Ameris Bancorp - Q3 2023
October 27, 2023
Transcript
Operator (participant)
Good morning, everyone, and welcome to Ameris Bancorp's third quarter 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 and then one using a touchtone telephone. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Nicole Stokes, Chief Financial Officer. Ma'am, please go ahead.
Nicole Stokes (CFO)
Great. Thank you, Jamie, and thank you to all who have joined our call today. During the call, we will be referencing the press release and the financial highlights that are available on the Investor Relations section of our website at amerisbank.com. I'm joined today by Palmer Proctor, our CEO, and Jon Edwards, our Chief Credit Officer. Palmer will begin with some opening general comments, and then I'm going to discuss the details of our financial results before we open it up for Q&A. But before we begin, I'll remind you that our comments may include forward-looking statements. These statements are subject to risks and uncertainties. The actual results could vary materially. We list some of the factors that might cause results to differ in our press release and in our SEC filings, which are available on our website.
We do not assume any obligation to update any forward-looking statements as a result of new information, early developments, or otherwise, except as required by law. Also, during the call, we will discuss certain non-GAAP financial measures in reference to the company's performance. You can see our reconciliation of these measures and GAAP financial measures in the appendix to our presentation. With that, I'll turn it over to Palmer for his comments.
Palmer Proctor (CEO)
Thank you, Nicole, and good morning, everyone. I appreciate you taking the time to join our call today. I am proud to talk about our solid third quarter financial results that we reported yesterday. This quarter really was a testament to our discipline and core profitability, and it's what creates the positive outlook we have for the future. So for the third quarter, we reported net income of $80 million or $1.16 per diluted share. Because of these strong core earnings and the minimal impact to AOCI from our bond portfolio, counter to most of the industry, we grew tangible book value by over 12% annualized and moved our TCE ratio to above 9%. We recorded $24.5 million in provision for credit losses, bringing our coverage ratio up to 144% of loans and 420% of portfolio NPAs.
This provision was model-driven and not related to credit deterioration, as our credit metrics actually improved once again this quarter. Our net charge-off ratio improved to just 23 basis points, and our NPA ratio, excluding Ginnie Mae, improved to 27 basis points. On the balance sheet side, assets declined slightly as expected this quarter to $25.7 billion from $25.8 billion last quarter. Deposits, or as I should say, core deposits, increased to $147 million, while loans declined by $271 million, all within the mortgage warehouse lines, as we had expected and discussed last quarter. We're still lending, but we are being more discerning and deliberate with our pricing and structure. And because of these shifts, our loan-to-deposit ratio actually improved to 98%, and our loans plus securities to deposits, improved to 106%.
Brokered CDs remained relatively flat, and we successfully reduced our FHLB advances by $325 million this quarter. We continue to be well-capitalized and feel comfortable with our capital and our dividend levels. We also announced yesterday the approval of another $100 million share repurchase program through October of next year. We have strong balance sheet with diversified earning assets in some of the strongest markets in the Southeast, along with a healthy allowance for credit losses to absorb potential economic challenges. We remain focused on core profitability and balance sheet management, and this focus includes core deposit growth, controlled asset growth, stable margin, expense control, and tangible book value growth.
I'm extremely proud of our team and the financial results for the quarter, and I'd be remiss if I didn't take time on today's call to thank each and every one of our teammates for their contribution to our success. With that, I'll turn it over to Nicole to discuss our financial results in more detail.
Nicole Stokes (CFO)
Great. Thank you, Palmer. As you mentioned, for the third quarter, we're reporting net income of $80.1 million or $1.16 per diluted share. Our return on assets was 1.25, and on a pre-provision, pre-tax basis, our PPNR ROA was just over 2%. Our return on tangible common equity improved to 14.35 for the quarter. We ended the quarter with tangible book value of $32.38. That's an increase of $0.96 or 12.2% annualized. Our tangible common equity ratio, as you mentioned, increased to $9.11 at the end of the quarter, compared to $8.80 at the end of last quarter. You know, we've said for several quarters, or actually probably several years, that our capital goal was to get to 9% TCE, and we finally did it.
On the revenue side of things, our interest income continues to increase. We were up about $8.6 million this quarter to $330.6 million. Again, due to rising deposit costs, our net interest income declined slightly to just about $1.8 million, down to $207.8 million for the quarter. Our margin came in higher than anticipated at 3.54, down just 6 basis points from the 3.60 reported last quarter. You know, all of this compression was really due to money market rates and that beta catch-up on money market rates. Our year-to-date margin remained strong at 3.63. That's only 4 basis points of compression from last year's 3.67 for the first nine months.
You know, we're really encouraged by the fact that the pace of rising deposit costs slowed significantly in the third quarter, as interest-bearing deposit costs only increased 33 basis points this quarter, while last quarter it increased 82 basis points. So we see that slowing. We continue to be very close to asset liability sensitive neutral, which positions us well for the next Fed decision, whatever that, whether that's a move or not. We've updated the interest rate sensitivity information on our presentation slide 11. Non-interest income decreased about $4.2 million for the quarter. That was all in the mortgage division. That was about an 11% decline in mortgage revenue. Production declined slightly to about $1.2 billion, and the gain on sale margin came in right at 2.15.
Then I saved the best for last, that's expense control and efficiency ratio. Total non-interest expense decreased $7 million this quarter, almost all in the banking division, and that's highlighted on page 10 of the investor presentation. You know, this drove our adjusted efficiency ratio down to an impressive 52.02% for the quarter, an improvement from the 53.41% last quarter. You know, I wanted to take just a minute to talk about expense control. It's not an initiative around here. It really is a discipline and a part of our culture. We continuously look for ways to be more efficient, and we make sure that that next dollar spent is spent in the right way.
As an example, if you look at our headcount, we've reduced our headcount by 3.5% over the past year through diligent analysis and the rehiring and staffing model, and without announcing major layoffs and without disruption to morale. I want to close by reiterating how focused we are on discipline and core fundamentals as we look forward to 2024 and beyond. And with that, I'm going to turn the call back over to Jamie for any questions from the group, and we really appreciate everyone's time today.
Operator (participant)
Ladies and gentlemen, at this time, we'll begin that question and answer session. To ask a question, you may press star and then one on your touchtone telephones. If you are using a speakerphone, we do ask you please pick up your handset prior to pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star and two. Once again, that is star and then one to join the question queue. We'll pause momentarily to assemble the roster. Our first question today comes from Brady Gailey from KBW. Please go ahead with your question.
Brady Gailey (Managing Director of Equity Research)
Hey, thanks. Good morning, guys.
Nicole Stokes (CFO)
Good morning, Brady.
Brady Gailey (Managing Director of Equity Research)
So the net interest margin has really held in quite well, especially relative to peers. But maybe just talk about how you're thinking about the margin into the fourth quarter, and maybe into 2024, and maybe hit on, you know, non-interest bearing. Non-interest bearing deposits were down just a little bit. 32% is still a great level, but how does that factor into how you're thinking about the margin?
Nicole Stokes (CFO)
Sure. Great. No, I think those are all tied together for sure. So first, kind of, I'll talk about the margin, and as I mentioned on, in my prepared remarks, that the whole 6 basis points of compression really was money market, the change in money market. You know, we had a positive move from our deposit mix for the first time this quarter. That actually was about 2 basis points up. But then we had some asset sensitivity, kind of some one-off compression from some. Sounds counterintuitive, but by paying off the Federal Home Loan Bank advances, you lose the dividend. And so kind of some one-off there that kind of offset that positive move from the deposit mix that was kind of overshadowed by that money market data. So when I think about margin going forward, I'm very cautious to say that we've troughed.
I know a couple banks have said that they feel like we've troughed. I'm not ready to declare victory yet, and I'm not ready to say that we've troughed, but certainly a six basis points compression compared to what we thought, we were pretty excited about that. And I think really when I think about margin guidance, there's probably three components. You know, typically, when we give margin guidance, we look at a model and we get very specific. And I think there's some behavioral issues, this right now, that affect margin more so than what the, you know, asset liability model says. And the first one being kind of that non-interest bearing mix and how much of our non-interest bearing moves to interest bearing. And we certainly saw that slow this quarter.
You know, we were 33% last quarter, 32% this quarter. You know, when you kind of go back and you look post-Fidelity, pre-COVID, where were we? And I went back and pulled those numbers, and in September 2019, we were at 29.9%. December 2019, we were at 29.9%, and then March 2020, we were at 30.5%. So I really do feel like somewhere between the 30% and the 32%-33% is where we stabilize. You know, I've kind of said that now a quarter or two, and I still believe that to be true, seeing the customer behavior that we saw this quarter. And then the second part of margin guidance going forward would really be that incremental growth.
You know, when we're, we've said that we're gonna, you know, we use core deposit growth as a governor for loan growth. So that really comes down to the question of, if we grow core deposits, can we grow 30% of our or 32% of our core deposit growth be in non-interest bearing next year? We think we can, but obviously, that can tweak that mix down, you know, somewhere in that 29%-30%, where we'd like to keep it more in that 30%-32%. And then the third piece that's affecting margin is what I would call competitive behavior, and we've seen that certainly stabilize. We've seen some of the erratic high customer deposits or competitor deposit rates kind of stabilize.
So having said all that, the summary version is I would expect a little bit more compression. You know, I think I said last quarter, and I still agree with it, that if we can come out of this cycle above a 3.50, that would be a huge victory, and we still have a very strong margin compared to peers, so.
Jon Edwards (EVP and Chief Credit Officer)
Brady, to your question on non-interest bearing, you know, there's two sides to that equation. One is retention of existing accounts, and then the other is,
Focusing your efforts on attracting new deposits, non-interest-bearing deposits. So when you look at our, whether it's our incentive plans or our treasury management efforts or our commercial banking efforts, those, all are and have been centered around that. So I think that helps mitigate some of the additional downside that, that, that we're not feeling that some others are at this point.
Brady Gailey (Managing Director of Equity Research)
Okay. All right, and then moving on to expenses. I mean, Nicole, as you said, great expense control with expenses down, linked quarter, in 3Q. How, how are you thinking about expense creep as we head into 4Q and next year?
Nicole Stokes (CFO)
Yeah, so there is, I mean, I hope everybody saw that in the presentation, that we did have part of the expense control or the reduction expenses was actually a gain on a piece of OREO. That was about $1.5 million credit or benefit that I don't necessarily expect going forward. And so I think that has to be added back almost immediately. And so if you look at kind of our year-to-date run rate of about $429 million, if you annualize that, that kind of comes us to about $574 million. That leaves about $145 million, hundred and forty-four and a half, $145 million for the fourth quarter. I think that's right where consensus has us, and I think that's about right.
And then if you take that, I think I've guided a 3%-5% increase in expenses, excluding mortgage, for next year. So if you assume mortgage production is flat and you assume mortgage expenses are flat, and you kind of take that out, you know, kind of a 3% growth on that is about $590 million. That's right in line with current consensus. So I think my messaging on expenses has been well received or understood in everybody's model. And kind of that 3%-5% expense growth that I mentioned last quarter, I still think that kind of 3%, 3%-4% is about right. If you want to break it down a little bit further, I think salaries and benefits is probably 3%-5%. Everything else is 2%.
That kind of blends out to be about a 3% total increase in expenses next year, which I think is in line with current consensus.
Brady Gailey (Managing Director of Equity Research)
All right. That's, that's helpful. Then finally, for me, you know, you, you hit the 9%+ TCE. The stock is cheap at 1.1 at tangible book value. You know, you've repurchased a little bit of stock year to date, but not, not a ton. I mean, should we think about the buyback becoming a little more active here, or do you think you're still in capital, you know, growth mode?
Palmer Proctor (CEO)
Well, I would tell you that we kind of remained opportunistic in that regard, and that's why we renewed the program, obviously. And if and when we feel appropriate, we will certainly take advantage of that.
Brady Gailey (Managing Director of Equity Research)
All right, great. Thanks for the color, guys.
Operator (participant)
Our next question comes from Casey Whitman from Piper Sandler. Please go ahead with your question.
Casey Orr Whitman (Managing Director)
Hey, good morning.
Nicole Stokes (CFO)
Good morning, Casey.
Casey Orr Whitman (Managing Director)
Hey. Okay, so Palmer, appreciate that there was some seasonality this quarter in just the warehouse balances, but can you speak to sort of how you're seeing loan growth in this environment? Do you see that slowing a bit? Just an update as to where you see growth over the next year or so.
Palmer Proctor (CEO)
Yeah, Casey, I think with all banks, what you've heard is just kind of, as I mentioned earlier, people just being more discerning. And then, obviously, the opportunity that the industry has right now is to really take advantage of the upside of rates on the asset side of the balance sheet, due to the rapid increase we've seen on the liability side. So we're kind of utilizing this time to reprice accordingly, to hold margin and build margin as we go forward. And I think that, we're being far more selective in our credits. Obviously, we've said from the very beginning that we're not gonna allow our loan growth to outpace our deposit growth, and that discipline will continue. And obviously, when you take that approach, it will slow down growth.
But what it does allow you to do is, the growth you have is, in my opinion, it's better priced. It's stronger credits, even in an environment like today, and that's kind of the mode that we'll continue with as we go forward. Mortgage volume will obviously pull back. We pulled back intentionally on CRE, and you've seen that, that loan-to-deposit ratio pulling back. So I think you'll continue to see that discipline for the remainder of the year.
Casey Orr Whitman (Managing Director)
Okay. Are there particular markets that you're in, where you're seeing more opportunities or less opportunities than others, or is it pretty broad-based across your footprint?
Palmer Proctor (CEO)
Well, for us, you know, Atlanta's always been a consistent performer, and then we're seeing a lot of opportunities in our Florida markets, too, and the Carolinas. And so if you looked at the opportunity, I'd tell you that probably Tampa and Jacksonville are some real bright spots for us, in addition to certain pockets of the Carolinas. And then Atlanta's always been kind of our stable provider of a lot of activity. So I think those are probably the primary opportunities as we look out and look forward.
Casey Orr Whitman (Managing Director)
Okay. Just one credit question. Can you just talk about what you're seeing in that watchlist bucket? It looks like there's some assisted living in there. Is there any office in there, or just sort of can you give us any color on, on the watchlist, which I appreciate didn't move much this quarter, but maybe you can give us, it'll be helpful. Thanks.
Palmer Proctor (CEO)
Yeah. Casey, we did add that just to see if that would help to kind of give you a little bit. I mean, 85% of the watchlist is in those six categories there. So, as far as office is concerned, specifically, there's really just one non-owner occupied credit that's on the watchlist and you know, in the non-accrual bucket right now, it's $3.6 million. So it's not really anything to speak of.
You know, and those being the top five or six that we noted there, you didn't see an office category because it's not on there. So the ALF has been, and I think I mentioned it, maybe starting in the first of the year, is we had some downgrades in that category. And so we've got really kind of two larger deals on there that are on the watch list. At least one of which I have pretty good confidence might correct itself this, or be paid off actually this quarter. But yeah, we've had a little bit of stress on the ALF side, and that. But that watch list for ALF has kind of been there now for about nine months or so.
Casey Orr Whitman (Managing Director)
Okay. Thank you. Great quarter.
Jon Edwards (EVP and Chief Credit Officer)
Thank you.
Operator (participant)
Our next question comes from Chris Marinac, from Janney Montgomery Scott. Please go ahead with your question.
Christopher Marinac (Director of Research)
Thanks. Good morning. Wanted to go a little deeper on the C&I net charge-offs. First, just wanted to clarify, can we adjust those charge-offs for the one equipment finance loan that was called out? And then what would be a, I guess, a good run rate for general C&I losses going forward?
Palmer Proctor (CEO)
Well, the C&I losses, that is where the equipment finance loans roll up. So, pretty much everything that you see in there is related to the Equipment Finance Group. And to say one loan, if you took that away from the slide deck, Chris, that's probably my fault, because it was a group of pre-acquisition loans. The extraordinary items were a group of pre-acquisition NPAs that we had acquired at the merger. So, we had determined that, you know, we'd kind of reached a bit of our end on the near-term collections on some of those, and so we went ahead and took the losses on that this quarter. It was about $3.2 million.
So the run rate for the rest of equipment finance and really the C&I was about mid-8. And that is consistent pretty much with what the year has been like so far in 2023. I think that is, as we've talked about before, a bit on the high side as far as the long-term average for the equipment group, and so I do expect that to kind of ebb back some as we go into next year.
Christopher Marinac (Director of Research)
Great, John. That's very helpful. Thanks for that detail. And is the Equipment Finance Group growing, at a similar pace as the last few quarters, or would you look for that pace to change in the next year?
Jon Edwards (EVP and Chief Credit Officer)
Well, it is moderated some in the last couple of quarters. As Palmer said, it's, you know, big picture is that we're not gonna let the loans outpace deposits, and so that is across the board. The decline in loans that happened during the quarter, especially in the mortgage warehouse lines, kind of took the denominator down, so it looks like the portfolio is a greater percentage of the whole now, and because it's up to 6%, but that's really just sorta end-of-period numbering. It's still, you know, not outpacing the growth of the whole portfolio when you look at it a little bit better than just that one date and time. It's going to be pretty much the same kind of growth that we see the whole portfolio.
Palmer Proctor (CEO)
Yeah, Chris, we're not looking to accelerate that growth, if that's your question, in that particular sector, above and beyond what it already is.
Christopher Marinac (Director of Research)
Okay, great. And then just one quick expense question: as you think about expenses next year, should we see a handful of new branches as you continue to look for new deposits?
Jon Edwards (EVP and Chief Credit Officer)
You know, we're all about branch optimization, and a lot of that has to do not necessarily with closing branches or opening new branches, but we may repurpose some in terms of relocating to better locations, and so it'll be more optimization in that regard. There are a couple markets where we clearly have a void in branching. In our Tampa market, for instance, we need a little more presence there. But other than one or two branches, I wouldn't expect much in that regard.
Christopher Marinac (Director of Research)
Great. Thanks for taking my questions.
Jon Edwards (EVP and Chief Credit Officer)
Thank you.
Operator (participant)
Our next question comes from Kevin Fitzsimmons from D.A. Davidson. Please go ahead with your question.
Kevin Fitzsimmons (Managing Director and Senior Research Analyst)
Hey, good morning, everyone.
Nicole Stokes (CFO)
Good morning, Kevin.
Kevin Fitzsimmons (Managing Director and Senior Research Analyst)
Just, you know, it seems like, I don't know if it's three or four quarters, it seems like a number of quarters in a row, you guys have, you know, it seems like from our vantage point, have been deliberately or proactively building the reserve, so sacrificing some of your near-term earnings to do that. And I'm just curious what your outlook. You know, I know there's the model and there's the inputs to the model, but there's also, you know, what, you know, from a top-level point of view, where you wanna take that ultimately.
I'm just curious how many, if things kind of stay where they are right now, and we don't have any massive shift, do we have more quarters of building the reserve ahead of us, or are you getting close to a point where you're getting comfortable with what you see out there today? Thanks.
Palmer Proctor (CEO)
Well, Kevin, I would say that, as you pointed out, that it is model-driven, and therefore, you know, we are following the forecast models that we look at. The part of the answer, I think, was found in the third quarter, actually, because the provision was half or thereabout what it was in the second quarter. So that, in and of itself, tells you that the forecasts were moderating.
The level of change, which is what really creates reserve one way or the other, is slowing. So it seems like you want to kind of envision a hockey stick, maybe that's the way it sort of began to look in the third quarter. So I think that, you know, I wouldn't anticipate that it would be, you know, back to the level it was in the early part of the year, given that kind of forecast model. But, you know, things in the world are changing and, you know, things do have a tendency to change. But as it stands right now, I would anticipate that we're kind of moderating from the high levels early in the year.
Kevin Fitzsimmons (Managing Director and Senior Research Analyst)
Okay, great. That's helpful. And then just to follow up on the margin, I totally understand, Nicole, you're not wanting to declare victory on calling a trough. But if we, you know, say we're getting close to that, maybe, you know, we have some, you know, a moderating pace of compression, maybe call it the next quarter or two. As we look into 2024, do we hit a point in early 2024, in your view, where the fixed asset repricing should start to outpace the rising deposit costs? And I know a lot of that hinges on does the non-interest-bearing shift really slow down and come to a halt? But assuming that's slowing also, do we anticipate kind of modest margin compression, maybe starting in second quarter through 2024?
Nicole Stokes (CFO)
So I would guide that there is some stabilization, absolutely. And I think you said, is there some mild compression after second quarter? And I'm not necessarily saying that there's more compression coming, but there may not be a lot of expansion coming. So I think it stabilizes and kind of in that higher for longer mentality, it stabilizes. And then again, a lot of that has to do with competitors. And if there's some sort of liquidity issue that all of a sudden starts driving up and not liquidity issue with us, but liquidity issue in the market or with other competitors, that causes, you know, people to start paying up for those deposits, it could we could certainly see the trickle effect.
But from a repricing standpoint, you know, we've got 36% of our loans that reprice within the next 12 months. And so there's definitely some upward movement on the asset side that should help. I've just been very hesitant because of what we're seeing on the deposit side and some erratic competition.
Kevin Fitzsimmons (Managing Director and Senior Research Analyst)
Okay, but it sounds like you're saying that's, that's really gonna serve to help keep it stable, not necessarily outpace it over the course of 2024. Is that fair?
Nicole Stokes (CFO)
Yes, that is fair, and that is absolutely the goal and the target.
Kevin Fitzsimmons (Managing Director and Senior Research Analyst)
Okay. Okay, great. And I'm just, Tom, we're just throwing one out there. I know there hasn't been a lot of M&A activity, and obviously, you guys are not in this situation that a lot of banks are in terms of having their bond portfolios quite underwater, and that's slowing down activity. But what's your view on that in terms of, you know, pace of conversations, your interest, your appetite, what of anything happening over the next year or two?
Palmer Proctor (CEO)
Yeah, I think over the next year or two, you're gonna see a wave of consolidation. We've had a couple deals announced just recently, as you know, in the industry, and I think you'll continue to see that accelerate. You know, when you look at the industry going forward, I do think I don't even like to say higher for longer. I just think rates will stay where they are, because they really aren't that high right now relative to historical measures. And I think we all just need to kind of adapt and adjust to that. But what that means is a lot of banks are gonna remain under pressure for their earnings.
They don't have the core deposit base, or they don't have the diversification in their asset generation, and so it's gonna create a hardship. So I think there are gonna be more and more people looking to partner together. And so, as we see that, and assuming they can get regulatory approval, which right now is a big timing issue and a big if all the way around, I think, aside from that, there should be a lot of activity taking place over the next, as we look out into next year and into the following year.
Kevin Fitzsimmons (Managing Director and Senior Research Analyst)
Great. Thanks very much.
Palmer Proctor (CEO)
Mm-hmm.
Operator (participant)
Our next question comes from Russell Gunther from Stephens. Please go ahead with your question.
Russell Gunther (Managing Director and Senior Research Analyst)
Hey, good morning, guys. Just a quick one at this point on the mortgage outlook. It looks like the MBA forecast is pretty optimistic for next year from an origination volume perspective. It would be helpful to get your guys' thoughts in terms of what you're seeing, both on originations and gain on sale as you look out in the next quarter in 2024.
Palmer Proctor (CEO)
Yeah, we're pleased to say that, you know, when you look at the gain on sale margin, it, it's stabilized. And so because for a while there, we, like many others, started to see a deterioration in that margin, and it seems to have stabilized. When you look at production, say, last quarter versus this quarter, second quarter, we were at $1.3 billion. This quarter, we're at $1.175 billion. And I think that's kind of a good run rate for us as we look out. There is, keep in mind, as we said last time, seasonality, in this space. I think it's going back to historical seasonality type activity as opposed to, you know, the mad pandemic rush we had and some of the other refi crazes.
But that being said, we'll get our fair share of the volume. We feel comfortable with our current run rate, and more importantly, we feel comfortable with our ability to adjust the expenses accordingly. The biggest falloff we saw, obviously, this quarter, as we had predicted, was in the warehouse space. But in terms of retail origination, I think there's gonna be some opportunities there, especially if we start seeing some improvement in rates towards the end of next year. You know, we always look for tailwinds as much as we do for headwinds, and I think that's one where we're very well positioned to take advantage of that.
So I would tell you that, I think our current run rate is a pretty good barometer for what we see as we go into fourth quarter and next year, aside from just normal seasonality.
Russell Gunther (Managing Director and Senior Research Analyst)
I appreciate that, Palmer, Palmer. You, you touched on the expense side of things, which really was my follow-up. Just curious if the earlier conversation around expenses considered any further reduction in the mortgage vertical for 2024?
Palmer Proctor (CEO)
No, I think we've got that positioned well enough now that, you know, you have a core run rate of overhead and expenses you have to have to operate the business, and we're there. What we've got is the ability to scale, and it's a very scalable business if you make sure you scale on both sides, going up and coming down. Our management team has done an excellent job of doing that, and I think has positioned us well to be able to, as I said, take advantage of the tailwinds and, obviously, deal with any headwinds that come. Just know, and I think you do, that we're pretty disciplined in that regard and consequential in that regard. If we see pullback in revenue, then you're gonna see a pullback in expenses.
Russell Gunther (Managing Director and Senior Research Analyst)
Understood. All right, guys, thank you. That's it for me.
Nicole Stokes (CFO)
Thank you.
Operator (participant)
Ladies and gentlemen, our final question today comes from Brandon King from Truist Securities. Please go ahead with your question.
Brandon King (Equity Research Analyst)
Hey, good morning.
Nicole Stokes (CFO)
Good morning.
Brandon King (Equity Research Analyst)
So loan yields saw a nice increase in the quarter despite, you know, the slowing of loan growth. So, Nicole, could you potentially quantify kind of your expectations for what asset yields could do over the next couple of quarters?
Nicole Stokes (CFO)
Sure. So I'll tell you that we've got, you know, about $5.4 million of our loans that are gonna reprice in the next three months or less, and that was at, like, a 7.7%. So there's definitely some room for that to move up. And then kind of in the 3-12 month window, we've got another $1.9 billion, and that's kind of at an 8%-8.5%. So there's a little bit of room there. And then, you know, so that, that's really kind of over the next four quarters, where you can see some of that coming in on the asset side.
That should certainly help offset the deposit side, which is why kind of my margin guidance says outside of competition and that non-interest-bearing move, mix change, we really should kind of see that margin stabilizing over the next, you know, two quarters or so.
Brandon King (Equity Research Analyst)
Okay, very helpful. And then on deposits, I know we talked a lot about the mix change between non-interest-bearing and interest-bearing, but what about within interest-bearing? I noticed interest checking were lower quarter-over-quarter. Are you seeing any mix change within your interest-bearing deposit accounts, as like people move into more towards money market or CDs?
Nicole Stokes (CFO)
No, those have been fairly consistent. And I will say the one thing that we will have coming in in the fourth quarter is those, that cyclical public funds that comes in kind of in the fourth quarter. We have no reason to think that that's not gonna come in again this quarter. That's typically about 15% non-interest-bearing and about 85% interest-bearing, typically all in money market and now. So you may actually see a little shift in the fourth quarter from a, from a blend there, but know that that's that cyclical money, public fund money that comes in.
Brandon King (Equity Research Analyst)
Okay. Okay. And how are you thinking about broker deposits from here? Do you have any upcoming maturities, and do you think you can move that down over the next couple of quarters?
Nicole Stokes (CFO)
So we have our brokered CDs and our FHLB advances kind of staggered. And then again, some of that will change kind of temporarily in the fourth quarter and first quarter as we see those public funds come in, so that we've positioned ourselves well to be able to manage the margin, and not have a lot of that excess borrowings or brokered out there. So I think we'll be okay there. We certainly continue to like to look from an ROA and margin perspective, between FHLB advances and brokered CDs. We have ample liquidity, ample availability at both of those places, so we like to look at it from a, from kind of an ROA margin perspective as which way would we go if we need it.
But potentially in the fourth quarter, as those public fund money comes in, you could see some of those pay back down. But just remember this, when it comes back, you know, second quarter, when the public fund money runs back out, we'll kind of offset that way.
Brandon King (Equity Research Analyst)
Okay, makes sense. That's all I had. Thanks for taking my questions.
Nicole Stokes (CFO)
Great. Thank you, Brandon.
Operator (participant)
Ladies and gentlemen, that will conclude our question and answer session. I'd like to turn the floor back over to Palmer Proctor, our CEO, for any closing remarks.
Palmer Proctor (CEO)
Great. Thank you very much, and I'd like to thank everyone again for listening to our third quarter earnings call. Our focus, as you can tell, remains on the things that we can control, which include core profitability, capital growth, and our controlled asset growth. This is what continues to position us well for the future. Thank you for your time and your interest in Ameris Bank.
Operator (participant)
Ladies and gentlemen, the conference has now concluded. We thank you for joining today's presentation. You may now disconnect your lines.