Atlantic Capital Bancshares, Inc. (ACBI) Q2 2019 Earnings Call Transcript

ACBI earnings call for the period ending June 30, 2019.

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Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI)
Q2 2019 Earnings Call
Jul 26, 2019, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Atlantic Capital Bank Second Quarter 2019 earnings conference call. [Operator Instructions] I would now like to turn the conference over to Gary Fleming, Chief Risk Officer. Mr. Fleming, please go ahead.

Gary G. Fleming -- Executive Vice President and Chief Risk Officer

Thank you, Anita and thank you all for joining us for our second quarter 2019 earnings call. With me today to discuss our results are Doug Williams, Chief Executive Officer and Patrick Oakes, Chief Financial Officer. Also with us are Rich Oglesby, General Banking Executive and Kurt Shreiner, our Corporate Financial Services Executive.

As a reminder, the Atlantic Capital earnings release is available in the Investor Relations section of our website. Wish to caution you that we will be making forward-looking statements during this call and that actual results may differ materially. Encourage you to review the disclaimer in the earnings release dealing with forward-looking information. This disclaimer applies equally to statements made in this call.

In addition, some discussions may include references to non-GAAP financial measures. Information about those measures, including reconciliation to GAAP measures, may be found in our SEC filings and our earnings release.

And with that, I'll turn the call over to the CEO of Atlantic Capital, Doug Williams.

Douglas L. Williams -- President and Chief Executive Officer

Thank you and good morning. As you know, Atlantic Capital completed a key element of its strategic transition early in the second quarter. With the divestiture of our underperforming Tennessee operations, we're now fully engaged in building our sustainably sound, growing and established Atlanta and specialty commercial businesses.

Our Company is changing to address the significant opportunities we are already seeing as result of M&A-induced turmoil in the Atlanta market. We've added 25 five people to our Company this year, including 12 new producing bankers, seven new credit officers, and six new people in key operational service delivery roles. We've substantially increased our capacity to grow new and expanded client relationships. Our new teammates joined and engaged in an energetic company, recently named by the Atlanta Business Chronicle as the best place to work, aligned with our purpose to fuel prosperity for our clients, teammates and shareholders. This sound cultural foundation is the reason behind the distinctive competitive posture and sustained momentum in our Atlanta and specialty commercial businesses.

Over the last three-and-one-half years, Atlantic Capital has grown in commercial and industrial and owner occupied commercial real estate loans at a compound average rate of 20%. Core relationship deposits have grown at a compound annual rate of 16%. Average non-interest bearing deposits have grown at compound rate of 18% per year and have averaged around 30% or more of total deposits.

Our results in the second quarter continue these trends and are further evidence of our progress. As you've seen, Atlantic Capital announced net income from continuing operations of $7 million or $0.29 per share with strong loan deposit and non-interest income growth, and good expense control while investing in expanded capacity to address new opportunities in Atlanta and our specialty commercial businesses.

C&I and owner occupied real estate loans were up 12.4% linked quarter annualized, and grew 25% year-over-year. Average deposits from continuing operations increased 24% linked quarter annualized and 24% compared to the second quarter of 2018. Average non-interest bearing deposits were up 31% of total average deposits during the second quarter and grew 9% annualized from the first quarter despite our normal seasonal decline and increased 20% compared to the second quarter of 2018. Core non-interest income increased 13% annualized from the first quarter.

Now, Patrick Oakes will review the financials in more detail, then I'll return to discuss our progress on our priorities for the year and the outlook for business.

Patrick T. Oakes -- Executive Vice President, Chief Financial Officer, Secretary and Treasurer

Thanks, Doug. Before I provide details on the financials for our continuing operations, let me briefly discuss overall performance for the Company in the second quarter.

We reported consolidated net income of $29.2 million, which included net income of $22.1 million for discontinued operations as we booked a gain of $34.5 million on the branch sale. This gain includes intangible impairments of $2 million and will leave $20 million in goodwill remaining on our balance sheet. The gain on sale, along with quarterly earnings and improvements and other comprehensive income, led to an increase in tangible book value per share of a $1.43 to $13.60.

Capital ratios also significantly improved with the TCE ratio of $13.37% and total risk based capital of $16.5 even after the repurchase of shares during the quarter. The Bank purchased 1.1 million shares totaling $20 million during the quarter and 2.9 million shares totaling $51 million since the share repurchase program was put in place during the fourth quarter of 2018.

Now let me provide more details on continuing operations. The net interest margin from continuing operations in the second quarter was 3.61%, a 13 basis point decline from the 3.74% margin in the first quarter. The main drivers of this quarterly decrease were related to lower loan yields due to a -- due to the declining one month LIBOR, increased borrowings and broker deposits to fund the branch sale, and rising deposit costs.

In our previous earnings call, we communicated a decline in the net interest margin from [Phonetic] 3.50% to 3.55%. The margin outperformed this guidance mainly due to the positive impact of the sales investment securities, along with stronger deposit growth than forecasted. It's led to less borrowings than anticipated. In fact, borrowings were down $110 million compared to the second quarter of 2018.

Seasonality is a significant dynamic in our deposit base, and typically, the second quarter marks our low point for the year. This year, second quarter average deposits were actually up $108 million compared to the first quarter, and illustrates success of the Bank's commercial deposit gathering strategy in a competitive environment.

Overall, we are still comfortable with our previous guidance for the third quarter, but based on the likelihood of a decrease in the Fed funds rate next week, we anticipate a lower margin in the fourth quarter. The Bank remains asset sensitive with almost two-thirds of our loan book floating rate. This will put pressure on the margin with lower rates. We are actively working with our bankers to ensure we can quickly reduce deposit costs as much as competition will allow. This includes market index deposits, which total about 25% of total deposits and will price down fairly quickly.

Provision expense for the second quarter was $698,000 and included $619,000 in net charge-offs. Our credit quality remains solid with annualized net charge-offs of 14 basis points in the second quarter and 12 basis points year-to-date. Non-performing loan to total loans were 35 basis points, a decrease from 51 basis points in the first quarter.

Non-interest income from continuing operations improved to $2.9 million in the second quarter, compared to $2.3 million in the prior quarter. And strong growth in the quarter included an improvement in service charge income primarily driven by continued strong growth in our payments business and solid gain income from our SBA business. The quarter also included a gain of $654,000 on the sale of $54 million in securities to help fund the branch sale and a loss of $233,000 from a market value adjustment on our customer swap portfolio.

Second quarter expenses from continuing operations decreased $541,000 from the first quarter to $13.3 million. The lower expenses helped our efficiency ratio to improve to 58% in the quarter. This improvement was primarily driven by a decrease in salary and benefits of $684,000 from lower benefits expense. Salary and benefits also included approximately $300,000 expenses from the new hiring that Doug mentioned earlier. We are still comfortable with our guidance that the quarterly run rate for expenses in the second half of 2019 should be approximately $13.5 million. This includes the full impact of our recent new hires in our new offices in Atlanta.

Now, I will turn it back over to Doug.

Douglas L. Williams -- President and Chief Executive Officer

Thank you, Pat. During our calls in January and April, we shared these 2019 priorities with you. Number one, complete the divestiture of our Tennessee and Northwest Georgia business. Number two, invest in growth capacity for Atlanta and specialty commercial businesses. Three, focus on deposit growth by building treasury management services-based relationships. And four, maintain best-in-class asset quality. We also expect to continue our $85 million share repurchase program.

As you know, we closed the divestiture of our Tennessee and Northwest Georgia operations on April 5th and booked a significant gain to complete the strategic pivot through opportunities in Atlanta and our specialty commercial businesses.

Atlanta is the ninth largest metropolitan market in the US with a population of 5.9 million, more than 221,000 business enterprises and an estimated gross domestic product over $385 billion. Among the Top 10 metropolitan markets in the US, Atlanta ranked fourth in net job creation in 2016 and '17 and ranked second in expected population growth through 2020. With a diversified regional economy, we expect the expansion in Atlanta to extend beyond that of the rest of the US.

With several mergers recently announced and now consummated, and the Truest [Phonetic] deal scheduled to close this fall, Atlantic Capital will become Atlanta's largest publicly held banking company, and as we advertise, Atlanta's only hometown business bank.

Our specialty commercial lines of business continue to grow at a rapid pace. Deposits and fee income in our treasury management-oriented payments and financial technology banking business are growing 20% to 25% per year, and Atlantic Capital now ranks 44th nationally in ACH origination.

Our SBA and franchise finance businesses are growing at a sound and sustainable pace. We are investing in growth capacity in Atlanta and our specialty commercial lines of business, by adding new bankers and opening new offices. As noted earlier, we've added 25 new teammates this year in production and production support roles.

With an attractive culture, a distinctive competitive presence and an established record of success in our markets and businesses, we are winning the war for talent. While we do not anticipate replicating the first half hiring pace in the second half of the year, we continue to actively recruit and may opportunistically add new bankers and support professionals over the course of the year.

Our loan production office in Cobb County officially opened in March. Our new banking office in Athens opens next week, and we'll open a new private banking office in Atlanta's Buckhead neighborhood later this year.

Core client deposit growth remained strong, sustained by the treasury management focus and expertise of our bankers and deployment of Atlantic Capital Exchange or ACE for Treasury and ACE for business, our next-generation treasury management platforms.

With our focus on building treasury management relationships in our Atlanta commercial and payments in financial technology banking businesses, core deposits in related non-interest income should continue to grow at an annual pace in the mid-teens percentages or better.

We're pleased with the performance of our borrowing clients and the overall condition of our loan portfolio. While charge-offs have been higher in the first half of 2019 compared to last year's unusually low level, we believe this is a normalized late cycle level of charge-offs, and criticized assets and non-performing assets are trending down. Our borrowers are optimistic about their prospects and are making new investments which should result in solid loan production during the next quarter.

For the balance of the year, we expect to sustain commercial and industrial and owner occupied loan growth, generally consistent with our established multi-year trend. Commercial real estate loans, including the acquired and amortizing TriNet portfolio, are likely to decline at a moderate pace this year, due to a heavy calendar of repayments. These repayments are being replaced by construction commitments, which will fund over time. Taking all together, we still expect consolidated loan growth in the high-single digit percentages this year.

Our results and progress in the first half of the year have been consistent with our expectations and have established a trajectory generally indicative of the guidance we've provided to you.

Now, we'll be happy to answer your questions.


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Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question today from Jennifer Demba with SunTrust. Please go ahead.

Steve -- SunTrust Robinson Humphrey -- Analyst

Hey, guys, it's actually Steve [Phonetic] on for Jennifer.

Douglas L. Williams -- President and Chief Executive Officer

Good morning.

Steve -- SunTrust Robinson Humphrey -- Analyst

Morning. Just wanted to kind of go over some of the -- some kind of credit stuff. I know your portfolio looks pretty good. But are you seeing any yellow flags or anything that you're starting to de-emphasize as we move a little later in cycle?

Douglas L. Williams -- President and Chief Executive Officer

Generally, no. We are seeing as I mentioned, sort of a -- what we think is a normalized level of life cycle charge-offs. And this is really -- what you typically -- I've been doing this for 39 years and have been through several cycles, and this is often what you see late in cycles, you have a prolonged period of success, for management teams are increasingly confident and bold and willing to take riskier steps in terms of investment and M&A activity and that sort of thing. And that can often create problems in performance.

And -- so, I think that's what we're seeing. I think that's what you're seeing sort of across the industry in the series of one-offs that you've noticed. And I think this is just sort of late cycle behavior, and I think charge-offs here in Atlantic Capital and elsewhere are indicative of that.

Steve -- SunTrust Robinson Humphrey -- Analyst

Okay. So there's nothing you're de-emphasizing particularly right now?

Douglas L. Williams -- President and Chief Executive Officer

I think we are a little bit more defensive in our commercial real estate business than we have been earlier in the cycle, but we continue to produce loans there and that's sort generally designed to replace run-off, and we see good opportunities. But I think we are being a little more defensive in that sector than we are elsewhere.

Steve -- SunTrust Robinson Humphrey -- Analyst

Okay. And the guidance you kind of talked about on margin, well, that was one rate cut. I mean, if we get the two -- if we get kind of a July and September cut, what would have been the impact on you guys?

Patrick T. Oakes -- Executive Vice President, Chief Financial Officer, Secretary and Treasurer

Well, so we had previously given guidance of 3.50% to 3.55%, which [Indecipherable] no rate cuts. We're still kind of -- we're still comfortable with that range for the third quarter. If we get the rate cut that is expected next week, that margin will drop below that range. I think it would be difficult to hold on to a 3.50%. Hard to say where it's going to fall out with how quickly we can drop deposit rates. So we'll have to see how it shakes out, but it will be below that range.

Steve -- SunTrust Robinson Humphrey -- Analyst

Okay. What have you seen in the deposit rate environment so far in Atlanta? Are you seeing people kind of start to lower rates, things starting to peak out or people are already starting to cut?

Patrick T. Oakes -- Executive Vice President, Chief Financial Officer, Secretary and Treasurer

So they've peaked out. I mean, a little bit of -- I wouldn't say a lot of cutting yet. I think most people are waiting to see what happens next week like us. I think some of our competitors are still aggressive and others probably are a little bit less aggressive citing it all over the board. For us it's a commercial bank, right. A lot of these deposit rates are based on relationships that aren't negotiated. So it's really case by case situation.

Douglas L. Williams -- President and Chief Executive Officer

And our bankers have been preparing their clients for the prospect of lower rates. So our hope is that we can respond quickly in a disciplined fashion and lowering rates wherever possible. So we'll just have to see what -- how much success we have in that and how quickly we can lower rates. And that will have a big impact on the margins. That and the growth in non-interest bearing deposits, which has been very good. As I mentioned, it's been 18% over the last three-and-one-half years, and we've had good growth in the first half of this year as well. So we'll see what the pace of growth is second half of the year, and how much of that can offset the margin compression that will come from lower yields on loans.

Steve -- SunTrust Robinson Humphrey -- Analyst

Perfect. Thanks, guys.

Operator

The next question comes from William Wallace with Raymond James. Please go ahead.

William Wallace -- Raymond James & Associates -- Analyst

Thanks. Morning, Doug, Pat. Maybe to just continue on the discussion of net interest margin, can you remind us what portion of your portfolio floats and what portion of that is tied to LIBOR versus prime?

Patrick T. Oakes -- Executive Vice President, Chief Financial Officer, Secretary and Treasurer

Yeah. So it's about two-thirds that are floating rates. And I would say about 50% of our portfolio is tied to LIBOR, maybe a little more than that.

William Wallace -- Raymond James & Associates -- Analyst

Okay. And then on the funding side, how much of your funding is contractual and what price, like public funds or whatever, would price down immediately on a new prime?

Patrick T. Oakes -- Executive Vice President, Chief Financial Officer, Secretary and Treasurer

So about 25% of our deposits are index to some market rate. They may not -- some of them will fight down immediately, some of them probably over a few months period. But they were all priced down, those 25%. It's just a matter of timing associated with that, whether it's index dropping to a rate or broker deposits or some other things. And then the rest is either offer rate sheets or negotiated rates.

William Wallace -- Raymond James & Associates -- Analyst

Okay. And then outside of deposits, do you have any borrowings that are short term that could replace or reprice, or do you have any borrowings that you could replace?

Patrick T. Oakes -- Executive Vice President, Chief Financial Officer, Secretary and Treasurer

So we have small amount of borrowings. We had averaged about $70 million last quarter, and obviously, that's typically done one month or less.

William Wallace -- Raymond James & Associates -- Analyst

Okay. So in the third quarter, if I look at that on a continuing basis, you're saying NIM is down 6 basis points to 11 basis points from the second quarter without a Fed move next week?

Patrick T. Oakes -- Executive Vice President, Chief Financial Officer, Secretary and Treasurer

Well -- we're going to look -- so LIBOR has been down, right. LIBOR is now at 2.23% to 2.24% [Phonetic]. So we've seen the impact of a lot of LIBOR already. And that's after...

William Wallace -- Raymond James & Associates -- Analyst

Can you quantify -- so that's why I'm surprised that your margin held up so well in the second quarter, because of the LIBOR pressure.

Patrick T. Oakes -- Executive Vice President, Chief Financial Officer, Secretary and Treasurer

Yeah, we're seeing more of that this quarter.

William Wallace -- Raymond James & Associates -- Analyst

Okay.

Patrick T. Oakes -- Executive Vice President, Chief Financial Officer, Secretary and Treasurer

And the margin held up so well, because we've seen a lot more deposit growth than we anticipated, right. So we're borrowing a lot less money than we thought. That's helped the margin.

William Wallace -- Raymond James & Associates -- Analyst

Okay. Okay. All right. Great. And that's actually great. That's a great segue to another question I had is, on the deposit growth side, you say you're still comfortable with high-single digit growth on the loans. What about deposits for the year for the back half of the year, maybe as a better way to think about it?

Douglas L. Williams -- President and Chief Executive Officer

We normally have stronger seasonal growth in deposits in the second half of the year than we do in the first half of the year. We're pleased that we saw good solid growth in deposits in the first half of the year. So if our normal pattern holds, we should see good growth in the second half of the year. And as I mentioned earlier, we have grown core relationship deposits over the last three-and-a-half years with a compound average rate of 16%. We don't see anything that would suggest that it will be materially different in the second half of this year.

William Wallace -- Raymond James & Associates -- Analyst

But with that deposit rate, there is volatility. So you can't move around quarter-by-quarter?

Douglas L. Williams -- President and Chief Executive Officer

There is a lot of volatility in both loan and deposit balances given concentrations, which is reflective of our customer base.

William Wallace -- Raymond James & Associates -- Analyst

Okay. With the 12 bankers that you -- that you hired, how -- can you kind of give us a sense of the [Technical Issues] those onboard during the first half of the year?

Douglas L. Williams -- President and Chief Executive Officer

Most of them were in the second quarter and they are sort of equally distributed among our various banking teams, some of which have a heavier deposit focus, some of which have a heavier loan focus, and some of which have a sort of more comprehensive relationship development focus. So, we even -- we've expanded the production capacity in terms of numbers of production bankers by about 20% in the first half of the year.

And that wouldn't necessarily translate into an expectation of 20% additional loan growth, because again, it's just the emphasis of those different bankers is pretty well distributed across our business and the focus is on increasing banking relationships, and of course, that shows up in both loans and deposits over time. We're sort of on a trajectory right now that would suggest that deposit growth in the second half of the year could be stronger than loan growth, which has been one of our priorities for the year.

William Wallace -- Raymond James & Associates -- Analyst

Okay. Very good. Thank you very much for all the color, Doug and Pat. Appreciate it.

Patrick T. Oakes -- Executive Vice President, Chief Financial Officer, Secretary and Treasurer

Thank you.

Operator

The next question comes from Nancy Bush with NAB Research. Please go ahead.

Nancy Bush -- NAB Research LLC -- Analyst

Good morning. Couple of questions. First one for you, Doug. I mean, you've advanced pretty strong confidence in growth through your relationships. You said your customers are confident that they're investing etc., etc. We're coming to the end of the second quarter earnings season here and that question about business confidence has gotten answers that were all over the board. I think yesterday, we heard one of your regional competitors say that, you know, there'd been a big drop in confidence among their customers and you know, blah, blah, blah. So, I mean, what is it you think about your particular base? Is it just more Atlanta-centric, is it not as impacted by trade issues? Can you just talk about this -- the confidence that you have in your customers on confidence?

Douglas L. Williams -- President and Chief Executive Officer

Yeah, you're certainly right. The data has indicated that business confidence is weaker. You saw the GDP prep [Phonetic] this morning with the lower level [Speech Overlap] investment in the second quarter. And I think a lot of this is related to trade policy and slower growth abroad. I think our client base is more domestically oriented. I think there's still a lot of confidence and optimism among these Atlanta area-based companies about their prospects for the future. So the anecdotal feedback we're getting from our clients is still positive and still much more positive than the data would indicate.

So, we -- as I mentioned, we think the economic expansion in Atlanta is likely to extend beyond that of the country as a whole. So we see a lot of confidence out there, we see good opportunities over the next 12 months to 18 months, and of course, that's -- that view is subject to change as time goes on. But I think there is a difference there.

Nancy Bush -- NAB Research LLC -- Analyst

Secondly, your treasury management business and the businesses are allied with that, and you're -- that you're starting and you're growing. What is -- how do you think about investment into these businesses? Is there sort of a set investment goal that you have, or is this more opportunistic? I mean, now that you've shed Tennessee, I guess, my bigger question is, now that you shed Tennessee, what is your opportunity to invest and grow these businesses?

Douglas L. Williams -- President and Chief Executive Officer

We've invested consistently along the way in our treasury management platforms, and a lot of that -- the more heavy -- a heavier portion of that investment I think, is behind us at this point, and I don't see need for substantial investment for the next couple of years. But there is investment in new capabilities. We're looking at real-time payments, we're looking at -- at card payments, card-based payments. So there are a number of opportunities in front of us that would require some investment, but nothing that's significant as a new treasury management platform or anything like that.

Nancy Bush -- NAB Research LLC -- Analyst

Okay. All right. Thank you very much.

Douglas L. Williams -- President and Chief Executive Officer

Certainly.

Operator

[Operator Instructions] The next question comes from Steve Comery with G. Research. Please go ahead.

Steven Comery -- G. Research -- Analyst

Hey, guys. Good morning.

Douglas L. Williams -- President and Chief Executive Officer

Good morning.

Patrick T. Oakes -- Executive Vice President, Chief Financial Officer, Secretary and Treasurer

Morning.

Steven Comery -- G. Research -- Analyst

I was just wondering if you could, kind of, just given the decline in LIBOR during the quarter, give us an indication as to where loan yields were coming on the book during the quarter? You know, unit's just a directional indication.

Patrick T. Oakes -- Executive Vice President, Chief Financial Officer, Secretary and Treasurer

[Indecipherable] so many floating rate loans. I don't expect to change much. I think it's fair to say that we're not seeing a lot of pressure besides the pressure from LIBOR moving.

Steven Comery -- G. Research -- Analyst

Okay. So competition is pretty much steady as it goes then? Fair to say?

Douglas L. Williams -- President and Chief Executive Officer

I think that's fair to say.

Steven Comery -- G. Research -- Analyst

Okay. And then on the consumer books, the consumer and the residential books both, it doesn't look like there was really any growth in those this quarter. I was just wondering if I could have some kind of updated thoughts on -- on you guys thoughts on that those two businesses.

Douglas L. Williams -- President and Chief Executive Officer

Yeah. We're really not -- we're not consumer lenders, we're business lenders. The consumer loans on our books are really mostly private banking loans. They're related to the principles of the commercial enterprises we bank almost as accommodations or part of those relationships. And we really don't anticipate any significant growth in those categories going forward.

Steven Comery -- G. Research -- Analyst

Okay, fair enough. And then, on the margin generally, we've talked to you on this call -- in previous calls like, how much were the book floats? Do you guys have any sort of general thoughts on the potential of decreasing the Bank's overall asset sensitivity going forward? Is that something you'd be interested in and then if so, under what conditions?

Operator

Pardon me, this is operator. We've had a disconnect with the speakers. If you could please stay on the line. Thank you. [Technical Issues] Thank you for your patience. Mr. Williams, please go ahead.

Douglas L. Williams -- President and Chief Executive Officer

Thank you, Anita. I believe for some reason, we were -- the call was dropped. There are still more questions out there. We're happy to entertain that. Steve, you were in the middle of a question.

Steven Comery -- G. Research -- Analyst

Yeah. I am on?

Douglas L. Williams -- President and Chief Executive Officer

You are.

Steven Comery -- G. Research -- Analyst

Okay. Yeah. My question was just, if you guys had any thoughts about reducing the asset sensitivity of the Bank in light of the fact that interest rates appear to be moving down from here?

Patrick T. Oakes -- Executive Vice President, Chief Financial Officer, Secretary and Treasurer

So, we started that process earlier this year and currently we have about $175 million in hedges on the balance sheet, but pricing's moved away from us at this point. It's just too expensive to put the initial hedging on where pricing is. So we kind of stop at this point.

Douglas L. Williams -- President and Chief Executive Officer

I think there is obviously opportunity to mitigate the compression of the margin going forward with strong revenue growth and strong growth in non-interest bearing deposits. And we think we have some opportunity to do that. We do expect continued good revenue growth and good deposit growth. And so, we'll have to see how this sort of develops.

Patrick T. Oakes -- Executive Vice President, Chief Financial Officer, Secretary and Treasurer

Yeah, if pricing improved, we're happy to put more hedging on. We're -- just we're watching it.

Douglas L. Williams -- President and Chief Executive Officer

Steve?

Steven Comery -- G. Research -- Analyst

You know, kind of what's your guys discipline on repurchases, is it dependent on the stock price, are you going to try to be opportunistic, or are you going to try to use the authorization while you have it?

Patrick T. Oakes -- Executive Vice President, Chief Financial Officer, Secretary and Treasurer

So it's -- we're buying pretty consistently every day. While it's -- the amount of share we're purchasing is really dictated by where the stock price is. So we try to be optimistic around that.

Steven Comery -- G. Research -- Analyst

Okay. Fair enough. That's it for me. Thanks guys.

Douglas L. Williams -- President and Chief Executive Officer

Thank you. You want to reprompt?

Operator

[Operator Instructions]

Douglas L. Williams -- President and Chief Executive Officer

Okay. Operator, it looks like we don't have any more questions. All right. We appreciate you dialing in this morning. We had a good quarter, good strong growth in loans, deposits and non-interest income, good expense control. We're optimistic about the second half of the year despite the potential compression in our net interest margin, and we look forward to talking to you again after the third quarter. Good morning.

Operator

[Operator Closing Remarks]

Duration: 36 minutes

Call participants:

Gary G. Fleming -- Executive Vice President and Chief Risk Officer

Douglas L. Williams -- President and Chief Executive Officer

Patrick T. Oakes -- Executive Vice President, Chief Financial Officer, Secretary and Treasurer

Steve -- SunTrust Robinson Humphrey -- Analyst

William Wallace -- Raymond James & Associates -- Analyst

Nancy Bush -- NAB Research LLC -- Analyst

Steven Comery -- G. Research -- Analyst

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