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DATE
Tuesday, July 29, 2025, at 9 a.m. ET
CALL PARTICIPANTS
- Chief Executive Officer — Palmer Proctor
- Chief Financial Officer — Nicole S. Stokes
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TAKEAWAYS
- Net Income: $109.8 million, or $1.60 per diluted share, reflecting a 21% increase compared to the same quarter of the prior year.
- Return on Assets (ROA): 1.65%, with a pre-provision net revenue (PPNR) ROA of 2.18%.
- Return on Tangible Common Equity: 15.8% return on tangible common equity, indicating continued profitability improvement.
- Revenue Growth: 20.9% annualized, nearly double the pace of expense growth.
- Efficiency Ratio: 51.63%, an improvement from 52.83% in the previous quarter, attributed to controlled expenses and revenue expansion.
- Net Interest Margin (NIM): Core net interest margin was 3.77%, up four basis points sequentially, with management noting it is "well above most peer levels" and based solely on core margin (zero accretion).
- Loan Growth: $335 million, or 6.5% annualized, mainly from commercial and industrial, mortgage warehouse, and premium finance segments.
- Total Loan Production: $1.9 billion, up from $1.5 billion in the previous quarter.
- Deposit Growth: $20 million, with non-interest-bearing deposit balances up over 3% annualized to 31% of total deposits.
- Provision for Credit Losses: $2.8 million provision for credit losses, maintaining a reserve at 162% of non-performing loans and 408% of portfolio non-performing loans (NPLs).
- Asset Quality: Annualized net charge-offs improved by 14 basis points quarter-over-quarter; Non-performing assets, net charge-offs, and both classified and criticized loans all declined.
- Tangible Book Value: Increased to $41.32 per share, representing a 15.5% annualized growth ($1.54 per share increase during the quarter).
- Tangible Common Equity Ratio: Rose to 11.09% at quarter-end.
- Common Equity Tier 1 Ratio: Increased to 13%, reflecting enhanced capital strength.
- Share Repurchases: $12.8 million repurchased in common stock (212,000 shares), with $72 million authorization remaining through October 2025.
- Non-Interest Income: Increased by $4.9 million, mostly from mortgage operations, where production grew 36% to approximately $1.3 billion and gain on sale rose to 2.22%.
- CRE and Construction Concentrations: Commercial real estate at 2.6% and construction lending at 14.5% of loans, both remaining low.
- Brokered CDs: Brokered CDs represent 5% of total deposits, with broker deposit levels increasing $82 million.
- Securities Portfolio: Added approximately $200 million of new securities at yields of 4.75%-5%, replacing approximately $260 million maturing at 2.77%.
- Margin Guidance: Management projects net interest margin normalizing in the 3.60%-3.65% range over the next eighteen months, assuming upward pressure on deposit costs as loan growth continues.
- Expense Outlook: Non-interest expense for Q3 2025 is expected to be consistent with current levels, or $156 million to $158 million, due to stable production activity and recent merit increases.
- Hiring Activity: Approximately 64 new revenue-generating employees recruited year-to-date.
- Reserve for Investor Office Loans: Increased to 3.8% for that sector following a qualitative factor adjustment.
- FHLB Advances and Funding Sources: Flexibility maintained through runway in FHLB advances and a continued focus on growing core deposits relative to brokered sources.
- Capital Deployment Strategy: Management expressed a continued priority on organic growth, with share repurchases and dividends as secondary, and merger-and-acquisition activity only considered for highly compelling opportunities.
SUMMARY
Ameris Bancorp (ABCB -0.40%) reported substantial revenue and loan growth in Q2 2025, supported by efficiency improvements and expanding margins, resulting in enhanced capital and book value metrics. Diversification in fee income, particularly from mortgage operations, contributed meaningfully alongside stable asset quality and rising core capital ratios. The company signaled persistent competitiveness in deposits, readiness to support further asset growth, and discipline in operating expense control, setting a constructive outlook for the second half of the year and beyond.
- Nicole Stokes noted, "our growth is margin accretive at this point," highlighting that recent loan production rates outpace deposit production costs.
- Chief Executive Officer Palmer Proctor emphasized readiness to capture additional market share in Southeastern markets by leveraging experienced bankers and a granular deposit base.
- Management expects non-interest expense in Q3 2025 to remain stable or rise modestly, driven by continued robust production and merit increases.
- On securities yields, Stokes explained, "what we're putting on right now is coming in much higher than that, almost 4.75%, 5%" compared to maturing securities at 3.50%.
- The efficiency ratio improvement was attributed to operating leverage, with revenue growth nearly double that of expenses.
- The company stated that M&A would require a "very, very special" opportunity, indicating an ongoing reluctance to be distracted from the current organic growth strategy.
- Stokes clarified that anticipated net interest margin compression reflects pressure as loan growth picks up in the second half of 2025. while remaining confident in the company's ability to manage deposit costs dynamically.
- The increase in the investor office loan reserve to 3.8% suggests proactive credit risk management in sectors identified by management as requiring attention.
INDUSTRY GLOSSARY
- PPNR ROA: Pre-provision net revenue as a percent of average assets, indicating core profitability before loss provisioning.
- Mortgage Warehouse: Short-term lending to mortgage originators, secured by mortgage loans held for quick resale.
- Brokered CDs: Certificates of deposit sourced from third parties or brokers, often used to supplement traditional deposit growth.
- FHLB Advances: Short- and long-term loans from Federal Home Loan Banks, used by banks for liquidity and funding needs.
- Non-Performing Loan (NPL): A loan on which the borrower is not making interest payments or repaying principal as scheduled.
Full Conference Call Transcript
Palmer Proctor: Thank you, Nicole. Good morning, everyone. We appreciate you joining our call today. I'm very proud of our second quarter results, which again beat expectations and resulted in an increase in our return on assets, PPNR ROA, return on tangible common equity, and an improved ratio. As you can see, we remain focused on enhancing revenue generation and positive operating leverage. This is evidenced by our 20-plus percent annualized revenue growth in the quarter, which was almost double our expense growth and pushed our efficiency ratio to below 52%. Our margin continued to expand during the quarter, while we grew loans 6.5% annualized, which is within our mid-single-digit guidance.
Our 3.77% NIM remains well above most peer levels, particularly thanks to our strong 31% level of non-interest-bearing deposits. Capital ratios grew again in the quarter, which positions us well for future growth opportunities. Our strong second quarter earnings and capital generation increased our common equity Tier one to 13% and TCE to over 11%. We also saw improvement across the board in all aspects of asset quality. We grew tangible book value this quarter by 15.5% annualized, passing through the $40 level for the first time to finish the quarter over $41 per share. We now have $50 of tangible book value in our sights. We were active in repurchasing stock, buying back $12.8 million in the quarter.
Our CRE and construction concentrations remain low at 2.6% and 14.5%, respectively. Our strong loan growth is driven mostly by C&I. Deposits grew as well, but at a smaller pace. Non-interest-bearing deposits remained our core focus, with those balances growing over 3% annualized. Our bankers are well-positioned to take advantage of growth opportunities and disruption within our attractive Southeastern markets. In fact, production increased 29% from the first quarter, with this quarter having the highest loan production since 2022. Overall, we continue to stay focused on what we can control.
When I look out for 2025, I'm encouraged as we continue to benefit from a robust margin, a solid non-interest-bearing deposit base, a diversified revenue stream, strong capital and liquidity, healthy allowance and asset quality, a proven culture of expense control and positive operating leverage, experienced local bankers, and top Southeast markets, and obviously notable scarcity value given our size and scale in those markets, which allows us to take advantage of the banking disruption the Southeast continues to experience. Overall, I'm extremely optimistic for the remainder of 2025 and into 2026. I'll stop there and turn it over to Nicole to discuss our financial results in more detail.
Nicole Stokes: Great. Thank you, Palmer. We reported net income of $109.8 million or $1.60 diluted share in the second quarter, which is a notable 21% increase over the year-ago quarter. As Palmer mentioned, our profitability improved to levels well ahead of our recent past, with an ROA and return on tangible common equity both moving higher. Our efficiency ratio improved to 51.63% this quarter compared to 52.83% last quarter as we continue to focus on positive operating leverage, evidenced by our revenue growth of 20.9% annualized, well outpacing our expense growth. This quarter, our return on assets was robust at 1.65%. Our PPNR ROA was 2.18%, and our return on tangible common equity was 15.8%.
All of these profitability metrics remain top of class. Capital levels continue to strengthen, and tangible book value per share increased to $41.32 per share, which was a strong 15.5% annualized growth or $1.54 per share in the quarter. Our tangible common equity ratio increased to 11.09% at the end of the quarter, and we did repurchase about $12.8 million of common stock or about 212,000 shares during the second quarter. We have about $72 million remaining through October available to purchase. Our strong revenue growth was driven by increases in both net interest income and fee income.
Our spread income grew by $10 million in the quarter, or 18% annualized, and I'll note here that our average earning assets increased $564 million or over 9% annualized this quarter. In addition to that, our net interest margin continued expanding, up four basis points this quarter to a strong 3.77%. And remember, this margin is a core margin. We have zero accretion in that margin. The modest margin expansion came mostly from the asset side, with a three-basis-point positive impact in our loans and a one-basis-point from a higher bond yield.
The previous benefit to our margin from the lower funding cost has been fully realized, with our total cost of funds remaining flat during the quarter. We believe that we will see margin normalize above the 3.6% to 3.65% range over the next few quarters as we expect pressure on deposits as we see loan growth pick up in the second half of the year. We continue to be close to neutral on asset sensitivity. Non-interest income increased about $4.9 million this quarter, mostly from Better Mortgage. Our mortgage production grew 36% in the quarter to approximately $1.3 billion, and our mortgage gain on sale climbed five basis points to 2.22%.
Total non-interest expense increased $4.2 million in the second quarter, mostly driven by higher salaries and employee benefits, which related to the stronger mortgage production and our annual merit increases. As I previously mentioned, our efficiency ratio was strong at 51.63%. During the second quarter, our provision for credit losses was $2.8 million. Our reserve remained strong at 162% of loans or 408% of our portfolio NPL. Overall, asset quality trends were favorable, with non-performing assets, net charge-offs, and both classified and criticized all improving in the quarter. Our annualized net charge-offs improved 14 basis points. Looking at our balance sheet, we ended the quarter with $26.7 billion of total assets compared to $26.5 billion last quarter.
Loan growth returned with an increase of $335 million or 6.5% annualized, in line with our loan growth guidance. Loan growth was mostly from C&I loans this quarter, particularly mortgage warehouse and premium finance. Total loan production in the quarter was $1.9 billion, up nicely from last quarter's $1.5 billion of production. And deposits increased $20 million, with a continued seasonal decline in cyclical municipal deposits of $77 million offset by an increase in broker deposits of $82 million. We were able to grow non-interest-bearing deposits, increasing our percentage to 31% of total deposits from 30.8% last quarter. And our brokered CDs represent only 5% of total deposits.
We continue to anticipate loan and deposit growth going forward in the mid-single-digit range and expect that longer-term deposit growth will continue to be the governor of loan growth. With that, I'll wrap it up and turn the call back over to Wyatt for any questions from the group.
Operator: Thank you. We will now begin the question and answer session. Our first question will come from Stephen Scouten with Piper Sandler. Please go ahead.
Stephen Scouten: Yes, good morning. Thanks, everyone. I guess, maybe my first question would be around kind of loan growth trends, what you're seeing from your customers, maybe any sort of color into the pipelines and maybe within that, the mortgage warehouse lending, if this should be kind of a seasonal peak for that component of the loan book and how we should think about maybe the competition moving forward a little bit?
Palmer Proctor: Yeah. I'll answer that, Chris. This is Palmer in reverse order, but the mortgage warehouse, certainly there's seasonality to that. This was a very strong quarter for that. That being said, as it pertains to the other lines and pipelines and production, I think it's probably very reflective of what we're seeing in the market. There is a, I would call, a resurgence of activity. Much better than what we saw in the first quarter. And I think that we're hopeful that will continue throughout the remainder of the year and into 2026. At the same time, I think there's a bit of caution that still remains out there.
But our bankers are seeing more opportunities, certainly becoming more competitive, which is always a good sign of that increased competition in terms of activity. So I would expect that the third quarter would end up being very similar to the second quarter in terms of activities that we're seeing unless there's some unforeseen event that takes place.
Stephen Scouten: Okay, great. That's helpful. And then maybe thinking about, you know, kind of future growth opportunities, capital continues to build rapidly. You've said in the past kind of a measured approach to kind of how you would deploy that excess capital. But any kind of change in terms of maybe preferences, order of operations there? Whether that's new hires, potential M&A, additional balance sheet kind of remixing and the like?
Palmer Proctor: Sure. And I don't want to sound like a broken record, but as we've said all along, when I look at our bankers and how we're positioned in the growth markets we're in, we have got the right talent in the right place to execute on our plan. In terms of what we have, that doesn't mean we're not actively looking or won't look for new talent that comes in. We're, as you know, very consequential with talent and we expect it to produce. Year to date, when you look at our revenue generators, we've brought in about 64 new revenue generators. At the same time, we're very consequential moving out those that aren't generating revenue.
But what I see now is the opportunity to really accelerate because of how we're already positioned, not something we need to do to get positioned, but how we're already positioned in the key Southeastern growth markets. So I think when you look at the opportunities that are out there as it pertains to capital, our first and foremost is growing organically. And then after that, there's certainly, especially where we're trading today, I would tell you that stock buybacks aren't off the table because relative to where we trade today and the value we're creating, the stock is cheap in my opinion. Then also, we've got the dividend.
We increased the dividend before, so I don't see a whole lot of changes there. And then the proverbial M&A question, it would take a lot to distract us. It'd have to be something very, very special right now. We're firing on all cylinders and so to distract us with something like that, as well-positioned as we are on a go-forward basis, I think we will remain focused as we have been for the last five and a half years on organic growth.
Stephen Scouten: Great. And maybe just one follow-up, everyone now is talking about team lift-outs or, you know, new hires versus maybe M&A in the past. How do you differentiate yourself, and how do you convince people to come to Ameris versus, you know, XYZ Bank that might also be trying to bring that banker?
Palmer Proctor: Yeah. I think what sells people on our model is we're focused on market share, not just having a pin on a map. So when you look at the density we have in a lot of our key growth markets, they like to see that we've got an organic engine that can grow. And in today's world, they like an environment that's not as volatile in terms of the work environment that they're in. Our plans are very clear, especially for the revenue generators on the core banking side. It's very heavy on the deposit side focus relative to a lot of peer plans.
And so they come in with clear expectations, and those expectations also allow them to understand that they need to deliver. And if they deliver, they're well compensated for it. If they don't, we try and do what we can to coach them up. But I think it all comes down to accountability here. But I think, you know, to be able to work for a company that's been around for fifty years, it's got a clear business model, there's not any noise out there, and you can go ahead and focus on what you need to focus on and not get distracted by a lot of changes. That's probably the biggest selling point we have in today's market.
Stephen Scouten: Perfect. Thanks for all the color. Congrats on a fantastic quarter.
Palmer Proctor: Thank you.
Operator: Our next question will come from Catherine Mealor with KBW. Please go ahead.
Catherine Mealor: Thanks. Good morning. Good morning. Maybe talk about the margin and maybe the balance sheet. I think it's just circle back first on the balance sheet side, I noticed that you added some securities this quarter. And so curious, you've talked about mid-single-digit growth in loans, that was so great to see this quarter better than I had expected. But in terms of the bond book, do you expect to continue to build that through the back half of the year or as loan growth improves, does that kind of pare back a little bit?
Nicole Stokes: Catherine, we like the optionality that we have there. And this is kind of what I would call the tail end of that strategy of going back and not getting into the bond book and having the AOCI issue several years ago. So, we still historically we would be about 9% of earning assets pre-pandemic would be in our bond portfolio. So we could still add about another $200 million to the portfolio to get there. Could add another $400 million to get to about 10%. So we like that optionality we have there. That we have both the loan book that we can grow and the bond book.
So I would definitely say that we could do go either place. What we do have also in the rest of the year, we have about $71 million that's going to mature out and that's coming out at a 3.50% rate. And, you know, what we're putting on right now is coming in much higher than that, almost 4.75%, 5%. So as we're circling that out, we like doing that in the bond book. And if we have some opportunities to put some 4.75%, 5% bonds in there, with a good duration, we'll capitalize on that opportunity when we see it.
Catherine Mealor: Great. That's super helpful. And then maybe then circling back to the margin, you had another margin beat in your guidance for that to be, I think you said normalize above the 3.6% to 3.65% range. Just because of deposit costs. So I guess I'm just kind of curious your view on deposit costs, maybe how we think about that in a stable rate environment. So maybe in the third quarter, we don't see rate cuts this quarter, it seems like you still think that will increase a little bit this quarter. And then how you're thinking about deposit costs as we start to see cuts?
Nicole Stokes: Yes. So, assuming the Fed stays flat, we don't see any cuts. I just feel like there's going to be some pressure on that deposit cost. Everybody is talking about loan growth in the second half of the year. So I think as we start to see that loan growth demand pick up, we're going to see just as much demand because everybody's going to be competing on the deposit side. So when you look at the second quarter, we brought in our interest-bearing came in at 2.99% kind of spot production for the quarter and that's compared to a book of 2.83%. So we already see that new production coming on a little bit higher than the current mix.
And I just think that's going to get more aggressive and more pressure as we see the loan growth demand come in. And then assuming that the Fed did cut, we think that we would be just as aggressive as we have been in the past on reducing those. So if the Fed were to cut, I think we could maybe see a little bit of bump in the margin. Just from getting that head getting ahead of the curve there on the deposit side. Knowing that the loan side would eventually catch up, but we could see a small little pop if the on the deposit side if the if the Fed cuts.
Catherine Mealor: Okay. Great. Very helpful. Great quarter, guys. Appreciate it.
Nicole Stokes: Thank you.
Operator: Our next question will come from David Feaster with Raymond James. Please go ahead.
David Feaster: Hi, good morning everybody. Good morning, David. Good morning. Just wanted to follow-up maybe on the commentary on the growth side. It sounds like the increase in your origination activity that you saw this quarter is really more of a function of your bankers being increasingly productive and gaining share versus, you know, real improvement in demand. Is that a fair characterization? And then was hoping you could elaborate too on your commentary on the competitive landscape. Are there any segments or markets that are notably challenging? And whether competition is primarily centered on pricing or have you seen competition shift towards more underwriting structure and standards too?
Palmer Proctor: Yes. I think it depends on the business line. I would tell you across the board, we're seeing more activity. And I don't know if it's think it's more of a reflection of customers and prospects becoming more active. Our bankers have been out actively calling. So it's not like anybody was sitting on the sidelines. I think people are just now moving forward with whatever initiatives they've got, especially in that middle market space. And along those same lines, the middle market type lending, the nice thing about our company is we've got the scale and the size to do what we need to do in terms of accommodating borrowing needs, treasury management needs.
So we focus heavily especially on treasury management calling. That's been very helpful on our deposit growth. But I would tell you there is a lot of competition out there and it's starting to go beyond pricing now. There are some structural changes that we're starting to see out there with people getting aggressive. Nothing crazy, but it is different. And so I think that's a sign just that more people are needing that growth, wanting that growth. And fortunately, hopefully, it will continue to come as we look out and look at the pipelines that we see.
If you break ours down by vertical, clearly, equipment finance and the premium finance, mortgage warehouse has done well, retail mortgage volume just due to rates has been a little bit subdued. But if we see some rate improvement towards the end of the year there or next year, that's certainly something that we can ramp up very quickly and capitalize on. Our focus on deposits and leading with deposits. So I would kind of give it an overall more positive outlook for going into the third quarter than what we had seen obviously in the first quarter. Does that answer your question?
David Feaster: Yep. No. That's super helpful. And then maybe, Nicole, as you talk about that 3.60% to 3.65% margin guide, is that purely a function of higher marginal funding cost to support the growth? Or does that incorporate any Fed cuts in that? And just kind of how do you think about the timeline of hitting that range? Is that kind of a step change that you would expect here in the third or fourth quarter? Just kind of curious some of your thoughts on that.
Nicole Stokes: Yes. So that assumes no rate cuts. That kind of is a flat environment. And like I said, if we if the Fed did cut, we could actually see a little bit of bump because we feel like we would be aggressive on the deposit repricing side. And then eventually the loans would catch up to us. That 3.60%, 3.65% guide is over the longer term. So I don't think that's a sudden drop in the third or fourth quarter.
I think that's just a longer-term margin guide looking out eighteen months or so to say that we feel like there's going to be some deposit pressure as we see the loan growth come back and there's going to be again that competitive pressure. So I think we're going to see some pressure on the deposit side paying up. We might see a little bit on the loan side as well as people get competitive for that. So I just I think that we're gonna get it squeezed a little bit. And that we're in a spot to compete with a margin as strong as we have if we give up a little bit for the growth.
We continue to focus on the growth in net interest income and then the growth in earning assets.
David Feaster: Okay. And then maybe just last one, just touching on the mortgage segment, nice to see the seasonal increase still primarily purchase driven. Just kind of curious maybe some of the underlying trends you're seeing there. How and how your capacity is today? I know you've made a lot of efficiency improvements. But how's your capacity today if we do get a refi wave as rates potentially decline? We've seen what that can how quickly that can move. And then just any thoughts on the gain on sale side as we look forward?
Nicole Stokes: Sure. So for mortgage, I would say that the third quarter, I would see it being consistent with the second quarter, maybe down a little bit, just some of the trends that we're seeing. But when I say a little bit, 5%, 10% down on we've seen the gain on sale pick up from that $217 million to the $222 million. I think kind of we've we've seen that kind of hold. I mean, we're only, you know, three weeks in, but assuming that kind of holds in that $2.15 to $2.25 range. And then as far so I think we'll third quarter will be consistent with second quarter.
As far as what we could do if we saw refi boom, our team's ready to go. You know, we don't need to add people, and we've got the resources that if a refi boom were to happen, rates come down and we see that opportunity, our folks are ready to go with it.
Palmer Proctor: David, as we've said, the nice thing about mortgage, when you look at the profitability of it, it stands today relative to peers, it's it's really phenomenal how well they've done. And this is kind of a baseline, so any improvement we get in rates from here would just be icing on the cake.
David Feaster: Got it. That's helpful. Thanks, everybody.
Operator: Our next question will come from Russell Gunther with Stephens. Please go ahead.
Russell Gunther: Hey, good morning guys. Good morning. I had a margin follow-up question to start, please. Nicole, it'd be helpful to get a sense for the cadence of the NIM over the course of the quarter from that kind of 3.69% in March start to where we ended up at 3.77% and, if possible, any commentary on where the June one shook out?
Nicole Stokes: Yes. So the margin was kind of growing throughout the quarter. It was just a steady growth month over month. And then for the month of June, there were some anomalies. So I hate to give this number out because it was higher than the 3.77%, but there were some anomalies in that margin. So kind of bringing me back to saying kind of that flat 3.77% margin maybe a few basis points up or down in the third quarter, but eventually over the long term, being willing to give up a little bit of our margin to get the growth.
Russell Gunther: Okay. That's very helpful. I appreciate the color. And then switching gears back to sort of the loan growth side. You guys mentioned strength in equipment finance. It'd be helpful to get a sense for where those related loan balances are this quarter versus last. Similarly on the charge-off front? And then what your related balance sheet growth versus gain on sale expectations are there?
Palmer Proctor: On Balboa, we ended at about $1 billion. Sorry, Equipment Finance about 7.2% of our loans. The charge-offs overall for the company, which equipment finance has contributed to, once we retool their credit box in 2023, it's performed as we expected. And for the last rolling four quarters, we now have that in the target range that we were seeking for equipment finance, those charge-offs.
Russell Gunther: Okay. Got it. And then just last one for me. Great expense results, both this quarter and on a year-over-year basis. Efficiency ratio lower on both those data points, Nicole, it'd be helpful to just get a sense for how you're thinking 3Q looks from a non-interest expense perspective.
Nicole Stokes: Yes. I think 3Q, when you think about what the bump in second quarter compared to first quarter, really related to that increased production in mortgage. And so if we see that production come in consistent, those expenses should be consistent. And then we have the merit increases that we go into effect April 1 for us. We had a full quarter of merit increases. So I see the third quarter being consistent with the second quarter. I think consensus has it bumping up just a little bit. And I think that kind of makes sense. That's reasonable to me.
So I would say somewhere, you know, in that $156 million to $158 million, which is right kind of where consensus is. And consistent with the second quarter.
Russell Gunther: Alright. Absolutely. Thanks.
Operator: Our next question will come from Christopher Marinac with Janney Montgomery Scott. Please go ahead.
Christopher Marinac: Hey, thanks. Good morning. Nicole and Palmer, I want to dig into the deposits, I think it's Slide 11 in terms of just the numbers of accounts as well as sort of the average. What's the right way to think about that over time? Not just quarter to quarter, but thinking of it from last year and the prior year, you've been giving us this data for a while.
Nicole Stokes: Yes. No, we have been very consistent. I think that's one of the things that we probably don't brag on ourselves enough about is our very, very granular deposit base. And that, that you don't get this kind of deposit base overnight. This is a fifty-year history franchise of growing our deposits. And when you look back at our deposits, we did a kind of back look of how many have been since the Fidelity acquisition, how many came in from Fidelity, and then how many prior to that. And we have a really, really strong core deposit base that has been here for a long, long time.
Even through our acquisitions, those have had a long history and we've been able to retain those deposits. So I think this is very, very consistent with the very granular deposit base that we've had. This is not a new thing.
Christopher Marinac: Great. And do you think that the pace of deposits will look different the next couple of quarters? I know part of the margin guide kind of implies that. So just trying to think about if we should see an acceleration in the next few quarters.
Nicole Stokes: We continue to look and lead with deposits. And I'm so proud of our bankers for that, that we don't just have loan officers, we have bankers. That they're asking for the deposits and growing deposits. So I think the big question there for us is, we know that we can grow deposits, but at what rate can we grow deposits? And then really we've been so focused on the non-interest-bearing and to have 31% of our franchise in non-interest-bearing, the question is, can 31% of our growth be in non-interest-bearing? So while we continue to focus on that growth in non-interest-bearing, the percentage to the total may change a little bit.
Then obviously coming in kind of the end of the third quarter into the fourth quarter, we have all those cyclical municipal funds that flow back in. So that always kind of makes us look a little bloated on deposits at the end of the year. But again, we remain focused on growing deposits. And we have some runway with FHLB advances or brokerage CDs. There are brokered CDs or only 5% of our funding. But we really focus on growing those core deposits and that's definitely the goal is to continue to grow that. Hence, why my guidance is that we are willing to maybe pay up for that growth if we need to.
Christopher Marinac: Okay, great. Thank you for that background. That's great. I had a question on the reserve. Just curious if there's any qualitative changes, some of the factors behind the scenes this quarter or some of those possibilities as drivers of your reserve in the next several quarters?
Nicole Stokes: Yes, Chris. We did add a little bit of a Q factor as it relates to investor office and the office slide. We now have that reserve at about 3.8% for that sector now.
Christopher Marinac: And then in general, given just the low level of charge-offs and overall low level of criticized, does that give you flexibility to simply grow into the reserve? Or do you think of it any differently?
Palmer Proctor: No, we do. I mean having a robust reserve, which we do at the $162 million, we would consider that among top of class amongst our peers. And you look at it through two different lenses. One, the offense strategy and that we grow into it, which is what we want to do. But if you turn into a credit cycle, it's there as a defensive position as well.
Christopher Marinac: Great. Thanks for taking all of our questions this morning.
Palmer Proctor: Thank you, Chris.
Operator: Our next question will come from Manuel Navas with D.A. Davidson. Please go ahead.
Manuel Navas: Hey, getting back to that kind of long-term NIM range of $360 million and $3.60 to $3.65, you're to sit above it for some time. What could bring that range higher? Is this just like a steeper yield curve, success on deposits? Just kind of some of the drivers there.
Nicole Stokes: I'll go with all of the above. So, yes, I think that success on the deposit side would absolutely drive it higher. If the Fed cuts and we are able to reduce the deposit side as we typically would or historically would, that would give us a little margin pop. And then also right now, all of our growth is margin accretive right now. When you look at the second quarter, what our loan coming on rate loan production rate versus our deposit production rate, all of our growth is margin accretive. But I'll tell you for this quarter, if you look at our loan rate of 6.76% kind of all in production, and our interest-bearing deposits were at 2.99%.
So that's right at a $377. So really what is going to drive that is that growth in non-interest-bearing deposits. So if we get the growth in non-interest-bearing deposits that brings down our total production of deposits, that's really what could also kind of help the margin there. But we are still proud to say that our growth is margin accretive at this point.
Manuel Navas: I was going to ask you about loan yields. I appreciate that. Description of the marginal NIM. How are non-interest-bearing pipelines right now? Know they're lumpy. It's hard to project, but just kind of some thoughts on that side of the deposit base.
Palmer Proctor: Yes. I would tell you that they're accelerating. It's very similar, kind of mirrors our loan production. And a lot of that, as I mentioned earlier, is attributed to our treasury management efforts. In addition, obviously, to the bankers. But we're seeing more and more opportunities. And as of recent. So I would tell you that we're encouraged by what we're seeing as we move into the second half of the year.
Manuel Navas: Alright. Appreciate that. The securities yield increase, was there a tip, like, a one-time adjustment, anything securities, or is that just you're adding those higher-yielding securities this quarter?
Nicole Stokes: That is adding our securities. So during the quarter, we bought about $200 million that came on at a $4.88 and we matured out about $260 million that was at a $2.77.
Manuel Navas: Perfect, perfect. I appreciate that. Thank you for the commentary.
Nicole Stokes: Sure.
Operator: This will conclude our question and answer session. I would like to turn the conference back over to Palmer Proctor for any closing remarks.
Palmer Proctor: Great. Thank you, Wyatt. I want to thank all of our teammates for another outstanding quarter. We remain focused on producing top-of-class results, growing our tangible book value per share, and maintaining our strong core deposit base. We are very well positioned to take advantage of future growth opportunities in our Southeastern markets, and we certainly appreciate your interest in Ameris Bancorp.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.