Q2 2021 Ameris Bancorp Earnings Call
1 of them.
Good day and welcome to the MMA.
The earnings conference call.
All participants will be.
Should the need of Crystal.
Conference the splits by pressing star followed by the usual.
For today's presentation there'll be an opportunity to ask questions.
A quick question for me for Star then 1 on the question for him to the Joe a question. Please press Star then 2 please.
Please note this event the thing that got it.
I would now like to turn the conference over to Nicole Stokes. Please go ahead.
Great. Thank you guys 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 <unk> Dot Com and I'm joined today I talked to other Proctor, our CEO and Jon Edwards, our Chief Credit Officer.
Palmer will begin 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 lift some of the factors that might cause results.
The 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 the 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.
Can see a 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 has joined our call today I'm excited to share with you of second quarter results. In fact, I was actually more impressed with our team's result, this quarter than the record earnings we post.
In the first quarter and here's why you know 1 of the big questions in the very legitimate question for many of our a b C D stockholders of stakeholders, because what happens when mortgage revenue normalizes for the bank.
And this quarter shows you exactly what happens when mortgage revenue moderate this quarter reflects the purposeful and deliberate actions the mirrors teammates of taken to reduce expenses associated with the decline of 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.
It also reflects the meaningful pipeline of relationships, we continue to build which results in a really strong second quarter results as we're reporting net income of $88 million or of $1.25 per diluted share on an adjusted basis and this represents a $1.63 for return on average assets in the 19th of 146 for.
Turn on tangible equity.
Our adjusted efficiency ratio actually improved from the first quarter to 50, 462% in the core in the first quarter to this quarter of 54 point.
The 7%.
As you May recall, we reversed $28.6 million of provision for loan loss expense last quarter and this quarter. We had just the minimal provision expense due to the positive loan growth, we'll talk about and speaking of the loan growth. It was an incredible quarter that we had you know when you look at our annualized net loan growth. It was right at 5% for the quarter net of people.
The P in our indirect runoff and we still expect to deliver a mid to upper single digit loan growth for the year as we look at our pipelines and the opportunities in and all of our growth markets. The area of ours. Most excited about was the $100 million of growth, we hadn't C&I and you'll be able to see this on our slide deck on page 16.
And the coal 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 to 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 thats the time youre going to find out from the real leaders are who the real leaders are in our industry in terms of who took the opportunity to grow core funding. During this time and we will certainly be of stand out there on.
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 GCE and tangible book value. We grew tangible book value by $1.18 per share of 4.7% during the second quarter. We've also grown.
Well look now of about $2.76 or.
For over 11%.
For the year, so for and this equates to over 20% annualized growth for tangible book value.
We clearly have the capital to support our growth initiatives and to consider opportunistic transactions as we go forward.
John Edwards, our chief credit officers with us today and he is available to take any questions. After our prepared remarks, but I did want to hit a few highlights in terms of credit our nonperforming assets as a percentage 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 the firm.
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, excluding the unfunded commitments was 1.3% net of our PPP loans at the end of the quarter.
In terms of Covid, a quick update here July 6 was of our official back to the office date all of our branches are open and all of our staff, including the support administrative staff for back to the office some of that some of 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 in the restaurants and wait times in the 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.
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 learned out and round 1 and we have about 362 million left of the $409 billion for round 2.
There's about $22 million of deferred revenue remaining on PPP for us.
And 1 last comment I wanted to make I am very proud to announce of 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 the shout out to our entire team Theres a lot of fall and a lot of actions and hard work that went into this report.
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 the cold to discuss our financial results in more detail great. Thank you Palmer.
Thank you for the second quarter, we are reporting net income of $88.3 million of our $1.27 per diluted share on an adjusted basis. We earned <unk> 87, 5 million or of $1.25 per diluted share and that's really excluding the small recovery on the servicing asset impairment and a gain on sale of premises this quarter were.
He used with our operating ratios are adjusted our way in the second quarter with $1.63 and for the year. It's 190 for our adjusted return on tangible common equity was $19.46 for the quarter and $23 for 1 for the year to date.
As Tom mentioned, our tangible book value increased by $1.18 of our 4.7% from 25, 27% to 26.45 during the quarter.
For the year over year tangible book value has increased.
$5.55, or 26.6 per cent from 2019. This time last year. In addition, our tangible common equity ratio increased 21 basis points. This quarter to 83 for 862 at the end of the first quarter and has increased 113 basis points over the past year from 77.
This time last year.
The approximate $2.5 billion of excess liquidity, our balance sheet negatively impacted this ratio by 120 basis point, so excluding that cash from cable assets, our TCE ratio would've been approximately $10.3 at quarter end, which is well above our stated target of 9%. So we continue to be well capitalized.
I think we feel comfortable with our capital and our dividend level.
Okay.
Margin, our net interest margin declined 23 basis points from $3.57 to $3.34 during the quarter our yield on earning assets declined by 27 basis 0.1 of our total funding cost decreased 4 basis points. We did a description of the gas on slide 8 you can see the 27 basis point decline was attributable to.
Several unusual factors, we had 8 basis points of compression because of the $4 million decline in P. P. P income, we had 5 basis points from the AMA.
Almost $2 million for $1.7 million of the accretion income decline.
We have 5 basis point kind of of thumped last quarter that was a non recurring revenue related to the sale of that consumer portfolio. We had 4 basis points due to the continued growth in excess of liquidity and then we really came down to 5 final basis point due to true loan yield compression that was 2 basis points of mortgage 1 basis point in held for sale.
And 2 basis points of the tree of commercial bank loan yield compression.
My point here is that true loan yield compression of its really 5 basis points and we had a 4 basis points of funding costs. During the quarter also added the slide 8.
You can see the day the impact of debt $2.5 billion of excess liquidity had on our margin and how it accounts for 36 basis points from the of the total negative margin compression for 1 year ago, we're focused on our deposit costs and we continue to grind in day, 1 we still have some room for improvement in the CD portfolio.
But the real driver to an improving margin going forward is putting that excess liquidity to work, which we anticipate occurring over the next 3 quarters.
As Paul mentioned as well, we had a small provision for loan loss expense of about 142000 compared to that $28.6 million of reversal last quarter. The continued economic conditions, specifically unemployment and GDP and CRE index and our own improved credit quality of this quarter helped offset the need for additional provisions on our loans.
Our ending allowance for loan losses of $175.1 million compared to just the $178.6 at the end of last quarter and $208.8 million at the end of second quarter last year, which was in the middle of the pandemic and our heightened deferrals.
So, including the unfunded commitment reserves and allowance for credit losses for other credit losses. Our total allowance was 197.8 million at quarter end compared with 200 point of view at the end of last quarter.
Moving on to noninterest income so as expected our noninterest income declined this quarter and it really with each of the decreases in mortgage banking.
Excluding the $9.7 million of recovery last quarter, and the 749000 and recovery this quarter. Our mortgage income declined about $19.3 million and there's really 2 factors contributing to the decline in revenue. It was both production and gain on sale margin as you can see on we put in the new slide.
The bomb, which really has the information on mortgage.
As you can see on that slide production in the retail mortgage group declined 9% to $2.4 billion this quarter from $2.6 last quarter and it's important to note here. The total non interest expense also declined 9% or $5.6 million in there in the retail mortgage division.
In addition to that production that's going to drive those reductions in variable costs. We also saw the average gain on sale of decrease back to normal levels.
The decrease of $2, 77% compared to elevated 395 last quarter, we really don't anticipate further the client decline in the gain on sale margin.
The other in pipeline at the end of the second quarter was $1.7 billion compared to $2.3 billion at the end of last quarter and we do believe that there is further reductions in noninterest expense as production continues to decline.
As we previously stated stated we had a large amount of our expenses are variable costs, and we designed that and debt in our mortgage group.
Total noninterest expense for the company declined by $13 million for about $148.8 million last quarter or 2 of $135.8 million this quarter.
Just mentioned mortgage expenses declined almost 6 million during the quarter and then of traditional fixed and a half million dollar reduction was seen in the banking division, which includes the enterprise wide service and support staff.
We continue to look for ways to become more efficient and we continuously monitor the efficiency ratio by division.
On that day, our adjusted efficiency ratio increased slightly this quarter the $54.7 from 50, 450.462 last quarter.
Previously guided for the efficiency ratio to stabilize in the 53% to 55% range, because we did not anticipate them that previous level of mortgage revenue and efficiency to be sustainable.
Think of 54 point out of southern is right in the middle of that range as we saw mortgage stabilize.
And then also reminder, this quarter, we saw the gain on sale margin, which doesn't affect the variable cost fell back to normal levels and we still saw that improvement in our efficiency ratio.
On the balance sheet side, we ended the quarter with assets of $21.9 billion compared to $21.4 billion at the end of last quarter. We were pleased with our organic loan growth of 181 million of 5% annualized for the second quarter.
And you can see on slide 16, we had about we had $473 million of headwind against the 655 million dollar growth in CRE C&I premium finance and residential.
P. P. T declined a PPP loans declined $304 million and indirect loans declined $85 million, we have approximately $488 million of P. P. P loans left and we have $397 million of indirect loans left we anticipate the headwinds from run off in both of these portfolios to really subsided early next year.
And a few extra details on P. P P.
We've received payments of forgiveness of approximately 975 million on round, 1 leading the outstanding balance at $126 million and we now have the knee round 2 balance of 362 million. The average balance of PPP loans in the second quarter was $708.5 million compared to an average balance in the.
The first quarter of $764.9 million.
We have about $22.3 million left of deferred income on the P. P. P loans, that's $2.2 million of around 1 and $20.1 million of around 2 and again, we can hit the pie anticipate amortizing that into income over the next year if not sooner.
We already discussed the excess liquidity you can see in other earning assets on the balance sheet to each of our tremendous deposit growth that we've seen over the past few quarters.
But again this quarter, we grew $382 million this quarter in deposits and 46 per cent of that growth was in noninterest bearing.
I'm like a broken record, but we really do anticipate some deposit run off of life gets back to normal post pandemic and as rates potentially rise. We continue to anticipate net loan growth net of P. P. P activity for the year in the mid single digits, which is about $1 billion of loan growth that leaves about 1.5 billion of excess cash to prepare.
For deposit run off runoff if rates start to increase and to begin buying investments in the in the bond portfolio. We did purchase of $100 million of bully during the second quarter with the non taxable yield of approximately $3.5 per cent and we are considering other investment purchases all the way we would like the curve to steepen, just a little bit before we really started.
Doing that.
And with that I will wrap it up I appreciate everyone's time today and now I'll turn the call over to device for any questions from the group.
Well go no go simple question and then of course.
Who asked the question.
Other than the 1 on the touched on the phone hopefully using a speakerphone. Please pick up the at home coffee cocoa, Kentucky.
The first of all my question has to have taken I would like to withdraw your question.
For them too.
The decline we will pause momentarily.
Awesome.
The first question comes from Brady Gailey with <unk> revenue.
Please go ahead.
Hey, Thanks, good morning, guys.
What are the right.
So when I looked at what happened on the expense side basically your of your ability to reduce expenses to help offset the pressure of you no doubt revenue at the end, mostly down mortgage we thought that was pretty impressive in the second quarter.
Should that dynamic continue to play out like it did into Q, you know going forward there as mortgage continues to normalize.
So I'm going to take that question and split it into 2 if that's okay. And then talk about the mortgage side and then talk about the banking side, because I think theres 2 different dynamics there on the mortgage side, we do anticipate and again kind of looking at mortgage revenue. There's 2 components..1 is driven by gain on sale and the other component of production.
And the gain on sale margin it really doesn't affect those variable costs and we feel like we've absorbed all of that into the second quarter than when you turn to the production side. The production side is where the variable costs really are are affected them.
We have about an 80 per cent structure. There. So as production comes down and we expect additional cost saves on the on the expense side that mostly in salaries benefits basically commissions incentives.
And then also on the it side to the production comes down your data processing for account comes down so.
Those are the 2 main categories on debt deal that kind of 80 per cent the.
Decline in expenses as the production revenue comes down so I do anticipate on the mortgage side.
On the banking side part of the decrease this quarter had to do with deferred costs because of our very strong production. So I think some of that could come back I don't think that will go back to the 80.385 that we were running but I think the 76 could easily bump up a little bit as that production.
You know again, we have very robust and when you think about third and fourth quarters. If it is not quite as robust production those deferred fees could impact that so I think the 76 could easily go up closer to the 79 to 80, but I don't anticipate it going as high as it was you know net 85 range of cause people to go.
Okay.
When I look at your capital base I mean, Nichole you mentioned, the adjusted TCE of 10%, that's the 100 basis points above your 9% target.
The stock has pulled back a little bit here, it's sort of 11 times earnings.
The only 1.7 times tangible which is which is pretty attractive.
It's on the you know reengage the than the share buyback.
Yes Brady. This is the Palmer as you know we've got the the playing out there and authorized and we've got opportunities to do that and if we continue to see the the pullback that we're seeing now because of the stock is at the very attractive price.
That's certainly the consideration will take into consideration.
Okay, and then and then finally for me.
Just an update on M&A, we saw south state enter your market in a big way. This morning with the acquisition of Atlantic Capital You know what would of what a target like that possibly have been of interest to you and then just generally speaking of maybe an update on how you guys are thinking about the M&A now Palmer.
Yeah, No I think that's a nice transaction for SaaS day, then it gets a good bolt on for them.
I think that it's a you know whenever you can garner market share in the market like Atlanta, I think it's a good opportunity the and I think that the.
The opportunity for a lot of folks looking at Atlanta as they realize the opportunity here in terms of the growth prospects and that's what we will continue to capitalize on them. When you look at where we stand in the market in terms of market share.
And the.
The existing platform, we have in place will be able to lever that in a meaningful way in terms of our outlook, we were pretty consistent in terms of what we're looking for we've got we're very disciplined and obviously very principled.
What we want to do so we take a lot of of the social considerations into account. In addition to the pricing and you know so we're going to remain opportunistic which is where we are and it's nice to be in a position to to be able to to think that way but.
<unk> from M&A as you know, we've got incredible growth organic growth opportunities and we'll continue to pursue those either way.
Okay, great. Thanks for the color guys.
You bet. Thanks Brady.
The next question comes from Casey the total pulp.
The final. Please go ahead.
Good morning.
Casey.
But Nicole maybe can you walk us through how you are thinking about you of core margin over the back half of the year, you know without P. P P and accretion and obviously, how liquidity is going to play into that.
Absolutely. So I was gonna say, excluding kind of just assuming flat P. P. P slight accretion of flat liquidity, we're guiding for another quarter of mid single digit compression.
That's you know a couple of basis points on the asset side offset we do think we have a couple of more basis points. The squeeze out on the deposit side, mostly in that CD portfolio. So again kind of mid single.
Did the compression for the next quarter until we start to stabilize and again you know that we have got $202.5 billion of excess liquidity. So as we can as.
We can start deploying that you know every hundred million is about 2 basis points.
And our margins and as soon as we start to start.
Deploying that we will definitely see the pick up on.
I had that added back in the assuming the liquidity stays flat accretion in PPP stay flat, where mid single digit compression for 1 of the quarter.
Okay makes sense, that's all I had a nice quarter.
Great. Thank you Casey.
Okay.
The next question comes from China For example, the true Securities. Please go ahead.
Jennifer the line yet it we can't hear you.
Can you hear me now.
Yes, good morning, Jennifer.
Hi, how are you more of my question is on the mortgage business can you just talk about what kind of production trends you think youre going to see over the next couple of quarters and how much of the issue is the in the.
Towards the shortage right now.
Yeah, I'll I'll take that I think when you look at our current production and you saw this quarter. It is still very meaningful obviously were impacted by the margin, but in terms of the impact from a supply situation. What we're finding is that while supplies in short order. The demand is still there and typically in this business you've got a lot of seasonality.
For the second half of the year and I don't think you're going to see that so I think what's going to happen is it's actually going to be when you look at the run rate going forward over the next probably 2 to 4 quarters I think it's going to be actually much more stable than what we've historically seen.
Just because that the constant demand for for inventory until the end for absorption, which we normally see of pullback as we get into the later into the year. So.
I'm kind of a contrarian and that the even think that in certain markets. As we all know there is a very a shortage of supply, but the absorption is there and so I think it's going to continue to be a steady performer for those that are heavily focused on on purchase type of activity, which we are with builder of Realtors I think that's kind of serve us well.
We certainly all saw a little pickup in the refi activity just due to the drop in rates of of last last quarter, but going forward I think it's going to be a much more stable type of environment for mortgage quite frankly for those that are heavy purchase oriented.
Yeah.
Okay.
And back on the merger of interest topic.
Could you just.
Give us a little more detail on what types of true watching of Maris might be interested in.
If that makes sense.
Yeah, I would tell you those of the kind of transaction for looking at anything that makes sense to us.
We're big on culture as you know here. So there's got to be very good cultural fit and alignment there and there's got to be accretive.
We're very disciplined in our pricing, we're not going to do anything that's overly dilutive to this company and to our shareholders.
But first and foremost it's gotta be of good cultural fit and the.
So we will remain a like I said opportunistic and open to.
Other opportunities that are out there both bank and nonbank type of transactions.
Okay. Thank you.
You bet.
The next question comes from glad you called some of them with Stephens Inc. Please go ahead.
Hey, good morning, everyone.
Good morning Brady.
And Nicole could you just help me around the around the core expenses.
So.
I hear you the.
The bump back up to 79 or 80 with the production, but just when I look at the year over year sort of decline you know understanding of the <unk>.
Seasonally high of seasonal high for you guys because of the payroll. What you you know you down from 83 year over year to 70 cents regimes. The in all of the fact that we take about $7 billion.
Out of the quarterly run rate on the year over year basis, and so just help me understand how you like what specifically has driven that level of the decline in the core bank expenses over the last year, while you've been actively hiring people.
Sure that.
Great question I appreciate it and so did it really comes back to what we've been saying for several quarters is that you know we feel like we've been a head of the curve on a few things we did our branch rationalization.
And then you know close branches. There we were looking at lease opportunities as leases were expiring to the move out of those and kind of consolidate spaces and said that it's been exactly what we had planned and then it's and we have been able to do hiring I will say that we have certainly Houston I know people would had anything there.
The reallocation of resources, but finding ways to pay for things.
So even though we have had new hires we've also had some attrition or some retirement and maybe we've reallocated those funds on to be able to move into some other growth markets and not not fill day.
Physicians in some of our other markets and then we've also started using technology to help as well and so when you look at the expense down the line. It. It's just about every bucket I mean, you'll see data processing and telecommunications is about the only 1 that's been.
The flat there.
But some of the expenses that we spent there have been able to help us in some of the other noninterest expenses that are down.
Occupancy is down as well as salaries and employee benefits and you're exactly right we had about.
Millions of $2 million, a payroll tax in the first quarter that we didn't have again and then the often had those deferred cost of debt that could come back up into that salary category. The burden of this is the Palmer you know 1 thing that all companies obviously the largest expense item is the of the.
Teammates at the overhead and I think what I've been very pleased with with the of mirrors team here is the the discipline in terms of accountability and expectations and I'm being realistic about it obviously, but what you will find a good examples even in our commercial banking group a year.
Year to date, we've hired 11, new new individuals', but net net when we were only up 3 ftes.
Well that's reflective of it is just holding people accountable for their roles in their performance and if you can do the throughout an entire company whether it's on the operational side on the production side. What you end up with is a very meaningful group of high performing individuals and instead of just layering in additional expense to the mask.
A deficiency and so I think that's 1 of the things that we've been very consequential about the this year and last year and it's certainly the.
The dividends.
For us currently and going forward.
Got it do you have of my question the contango.
Oh, yeah, sorry about that I'm sorry.
So I guess on the mortgage side you know on the call of just 1 last question. If it's 80 per cent of the of the expenses tied to variable comp.
The production went down so 5 per cent of 1 next quarter does that mean expenses for my business and should be down 4% of that how should we be thinking about that.
Exactly yes.
Okay great.
Great. Thanks for the I guess, maybe just on that for the mortgage banking.
Is that tied to total production or is that or are those expenses tied to the sold production.
The total production.
Okay.
Great. Thanks for that clarification.
Maybe just switching the core loan yields.
I think backing out P. P. P M sort of calculating a call on the old right around for 25 this quarter.
<unk> was down about 10 basis points from last quarter.
Just given that new production yields continue to head down by 5 to 6 bps per quarter here should should we expect a similar kind of decrease in that core loan yields over the next couple of quarters or I guess, when do you sort of expect that to subside.
You're exactly right to our with our current come on the rate.
It is hum.
Pushing our loan yield down and so we really need about a 50 basis point.
Upswing for that to stabilize so if rates stay where they are for a long period, we could continue to see see some of that compression again, we have the deposit side.
To help some of that for sure.
But again, we kind of hit the 50 basis point swing really stop that margin decline and anything above that would start to the accretive.
Okay.
And the HSA Hff's portfolio of this $2.77 yield of that you know of good normalized yield the to use them for it I know, it's I know it can be pretty variable.
It is pretty pretty variable I I hate to say this but I don't anticipate it going down.
So I think he could probably use that and that would be conservative.
Okay and on that Hff's portfolio in the call of the pipelines being.
<unk> being down you know this quarter and you know NBA.
MBA forecast being what they are I guess, we should expect this hff's portfolio of continued a leg down from here and so would you kind of expect it to get back to that $800 million range by some point next year.
I would say that that you know we've kind of guided to 902.1 billion is kind of the.
Kind of what we think will be the new norm.
It still has a couple of hundred million to come down yes.
Okay.
And then just on the mortgage banking division of gun just could you help me understand some of the variability of that you see on a quarter to quarter basis in the provision line item there sort.
Sort of what drives that as it related to be average loans that you are.
Or in the Hff's portfolio are 1 of the specific components that drive that.
To share some of that is related to how we allocate the provision and said when we start looking at some internal credit metrics similar such as you.
You know deferrals or delinquencies all of them and then also just when we look at overall general economic factors and we could have some shifts between buckets. So you'll see I think what you're looking at as you know of.
6 when you again look at last quarter that for $5 million, we had a $28 million relief for the whole company for some of that was allocated to mortgage and then this quarter. You'll see you know kind of the banking division got the credit and then retail mortgage got.
Of the have the extent, but it all kind of net out.
Some of the modeling of economic factors as well as an individual.
Internal credit metrics.
Okay, and then just on the C&I portfolio. It was it was nice to see some strength there in the core C&I portfolio I think of it was up.
12, 5% linked quarter.
Could you maybe help me understand is is that new kind of commitments of that increase on utilization of that some of the folks that you hired over the last few years are starting to hit their stride. So help me kind of understand what happened there.
It's a bit of all of the above which is exciting to see and a lot of it already.
He has come out of some of our investments we've made in many of the the.
The growth markets, including the Charlotte area.
North, Florida had a great quarter.
Atlanta has been very consistent in the pipelines remain full.
Most of this was incremental new business and the other part of it is of some of its incremental from new markets, which I like seeing so the investments we made last year are paying off.
We are very excited about the outlook there.
Okay, Great and then just 1 last 1 if I may Nicole do you happen to know what the what the survey. The servicing income was this quarter I think of it was $10.1 million last quarter for.
For the mortgage yeah. It was it was pretty consistent with that.
Okay. Thank you very much.
And that's a good point you bring up there and for everybody. That's listening to the day. When you look at mortgage and you look at potential volatility of mortgage 1 thing is not as volatile of mortgages servicing income and we've got a meaningful servicing asset there and I think it's important for people to remember that in terms of it's certainly helpful for us in terms of our forecasting.
And budgeting.
And the income coming from mortgage because it's a nice stabilizer for what can sometimes be.
The volatile.
A lot of business.
And thank you all for taking my questions I really appreciate it.
Great. Thanks Bernie.
Yes.
As a reminder, if you have a question. Please go for.
And then wanted to be joining 1 of the key.
The next question comes from Christopher of Monarch, right quality of Montgomery, Scott, It's kind of help.
Yeah.
Thanks, Good morning, Palmer, Nicola you've been able to gain business from the other bank merger for a long long time. So you know today's news at the low plays not any surprise I'm, just curious kind of what makes customers move or existing customers do more business with the merits of kind of how that gets applied as the sort of of Deckchairs get shuffled once again.
Well I think is fairly typical of of all of disruption. Some of it is this went on the account officer leaves their bank of moves to another bank, obviously, a lot of people think with people.
But then there's the execution side too and the commitment to the market I do think that we benefited from that because we've got a lot of meaningful presence in a lot of key growth markets, but when you start having changes in reporting lines, you start having changes in and credit approvals.
That can be disruptive to the lenders and it can also the disruptive as an end result of the to the customer which is what we're all about so I think with with all of the movement out there in terms of M&A and Furthermore, just changes in reporting lag that's presented a lot of disruption that we've been able to capitalize on I think.
We'll continue to.
Going forward.
Is it fair to safe Harbor that Theres more hires coming to some of your core leathers on all sides of the bank.
There are of new opportunities and we've got several folks right now and I am excited to say a lot of them are coming from some of our new initiatives and new markets, especially of the Carolinas and in Florida.
But that being said of the thing that gives me comfort in terms of our projections for growth. We have all of the folks we need to deliver on the.
The forecast that we have set out for the remainder of this year. So anything beyond that will be incremental lift for us, which will continue to capitalize on as we move for.
Okay, Great and then last question for me is just about power spin torque is evolving for you Oh the Maryland.
1 of the priorities of new initiatives there of the we should expect the next couple of quarters.
Yeah, I think for us we like to stay not on the on the bleeding edge, but on the cutting edge of that we're obviously heavily involved in a lot of the fintech initiatives that are out there with the free.
The canopy and Vince off and just staying on the forefront of that but at the same time of it gives us an opportunity to be exposed to that new technology. We've embraced a lot of it we've as we've talked about before the robotics continue to be a major focus for us in some of our higher volume areas like mortgage and then we will continue to roll that out of the areas like premium.
Finance and you garner a lot of efficiencies there.
We have agree.
Aggressive sales force initiative underway right now throughout the entire company. We were utilized until force end and seen of many of the areas of the company, but going forward. We will have and we've got an act of rollout of sales force over the next 2 or 3 quarters and I think the important thing theres. So many things that you want to do but you've got to prioritize in terms of where you're going to see the <unk>.
Largest gain inefficiencies and so right now we see that on the robotics front and on the sales force front of law.
Lot of that has to do with workflow not just managing pipelines and that's where we will continue to make meaningful investments and then obviously down the road as we.
We all talk about is what opportunities we might have in terms of our core processors going forward and getting into more open architecture type of environment, which is really exciting to me and I don't think for the industry were quite there yet.
We've certainly got some prototypes of our experimental of activity going on but until that's a little bit more secure and we've got the the comfort of our regulators and everyone else I think that's probably a couple of years out but in the meantime of Theres a lot. The banks can be doing now to position themselves become more efficient and that's what we've.
Prided ourselves on the last last last year.
Great.
Cause all back to the core expense improvements of the coal was elaborating on earlier some of this more of their general absolutely. Yeah. We've always talked about mortgage has the scale of business. The question is is do you execute on that and with the robotics that we had in place that allowed us quite frankly to make some expense reductions of immediately without.
Creating havoc or.
Some sort of concern in the back office.
The environment and so that's where you start really appreciating the efficiency of garner from from technology.
Great. Thanks for the background.
Thank you.
This concludes our question and answer the question I would like to turn the conference back over to Palmer.
In closing remarks.
Thank you very much and once again I'd like to thank everyone for listening to our second quarter of 2021 earnings result call. We're.
We're excited about the momentum as you can tell throughout the entire footprint and we feel like were extremely well position of for the second half of 2021 and into the future.
And as I've always said before we're going to continue the liberal top quartile financial results and remain focused on our disciplined growth in our operating efficiencies and growing our franchise value, but thank you all again for your time and your interest in the aerospace.
The conference has now concluded. Thank you for attending today's presentation and the lack of cool.
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