Q1 2026 Ameris Bancorp Earnings Call

April 24, 2026

Operator: Good day, and welcome to the Ameris Bancorp Q1 conference call. All participants will be in a 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 one on the touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Nicole Stokes, Chief Financial Officer. Please go ahead.

Operator: Good day, and welcome to the Ameris Bancorp Q1 Conference Call. All participants will be in a 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 one on the touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Nicole Stokes, Chief Financial Officer. Please go ahead.

Speaker #2: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on the touch-tone phone.

Speaker #2: 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.

Speaker #2: Please go ahead.

Speaker #3: Thank you, Bailey. 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.

Nicole Stokes: Thank you, Bailey, 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 with Palmer Proctor, our CEO, and Doug Strange, our Chief Credit Officer. Palmer will begin with some opening comments, and then I will discuss the details of our financial results before we open up for Q&A. 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.

Speaker #3: I'm joined today by Palmer Proctor, our CEO, and Doug Strange, our Chief Credit Officer. Palmer will begin with some opening comments, and then I will discuss the details of our financial results before we open up for Q&A.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Nicole Stokes: 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 our performance. You can see our reconciliation of these measures and GAAP financial measures in the appendix to our presentation. With that, I'll turn it over to Palmer for his comments.

Speaker #3: Also, during the call, we will discuss certain non-GAAP financial measures in reference to our performance. You can see our reconciliation of these measures and GAAP financial measures in the appendix to our presentation.

Speaker #3: And with that, I'll turn it over to Palmer for his comments.

Speaker #4: Thank you, Nicole. Good morning, everyone. We appreciate you taking the time to join our First Quarter Call. I'm proud of our performance to start the year, primarily from three things.

Palmer Proctor: Thank you, Nicole. Good morning, everyone. We appreciate you taking the time to join our Q1 call. I'm proud of our performance to start the year primarily from three things. First, we operated at a high level of core profitability with an ROA above 160, PPNR ROA at 230, and a return on tangible common equity of almost 15%. Second, we experienced good growth in loans, deposits, earning assets, and revenue. Third, we actively managed our capital by repurchasing 1.4% of the company in the quarter at about a 7.5% discount to yesterday's closing price. In addition to those three positives, I want to revisit something I said on our Q1 call last year. I said we were focused on enhancing revenue generation and positive operating leverage, and once again, we executed on our plan.

Speaker #4: First, we operated at a high level of core profitability with an ROA above 160 PP&R ROA at 230 and a return on tangible common equity of almost 15%.

Speaker #4: Second, we experienced good growth in loans, deposits, earning assets, and revenue. And third, we actively managed our capital by repurchasing 1.4% of the company in the quarter at about a 7.5% discount to yesterday's closing price.

Speaker #4: In addition to those three positives, I want to revisit something I said on our First Quarter Call last year. I said we were focused on enhancing revenue generation and positive operating leverage, and once again, we executed on our plan compared to the First Quarter of 2025.

Palmer Proctor: Compared to Q1 2025, our quarterly revenue is up 10%, with expenses up only 4%. That's about a 21% efficiency ratio on our growth due to our focus on efficient, organic, profitable growth. More specifically, on an annualized basis, we grew loans and deposits by 5% to 6%, along with earning assets at nearly 10%. Revenue increased 9.5%, driven by an uptick in fee income, which represented a strong 22% of total revenue for the quarter. Our continued focus on expense discipline across the company results in efficiency ratio just under 50%, despite some seasonal revenue and expense headwinds in Q1. Our net interest margin expanded three basis points to 388 in the quarter and remains well above peer level. Loan production was $2.2 billion in Q1, a 45% increase over Q1 last year.

Speaker #4: Our quarterly revenue is up 10% with expenses up only 4%. That's about a 21% efficiency ratio on our growth due to our focus on efficient, organic, profitable growth.

Speaker #4: More specifically, on an annualized basis, we grew loans and deposits by 5 to 6 percent, along with earning assets at nearly 10%. Revenue increased 9.5%, driven by an uptick in fee income.

Speaker #4: Which represented a strong 22% of total revenue for the quarter. Our continued focus on expense discipline across the company results in efficiency ratio of just under 50% despite some seasonal revenue and expense headwinds in the first quarter.

Speaker #4: Our net interest margin expanded three basis points to 388 in the quarter, and it remains well above peer level. Loan production was 2.2 billion in the first quarter, a 45% increase over first quarter last year.

Speaker #4: Our loan pipeline remained robust at $2.8 billion. On the deposit front, we continue to focus on core granular deposits and relationship banking, with total deposits up 5% annualized in the quarter.

Palmer Proctor: Our loan pipeline remained robust at $2.8 billion. On the deposit front, we continue to focus on core granular deposits and relationship banking, with total deposits up 5% annualized in the quarter. Our non-interest-bearing deposits grew to $323 million in the quarter, recapturing some of the seasonal decline of last quarter. Our non-interest-bearing deposits returned to 30% of total deposits, and we have minimal reliance on brokered funds. We increased our capital return in the quarter by repurchasing $75 million or 1.4% of shares outstanding, which is the highest level of buybacks we have had in any one quarter. Capital levels remain robust with CET1 finishing at roughly 13%, and our TCE ratio is slightly above 11%. These capital levels position us well for any type of environment. Credit quality was stable.

Speaker #4: Our non-interest-bearing deposits grew $323 million in the quarter, recapturing some of the seasonal decline of last quarter. Our non-interest-bearing deposits returned to 30% of total deposits, and we have minimal reliance on brokered funds.

Speaker #4: We increased our capital return in the quarter by repurchasing 75 million, or 1.4%, of shares outstanding, which is the highest level of buybacks we have had in any one quarter.

Speaker #4: Capital levels remain robust with CET1 finishing at roughly 13%, and our TCE ratio is slightly above 11%. These capital levels position us well for any type of environment.

Speaker #4: Credit quality was stable. Our 162 reserve was unchanged. And both net charge-offs and non-performing assets excluding government-guaranteed mortgages improved modestly in the quarter. CRE and construction concentrations were relatively stable, at 265 and 46% respectively.

Palmer Proctor: Our 1.62% reserve was unchanged, and both net charge-offs and non-performing assets, excluding government-guaranteed mortgages, improved modestly in the quarter. CRE and construction concentrations were relatively stable at 2.65% and 46%, respectively. Overall, we remain well-positioned for future growth, and this growth should be positively impacted by the continued disruption in our southeastern footprint. I'll stop there and turn it over to Nicole to discuss our financial results in more detail.

Speaker #4: Overall, we remain well positioned for future growth, and this growth should be positively impacted by the continued disruption in our southeastern footprint. I'll stop there and turn it over to Nicole to discuss our financial results in more detail.

Speaker #3: Great. Thank you, Palmer. So we reported net income of $110.5 million or $1.63 per diluted share in the first quarter. Our return on assets was 1.62%.

Nicole Stokes: Great. Thank you, Palmer. We reported net income of $110.5 million or $1.63 per diluted share in Q1. Our return on assets was 1.62%, our PPNR ROA was 2.3%, and our return on tangible common equity was 14.75% for the quarter. Our tangible book value increased to $44.79, and that's about 12.5% higher than a year ago. As Palmer said, capital levels remain robust, and we were notably active in our share buybacks during the quarter, repurchasing $74.9 million of common stock or 950,400 shares at an average price of $78.76. Combined with our full year 2025 share buybacks, we've repurchased just over 3% of the company over the last five quarters. Our remaining share repurchase authorization was $84.3 million at the end of Q1. Our net interest margin expanded three basis points to a strong 3.88%.

Speaker #3: Our PP&R ROA was 2.3%, and our return on tangible common equity was 14.75% for the quarter. Our tangible book value increased to $44.79, and that's about 12.5% higher than a year ago.

Speaker #3: As Palmer said, capital levels remain robust, and we were notably active in our share buybacks during the quarter, repurchasing $74.9 million of common stock, or 950,400 shares, at an average price of $78.76.

Speaker #3: Combined with our full year 2025 share buybacks, we've repurchased just over 3% of the company over the last five quarters. Our remaining share repurchase authorization was 84.3 million at the end of the first quarter.

Speaker #3: Our net interest margin expanded three basis points to a strong 388. The expansion came from six basis point positive impact on the funding side more than offsetting the three basis point decline from the lower asset yields.

Nicole Stokes: The expansion came from a 6 basis point positive impact on the funding side, more than offsetting the 3 basis point decline from the lower asset yields. Our margin level is well above peer and is at 100% core without any purchase accounting accretion from M&A. Our asset-liability sensitivity is effectively neutral and has really served us well through this macroeconomic environment. That said, we do anticipate we could have some slight margin compression over the next few quarters, and that's really due to pressure on the deposit costs as we fund our balance sheet growth. We believe the margin could decline a few basis points per quarter, probably 5 to 10 total basis points lower over the next few quarters. We will continue to focus on growth and net interest income, both through earning asset growth and margin management.

Speaker #3: Our margin level is well above peer, and it's at 100% core without any purchase accounting accretion from M&A. Our asset-liability sensitivity is effectively neutral, and it's really served us well through this macroeconomic environment.

Speaker #3: That said, we do anticipate we could have some slight margin compression over the next few quarters, and that's really due to pressure on the deposit costs as we fund our balance sheet growth.

Speaker #3: We believe the margin could decline a few basis points per quarter, probably 5 to 10 total basis points lower over the next few quarters.

Speaker #3: But we will continue to focus on growth and net interest income, both through earning asset growth and margin management. Non-interest income increased $8.1 million this quarter, mostly from better mortgage fees as well as an increase in our equipment finance fees.

Nicole Stokes: Non-interest income increased $8.1 million this quarter, mostly from better mortgage fees, as well as an increase in our equipment finance fees. Total non-interest expense increased about $14 million in the quarter, partially driven by seasonally higher compensation costs, specifically higher payroll taxes, 401(k) matching expense, and incentive accruals. Comparing cyclical Q1s, our efficiency ratio this year was 49.97%, an improvement from 52.83% Q1 of last year. This improvement was driven by the positive operating leverage as year-over-year quarterly revenue growth was $28.5 million, and our expense growth was only $6 million for that same period. Going forward, I anticipate the efficiency ratio to be slightly above 50% for the rest of the year. During the quarter, we recorded $16.6 million of provision expense. Annualized net charge-offs this quarter decreased to 21 basis points.

Speaker #3: Total non-interest expense increased about $14 million in the quarter, partially driven by seasonally higher compensation costs, specifically higher payroll taxes, 401(k) matching expense, and incentive accruals.

Speaker #3: Comparing cyclical first quarters, our efficiency ratio this year was 49.97, an improvement from 52.83 in first quarter last year. This improvement was driven by the positive operating leverage, as year-over-year quarterly revenue growth was $28.5 million and our expense growth was only $6 million for that same period.

Speaker #3: Going forward, I anticipate the efficiency ratio to be slightly above 50% for the rest of the year. During the quarter, we recorded $16.6 million of provision expense. Annualized net charge-offs this quarter decreased to 21 basis points.

Speaker #3: We continue to anticipate net charge-offs in the 20 to 25 basis point range for 2026. Our reserve remained strong at 1.62% of loans, the same as last quarter, and overall asset quality trends remain strong, with non-performing assets—excluding government-guaranteed mortgages—and net charge-offs down in the quarter.

Nicole Stokes: We continue to anticipate net charge-offs in the 20 to 25 basis point range for 2026. Our reserve remains strong at 1.62% of loans, the same as last quarter, and overall asset quality trends remain strong with non-performing assets, excluding government-guaranteed mortgages, and net charge-offs down in the quarter, and both classified and criticized remain well below peer. Looking at our balance sheet, we ended the quarter at $28.1 billion of total assets compared to $27.5 billion at year-end. Earning assets grew $607.8 million or 9.7% annualized as we grew both the loan book and the bond portfolio. Loans grew $314.5 million or about 5.9% annualized. As Palmer mentioned, our loan production and our pipelines remain strong. The real big win for the quarter was our core deposit growth.

Speaker #3: And both classified and criticized remain well below peer. Looking at our balance sheet, we ended the quarter at $28.1 billion of total assets, compared to $27.5 billion at year-end.

Speaker #3: Earning assets grew $607.8 million, or 9.7% annualized, as we grew both the loan book and the bond portfolio. Loans grew $314.5 million, or about 5.9% annualized, and as Palmer mentioned, our loan production and our pipelines remain strong.

Speaker #3: The real big win for the quarter was our core deposit growth. Deposits grew $261 million, or 4.7% annualized, and that was really strong growth in both our consumer and commercial customers of $547 million.

Nicole Stokes: Deposits grew $261 million or 4.7% annualized, and that was really strong growth in both our consumer and commercial customers of $547 million. As expected, we had the seasonal outflows of about $430 million of public funds, and our non-interest-bearing to total deposit ratio improved back up to 29.8% from 28.7% at year-end. We project our loan and deposit growth to be in the mid-single digit range for the rest of the year. As I previously mentioned, we expect longer-term deposit growth will be the governor on loan growth. With that, I'm going to wrap it up and turn the call back over to Bailey for any questions from the group.

Speaker #3: As expected, we had the seasonal outflows of about $430 million of public funds. And our non-interest-bearing to total deposit ratio improved back up to 29.8% from 28.7% at year-end.

Speaker #3: We project our loan and deposit growth to be in the mid-single digit range for the rest of the year. And as I previously mentioned, we expect longer-term deposit growth will be the governor on loan growth.

Speaker #3: With that, I'm going to wrap it up and turn the call back over to Bailey for any questions from the group.

Speaker #1: We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw the question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Brady Gailey with KBW. Please go ahead.

Speaker #1: If at any time your question has been addressed and you would like to withdraw the question, please press star then two. At this time, we will pause momentarily to assemble our roster.

Speaker #1: Our first question comes from Will Jones, with KBW. Please go ahead.

Speaker #4: Yeah, hey, thanks. Good morning, guys.

Brady Gailey: Yeah. Hey, thanks. Good morning, guys.

Will Jones: Yeah. Hey, thanks. Good morning, guys.

Speaker #5: Good morning.

Nicole Stokes: Good morning.

Palmer Proctor: Good morning.

Speaker #6: Good morning, Will.

Brady Gailey: Good morning, Will.

Nicole Stokes: Good morning, Will.

Speaker #4: Hey, so Nicole, I just wanted to start just with the margin. You guys have just perpetually continued to outperform your guidance and kind of outperform your expectations there, although the forward outlook, the messaging has really been the same that the kind of see a couple of basis point headwind just as comes more competitive to fund some of your growth.

Brady Gailey: Hey, Nicole, I just wanted to start just with the margin. You guys have just perpetually continued to outperform your guidance and kind of outperform your expectations there. Although, the forward outlook, the messaging has really been the same that you kind of see a couple basis points headwind just as it becomes more competitive to fund some of your growth. Although it feels like that messaging hasn't particularly changed much either. Maybe just a backward-looking question. What has kind of differed from your expectations with that dynamic and maybe more forward-looking, where are you seeing new loan yields today coming on just relative to new deposits?

Will Jones: Hey, Nicole, I just wanted to start just with the margin. You guys have just perpetually continued to outperform your guidance and kind of outperform your expectations there. Although, the forward outlook, the messaging has really been the same that you kind of see a couple basis points headwind just as it becomes more competitive to fund some of your growth. Although it feels like that messaging hasn't particularly changed much either. Maybe just a backward-looking question. What has kind of differed from your expectations with that dynamic and maybe more forward-looking, where are you seeing new loan yields today coming on just relative to new deposits?

Speaker #4: Although it feels like that messaging hasn't particularly changed much either. So maybe just a backward-looking question: What has kind of differed from your expectations with that dynamic?

Speaker #4: And maybe more forward-looking, where are you seeing new loan yields today coming on, just relative to new deposits?

Speaker #6: Yep. Great question. So I'll start with kind of the look back. And we've said, all of our guidance, when we talk about our ALM modeling and where our margin guidance is going, we've said all along that that had to do with some of our guidance.

Nicole Stokes: Yep, great question. I'll start with kind of the look back. We've said all of our guidance when we talk about our ALM modeling, and where our margin guidance is going. We've said all along that some of our guidance we added was deposit pressure, and also the funding and the mix of the deposits as we fund the growth. Where is the growth coming from? Certainly in Q1, something that really helped the margin was the deposit growth of the non-interest-bearing. $323 million of non-interest-bearing growth absolutely helped the margin. I understand that every quarter I say that there could be some slight compression coming. I did want to mention that for the month of March, our month of March margin was slightly below the 388 that we reported for the quarter.

Speaker #6: We added deposit pressure and also the funding and the mix of the deposits as we fund the growth. So, where is the growth coming from?

Speaker #6: So, certainly in the first quarter, something that really helped the margin was the deposit growth of the non-interest-bearing. So, $323 million of non-interest-bearing growth absolutely helped the margin.

Speaker #6: And I understand that every quarter I say that there could be some slight compression coming, but I did want to mention that for the month of March, our March margin was slightly below the 3.88 that we reported for the quarter.

Speaker #6: So we really do see they're kind of coming down a little bit in the quarter and in future quarters. Again, not huge amounts, but just some slight compression coming in.

Nicole Stokes: We really do see they're kind of coming down a little bit in the future quarters. Again, not huge amounts, but just some slight compression coming in. We will continue to remain focused on the growth in NII and the profitability. Then when you talk about, and I think the second part of your question was the loan and deposit production, and that feeds in exactly to the first part of the question. When we look at our loan coupon yields and production for the quarter versus our deposits, our loans, it's still accretive when you take in all deposits, when you take in interest-bearing and non-interest-bearing. Loans came in for the quarter, total loan production at about 6.13%. Then total deposit production, including non-interest-bearing, came in at about 1.90%. That's still coming in at a positive accretive spread to margin.

Speaker #6: But we will continue to remain focused on the growth in NII and the profitability. And then, when you talk about—I think the second part of your question was—the loan and deposit production.

Speaker #6: And that feeds in exactly to the first part of the question. When we look at our loan coming-on yields and production for the quarter versus our deposits, our loans, it's still accretive when you take in all deposits.

Speaker #6: When you take in interest-bearing and non-interest-bearing, loans came in for the quarter, total loan production at about 6.13%. And then total deposit production, including non-interest-bearing, came in at about $190 million.

Speaker #6: So that's still coming in at a positive accretive spread to margin. However, if you take out the non-interest-bearing and you look at just interest-bearing deposits, our interest-bearing total deposit production was at 274.

Nicole Stokes: However, if you take out the non-interest-bearing and you look at just interest-bearing deposits, our interest-bearing total deposit production was at 274. If we don't continue to get that non-interest-bearing growth, the spread between loans and interest-bearing deposits are slightly dilutive to margin. It just goes back to how key that non-interest-bearing deposit growth is for us.

Speaker #6: So if we don't continue to get that non-interest-bearing growth, the spread between loans and interest-bearing deposits is slightly diluted to margin. It just goes back to how key that non-interest-bearing deposit growth is for us.

Speaker #4: Yeah, okay. That's very helpful, Color. We like margin beats, for what it's worth. I guess, unpacking that just a little bit more—if we think about an environment where we don't get rate cuts for the rest of the year, is it possible that deposit costs could actually creep up throughout the year, just as we think about this 5 to 10 basis point margin headwind that you kind of see?

Brady Gailey: Yeah. Okay. That's very helpful color. We like margin beats for what it's worth.

Will Jones: Yeah. Okay. That's very helpful color. We like margin beats for what it's worth.

Brady Gailey: Thank you.

Nicole Stokes: Thank you.

Brady Gailey: I guess unpacking that just a little bit more, if we think about an environment where we don't get rate cuts for the rest of the year, is it possible that deposit costs could actually creep up throughout the year just as we think about this 5 to 10 basis point margin headwind that you kind of see?

Will Jones: I guess unpacking that just a little bit more, if we think about an environment where we don't get rate cuts for the rest of the year, is it possible that deposit costs could actually creep up throughout the year just as we think about this 5 to 10 basis point margin headwind that you kind of see?

Speaker #6: So, if rates stay flat, there's a couple of moving targets there. Tactically speaking, all of our retail CDs are all pretty short.

Nicole Stokes: If rates stay flat, there's a couple moving targets there. Tactically speaking, we have all of our retail CDs are all pretty short. We've got about 35% of our CDs that reprice or that mature in Q2. Those are coming off at about 3.48, and you compare that to our Q1 production of 3.44. It's very close. New production was a little bit accretive compared to what is expected to come off. When you look at the whole book, 83% will mature the rest of this year. That is at about 3.39 versus production of 3.44. There's definitely that tailwind that was coming in on CDs has certainly slowed, which is feeding into my guidance.

Speaker #6: We've got about 35% of our CDs that reprice or that mature in the second quarter, and those are coming off at about a 3.48%.

Speaker #6: And you compare that to our first quarter production of 344. So it's very close. I mean, new production was a little bit accretive compared to what is expected to come off.

Speaker #6: And then when you look at the whole book, 83% will mature the rest of this year. And that is at about a 3.39% versus production of 3.44%.

Speaker #6: So there's definitely that tailwind that was coming in on CDs has certainly slowed, which is feeding into my guidance. So on overall deposit cost, a lot of that, I think, is going to be contingent upon competition.

Nicole Stokes: On overall deposit costs, a lot of that, I think, is going to be contingent upon competition, and on the loan growth and the opportunities that we have for loan growth. We are going to protect our core relationships and protect our customers, but we are definitely after the relationship, not just the transaction. We like having non-interest-bearing included in, we like the operating accounts for our loan customers as well. That blend is really what's going to help keep our deposit costs.

Speaker #6: And on the loan growth and the opportunities that we have for loan growth, we are going to protect our core relations and protect our customers but we are definitely after the relationship, not just the transaction.

Speaker #6: And so, we like having non-interest-bearing included in—we like the operating accounts for our loan customers as well. So that blend is really what's going to help keep our deposit costs.

Speaker #4: Yeah, okay. That's great. And lastly, I just wanted to touch on fee income a little bit, particularly the equipment finance business. I feel like maybe we've underappreciated a little bit some of the growth that's happened there in that business and that revenue stream.

Brady Gailey: Yeah. Okay. That's great. Lastly for me, I just wanted to touch on fee income a little bit, specifically the equipment finance business. I feel like maybe we've underappreciated a little bit some of the growth that's happened there in that business and that revenue stream. Maybe if you could talk about any drivers or initiatives that you've taken there in that business, and then just what an appropriate growth rate for the equipment finance revenue stream is going forward.

Will Jones: Yeah. Okay. That's great. Lastly for me, I just wanted to touch on fee income a little bit, specifically the equipment finance business. I feel like maybe we've underappreciated a little bit some of the growth that's happened there in that business and that revenue stream. Maybe if you could talk about any drivers or initiatives that you've taken there in that business, and then just what an appropriate growth rate for the equipment finance revenue stream is going forward.

Speaker #4: Maybe if you could talk about any drivers or initiatives that you've taken there in that business and just what an appropriate growth rate for the equipment finance revenue stream is going forward.

Speaker #6: Yeah. So the equipment finance, we do like that business. And I think everybody knows that we've got that credit box where we like it.

Nicole Stokes: Yeah. The equipment finance, we do like that business, and I think everybody knows that we've got that credit box where we like it. The non-interest income that comes from that's really service charges and some fees on those loans. We like that. We think that that's going to grow pretty commensurate with the rest of the balance sheet. They're actually down to about 6.9% of total loans. They kind of peaked out at about 7.2%. I would consider the growth of the equipment finance to be in line with the growth of the rest of the company, and those fees should grow similarly to the loan growth.

Speaker #6: And so the non-interest income that comes from that, that's really service charges and some fees on those loans. We like that. We think that that's going to grow pretty commensurate with the rest of the balance sheet.

Speaker #6: They're actually down to about 6.9% of total loans. They kind of peaked out at about 7.2%. So I would consider the growth of the equipment finance to be in line with the growth of the rest of the company.

Speaker #6: And those fees should grow similarly to the loan growth.

Speaker #4: Yeah, okay. That's it for me. Thanks, guys.

Brady Gailey: Yeah. Okay. That's it for me. Thanks, guys.

Will Jones: Yeah. Okay. That's it for me. Thanks, guys.

Speaker #6: Perfect. Thanks, Will.

Nicole Stokes: Perfect. Thanks, Brady Gailey.

Speaker #1: Our next question comes from David Feaster with Raymond James. Please go ahead.

Operator: Our next question comes from David Feaster with Raymond James. Please go ahead.

Speaker #5: Hi, good morning, everybody.

David Feaster: Hi, good morning, everybody.

Speaker #7: Morning, David.

Nicole Stokes: Morning, David.

Palmer Proctor: Morning, David.

David Feaster: I wanted to start. I appreciate your commentary on that deposits are the governor for growth, still targeting mid-single digit growth. You've done a phenomenal job driving core deposit growth and funding growth of core deposits. Could you talk about the strategy to grow core deposits, and would you be willing to utilize more non-core funding to support growth if needed? Just how a competitive landscape for deposits is playing into some of that.

Speaker #5: I wanted to start I appreciate your commentary on the deposits or the governor for growth. Still targeting mid-single-digit growth. You've done a phenomenal job driving core deposit growth and funding growth of core deposits.

Speaker #5: Could you talk about the strategy to grow core deposits, and would you be willing to utilize more non-core funding to support growth if needed? And then, just how is the competitive landscape for deposits playing into some of that?

Speaker #7: Yeah, I think if you look at our investments in talent over the last several years, we focused a lot, as I've said before, on treasury management.

Nicole Stokes: Yeah. I think if you look at our investments and talent over the last several years, we've focused a lot, as I've said before, on treasury management. That's been a huge help for us when it comes to operating accounts, payroll accounts, and obviously, we remain focused on just even consumer checking accounts.

Palmer Proctor: Yeah. I think if you look at our investments and talent over the last several years, we've focused a lot, as I've said before, on treasury management. That's been a huge help for us when it comes to operating accounts, payroll accounts, and obviously, we remain focused on just even consumer checking accounts. That's kind of in our DNA. That's where our focus will continue to lie. Would we be willing to sacrifice some of that for growth? We would, for the right kind of growth. Our growth will always be measured. We don't like erratic growth, but we will certainly remain competitive and capitalize on opportunities that come before us. The answer to that would be yes, we'd be willing to sacrifice some of that for future growth.

Speaker #7: That's been a huge help for us when it comes to operating accounts, payroll accounts, and obviously we remain focused on just even consumer checking accounts.

Speaker #7: But that's kind of in our DNA. That's where our focus will continue to lie. Would we be willing to sacrifice some of that for growth?

Palmer Proctor: That's kind of in our DNA. That's where our focus will continue to lie. Would we be willing to sacrifice some of that for growth? We would, for the right kind of growth. Our growth will always be measured. We don't like erratic growth, but we will certainly remain competitive and capitalize on opportunities that come before us. The answer to that would be yes, we'd be willing to sacrifice some of that for future growth.

Speaker #7: We would. For the right kind of growth. I mean, our growth will always be measured. We don't like erratic growth, but we will certainly remain competitive and capitalize on opportunities that come before us.

Speaker #7: So the answer to that would be, yes, we'd be willing to sacrifice some of that for future growth.

Speaker #5: Okay. And maybe just there's obviously been a lot of disruption across your footprint, kind of a two-part question, I guess. First off, how has that disruption impacted the competitive landscape in your footprint?

David Feaster: Okay. There's obviously been a lot of disruption across your footprint. Kind of a two-part question, I guess. First off, how has that disruption impacted the competitive landscape in your footprint? And secondarily, have you seen much dislocation from any of this M&A yet? And is it on the client acquisition side or the hiring front? Where are you seeing the most opportunities?

Speaker #5: And secondarily, have you seen much dislocation from any of this M&A yet? And is it on the client acquisition side or the hiring front?

Speaker #5: Where are you seeing the most opportunities?

Speaker #7: Well, our focus remains on the client acquisition side. Because, as we've said before, we have the talent. We're very selective in the talent we have.

Palmer Proctor: Well, our focus remains on the client acquisition side. Because as we've said before, we have the talent. We're very selective in the talent we have, and then we'll continue to obviously look at new talent. In terms of our ability to execute on our mid-single-digit kind of growth, we've got everybody we need on board to do that. Our focus remains on the client. I think the benefit we probably have, David, is by being an overlapping market with a lot of the disruptions going on, and already having a presence in those existing markets where you've got name recognition, and you may potentially already have some of the wallet share, not all of it. I think that gives us a leg up over a lot of our competition that just doesn't have the same presence we have in some of those overlapping markets.

Speaker #7: And then we'll continue to, obviously, look at new talent. But in terms of our ability to execute on our mid-single-digit kind of growth, we've got everybody we need on board to do that.

Speaker #7: So our focus remains on the client. I think the benefit we probably have, David, is by being an overlap market with a lot of the disruption that's going on and already having a present in those existing markets, where you've got name recognition and you may potentially have already have some of the wallet share, not all of it, I think that gives us a leg up over a lot of our competition that just doesn't have the same presence we have in some of those overlapping markets.

Speaker #7: So I view that as a potential accelerator for us, where we're not having to introduce the bank. They already know the bank. And in some situations, we already have, as I mentioned, some of the business. Now, the objective is to become the primary business and primary wallet shareholder.

Palmer Proctor: I view that as a potential accelerator for us, where we're not having to introduce the bank. They already know the bank. In some situations, we already have, as I mentioned, some of the business now. The objective is to become the primary business and primary wallet shareholder. I think that's where you'll see our growth from the disruption continue to accelerate. We clearly stay focused on the customer acquisition side, and that's where that focus will remain.

Speaker #7: And so I think that's where you'll see our growth from the disruption continue to accelerate, but we clearly stay focused on the customer acquisition side.

Speaker #7: And that's where that focus will remain.

Speaker #5: That makes sense. And then you've got a lot of excess capital. You're continuing to generate a lot of organic capital. I wanted to get the thoughts.

David Feaster: That makes sense. You've got a lot of excess capital. You're continuing to generate a lot of organic capital. I just want to get your thoughts on the regulatory relief here around, specifically on the capital relief side. Have you done any work around what that could mean for you all, especially around the treatment of MSRs? Does that change your strategy at all? Just how do you think about capital deployment? Obviously, the buyback has been a focus. Just kind of curious your thoughts on capital at this point.

Speaker #5: I just want to get your thoughts on the regulatory relief here, specifically on the capital relief side. Have you done any work around what that could mean for y'all, especially around the treatment of MSRs?

Speaker #5: Does that change your strategy at all? And just how do you think about capital deployment? Obviously, the buyback has been a focus—just kind of curious your thoughts on capital at this point.

Speaker #7: Yeah, because we have so much capital right now in terms of the relief, it really doesn't change our direction at all, because we're already well capitalized.

Palmer Proctor: Yeah. Because we have so much capital right now in terms of the relief, it really doesn't change our direction at all because we're already well-capitalized, especially when it comes to any effort for growth. Our capital priorities will remain intact in terms of what the opportunities are, and first would be the organic growth that we stay concentrated on. I do think that depending on the macro environment, if it presents opportunities, there's additional buyback opportunities perhaps. Third, you've got dividends, which we're pleased where those are. Last but not least would be M&A. Like we've said before, M&A is really not on our radar just because we've got so much opportunity in front of us, and we don't need to distract ourselves from the great organic opportunities that are in our disruptive markets.

Speaker #7: Especially when it comes to any efforts for growth. Our capital priorities will remain intact in terms of what the opportunities are, and first would be the organic growth that we stay concentrated on.

Speaker #7: Then I do think that depending on the macro environment, if it presents opportunities, there's additional buyback opportunities perhaps. And then third, you've got dividends, which we're pleased where those are.

Speaker #7: And then, last but not least, would be M&A. But like we've said before, M&A is really not on our radar, just because we've got so much opportunity in front of us and we don't need to distract ourselves from the great organic opportunities that are in our disruptive markets.

Speaker #5: Okay. That makes sense. Thanks, everybody.

David Feaster: Okay. That makes sense. Thanks, everybody.

Speaker #7: And Nicole, anything you want to add on that?

Palmer Proctor: Nicole, anything you want to add on the?

Speaker #6: Sure. On the regulatory changes. So I think the Fed has estimated that CET1 Capital is probably going to fall by about 8% for banks and about an 8% reduction in risk-weighted assets.

Nicole Stokes: Sure. On the regulatory changes. I think the Fed has estimated that CET1 capital is probably going to fall by about 8% for banks, and about an 8% reduction in risk-weighted assets. Our preliminary analysis shows that we're going to be very close in line with the Fed estimates.

Speaker #6: And our preliminary analysis showed that we're going to be very close in line with the Fed estimates.

Speaker #5: Okay. Okay. That's helpful. Thanks.

David Feaster: Okay. That's helpful. Thanks.

Speaker #1: Our next question comes from Gary Tenner with D.A. Davidson. Please go ahead.

Operator: Our next question comes from Gary Tenner with D.A. Davidson. Please go ahead.

Speaker #8: Hey, guys. I'm on the phone for Gary Tenner here. First question on maybe loan growth trends. Saw that unfunded commitments increased—can you comment on the pipelines and what we could potentially see in Q2?

[Analyst] (D.A. Davidson): Hey, guys. I'm on the phone for Gary Tenner here. First question on maybe loan growth trends. Saw that unfunded commitments increased. Can you comment on the pipelines and what we could potentially see into a Q?

Speaker #7: Yeah, we remain obviously driven by our markets, and we were very encouraged by the start of the year. More importantly, we saw robust pipelines throughout all the different verticals.

Palmer Proctor: Yeah. We've remained obviously driven by our markets, and we were very encouraged by the start of the year. More importantly, we saw robust pipelines throughout all the different verticals. It wasn't any one vertical. That's more encouraging than anything to me in terms of diversification and opportunity. Any growth that accelerates or decelerates is really going to be driven more by the macro environment than it is anything internally here. Structurally, we're well positioned to capitalize on those tailwinds or headwinds. I will tell you, we remain encouraged by the existing pipelines across the board.

Speaker #7: It wasn't any one vertical, so that's more encouraging than anything to me in terms of diversification and opportunity. Any growth that accelerates or decelerates is really going to be driven more by the macro environment than it is anything internally here.

Speaker #7: Because structurally, we're well positioned to capitalize on those tailwinds or headwinds. But I will tell you, we remain encouraged by the existing pipelines across the board.

Speaker #8: Got it. And maybe on mortgage banking income. It rebounded strongly despite lower production volumes and narrower gain-on-sale margins. Can you talk about the different puts and takes there?

[Analyst] (D.A. Davidson): Got it. Maybe on mortgage banking income, it rebounded strongly despite lower production volumes and narrower gain on sale margins. Can you talk about the different puts and takes there and maybe outlook on that segment?

Speaker #8: And maybe outlook on that segment?

Speaker #6: Absolutely. So when we looked at fourth quarter, we had some seasonality in the fourth quarter, and so revenue was actually down in the fourth quarter.

Nicole Stokes: Absolutely. When we look at Q4, we had some seasonality in Q4. Revenue was actually down in Q4, is the anomaly there, based on some wholesale versus retail mix. Really Q1 was just a rebound back to normal profitability as we had expected. I think that continues. Q1 was a good strong quarter. Now a lot of that is dependent on rates and rate locks, but we are in good markets for the mortgage group.

Speaker #6: Is the anomaly there? Based on some wholesale versus retail mix. And so really the first quarter was just a rebound back to normal profitability as we had expected.

Speaker #6: And then I think that continues. The first quarter was a good, strong quarter. Now, a lot of that is dependent on rates and rate locks.

Speaker #6: But we are in good markets for the mortgage group.

Speaker #7: And that sector, as you know, is just so rate-driven and tied to that 10-year. And we did see an increase in apps, obviously, January and February when rates dipped.

Palmer Proctor: That sector, as you know, is just so rate driven and tied to that 10-year. We did see an increase in apps, obviously January, February when rates dipped, and then of course, they rebounded backwards the other way. It's primarily driven by the rate environment.

Speaker #7: And then, of course, they rebounded backwards. The other way. So it's primarily driven by the rate environment.

Speaker #8: All right, that makes sense. And maybe, broadly, can you talk about your AI strategy and what that means for your expense levels? And perhaps how that is impacting different contract negotiations with your vendors?

[Analyst] (D.A. Davidson): All right. That makes sense. Maybe broadly, can you talk about your AI strategy and what that means for your expense levels? Perhaps how that is impacting different contract negotiations with your vendors? Just kind of curious.

Speaker #8: Just kind of curious.

Palmer Proctor: Yeah. I would tell you that AI here is more of an evolution than a revolution. The way we look at it is utilizing it to build capacity, not so much to cut out expense. What we have done is spent a considerable amount of time looking through process here throughout the company, especially in some of our higher volume areas, and how we can create automation for that. With that, you're going to build efficiencies, and with that, you're going to build capacity. As the bank grows, we won't have to layer in additional expense. That's the way we look at it. We don't look at it as a true cost-saving measure. We look at it as an ability to build capacity for the company as it continues to grow.

Speaker #7: Yeah. I would tell you that AI here is more of an evolution than a revolution. And the way we look at it is utilizing it to build capacity, not so much to cut out expense, and so what we have done has been a considerable amount of time looking through process here throughout the company, especially in some of our higher volume areas, and how we can create automation for that.

Speaker #7: And with that, you're going to build efficiencies and with that, you're going to build capacity. So as the bank grows, we won't have to layer in additional expense.

Speaker #7: But that's the way we look at it. We don't look at it as a true cost-saving measure. We look at it as an ability to build capacity for the company as it continues to grow.

Speaker #8: Got it. That makes sense. Maybe just the second part of that question. Is it getting easier to negotiate contracts with your software vendors, or?

[Analyst] (D.A. Davidson): Got it. That makes sense. Maybe just the second part of that question. Is it getting easier to negotiate contracts with your software vendors, or?

Speaker #7: Well, it is. It depends on the software. And obviously, the best part of AI is being able to utilize it to look at contracts and help you identify some opportunities.

Palmer Proctor: Well, it is. It depends on the software. Obviously, the best part of AI is being able to utilize it to look through some of those contracts and help you identify some opportunities. Yeah, a lot of software vendors are getting very antsy right now in trying to lock you in for longer term contracts, which we're not a big fan of because technology changes so quickly, and the last thing you want to be is beholden to something that becomes antiquated in short order. We are able to negotiate within reason, but they are becoming more aggressive on the other side, knowing that they need to lock in some of their customers in anticipation of disruption in their own world. That kind of works both ways.

Speaker #7: But yeah, a lot of the software vendors are getting very antsy right now and trying to lock you in for longer-term contracts, which we're not a big fan of because technology changes so quickly.

Speaker #7: And the last thing you want to be is beholden to something that becomes antiquated in short order. So, we are able to negotiate within reason, but they are becoming more aggressive on the other side, knowing that they need to lock in some of their customers in anticipation of disruption in their own world.

Speaker #7: So, that kind of works both ways.

Speaker #8: Got it. Thanks for the color there.

[Analyst] (D.A. Davidson): Got it. Thanks for the color there.

Palmer Proctor: Mm-hmm.

Speaker #6: Thanks, Gary.

Nicole Stokes: Thanks, Gary.

Speaker #1: Our next question comes from Russell Gunther with Stevens. Please go ahead.

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

Speaker #9: Hey, good morning, guys. Maybe just to follow up on the expense question. Really great improvement year over year on an already stellar efficiency ratio.

Russell Gunther: Hey, good morning, guys. Maybe just to follow up on the expense question. Really great improvement year over year on an already stellar efficiency ratio. Nicole, you tend to level set us relative to consensus expectations for the year. Hoping you could weigh in there and then perhaps just address the cadence of non-interest expense as well.

Speaker #9: Nicole, you tend to level set us relative to consensus expectations for the year. So hoping you could wade in there and then perhaps just address the cadence of non-interest expense as well.

Speaker #6: Sure. So I think consensus right now is really a good number. When you look at kind of the 2025 actual and 2026 consensus, that's about a 35-million-dollar increase.

Nicole Stokes: Sure. I think consensus right now is really a good number. When you look at kind of the 2025 actual and 2026 consensus, that's about a $35 million increase. Remember, Q4 was a little bit low last year. It's about a 6% increase. If you take in a little bit extra mortgage, I think that expense run rate looks reasonable. You kind of have a 4% to 5% increase in overall expenses, majority of that being salaries and benefits. Then you add in a little bit extra for mortgage, you can kind of get to that $30 to $35 million increase. That's kind of where I would guide. I feel like consensus is good in that I think it's running about $160 million, $162 million a quarter for the next three quarters.

Speaker #6: And remember, fourth quarter was a little bit low last year. So it's about a 6% increase. And if you take in a little bit extra mortgage, I think that expense run rate looks reasonable.

Speaker #6: You kind of have a 4 to 5 percent increase in overall expenses, the majority of that being salaries and benefits. And then you add in a little bit extra for mortgage, you can kind of get to that $30 to $35 million increase.

Speaker #6: So that's kind of where I would guide. So I feel like consensus is good in that I think it's running about 160, 162 million a quarter for the next three quarters.

Speaker #6: And then remember, second and third quarter is typically our cyclically higher quarters, because of that extra mortgage expense.

Nicole Stokes: and Q3 is typically our cyclically higher quarters because of that extra mortgage expense.

Speaker #9: Okay, excellent. Thank you so much for that. And then, similar follow-up on fees—so appreciate the comment around mortgage as well as the Balboa gain-on-sale.

Russell Gunther: Okay. Excellent. Thank you so much for that. Similar follow-up on fees. Appreciate the comment around mortgage as well as the Balboa gain on sale. In the past, you've kind of helped us think about core fee income growth ex the mortgage vertical. Any insight there for the year would be helpful as well.

Speaker #9: In the past, you've kind of helped us think about core fee income growth after the mortgage vertical, and so any insight there for the year would be helpful as well.

Speaker #6: Yeah, and I apologize. I didn't hear—did you say 'ex-mortgage' or 'for-mortgage'?

Nicole Stokes: Yeah. I apologize, I didn't hear. Did you say ex mortgage or for mortgage?

Speaker #9: Well, I'll take it either way. But I was really focused on the ex-mortgage piece, in particular.

Russell Gunther: Well, I'll take it either way.

Nicole Stokes: Ex mortgage.

Russell Gunther: I was really focused on the ex-mortgage piece.

Nicole Stokes: Okay

Russell Gunther: ... in particular.

Speaker #6: Yep. So for the ex-mortgage piece, I think that you can expect service charges on deposit accounts to really follow the growth of deposits.

Nicole Stokes: Yeah. For the ex-mortgage piece, I think that you can expect kind of service charges on deposit accounts to really kind of follow the growth of deposits. If we're expecting mid-single-digit deposit growth, I would say mid-single-digit service charge growth. Same with equipment finance activity. I would say that the loan growth, that fee activity should follow the loan growth for that group. Again, kind of mid-single-digit as well there. Other non-interest income, that really includes kind of our BOLI income, which is pretty stable. It also includes some SBA gains. Typically Q2 and Q3 are a little bit higher than Q1. I think kind of tying it in, consensus seems to be really close, I think, to expectations.

Speaker #6: So, if we're expecting mid-single-digit deposit growth, I would say mid-single-digit service charge growth. And then, same with equipment finance activity. I would say that the loan growth—that fee activity or that—should follow the loan growth for that group.

Speaker #6: So again, kind of mid-single-digit as well there. And then other non-interest income, that really includes kind of our BOLI income, which is pretty stable.

Speaker #6: And then it also includes some SBA gains. And so, typically, second and third quarter are a little bit higher than first quarter. But I think, kind of tying it in, consensus seems to be really close, I think.

Speaker #6: To expectations.

Speaker #9: Okay. I appreciate you unpacking all of that for me. That's it for me, guys. Thanks for taking my questions.

Russell Gunther: Okay. I appreciate you unpacking all of that for me. That's it for me, guys. Thanks for taking my question.

Nicole Stokes: Great.

Speaker #6: Great. Thanks, Russell.

Palmer Proctor: Thank you.

Nicole Stokes: Thanks, Russell.

Speaker #1: Our next question comes from Christopher Marinak with Breen. Please go ahead.

Operator: Our next question comes from Christopher Marinac with Janney Montgomery Scott. Please go ahead.

Speaker #10: Hey, good morning. Palmer and Nicole, I wanted to ask a little bit more about the deposits per account and the information you've given us now for several quarters.

Christopher Marinac: Hey, good morning. Palmer and Nicole, wanted to ask a little bit more about the deposits per account and the information you've given us now for several quarters. Probably $1 billion ago on deposits, you used to have interest-bearing checking in the $80s per account. Now it's well over $100,000. I'm curious, is that a reflection of change of behavior of your customers, or is it that you're focusing on slightly bigger small businesses within the footprint?

Speaker #10: Probably a billion dollars ago on deposits, you used to have interest-bearing checking in the '80s per account. Now it's well over $100,000. And I'm curious, is that a reflection of change of behavior of your customers?

Speaker #10: Or is it that you're focusing on slightly bigger small businesses within the footprint?

Speaker #7: I think what it's a reflection of is our customer base has grown—the existing customer base, and then the customers that we're calling on.

Palmer Proctor: I think what it's a reflection of is our customer base has grown, the existing customer base, and then the customers that we're calling on. A lot of customers, they just have more liquidity on their balance sheet. I think that's really the primary driver of that differential.

Speaker #7: And a lot of customers, they just have more liquidity on their balance sheet. So I think that's really the primary driver of that differential.

Speaker #10: And in terms of kind of net new accounts, the pace seems to have been kind of mid-single digits for a while, Palmer. Is that still something that you're kind of looking at as a consistent piece going forward?

Christopher Marinac: In terms of net new accounts, the pace seems to have been mid-single digits for a while, Palmer. Is that still something you're looking at as a consistent piece going forward?

Speaker #7: Yes, that is the objective. And when you look at it—especially our non-interest-bearing—we've continued. I've been very pleased with not only the growth there but also the unit growth.

Palmer Proctor: Yes. That is the objective. When you look at, especially our non-interest bearing, I've been very pleased with not only the growth there but also the unit growth, not just dollar growth. The team remains laser-focused on that opportunity. If you can lead with that opportunity and then follow with the loans, that's the preferred method. Many times banks have historically led with the loans and a cheap rate on the loan and then asked for deposits. We try and turn that on its head and ask for the deposits and then consider doing a loan. In competitive environments, that gets more and more difficult to do.

Speaker #7: Not just dollar growth, and the team remains laser-focused on that opportunity. If you can lead with that opportunity and then follow with the loans, that's the preferred method.

Speaker #7: So many times, banks have historically led with the loans and a cheap rate on the loan, and then asked for deposits. We try and turn that on its head and ask for the deposits, and then consider doing a loan.

Speaker #7: But in competitive environments, that gets more and more difficult to do.

Speaker #10: Understood. Thanks for that. And just a quick question on the mortgage business: Do you see the change in the rates in the past maybe six to eight weeks?

Christopher Marinac: Understood. Thanks for that. Then just a quick question on the mortgage business. Do you see the change in the rates in the past maybe 6 to 8 weeks? Has that impacted at all profitability as the rest of this year, particularly in the seasonally strong Q2 and Q3? Does that play out any differently than you would've thought?

Speaker #10: Is that impact at all profitability as the rest of this year? Particularly in the seasonally strong Q2 and Q3. Does that play out any differently than you would have thought?

Speaker #6: I think it came exactly as we expected. We knew that fourth quarter was a little bit low because of the mix, and that first quarter came in.

Nicole Stokes: I think it came exactly as we expected. We knew that Q4 was a little bit low because of the mix, and the Q1 came in. I think what was maybe a little bit better than expected was production. Because typically Q1 is a little bit cyclically slower. It did drop a little bit, but it was coming off of this really strong Q4, so we would've expected it to drop a little bit more than it did. It was definitely a good quarter for mortgage.

Speaker #6: I think what was maybe a little bit better than expected was production—was a little bit better than expected—because typically, first quarter is a little bit cyclically slower.

Speaker #6: And it did drop a little bit, but it was coming off of a really strong fourth quarter. So, we would have expected it to drop a little bit more than it did.

Speaker #6: So it was definitely a good quarter for mortgage.

Speaker #10: And then, looking into these next few quarters, we could still use sort of past history as a reasonable guidepost for the moment.

Christopher Marinac: looking into these next few quarters, we could still use sort of past history as a reasonable guidepost for the moment.

Speaker #6: I do. I think so. I mean, second, I would say that first quarter, because it was seasonally strong, I think second quarter could be consistent with first quarter.

Nicole Stokes: I do. I think so. I would say that Q1, because it was seasonally strong, I think Q2 could be consistent with Q1. Depending upon what we see with the 10-year, there's certainly, I think, some pent-up demand if we get some movement. If not, then I think we're going to be similar to where we are for Q1. Again, we're close to 90% purchase, so we're not a refi shop. Our business is going to be consistent with just life events, that people are moving and buying houses. The tailwind for us could really be if rates come down, if we get kind of a refi boom later in the year.

Speaker #6: And then depending upon what we see with the 10-year, there's certainly, I think, some pent-up demand if we get some movement. If not, then I think we're going to be similar to where we are for the first quarter.

Speaker #6: That people are and again, we're close to 90% purchased. So we're not a refi shop. So you're really going to our business is going to be consistent with just life events that people are moving and buying houses.

Speaker #6: And that the tailwind for us could really be if rates come down, if we get kind of a refi boom later in the year.

Speaker #10: Right, Nicole. Thank you very much. I appreciate you taking our questions this morning.

Christopher Marinac: Great, Nicole. Thank you very much. I appreciate you taking our questions this morning.

Speaker #6: Absolutely. Thank you.

Nicole Stokes: Absolutely. Thank you.

Speaker #1: Our next question comes from Steven Scouten with Piper Sandler. Please go ahead.

Operator: Our next question comes from Stephen Scouten with Piper Sandler. Please go ahead.

Speaker #11: Hey, good morning. Thanks. Jumped on here a little late, so apologies if I'm hitting anything you've already covered. But Palmer, it feels like you've been pretty bullish about the organic growth opportunities in the bank for some time.

Stephen Scouten: Hey, good morning. Thanks. Jumped on here a little late, so apologies if I'm hitting anything you've already covered. Palmer, it feels like you've been pretty bullish about the organic growth opportunities in the bank for some time. What do you think it would take to get above and beyond the mid to high single digit growth? Because it feels like the potential maybe is there for even faster growth. Is it really just deposits or is there something else besides that you'd need to see happen to get maybe even stronger growth?

Speaker #11: What do you think it would take to get kind of above and beyond the mid- to high-single-digit growth? Because it feels like the potential maybe is there for even faster growth.

Speaker #11: Is it really just deposits, or is there something else besides that that you’d need to see happen to get maybe even stronger growth?

Speaker #7: Well, the capacity is certainly there. But so much of that is driven by the macro environment. And the thing that we can assure the market is that if it's prudent to do so, we will hit the accelerator.

Palmer Proctor: Well, the capacity is certainly there. So much of that is driven by the macro environment. The thing that we can assure the market is that if it's prudent to do so, we will hit the accelerator. I think right now, growth, we're encouraged by what we see. Historically, we're accustomed to growing at double digits, and that's obviously where we would all like to get back to. Only if it's prudent to do. While we like mid-single digits better than what historically the banks have seen over the last couple of years, we do hope that we can get back to higher single digits or double digits in general, on a go-forward basis. That's just going to be driven by the macro economy.

Speaker #7: I think, right now, we're encouraged by what we see. But historically, we're accustomed to growing at double digits, and that's obviously where we would all like to get back to.

Speaker #7: But only if it's prudent to do so. So, while we like mid-single digits better than what, historically, the banks have seen over the last couple of years, we do hope that we can get back to higher single digits or double digits in general, on a go-forward basis.

Speaker #7: But that's just going to be driven by the macroeconomy.

Speaker #11: Makes sense. And then, in terms of the pace of the repurchase from here, potentially, how price-sensitive would you guys be with the continued outperformance of the shares?

Stephen Scouten: Makes sense. In terms of the pace of the repurchase from here, potentially, how price sensitive would you guys be with the continued outperformance of the shares? How should we think about excess capital? Is there a CET1 level you think about, or is there a total payout ratio? What would be the marker that we should look at there?

Speaker #11: And how should we think about excess capital? Is there a CET1 level you think about, or is there a total payout ratio? What would be kind of the marker that we should look at there?

Speaker #6: Yes. So our TCE target, we've kind of said around 10, 10 and a half percent. We're above that currently. And then our CET1, we've kind of targeted around 12.

Nicole Stokes: Yes. Our TCE target, we've kind of said around 10%, 10.5%. We're above that currently. Our CET1, we've kind of targeted around 12%, and we're currently above that. In our total risk base, we're targeting about 14% to 15%, and we're right in that at 14.8%. All of that being said, we like where our capital is. When you think about the buyback, we've been more aggressive, and we doubled the buyback last October, and then we're aggressive. When we look at kind of balancing our buyback versus growth and how to utilize our capital, we have about $84 million left. We could do the remaining $84, which would be the full $200 million buyback, and have about 9% asset growth and keep our capital ratios pretty consistent to where they are today. We could do about $34 million more.

Speaker #6: And we're currently above that. So, in our total risk base, we're targeting about 14 to 15, and we're right in that at 14.8. So, all of that being said, we like where our capital is.

Speaker #6: When you think about the buyback, we were more aggressive. We've been more aggressive. And we doubled the buyback last October, and then we were aggressive.

Speaker #6: When we look at kind of balancing our buyback versus growth and how to utilize our capital, we have about $84 million left.

Speaker #6: So, we could do the remaining $84 million, which would be the full $200 million buyback, and have about 9% asset growth and keep our capital ratios pretty consistent to where they are today.

Speaker #6: We could do about $34 million more. So that would be about $150 million of the $200 million—so 70% of the authorization. And do about 11% asset growth and keep our capital levels kind of flat.

Nicole Stokes: That would be about $150 million of the $200, so 70% of the authorization, and do about 11% asset growth and keep our capital levels kind of flat. I'm saying all that to say that I think you could see us being opportunistic, but we definitely felt we went pretty aggressive in Q1, knowing that kind of strategy, and we had that runway in our capital numbers.

Speaker #6: So, I'm saying all that to say that I think you could see us be opportunistic. But we definitely felt we went pretty aggressive in the first quarter.

Speaker #6: Knowing that that kind of strategy, and we had that runway in our capital numbers.

Speaker #11: Extremely helpful, Nicole. And then maybe just one last thing for me—maybe more of a philosophical question here. I mean, you guys have been pretty adamant that M&A is very low on the priority list.

Stephen Scouten: Extremely helpful, Nicole. Then maybe just last thing for me, maybe more a philosophical question here. You guys have been pretty adamant that the M&A is very low in the priority list, really not on the table or of interest today. You guys have run the bank so efficiently and are putting up such great returns. At what point do you say, "Hey, if we're putting up a 160 ROA, it'd be great to put that on a much bigger pool of assets." Does that philosophically drive any thoughts around M&A at some point down the line?

Speaker #11: Really not on the table or of interest today. But I mean, you guys have run the bank so efficiently and are putting up such great returns.

Speaker #11: At what point do you say, 'Hey, if we're putting up a 1.60% ROA, it'd be great to put that on a much bigger pool of assets, and does that philosophically drive any thoughts around M&A at some point down the line?'

Speaker #7: Well, for us, as long as that pool of assets is generated organically, we're fine with that. But in terms of M&A itself, to your point, we have a high bar.

Palmer Proctor: Well, for us, as long as that pool of assets is generated organically, we're fine with that. In terms of M&A itself, to your point, we have a high bar that allows us to be a little more discerning because most of the deals that are out there are obviously all dilutive to a certain degree. Our biggest priorities are deposits. When you try and look for deposit-rich banks that could be accretive, it narrows down the playing field pretty quickly. Furthermore, with all the opportunity in front of us, there's just very little interest in getting distracted with an M&A deal. It remains low on our priority list. Now if we didn't have the organic ground game or didn't see the opportunity for growth, maybe you reconsider, step back, or move it up the priority stack.

Speaker #7: It allows us to be a little more discerning, because most of the deals that are out there are, obviously, they're all dilutive to a certain degree.

Speaker #7: And then we look at our biggest—our biggest priorities are deposits. So when you try and look for deposit-rich banks that could be accretive, it narrows down the playing field pretty quickly.

Speaker #7: And then, furthermore, with all the opportunity in front of us, there's just very little interest in getting distracted with an M&A deal. So it remains low on our priority list.

Speaker #7: And now, if we didn't have the organic ground game or didn't see the opportunity for growth, maybe you'd reconsider or step back or move it up the priority stack.

Speaker #7: But right now, we just don't see the benefit in getting distracted with that.

Palmer Proctor: Right now, we just don't see the benefit in getting distracted with that.

Speaker #11: Got it. Makes a lot of sense. Congrats on another great quarter.

Stephen Scouten: Got it. Makes a lot of sense. Congrats on another great quarter.

Speaker #7: Thank you.

Palmer Proctor: Thank you.

Speaker #1: This concludes our question-and-answer session. I would like to turn the call over to Palmer Proctor for any closing remarks.

Operator: This concludes our question and answer session. I would like to turn the call over to Palmer Proctor for any closing remarks.

Speaker #7: Great, thank you, Bailey. One of our key internal priorities for 2026 has been operating as one bank, one team, and a commitment clearly reflected in our strong first quarter results.

Palmer Proctor: Great. Thank you, Bailey. One of our key internal priorities for 2026 has been operating as one bank, one team, and a commitment clearly reflected in our strong Q1 results. I'd like to thank all my Ameris teammates for their contributions to this outstanding start to the year. Looking ahead, we're going to remain focused on controlling what we can control and driving profitable organic growth and top-tier performance metrics while enhancing shareholder value through continued growth in our core deposit base and tangible book value per share. I want to thank you once again for joining our call. We appreciate your continued interest in Ameris.

Speaker #7: And I'd like to thank all my Ameris teammates for their contributions to this outstanding start to the year. Looking ahead, we're going to remain focused on controlling what we can control and driving profitable organic growth and top-tier performance metrics.

Speaker #7: While enhancing shareholder value through continued growth in our core per share, I want to thank you once again for joining our call. We appreciate your continued interest in Ameris.

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

Q1 2026 Ameris Bancorp Earnings Call

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