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Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI)
Q3 2019 Earnings Call
Oct 25, 2019, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Atlantic Capital Bank Third Quarter 2019 Earnings Conference Call.

[Operator Instructions]

I would now like to turn the conference over to Ashley Carson, Executive Vice President, Corporate and Community Affairs Officer. Please go ahead.

Ashley C. Carson -- Executive Vice President Corporate and Community Affairs Executive

Thank you, Rocco, and thank you all for joining us for our third quarter 2019 earnings call. With me today to discuss our results are Doug Williams, Chief Executive Officer; and Patrick Oakes, Chief Financial Officer.

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

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

Douglas L. Williams -- President and Chief Executive Officer

Thank you, Ashley, and good morning. With solid loan and deposit growth from new and expanded client relationships, disciplined expense management and sound credit quality, Atlantic Capital recorded another quarter of strong operating results. As you've seen, we reported net income from continuing operations of $7.6 million or $0.33 per diluted share for the third quarter of 2019, compared to $7 million or $0.27 per diluted share for the third quarter of 2018, and $7 million or $0.29 per diluted share for the second quarter of 2019.

Loan sale for investment from continuing operations grew 10% annualized from the second quarter and 10% over the third quarter of 2018. Commercial and industrial and owner-occupied commercial real estate loans increased 14% linked quarter annualized and grew 20% from the third quarter of 2018. For the last 15 quarters, which is our history as a public company, this core category of loans from continuing operations has grown at a compound average annual rate of 20%.

Average deposits in the third quarter, up 10% annualized over the second quarter and 18% compared to the third quarter of 2018. Average non-interest bearing demand deposits increased 34% annualized compared to the second quarter and 14% from the third quarter of 2018. Non-interest bearing demand deposits were 33% of total average deposits during the third quarter and have grown at a compound average annual rate of over 18% for the last 15 quarters. This loan and deposit growth from new and expanded client relationships over the last 15 quarters is the direct product of a company aligned for the common purpose of fueling client prosperity with full in tailored credit and treasury management solutions and reliable service delivery.

Building an attractive and distinctive culture is a competitive weapon, is a key priority at Atlantic Capital. And we are pleased to report that our Company was recognized last quarter by the American Banker as a best bank to work for. Two key elements of this purpose and performance-driven culture; client focus teamwork and risk management expertise, are foundational to our results.

Our talented and experienced bankers, credit officers, treasury management officers, and operational delivery and support professionals work well together to design and deliver solutions and service to our clients. Good teamwork is making our Company more productive and efficient. While investing in new capacity to pursue opportunities in the Atlanta market and in our specialized treasury management and transaction processing businesses, non-interest expense in the third quarter of 2019 was actually down from that in the second quarter and grew at a modest pace year-over-year.

Sound risk management practices enable sustainable growth at Atlantic Capital, and our results show it. Net charge-offs for the quarter were 11 basis points of loans held for investment and 12 basis points year-to-date. Non-performing assets were 29 basis points of assets at quarter end.

Now, Pat Oakes will review the financials with you in more detail and then I'll return to offer perspective on our priorities and the outlook for the fourth quarter. Pat?

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

Thanks, Doug, and good morning, everyone. I'm happy to report on the strong results for Atlantic Capital in our first full quarter after the closing the branch sale in April. This included net income between operations of $0.33 per diluted share, an increase of 22% compared to the third quarter of 2018. Tangible book value per share of $13.91, also an increase of 22% from September 30, 2018. Another quarter of solid loan and deposit growth, a loan and deposit ratio of 92% and an emphasis on expense management.

We are pleased with these results despite the decline in our net interest margin from the recent cuts in the Fed funds rate. The NIM in the third quarter was 3.52%, a 9 basis point decline from the 3.61% margin in the second quarter. This was in line with our expectations. The main drivers of this quarterly reduction were lower loan yields due to the decline in short-term interest rates, mainly one-month LIBOR and an increase in excess cash from higher volatility in our deposit balances. This was offset by a decrease in our cost of interest bearing deposits and the solid growth in non-interest-bearing deposits, Doug mentioned earlier.

With the uncertainty of future rate cuts, providing further guidance on our NIM is difficult. The bank remains asset sensitive with approximately 65% of our loan book floating rate and 50% of loans tied to one-month LIBOR. This will continue to put pressure on our margin. For the third quarter, loan yields decreased 16 basis points to 5.18%.

During the third quarter, we were successful in reducing the cost of interest bearing deposits 8 basis points to 1.58%. This included the benefit from lower rates in our market index deposits and rate sheets, along with some decrease in our negotiated rates, which account for about 45% of our interest bearing deposits. Our bankers continue working with their customers to reduce deposit costs as much as competition will allow, but there is a lag with how quickly we can reduce these negotiated rates. Our overall cost of deposits decreased 9 basis points to 1.06%.

Non-interest income totaled $2.8 million in the third quarter compared to $2.9 million in the prior quarter and $2.3 million in the third quarter of 2018. Service charge income grew 25% linked quarter annualized and 15% from the third quarter of 2018, driven by continued strong growth in our payments and FinTech businesses. The quarter also included a gain of $253,000 on the sale of securities as we extended the duration of the investment portfolio in order to reduce the asset sensitivity of the balance sheet by selling short duration securities and began replacing with municipal securities. We have continued to purchase additional municipal securities and our held to maturity portfolio during the fourth quarter. This will improve income and reduce our asset sensitivity, but result in some additional pressure on our NIM.

I am pleased with our continued focus on managing expenses post the branch sale. Total expenses in the third quarter decreased $577,000 to $12.7 million. We benefited in the third quarter from an FDIC assessment credit that lowered the FDIC expense by $368,000 from the second quarter. Based on our remaining credits that can be applied to future invoices, we do not anticipate have an FDIC premium expense for the next few quarters.

We continue to actively purchased shares under our $85 million share repurchase program. During the quarter, we purchased $20.1 million or 1.2 million shares at an average price of $17.29. This brings the total program repurchase to $70.9 million or 4.1 million shares, and has reduced our share count by approximately 16%. Given all the share repurchase activity, our tangible common equity ratio decreased to 12.9% at quarter end, down from 13.4% from June 30th. We remain focused on capital management and improving both our return on equity and earnings per share.

Now, I will turn it back over to Doug.

Douglas L. Williams -- President and Chief Executive Officer

In earlier calls this year, we've shared the following priorities with you: Number one, complete the transformational or rather reformational divestiture of our Tennessee and Northwest Georgia business; number two, invest in growth capacity for our Atlanta and specialty businesses; number three, focus on deposit growth by building treasury management and transaction processing based relationships; number four, maintain best in class credit quality; and number five, employees shareholder return enhancing capital management strategies.

I think you'll agree that we've addressed each of these priorities with energy and discipline, and then our results reflect compelling progress in building the value of our company. We expect more progress in the fourth quarter. Our bankers are energetically pursuing new opportunities and new business pipelines remain solid. Good teamwork is improving our productivity and efficiency. Credit risk as well managed. While the effect of interest rate reductions will become more apparent in the fourth quarter, we expect to sustain these good operating trends.

Our planning for 2020 is well under way. Although the course of the economy and interest rates is uncertain, we see considerable opportunity for Atlantic Capital in the midst of Atlanta market turmoil and in our specialty businesses. We're well positioned with an energetic and engaged team, new business development capacity and robust capital flexibility to address these opportunities.

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

Questions and Answers:

Operator

[Operator Instructions] Today's first question comes from Brady Gailey of KBW. Please go ahead.

Brady Gailey -- Keefe, Bruyette & Woods -- Analyst

Hey. Good morning, guys.

Douglas L. Williams -- President and Chief Executive Officer

Good morning, Brady.

Brady Gailey -- Keefe, Bruyette & Woods -- Analyst

I wanted to start with the buyback -- I mean, you bought back a material amount of your stock over the last year. It feels like at this pace, you'll have the $85 million done in the fourth quarter. When that happens, you're still going to have excess capital. So how do you think about additional buybacks in 2020?

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

I'll start. I think the initial goal here is to complete $85 million buyback program. We're still in the planning processes -- capital planning process with the Board, and so I think more to come in January once we get this program finished about any additional steps we want to take.

Douglas L. Williams -- President and Chief Executive Officer

Yeah, I'd just say that we are evaluating various strategies going forward, we'll share in those with the Board and we'll have more information for you in January. We really like the capital position that we have finishing out the year. We have a lot of flexibilities, I've mentioned and that capital conserve both defensive and offensive purposes.

Brady Gailey -- Keefe, Bruyette & Woods -- Analyst

Yeah. Okay. And then Pat, you mentioned making some changes in the bond portfolio and buying the munis. If you look at the average balance of the bond book in the third quarter, it was about $340 million. Do you expect that to go a lot higher with these changes or is it more just a mix shift and those balances should stay fairly stable going forward?

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

Well, part of the reason it's down is because of the sales that we did, as we were doing the restructuring. So you will see that build back up and most likely increase from what we -- the balance was in the second quarter.

Brady Gailey -- Keefe, Bruyette & Woods -- Analyst

Okay. And anything on CECL and the likely impact coming up here in 90 days?

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

So we're still in the final stages of finalizing that. At this point, we don't expect a material change in what our allowance is going to be based on our business model, being so commercial focused and a short duration portfolio.

Brady Gailey -- Keefe, Bruyette & Woods -- Analyst

All right, and then just last from me. Your mortgage warehouse business, I know you all partner with another bank in that business, but it's gotten down to 1% of loans. That business has been a lot more robust recently, just given the backdrop of mortgage rates. I mean, do you expect to start to participate more in that program with the warehouse space, be it a lot more robust nowadays?

Douglas L. Williams -- President and Chief Executive Officer

We do not, Brady. We -- I would anticipate those balances will continue to diminish over the next couple of quarters.

Brady Gailey -- Keefe, Bruyette & Woods -- Analyst

Okay. Great. Thanks for the color, guys.

Douglas L. Williams -- President and Chief Executive Officer

Thank you.

Operator

And our next question today comes from Stephen Scouten of Sandler O'Neill. Please go ahead.

Stephen Scouten -- Sandler O'Neill -- Analyst

Hi, guys, good morning.

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

Good morning.

Douglas L. Williams -- President and Chief Executive Officer

Good morning, Stephen.

Stephen Scouten -- Sandler O'Neill -- Analyst

And maybe to follow-up on Brady's last question here a little bit, just around overall loan growth expectations, kind of if you could give some color on how your pipelines are looking and really what you're seeing from customers in regards to loan demand maybe quarter-over-quarter origination and pay down activity kind of how that compares to what we've seen in the last few quarters?

Douglas L. Williams -- President and Chief Executive Officer

Yeah, we -- as I've mentioned, the pipelines remain solid and we think we can generally sustain the trajectories that we've been in this year and prior years with respect to loan growth in various categories. Having said that, demand has softened up a bit this year, less evident in the data and also anecdotally, and it's very difficult to calibrate that for not only the fourth quarter but 2020. I think we guided you to high-single digit loan growth for the year and that still looks like a reasonable expectation. So finish the year out probably in the 7% to 9% range I would guess.

Stephen Scouten -- Sandler O'Neill -- Analyst

Okay. Helpful. And maybe following back on capital a little bit to; I know you said you're still in those planning stages, but how do you think about capital moving longer term I guess and what an appropriate level of capital would be whether that's TCE or total risk base or whatever ratio you look to most centrally? But how do you think about that long-term, where you'd like to operate?

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

So the biggest constraint for us is total risk-based capital at the bank and that's our business model. We have a lot of unfunded commitments that kind of [Indecipherable] a little bit more capital associated with that. So that's our biggest constraint. We'd like to get TCE ratio down obviously from the almost 13%, we're at now. But there is a constraint around that. But you're right, we are well over capitalized and well aware of that. Like Doug said, that's good offensively and defensively.

Stephen Scouten -- Sandler O'Neill -- Analyst

Okay, great. And then maybe last thing for me, just kind of can you talk about where you're investing today in the Atlanta market place, whether that certain segments, pace of new hiring goals, if there are certain submarkets in the Atlanta MSA you're really focused on today? Just kind of give us a feel for what the direction of incremental investments will be?

Douglas L. Williams -- President and Chief Executive Officer

As we've told you in our second quarter call, we've hired over 25 people this year including 12 new producers, I think, seven new credit officers and the remainder would be operational service delivery folks. The pace of hiring is slowed. We're anticipating the next few quarters here to absorb that growth and see it become more productive, particularly as we move into 2020. We will remain very opportunistic with respect to hiring more people when we find good people that want to work at Atlantic Capital, we'll be quick to hire them. But I think it will take a little time to absorb the folks we've hired and see them become productive.

The hiring has been sort of across the scope of our businesses, both here in Atlanta and in our specialty businesses, and we have expectations for not only loan growth but deposit growth and as you've seen, we've had deposit growth this year that has been very strong, and in fact has outpaced loan growth. And that may well continue into the next few quarters.

Stephen Scouten -- Sandler O'Neill -- Analyst

Great. Thanks for the color, guys. I appreciate it.

Operator

And our next question today comes from Jennifer Demba of SunTrust. Please go ahead.

Jennifer Demba -- SunTrust -- Analyst

Thank you. Good morning.

Douglas L. Williams -- President and Chief Executive Officer

Good morning.

Jennifer Demba -- SunTrust -- Analyst

Question on credit, it's still very good for you. I'm just wondering what you're seeing kind of underneath the covers, any cracks and any certain sectors, what's your trend in criticized loans that kind of thing?

Douglas L. Williams -- President and Chief Executive Officer

Yeah. Credit stats remain solid. We're not seeing any unusual or broad-based problems. I'd say the migration trends are very stable. We're certainly mindful of late cycle management behavior, particularly in the C&I world and we are cautious as we told you with respect to the CRE business at this point in the cycle. However, our charge-offs remain low. We've seen no meaningful change in classified loan levels and in fact with some expected payoffs -- refinancing payoffs away from us in the fourth quarter, we should see classified totals move down over time. So we feel good about credit at this point. There's always the possibility of unexpected occurring but we think credit quality is stable and likely to remain so.

Jennifer Demba -- SunTrust -- Analyst

Thanks so much.

Douglas L. Williams -- President and Chief Executive Officer

Sure.

Operator

And our next question today comes from Steve Comery of G. Research. Please go ahead.

Steve 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

Good morning.

Steve Comery -- G Research -- Analyst

Just want to ask about deposit pricing, just kind of some general color on what you guys are seeing in your market and whether or not you expect or just how you expect mix to kind of look going forward with the Fed policy?

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

Now, when you say mix, what are you referring to?

Steve Comery -- G Research -- Analyst

Yes. So I mean, there was a pretty substantial reduction in the quarter in brokered deposits, maybe just some comments on kind of how you look at that funding source at this point?

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

Well, the focus here has been growing core deposits and obviously as you can see, we've been pretty successful with that. And what that allows us to do is pay off some of these higher cost deposits and wholesale funding. We had increased brokered deposits with the branch sale and anticipation of that, because obviously we sold off a significant about deposits. And with all the growth we've seen, we bit a pace [Phonetic] some of that off, which is great, it helps margin. It helps funding. So that's the goal going forward to continue to do that. You can see that with our DDA at 32%, 33% of deposits.

Steve Comery -- G Research -- Analyst

Okay and then just kind of generally, I mean, how are you guys thinking about deposit competition, are you seeing anything different, following Fed changes or anything recently like that?

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

So look, we're a commercial bank, so a lot of what we have is relationship based. So, yes, we are competing with the overall relationship with other banks. So it's not necessarily special that we see advertise somewhere. It's more just competing for the business individually. So it's a lot of negotiation with individual customers and the overall relationship along with what's going on the market. So it's a lot of one-offs.

Steve Comery -- G Research -- Analyst

Okay, fair enough. Thanks.

Operator

And our next question today comes from Nancy Bush of NAB Research. Please go ahead.

Nancy Bush -- NAB Research -- Analyst

Good morning, gentlemen. Just a general question for you, Doug and Pat. The issues that we're seeing -- the liquidity issues that we're seeing in the markets these days, which seem to vary from day to day. Given your growing payments business, etc., do these issues hit you at all or do they concern you at all?

Douglas L. Williams -- President and Chief Executive Officer

They haven't at this point, Nancy. As we've said, we've had a really strong deposit growth this year. We maintain a lot of liquidity on the balance sheet and have a lot of access to liquidity from various sources. So we've been able to manage that day to day volatility, I think, very well up to this point and I think we expect to continue to be able to do that.

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

Now one of the things we've discussed approaching year-end is what potential liquidity [Indecipherable] year-end, it's holding more cash. So you could potentially see our cash balances increase at the bank just as protection going in the year-end.

Nancy Bush -- NAB Research -- Analyst

So there would not -- but there -- you don't anticipate that that itself would have a material impact on the margin?

Douglas L. Williams -- President and Chief Executive Officer

Not material.

Nancy Bush -- NAB Research -- Analyst

Okay. Secondly, this whole issue of negotiated rates and negotiating negotiated rates, I guess, you'd call it. You're hardly the only one who is in that process right now. And I'm just wondering if you can give some color on how those discussions go? I mean, do you have to say, OK, we'd like to negotiate the rates, but we need to offer you -- we're going to offer you something and fees or whatever? I mean, how does that work?

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

Look, there are -- a lot of this is an overall relationship. You are typically not negotiating anything besides that deposit rate because we've already got the rest of relationship. And look, we were fair with these customers as rates increase of paying them higher rates and the idea is, we're expecting the same thing is rates move down, but I think most customers get that, most of our bankers get that, but look, this was a big change, rates moved very, very quickly, so it's getting everybody comfortable with that shift. So there's just a lag. We don't want lose a customer we're cutting the deposit rate, but we also need to be fair on both sides. So it's just a work in progress.

Douglas L. Williams -- President and Chief Executive Officer

And I would say that with respect to sort of excess corporate cash, it's a national market competition for that is national, so you see these very high money market rates from online banks or money market funds and so forth and generally what our relationship customers are looking for is just a nod in that direction. We don't necessarily have to match those rates, but we have to move in that direction. And then we get, as Pat said, we find that -- they understand what's going on and they're willing to move down over a period of time, but there is a lag there and we expect to have more success as we move forward in terms of lowering rates than we've had so far this year with really quarter of lower rates.

Nancy Bush -- NAB Research -- Analyst

Yeah, and just ancillary to that, the deposit market in Atlanta has tended to do crazy things over time, and I'm wondering how the competitive situation sort of rationality situation and deposit pricing is shaping up right now?

Douglas L. Williams -- President and Chief Executive Officer

I don't know that Atlanta is at this point a lot different from anywhere else in the country. I think we saw rates run up last year and earlier this year, and now they're coming off the competitive rates, they're being offered in the market, but again the progress is not as fast as we would like it to be, it's slower going down than it was going up.

Nancy Bush -- NAB Research -- Analyst

Right. Okay. All right. Thank you very much.

Douglas L. Williams -- President and Chief Executive Officer

Thank you.

Operator

And our next question today comes from Christopher Marinac of Janney Montgomery Scott. Please go ahead.

Christopher Marinac -- Janney Montgomery Scott -- Analyst

Thanks, good morning. Doug, you mentioned the FinTech businesses and success on deposits there. Could you elaborate further on sort of what's happening there and sort of how that can be a further propellant for 2020?

Douglas L. Williams -- President and Chief Executive Officer

Yeah, it's really -- we think it is an exciting opportunity. We have positioned ourselves very nicely. I think in the payments alley that is Atlanta. We're working with a number of companies here, as well as across the country. We have really solid pipelines out into the next two or three quarters in terms of new payments volume, ACH volume and that should result in higher demand deposits and higher service charge income going forward. So we're very optimistic about that. We think we've carved out a highly competitive niche in that business. We're very competent in treasury management services and item processing and this is a real area of strength for our Company. And it should show up in results over the next few quarters here.

Christopher Marinac -- Janney Montgomery Scott -- Analyst

Okay, great. And is it possible that the DDA ratio just sort of rises slightly as a result of [Indecipherable]?

Douglas L. Williams -- President and Chief Executive Officer

Well, we hope so. I don't know if it will. You've -- some countervailing forces there at work. We've been pleased that it's held up. So we're in excess of 30% for the last several quarters now and had good growth in those balances. Obviously, an important element of mitigating margin compression will be to gather more non-interest-bearing deposits. So that's core to our strategies and is particularly a part of this transaction processing treasury management of business that we have.

Christopher Marinac -- Janney Montgomery Scott -- Analyst

Okay, great, thank you for that. And then as a follow-up to Nancy's question about negotiated rates, what are you seeing on the ability of customers to do loan force or even to negotiate something favorable for you in terms of prepayment penalties that get waived or at least are reasonable for both sides?

Douglas L. Williams -- President and Chief Executive Officer

Yeah, I think we're just starting to see some of that in the market. There are opportunities to refinance at lower fixed rates. And so that's creating some interest among various customers here and elsewhere to do that. We also -- we're just trying to get some LIBOR floors in some of our loans going forward, I think that's a new aspect in the market and we'll see if that -- if we're successful doing that going forward, but something we're starting to do.

Christopher Marinac -- Janney Montgomery Scott -- Analyst

Great, thank you, Doug.

Operator

And our next question comes from William Wallace of Raymond James. Please go ahead.

William Wallace -- Raymond James -- Analyst

Thanks. Good morning, guys. I'll be brief. Most questions have been asked, but as a quick follow-up to Chris' question on floors, do you have any loans that are sitting up floors today?

Douglas L. Williams -- President and Chief Executive Officer

I don't think we do, Wally. If we do, it's de minimis. We haven't seen floors sort of competitively in the market for, I don't know, three years or so now and so that's why I say, we'd like to start getting some of those, whether that will work competitively remains to be seen and we're early in our effort to do that.

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

I think Wally, we will have more success doing fixed rate.

Douglas L. Williams -- President and Chief Executive Officer

Yeah.

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

Rather than doing floors. We have 35% of our loan portfolio is at fixed, probably a higher percentage of our new business is doing fixed rate. So it's hard to move the needle significantly, but that's probably where we're having more luck.

William Wallace -- Raymond James -- Analyst

Is that because you're doing less C&I loans given where we are in the cycle or is that because you're shifting the focus?

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

Shifting the focus.

Douglas L. Williams -- President and Chief Executive Officer

We're shifting the focus in response to borrower demand. There is more interest in doing fixed rate financing now than there has been in the past.

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

And obviously, we have more interest in that too.

Douglas L. Williams -- President and Chief Executive Officer

And we have more interest in that, and as Pat says, incrementally, we're seeing a good portion of our growth there. We are doing more C&I. We are doing more owner-occupied commercial, which is C&I and a different regulatory call code, but the C&I business, as we broadly define, as we mentioned, it has been growing at a very nice pace for 15 quarters, now 20% per annum compounded. So we have a -- we have robust growth in that sector of our business, which is now about 60% of the total mix.

William Wallace -- Raymond James -- Analyst

Okay. And then just two questions on NIM. Pat, do you have the -- what the net interest margin was for the month of September?

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

Yes. But we don't want to disclose. Lower. It was lower. So look -- I guess that's what answer that is, if we don't get any further rate cuts, we're going to see some more margin pressure here without any further rate cuts, probably another -- just another 6 or 8 basis points probably a loan with that and then you add in any rate cuts in October-December obviously we'll add on top of that, so.

William Wallace -- Raymond James -- Analyst

And that's -- that does not -- does that 6 basis point to 8 basis point, does that include what we've already seen from LIBOR in October? Or that would be additional pressure?

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

That will be the additional pressure from LIBOR. Obviously, we didn't see because the rate cut was so late in September, we didn't see a lot of the impact from lower LIBOR in September. We saw some but not all of it. We'll see more of that in October, and then obviously, get a benefit in deposit cost cuts but more to come with that. So as I've said before, there's going to be initial lag with our margin, really run the deposit side. And hopefully we can start to catch up. It seems to get through these rate cuts.

William Wallace -- Raymond James -- Analyst

Right, understood. And, Pat, I know you said in the prepared remarks, but I couldn't write fast enough. What's the dollar amount tied to LIBOR and the dollar amount tied to prime?

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

So dollar amount tied to LIBOR is just over -- it's $900 million; hold on, I'll pull it up for you. I'll get it back to you.

Douglas L. Williams -- President and Chief Executive Officer

It's roughly 50%.

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

Yeah.

Douglas L. Williams -- President and Chief Executive Officer

About $900 million. [Phonetic]

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

Yeah.

William Wallace -- Raymond James -- Analyst

And another $900 million -- and then another $900 million is on prime?

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

And the prime is about $225 million.

William Wallace -- Raymond James -- Analyst

Okay, great. Thanks guys. I really appreciate the time.

Operator

And ladies and gentlemen, this concludes the question-and-answer session. I'd like to turn the conference back over to the management team for any final remarks.

Douglas L. Williams -- President and Chief Executive Officer

All right. We appreciate you dialing in this morning. Very pleased with our results and we're available to have further discussion today and first part of next week for anybody that wants to. Thank you very much.

Operator

[Operator Closing Remarks]

Duration: 33 minutes

Call participants:

Ashley C. Carson -- Executive Vice President Corporate and Community Affairs Executive

Douglas L. Williams -- President and Chief Executive Officer

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

Brady Gailey -- Keefe, Bruyette & Woods -- Analyst

Stephen Scouten -- Sandler O'Neill -- Analyst

Jennifer Demba -- SunTrust -- Analyst

Steve Comery -- G Research -- Analyst

Nancy Bush -- NAB Research -- Analyst

Christopher Marinac -- Janney Montgomery Scott -- Analyst

William Wallace -- Raymond James -- Analyst

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