Earnings Call Transcript - ABCB Q3 2023

Operator, Operator

Good morning, everyone, and welcome to Ameris Bancorp's Third Quarter Conference Call. All participants will be in a listen-only mode. After today’s presentation, there will be an opportunity to ask questions. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Nicole Stokes, Chief Financial Officer. Ma'am, please go ahead.

Nicole Stokes, CFO

Great. Thank you, Jamie, 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 Jon Edwards, our Chief Credit Officer. Palmer will begin with some opening general comments, and then I'm going to 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 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 his comments.

Palmer Proctor, CEO

Thank you, Nicole, and good morning, everyone. I appreciate you taking the time to join our call today. I am proud to talk about our solid third quarter financial results that we reported yesterday. This quarter really was a testament to our discipline and core profitability, and it's what creates the positive outlook we have for the future. So for the third quarter, we reported net income of $80 million or $1.16 per diluted share. Because of these strong core earnings and the minimal impact to AOCI from our bond portfolio, counter to most of the industry, we grew tangible book value by over 12% annualized and moved our TCE ratio to above 9%. We recorded $24.5 million in provision for credit losses, bringing our coverage ratio up to 1.44% of loans and 420% of portfolio NPAs. This provision was model driven and not related to credit deterioration as our credit metrics actually improved once again this quarter. Our net charge-off ratio improved to just 23 basis points, and our NPA ratio, excluding Ginnie Mae's, improved to 27 basis points. On the balance sheet side, assets declined slightly as expected this quarter to $25.7 billion from $25.8 billion last quarter. Deposits, or as I should say, core deposits increased to $147 million, while loans declined by $271 million, all within the mortgage warehouse lines as we had expected and discussed last quarter. We're still lending, but we are being more discerning and deliberate with our pricing and structure. And because of these shifts, our loan-to-deposit ratio actually improved to 98% and our loans plus securities deposits improved to 106%. Brokered CDs remain relatively flat, and we successfully reduced our FHLB advances by $325 million this quarter. We continue to be well capitalized and feel comfortable with our capital and our dividend levels. We also announced yesterday the approval of another $100 million share repurchase program through October of next year. We have a strong balance sheet with diversified earning assets in some of the strongest markets in the Southeast, along with a healthy allowance for credit losses to absorb potential economic challenges. We remain focused on core profitability and balance sheet management, and this focus includes core deposit growth, controlled asset growth, stable margin, expense control and tangible book value growth. And I'm extremely proud of our team and the financial results for the quarter, and I'd be remiss if I didn't take the time on today's call to thank each and every one of our teammates for their contribution to our success. With that, I'll turn it over to Nicole to discuss our financial results in more detail.

Nicole Stokes, CFO

Great. Thank you, Palmer. As he mentioned, for the third quarter, we're reporting net income of $80.1 million or $1.16 per diluted share. Our return on assets was 1.25% and on a pre-provision pretax basis, our PPNR ROA was just over 2%. Our return on tangible common equity improved to 14.35% for the quarter. We ended the quarter with tangible book value of $32.38, that's an increase of $0.96 or 12.2% annualized. Our tangible common equity ratio, as he mentioned, increased to 9.11% at the end of the quarter compared to 8.80% at the end of last quarter. We've said for several quarters or actually probably several years that our capital goal was to get to 9% TCE and we finally did it. On the revenue side of things, our interest income continues to increase. We were up about $8.6 million this quarter to $330.6 million. But again, due to rising deposit costs, our net interest income declined slightly, just about $1.8 million down to $207.8 million for the quarter. Our margin came in higher than anticipated at 3.54%, down just 6 basis points from the 3.60% reported last quarter. All of this compression was really due to money market rates and that data catch up on money market rate. And our year-to-date margin remained strong at 3.63%. That's only 4 basis points of compression from last year's 3.67% for the first nine months. We're really encouraged by the fact that the pace of rising deposit costs slowed significantly in the third quarter, as interest-bearing deposit costs only increased 33 basis points this quarter, while last quarter, it was an increase of 82 basis points. So we see that slowing. We continue to be very close to asset liability sensitive neutral, which positions us well for the next interest rate decision. We've updated the interest rate sensitivity information on our presentation, Slide 11. Non-interest income decreased to about $4.2 million for the quarter. That decrease was all in the mortgage division, which was about an 11% decline in mortgage revenue. Production declined slightly to about $1.2 billion and the gain on sale margin came in right at 2.15. I have also saved the best for last, that expense control and efficiency ratio. Total non-interest expense decreased by $7 million this quarter, almost all in the banking division, and that is highlighted on Page 10 of the investor presentation. This drove our adjusted efficiency ratio down to an impressive 52.02% for the quarter, an improvement from the 53.41% last quarter. I wanted to take just a minute to talk about expense control. It's not just an initiative around here. It really is a discipline and a part of our culture. We continuously look for ways to be more efficient, and we make sure that the next dollar spent is spent in the right way. As an example, if you look at our headcount, we've reduced our headcount by 3.5% over the past year through diligent analysis and rehiring and staffing models without announcing major layoffs and without disruption to the working environment. I want to close by reiterating how focused we are on discipline and core fundamentals as we look forward to 2024 and beyond. And with that, I'm going to turn the call back over to Jamie for any questions from the group and we really appreciate everyone’s time today.

Operator, Operator

Ladies and gentlemen, at this time, we'll begin the question-and-answer session. Our first question today comes from Brady Gailey from KBW. Please go ahead with your question.

Brady Gailey, Analyst

Hey. Thanks. Good morning, guys.

Nicole Stokes, CFO

Good morning, Brady.

Brady Gailey, Analyst

So the net interest margin has really held in quite well, especially relative to peers. Maybe just talk about how you're thinking about the margin into the fourth quarter and maybe into 2024 and maybe hit on non-interest-bearing. Non-interest-bearing deposits were down just a little bit. 32% is still a great level, but how does that factor into how you're thinking about the margin?

Nicole Stokes, CFO

Sure, those aspects are definitely interconnected. First, I want to address the margin. As I noted earlier, the 6 basis points of compression was primarily due to changes in the money markets. We did see a positive shift in our deposit mix for the first time this quarter, with an increase of about 2 basis points. However, there were some one-off compressions due to paying off home loan bank advances, which resulted in lost dividends, and this offset the positive movement from the deposit mix that was affected by money market trends. Looking ahead, I'm cautious about claiming that we’ve hit the lowest point. Some banks believe we have, but I’m not ready to say that yet. The 6 basis points of compression was better than we expected. When considering margin guidance, I believe there are three main factors. Typically, we rely on our model for specific guidance, but behavioral issues are currently influencing margins more than our asset-liability model does. Firstly, we are observing how much of our non-interest-bearing deposits shift to interest-bearing accounts; this has slowed this quarter, moving from 33% last quarter to 32% this quarter. If we look back to pre-COVID levels, in September 2019, we were at 29.9%, December 2019 at 29.1%, and March 2020 at 30.5%. I genuinely feel we have stabilized between 30% and 33%, as this quarter's customer behavior reflects. Secondly, incremental growth is another key area for margin guidance. We plan to utilize core deposit growth as a constraint for loan growth. This hinges on whether we can achieve 30% or 32% growth in our non-interest-bearing core deposits next year. We believe we can, but this could potentially shift our target towards the 29% to 30% range, whereas we ideally want to maintain it between 30% and 32%. The third factor impacting margin is competitive behavior, which has started to stabilize. We've seen fluctuations with high customer deposits, but competitor deposit rates appear to be stabilizing as well. To summarize, I anticipate some additional compression in margins. Last quarter, I mentioned that if we emerge from this cycle above 3.50%, it would be a significant achievement, and we still maintain a strong margin relative to our peers.

Palmer Proctor, CEO

In response to your question about non-interest bearing deposits, there are two key aspects to consider. One is retaining our existing accounts, and the other is actively working to attract new non-interest-bearing deposits. Our strategies, including incentive plans, treasury management, and commercial banking initiatives, have all been geared toward these goals. This approach has helped alleviate some of the challenges we face, which others in the industry are currently experiencing.

Brady Gailey, Analyst

Okay. All right. Then moving on to expenses. I mean, Nicole, as you said, great expense control with expenses down like quarter in 3Q. How are you thinking about expense creep as we head into 4Q and next year?

Nicole Stokes, CFO

There is M&A activity mentioned in the presentation. A part of the expense control or reduction in expenses included a gain from a piece of OREO, which amounted to about $1.5 million. I don't expect this gain to continue in the future, so it should be factored out quickly. Our year-to-date run rate is approximately $429 million, which annualizes to about $574 million. This would leave us with around $145 million for the fourth quarter, aligning with consensus expectations. I have indicated a 3% to 5% increase in expenses, excluding mortgage, for next year. Assuming flat mortgage production and expenses, a 3% growth in this area would bring us to about $590 million, consistent with current consensus. I believe my guidance on expenses has been understood, and the 3% to 5% expense growth I discussed last quarter is still accurate. Breaking it down further, I expect salaries and benefits to increase by 3% to 5%, while other expenses will rise by 2%. This results in an overall projected increase of about 3% in expenses for next year, which aligns with current consensus.

Brady Gailey, Analyst

All right. That's helpful. Then finally for me, you hit 9% plus TCE. The stock is cheap at 11% tangible book value. You've repurchased a little bit of stock year-to-date, but not a ton. Should we think about the buyback becoming a little more active here or do you think there is still in capital growth mode?

Palmer Proctor, CEO

Well, I would tell you that we kind of remain opportunistic in that regard. And that's why we've renewed the program, obviously. If and when we feel appropriate, we will certainly take advantage of that.

Operator, Operator

Our next question comes from Casey Whitman from Piper Sandler. Please go ahead with your question.

Casey Whitman, Analyst

Hey. Good morning.

Nicole Stokes, CFO

Good morning, Casey.

Casey Whitman, Analyst

Hi. Okay. So Palmer, appreciate that there was some seasonality this quarter in just the warehouse balances. But can you speak to sort of how you're seeing loan growth in this environment? Do you see that slowing a bit, just an update as to where you see growth over the next year or so?

Palmer Proctor, CEO

Yeah. Casey, I think with all banks, which you've heard is just kind of, as I mentioned earlier, people just being more discerning, and then obviously the opportunity that the industry has right now is to really take advantage of the upside of rates on the asset side of the balance sheet due to the rapid increase we've seen on the liability side. We're kind of utilizing this time to reprice accordingly to hold margin and build margin as we go forward. I think that we're being far more selective in our credits, obviously. We've said from the very beginning that we're not going to allow our loan growth to outpace our deposit growth, and that discipline will continue. When you take that approach, it will slow down growth. But what it does allow you to do is ensure that growth is better priced and stronger credits even in an environment like today, and that's the mode that we will continue with as we go forward. Mortgage volume will obviously pull back; we pulled back intentionally on CRE, and you've seen that loan deposit ratio pulling back. I think you'll continue to see that discipline for the remainder of the year.

Casey Whitman, Analyst

Okay. Are there particular markets that you're in where you're seeing more opportunities or less opportunities than others or is it pretty broad-based across your footprint?

Palmer Proctor, CEO

For us, Atlanta has always been a consistent performer. We're seeing a lot of opportunities in our Florida markets too and the Carolinas. If you looked at the opportunities, I'd tell you that probably Tampa and Jacksonville are some real bright spots for us, in addition to certain pockets of the Carolinas. And then Atlanta has always been kind of our stable provider of a lot of activity. So I think those are probably the primary opportunities as we look out and forward.

Casey Whitman, Analyst

Okay. Just a quick one credit question; can you just talk about what you're seeing in that watchlist bucket? It looks like there are some assisted living in there. Is there any office in there, just sort of, can you give us any color on the watch list which I appreciate didn't move much this quarter, but maybe you can give us would be helpful. Thanks.

Jon Edwards, Chief Credit Officer

Yeah. Casey, we did add that just to see if that would help to kind of give you a little bit. I mean, 85% of the watch list is in those six categories there. So as far as office is concerned, specifically, there's really just one non-owner occupied credit. It's on the watch list. And in the non-accrual bucket, right now it's $3.6 million. So it's not really anything to speak about, and those being the top five or six that we noted there; we didn't see an office category because it's not on there. The ALF has been, and I think I mentioned it, may be starting in the first of the year we had some downgrades in that category. We've got really kind of two larger deals on there that are on the watch list, at least one of which I have pretty good confidence might correct itself or be paid off actually this quarter. But, yeah, we've had a little bit of stress on the ALF side in that but that watchlist for ALF has kind of been there now for about nine months or so.

Casey Whitman, Analyst

Okay. Thank you. Great quarter.

Palmer Proctor, CEO

Thank you.

Operator, Operator

Our next question comes from Chris Marinac from Janney Montgomery Scott. Please go ahead with your question.

Chris Marinac, Analyst

Thanks, good morning. Wanted to go a little deeper on the C&I net charge-offs. First, I just wanted to clarify. Can we adjust those charge-offs for the one equipment finance loan that was called out and then what would be, I guess, a good run rate for general C&I losses going forward?

Jon Edwards, Chief Credit Officer

Well, the C&I losses, that is where the equipment finance loans roll up. So pretty much everything that you see in there is related to the equipment finance group. To say one loan if you took that away from the slide deck, Chris, that is probably my fault, because it was a group of pre-acquisition loans that the extraordinary items were a group of pre-acquisition NPAs that we had acquired at the merger. We had determined that we've kind of reached a bit of our end on the near-term collections on some of those. So we went ahead and took the losses on that this quarter, it was about $3.2 million. I think the run rate for the rest of equipment finance, and really the C&I was about mid-eights and that is consistent, pretty much with what the year has been like. So far in '23, I think that is, as we've talked about before, a bit on the high side as far as the long-term average for the Equipment Group. I expect that to kind of add back some as we go into next year.

Chris Marinac, Analyst

Great, Jon. That's very helpful. Thanks for that detail. Is the equipment finance group growing at a similar pace as the last few quarters, or would you look for that pace to change in the next year?

Jon Edwards, Chief Credit Officer

Well, it has moderated some in the last couple of quarters. As Palmer said, big picture is that we're not going to let the loans outpace deposits, and that is across the board. The decline in loans that happened during the quarter, especially in the mortgage warehouse lines kind of took that denominator down. It looks like that the portfolio is a greater percentage of the whole now because it's up to 6%, but that's really just sort of end-of-period numbering. It's still not outpacing the growth of the whole portfolio when you look at it a little bit better than just that one day in time. It's going to be pretty much the same kind of growth that we see in the whole portfolio.

Palmer Proctor, CEO

Yeah, Chris. We're not looking to accelerate that growth, if that's your question in that particular sector, but above and beyond what it already is.

Chris Marinac, Analyst

Okay. Great. And then just one quick expense question. As you think about expenses next year, should we see a handful of new branches as you continue to look for new deposits?

Palmer Proctor, CEO

We're all about branch optimization, and a lot of that has to do not necessarily with closing branches or opening new branches, but we may repurpose some in terms of relocating to better locations and so be more optimization in that regard. There are a couple of markets where we clearly have a void in branching, in our Tampa market, for instance, we need a little more presence there. Other than one or two branches, I wouldn't expect much in that regard.

Chris Marinac, Analyst

Great. Thanks for taking my questions.

Palmer Proctor, CEO

Thank you.

Operator, Operator

Our next question comes from Kevin Fitzsimmons from DA Davidson. Please go ahead with your question.

Kevin Fitzsimmons, Analyst

Hey. Good morning, everyone.

Nicole Stokes, CFO

Good morning, Kevin.

Kevin Fitzsimmons, Analyst

It appears that for the past several quarters, you have been intentionally building your reserve, which has affected your near-term earnings. I'm interested in your outlook on this. While I understand the model and its inputs, I would like to know your overall strategy moving forward. If the current conditions remain stable without significant changes, will you continue to build the reserve in the upcoming quarters, or are you nearing a point where you feel comfortable with the current situation? Thank you.

Jon Edwards, Chief Credit Officer

Well, Kevin, I would say that, as you pointed out, it is model-driven and therefore we are following the forecast models that we look at. Part of the answer I think was found in the third quarter actually, because the provision was about half of what it was in the second quarter. So that in and of itself tells you that the forecast we're moderating the level of change, which is what really creates reserve one way or the other is slowing. It seems like you want to envision a hockey stick, maybe that's the way it sort of began to look in the third quarter. I wouldn't anticipate that it would go back to the level it was in the early part of the year, given that kind of forecast model, but if things in the world change and have a tendency to change, as it stands right now, I would anticipate that we're moderating from the high levels early in the year.

Kevin Fitzsimmons, Analyst

Okay. Great. That's helpful. And then just a follow-up on the margin. I totally understand that, Nicole, you're not wanting to declare victory on calling a trough but if we, say we're getting close to that maybe, we have some moderating pace of compression, maybe, call it the next quarter or two. As we look into '24, do we hit a point in early '24 in your view, where the fixed asset repricing should start to outpace the rising deposit costs? I know a lot of that hinges on, does that noninterest-bearing shift really slow down and come to a halt. But assuming that slowing also, do we anticipate kind of modest margin compression maybe starting in the second quarter through '24?

Nicole Stokes, CFO

I believe there is some stabilization occurring. While there has been mild compression following the second quarter, I am not necessarily suggesting that more compression is imminent, nor do I expect significant expansion. It seems to be stabilizing in a higher for longer environment, and this stabilization heavily depends on competitors and any liquidity issues in the market that might affect others, which could impact our situation as well. From the perspective of repricing, we have 36% of our loans set to repriced within the next year, and there is definitely some upward movement on the asset side that should be beneficial. However, I remain cautious due to the unpredictable nature of the deposit side and competitive behavior.

Kevin Fitzsimmons, Analyst

Okay. But it sounds like you're saying that's really going to serve to help keep it stable, not necessarily outpace it over the course of '24. Is that fair?

Nicole Stokes, CFO

Yes. That is fair and that is absolutely the goal and the target.

Kevin Fitzsimmons, Analyst

Okay. Great. Palmer, I have a question for you. I know there hasn’t been much M&A activity, and you’re not in the same position as many banks with underwater bond portfolios affecting activity. How do you view the pace of conversations, your interest, and appetite for M&A? Is there anything on the horizon for the next year or two?

Palmer Proctor, CEO

Yeah. I think over the next year or two, you're going to see a wave of consolidation. We've got a couple of deals announced just recently as in the industry, and I think you'll continue to see that accelerate. When you look at the industry going forward, I do think, I don't even like to say higher for longer, I just think rates will stay where they are because they really aren't that high right now relative to historical measures. I think we all just need to adapt and adjust to that. What that means is that a lot of banks are going to remain under pressure for earnings. They don't have the core deposit base, so they lack the diversification in their asset generation, which is going to create hardships. I think there are going to be more and more people looking to partner together. As we see that and assuming they can get regulatory approval, which right now is a big timing issue and a big if all the way around. I think, aside from that, there should be a lot of activity taking place as we look out into next year and into the following year.

Operator, Operator

Our next question comes from Russell Gunther from Stephens. Please go ahead with your question.

Russell Gunther, Analyst

Hey. Good morning, guys. Just a quick one at this point on the mortgage outlook. It looks like the MBA forecast is pretty optimistic for next year from an origination volume perspective. It would be helpful to get your guys' thoughts in terms of what you're seeing both on originations and gain on sales as you look out into next quarter and '24?

Palmer Proctor, CEO

Yeah. We're pleased to say that when you look at the gain on sale margin, it's stabilized. For a while there, we like many others started to see deterioration in net margin, and it seems to have stabilized. When you look at production, last quarter we were at $1.3 billion, and in this quarter, we're at $1.175 billion, and I think that's kind of a good run rate for us as we look out. There is, keep in mind, as we said last time, seasonality in this space. I think it's going back to the historical seasonality-type activity as opposed to the pandemic rush we had in some of the other operations. That being said, we'll get our fair share of the volume. We feel comfortable with our current run rate, and more importantly, we feel comfortable with our ability to adjust the expenses accordingly. The biggest fall-off we saw obviously this quarter, as we had predicted, was in the warehouse space, but in terms of retail origination, I think there are going to be some opportunities there. Especially if we start seeing some improvement in rates towards the end of next year, we always look for tailwinds as much as we do for headwinds, and I think that's one area where we're very well positioned to take advantage of that. So I would tell you that I think our current run rate is a pretty good barometer for what we see as we go into the fourth quarter and next year aside from just normal seasonality.

Russell Gunther, Analyst

Yeah, I appreciate that, Palmer, and you touched on the expense side of things; it's really what's my follow-up. So just curious if the earlier conversation around expenses considered any further reduction in the mortgage vertical for '24?

Palmer Proctor, CEO

No, I think we've got that positioned well enough now that you have a core run rate of overhead expenses you need to operate the business, and we're there. What we've got is the ability to scale, and it's a very scalable business. If you make sure you scale on both sides, going up and coming down. Our management team has done an excellent job of doing that and I think has positioned us well to be able to, as I said, take advantage of the tailwinds and obviously deal with any headwinds to come. No, I think we're pretty disciplined in that regard and consequential in that regard. If we see a pullback in revenues, then you're going to see a pullback in expenses.

Russell Gunther, Analyst

Understood. All right, guys. Thank you. Now, that's it for me.

Nicole Stokes, CFO

Thank you.

Operator, Operator

And ladies and gentlemen, our final question today comes from Brandon King from Truist Securities. Please go ahead with your question.

Brandon King, Analyst

Hey, good morning.

Jon Edwards, Chief Credit Officer

Good morning.

Nicole Stokes, CFO

Good morning.

Brandon King, Analyst

So, loan, you saw a nice increase in the quarter despite the slowing of loan growth. So, Nicole, could you potentially quantify kind of your expectations for what asset yields could do over the next couple of quarters?

Nicole Stokes, CFO

Sure. So I'll tell you that we've got about $5.4 million of our loans that are going to reprice in the next three months or less, and that was at like $7.7 million. So there's definitely some room for that to move up. In kind of the three months to the 12-month window, we have another $1 billion line, and that's kind of at an 8%, 8.5%. So there's a little bit of room there, and that's really kind of over the next four quarters where you can see some of that coming in on the asset side that should certainly help offset the deposit side, which is why kind of a margin guidance as outside of competition and that noninterest-bearing mix change, we really should kind of see that margin stabilizing over the next two quarters or so.

Brandon King, Analyst

Okay, very helpful. And then on deposits, I know we talked a lot about the mix change between non-interest-bearing to interest-bearing, but what about within interest-bearing? I noticed interest checking were a little lower quarter-over-quarter. Are you seeing any mix change within your interest-bearing deposit accounts as like people move into more towards money market or CDs?

Nicole Stokes, CFO

No, those have been fairly consistent. I will say the one thing that we will have coming in the fourth quarter is those cyclical public funds that typically come in during that time. We have no reason to think that will not happen again this quarter; that's usually about 15% noninterest-bearing and about 85% interest-bearing, primarily in money market. So you may see a slight shift in the fourth quarter from that blend, but those are the cyclical public fund deposits that come in.

Brandon King, Analyst

Okay. And how are you thinking about broker deposits from here? Do you have any upcoming maturity, and do you think you can move that down over the next couple of quarters?

Nicole Stokes, CFO

We have our brokered CDs and FHLB advances staggered. There will be some temporary changes in the fourth quarter and first quarter as public funds come in, but we are well-positioned to manage margins without excessive borrowings or brokered amounts. I believe we will be fine. We continue to focus on return on assets and margin between FHLB advances and brokered CDs. We have plenty of liquidity and availability from both sources. We consider our strategy from a return on assets margin perspective for potential actions. In the fourth quarter, as public funds arrive, you may see some paydowns. Just keep in mind that when those funds deplete in the second quarter, it will offset the situation.

Brandon King, Analyst

Okay. Makes sense. That's all I had. Thanks for taking my questions.

Nicole Stokes, CFO

Great. Thank you, Brandon.

Operator, Operator

Ladies and gentlemen, that will conclude our question-and-answer session. I'd like to turn the floor back over to Palmer Proctor, our CEO, for any closing remarks.

Palmer Proctor, CEO

Great. Thank you very much. I'd like to thank everyone again for listening to our third-quarter earnings call. Our focus, as you can tell, remains on the things that we can control, which include core profitability, capital growth, and our controlled asset growth, and this is what continues to position us well for the future. So thank you for your time and your interest in Ameris Bank.

Operator, Operator

Ladies and gentlemen, the conference has now concluded. We thank you for joining today's presentation. You may now disconnect your lines.