacks. We will remain opportunistic there. Then the dividend, and then, obviously, last would be any sort of external activity. But, you know, given the markets we're in now and the opportunities we see, that would be far, far down the list. You know, in terms of target for us, I think we would be looking more on the TCE level, probably around 10, 10.5, and then on the CT1 target of around 12% if you wanted to look at longer term. That's really helpful, Palmer. Thank you for that.

And, guys, just last one for me. I hear you on the charge-off guide for the year, fourth quarter results are kind of at the high end of that. to just discuss quickly the drivers of the net charge-off activity this quarter and perhaps Balboa's contribution specifically.

Well, Russell, this is Doug. First of all, equipment finance really was – they were in line and consistent for the whole year. We did have some consumer medical notes that we charged off, but, you know, our charge-offs, they tend to ebb and flow from quarter to quarter, and fourth quarter was preceded by two very low charge-off quarters, that being at 14 basis points. But as Nicole framed it, when you look at it for the year at 18 basis points, you know, we were below the prior year, below consensus. And just to reiterate, you know, for this year, we're still in that 20 to 25 basis point guidance.

Thank you guys for taking my questions.

Thank you. The next question comes from John McDonald with Truist Securities. Please go ahead.

Thanks. Good morning. Nicole, I was wondering if you could give us a little more color on the puts and takes on deposit trends in the fourth quarter. There was a little bit of a decline in the NIB, and wondering if you've seen some of that come back. And then just as you think about your mid-single-digit outlook for this year, what kind of mix evolution are you planning for in the overall deposit mix?

Sure. So we did have, and there is some cyclicality in our balance sheet every year, and this year was no different. We have kind of the fourth quarter, we have public funds that roll in, And then at the same time, we kind of have the mortgage escrow deposits that roll out. So fourth quarter is always kind of our lowest point for that NIV mix. So we were pleased that it ended up close to 29%. What we also saw this year was a little bit different to your point about has any of it come back, and the answer is yes. So from a non-interest-bearing perspective, our number of accounts has continued to increase. And so what we saw in that decline of NIB were two things, some of that mortgage escrow deposits, and then also we had some customers, and I'm not talking about two lumpy customers, it's spread across 20 to 30 customers that moved money out at the end of the year. And some of that, we believe, was used for some tax planning purposes with some of the One Big Beautiful Bill items, and then also some of it was used to kind of do their balance sheet management at the end of the year. And we've seen a lot of that come back in already. So while it looks a little bit like an anomaly, I think our underlying focus continues to be on non-interest bearing. And based on the number of accounts that we're opening and that net growth in number of accounts, we still feel positive about NIB growth. So that kind of leads right into the second part of your question is where do we see that growth? You know, we are so focused on growing core deposits and being the relationship banker. And that's where we see some of the excitement of the market, potential market disruption or the potential from the market disruption, where we can continue to grow those core deposits with the relationship. So we would focus on, you know, the operating accounts as well as their money market accounts and then backfill any of that with brokered. But we were pleased to be able to keep brokered at 5% year over year.

Great. And just to follow up on the idea that deposit growth is a governor of loan growth, are they – if you're looking at mid-single-digit growth on both, is it a related forecast or are they independent? Because as Palmer mentioned, it feels like the loan growth, if pay-downs normalized, could be better than mid-single-digit. Just kind of wondering if those are connected as a forecast.

So we do actually forecast – I mean, we budget and we forecast for core deposit growth. But when you look at our balance sheet, there's several components of our loan portfolio that don't necessarily have a deposit feature with it. So really one of the – if you kind of look at where we get core loan growth for the bank, core deposit growth, and then some of these other lines of business. So if we ended up funding some of those other lines of business with either brokered or wholesale, as long as we are, you know, continuing to focus on that margin. So that's where you may see from our kind of forecast perspective, but from a core bank, core growth, we are definitely focused on funding that with core deposits.

And one last follow-up. On the provision build this quarter, some of it was for unfunded commitments. Is that relationship of growth to provision build something that had anything unique about it this quarter, or is that how we should think about it going forward?

So I think a lot of that unfunded commitment, and this is actually the second quarter in a row that we've seen that. And when you look back over our, you know, we kind of put a governor on our, some of our CRE and some of our, all of our constructions, whether that was home builder as well as CRE. So that bucket of unfunded kind of hit a lull. And now we're building that bucket back up. So as we're building that bucket in a normal environment that that stays consistent, you don't have that refill. So kind of we're starting from, you know, a much lower point of filling it, and we've got it about full. Now, if we had a really big quarter of production that unfunded, you could see it go up, but we also see that as opportunistic. That means we've produced loans, we've closed loans, they just haven't funded. So every time we see a growth in that unfunded, we feel like that's a good driver for future loan growth because we know we have those in the pipeline.

Great. Thank you very much.

The next question comes from Gary Tanner with DA Davidson. Please go ahead.

Thanks. Good morning, everybody. So I've got a couple of questions on the mortgage segment. You know, you had the $2 million net revenue decline from the MSR sale and the valuation change. But given the flattish production and gain on sale margin, can you talk about kind of withdraw the remainder of that $10 million quarter-over-quarter decline in fee income in the division?

Absolutely. So, you know, while mortgage production and gain on sales were fairly stable, the fourth quarter had a heavier mix of wholesale production. and that's a little less profitable than the retail originations. And you always have a little bit of cyclicality in the fourth quarter because your pipelines are down, so that gain on, I'm sorry, your market value of your pipeline is down as well. But when you look at the year today, if you take out that MSR gain last year and you kind of level the playing field for that noise and you look, mortgage revenue was down about 13 million or about 8% from 24 to 25, and then our expenses were down $6 million or about 4%. So it's right in line with our expectations of running kind of that additional growth or pullback in the mortgage group at that 50% efficiency ratio. So while there were some anomalies in the fourth quarter, it evens out for the year.

Okay, great. And then the second mortgage question, I guess, is could you give us, because I didn't see it, and I apologize if I missed it, but the unpaid principal balance of the servicing portfolio at your end?

Yes. At the end of the year, our unpaid principal balance was about $8.7 billion, which is about 4% of Tier 1 capital, so well, well below the 25% regulatory threshold.

Great. Thank you for that. And then last question for me, just to follow up on the capital side. Roger, you talked about your remaining opportunistic there. I'm just curious if you'd be willing to talk about any kind of sensitivities around price levels. I mean, the stock is up 15% from where you repurchased in the fourth quarter. Obviously, the capital accretion outlook remains very strong. So just wondering how you balance kind of the relative price versus your appetite there.

Yeah, no, it is a balancing act. But, you know, the way we look at it, right or wrong, is if you see a lot of M&A out there in the market, and if there was a mini Ameris bank for sale out there, what would we be willing to pay for it is another way to look at it. And who better to invest in than yourself? So we will still be selective there in terms of buyback opportunities.

Great. Thank you.

The next question comes from David Feaster with Raymond James. Please go ahead.

Hey, good morning, everybody.

Good morning.

I wanted to circle back to the production side. I mean, production was real strong in the past three years. I want to get a sense of how much that is, you know, increased productivity from your bankers versus a shift in demand. And just curious if the market is that you're going to be maybe getting more shifts or getting more opportunities.

David, this is Palmer. I'll try and answer your question. You're kind of coming in and out. There's a bad connection. But I would answer it this way. I would say it's all of the above. We've got a lot of focused individuals. that are here and generating great production regardless of additional market disruption from M&A. And then you compound that with recent activities that I think will continue to deliver additional opportunities for us. And then also, given how we're positioned in just high-growth markets, that bodes well for us as we look out. And, you know, if the macro environment continues to improve, I think what you'll see is we're well positioned to grow at a faster pace. And we're not going to stretch on our assumptions because, you know, to put it another way, we prefer to earn the upside rather than promise it.

Yeah. Okay. And maybe just on the loans side, I mean, you know, anecdotally, we hear a lot about increasing competition. It sounds like it's primarily on the pricing front, but I'm just curious, what's the competitive landscape lending like from your standpoint? Has it primarily just been on the pricing side, or are you starting to see more pressure on, you know, standards and structures as well?

No, it's mainly been on pricing. I mean, structure, fortunately for us and for the industry, which is a good sign, has held up relatively well. You'd have some folks that are getting a little more aggressive than others, but, you know, good for us. We've grown up in a very competitive environment when you're in these high-growth markets. So the competition is nothing new to us to have to adapt and adjust to, and we'll get our fair share of the opportunities.

And then, you know, premium finance. You talked about – this is a segment I know you all have been pretty excited about. You talked about some of the seasonality in a prepared remarks. Just kind of curious, what are you seeing about within that segment and growth expectations and any other opportunities there.

Yeah, no, thank you for the question. Premium Finance has been a good, steady, stable performer for us. I don't think you're going to see, in terms of balance sheet composition, it's not going to consume a lot more of the balance sheet, but what it will do is continue to provide meaningful earnings to the company on a go-forward basis. And the pipelines there remain full. There are additional opportunities, I think, that we will see in the market. But we like that space and are committed to that space, and it's obviously delivered for us.

Our next question comes from Christopher Maranek with Jannie Montgomery Scott. Please go ahead.

Hey, thanks. Good morning. Palmer and Nicole, I wanted to look at just the growth over the last couple of years in terms of the accounts of DDAs and the now accounts. It seems that you're up about 4% or 5% in both those categories, and I'm just in money markets too. And I'm curious, as you look at net new accounts being higher, is there a way that you are incenting to get balances to grow faster? And does it start with getting the account in the first place on a net basis?

Yes, Chris. We have a little technical difficulty here. So we do focus on – I mean, you're exactly right. The first part is getting the customer in the door and getting the account opened. And then the second aspect is how do you grow that relationship? And you start with one account, and then how do you get more? And I think that's where we look forward to some of the disruption in our markets, because maybe right now we have one account but not the whole account. And so as they maybe have some disruption in their banking relationship with the other bank, we might be able to pick up some of those other deposits as well as grow the current relationship. So we see it as kind of a two-prong. One, you have to grow the number of accounts, and you have to grow the number of relationships, and then you also have to grow those relationships within it, within the relationship. So, yes, it's absolutely both of those.

And, Chris, just to add a further comment, our incentive plans are geared around that, too, and motivate that type of behavior. And one of the things I think that a lot of folks in the industry, with the exception of a few, overlook is a lot of the value of the consumer accounts. And while they might not add as much in the way of total deposits and funding, What they do add are meaningful, sticky, stable relationships. So we have not lost focus of the consumer, and we're able to leverage our branches and the retail land extremely well, and we'll continue to do that. And then a lot of the additive, too, with us is the investments we've made in treasury management over the last several years. A lot of people talk about, you know, lenders that they've hired. We like to focus on the deposit side and on the treasury side equally, if not more. And so I think that's been a big driver for us as we look forward into opportunities for good commercial deposit growth.

Is the Treasury success going to show up in just the NOW accounts, or will it show up in money market to some extent, too?

Both. You're right, both. I mean, you've got your operating payroll accounts, and then obviously any excess funds will be swept into a money market type of account or higher interest-bearing account.

And then you've had success dropping the cost of funds, as we see every quarter here. And I'm just curious, do you have any opportunity to kind of tweak deposit pricing to get more dollars in and still keep your margin where you are trying to manage?

It's becoming more and more competitive. Obviously, you know, when you look out there at the rates that are being offered by, you know, banks and non-banks, and you compound that with the fact we've got a lot of new entrants coming in with splashy rates. But most of those are going to be more, I call it hot money, where people are just chasing the yield. What we try and stay focused on is garnering opportunities to bring in more core relationships and less on that. But that doesn't mean at some point we don't have to participate and have to be competitive. But our focus remains on the relationship side. and then I'd rather pay an existing relationship customer a higher rate on their CD than just lure people in with high-rate funding.

Got it. Thank you, Boach, for the color this morning. We appreciate it. You bet.

This concludes our question and answer session. I would now like to turn the conference back over to Palmer Proctor, CEO, for any closing remarks.

Great. Thank you, Megan. And finally, I'd like to also thank all of our Ameris teammates for their contributions to a record year in 2025. I'd also like to thank everybody again for listening to our fourth quarter and full year 2025 earnings call. We're proud of another solid quarter performance, and we're really looking forward to 2026. And please know that we remain focused on core profitability, organic growth, and enhancing value through our core deposit base and tangible book value growth. We appreciate your continued interest in Ameris Bank. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.