Ameris Bancorp (ABCB) Q3 2023 Earnings Call Transcript

Ameris Bancorp (NASDAQ:ABCB) Q3 2023 Earnings Conference Call October 27, 2023 9:00 AM ET

Company Participants

Nicole Stokes – EVP & CFO

Palmer Proctor – CEO

Jon Edwards – EVP & CCO

Conference Call Participants

Brady Gailey – KBW

Casey Whitman – Piper Sandler

Chris Marinac – Janney Montgomery Scott

Kevin Fitzsimmons – DA Davidson

Russell Gunther – Stephens

Brandon King – Truist Securities

Operator

Good morning, everyone, and welcome to Ameris Bancorp’s Third Quarter Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note today’s event is being recorded.

At this time, I’d like to turn the floor over to Nicole Stokes, Chief Financial Officer. Ma’am, please go ahead.

Nicole Stokes

Great. Thank you, Jamie, and thank you to all who have joined our call today. During the call, we will be referencing the press release and the financial highlights that are available on the Investor Relations section of our website at amerisbank.com. I’m joined today by Palmer Proctor, our CEO; and Jon Edwards, our Chief Credit Officer. Palmer will begin with some opening general comments, and then I’m going to discuss the details of our financial results before we open it up for Q&A.

But before we begin, I’ll remind you that our comments may include forward-looking statements. These statements are subject to risks and uncertainties. The actual results could vary materially. We list some of the factors that might cause results to differ in our press release and in our SEC filings, which are available on our website. We do not assume any obligation to update any forward-looking statements as a result of new information, early developments or otherwise, except as required by law.

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

And with that, I’ll turn it over to Palmer for his comments.

Palmer Proctor

Thank you, Nicole, and good morning, everyone. I appreciate you taking the time to join our call today. I am proud to talk about our solid third quarter financial results that we reported yesterday. This quarter really was a testament to our discipline and core profitability, and it’s what creates the positive outlook we have for the future.

So for the third quarter, we reported net income of $80 million or $1.16 per diluted share. Because of these strong core earnings and the minimal impact to AOCI from our bond portfolio, counter to most of the industry, we grew tangible book value by over 12% annualized and moved our TCE ratio to above 9%.

We recorded $24.5 million in provision for credit losses, bringing our coverage ratio up to 1.44% of loans and 420% of portfolio NPAs. This provision was model driven and not related to credit deterioration as our credit metrics actually improved once again this quarter. Our net charge-off ratio improved to just 23 basis points, and our NPA ratio, excluding Ginnie Mae’s, improved to 27 basis points.

On the balance sheet side, assets declined slightly as expected this quarter to $25.7 billion from $25.8 billion last quarter. Deposits or, as I should say, core deposits increased to $147 million, while loans declined by $271 million, all within the mortgage warehouse lines as we had expected and discussed last quarter. We’re still lending, but we are being more discerning and deliberate with our pricing and structure. And because of these shifts, our loan-to-deposit ratio actually improved to 98% and our loans plus securities deposits improved to 106%.

Brokered CDs remain relatively flat, and we successfully reduced our FHLB advances by $325 million this quarter. We continue to be well capitalized and feel comfortable with our capital and our dividend levels. We also announced yesterday the approval of another $100 million share repurchase program through October of next year. We have a strong balance sheet with diversified earning assets in some of the strongest markets in the Southeast, along with a healthy allowance for credit losses to absorb potential economic challenges.

We remain focused on core profitability and balance sheet management, and this focus includes core deposit growth, controlled asset growth, stable margin, expense control and tangible book value growth. And I’m extremely proud of our team and the financial results for the quarter, and I’d be remiss, if I didn’t take time on today’s call to thank each and every one of our teammates for their contribution to our success.

With that, I’ll turn it over to Nicole to discuss our financial results in more detail.

Nicole Stokes

Great. Thank you, Palmer. As he mentioned, for the third quarter, we’re reporting net income of $80.1 million or $1.16 per diluted share. Our return on assets was 1.25% and on a pre-provision pretax basis, our PPNR ROA was just over 2%. Our return on tangible common equity improved to 14.35% for the quarter. We ended the quarter with tangible book value of $32.38, that’s an increase of $0.96 or 12.2% annualized.

Our tangible common equity ratio, as he mentioned, increased to 9.11% at the end of the quarter compared to 8.80% at the end of last quarter. We’ve said for several quarters or actually probably several years that our capital goal was to get to 9% TCE and we finally did it. On the revenue side of things, our interest income continues to increase. We were up about $8.6 million this quarter to $330.6 million. But again, due to rising deposit costs, our net interest income declined slightly, just about $1.8 million down to $207.8 million for the quarter.

Our margin came in higher than anticipated at 3.54%, down just 6 basis points from the 3.60% reported last quarter. All of this compression was really due to money market rates and that data catch up on money market rate. And our year-to-date margin remained strong at 3.63%. That’s only 4 basis points of compression from last year’s 3.67% for the first nine months. We’re really encouraged by the fact that the pace of rising deposit costs slowed significantly in the third quarter, as interest-bearing deposit costs only increased 33 basis points this quarter, while last quarter, it was increased 82 basis points. So we see that slowing.

We continue to be very close to asset liability sensitive neutral, which positions us well for the next to that decision. Whatever that, whether that’s a move or not. We’ve updated the interest rate sensitivity information on our presentation, Slide 11. Non-interest income decreased to about $4.2 million for the quarter. That was all in the mortgage division, that was about an 11% decline in mortgage revenue. Production declined slightly to about $1.2 billion and the gain on sale margin came in right at 2.15.

And then I save the best for last, that expense control and efficiency ratio. Total non-interest expense decreased $7 million this quarter, almost all in the banking division, and that is highlighted on Page 10 of the investor presentation. This drove our adjusted efficiency ratio down to an impressive 52.02% for the quarter, an improvement from the 53.41% last quarter.

I wanted to take just a minute to talk about expense control. It’s not an initiative around here. It really is a discipline and a part of our culture. We continuously look for ways to be more efficient, and we make sure that, that next dollar spent is spent in the right way. As an example, if you look at our headcount, we’ve reduced our head count by 3.5% over the past year through diligent analysis and the rehiring and staffing model and without announcing major layoffs and without disruption to move round.

I want to close by reiterating how focused we are on discipline and core fundamentals as we look forward to 2024 and beyond.

And with that, I’m going to turn the call back over to Jamie for any questions from the group and we really appreciate everyone’s time today.

Question-and-Answer Session

Operator

Ladies and gentlemen, at this time, we’ll begin the question-and-answer session. [Operator Instructions] Our first question today comes from Brady Gailey from KBW. Please go ahead with your question.

Brady Gailey

Hey. Thanks. Good morning, guys.

Nicole Stokes

Good morning, Brady.

Brady Gailey

So the net interest margin has really held in quite well, especially relative to peers. Maybe just talk about how you’re thinking about the margin into the fourth quarter and maybe into 2024 and maybe hit on non-interest-bearing. Non-interest-bearing deposits were down just a little bit. 32% is still a great level, but how does that factor in the how you’re thinking about the margin?

Nicole Stokes

Sure. Great. No, I think those are all tied together for sure. So first, kind of I’ll talk about the margin. And as I mentioned in my prepared remarks that the whole 6 basis points of compression really was money market, the change in money markets. We had a positive move from our deposit mix for the first time this quarter that actually was about 2 basis points up.

But then we had some asset sensitivity kind of some one-off compression from some sound counterintuitive about paying off the home loan bank advances, you lose the dividend and the kind of some one-offs there that kind of offset that positive move from the deposit mix that was kind of overshadowed by that money market data.

So when I think about margin going forward, I’m very cautious to say that we’ve troughed. I know a couple of banks have said that they feel like we trough. I’m not ready to declare victory yet, and I’m not ready to say that we trough. But certainly a 6 basis point compression compared to what we thought. We were pretty excited about that.

And I think really, when I think about margin guidance, there’s probably three components. Typically, when we give margin guidance, we look at our model and we give very specific. And I think there are some behavioral issues this right now that affect margin more so than what the asset liability model does. And the first one being kind of that non-interest-bearing mix and how much of our non-interest-bearing moves to interest-bearing.

And we certainly saw that slow this quarter. We were 33% last quarter, 32% this quarter. When you kind of go back and you look post-Fidelity pre-COVID, where were we? And I went back and pull those numbers and yet September of ’19, we were at 29.9%. December of ’19, we were at 2.9% and then March of 2020, we were at 30.5%. So I really do feel like somewhere between the 30% and the 32%, 33% is where we stabilized. I kind of said that now a quarter or two, and I still believe that to be true to being the customer behavior that we saw this quarter.

And then the second part of margin guidance going forward would really be that incremental growth. When were — we’ve said that we’re going to, use core deposit growth as a governor for loan growth. So that really comes down to the question of, if we grow core deposits, can we grow 30% of our — or 32% of our core deposit growth being in noninterest-bearing next year?

We think we can, but obviously, that can tweak that mix down, somewhere in that 29% to 30% where we’d like to keep it more in that 30% to 32%. And then the third piece that’s affecting margin is what I would call competitive behavior, and we’ve seen that certainly stabilized. We’ve seen some of the erratic high customer deposits. Our competitor deposit rates kind of stabilized.

So having said all that, the summary version is, I would expect a little bit more compression. I think I said last quarter and I still agree with it that if we can come out of this cycle above 3.50% that would be a huge victory and we still have a very strong margin compared to peers, so.

Palmer Proctor

And Brady, to your question on non-interest bearing, there’s two sides of the equation. One is retention of existing accounts and then the other is focusing your efforts on attracting new deposits, non-interest bearing deposits. So when you look at our — whether it’s our incentive plans or our treasury management efforts, or our commercial banking efforts, those all are and had been centered around that. So, I think that helps mitigate some of the additional downside that we are not feeling but some others are at this point.

Brady Gailey

Okay. All right. Then moving on to expenses. I mean, Nicole, as you said, great expense control with expenses down like quarter in 3Q. How are you thinking about expense creep as we head into 4Q and next year?

Nicole Stokes

Yeah. So there is M&A. I hope everybody saw that in the presentation that we did have part of the expense control or the reduction expenses was actually a gain on a piece of Oreo. That was about $1.5 million credit or benefit that I don’t necessarily expect going forward. And so I think that has to be added back almost immediately.

And so if you look at kind of our year-to-date run rate of about $429 million, if you annualize that, that kind of comes to us about $574 million. That leaves about $145 million — $144.5 million, $145 million for the fourth quarter. I think that’s right where consensus has us and I think that’s about right. And then if you take that, I think I’ve guided at 3% to 5% increase in expenses excluding mortgage for next year.

So if you assume mortgage production is flat and you say mortgage expenses are flat and you kind of take that out, kind of a 3% growth on that is about $590 million, that’s right in line with current consensus. So I think my messaging on expenses has been well received or understood and everybody’s model, it kind of that 3% to 5% expense growth that I mentioned last quarter, I still think that kind of 3% to 4% is about right.

If you want to break it down a little bit further, I think salaries and benefits is probably 3% to 5%. Everything else is 2%. So that kind of blends out to be about a 3% total increase in expenses next year, which I think is in line with the current consensus.

Brady Gailey

All right. That’s helpful. Then finally for me, you hit 9% plus TCE. The stock is cheap at 11% (ph) tangible book value. You’ve repurchased a little bit of stock year-to-date, but not a ton. I mean, should we think about the buyback becoming a little more active here or do you think there is still in capital, growth mode?

Palmer Proctor

Well, I would tell you that we, kind of remain opportunistic in that regard. And that’s why we’ve renewed the program, obviously. And if and when we feel appropriate, we will certainly take advantage of that.

Brady Gailey

All right, great. Thanks for the color, guys.

Operator

Our next question comes from Casey Whitman from Piper Sandler. Please go ahead with your question.

Casey Whitman

Hey. Good morning.

Nicole Stokes

Good morning, Casey.

Casey Whitman

Hi. Okay. So Palmer, appreciate that there was some seasonality this quarter in just the warehouse balances. But can you speak to sort of how you’re seeing loan growth in this environment? Do you see that slowing a bit, just an update as to where you see growth over the next year or so?

Palmer Proctor

Yeah. Casey, I think with all banks, which you’ve heard is just kind of, as I mentioned earlier, people just being more discerning, and then obviously the opportunity that the industry has right now is to really take advantage of the upside of rates on the asset side of the balance sheet due to the rapid increase we’ve seen on the liability side. So we’re kind of utilizing this time to reprice accordingly to hold margin and build margin as we go forward.

And I think that we’re being far more selective in our credits, obviously, we’ve said from the very beginning that we’re not going to allow our loan growth to outpace our deposit growth and that discipline will continue, and obviously, when you take that approach, it will slow down growth. But what it does allow you to do is the growth you have is, in my opinion, it’s better priced, it’s stronger credits even in an environment like today and that’s kind of a mode that we will continue with as we go forward.

Mortgage volume will obviously pull back, we pulled back intentionally on CRE, and you’ve seen that, that loan deposit ratio pulling back. So I think you’ll continue to see that discipline for the remainder of the year.

Casey Whitman

Okay. Are there particular markets that you’re in where you’re seeing more opportunities or less opportunities than others or is it pretty broad-based across your footprint?

Palmer Proctor

Well, for us, Atlanta has always been a consistent performer. And then we’re seeing a lot of opportunities in our Florida markets too and the Carolinas. And so if you looked at the opportunity, I’d tell you that probably Tampa and Jacksonville are some real bright spots for us in addition to certain pockets of the Carolinas. And then Atlanta has always been kind of our stable provider of a lot of activity. So I think those are probably the primary opportunities as we look out and look forward.

Casey Whitman

Okay. Just a quick — one credit question, can you just talk about what you’re seeing in that watchlist bucket? It looks like there are some assisted living in there. Is there any office in there, just sort of, can you give us any color on the watch list which I appreciate didn’t move much this quarter, but maybe you can give us would be helpful. Thanks.

Jon Edwards

Yeah. Casey, we did add that just to see if that would help to kind of give you a little bit, I mean 85% of the watch list is in those six categories there. So as far as office is concerned, specifically, there’s really just one non-owner occupied credit. It’s on the watch list. And, in the non-accrual bucket, right now it’s $3.6 million.

So it’s not really anything to speak up, and those being the top five or six that we noted there, we didn’t see an office category because it’s not on there. So the ALF has been and I think I mentioned it, may be starting in the first of the year is we had some downgrades in that category.

And so we’ve got really kind of two larger deals on there that’re on the watch list. At least one of which I have pretty good confidence, it might correct itself, or be paid off actually this quarter. But, yeah, we’ve had a little bit of stress on the ALF side in that but that watchlist for ALF has kind of been there now for about nine months or so.

Casey Whitman

Okay. Thank you. Great quarter.

Palmer Proctor

Thank you.

Operator

Our next question comes from Chris Marinac from Janney Montgomery Scott. Please go ahead with your question.

Chris Marinac

Thanks, good morning. Wanted to go a little deeper on the C&I net charge-offs. And first, I just wanted to clarify. Can we adjust those charge-offs for the one equipment finance loan that was called out and then what would be, I guess, a good run rate for general C&I losses going forward?

Jon Edwards

Well, the C&I losses, that is where the equipment finance loans roll up. So pretty much everything that you see in there is related to the equipment finance group and to say one loan if you took that away from the slide deck, Chris, that is probably my fault, because it was a group of pre-acquisition loans that the extraordinary items were a group of pre-acquisition NPAs that we had acquired at the merger.

So we had determined that, we’ve kind of reached a bit of our end on the near-term collections on some of those. And so we went ahead and took the losses on that this quarter, it was about $3.2 million. So the run rate for the rest of equipment finance, and really the C&I was about mid-eights and that is consistent, pretty much with what the year has been like. So far in ’23, I think that is as we’ve talked about before, a bit on the high side as far as the long-term average for the Equipment Group. And so, I do expect that to kind of add back some as we go into next year.

Chris Marinac

Great, Jon. That’s very helpful. Thanks for that detail. And is the equipment finance group growing at a similar pace as the last few quarters, or would you look for that pace to change in the next year?

Jon Edwards

Well, it is moderated some in the last couple of quarters. As Palmer said, it’s big picture is that we’re not going to let the loans outpace deposits and so that is across the board. The decline in loans that happened during the quarter, especially in the mortgage warehouse lines kind of took the denominator down. So it looks like that the portfolio is a greater percentage of the whole now because it’s up to 6%, but that’s really just sort of end-of-period numbering. It’s still, not outpacing the growth of the whole portfolio when you look at it a little bit better than just that one day in time. So, it’s going to be pretty much the same kind of growth that we see in the whole portfolio.

Palmer Proctor

Yeah, Chris. We’re not looking to accelerate that growth, if that’s your question in that particular sector. But above and beyond what it already is.

Chris Marinac

Okay. Great. And then just one quick expense question. As you think about expenses next year, should we see a handful of new branches as you continue to look for new deposits?

Palmer Proctor

We’re all about branch optimization and a lot of that has to do not necessarily with closing branches, opening new branches, but we may repurpose some in terms of relocating to better locations and so be more optimization in that regard. There are a couple of markets where we clearly have a void in branching, in our Tampa market, for instance, we need a little more presence there. But other than one or two branches, I wouldn’t expect much in that regard.

Chris Marinac

Great. Thanks for taking my questions.

Palmer Proctor

Thank you.

Operator

Our next question comes from Kevin Fitzsimmons from DA Davidson. Please go ahead with your question.

Kevin Fitzsimmons

Hey. Good morning, everyone.

Nicole Stokes

Good morning, Kevin.

Kevin Fitzsimmons

Just it seems like, I don’t know if it’s three or four quarters, it seems like a number of quarters in a row you guys have, it seems like from our vantage point have been deliberately or proactively building the reserve, so sacrificing some of your near-term earnings to do that. And I’m just curious what your outlook. I know there’s the model and there the inputs to model, but there’s also with, from a top-level point of view, where you want to take that ultimately?

And I’m just curious how many — if things kind of stay where they are right now and we don’t have any massive shift, do we have more quarters of building the reserve ahead of us or are you getting close to a point where you’re getting comfortable with what you see out there today? Thanks.

Jon Edwards

Well, Kevin, I would say that as you pointed out that it is model-driven and therefore, we are following the forecast models that we look at. The part of the answer I think was found in the third quarter actually, because the provision was half or thereabouts what it was in the second quarter. So that in and of itself tells you that the forecast we’re moderating the level of change, which is what really creates reserve one way or the other is slowing. So it seems like that you want to kind of envision a hockey stick, maybe that’s the way it’s sort of began to look in the third quarter.

So I think that, I wouldn’t anticipate that it would be, back to the level it was in the early part of the year, given that kind of forecast model, but, things in the world changing and, if things do have a tenancy to change, but as it stands right now, I would anticipate that we’re kind of moderating from the high levels early in the year.

Kevin Fitzsimmons

Okay. Great. That’s helpful. And then just a follow-up on the margin. I totally understand that, Nicole, you’re not wanting to declare victory on calling a trough but if we, say we’re getting close to that maybe, we have some, moderating pace of compression, maybe, call it the next quarter or two. As we look into ’24, do we hit a point in early ’24 in your view, where the fixed asset repricing should start to outpace the rising deposit costs? And I know a lot of that hinges on does that noninterest-bearing shift really slow down and come to a halt. But assuming that slowing also, do we anticipate kind of modest margin compression maybe starting in the second quarter through ’24?

Nicole Stokes

So I would guide that there is some stabilization, absolutely. And I think you said, there is some mild compression after the second quarter. And I’m not necessarily saying that there’s more compression coming, but there may not be a lot of expansion coming. So I think it stabilizes and kind of in that higher for longer mentality it stabilizes and then again a lot of that has to do with competitors and if there are some sort of liquidity issue, that all of a sudden starts driving — not liquidity issue with us, but the liquidity issue in the market or with other competitors that causes, people to start paying off for those deposits, it could — we could certainly see the trickle effect.

But from a repricing standpoint, we’ve got 36% of our loans that repriced within the next 12 months. And so there is definitely some upward movement on the asset side that should help, I just been very hesitant because of what we’re seeing on the deposit side and some erratic competition.

Kevin Fitzsimmons

Okay. But it sounds like you’re saying that’s really going to serve to help keep it stable, not necessarily outpace it over the course of ’24. Is that fair?

Nicole Stokes

Yes. That is fair and that is absolutely the goal and the target.

Kevin Fitzsimmons

Okay. Great. And just — Palmer, just throwing one out there. I know there hasn’t been a lot of M&A activity, and obviously, you guys are not in this situation that a lot of banks are in terms of having the bond portfolios quite underwater and that slowing down activity. But how — what’s your view on that in terms of, the pace of conversations, your interest, your appetite, [Technical Difficulty] anything happening over the next year or two?

Palmer Proctor

Yeah. I think over the next year or two, you’re going to see, a wave of consolidation. We’ve got a couple of deals announced just recently as in the industry and I think you’ll continue to see that accelerate. When you look at, you look at the industry going forward, I do think, I don’t even like to say higher for longer, I just think rates will stay where they are because they really aren’t that high right now relative to historical measures.

And I think we all just need to kind of adapt and adjust to that. But what that means is that a lot of banks are going to remain under pressure for the earnings. They don’t have the core deposit base, so they don’t have the diversification in their asset generation and so it’s going to create hardships.

So, I think they’re going to be more and more people looking to partner together. And so as we see that and assuming they can get regulatory approval, which right now is a big timing issue and a big if all the way around. I think, aside from that, there should be a lot of activity taking place over the next, as we look out into next year and into the following year.

Kevin Fitzsimmons

Great. Thanks very much.

Operator

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

Russell Gunther

Hey. Good morning, guys. Yeah, just a quick one at this point on the mortgage outlook. So it looks like the MBA (ph) forecast is pretty optimistic for next year from an origination volume perspective. It would be helpful to get your guy’s thoughts in terms of what you’re seeing both on originations and gain on sales as you look out into next quarter and ’24?

Palmer Proctor

Yeah. We’re pleased to say that, when you look at the gain on sale margin, it’s stabilized and so because for a while there, we like many others starting to see deterioration in net margin and it seems to have stabilized. When you look at production, say last quarter, for the sixth quarter, second quarter we were at $1.3 billion, and in this quarter we’re at $1.175 billion and I think that’s kind of a good run rate for us as we look out. There is, keep in mind as we said last time seasonality in this space.

I think it’s going back to the historical seasonality-type activity as opposed to, the mad pandemic rush we had in some of the other [indiscernible] raises. But that being said, we’ll get our fair share of the volume. We feel comfortable with our current run rate and more importantly, we feel comfortable with our ability to adjust the expenses accordingly. The biggest fall-off we saw obviously this quarter as we had predicted was in the warehouse space, but in terms of retail origination, I think there’s going to be some opportunities there.

Especially, if we start seeing some improvement in rates towards the end of next year, we always look for tailwinds as much as we do for headwinds and I think that’s one where we’re very well positioned to take advantage of that. So I would tell you that I think our current run rate is a pretty good barometer for what we see as we go into the fourth quarter and next year aside from just normal seasonality.

Russell Gunther

Yeah, I appreciate that, Palmer, and you touched on the expense side of things, it’s really what’s my follow-up. So, just curious if the earlier conversation around expenses considered any further reduction in the mortgage vertical for ’24?

Palmer Proctor

No, I think we’ve got that positioned well enough now that, you have a core run rate of overhead expenses, you have to have to operate the business and we’re there. What we’ve got is the ability to scale and it’s a very scalable business, if you make sure you scale on both sides going up and coming down, and our management team has done an excellent job of doing that and I think has positioned us well to be able to, as I said, take advantage of the tailwinds and obviously deal with any headwinds to come.

So just no, and I think you do that, that we’re pretty disciplined in that regard and consequential in that regard. If we see pull back in revenues, then you’re going to see a pullback in expenses.

Russell Gunther

Understood. All right, guys. Thank you. Now, that’s it for me.

Nicole Stokes

Thank you.

Operator

And ladies and gentlemen, our final question today comes from Brandon King from Truist Securities. Please go ahead with your question.

Brandon King

Hey, good morning.

Jon Edwards

Good morning.

Nicole Stokes

Good morning.

Brandon King

So, loan, you saw a nice increase in the quarter despite the slow slowing of loan growth. So, Nicole, could you potentially quantify kind of your expectations for what asset yields could do over the next couple of quarters?

Nicole Stokes

Sure. So I’ll tell you that we’ve got, about $5.4 million of our loans that are going to reprice in the next three months or less and that was at like a $7.7 million. So there’s definitely some room for that to move up and then kind of in the three months to 12-month window we’ve got another $1 billion line and that’s kind of at an 8%, 8.5%. So there’s a little bit of room there and then, that’s really kind of over the next four quarters where you can see some of that coming in on the asset side that should certainly help offset the deposit side, which is why kind of a margin guidance as outside of competition and that noninterest-bearing move mix change we really should kind of see that margin stabilizing over the next, two quarters or so.

Brandon King

Okay, very helpful. And then on deposits, I know, we talked a lot about the mix change between non-interest bearing to interest bearing, but what about within interest bearing? I noticed interest checking were little lower quarter-over-quarter. Are you seeing any mix change within your interest-bearing deposit accounts as like people move into — to more towards money market or CDs?

Nicole Stokes

No, those have been fairly consistent. And I will say the one thing that we will have coming in the fourth quarter is those that cyclical public funds that comes in kind of in the fourth quarter. We have no reason to think that that’s not going to come in again this quarter, that’s typically about 15% noninterest-bearing and about 85% interest-bearing typically all in money market and now. So you may actually see a little shift in the fourth quarter from a blend there but those are that cyclical money — public fund money that comes in.

Brandon King

Okay. And how are you thinking about broker deposits from here? Do you have any upcoming maturity, then do you think you can move that down over the next couple of quarters?

Nicole Stokes

So we have our brokered CDs in our FHLB advances kind of staggered. And then again, some of that will change kind of temporarily in the fourth quarter and first quarter as we see those public funds come in so that we positioned ourselves well to be able to manage the margins and not have a lot of that excess borrowings or brokered out there.

So I think we’ll be okay there. We certainly continue to like to work from a ROA and margin perspective between FHLB advances and brokered CDs. We have ample liquidity, ample availability of both of those places. So we like to look at it from a — from kind of a ROA margin perspective is which way we would go if we need it. But, potentially in the fourth quarter as those public assignment money comes in and you could see some of those pays that down. But just remember this when it comes back, second quarter when the public fund money runs back out will kind of offset that way.

Brandon King

Okay. Makes sense. That’s all I had. Thanks for taking my questions

Nicole Stokes

Great. Thank you, Brandon.

Operator

Ladies and gentlemen, that will conclude our question-and-answer session. I’d like to turn the floor back over to Palmer Proctor, our CEO, for any closing remarks.

Palmer Proctor

Great. Thank you very much. And I’d like to thank everyone again for listening to our third-quarter earnings call. Our focus, as you can tell, remains on the things that we can control, which include core profitability, capital growth, and our controlled asset growth and this is what continues to position us well for the future. So thank you for your time and your interest in Ameris Bank.

Operator

Ladies and gentlemen, the conference has now concluded. We thank you for joining today’s presentation. You may now disconnect your lines.