Ameris Bancorp (NASDAQ:ABCB) Q3 2023 Earnings Call Transcript

Russell Gunther: Hey. Good morning, guys. Yeah, just a quick one at this point on the mortgage outlook. So it looks like the MBA (ph) forecast is pretty optimistic for next year from an origination volume perspective. It would be helpful to get your guy’s 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: Yeah. We’re pleased to say that, when you look at the gain on sale margin, it’s stabilized and so because for a while there, we like many others starting to see deterioration in net margin and it seems to have stabilized. When you look at production, say last quarter, for the sixth quarter, second 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 mad pandemic rush we had in some of the other [indiscernible] raises. But 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’s 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 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: 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: No, I think we’ve got that positioned well enough now that, you have a core run rate of overhead expenses, you have to have 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, and 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. So just no, and I think you do that, that we’re pretty disciplined in that regard and consequential in that regard. If we see pull back in revenues, then you’re going to see a pullback in expenses.

Russell Gunther: Understood. All right, guys. Thank you. Now, that’s it for me.

Nicole Stokes: Thank you.

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

Brandon King: Hey, good morning.

Jon Edwards: Good morning.

Nicole Stokes: Good morning.

Brandon King: So, loan, you saw a nice increase in the quarter despite the slow 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?