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27800.0 | 2021-02-09 00:00:00 UTC | Have Ameris Bancorp (NASDAQ:ABCB) Insiders Been Selling Their Stock? | ABCB | https://www.nasdaq.com/articles/have-ameris-bancorp-nasdaq%3Aabcb-insiders-been-selling-their-stock-2021-02-09 | nan | nan | Anyone interested in Ameris Bancorp (NASDAQ:ABCB) should probably be aware that a company insider, Jon Edwards, recently divested US$262k worth of shares in the company, at an average price of US$43.74 each. That sale was 10% of their holding, so it does make us raise an eyebrow.
The Last 12 Months Of Insider Transactions At Ameris Bancorp
Notably, that recent sale by Jon Edwards is the biggest insider sale of Ameris Bancorp shares that we've seen in the last year. That means that even when the share price was below the current price of US$45.51, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 10% of Jon Edwards's holding.
Over the last year, we can see that insiders have bought 26.94k shares worth US$674k. But they sold 6.00k shares for US$262k. Overall, Ameris Bancorp insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
NasdaqGS:ABCB Insider Trading Volume February 10th 2021
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does Ameris Bancorp Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Ameris Bancorp insiders own about US$172m worth of shares (which is 5.5% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Ameris Bancorp Insider Transactions Indicate?
An insider sold Ameris Bancorp shares recently, but they didn't buy any. On the other hand, the insider transactions over the last year are encouraging. We are also comforted by the high levels of insider ownership. So we're happy to look past recent trading. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. You'd be interested to know, that we found 1 warning sign for Ameris Bancorp and we suggest you have a look.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Anyone interested in Ameris Bancorp (NASDAQ:ABCB) should probably be aware that a company insider, Jon Edwards, recently divested US$262k worth of shares in the company, at an average price of US$43.74 each. NasdaqGS:ABCB Insider Trading Volume February 10th 2021 There are always plenty of stocks that insiders are buying. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders. | Anyone interested in Ameris Bancorp (NASDAQ:ABCB) should probably be aware that a company insider, Jon Edwards, recently divested US$262k worth of shares in the company, at an average price of US$43.74 each. NasdaqGS:ABCB Insider Trading Volume February 10th 2021 There are always plenty of stocks that insiders are buying. The Last 12 Months Of Insider Transactions At Ameris Bancorp Notably, that recent sale by Jon Edwards is the biggest insider sale of Ameris Bancorp shares that we've seen in the last year. | Anyone interested in Ameris Bancorp (NASDAQ:ABCB) should probably be aware that a company insider, Jon Edwards, recently divested US$262k worth of shares in the company, at an average price of US$43.74 each. NasdaqGS:ABCB Insider Trading Volume February 10th 2021 There are always plenty of stocks that insiders are buying. The Last 12 Months Of Insider Transactions At Ameris Bancorp Notably, that recent sale by Jon Edwards is the biggest insider sale of Ameris Bancorp shares that we've seen in the last year. | Anyone interested in Ameris Bancorp (NASDAQ:ABCB) should probably be aware that a company insider, Jon Edwards, recently divested US$262k worth of shares in the company, at an average price of US$43.74 each. NasdaqGS:ABCB Insider Trading Volume February 10th 2021 There are always plenty of stocks that insiders are buying. Ameris Bancorp insiders own about US$172m worth of shares (which is 5.5% of the company). |
27801.0 | 2021-02-07 00:00:00 UTC | Validea's Top Five Financial Stocks Based On Joel Greenblatt - 2/7/2021 | ABCB | https://www.nasdaq.com/articles/valideas-top-five-financial-stocks-based-on-joel-greenblatt-2-7-2021-2021-02-07 | nan | nan | The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. This value model looks for companies with high return on capital and earnings yields.
ARES COMMERCIAL REAL ESTATE CORP (ACRE) is a small-cap growth stock in the Misc. Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ares Commercial Real Estate Corporation is a specialty finance company. The Company is primarily engaged in originating and investing in commercial real estate (CRE) loans and related investments. The Company operates through principal lending segment. Its target investments include senior mortgage loans, subordinated debt, preferred equity, mezzanine loans and other CRE investment opportunities, including commercial mortgage-backed securities. These investments are generally held for investment and are secured, directly or indirectly, by office, multifamily, retail, industrial, lodging, senior-living, self-storage and other commercial real estate properties, or by ownership interests therein. Through the Company's manager, Ares Commercial Real Estate Management LLC, it has investment professionals located across the United States and Europe who directly source loan opportunities for the Company with owners, operators and sponsors of CRE properties.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ARES COMMERCIAL REAL ESTATE CORP
Full Guru Analysis for ACRE>
Full Factor Report for ACRE>
ARCH CAPITAL GROUP LTD. (ACGL) is a large-cap value stock in the Insurance (Prop. & Casualty) industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Arch Capital Group Ltd. provides insurance, reinsurance and mortgage insurance. The Company provides a range of property, casualty and mortgage insurance and reinsurance lines. The Company operates in five segments: insurance, reinsurance, mortgage, other and corporate. The insurance segment's product lines include construction and national accounts; excess and surplus casualty; lenders products; professional lines; programs; property, energy, marine and aviation; travel, accident and health, and other. The reinsurance segment's product lines include casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe, and other. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. The other segment includes the results of Watford Holdings Ltd.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ARCH CAPITAL GROUP LTD.
Full Guru Analysis for ACGL>
Full Factor Report for ACGL>
ALLEGIANCE BANCSHARES INC (ABTX) is a small-cap growth stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Allegiance Bancshares, Inc. is a bank holding company. Through its subsidiary, Allegiance Bank (the Bank), the Company provides a range of commercial banking services primarily to Houston metropolitan area-based small to medium-sized businesses, professionals and individual customers. In addition to banking during normal business hours, the Company offers extended drive-in hours, automated teller machines (ATMs) and banking by telephone, mail and Internet. The Company also provides debit card services, cash management services and wire transfer services, and offers night depository, direct deposits, cashier's checks, letters of credit and mobile deposits. It also offers safe deposit boxes, automated teller machines, drive-in services and round the clock depository facilities. The Company maintains an Internet banking Website that allows customers to obtain account balances and transfer funds among accounts.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ALLEGIANCE BANCSHARES INC
Full Guru Analysis for ABTX>
Full Factor Report for ABTX>
AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ameris Bancorp is a financial holding company. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of AMERIS BANCORP
Full Guru Analysis for ABCB>
Full Factor Report for ABCB>
ALLIANCEBERNSTEIN HOLDING LP (AB) is a mid-cap value stock in the Investment Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: AllianceBernstein Holding L.P. is engaged in providing research, investment management and related services to a range of clients through its three buy-side distribution channels: Institutions, Retail and Private Wealth Management, and its sell-side business, Bernstein Research Services. The Company offers a range of investment services, including equity strategies, with global and regional portfolios across capitalization ranges and investment strategies, including value, growth and equities; traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies; passive management, including index and enhanced index strategies; alternative investments, including hedge funds, fund of funds and private equity, and multi-asset solutions and services, including dynamic asset allocation, customized target-date funds and target-risk funds. The Company's services span various investment disciplines, including market capitalization, term and geographic locations.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ALLIANCEBERNSTEIN HOLDING LP
Full Guru Analysis for AB>
Full Factor Report for AB>
More details on Validea's Joel Greenblatt strategy
Joel Greenblatt Stock Ideas
About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. The "Magic Formula," as he called it, produced back-tested returns of 30.8 percent per year from 1988 through 2004, more than doubling the S&P 500's 12.4 percent return during that time. Greenblatt also produced exceptional returns as managing partner at Gotham Capital, a New York City-based hedge fund he founded. The firm averaged a remarkable 40 percent annualized return over more than two decades.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Detailed Analysis of ALLEGIANCE BANCSHARES INC Full Guru Analysis for ABTX> Full Factor Report for ABTX> AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> ALLIANCEBERNSTEIN HOLDING LP (AB) is a mid-cap value stock in the Investment Services industry. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. | Detailed Analysis of ALLEGIANCE BANCSHARES INC Full Guru Analysis for ABTX> Full Factor Report for ABTX> AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> ALLIANCEBERNSTEIN HOLDING LP (AB) is a mid-cap value stock in the Investment Services industry. Detailed Analysis of ARES COMMERCIAL REAL ESTATE CORP Full Guru Analysis for ACRE> Full Factor Report for ACRE> ARCH CAPITAL GROUP LTD. (ACGL) is a large-cap value stock in the Insurance (Prop. | Detailed Analysis of ALLEGIANCE BANCSHARES INC Full Guru Analysis for ABTX> Full Factor Report for ABTX> AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> ALLIANCEBERNSTEIN HOLDING LP (AB) is a mid-cap value stock in the Investment Services industry. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. | Detailed Analysis of ALLEGIANCE BANCSHARES INC Full Guru Analysis for ABTX> Full Factor Report for ABTX> AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> ALLIANCEBERNSTEIN HOLDING LP (AB) is a mid-cap value stock in the Investment Services industry. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. |
27802.0 | 2021-01-30 00:00:00 UTC | Validea Peter Lynch Strategy Daily Upgrade Report - 1/30/2021 | ABCB | https://www.nasdaq.com/articles/validea-peter-lynch-strategy-daily-upgrade-report-1-30-2021-2021-01-30 | nan | nan | The following are today's upgrades for Validea's P/E/Growth Investor model based on the published strategy of Peter Lynch. This strategy looks for stocks trading at a reasonable price relative to earnings growth that also possess strong balance sheets.
COLUMBIA FINANCIAL INC (CLBK) is a small-cap growth stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 0% to 78% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Columbia Financial, Inc. is a bank holding company that operates through its subsidiary, Columbia Bank (The Bank). Columbia Bank is a federally chartered stock savings bank that provides banking products and services. The Bank operates over 52 full-service banking offices in ten of New Jersey's 21 counties. In addition, First Jersey Title Services, Inc., is a wholly owned subsidiary of Columbia Bank, and offers title insurance solutions. It offers wealth management services through a third-party relationship. The Company's operations are solely in the financial services industry and include providing traditional banking and other financial services to its customers. The Bank offers a variety of loans, including commercial real estate and multifamily loans, commercial business loans and construction loans
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: FAIL
Detailed Analysis of COLUMBIA FINANCIAL INC
Full Guru Analysis for CLBK
Full Factor Report for CLBK
RBB BANCORP (RBB) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 74% to 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: RBB Bancorp (the Bank) is a bank holding company with the principal business to serve as the holding company for its wholly-owned banking subsidiaries, including Royal Business Bank (Bank) and RBB Asset Management Company (RAM). The Company operates Royal Business Bank, which is a California state-chartered commercial bank. The Bank is focused on providing commercial banking services. The Bank's offerings include traditional commercial real estate loans, secured commercial and industrial loans, and trade finance services for companies doing business in China, Taiwan and other Asian countries. The non-qualified single-family residential mortgage loans, small business administration loans. As of March 31, 2017, the Company had total consolidated assets of $1.5 billion, total consolidated deposits of $1.2 billion and total consolidated shareholders equity of $183.5 million.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
Detailed Analysis of RBB BANCORP
Full Guru Analysis for RBB
Full Factor Report for RBB
RELIANT BANCORP INC (RBNC) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 72% to 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Reliant Bancorp, Inc., formerly Commerce Union Bancshares, Inc., serves as the bank holding company for Reliant Bank. The Company has two segments: Retail Banking and Residential Mortgage Banking. Retail Banking provides deposit and lending services to consumer and business customers within its primary geographic markets. Its customers are serviced through branch locations, automated teller machines (ATMs), online banking and mobile banking. Residential Mortgage Banking originates first lien residential mortgage loans throughout the United States. These loans are typically underwritten to government agency standards and sold to third-party secondary market mortgage investors. Reliant Bank provides a range of traditional banking services throughout the Middle Tennessee Region and the Nashville-Davidson-Murfreesboro-Franklin Metropolitan Statistical Area. Reliant Bank provides commercial banking services for businesses and individuals.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
Detailed Analysis of RELIANT BANCORP INC
Full Guru Analysis for RBNC
Full Factor Report for RBNC
ALLY FINANCIAL INC (ALLY) is a large-cap value stock in the Consumer Financial Services industry. The rating according to our strategy based on Peter Lynch changed from 0% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ally Financial Inc. is a digital financial services company. The Company is a bank and financial holding company. Its segments include Automotive Finance operations, Insurance operations, Mortgage Finance operations, Corporate Finance operations, and Corporate and Other. The Automotive Finance operations segment provides the United States-based automotive financing services to consumers and automotive dealers, and automotive and equipment financing services to companies and municipalities. The Insurance operations segment offers both consumer finance protection and insurance products sold through the automotive dealer channel, and commercial insurance products sold directly to dealers. The Mortgage Finance operations segment consists of the management of a held-for-investment consumer mortgage finance loan portfolio. The Corporate Finance operations segment provides senior secured leveraged cash flow and asset-based loans to mostly the United States-based middle market companies.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: FAIL
Detailed Analysis of ALLY FINANCIAL INC
Full Guru Analysis for ALLY
Full Factor Report for ALLY
SYNOVUS FINANCIAL CORP. (SNV) is a mid-cap growth stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 72% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Synovus Financial Corp. is a financial services company and a bank holding company. The Company provides integrated financial services, including commercial and retail banking, financial management, insurance and mortgage services, to its customers through locally branded banking divisions of its subsidiary bank, Synovus Bank (the Bank), and other offices in Georgia, Alabama, South Carolina, Florida and Tennessee. The Bank offers commercial banking services and retail banking services. The Bank's commercial banking services include cash management, asset management, capital markets services, institutional trust services, and commercial, financial and real estate loans. Its retail banking services include mortgage, installment and other retail loans; investment and brokerage services; safe deposit services; automated banking services; automated fund transfers; Internet-based banking services, and bank credit card services, including MasterCard and Visa services.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
Detailed Analysis of SYNOVUS FINANCIAL CORP.
Full Guru Analysis for SNV
Full Factor Report for SNV
SYNCHRONY FINANCIAL (SYF) is a large-cap value stock in the Consumer Financial Services industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Synchrony Financial is a consumer financial services company. The Company provides a range of credit products through programs it has established with a group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers. The Company's revenue activities are managed through three sales platforms: Retail Card, Payment Solutions and CareCredit. It offers its credit products through its subsidiary, Synchrony Bank (the Bank). Through the Bank, it offers a range of deposit products insured by the Federal Deposit Insurance Corporation (FDIC), including certificates of deposit, individual retirement accounts (IRAs), money market accounts and savings accounts. The Company offers three types of credit products: credit cards, commercial credit products and consumer installment loans. The Company also offers a debt cancellation product. It offers two types of credit cards: private label credit cards and Dual Cards.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
Detailed Analysis of SYNCHRONY FINANCIAL
Full Guru Analysis for SYF
Full Factor Report for SYF
TRIUMPH BANCORP INC (TBK) is a small-cap growth stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 0% to 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Triumph Bancorp, Inc. is a financial holding company. Through its bank subsidiary, TBK Bank, SSB (TBK Bank), the Company offers traditional banking services, as well as commercial finance products. The Company operates through four segments: Banking, Factoring, Asset Management and Corporate. The Factoring segment includes the operations of Triumph Business Capital with revenue derived from factoring services. The Banking segment includes the operations of TBK Bank, including loans originated under its Triumph Commercial Finance, Triumph Healthcare Finance and Triumph Premium Finance brands. The Asset Management segment includes the operations of Triumph Capital Advisors, LLC with revenue derived from fees for providing other services related to collateralized loan obligation funds. The Corporate segment includes holding company financing and investment activities and management and administrative expenses to support the overall operations of the Company.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
Detailed Analysis of TRIUMPH BANCORP INC
Full Guru Analysis for TBK
Full Factor Report for TBK
DORIAN LPG LTD (LPG) is a small-cap value stock in the Water Transportation industry. The rating according to our strategy based on Peter Lynch changed from 72% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Dorian LPG Ltd. is a holding company. The Company, through its subsidiaries, is focused on owning and operating very large gas carrier (VLGCs) in the liquefied petroleum gas (LPG) shipping industry. The Company is engaged in the transportation of LPG across the world through its ownership and operation of LPG tankers. As of March 31, 2016, the Company owned and operated a fleet of 22 VLGCs, including 19 84,000 cubic meter (cbm) ECO-design VLGCs (ECO VLGCs) and three 82,000 cbm VLGCs. The VLGCs in its fleet had an aggregate carrying capacity of approximately 1.8 million cbm at May 26, 2016. It provides in-house commercial and technical management services for all of its vessels. As of May 26, 2016, its VLGCs included Captain Nicholas ML; Captain John NP; Comet; Corsair; Corvette; Cougar; Concorde; Cobra; Continental; Commodore; Constellation; Cheyenne; Cratis; Chaparral; Commander, and Challenger. The Company's customers include global energy companies, commodity traders and importers.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
INVENTORY TO SALES: PASS
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
Detailed Analysis of DORIAN LPG LTD
Full Guru Analysis for LPG
Full Factor Report for LPG
HARBORONE BANCORP INC (HONE) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 65% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: HarborOne Bancorp, Inc. is a mid-tier stock holding company. The Company's principal subsidiary is HarborOne Bank (the Bank), a state chartered co-operative bank whose primary subsidiary is a residential mortgage company, Merrimack Mortgage Company, LLC (Merrimack Mortgage). The Company operates through two segments: HarborOne Bank and Merrimack Mortgage. The Bank segment provides consumer and business banking products and services to customers. Consumer products include loan and deposit products, and business banking products include loans for working capital, inventory and general corporate use, commercial real estate construction loans and deposit accounts. The Merrimack Mortgage segment consists of originating residential mortgage loans primarily for sale in the secondary market. The Company's subsidiary, Legion Parkway Company LLC, is a security company.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: FAIL
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
Detailed Analysis of HARBORONE BANCORP INC
Full Guru Analysis for HONE
Full Factor Report for HONE
APPLIED MATERIALS, INC. (AMAT) is a large-cap growth stock in the Semiconductors industry. The rating according to our strategy based on Peter Lynch changed from 87% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Applied Materials, Inc. provides manufacturing equipment, services and software to the global semiconductor, display and related industries. The Company's segments are Semiconductor Systems, which includes semiconductor capital equipment for etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging, and ion implantation; Applied Global Services, which provides integrated solutions to optimize equipment and fab performance and productivity; Display and Adjacent Markets, which includes products for manufacturing liquid crystal displays, organic light-emitting diodes, upgrades and roll-to-roll Web coating systems and other display technologies for televisions, personal computers, smart phones and other consumer-oriented devices, and Corporate and Other segment, which includes revenues from products, as well as costs of products sold for fabricating solar photovoltaic cells and modules, and certain operating expenses.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
Detailed Analysis of APPLIED MATERIALS, INC.
Full Guru Analysis for AMAT
Full Factor Report for AMAT
ALEXION PHARMACEUTICALS, INC. (ALXN) is a large-cap growth stock in the Major Drugs industry. The rating according to our strategy based on Peter Lynch changed from 72% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Alexion Pharmaceuticals, Inc. is a biopharmaceutical company. The Company is focused on the development and commercialization of therapeutic products. The Company's marketed products include SOLIRIS (eculizumab), Strensiq (asfotase alfa), Kanuma (sebelipase alfa), ULTOMIRIS, Andexxa and Ondexxya. The Company's clinical development programs include ALXN1210, ALXN1810, ALXN1720, ALXN1830, ALXN1840 and ABY-039. The Company's ULTOMIRIS is a long-acting C5 inhibitor discovered and developed by Alexion that works by inhibiting the C5 protein in the terminal complement cascade. Its SOLIRIS is an C5 inhibitor discovered and developed by Alexion that works by inhibiting the C5 protein in the terminal complement cascade. SOLIRIS is a humanized monoclonal antibody that effectively blocks terminal complement activity at the doses prescribed.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: FAIL
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
Detailed Analysis of ALEXION PHARMACEUTICALS, INC.
Full Guru Analysis for ALXN
Full Factor Report for ALXN
SOUTHERN MISSOURI BANCORP, INC. (SMBC) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 72% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Southern Missouri Bancorp, Inc. is the holding company for Southern Bank (the Bank). The principal business of the Bank consists primarily of attracting retail deposits from the public and using such deposits along with wholesale funding from the Federal Home Loan Bank of Des Moines (FHLB), and brokered deposits. The Bank offers a range of deposit instruments, such as demand deposit accounts, negotiable order of withdrawal (NOW) accounts, money market deposit accounts, saving accounts, certificates of deposit and retirement savings plans. The Bank's lending activities consist of origination of loans secured by mortgages on one-to four-family and multifamily residential real estate, commercial and agricultural real estate, construction loans on residential and commercial properties, commercial and agricultural business loans and consumer loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
Detailed Analysis of SOUTHERN MISSOURI BANCORP, INC.
Full Guru Analysis for SMBC
Full Factor Report for SMBC
MARTEN TRANSPORT, LTD (MRTN) is a small-cap growth stock in the Trucking industry. The rating according to our strategy based on Peter Lynch changed from 72% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Marten Transport, Ltd. is a temperature-sensitive truckload carrier. The Company focuses on transporting and distributing food and other consumer-packaged goods that require a temperature-controlled or insulated environment. The Company operates through four segments: Truckload, Dedicated, Intermodal and Brokerage. It operates throughout the United States and in parts of Canada and Mexico. The Company's medium-to-long-haul traffic lanes are between the Midwest and the West Coast, Southwest, Southeast, and the East Coast, as well as from California to the Pacific Northwest. It provides regional truckload carrier services in the Southeast, West Coast, Midwest, South Central and Northeast regions. It also offers loading and unloading activities, equipment detention and other ancillary services. The Company's Truckload segment provides a combination of regional short-haul and medium-to-long-haul full-load transportation services.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
Detailed Analysis of MARTEN TRANSPORT, LTD
Full Guru Analysis for MRTN
Full Factor Report for MRTN
PRINCIPAL FINANCIAL GROUP INC (PFG) is a large-cap value stock in the Insurance (Accident & Health) industry. The rating according to our strategy based on Peter Lynch changed from 0% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Principal Financial Group, Inc. is an investment management company. The Company offers a range of financial products and services, including retirement, asset management and insurance. Its segments include Retirement and Income Solutions; Principal Global Investors, Principal International; U.S. Insurance Solutions, and Corporate. The Company offers a portfolio of products and services for retirement savings and retirement income. The Company's Principal Global Investors segment manages assets for investors around the world. The Company offers pension accumulation products and services, mutual funds, asset management, income annuities and life insurance accumulation products. The Company's U.S. Insurance Solutions segment provides group and individual insurance solutions. It focuses on small and medium-sized businesses, providing a range of retirement and employee benefit solutions, and individual insurance solutions to meet the needs of the business owners and their employees.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
SALES: PASS
YIELD COMPARED TO THE S&P 500: PASS
YIELD ADJUSTED P/E/GROWTH (PEG) RATIO: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: FAIL
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
Detailed Analysis of PRINCIPAL FINANCIAL GROUP INC
Full Guru Analysis for PFG
Full Factor Report for PFG
1-800-FLOWERS.COM INC (FLWS) is a small-cap growth stock in the Retail (Specialty) industry. The rating according to our strategy based on Peter Lynch changed from 87% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: 1-800-Flowers.Com, Inc. is a provider of gourmet food and floral gifts for all occasions. The Company offers gifts for every occasion, including fresh flowers and a selection of plants, gift baskets, gourmet foods, confections, candles, balloons and stuffed animals. The Company operates through three business segments: Consumer Floral, Gourmet Food and Gift Baskets, and BloomNet Wire Service. The Consumer Floral segment includes the operations of the Company's flagship brand, 1-800-Flowers.com, FruitBouquets.com and Flowerama. The Gourmet Food and Gift Baskets segment includes the operations of Harry & David (which includes Wolferman's, Moose Munch and Stockyards.com), Cheryl's (which includes Mrs. Beasley's), The Popcorn Factory, DesignPac, Shari's Berries and 1-800-Baskets. The BloomNet Wire Service segment includes the operations of BloomNet and Napco.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
Detailed Analysis of 1-800-FLOWERS.COM INC
Full Guru Analysis for FLWS
Full Factor Report for FLWS
TELEDYNE TECHNOLOGIES INCORPORATED (TDY) is a large-cap growth stock in the Communications Equipment industry. The rating according to our strategy based on Peter Lynch changed from 0% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Teledyne Technologies Incorporated provides enabling technologies for industrial growth markets. The Company's segments include Instrumentation, Digital Imaging, Aerospace and Defense Electronics, and Engineered Systems. Instrumentation segment provides monitoring and control instruments for marine, environmental, industrial and other applications, as well as electronic test and measurement equipment. Digital Imaging segment includes sensors, cameras and systems, within the visible, infrared, ultraviolet and X-ray spectra. Aerospace and Defense Electronics segment provides electronic components and subsystems and communications products, including defense electronics. Engineered Systems segment provides systems engineering and integration and technology development, as well as manufacturing solutions.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: FAIL
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
Detailed Analysis of TELEDYNE TECHNOLOGIES INCORPORATED
Full Guru Analysis for TDY
Full Factor Report for TDY
MID PENN BANCORP, INC. (MPB) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 63% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Mid Penn Bancorp, Inc. (Mid Penn) is the bank holding company for Mid Penn Bank (the Bank). The Bank engages in a full-service commercial banking and trust business, providing a range of financial services, including mortgage and home equity loans, secured and unsecured commercial and consumer loans, lines of credit, community development loans, loans to non-profit entities and local government loans, and various types of time and demand deposits, including checking accounts, savings accounts, clubs, money market deposit accounts, certificates of deposit and individual retirement accounts (IRAs). The Bank provides a range of trust and retail investment services. The Bank also offers other services, such as online banking, telephone banking, cash management services, automated teller services and safe deposit boxes. The Bank has approximately 37 retail banking properties located in Berks, Bucks, Chester, Cumberland, Dauphin, Fayette, Northumberland, Schuylkill and Westmoreland counties.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
Detailed Analysis of MID PENN BANCORP, INC.
Full Guru Analysis for MPB
Full Factor Report for MPB
TREX COMPANY INC (TREX) is a large-cap growth stock in the Forestry & Wood Products industry. The rating according to our strategy based on Peter Lynch changed from 0% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Trex Company, Inc. is a manufacturer of wood-alternative decking and railing products. The Company's products are marketed under the brand name Trex and are manufactured in the United States. It offers a set of outdoor living products in the decking, railing, porch, fencing, trim, steel deck framing and outdoor lighting categories. Its decking products include Trex Transcend, Trex Enhance and Trex Select. The Company's railing products include Trex Transcend Railing, Trex Select Railing and Trex Signature aluminum railing. It offers Trex Transcend Porch Flooring and Railing System, which is an integrated system of porch components and accessories. The Company offers Trex Seclusions fencing product, which consists of structural posts, bottom rail, pickets, top rail and decorative post caps. It offers a triple-coated steel deck framing system called Trex Elevations. The Company also offers outdoor lighting systems, such as Trex DeckLighting and Trex Landscape Lighting.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: FAIL
SALES AND P/E RATIO: NEUTRAL
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
Detailed Analysis of TREX COMPANY INC
Full Guru Analysis for TREX
Full Factor Report for TREX
TC PIPELINES, LP (TCP) is a mid-cap value stock in the Natural Gas Utilities industry. The rating according to our strategy based on Peter Lynch changed from 72% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: TC PipeLines, LP is a master limited partnership. The Company acquires, owns and participates in the management of energy infrastructure businesses in North America. The Company's pipeline systems transport natural gas in the United States. As of December 31, 2016, the Company had four pipelines and equity ownership interests in three natural gas interstate pipeline systems that are collectively designed to transport approximately 9.1 billion cubic feet per day of natural gas from producing regions and import facilities to market hubs and consuming markets primarily in the Western, Midwestern and Eastern United States. The Company's pipeline systems include Gas Transmission Northwest LLC (GTN), Bison Pipeline LLC (Bison), North Baja Pipeline, LLC (North Baja), Tuscarora Gas Transmission Company (Tuscarora), Northern Border Pipeline Company (Northern Border), Portland Natural Gas Transmission System (PNGTS), and Great Lakes Gas Transmission Limited Partnership (Great Lakes).
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
SALES: FAIL
INVENTORY TO SALES: PASS
YIELD COMPARED TO THE S&P 500: PASS
YIELD ADJUSTED P/E/GROWTH (PEG) RATIO: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
Detailed Analysis of TC PIPELINES, LP
Full Guru Analysis for TCP
Full Factor Report for TCP
FIRST HORIZON CORP (TENNESSEE) (FHN) is a mid-cap value stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 74% to 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: First Horizon Corporation, formerly First Horizon National Corporation (FHN), is a bank holding company. The Company provides financial services through its subsidiary, First Tennessee Bank National Association (the Bank). The Company has four segments: regional banking, fixed income, corporate and non-strategic. The Company's regional banking segment offers financial products and services, including traditional lending and deposit taking, to retail and commercial customers in Tennessee and other selected markets. The regional banking segment provides investments and financial planning. Its fixed income segment consists of fixed income securities sales, trading, and strategies for institutional clients in the United States and abroad. Its corporate segment consists of funds management, tax credit investment activities and gains on the extinguishment of debt, among others. The non-strategic segment offers wind-down national consumer lending activities and mortgage banking elements.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
Detailed Analysis of FIRST HORIZON CORP (TENNESSEE)
Full Guru Analysis for FHN
Full Factor Report for FHN
BANK OF COMMERCE HOLDINGS (BOCH) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 63% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Bank of Commerce Holdings (Holding Company) is a bank holding company. The Company's principal business is to serve as a holding company for Redding Bank of Commerce (Bank), which operates under two separate names (Redding Bank of Commerce and Sacramento Bank of Commerce). The Bank operates over four full service facilities in two diverse markets in Northern California. The Bank provides a range of financial services and products for business and retail customers. Its principal products include various types of accounts, such as checking, interest-bearing checking, savings, certificate of deposit and money market deposit. It also offers sweep arrangements, commercial loans, construction loans, term loans, safe deposit boxes and electronic banking services. The primary focus of the Bank is to provide banking and related services to small and mid-sized businesses and not-for-profit organizations, as well as banking services for consumers, primarily business owners and their employees.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: FAIL
Detailed Analysis of BANK OF COMMERCE HOLDINGS
Full Guru Analysis for BOCH
Full Factor Report for BOCH
CELANESE CORPORATION (CE) is a large-cap value stock in the Chemical Manufacturing industry. The rating according to our strategy based on Peter Lynch changed from 0% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Celanese Corporation (Celanese) is a technology and specialty materials company. The Company's segments include Advanced Engineered Materials, Consumer Specialties, Industrial Specialties, Acetyl Intermediates and Other Activities. The Advanced Engineered Materials segment includes the Company's engineered materials business and certain affiliates. The Consumer Specialties segment includes the Company's cellulose derivatives and food ingredients businesses, which serve consumer-driven applications. The Industrial Specialties segment includes the Company's emulsion polymers and ethylene vinyl acetate (EVA) polymers businesses. The Acetyl Intermediates segment includes the Company's intermediate chemistry business, which produces and supplies acetyl products, including acetic acid, vinyl acetate monomer (VAM), acetic anhydride and acetate esters. The Company has operations in North America, Europe and Asia. As of December 31, 2016, the Company had 30 global production facilities.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: FAIL
Detailed Analysis of CELANESE CORPORATION
Full Guru Analysis for CE
Full Factor Report for CE
AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 72% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ameris Bancorp is a financial holding company. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
Detailed Analysis of AMERIS BANCORP
Full Guru Analysis for ABCB
Full Factor Report for ABCB
SOUTHERN FIRST BANCSHARES, INC. (SFST) is a small-cap growth stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 0% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Southern First Bancshares, Inc. is a bank holding company that owns the capital stock of Southern First Bank (the Bank), a South Carolina state bank, and all of the stock of Greenville First Statutory Trust I and II (the Trusts). The Bank is a commercial bank with approximately nine retail offices located in Greenville, Columbia and Charleston, South Carolina. The Bank is primarily engaged in the business of accepting demand deposits and savings deposits insured by the Federal Deposit Insurance Corporation (the FDIC) and providing commercial, consumer and mortgage loans to the public. In addition to deposit and loan services, the Company offers other bank services, such as Internet banking, cash management services, safe deposit boxes, direct deposit and automatic drafts for various accounts. The Bank offers a range of lending services, including real estate, commercial, and equity-line consumer loans to individuals and small- to medium-sized businesses, and professional firms.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: FAIL
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
Detailed Analysis of SOUTHERN FIRST BANCSHARES, INC.
Full Guru Analysis for SFST
Full Factor Report for SFST
UNITY BANCORP, INC. (UNTY) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 74% to 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Unity Bancorp, Inc. is a bank holding company that serves as a holding company for Unity Bank (the Bank). The Company's primary business is ownership and supervision of the Bank. The Company, through the Bank, conducts a traditional and community-oriented commercial banking business and offers services, such as personal and business checking accounts, time deposits, money market accounts and regular savings accounts. It engages in lending activities and offers commercial, small business administration, consumer, mortgage, home equity and personal loans. The Bank is a full-service commercial bank, that provides business and consumer financial services through its office in Clinton, New Jersey and over 14 New Jersey branches located in Clinton, Edison, Flemington, Highland Park, Linden, Middlesex, North Plainfield, Phillipsburg, Scotch Plains, Somerset, South Plainfield, Union, Washington and Whitehouse. The Bank has over one Pennsylvania branch located in Forks Township.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
Detailed Analysis of UNITY BANCORP, INC.
Full Guru Analysis for UNTY
Full Factor Report for UNTY
More details on Validea's Peter Lynch strategy
Peter Lynch Stock Ideas
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Detailed Analysis of CELANESE CORPORATION Full Guru Analysis for CE Full Factor Report for CE AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB Full Factor Report for ABCB SOUTHERN FIRST BANCSHARES, INC. (SFST) is a small-cap growth stock in the Regional Banks industry. The Asset Management segment includes the operations of Triumph Capital Advisors, LLC with revenue derived from fees for providing other services related to collateralized loan obligation funds. | Detailed Analysis of CELANESE CORPORATION Full Guru Analysis for CE Full Factor Report for CE AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB Full Factor Report for ABCB SOUTHERN FIRST BANCSHARES, INC. (SFST) is a small-cap growth stock in the Regional Banks industry. Its retail banking services include mortgage, installment and other retail loans; investment and brokerage services; safe deposit services; automated banking services; automated fund transfers; Internet-based banking services, and bank credit card services, including MasterCard and Visa services. | Detailed Analysis of CELANESE CORPORATION Full Guru Analysis for CE Full Factor Report for CE AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB Full Factor Report for ABCB SOUTHERN FIRST BANCSHARES, INC. (SFST) is a small-cap growth stock in the Regional Banks industry. Company Description: RBB Bancorp (the Bank) is a bank holding company with the principal business to serve as the holding company for its wholly-owned banking subsidiaries, including Royal Business Bank (Bank) and RBB Asset Management Company (RAM). | Detailed Analysis of CELANESE CORPORATION Full Guru Analysis for CE Full Factor Report for CE AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB Full Factor Report for ABCB SOUTHERN FIRST BANCSHARES, INC. (SFST) is a small-cap growth stock in the Regional Banks industry. The Bank offers commercial banking services and retail banking services. |
27803.0 | 2021-01-29 00:00:00 UTC | Ameris Bancorp (ABCB) Q4 2020 Earnings Call Transcript | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-q4-2020-earnings-call-transcript-2021-01-29 | nan | nan | Image source: The Motley Fool.
Ameris Bancorp (NASDAQ: ABCB)
Q4 2020 Earnings Call
Jan 29, 2021, 9:00 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Good morning, and welcome to the Ameris Bank Q4 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]
I would now like to turn the conference over to Nicole Stokes, Chief Financial Officer. Please go ahead.
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Nicole S. Stokes -- Vice President and Chief Financial Officer
Thank you, Grant, 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 will discuss the details of our financial results before we open up for Q&A. 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 opening comments.
H. Palmer Proctor -- Chief Executive Officer
Thank you, Nicole, and good morning to everyone. 2020 certainly provided all of us a lesson in humility for humanity. And I'd like to begin by thanking all of my Ameris teammates, our customers and all of our stakeholders for their continued commitment, their loyalty and the great flexibility they all demonstrated during this unprecedented year. And what a year it's been. I mean, while 2020 was not what we had anticipated, I'm proud of our team, because they adapted quickly and remained disciplined and focused on the results. And Nicole is going to update you on the detailed financials in a few minutes. But before we get there, I did want to share a few highlights about the quarter and the year, and then spend some time discussing the plan and opportunities we have going into 2021. For the quarter, we earned $102 million, or $1.47 per diluted share on an adjusted basis, which is up over 53%, compared to fourth quarter last year. This represents 2.04% return on average assets and a 25.04% return on tangible equity.
As expected, our efficiency ratio increased slightly to 52.67%, which is right within the guidelines that we had given in terms of 52% to 55% in terms of our guidance earlier in the year. For the year 2020, we earned $300.5 million, or $4.33 per diluted share on an adjusted basis, which is up 14% over the 2019 results. This represents a year-to-date ROA of $1.56 and the year-to-date return on average tangible equity of $19.77. Our efficiency ratio improved during the year from over 55.67% last year to 52.17% this year. On the balance sheet side of things, I said last quarter that we anticipated some seasonal loan runoff in the fourth quarter that would bring our loan growth closer to our original estimates as we said throughout the year in terms of mid single-digits with full-year of 2020, and that's exactly what happened. We ended the year with a solid 6.5% loan growth, and that's exclusive of the PPP growth.
We continue to see strong deposit growth, and our total deposits are now almost $17 billion, with non-interest-bearing deposits now accounting for over 36% of total deposits. As for capital, we remain focused on capital preservation and growth in TCE and tangible book value. During the fourth quarter, we grew tangible book value by over 5% and over 13% for the year-to-date period, which is very meaningful. As reported last quarter, we do have a share repurchase program in place that's good through October 31st this year. We don't anticipate buying any purchases in the near future, nor did we buy any in the fourth quarter. But we do like having the option to repurchase if the right opportunity presents itself. As for the dividend, we remain comfortable where our dividends are today and do not anticipate any reduction at this time. Moving on to credit. John Edwards, our Chief Credit Officer is with us today and is available to take any credit questions after our prepared remarks, but I did want to hit a few highlights in terms of credit.During the fourth quarter, we opportunistically and selectively sold approximately $87 million of hotel loans, which greatly reduced our hospitality exposure. And as a result of that, we incurred a $17.2 million net charge-off.
And as far as the remaining reserve, we continue to believe all the heavy lifting that has been taken place and been completed, barring any further economic downturn or deterioration in specific credits. So this brings our allowance coverage ratio, excluding unfunded commitments to 1.46%, net of our PPP loans. Our annualized net charge-off ratio was 31 basis points of total loans compared to 10 basis points in 2019. Exclusive of the hotel note sale, the year-to-date annualized net charge-off ratio was 18 basis points of total loans. Our non-performing assets as a percentage of total assets decreased to 48 basis points compared to 82 basis points last quarter and mostly due to the $24 million decrease in non-accrual hotel loans that I referenced earlier that were included in that note sale, $32 million of mortgage loans recorded non-accrual in the third quarter, but have now been placed on the new Cares Act deferral programs and a net decrease in OREO of $6 million. And finally, the loans that remain on deferral at the end of the year were approximately 2.9% of total loans, which is down from approximately 19% of total loans at the end of the second quarter of 2020.
Quick update on COVID and PPP, I said on the last call that we opened up about half our branches in the lobbies in third quarter with minimal disruption. But unfortunately, with the rise in cases, we closed these lobbies again before the end of the year. And we really don't anticipate having them open until March where we start seeing some positive swings in the cases. But we've done a wonderful job of continuing to be able to serve the customers through the drive-throughs and digital channels or in the branch by appointment. And that being said, we are extremely pleased to be in the Southeast because I can tell you, many businesses here are back open, restaurants, retail shopping and certainly traffic continues to pick-up every day, so that's encouraging to see. But we all still need to remain diligent and careful. A quick update on PPP. During the fourth quarter, we started to see forgiveness and our PPP loans decreased by about $238 million. On the new round of PPP, our portal is open and so far we've received about 2,000 applications for approximately $220 million, just as an update. So approximately 80% of that is second draw request from customers who were also participants in the first round and 20% of applications are from new applicants. So our average loan size request has been around $130,000 for the second request and $30,000 for the first request. And this is obviously smaller than the first round as expected in terms of the loan amounts.
Now I'd like to talk briefly about the future of why our optimism is justified. When you look at the challenges we all face in 2020 and then you consider the success that Ameris had, it really makes me proud of the company and our teammates. And this year, we certainly not anticipated, but we were able to overcome the core challenges and adapt and improvise on our plans. And more importantly, we successfully delivered on top financial results. And as typical in the first quarter, we spent time and our Board retreat is actually virtual this time, but that's always an energizing program and process for us because it allows us to kind of reflect on our markets and our strategies and our talent and our goals. And as I mentioned earlier, we are fortunate being in some of the highest growth markets throughout the south of the east. We've got incredible talent, and we've got good core strength of our more rural markets, too. And this balance is really what allowed us to continue to grow safely and securely and most importantly, in a low-cost deposit environment. That's as far as funding is concerned.
So we continue to look for cost-saving measures to be able to fund the needed technology resources which are imminent. And we're already reaping the benefits from a lot of the investments we made in 2020 from our reallocation of expenses. But we remain focused on core deposit and loan growth, asset quality, operating efficiencies and capital preservation. And these are the strategies that you will see will continue to drive shareholder value.
I'll stop there and turn it over to Nicole to discuss our financial results.
Nicole S. Stokes -- Vice President and Chief Financial Officer
Great. Thank you, Palmer. As you mentioned, for the fourth quarter, we're reporting net income of $94.3 million or $1.36 per diluted share. On an adjusted basis, we earned $102 million or $1.47 per diluted share. And that's excluding things like the servicing asset impairment, COVID-19 expenses, certainly will see and the gain on sale of bank premises. These financial results represent a 53% increase over fourth quarter of 2019 earnings. Our adjusted ROA in the fourth quarter was $2.04. That was a decrease from the $2.35 last quarter, but it was an increase from the $1.47 reported fourth quarter last year. Our adjusted return on tangible common equity was $25.04 this quarter compared to $30.53 last quarter, and again, an increase from the $18.45 reported in the fourth quarter of 2019. For the full year 2020, we're reporting net income of $262 million or $3.70 per diluted share. On an adjusted basis, we earned $300.5 million or $4.33 per diluted share. That compared to $222.9 million and $3.80 last year. So that brings our full year ROA to $1.56 compared to $1.52 last year, and our full year ROTCE to $19.77 compared to $18.74 last year.
As we stated, we've already -- we've previously emphasized our focus on capital and tangible book value growth. So for the quarter, we saw an increase in tangible book value of $1.23 to end the quarter at $23.69 million. And for the full year, we had an over 13% increase in tangible book value, up $2.88 from the $20.81 last year to $23.69 this year. In addition, our tangible common equity ratio increased 20 basis points to 8.47% this quarter. And as you remember, the asset growth from our PPP loans negatively affect that ratio. This quarter, that was about a 38 basis point impact.So excluding those PPP loans from our total assets, our TCE ratio would have been approximately 8.85% at the end of the year, which is very close to our stated target of 9%. We continue to be well capitalized and we really feel comfortable with our capital level.Talking about margin, we previously guided that we expected low to mid-single-digit margin compression going forward. So we were extremely pleased with the stable margin of 3.64% in the fourth quarter.
That was consistent with what we had in the third quarter. And while there were many moving parts in margin this quarter and a lot of hard work and effort from our bankers, that shows you our spread actually improved by 3 basis points this quarter. So on the compression side; we reversed $2.3 million of interest income on loans that were sold in the hotel note sale. And then we also felt compression from the excess liquidity up on the balance sheet of approximately 9 basis points. However, those negative impacts were offset by the accelerated accretion of PPP fee due to the early forgiveness. And again, there are a lot of moving parts, but those are kind of the three highlights that really netted out to that stable margin. During the fourth quarter, our yield on earning assets declined by 4 basis points, while our interest-bearing deposit cost decreased by 13 basis points and our total funding decreased by 7 basis points, hence the improvement in spread.
Our core bank production yields declined slightly to 3.86%. But on the deposit side, we continue to see success in growing non-interest-bearing deposits. Our total deposits grew $894 million and over 26% of that was in non-interest-bearing. Our non-interest-bearing now represent 36.27% of our total deposits. And that's compared to about 29.9% this time last year. We do believe this is affected by the excess liquidity in the market, and we believe this could return closer to the 30% in the long-term horizon. However, we do remain diligent of retaining these deposits through superior customer service, product enhancements and the technology improvements that we've got. So for the year-to-date, our margin declined 18 basis points from 3.88% to 3.70%, even with the large 150 basis point Fed cut in March. I think it's key to look at our yield on earning assets, decreased by 67 basis points, while our funding cost decreased by 65 basis points. We feel like we work quick to cut cost or to cut funding costs and our deposit cost.
Talking about provision, during the fourth quarter, we reversed $1.5 million of previously recorded provision expense. That decrease was primarily related to the improvement of our economic forecast, particularly levels of unemployment and GDP. And that was offset by increased qualitative factors that we added in our commercial real estate and construction portfolios. For the full year, we recorded $145 million of provision for credit losses, and that was compared to just $20 million last year. Our ending allowance for loan loss was $199.4 million compared to $231 million at the end of the third quarter and just $38 million at the end of last year. Including the unfunded commitment reserve, our total allowance was $233 million compared with $260 million at September 30 and $39 million last year. Non-interest income in the fourth quarter remained strong due to the continued elevated production in the mortgage division. Mortgage production was right at $2.8 billion for the quarter. And the gain on sale increased over 4%, up from 3.92% last quarter. We anticipate that gain on sale to decrease back to normal levels more in the three -- upper three range going forward.
Net income in the retail mortgage division was $43.4 million compared to $61 million last quarter, but $11.6 million fourth quarter of last year. While pipelines remained strong and we continue to see the strong production in 2021 so far, we do realize that this could return to normal levels at some point this year and we're well prepared. Total non-interest expense continued to decline this quarter from $153.7 million last quarter to $151 million this quarter. Expenses in the retail mortgage division decreased $4.7 million, while expenses in the core bank and administrative functions increased $2.1 million. And I want to talk about those two separately. So the increase in core bank and administrative functions is really attributable to three things. There was a $1 million donation that we made to the newly formed Ameris state foundation, a $765,000 expense related to the early termination of our -- the law share agreement with the SEC; and then, $532,000 of OREO writedown. So despite the expense to terminate these loss share agreements, we do believe that exiting them will enhance our operational efficiencies going forward, both from a functional administrative perspective as well as the economic impact of clawback accruals and recovery sharing going forward.
We continually -- as usual, we prudently exam non-interest expenses, and we anticipate minimal increases in the core bank. And now moving on to the mortgage segment, we do anticipate decreases in the variable cost as production decreases back to normal levels. Although, I want to remind everybody that there's always that cyclical first quarter result, such as payment taxes. To time our efficiency ratio, we're pleased with our efficiency ratio this quarter and the overall progress we made here. Our adjusted efficiency ratio was 52.67 this quarter compared to 55.61 for the fourth quarter of last year. And for the full year, our efficiency ratio improved to 52.17, down from 55.67 last year. The additional mortgage revenue and the efficiency gain in the mortgage division significantly impacted its ratio during the second and third quarters.
We believe the ratio will stabilize in the 52% to 55% range in future quarters as we do not anticipate the level of mortgage revenue and efficiency to be sustainable long-term. On the balance sheet side, and this is really a focus. We are excited to say that we ended the quarter with total assets of over $20 billion at $20.4 billion, compared to $19.9 billion last quarter and $18.2 billion last year. So, as Palmer mentioned on the balance sheet, I want to give a little -- some details on that. We did experience a cyclical runoff. And if you remember to the third quarter, we said that we were anticipating that. So our total loans decreased a net $463 million during the quarter. But I really want to break that down and explain that we had expected decreases of $735 million, and that was offset by organic growth in the core bank of just over $280 million or 7.6% for the quarter.
Let's talk briefly about those decreases. Not to rattle off numbers, but I do want everybody to understand that, that $735 million of decreases were intentional, known and didn't really have -- it was not a surprise to us. So, those decreases included the $238 million of PPP reduction, $102 million of the continued indirect runoff, $87 million from the hotel note sale, an additional $87 million of the strategic runoff in the homebuilder line, $80 million of some cyclical mortgage warehouse lines as well as about $20 million in the cyclical ag line that is a typical fourth quarter event for us. In addition, we had $141 million of consumer loans that we transferred to the held for sale category. So again excluding that, I mean, we take that $735 million unit of runoff, that leaves us with $280 million to $300 million of organic loan growth, which, again, was 7.5% for the quarter, which we were pleased with.
For the full year, our net loan growth was $1.7 billion or 13%. That included PPP. If you exclude the PPP activity, net loan growth was $835 million or 6.5%, which was in line with our expectations of mid-single-digit loan growth. Additional information on the loan growth and the loan portfolio can be found in the investor presentation. So to wrap up, we are managing through this low rate environment and protecting our margin as much as possible. We continue to see strong non-interest income from the mortgage division and pipelines remained strong going into the first quarter. We, as always, are watching expenses and are finding ways to pay for new technology through a reallocation of resources, and we remain committed to preserving capital.
With that, I'll turn the call back over to Grant for any questions from the group.
Questions and Answers:
Operator
We will now begin the question-and-answer session. [Operator Instructions] Our first question today will come from Casey Whitman with Piper Sandler. Please go ahead.
Casey Whitman -- Piper Sandler -- Analyst
Good morning.
H. Palmer Proctor -- Chief Executive Officer
Good morning, Casey.
Nicole S. Stokes -- Vice President and Chief Financial Officer
Good morning, Casey.
Casey Whitman -- Piper Sandler -- Analyst
Maybe I'll just start by continuing where you just left off the call with. Can you maybe just give us some thoughts around how you're thinking about loan growth in 2021? Given all the puts and takes with indirect auto still running off, but the southeast opening up and all the hires you've made, how should we sort of think about the range of growth that you guys could put up in 2021?
H. Palmer Proctor -- Chief Executive Officer
Yes, I'll take that, Casey. This is Palmer. We feel very encouraged by that. And when I look at the pipelines, which is really indicative of what the future production looks like; it's more than encouraging as we look into first quarter, which is traditionally a seasonal quarter where you have a little pullback. But there certainly remains headwinds in the economy and pay downs. But what we're seeing in terms of the pipeline and the sustainability of what we've got, whether it be the new commercial initiatives where we've got 10 new C&I lenders, or whether it be on the mortgage front, or when I'm looking at the pipelines now, we've got incredible volumes still coming through those pipelines. I think that it's going to be a strong first half of the year for us. And like I mentioned in my comments, too, I think the benefit we have is obviously being well positioned in the markets we're in. And as a result of that, we feel very confident in our ability to still continue to deliver on the growth side.
And if you look at applications and locks, just in mortgage alone, we're still above where we were in November and December. And it's almost double of where we were in January of last year. So, it's starting out pretty solid in terms of the activity. Obviously, refi activity should slow as rates go up, but the purchase activity continues to be robust. And I think we'll see a lot of opportunity there as it pertains more specifically to mortgage.
Casey Whitman -- Piper Sandler -- Analyst
Okay, got it. And maybe ask one more. Just can you give us an update, Palmer, on how you're thinking about M&A this year as we come out of the pandemic, it's been some time since lion. So, how should we think about your appetite at this point for additional M&A?
H. Palmer Proctor -- Chief Executive Officer
I would tell you, as we've been very consistent saying all along in terms of the discipline here at the company, our first and foremost focus is always on organic growth and our ability to generate strong top-tier earnings, which we have proven over the last 18 months. We've had very little noise in our earnings over that period of time. And it's really allowed us and the market to see the earnings power of this organization without M&A. That being said, I do think there are going to be some opportunities, and we will remain opportunistic. And I think some of the opportunities that may present themselves have more to do with where we're headed in terms of the economy and where we're headed in terms of needs for technology.
So, I think the opportunity for M&A as we look out into 2021 will be robust for the industry. And what we want to do is remain in the position of offense and be able to be nimble and take advantage, if necessary, if we deem it appropriate for a potential target.
Casey Whitman -- Piper Sandler -- Analyst
Make sense. Thanks Palmer. Thanks for the call and look for next event.
H. Palmer Proctor -- Chief Executive Officer
Thank you.
Operator
Our next question will come from Brady Gailey with KBW. Please go ahead.
Brady Gailey -- KBW -- Analyst
Hey. Thank you. Good morning, guys.
H. Palmer Proctor -- Chief Executive Officer
Good morning, Brady.
Nicole S. Stokes -- Vice President and Chief Financial Officer
Good morning, Brady.
Brady Gailey -- KBW -- Analyst
So, if you look at what Ameris did in mortgage last year, it's just amazing. If you back out the MSR impairments, there was $414 million of mortgage banking fees. It's unlikely that's repeatable this year. And you had volumes going down and gain on sale coming down. Any idea how much those fees to decline this year, what the magnitude could be?
H. Palmer Proctor -- Chief Executive Officer
Well, I think that's going to be specific to the mortgage operation of each individual bank. I will tell you, our operation is very different to most. And I think that's reflective, obviously, in the success we've had this year relative to our peers. And I think you'll find the same thing to be true as we go forward. Because, when you look at -- and you look at the same numbers, I do in terms of the MBA estimates, but if you drill down into those estimates, what you'll find is, is that the purchase activity will actually increase the refi activity, which is a drop off. So when you hear people saying it's going drop 50%, well, that's all, for the most part, due to the refi activity. I would tell you, our shop has never prided itself on refi activities, mainly in purchase activity. And relationships, we've got with builders and realtors that we've established over many years. So I think what you'll find is a lot of the shops that have gorged on the refi activities to the detriment of the relationships with others will probably end up some of those ones that falling out, and we'll be able to pick up some incremental volume.
And as I said, when you look at our pipeline and the lock pipeline, more importantly, for what we're seeing now in January, it's equally as strong as what we saw in some of the third and fourth quarter. So I think the first half of the year for mortgage, for our mortgage shop is going to be less impactful than many others, but that being said, we will certainly, just like others, see the pullback in the refi activity as rates increase. But all-in-all, I think from a materiality standpoint, it's hard to predict what the market will look like after the first half of the year. But I can tell you, the housing market is extremely vibrant. We see it both on the construction side and on the mortgage side. And we'll continue to capitalize on that.
And what really makes our story different too is, when you look at the growth markets we operate in with the preponderance of our mortgage activity. So I feel that, ours will not be -- I think a lot of people are anticipating this cliff dive. And I do not see that happening with our mortgage operation in the way, its setup. And you can see the margin this quarter, Roberto and his team does excellent job of maintaining the margin. In fact, it improves. So that's a big kudos to them. And the efficiency too that we have garnered through robotics and automation, that's really what's going to be the differentiator as we go forward with other mortgage shops is our ability to continue to generate volume with less expense, because right now, the expenses are inflated because people are drinking through a fire hose. But as that slows down, that's where you're going to see a lot of disparity, I think, between mortgage shops.
Does that answer your question, Brady? I know it's a long-winded answer. But I hope I gave you a little color.
Brady Gailey -- KBW -- Analyst
Yeah. No, that's great, Palmer. I wanted to ask next, about the sale of the hotel loans. It looks like, you just kind of took the allocated reserve and charge it off, so there's not much of a financial impact versus the reserves you had already built against those lines. So I get it. But still, it's an 18% loss, on those hotel loans. I mean, do you think that that loss content was real? And are you thinking about doing any other loan sales like that, for any of the other, kind of, COVID impacted lending areas?
H. Palmer Proctor -- Chief Executive Officer
Yeah. I'll answer that. There's two parts to your question there. Number one, if we didn't think it was real, we wouldn't have done it for starters. And many folks on the phone that lived through the last downturn know good and well how that sector performed. And the way we look at it, we were able to do very selectively go through and call the portfolio and identify hotels that were struggling. And we looked at a lot of different factors, everything from the NSA in which it operated, to the operators themselves, to the flag, to the -- and a lot of these, as you know, were some of our non-performing loans, where we did not see a whole lot of upside. And when you look back to 2007, 2008 with hotels, and keep in mind back then, the hotels are still open and operating. Today, they're still struggling. And we see the hotel sector is continuing to be stressed. And when you take into account a typical hotel and -- business as you have to foreclose on it, just going through the foreclosure process, then you've also got on top of that, you've got deferred maintenance, you've got to do. The property taxes are passed so you've got to bring it current. You've lost the flag because it's been dark. The operator is probably gone by then.
And you look at the carry cost of that and the cost of capital associated with that. And then, when we look back at the, 2007, 2008 timeframe, you look at the losses that were incurred on that particular asset type. If I had told you back in 2007, 2008 that I could get $0.80 to $0.85 on the dollar for a hotel, you would tell me to jump all over it. And today, we feel like we have called the portfolio of those that we felt were stressed, extremely stressed. And do not anticipate any more sales. I think you'll find that there will be others that will be following suit because it's a -- right now, there are some sophisticated operators out there that have the ability to buy these and pay a fair price for them, instead of a distressed price. And as we look out into the future, I feel like these hotels and the economy in general, I think it's going to be much more of a gradual reopening, just as it was before it was kind of a slow decline initially. And we do not see that sector picking up dramatically in the near future. And as a result of that, we clearly identified this as an opportunity to capitalize on. So we did it.
Brady Gailey -- KBW -- Analyst
Okay. That makes sense. Then finally for me, just looking at the expense base, what sort of growth can we expect in expenses outside of mortgage banking? And I know that will kind of depend on what you do on the mortgage side. But maybe just talk about kind of core expense growth. And then I know, Palmer, you hired a lot of talented people in 2020. Will that continue in 2021?
H. Palmer Proctor -- Chief Executive Officer
We got -- well, on the C&I front, we're probably going to look to hire about seven or eight more C&I-specific lenders. But one of the things that well, Matt and his team did an excellent job of last year is making sure that the existing talent we do have is also pulling its weight. And so we were able to reallocate some of those -- that overhead expense into new lenders, and we'll continue to be efficient with that process. But I do see us looking to hire another seven to eight more C&I lenders in the near future. And Nicole, you can comment on any of the additional overhead expenses.
Nicole S. Stokes -- Vice President and Chief Financial Officer
Sure, Brady. We are very, very confident of non-interest expense. And we've closed additional branches in the fourth quarter, and we did have those three kind of events in the fourth quarter, again, that we probably -- we made a decision to make that donation and we made the decision to allow share. So we are trying to keep core bank expenses as flat as possible, especially really with potential margin squeeze and just everything, the uncertainty in the market. So we are very cognizant of finding for those places that we do need to spend money and we need to reinvest, finding a way to pay for it internally through a reallocation of resources. We are still following that same strategy on the core bank. And then we feel like the mortgage banking side, as mortgage banking origination pulls back, those variable costs will pull back as well.
Brady Gailey -- KBW -- Analyst
All right. Great. Thanks for all the color, guys.
Nicole S. Stokes -- Vice President and Chief Financial Officer
Thank you.
Operator
Our next question comes from David Feaster with Raymond James. Please go ahead.
David Feaster -- Raymond James -- Analyst
Hey, good morning, everybody.
Nicole S. Stokes -- Vice President and Chief Financial Officer
Good morning.
David Feaster -- Raymond James -- Analyst
I just wanted to start on production. Just curious, you guys had a nice pool of new hires announced a couple of months ago. Just curious how much they're contributing at this point? And then I guess, as they continue to ramp up, would you expect kind of production to accelerate in growth, hopefully, to accelerate throughout the year? And then, just kind of the pulse of the hiring market more broadly. Are you guys seeing new opportunities still?
H. Palmer Proctor -- Chief Executive Officer
Yes, absolutely. And to answer your question more specifically; when you look at our pipeline for the kind of the core bank, which typically, we'd like to keep that over $1 billion. I would tell you that right now, just about a third of that is specific to the C&I initiative that we have with the 10 new lenders. And when you look at that particular line of business or asset class, everyone look at it, C&I, by definition is a longer build. So it does take longer, unlike a CRE loan where you get immediate growth. So there is a ramp-up period, getting the individuals on board, giving them to move over business and getting them up and running. So we've been very pleased. When you look at the breakdown of that pipeline, what we're seeing is about a 60% of it is still coming out of Atlanta. And then you've got another 20% coming out of Florida and another 20% coming out of Carolina for the most part. But I think we'll continue to see that grow because a lot of the hiring opportunities that we have seen as of recent have come out of the -- quite frankly, the Carolinas and Florida. So I think what you'll see is, those areas will continue to grow and kind of catch-up with Atlanta, so we're excited with that.
And in addition to that, when you look at the seven or eight new lenders that we look to hire, we'll probably be adding those proportionately through those three states. But we're encouraged by what we see. But, then again, you need to be patient when you're building C&I, because if you start seeing erratic growth there, you probably -- it should create pause for you. But they're focused on middle market, established companies. These are relationships, not transactions. And so, I'm very encouraged by what we see. And I'm glad we made the investment last year, because, to your earlier point, it does take time for that investment to start ramping up. But we're encouraged by the production and the productivity we've seen so far. And when this economy opens up a little bit, I think that it will accelerate that opportunity.
David Feaster -- Raymond James -- Analyst
Okay. And then just -- again, you guys did a great job using hires and team lift-outs to do some geographic expansion through some new branching and new markets. Just curious, where are you interested? Is that still attractive to you and doing some market expansion, is it more attractive to do at de novo with some hires versus potential M&A? And just following up on the M&A commentary, just could you remind us some of your geographic priority sizes that you're interested in and financial metrics? And even if -- what kind of deals you'd be interested in?
H. Palmer Proctor -- Chief Executive Officer
Yeah. It's kind of a dual approach. I mean, if you look at it from the organic standpoint with Ameris, we are already operating in some of the top growth markets in the United States. So I would tell you what we need to focus there and do focus is, capturing additional market share. Then, if you look at expansion beyond that -- of our core branch footprint, you look at where our loan production offices are. We've got a meaningful office in the Mid-Atlantic. I could see us expanding there and other types of loans and branching, in terms of getting out of our existing footprint.
But, right now, when you look at Florida and you look at Georgia, and look at the Carolinas and parts of Alabama that we're in, in a meaningful way, there's plenty of opportunity there. And so, the phase two of that would be to look in some of the secondary markets, and I'd say secondary, that's where we would have primarily LPOs. Then the second strategy would be through M&A, where you would be an entry into a new market as a result of an acquisition perhaps. But I would tell you that's kind of the order of the priorities at this point.
David Feaster -- Raymond James -- Analyst
Okay. And what kind of size range for a transaction would you be interested in?
H. Palmer Proctor -- Chief Executive Officer
Well, I think, we've said all along and been very consistent, probably anything -- nothing smaller than $3 billion.
David Feaster -- Raymond James -- Analyst
Okay. And then, just on the fee income front, just curious, where are we in the process of reinstating some of the waived fees? And, I guess, how do you think about fees going forward? I mean, the counter-cyclicality of mortgage has obviously been a huge help. Just curious, how you think about the other lines. Are there anything that you'd be interested in expanding into, new lines coming in? Or even thoughts on expanding the -- like the premium finance and just the scalability of some of your other fee income lines?
H. Palmer Proctor -- Chief Executive Officer
Yeah. Premium finance has been a homerun for us this year, is a very stable, steady source of income. And if you do it right, it's got very low-risk in terms of credit risk. That is an area we will continue to grow. And we're focused primarily on a lot of the smaller agencies there, which I think there's a lot of opportunity to go after that business. And we've got a major focus on that for 2021. The Wealth Group, which for us includes private banking, trust and investment management. That's where I see some additional opportunity, and even along the lines of potential acquisition type of opportunity to develop there, because that's good fee income. It, too, is an investment, and it takes time. But that may be an area where there'll be opportunities, as we go forward to look to expand upon that fee income.
From just a core service fee income, when you look at the bank and these related to accounts, I think across the board, you're reading a lot of the reports that I'm reading that show that there's been an increase there. And I think, that will continue as the economy opens back up. We all saw and experienced to pull back, and we're obviously a lot more sensitive to fees. But, I think, you'll start seeing the service fee income for banks increasing as we go forward and the economy opens back up.
David Feaster -- Raymond James -- Analyst
Okay. That's helpful. Thanks everybody.
Operator
Our next question will come from Jennifer Demba with Truist Securities. Please go ahead.
Jennifer Demba -- Truist Securities -- Analyst
Thanks. And I think most of my questions have been covered. But, Palmer, when you think about expense reduction opportunities, how do you think about branch rationalization right now, given you seem to be operating pretty well with the lobbies closed.
H. Palmer Proctor -- Chief Executive Officer
Yes, we are. And I think as an industry, we've all benefited from being forced, quite frankly, to step back and look at that whole operation, the retail delivery operation, and banks, traditionally a very slow to move and adapt to change. And I think it's more of a herd mentality. And I think the herd is moving. I think that will help a lot of folks that have been reluctant to make some of these changes. But when we look at our numbers, and we had a board meeting yesterday and we're going through a lot of even the teller transactions. Teller transactions are still about where they were before. And what that tells you is that the drive-throughs are sufficiently servicing the customer base. And you compound that and combine that with digital technology and effective new account opening process and the user experience, that's what we're all about here is investing in that heavily over the next year or two.
Because that's what it's going to all come down because if you're trying to divert traffic or customers to another line or a way to come into a company, you need to make sure that, that way is equally is easing or appealing to them as the other walking in a branch. But I think that what we've found, just from -- and we've been pretty proactive in our branching in terms of branch closures and opening the drive-throughs, but I think what you'll find, as many branches will continue to keep the drive-throughs open but the lobbies will remain closed. And then you look at the talent within those branches, a lot of that talent can be utilized for us as we've grown so quickly in other areas like the call center. We've got a number of those same branch folks. They're dedicated to our PPP program right now and will be dedicated forgiveness for that. So I think a lot of that talent can be utilized other places without having to higher talent elsewhere.
So I think at the same time, you can look through processes and efficiencies and allow you, if you're growing, to absorb a lot more of those costs for efficiencies rather than just adding additional overhead. But branching in and of itself, I'm still a believer in having branches, but I think it can be a much more efficient footprint and a much more efficient use. We've touched on earlier the need for wealth management and mortgage, and turning them more into a destination center for an experience rather than just a transaction. And that's kind of the approach we're taking to our whole branch network as we look through it.
Jennifer Demba -- Truist Securities -- Analyst
Thank you.
Operator
Our next question will come from Kevin Fitzsimmons with D.A. Davidson. Please go ahead.
Kevin Fitzsimmons -- D.A. Davidson -- Analyst
Hey. Good morning, everyone.
Nicole S. Stokes -- Vice President and Chief Financial Officer
Good morning.
Kevin Fitzsimmons -- D.A. Davidson -- Analyst
Nicole, I understand that the margin did better than that prior guidance of low to mid single-digit compression. Just wondering, if we can pivot and look forward now. So is that still the outlook from here? And I know there's a lot of different factors. I'm assuming that's just the core margin you're talking about ex-accretion and ex-PPP fee accretion as well.
So maybe if you can kind of start there on what you're thinking about the core margin, what you're thinking about accretion contribution? I know it came in this quarter. I know that's a tough thing to predict, but just where you think that might be? And then if you could touch on PPP fees in terms of what fees, how much fees you have remaining? And is it reasonable to assume the round one fees get mostly taken up or recognized in the next two quarters? Thanks.
Nicole S. Stokes -- Vice President and Chief Financial Officer
Sure. Sure. So I'll take the last question first, that actually is going to lead right into the answer to the first one, if that's OK. So we have about $41 million remaining of the original PPP kind of round one, about $21 million. And I think that is -- we said that we expected -- while we are amortizing demand over the contractual maturity, which was two years. For all of our internal modeling, we were using a one year horizon, so that would really kind of be the end of the second quarter. So I think that it's a very logical assumption to assume that -- that $21 million or most of the $21 million. There will be some that extend out. But the majority of that will come in, in the next two to maybe 2.5 quarters. So knowing that we do have that coming in on the margin, and that is what helps protect it a little bit in the fourth quarter.
Kind of moving forward to what margin going forward, there's several things that are going to affect that and then have already started to effect it. So loan growth, liquidity, PPP forgiveness and deposit cost. So, we just talked about the PPP forgiveness and the potential there. One grows; we'll talk about that in connection with excess liquidity. So, we have about $1.5 billion of excess liquidity on the balance sheet at the end of the year. And we always have excess liquidity at the end of the year. We have cyclical deposits that come in. So, if I'm looking at how do I -- how do we use that liquidity, or how do we put that to use. So, we have about $0.5 billion, $500 million of cyclical runoff of deposits. We've already had about $300 million of that run off in January. We expect another $200 million in the first quarter. That's kind of our -- again, we have a lot of public funds that come in right at the end of the year, and that goes back out in the first quarter.
So, then we are estimating -- we're kind of guiding $200 million to $500 million -- I'm sorry, $300 million to $700 million is our expectation for PPP round two. So assuming that comes in at $500 million. And then, we've got about $300 million identified in the bank and through premium finance. So that really leaves us about $200 million of what I'd call excess liquidity. And that is where we think we have some additional opportunities for some strategic runoff on the deposit side, with either some rate reductions, or run off on the deposit side. Looking forward, our -- I think I've given guidance before in our CD pricing; we still have some opportunity there. We have about $500 million of CDs that repriced in the first quarter. They're currently at $112 million. Last quarter's production was about 30 basis points. So, if we can keep our production in that 30 basis points, we've got some improvement there. Second quarter, we've got another $0.5 million. That's at 70 basis points. And then, we have about another $400 million in the third quarter. So, we do have some offensive play there on the deposit side, and we are still looking at -- we have some -- we're to the point now of just some specific money market and now accounts that are outside of the norm. I think our Board rates are about as low as they can be.
So, depending upon that liquidity and how we are able to deploy that, and the execution on that deposit cost, the first quarter margin compression we're thinking to be in the five to seven basis point range. I hope to beat that again, but that's kind of where we anticipate it coming out. That was a long in detail, but I hope that answered your question.
Kevin Fitzsimmons -- D.A. Davidson -- Analyst
No, that's great. And just to clarify, so that includes PPP fees, that five to seven down or does not?
Nicole S. Stokes -- Vice President and Chief Financial Officer
It does.
Kevin Fitzsimmons -- D.A. Davidson -- Analyst
It does include that. Got it.
Nicole S. Stokes -- Vice President and Chief Financial Officer
It does include that. And so depending upon how much of that comes in the first quarter versus the second quarter that could vary. That could get us down to -- if more of it comes in, maybe we hit in at the three to four. But if less of it comes, then maybe we're in the seven.
Kevin Fitzsimmons -- D.A. Davidson -- Analyst
Got it. Okay, very helpful. Thank you very much. Just one quick follow-up question. The consumer portfolio, that $119 million that was transferred to held for sale. What is that portfolio? And why was it shifted over there?
Nicole S. Stokes -- Vice President and Chief Financial Officer
Sure. So that is -- it's kind of an ancillary product that we bought several years ago. We're funding to a third-party, and we getting out of that line of business. And so we have gotten bids on that. And so it's held for sale. We anticipate that potentially sell it in the first quarter. And that was an intentional decision for us to sell that.
Kevin Fitzsimmons -- D.A. Davidson -- Analyst
Great. Okay. Thank you very much.
H. Palmer Proctor -- Chief Executive Officer
Great.
Nicole S. Stokes -- Vice President and Chief Financial Officer
Thank you, Kevin.
Operator
Our next question will come from Brody Preston with Stephens, Inc. Please go ahead.
Brody Preston -- Stephens, Inc -- Analyst
Hey, good morning, everyone.
Nicole S. Stokes -- Vice President and Chief Financial Officer
Good morning.
Brody Preston -- Stephens, Inc -- Analyst
Hey I just wanted to ask, Nicole, just more specifically on expenses. You've all have done a good job sort of growing the core bank with core C&I and CRE this quarter, the growth was pretty strong. But sort of excluding the foundation contribution and the FDIC termination expense, you're running pretty flat on core expenses.
And so I guess given all the new hires, and given the growth trajectory moving forward, I was wondering, if you could speak to specific things that you've done to help sort of offset some of the investments that you've made, just because you're growing the core bank, but the core expenses aren't necessarily following suit?
Nicole S. Stokes -- Vice President and Chief Financial Officer
Yes. So, we've done several things there. One, we did the various optimization. So, we closed additional branches in October 1st. We had one additional branch that has closed so far in January. So, that's kind of the branch optimization update. And certainly -- and we said when we did that, that we were going to use those resources to pay for some of these other things. All of the new hires, they really came in kind of in the third quarter. And so fourth quarter, they are -- those expenses are in our fourth quarter run rate. We've also implemented some things on the technology side and some innovation side. We started using some robotics and some AI. We started that in mortgage, and we probably could have made a better decision there, because we did that first quarter of last year, not knowing what was about to happen.
And so that certainly helped drive the efficiency in the mortgage division. Not only did they have the increased production, but they also had an improvement in their efficiency ratio because of that technology. So we started to deploy that through other areas of the bank. And then we also -- we've done some -- and I think every company has done this at some point in their history where they just open it up to employees and say help us, and we're going to help you benefit. So kind of doing some cost initiatives there were asking people, if you're doing things, if that makes sense, right in hand and let's find out why. Look, there's a better way to do things, don't be afraid to raise that question. And we've had a history of cost saving. I remember when our efficiency ratio was in the 70s. And when we said, we were going to get to 60. Then we said, we were going to get to 50s. So it's almost become part of our culture. A word that we use a lot is discipline. And if you need to spend money, let's figure out a way to pay for it.
And then I think as we've also and definitely had the message of, if we're going to have margin compression and the uncertainty in the market, now is the time to really, really look at where we're spending. And so, that -- it's just kind of a culture as well. And just looking at and deciding where are we going to spend our net dollar and where do we get the best return on that investment dollar.
H. Palmer Proctor -- Chief Executive Officer
And Brody, echo some of Nicole's comments there, she's right on in terms of, we've gone through and continue to go through -- and I think that's one of the challenges all companies will have as they need to continuously do it, not periodically do it, is look at your lines of business, look obviously for inefficiencies that you can eliminate. But, also look at the materiality of what you're doing there. And could it never get into a scale and size and provide a meaningful return.
The held for sale portfolio, as you mentioned, that's a fine portfolio, but in and of itself, it's never going to move the needle. It's never going to be that material to what we do. And you look at the resources that are associated with maintaining that portfolio relative to where we can make reinvestment in other parts of the company with a higher return on investment capital, that's really what we're looking at as we go through dissect each sector of the company. So, I think you'll find more and more activity like that and continued activity from Ameris as we kind of go through and find this kind each year in the company. And that's how we came up with a decision on hotels and here we came decision on the held for sale. That's how we come on the robotics for the mortgage. And you'll see that kind of mentality throughout the company as we go through the remainder of the year.
Brody Preston -- Stephens, Inc -- Analyst
Okay. Thank you. And so, just as I think about growth in that core expense -- the core banking expense. From here, assuming that you'll continue to make some tweaks, but would it be safe to assume kind of a mid- single-digit growth rate from here, just given the long growth trajectory?
Nicole S. Stokes -- Vice President and Chief Financial Officer
Yes, very low-single-digits.
Brody Preston -- Stephens, Inc -- Analyst
Okay. Okay, thank you for that. And then, I guess just one last one on expenses. Assuming that we kind of get mortgage production to go back down more toward 3Q 2019, 4Q 2019 levels at some point here in the back half of 2021 and into 2022, would it be safe to assume that the expenses with that will head back toward 3Q 2019 and 4Q 2019 levels as well?
Nicole S. Stokes -- Vice President and Chief Financial Officer
Yes. It could even be a little bit better just based, if you think back to 3Q and 4Q of last year, we were still in the middle of the Ameris and Fidelity integration. So we still have some dual systems, and we also didn't have the robotics in place. So, they've done a tremendous job improving their efficiency ratio. So, that's definitely where we expect a variable cost. But then often, we'll see the rest of some of that efficiency.
Brody Preston -- Stephens, Inc -- Analyst
Okay, great. And then, I'm sorry if I missed it, but you had a big ramp-up in cash this quarter. I wanted to know some of that transitory? Or if it wasn't, what you plan to do with it? Just because when I look at the securities book, it's running at 5%, and I think it was at 9% sort of after the LION deal closed. And so, I wanted to ask you envision building this book at all in the near term?
Nicole S. Stokes -- Vice President and Chief Financial Officer
That's a great point. So we do have the excess liquidity. And just historical Ameris, we have some excess deposits that typically come in through our municipalities and also through some of our ag. So we have about $500 million of excess liquidity that we anticipate will run out just deposits that come in the fourth quarter and basically go back out in the first quarter.
We've already had about $300 million of that runoff in January. We anticipate another $200 million. So when I think about excess liquidity, I see about $1.5 million of excess liquidity. About $500 million of that will be those excess deposits to run off, we've got about $500 million earmarked for the new PPP round, about $300 million for the bank and premium finance growth. And then that really raises about $200 million to either have -- if we can have additional loan growth, but obviously be the preferred methodology that we need to keep it safe.
I'm looking at John through that message to make sure that it fits within our credit criteria. But then also, we can -- we have some opportunities from what we would call strategic runoff from certain deposit accounts. Again, we run off just about all of our non-core funding. Our funding were -- almost 97% of our funding is core bank deposits. So we've run off just about everything else we can, but we've got about $200 million that we could potentially run off or just reduce the rate.
Brody Preston -- Stephens, Inc -- Analyst
Okay. Understood. So it doesn't sound like you feel a need to build in the securities portfolio at all?
Nicole S. Stokes -- Vice President and Chief Financial Officer
Not necessarily right now.
Brody Preston -- Stephens, Inc -- Analyst
Okay. Under...
Nicole S. Stokes -- Vice President and Chief Financial Officer
That will be our last resort, I guess. We just don't want to give the -- risk at this point with the rate environment right now.
H. Palmer Proctor -- Chief Executive Officer
And if there's an opportunity to call, too, obviously, because we have that in London.
Nicole S. Stokes -- Vice President and Chief Financial Officer
That's right.
Brody Preston -- Stephens, Inc -- Analyst
Okay. Palmer, you mentioned -- just on the mortgage real quick. You mentioned the mix of Ameris being traditionally stronger toward purchase. And so I just wanted to ask what that mix was purchase versus refi in 2020?
H. Palmer Proctor -- Chief Executive Officer
We were running around 58%. Traditionally, we have run in the 90s, high-90s. And so I think that's what you'll see it migrate toward. And as I mentioned, we saw this during the last mortgage wave is that as refis pulled back, and then that's when core mortgage companies like ours actually garnered market share because when people pull out the business or close up shop and wait for the next wave to come, that's where we end up picking up incremental volume in terms of primarily purchasing if there is any refi left. But right now, we've got capacity in terms of the efficiencies that we put in place in the robotics to layer in additional production.
And right now, I'll tell you, too, there's fluid is, the market is, and as full as the pipelines are with a lot of these originators, there's still some movement out there. And I think we've got opportunities in some select markets that will be focused in on to bring in additional talent and production.
Brody Preston -- Stephens, Inc -- Analyst
Okay.
H. Palmer Proctor -- Chief Executive Officer
That was on the way to offset some of that run off. And once again, our focus when we're looking for originators, it's people with a strong purchase background, not a refi background.
Brody Preston -- Stephens, Inc -- Analyst
Okay, understood. On the hotel sale, I wanted to ask, it looks like you might not have had an existing mark on this, just given the specific reserve for the quarter was $14 million. But were there any maybe at a small reserve -- were there any specific reserves set aside for any of those loans before you sold them?
H. Palmer Proctor -- Chief Executive Officer
Yes, there were -- because there were some TDRs in that mix and nonaccrual loans in that mix. By the end of the third quarter, we had both the FAS 5 and some more 14 reserves associated with that portfolio.
Brody Preston -- Stephens, Inc -- Analyst
Okay. And then Nicole, the production yields, 3.86% at the core bank, you've seen a steady sort of -- it's not surprising, but a steady decline here the last couple of quarters in that production yield. Where do you see those going in the first quarter?
Nicole S. Stokes -- Vice President and Chief Financial Officer
I would anticipate and certainly post that they stay stable at this point. Again, the best offense for that or defense for that is a deposit costs to continue to watch those as well. So -- but the trend so far is still flat.
Brody Preston -- Stephens, Inc -- Analyst
Okay. And then just two left for me. When you look at your customer base, you guys have done a pretty good job on NIB historically, but I said like the core C&I portfolio is not a relatively large portion of the loan book. And so I wanted to ask, when you look at your customer base, where does most of your noninterest-bearing deposits come from?
H. Palmer Proctor -- Chief Executive Officer
From -- believe or not, they come from our commercial base, even albeit small in the core, that's what the majority of the costs coming down.
Brody Preston -- Stephens, Inc -- Analyst
Okay.
H. Palmer Proctor -- Chief Executive Officer
...which is -- of the growth of what we're investing in here and especially the change in the treasury management side, I think it's for all banks, they enhance their treasury management feature that helps accelerate the potential for additional deposits fund.
Brody Preston -- Stephens, Inc -- Analyst
Okay. Thank you. And then Palmer, I heard you response early on M&A, but I just wanted to ask again about the size of potential targets and your thoughts around any potential mergers of equals?
H. Palmer Proctor -- Chief Executive Officer
Yes. I would tell you that same answer I gave before, that if we looked at the target, it wouldn't be any smaller than $3 billion. And anything we do, we've got a pretty good thing going here at Ameris as you can see, we've had a wonderful year. Anything we do needs to be accretive. And anything we do is to be meaningful. And if you go down the line of an MOE type of discussion, one plus one would always need equal three to even consider or something like that. And you have to have the -- because what we don't want to do is get in a situation where we're doing some of this pulling back on our financial performance. So we've always prided ourselves on being a top-tier performer. And so we had to find somebody on a equal mindset that set on making sure that we retain the same level of performance. But right now, the nice thing that we've been able to show the market and show ourselves to in the -- aside from M&A, we don't do M&A. We've got tremendous earnings power here at this company. And if we do M&A, it would be just icing on the cake for us.
Brody Preston -- Stephens, Inc -- Analyst
Understood. Thank you very much for taking my questions. I appreciate the time this morning.
Operator
Our last question today will come from Christopher Marinac with Janney Montgomery Scott. Please go ahead.
Christopher Marinac -- Janney Montgomery Scott -- Analyst
Hey, Palmer and Nicole. Just a follow-up on the mortgage margin, I know the comments earlier, just curious if the history of Ameris and Fidelity before that. If that margin really is not relevant in terms of history, but it's a new paradigm for you, given the changes you're making, which means that perhaps the downside, there's some, but not as low as it had been historically?
H. Palmer Proctor -- Chief Executive Officer
Yes. Like a lot of the things, I think, it's an enhanced discipline. I think that both Ameris and Fidelity have always run good mortgage shops. But I think the focus there that Robert Odom and his team has put in place to -- and granted, margins are not going to hold, as well as they have, as we know as we move forward. But he has done excellent job of maintaining those margins. And I think as long as the volume is there, that helps keep those elevated. When the volume pulls back, obviously, you'll start seeing margins pull back. But it is a new focused discipline that we have, and we're seeing that throughout the company. And so while there is a controlled in place or discipline in place, it's just more enhanced now. And I think that's what delivers that improved margin and just efficiency that he's garnering throughout his operation.
Christopher Marinac -- Janney Montgomery Scott -- Analyst
Great. Thanks for that. And are there still opportunities to hire more producers on the mortgage side?
H. Palmer Proctor -- Chief Executive Officer
Yes. So as I touched on earlier, we've got opportunity there. And we'll be making that happen in short order. We've got some upcoming opportunities. So we'll see continued growth in that -- or new hires in the mortgage shop.
Christopher Marinac -- Janney Montgomery Scott -- Analyst
Great. Thanks very much for all the time this morning.
H. Palmer Proctor -- Chief Executive Officer
Okay. Thank you.
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.
H. Palmer Proctor -- Chief Executive Officer
Great. Thank you, Brandon. Once again, I want to thank everybody for listening in to our fourth quarter and full year 2020earnings call As we look forward to 2021, Ameris is extremely well positioned for the future. And we look forward to talking to you next quarter. Thank you.
Duration: 64 minutes
Call participants:
Nicole S. Stokes -- Vice President and Chief Financial Officer
H. Palmer Proctor -- Chief Executive Officer
Casey Whitman -- Piper Sandler -- Analyst
Brady Gailey -- KBW -- Analyst
David Feaster -- Raymond James -- Analyst
Jennifer Demba -- Truist Securities -- Analyst
Kevin Fitzsimmons -- D.A. Davidson -- Analyst
Brody Preston -- Stephens, Inc -- Analyst
Christopher Marinac -- Janney Montgomery Scott -- Analyst
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp (NASDAQ: ABCB) Q4 2020 Earnings Call Jan 29, 2021, 9:00 a.m. Davidson -- Analyst Brody Preston -- Stephens, Inc -- Analyst Christopher Marinac -- Janney Montgomery Scott -- Analyst More ABCB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. There was a $1 million donation that we made to the newly formed Ameris state foundation, a $765,000 expense related to the early termination of our -- the law share agreement with the SEC; and then, $532,000 of OREO writedown. | Davidson -- Analyst Brody Preston -- Stephens, Inc -- Analyst Christopher Marinac -- Janney Montgomery Scott -- Analyst More ABCB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Ameris Bancorp (NASDAQ: ABCB) Q4 2020 Earnings Call Jan 29, 2021, 9:00 a.m. Our non-performing assets as a percentage of total assets decreased to 48 basis points compared to 82 basis points last quarter and mostly due to the $24 million decrease in non-accrual hotel loans that I referenced earlier that were included in that note sale, $32 million of mortgage loans recorded non-accrual in the third quarter, but have now been placed on the new Cares Act deferral programs and a net decrease in OREO of $6 million. | Ameris Bancorp (NASDAQ: ABCB) Q4 2020 Earnings Call Jan 29, 2021, 9:00 a.m. Davidson -- Analyst Brody Preston -- Stephens, Inc -- Analyst Christopher Marinac -- Janney Montgomery Scott -- Analyst More ABCB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Our non-performing assets as a percentage of total assets decreased to 48 basis points compared to 82 basis points last quarter and mostly due to the $24 million decrease in non-accrual hotel loans that I referenced earlier that were included in that note sale, $32 million of mortgage loans recorded non-accrual in the third quarter, but have now been placed on the new Cares Act deferral programs and a net decrease in OREO of $6 million. | Davidson -- Analyst Brody Preston -- Stephens, Inc -- Analyst Christopher Marinac -- Janney Montgomery Scott -- Analyst More ABCB analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Ameris Bancorp (NASDAQ: ABCB) Q4 2020 Earnings Call Jan 29, 2021, 9:00 a.m. Our efficiency ratio improved during the year from over 55.67% last year to 52.17% this year. |
27804.0 | 2021-01-28 00:00:00 UTC | IPO Stock Rundown: Affirm, Coinbase, Dream Finders Homes, and HomePoint Capital | ABCB | https://www.nasdaq.com/articles/ipo-stock-rundown%3A-affirm-coinbase-dream-finders-homes-and-homepoint-capital-2021-01-28 | nan | nan | In this week's episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, are doing an IPO roundup. First, they dive into two companies that have recently gone public -- homebuilder Dream Finders Homes (NASDAQ: DFH) and fintech company Affirm (NASDAQ: AFRM). Then they'll take a closer look at what we know about upcoming IPOs for cryptocurrency exchange Coinbase and mortgage lender HomePoint Capital. Finally, Matt and Jason share why they're watching Tanger Factory Outlet Centers (NYSE: SKT) and Ameris Bancorp (NASDAQ: ABCB) ahead of their earnings announcements this week.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on January 25, 2021.
Jason Moser: It's Monday, Jan. 25th. I'm your host, Jason Moser. On this week's Financials show, we're taking a look at a couple of recent IPOs in the finance space, along with a couple of upcoming IPOs. We'll answer a listener question. We'll wrap it up with one to watch.
Joining me this week: Certified Financial Planner Mr. Matt Frankel. Matt, how's everything going?
Matt Frankel: Just great, I'm excited for our IPO chat. We haven't done this yet.
Moser: Yeah, this will be fun. We've got a couple of companies that just IPO'd we're going to talk about. Then we're going to talk about a couple of companies that you have on your radar. Companies that are going to be IPO'ing soon but haven't IPO'd yet. We'll get your take on what those businesses are all about.
But let's go ahead and start with the two recent IPOs here. I think both are very interesting businesses. I've certainly looked at both, and we'll go ahead and start here with one probably many haven't heard of, it's Dream Finders Homes. Ticker is DFH. This is a company that just went public last week. Small cap, it looks like a $2 billion market cap, so really a small company. But talk to us a little bit about Dream Finders. What does this company do, and how does it make money?
Frankel: They are a homebuilder, as we said. They operate mostly in the Sun Belt region. Just to name a couple of their biggest markets, they're based in Jacksonville. Other big markets are Orlando, Denver, and DC, believe it or not. That's their only Northeast market. You consider DC the Northeast? I don't know.
Moser: Given that I'm from South Carolina, I moved out here from Georgia. Yeah, I do feel like this is the Northeast, but I know most people here try to consider it the South still. We're going to give them the benefit of the doubt and say we're still in the South.
Frankel: Right. But it's only one of their major markets in that Sun Belt area if that makes sense. But anyway, they were founded in 2008. Like you said, they recently IPO'd. They are the 11th-largest private homebuilder. They're not a market leader or anything like that, which that's OK. They've sold about 9,100 homes since 2008. In their 12-year history, 9,100 homes. They IPO'd at a price of $13. It appears that the market likes them, because they are trading for about $21 as I write this.
Interestingly, they are backed by a company that we cover a lot on the show, Boston Omaha. I've mentioned that Boston Omaha has a bunch of minority investments in adjacent businesses. This was one of them. Boston Omaha owned about 6% of Dream Finders pre-IPO. This was a nice little windfall for them.
But for the Dream Finders business, the reason I really like them and wanted to bring them to people's attention is because they have a very asset-light business model for a homebuilder. A lot of homebuilders -- for example, I'm in a D.R. Horton house right now, that's who built my house. They bought all of the land in my neighborhood, developed it into homes, and, one by one, sold them off. It took them about five years from start to finish to do it.
That's a capital-intensive way to be a homebuilder, to buy a giant plot of land like that, develop a whole neighborhood, and hope that people buy them. Dream Finders uses an asset-light business model, meaning that they own options on land, meaning that they have the right to buy land, but they don't actually complete the purchase of the land that they're building on it until they have a buyer lined up.
It's a really capital-light business model. The return on equity was over 30% last year because of this. Most homebuilders are in the teens. It's a really interesting business, really rapid growth right now. They grew their revenue 30% year over year through the first nine months of 2020. I know 2020 wasn't really a typical time in the housing market, [laughs] but they have grown impressively just for the past few years. They are one of the fastest-growing homebuilders in the country. They're not a market leader yet, but I could see them getting toward that direction. I took a look at them a while ago, and I heard that that was Boston Omaha's home builder investment, and I was really glad to see they went public.
I'm not one for playing in the IPO market all that much. I think the last recent IPO I bought was Lemonade, but that was the first one in a couple of years. I might wait to see the price normalized 'till we get a quarter or two worth of earnings to really value the company on. I want to see how they do in a market that's not 2020. We have all their growth numbers from 2020, but we take that with a grain of salt.
Moser: Matt, homebuilding, it's a fascinating market and it's one where it really seems to favor scale. It definitely seems to favor the bigger players in the space. You mentioned D.R. Horton, for example, $28-some-odd-billion market capitalization. That's a company that's been doing it for a while. Obviously, knows what they're doing. With Dream Finders, this is a small company. This is a $2 billion-market-cap business. They don't have a ton of financial resources at their disposal, at least not yet. What are the things that you're keeping your eye on to make sure they're able to continue taking that step to the next level? What are the things we need to be watching to see this company really, to know that they're able to take that step and compete with the bigger players in the space?
Frankel: They've grown a lot through acquisition. They're now one of the private homebuilder leaders in the Charlotte area because of a big acquisition they made last year, for example. Growing through acquisition costs money. You want to see that they have a reliable and relatively inexpensive source of funding, which they don't have yet. They funded their last acquisition by getting a term loan from Boston Omaha, actually. Boston Omaha was an equity and debt investor. But it was like a one-year term loan, they paid something like 14% interest on the loan.
Moser: Wow.
Frankel: They're going to pay it off with the proceeds from the IPO, it looks like, so right now it's not a big deal. But you want to see them establish a better way to fund their growth. That will come as they grow, as they can really prove their earnings out and things like that. That will come. But that's one thing I'm watching. You're absolutely right, scale is everything in home building.
It's not a terribly high-margin industry usually, especially on the lower to mid-range of the market, which is where Dream Finders tends to operate, in the mid-range homes. For starter homes, the reason that you haven't seen a ton of supply and there are such supply constraints is they really haven't been economical for home builders to make. They're very dependent on things like lumber prices which have been high lately, and you want to see the business scale. As they scale, it will get more efficient. That's really what I'm watching.
Like I said, I love the growth-through-acquisition model because home building, aside from the DR Hortons of the world, it's a pretty fragmented market. There's a lot of smaller regional home builders that they could go after. I love that strategy but I'd like to see them be able to finance it a little more efficiently. Because paying 14% interest is not the way to go.
Moser: [laughs] No, I can imagine not. Well, speaking of buy now and pay later, because hey, that's essentially what buying a house is, right? You're just paying that thing off for the rest of your life pretty much or at least until you sell it. Affirm Holdings is another company you have on your radar. Recent IPO as well, just went public at the beginning of the year. It's a business we've talked about a little bit before together. It's certainly one that is starting to get a little bit more exposure here in our Foolish universe.
We get a lot of questions regarding that buy-now-pay-later opportunity. Questions regarding Visa and MasterCard, is this something that investors and those businesses should be concerned about? But let's talk a little bit about Affirm. It just went public. This is closing in on a $30 billion market cap. The market is receiving this company very well. I do understand, to a degree, why. I think we're still learning about the buy-now-pay-later market and exactly how big of an opportunity that really is. But let's talk a little bit about Affirm. What does this company do, and how does it make money?
Frankel: Affirm's goal is to make the credit process transparent, easy, and fair. A lot of people have used Affirm's services without knowing it, especially if you're a Peloton customer. They do buy-now-pay-later financing, which is basically a fancy way of saying installment plans. If you go to checkout on, say, Walmart.com or Target.com or any of those big websites, you might see a button that says pay X amount a month for six months instead of paying in full today. A lot of times, that's Affirm. That's what they do, they offer that option to merchants. It could be zero-interest financing. In some cases, they have to pay interest. It depends on the particular partnership. But they offer buy-now-pay-later plans, Peloton is by far their biggest customer, 28% of their revenue.
A lot of that has to do with, we mentioned, 2020 was not normal. Everybody in the world was buying a Peloton bike. It was like a Sega Genesis when I was younger. Every household wanted one of those in their house. I bet on the left or right of that piano behind you, there is a Peloton somewhere.
Moser: No, no, no. There is no Peloton in this house, Matt. But if there were, it would be downstairs. My wife's into Pilates, so we have a lot of that equipment. We have a treadmill downstairs. I think we're about tapped on exercise [...] for now though.
Frankel: Fair enough. But Peloton could not keep up with sales in 2020. The point is that that is a big risk going forward, to have 28% of your revenue tied to a company who just had a fantastic year because of the pandemic. The big unanswered question is what happens after the pandemic?
Affirm has a lot, they have 6,500 partners including Walmart, Target, Best Buy. There's a lot of big companies that partner with Affirm to offer this option, because a lot of buyers want that. A lot of buyers don't want a credit card that's going to charge them 20% interest. There is a big, big market for people who don't want to pay all the money up front but also don't want to pay a ton of interest. That's a big market.
Moser: Sure.
Frankel: They've had a lot of success with this, and that's why the market is so excited. They make money through their merchant partnerships. They're not doing this for Peloton out of the goodness of their hearts. Peloton is paying them.
Moser: Yeah. That's what I saw. They earn money from the merchant. They get that fee when they convert the sale. They get the interest income on some interest loans. But like you said, it's not necessarily always going to be some form of high-interest debt. That's really what they're trying to steer away from in order to offer folks an alternative to higher-interest credit cards.
Frankel: Right now, I could go apply for a credit card that had 0% interest for 18 months or something like that.
Moser: Yeah.
Frankel: But that's an extra step. It's a little confusing. The payments are tougher to keep track of. If I want to buy a TV at Best Buy right now, and want one at 0% interest, I can either open Citibank's website, apply for a new credit card, wait for the credit card to come in the mail then buy the TV. Or I could just go to my Best Buy shopping cart and click on the "pay over six months" button and be done with it.
Moser: Well, and so, to your point there in regard to the market opportunity, it really does feel like this is a service that is really geared toward younger consumers. I think that's a good thing. Particularly when I see the data, it really is clear that younger consumers, and we're talking about folks between 18 and 34 years old, these are consumers who are really more willing to trust their financial services with tech-related companies as opposed to the old bank relationship that perhaps we grew up on.
It's changing a little bit. You're getting these tech companies, these fintech companies that are partnering with banks in order to be able to offer these types of financial services, and consumers are feeling more trusting of those types of tech companies, feeling like maybe they're looking out more for their best interest. It feels like, to me, a lot of these companies, whether it's Affirm or even Lemonade, they are really homing in on that trust factor. Knowing that they have that in with that younger consumer, and it really is all about doing the right thing for their demographic.
Frankel: Millennials, of which I am one of the older examples, millennials are people like my age and like, 10 years younger than me. There are a few things that investors should know about the millennial generation. Like you said, they don't trust traditional banks. There are exceptions, but in a lot of cases, they don't trust the established financial institutions. This is why Robinhood and things like that are such big deals.
There are companies made by millennials for millennials, looking out for their interest. Millennials are anti-fee, they don't want to pay fees or interest, any of that. They want their money to go toward purchases that are going to go into their pockets. They're willing to pay $2,000 for a Peloton bike. But that's all they want to pay. They're not willing to put hundreds of dollars in their credit card company's pocket to do it.
No. 3, millennials want things to be easy. They don't want that -- like I said, I could get a credit card that has 0% interest for 18 months right now. But it's extra steps; it makes the process hard. They want things to be easy. If I could click a button and finance a purchase over six months, why am I going to go through the trouble of opening a new credit card to do it? Those three factors really are resonating with the millennial generation. No offense to the Gen-Xers like yourself. [laughs]
Moser: [laughs] None taken.
Frankel: I know you're a tech-savvy Gen-Xer.
Moser: Well, yeah, maybe, but part of that I guess, has to do with my job. But I think you're onto something there in regard to millennials and I think that's also something that carries on over to, what? Gen-Z. Maybe millennials are Gen-Z. No, it's not Gen-Z.
Frankel: No. Gen-Z's after millennials, but millennials are key because we're entering our prime earning years right now. Millennials, I don't want to quote the exact age range, but I know it ends at 38, because that's what I am. I want to say it's 28 to 38 is the millennial age range right now. They are entering the prime years of their career, and they have money to spend.
That's why American Express's Platinum card has been such a big hit, because of benefits like the Uber credits. Right now, they're doing a Goldbelly credit to get food delivered, which I just used, it was really nice. But things like that are really resonating with the millennial generation who has the money to spend and doesn't want to wait, doesn't want to pay fees, and doesn't really trust the establishment.
Moser: Yeah, it makes sense. It certainly seems like they're on to something, and that's whenever you see a business, they really find that market opportunity, that target demographic, and really cater to that demographic, and then you have to believe that with younger generations to follow, that will be the standard that's set. I think that with Affirm, they definitely are on to something, and we're seeing clearly with companies like MasterCard and Visa, the language in their calls. They are talking about this space as well. They are introducing these types of features into their business models as well. This is certainly something that a lot of companies are out there pursuing, and it feels like Affirm is really one of the prime companies blazing that trail, I guess.
Frankel: Yeah. They are a leader, but before we move on, it's important to note that they are not the only one in this space. They were founded by one of PayPal's co-founders, which I thought Jason would like about this company. But PayPal is launching its own buy-now-pay-later service, which could be a problem.
Moser: Square offers that to their merchants as well. Square offers that feature to their merchant customers.
Frankel: Afterpay is another big one in that space. They're not alone. It's a big market opportunity, but with any big market opportunity, they are not going to let one company have all the fun.
Moser: Exactly.
Frankel: You're going to see a lot of the established players like the PayPals and Squares of the world try to get it on the action.
Moser: Yeah, that makes sense. Well, Matt, let's talk about a couple of companies that haven't gone public yet, but their IPOs are impending, I guess is the best word to use. Coinbase, this is an interesting business just based on what they do. This is your favorite part of the financial sector, cryptocurrency. I'm just kidding. [laughs]
Frankel: Well, before we get into this whole segment, I want to say just because we are talking about these two companies doesn't necessarily mean I'm planning on buying the IPOs.
Moser: Right. That's a good point to make. This is not advice to invest in these businesses. We're giving you a little bit more of an understanding of what these businesses are and why folks are paying close attention to these IPOs.
Frankel: Anyone who has listened to us more than once knows that bitcoin is not my favorite place to put money.
Moser: Yeah. Well, with that in mind, because Coinbase is a cryptocurrency exchange. That's essentially what it is. Why does this IPO have you so intrigued?
Frankel: Well, the reason I'm really interested in it is because the cryptocurrency market is almost at $1 trillion in total market cap right now. A lot of the smaller coins are really gaining popularity. Coinbase is adding additional options. They offer 43 different cryptocurrencies on their platform right now. They have $90 billion in digital currency under management right now. They are a big deal. They've done $455 billion in volume since they started, and most of that is pretty recent. There's over 43 million people who use Coinbase. Even if I'm not one of them, some people like it.
What I'm really watching is how much the market's going to think this thing is worth. In December, a pretty good estimate put it at a $28 billion valuation, which, given the size of the market, seems cheap. But then another report a week or two later said it could get up to $75 billion in an IPO valuation. That's a pretty big range for estimates within a couple of weeks of each other, and these were all estimates done by crypto experts. It's not like one was by someone who is down on this space and one's by someone who is really optimistic.That's a pretty big range.
They filed a confidential S-1 filing, so we don't know that much about how much their sales have been, how much their revenue's growing. With crypto prices all over the map over the past few years, it's really tough to even put that into context when you do see the numbers.
Bitcoin's tripled over the past year, so if they say their revenue's tripled, is that just because bitcoin has gone up in price, or is it because the platform is getting more and more attention? There's a lot of questions to be asked. This one is kind of a TBA in terms of when it's going to actually happen. They did a confidential filing, we'll get some more information before they go public. Airbnb did their confidential filing months before they went public. So we don't know the exact timetable. It's entirely possible a SPAC could swoop in and take them public at this point.
But one thing that I saw today that was really interesting: Coinbase is going to sell shares to its members before the IPO, privately. They sent out an email today. They're going to send all their members an email at, they said, noon Pacific Time, which is 3:00 p.m. our time, detailing the process. I am going to be keeping an eye on that to see, because to do that, they're going to have to say something about the valuation.
Moser: I would imagine so. Yeah. [laughs]
Frankel: They're not just going to say, you're going to pay $20 a share. They're going to say what that's based on. I'm going to be paying attention to that. Coinbase is really on my watch list just because I have a lot more questions and answers, is the key takeaway.
Moser: Yeah. Well, that will definitely be an interesting one to learn about, and it feels like the market would receive it probably well, just based on all the enthusiasm in cryptocurrency today. But as you mentioned, there are a lot of questions in regards to the actual business and how it makes its money, and what that is really all dependent on, and we won't know that until more documents come out. I know there's been chatter of this IPO hopefully happening at some point early in February. Again, like you said, it's really to be determined. We just don't know yet, but certainly one to keep an eye on and one that I am certain will garner a lot of interest when it does finally go public.
Let's take a look at this other company. I love your description here. You call it a techie mortgage lender. It sounds right up my alley, man. But this is Home Point Capital, and I want you to tell me a little bit more about this, because when I see "mortgage lender," the first thing I think of is a company like Quicken Loans or Rocket. Is this the same type of business as those?
Frankel: Kind of. They rely more on their relationships with actual mortgage brokers to funnel them business. Everyone knows who Quicken Loans is, everyone knows what Rocket is, everyone knows Bank of America offers mortgages, things like that. Home Point, their ticker symbol, we already know, is going to be HMPT. They haven't exactly gone public yet. They are the third-largest wholesale mortgage lender, which goes through brokers and stuff like that. They are the 10th-largest nonbank mortgage lender in the country, to give you an idea of their size. If you exclude all the Bank of Americas, and Wells Fargos, and stuff like that -- Rocket Mortgage is not a bank, they're in that group. They're the 10th largest nonbank mortgage lender in the country.
The thing that really stood out to me is their growth. They've gone from doing $11 billion in mortgage volume in 2018 to $46 billion through the first three quarters of 2020. Now, 2020 was an exceptionally strong mortgage market. People were refinancing and getting new mortgages more than ever before. I think you and I both refinanced in 2020.
Moser: Yeah. We did.
Frankel: Remember, that's comparing a year to three quarters. When your volume jumps by that much, that's growth, that's not just because of the strong mortgage market. A couple of interesting tidbits. They've already announced our pricing range for their IPO, it is going to price between $19 and $21 a share. They didn't file confidentially, so we know a lot more about their growth than Coinbase. When a company announces their price range, that means expect the IPO soon. I would expect this in the next week. They are selling 12.5 million shares at those prices.
What's really interesting, normally when companies go public through the traditional route, it's to raise capital. If a company is selling a million shares at $20 a share, they're going to make $20 million in the IPO. It's a way to get some new capital in the door. A hundred percent of the shares being sold are from existing investors. The company is not getting a dime out this IPO.
Moser: They're cashing out.
Frankel: Yeah, so a lot of people are cashing out. It's a really interesting company. Like I said, the growth is really what stood out to me. I mentioned the volume numbers, but their market share is growing from 0.7% of the mortgage market to 1.3% over the past couple of years. That's almost doubling their market share in two years. It's a pretty impressive growth rate to me. That's what's really prompting me to dig more into this company and see how the IPO shakes out. Like I said, they're pricing it between $19 and $21. If it jumps to $40 on day one, I'm probably out for the time being. [laughs] But it's one that I'm keeping on my radar. Like I said, I'm not a huge IPO investor, and I only invest in an IPO if I'm super confident in it. I think it's early still, but I think I made the right call on Lemonade at, like, $40 a share.
Moser: Yeah, I think that's working really well.
Frankel: It's about $160 right now.
Moser: It's working out for you so far.
Frankel: I use my IPO calls sparingly, because right now on the show, I'm one for one.
Moser: Yeah. Well, every time I do it, I harken back to just a couple of lessons learned, and I mean, every once in a while, it works out. I noted a little while back, the company I bought shares in most recently is Unity Software. That's a business that I felt a lot of conviction in when it went public. Unity is working out OK, for now, but for every Unity, there's also something like an Eventbrite, where it just doesn't quite work out initially and they got to learn how to be a public company.
Frankel: You understand the software and tech space a lot better than I do. I'm more of the real estate and value investor type. You're more inclined to jump into the software businesses, which I'm a little hesitant about.
Moser: Maybe.
Frankel: Looking at your track record, I really can't argue with you.
Moser: So far it's working out, but listen, investing it's a lifelong journey as they say.
Frankel: Now Jason spends his time in the stables, he's gone too well.
Moser: [laughs] Yeah. Investing in animal medicine. [laughs]. Oh, man. We'll definitely keep an eye out on that. I'm certain that is a business we will cover here on the show going forward too. So excited about that, excited to learn more about Home Point Capital as well. OK.
Matt, let's move on here to a listener question we got on Twitter the other day. This comes from a listener with the handle @FooleryJoe. I like that, @FooleryJoe. @FooleryJoe asks, "Question for the financials episode this week: Do bonds, at their current yield, have a place, any Foolish portfolio?"
I'm going to go straight to our resident Certified Financial Planner, Mr. Matt Frankel. What do you think about this question here from Joe Foolery?
Frankel: The short answer is it depends. It's pretty well known if you have a good investing background, bonds are also known as fixed-income investments. They are generally designed to produce a steady stream of income without much downside risk to your principal. The reason is because if you buy bonds, at the bonds' maturity, you get your money back. If I pay $1,000 for a bond from a company, I will get that back whenever the bond matures. The problem is right now, interest rates are so low, they're not paying much of anything, especially the high-quality ones. If I buy a 10-year Treasury, I'm not going to get that much income out of it.
Moser: [laughs] No.
Frankel: I think they are just over 1% right now on 10-year Treasuries. It's better than it was. But it's more of a question of how much preserving your capital is a priority. If you can afford to survive the ups and downs of a market, let's say you're in your 30s like I am, and you have a few decades left till retirement, you can watch your portfolio go up and down. No doubt do you have a diverse collection of good businesses in there, you can have much less in bonds than you would say if bonds were yielding 4% or 5%. I know if bonds were yielding what they were in the '90s, I would have a whole lot more of them in my portfolio than I do right now. [laughs] I think you would agree with that statement.
Moser: I would. Yeah, absolutely.
Frankel: Then again, in your 60s right now, if you're almost at the finish line of retirement, your priority is preserving capital, bonds definitely still have in place. You're not going to get that type of capital preservation in the stock market, you're just not, even if you're buying like blue chip dividend stocks. Think of the most boring rock-solid company you can. Jason, any names come to mind?
Moser: Procter & Gamble (NYSE: PG).
Frankel: There you go. Look what they did in March of 2020. It did not preserve the investors' capital to have money in Procter & Gamble in March of 2020. If it's a question of capital preservation more than anything. If you have money that you need, fixed income or bonds still have a great place in your portfolio. People younger, a lot of them are going pretty much almost 100% stocks right now. If you're in your 30s and 40s, I really can't argue with that if you're doing it in a diverse and correct way.
Moser: Yeah. You need to take into consideration things like if you're a homeowner, the equity that you have in your home. There are other types of investments that can be a little bit more protected. I like how you talk about the, are you in the grow-your-wealth state or the protect-your-wealth state? If you get that really does dictate a lot.
I will say, I reached into some of our resources here at the Fool and just looked at some of the advice in Rule Your Retirement, and the team over there, and this is just a roundabout way of looking at it, there is context and whatnot to be considered here. But generally speaking, they're looking at this from the perspective, more than 10 years out from retirement, maybe you have 6% of your portfolio in bonds. If you're within 10 years of retirement, maybe you have about 20% of your portfolio and bonds. If you're in retirement, maybe you have closer to 25% of your portfolio in bonds.
Again, that's suggested guidance that doesn't take into consideration where all of your money is allocated. Again, if you have gold or real estate, or anything else, just things to keep in mind. But certainly, it feels like the closer you get to retirement, obviously, the more a role they potentially should play.
Frankel: Yeah, I would agree with that. They do have a position in your portfolio, but not as the income generators that they once were.
Moser: Yeah. Well, Matt, before we finish up here for the week, let's dig in to ones to watch. I've got a stock I'm watching, but what's the stock that you are watching coming week?
Frankel: Well, last week, we saw the bank earnings come out. This week, we're going to start seeing some real estate earnings, so I am watching Tanger Outlet. Ticker symbol is SKT. They report today after the close. People who are listening to this, it might have reported by the time you're listening. But I'm looking at that to get a gauge of how retail performed in the fourth quarter.
Because a lot of these mall REITs, real estate companies, they did pretty well in the third quarter because the pandemic wasn't gone, but the numbers were lower in the summer and fall months than they are right now, so people were more eager to venture out. I'm curious to see how the holiday season treated retail. Tanger just recently announced they're bringing back dividends, which is pretty nice for a retail REIT. I want to see their profitability really justifies that.
Moser: Well, there you go. Yeah, I have just one final bank that I'm really following here, this coming week. Ameris Bancorp earnings are out on Thursday. 2020 wasn't the greatest year for banks in general, and I think the S&P Financials index, that was one of the few underperformers. That was one of the few areas of underperformance in the market last year.
It's feeling like maybe banks are set up for a little bit more success this year. This is a small-cap bank, it's like that small-cap home-builder. Banking is one of those businesses where size really does help. Ameris is getting a little bit bigger via that acquisition of Fidelity not all that long ago, absolutely playing out on their non-interest-bearing deposits, becoming a greater percentage of deposits is kind of like free money, essentially.
Looking for trends that we saw here with the big banks, though, on loans growth versus deposit growth, I suspect we'll continue to see that deposit growth robust, whereas lending is just a hit or miss right now. Then really, just interested in their language for 2021, how they see the year shaping up. I know that they had been at least keeping an open mind toward acquisitions here going forward. So anytime you can get any language regarding potential deals, too, that's always interesting. But a well-run bank dealing with a tricky time right now with interest rates and as a shareholder, I remain a happy and patient one, but we'll be looking for the earnings on Thursday.
Matt, I think that's going to do it for us this week. As always, man, I appreciate you taking the time to jump in here and share your knowledge with our listeners.
Frankel: [laughs] Of course. Till next time.
Moser: Absolutely. Remember, you can always reach out to us on Twitter @MFIndustryFocus, or you can drop us some email at industryfocus@fool.com.
As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.
Thanks, as always, to Tim Sparks for putting the show together for us. For Matt Frankel, I'm Jason Moser. Thanks for listening, and we'll see you next week.
Matthew Frankel, CFP owns shares of American Express, Bank of America, Boston Omaha, Lemonade, Inc., Square, Tanger Factory Outlet Centers, and Wells Fargo and has the following options: short September 2022 $155 calls on Square. The Motley Fool owns shares of and recommends Boston Omaha, Lemonade, Inc., Mastercard, PayPal Holdings, Peloton Interactive, Square, Unity Software Inc., and Visa. The Motley Fool recommends Airbnb, Inc., Ameris Bancorp, Eventbrite, Inc., Tanger Factory Outlet Centers, and Uber Technologies and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Finally, Matt and Jason share why they're watching Tanger Factory Outlet Centers (NYSE: SKT) and Ameris Bancorp (NASDAQ: ABCB) ahead of their earnings announcements this week. Because a lot of these mall REITs, real estate companies, they did pretty well in the third quarter because the pandemic wasn't gone, but the numbers were lower in the summer and fall months than they are right now, so people were more eager to venture out. The Motley Fool owns shares of and recommends Boston Omaha, Lemonade, Inc., Mastercard, PayPal Holdings, Peloton Interactive, Square, Unity Software Inc., and Visa. | Finally, Matt and Jason share why they're watching Tanger Factory Outlet Centers (NYSE: SKT) and Ameris Bancorp (NASDAQ: ABCB) ahead of their earnings announcements this week. Matthew Frankel, CFP owns shares of American Express, Bank of America, Boston Omaha, Lemonade, Inc., Square, Tanger Factory Outlet Centers, and Wells Fargo and has the following options: short September 2022 $155 calls on Square. The Motley Fool owns shares of and recommends Boston Omaha, Lemonade, Inc., Mastercard, PayPal Holdings, Peloton Interactive, Square, Unity Software Inc., and Visa. | Finally, Matt and Jason share why they're watching Tanger Factory Outlet Centers (NYSE: SKT) and Ameris Bancorp (NASDAQ: ABCB) ahead of their earnings announcements this week. There is a big, big market for people who don't want to pay all the money up front but also don't want to pay a ton of interest. You're getting these tech companies, these fintech companies that are partnering with banks in order to be able to offer these types of financial services, and consumers are feeling more trusting of those types of tech companies, feeling like maybe they're looking out more for their best interest. | Finally, Matt and Jason share why they're watching Tanger Factory Outlet Centers (NYSE: SKT) and Ameris Bancorp (NASDAQ: ABCB) ahead of their earnings announcements this week. There is a big, big market for people who don't want to pay all the money up front but also don't want to pay a ton of interest. But things like that are really resonating with the millennial generation who has the money to spend and doesn't want to wait, doesn't want to pay fees, and doesn't really trust the establishment. |
27805.0 | 2021-01-14 00:00:00 UTC | Bank ABC acquires Blom Bank Egypt for $480 mln -sources | ABCB | https://www.nasdaq.com/articles/bank-abc-acquires-blom-bank-egypt-for-%24480-mln-sources-2021-01-14-0 | nan | nan | Adds details
CAIRO, Jan 14 (Reuters) - Bahrain's Bank ABC ABCB.BH completed its purchase of the Egyptian subsidiary of Lebanon's Blom Bank BLOM.BY for $480 million on Thursday, two banking sources said.
The transaction included all Blom Bank Egypt's physical and non-physical assets as well as customer accounts, the sources said.
Lebanon's Blom Bank, which owns 99.42% of the issued share capital of Blom Bank Egypt, said it had entered exclusive talks with Bahrain's ABC in December.
Lebanon has been in the throes of a financial crisis that has paralysed its banks, sunk the currency and fuelled poverty and unemployment.
Libya's central bank owns a 59.37% stake in Bank ABC, according to Bank ABC's website. The Bahrain-based bank has an Egyptian subsidiary, Bank ABC Egypt, in which it owns a 93% stake.
Blom Bank Egypt listed assets of 45.06 billion Egyptian pounds ($2.88 billion) as of Sept. 30, 2020.
It reported a net profit of 205.6 million Egyptian pounds in the three months ending Sept. 30 last year, down from 229.5 million a year earlier.
($1 = 15.6200 Egyptian pounds)
(Reporting by Afaf Ammar and Patrick Werr Writing by Aidan Lewis; editing by David Evans)
((Aidan.Lewis@tr.com; +20-1001174410;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Adds details CAIRO, Jan 14 (Reuters) - Bahrain's Bank ABC ABCB.BH completed its purchase of the Egyptian subsidiary of Lebanon's Blom Bank BLOM.BY for $480 million on Thursday, two banking sources said. The transaction included all Blom Bank Egypt's physical and non-physical assets as well as customer accounts, the sources said. Lebanon has been in the throes of a financial crisis that has paralysed its banks, sunk the currency and fuelled poverty and unemployment. | Adds details CAIRO, Jan 14 (Reuters) - Bahrain's Bank ABC ABCB.BH completed its purchase of the Egyptian subsidiary of Lebanon's Blom Bank BLOM.BY for $480 million on Thursday, two banking sources said. The Bahrain-based bank has an Egyptian subsidiary, Bank ABC Egypt, in which it owns a 93% stake. Blom Bank Egypt listed assets of 45.06 billion Egyptian pounds ($2.88 billion) as of Sept. 30, 2020. | Adds details CAIRO, Jan 14 (Reuters) - Bahrain's Bank ABC ABCB.BH completed its purchase of the Egyptian subsidiary of Lebanon's Blom Bank BLOM.BY for $480 million on Thursday, two banking sources said. Lebanon's Blom Bank, which owns 99.42% of the issued share capital of Blom Bank Egypt, said it had entered exclusive talks with Bahrain's ABC in December. Libya's central bank owns a 59.37% stake in Bank ABC, according to Bank ABC's website. | Adds details CAIRO, Jan 14 (Reuters) - Bahrain's Bank ABC ABCB.BH completed its purchase of the Egyptian subsidiary of Lebanon's Blom Bank BLOM.BY for $480 million on Thursday, two banking sources said. The transaction included all Blom Bank Egypt's physical and non-physical assets as well as customer accounts, the sources said. Lebanon has been in the throes of a financial crisis that has paralysed its banks, sunk the currency and fuelled poverty and unemployment. |
27806.0 | 2021-01-14 00:00:00 UTC | Bank ABC acquires Blom Bank Egypt for $480 mln -sources | ABCB | https://www.nasdaq.com/articles/bank-abc-acquires-blom-bank-egypt-for-%24480-mln-sources-2021-01-14 | nan | nan | CAIRO, Jan 14 (Reuters) - Bank ABC completed its acquisition of Blom Bank Egypt for $480 million on Thursday, two banking sources said.
The transaction included all physical and non-physical assets as well as customer accounts, the sources said.
(Writing by Aidan Lewis)
((Aidan.Lewis@tr.com; +20-1001174410;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | CAIRO, Jan 14 (Reuters) - Bank ABC completed its acquisition of Blom Bank Egypt for $480 million on Thursday, two banking sources said. The transaction included all physical and non-physical assets as well as customer accounts, the sources said. (Writing by Aidan Lewis) ((Aidan.Lewis@tr.com; +20-1001174410;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | CAIRO, Jan 14 (Reuters) - Bank ABC completed its acquisition of Blom Bank Egypt for $480 million on Thursday, two banking sources said. The transaction included all physical and non-physical assets as well as customer accounts, the sources said. (Writing by Aidan Lewis) ((Aidan.Lewis@tr.com; +20-1001174410;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | CAIRO, Jan 14 (Reuters) - Bank ABC completed its acquisition of Blom Bank Egypt for $480 million on Thursday, two banking sources said. The transaction included all physical and non-physical assets as well as customer accounts, the sources said. (Writing by Aidan Lewis) ((Aidan.Lewis@tr.com; +20-1001174410;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | CAIRO, Jan 14 (Reuters) - Bank ABC completed its acquisition of Blom Bank Egypt for $480 million on Thursday, two banking sources said. The transaction included all physical and non-physical assets as well as customer accounts, the sources said. (Writing by Aidan Lewis) ((Aidan.Lewis@tr.com; +20-1001174410;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. |
27807.0 | 2020-12-06 00:00:00 UTC | Validea's Top Five Financial Stocks Based On Joel Greenblatt - 12/6/2020 | ABCB | https://www.nasdaq.com/articles/valideas-top-five-financial-stocks-based-on-joel-greenblatt-12-6-2020-2020-12-06 | nan | nan | The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. This value model looks for companies with high return on capital and earnings yields.
ALLIANCE DATA SYSTEMS CORPORATION (ADS) is a mid-cap value stock in the Consumer Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Alliance Data Systems Corp is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ALLIANCE DATA SYSTEMS CORPORATION
Full Guru Analysis for ADS>
Full Factor Report for ADS>
ARES COMMERCIAL REAL ESTATE CORP (ACRE) is a small-cap growth stock in the Misc. Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ares Commercial Real Estate Corporation is a specialty finance company. The Company is primarily engaged in originating and investing in commercial real estate (CRE) loans and related investments. The Company operates through principal lending segment. Its target investments include senior mortgage loans, subordinated debt, preferred equity, mezzanine loans and other CRE investment opportunities, including commercial mortgage-backed securities. These investments are generally held for investment and are secured, directly or indirectly, by office, multifamily, retail, industrial, lodging, senior-living, self-storage and other commercial real estate properties, or by ownership interests therein. Through the Company's manager, Ares Commercial Real Estate Management LLC, it has investment professionals located across the United States and Europe who directly source loan opportunities for the Company with owners, operators and sponsors of CRE properties.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ARES COMMERCIAL REAL ESTATE CORP
Full Guru Analysis for ACRE>
Full Factor Report for ACRE>
ARCH CAPITAL GROUP LTD. (ACGL) is a large-cap value stock in the Insurance (Prop. & Casualty) industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Arch Capital Group Ltd. provides insurance, reinsurance and mortgage insurance. The Company provides a range of property, casualty and mortgage insurance and reinsurance lines. The Company operates in five segments: insurance, reinsurance, mortgage, other and corporate. The insurance segment's product lines include construction and national accounts; excess and surplus casualty; lenders products; professional lines; programs; property, energy, marine and aviation; travel, accident and health, and other. The reinsurance segment's product lines include casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe, and other. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. The other segment includes the results of Watford Holdings Ltd.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ARCH CAPITAL GROUP LTD.
Full Guru Analysis for ACGL>
Full Factor Report for ACGL>
ACAMAR PARTNERS ACQUISITION CORP (ACAM) is a small-cap growth stock in the Misc. Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Acamar Partners Acquisition Corp is a blank check company. The Company is formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. The Company's target business is not limited to a particular industry or geographic region, but intends to acquire businesses in North America and Western Europe. The Company is focused on acquiring businesses in consumer and retail sectors, including travel retail, food and beverage, luxury goods, fashion, lifestyle, leisure products and services
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ACAMAR PARTNERS ACQUISITION CORP
Full Guru Analysis for ACAM>
Full Factor Report for ACAM>
AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ameris Bancorp is a financial holding company. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of AMERIS BANCORP
Full Guru Analysis for ABCB>
Full Factor Report for ABCB>
More details on Validea's Joel Greenblatt strategy
Joel Greenblatt Stock Ideas
About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. The "Magic Formula," as he called it, produced back-tested returns of 30.8 percent per year from 1988 through 2004, more than doubling the S&P 500's 12.4 percent return during that time. Greenblatt also produced exceptional returns as managing partner at Gotham Capital, a New York City-based hedge fund he founded. The firm averaged a remarkable 40 percent annualized return over more than two decades.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Detailed Analysis of ACAMAR PARTNERS ACQUISITION CORP Full Guru Analysis for ACAM> Full Factor Report for ACAM> AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. | Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. Detailed Analysis of ACAMAR PARTNERS ACQUISITION CORP Full Guru Analysis for ACAM> Full Factor Report for ACAM> AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. Detailed Analysis of ALLIANCE DATA SYSTEMS CORPORATION Full Guru Analysis for ADS> Full Factor Report for ADS> ARES COMMERCIAL REAL ESTATE CORP (ACRE) is a small-cap growth stock in the Misc. | Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. Detailed Analysis of ACAMAR PARTNERS ACQUISITION CORP Full Guru Analysis for ACAM> Full Factor Report for ACAM> AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs. | Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. Detailed Analysis of ACAMAR PARTNERS ACQUISITION CORP Full Guru Analysis for ACAM> Full Factor Report for ACAM> AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. |
27808.0 | 2020-12-02 00:00:00 UTC | Blom Bank in talks with Bahrain's Arab Banking Corp to sell Egyptian unit | ABCB | https://www.nasdaq.com/articles/blom-bank-in-talks-with-bahrains-arab-banking-corp-to-sell-egyptian-unit-2020-12-02-0 | nan | nan | Adds background, link to previous story
BEIRUT, Dec 2 (Reuters) - Lebanon's Blom Bank BLOM.BY has entered exclusive talks with Bahrain's Bank ABC ABCB.BH to potentially sell its ownership in Blom Bank Egypt, Blom Bank said in a statement on Wednesday.
"Both parties will consequently enter into negotiations in order to reach a final agreement, however, there is no certainty that any transaction will be completed," the statement said.
Blom Bank owns 99.42% of the issued share capital of Blom Bank Egypt, the statement said.
Bahrain's ABC said in September it was in preliminary talks to buy Blom Bank's Egyptian subsidiary.
Lebanon is in the throes of a financial crisis that has paralysed its banks, sunk the currency and fuelled poverty and unemployment. The central bank in August called on banks to increase their capital by 20% by the end of February.
(Writing by Tom Perry; Editing by Christian Schmollinger and Louise Heavens)
((thomas.perry@thomsonreuters.com; Reuters Messaging: thomas.perry.reuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Adds background, link to previous story BEIRUT, Dec 2 (Reuters) - Lebanon's Blom Bank BLOM.BY has entered exclusive talks with Bahrain's Bank ABC ABCB.BH to potentially sell its ownership in Blom Bank Egypt, Blom Bank said in a statement on Wednesday. "Both parties will consequently enter into negotiations in order to reach a final agreement, however, there is no certainty that any transaction will be completed," the statement said. Bahrain's ABC said in September it was in preliminary talks to buy Blom Bank's Egyptian subsidiary. | Adds background, link to previous story BEIRUT, Dec 2 (Reuters) - Lebanon's Blom Bank BLOM.BY has entered exclusive talks with Bahrain's Bank ABC ABCB.BH to potentially sell its ownership in Blom Bank Egypt, Blom Bank said in a statement on Wednesday. Blom Bank owns 99.42% of the issued share capital of Blom Bank Egypt, the statement said. Bahrain's ABC said in September it was in preliminary talks to buy Blom Bank's Egyptian subsidiary. | Adds background, link to previous story BEIRUT, Dec 2 (Reuters) - Lebanon's Blom Bank BLOM.BY has entered exclusive talks with Bahrain's Bank ABC ABCB.BH to potentially sell its ownership in Blom Bank Egypt, Blom Bank said in a statement on Wednesday. Blom Bank owns 99.42% of the issued share capital of Blom Bank Egypt, the statement said. (Writing by Tom Perry; Editing by Christian Schmollinger and Louise Heavens) ((thomas.perry@thomsonreuters.com; Reuters Messaging: thomas.perry.reuters.com@reuters.net)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Adds background, link to previous story BEIRUT, Dec 2 (Reuters) - Lebanon's Blom Bank BLOM.BY has entered exclusive talks with Bahrain's Bank ABC ABCB.BH to potentially sell its ownership in Blom Bank Egypt, Blom Bank said in a statement on Wednesday. "Both parties will consequently enter into negotiations in order to reach a final agreement, however, there is no certainty that any transaction will be completed," the statement said. Lebanon is in the throes of a financial crisis that has paralysed its banks, sunk the currency and fuelled poverty and unemployment. |
27809.0 | 2020-12-01 00:00:00 UTC | Validea John Neff Strategy Daily Upgrade Report - 12/1/2020 | ABCB | https://www.nasdaq.com/articles/validea-john-neff-strategy-daily-upgrade-report-12-1-2020-2020-12-01 | nan | nan | The following are today's upgrades for Validea's Low PE Investor model based on the published strategy of John Neff. This strategy looks for firms with persistent earnings growth that trade at a discount relative to their earnings growth and dividend yield.
CAPSTAR FINANCIAL HOLDINGS INC (CSTR) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 58% to 77% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: CapStar Financial Holdings, Inc. is a bank holding company. The Company operates primarily through its subsidiary, CapStar Bank. CapStar Bank is a commercial bank. The Company's lines of business include commercial and industrial, commercial real estate, healthcare, correspondent banking, personal and private banking and wealth management, and mortgage banking. Its products and services include commercial and industrial loans to small and medium sized businesses, with a particular focus on businesses operating in the healthcare industry; commercial real estate loans; private banking and wealth management services for the owners and operators of business clients and other high net worth individuals, and correspondent banking services. As of June 30, 2016, the Company had seven locations, five of which are retail bank branches and two of which are mortgage origination offices.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: FAIL
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: FAIL
EPS PERSISTENCE: FAIL
Detailed Analysis of CAPSTAR FINANCIAL HOLDINGS INC
Full Guru Analysis for CSTR
Full Factor Report for CSTR
FIRST BANK (HAMILTON) (FRBA) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 60% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: First Bank is a commercial bank. The Company provides a range of lending, deposit and other financial products and services. It operates through Community Banking segment, which is engaged in providing a range of commercial and retail and related banking services. It offers a range of lending products to meet the needs of its customers located within its market areas, including commercial and industrial loans, commercial real estate loans, residential real estate loans, and consumer and other loans. It offers a range of deposit instruments, including non-interest bearing demand deposits, interest bearing demand accounts, money market accounts, savings accounts and certificates of deposit. The Company operates approximately 18 branches located in Cinnaminson, Cranbury, Delanco, Denville, Ewing, Flemington, Hamilton, Lawrence, Pennington, Randolph, Somerset and Williamstown, New Jersey, and Doylestown, Trevose, Warminster and West Chester, Pennsylvania.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: FAIL
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: FAIL
EPS PERSISTENCE: PASS
Detailed Analysis of FIRST BANK (HAMILTON)
Full Guru Analysis for FRBA
Full Factor Report for FRBA
COASTAL FINANCIAL CORP (EVERETT) (CCB) is a small-cap growth stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 62% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Coastal Financial Corporation is the bank holding company for the Coastal Community Bank (the Bank). The Company provides a full range of banking services to small and medium-sized businesses, professionals, and individuals. The Bank's principal business consists of attracting deposits from the general public, businesses and commercial industries, and using these funds to originate consumer, commercial business loans, commercial real estate loans, residential mortgage loans, boat and recreational vehicle loans, and land and land development loans. It conducts its business from 11 branches in Seattle, one branch in King County, 10 branches in Snohomish County, and 2 branches in Island County.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: FAIL
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS
Detailed Analysis of COASTAL FINANCIAL CORP (EVERETT)
Full Guru Analysis for CCB
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GRIFFON CORPORATION (GFF) is a small-cap growth stock in the Appliance & Tool industry. The rating according to our strategy based on John Neff changed from 62% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Griffon Corp is a diversified management and holding company that conducts business through its wholly-owned subsidiaries. The Company operates through three reportable segments: Consumer and Professional Products (CPP), Home and Building Products (HBP) and Defense Electronics. CPP segment consists of AMES Companies, Inc. (AMES), which is a manufacturer of branded consumer and professional tools and products for home storage and organization, landscaping, and enhancing outdoor lifestyles. HBP segment consists of Clopay Corporation (Clopay), which is a manufacturer and marketer of residential and commercial sectional garage doors and rolling steel doors in North America. Defense Electronics consists of Telephonics Corporation (Telephonics), which is a provider of surveillance and communications solutions for defense, aerospace and commercial customers.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: FAIL
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS
Detailed Analysis of GRIFFON CORPORATION
Full Guru Analysis for GFF
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WILLIAMS-SONOMA, INC. (WSM) is a mid-cap growth stock in the Retail (Specialty) industry. The rating according to our strategy based on John Neff changed from 62% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Williams-Sonoma, Inc. is a multi-channel specialty retailer of products for the home. The Company operates retail stores in the United States, Canada, Puerto Rico, Australia and the United Kingdom. It operates through two segments: e-commerce and retail. The e-commerce segment has various merchandising strategies, such as Williams-Sonoma, Pottery Barn, Pottery Barn Kids, West Elm, PBteen, Williams-Sonoma Home, Rejuvenation and Mark and Graham, which sell its products through the Company's e-commerce Websites and direct-mail catalogs. The retail segment has various merchandising strategies, such as Williams-Sonoma, Pottery Barn, Pottery Barn Kids, West Elm and Rejuvenation, which sell its products through the Company's retail stores. The Company franchises its brands to third parties in a number of countries in the Middle East, the Philippines and Mexico. The Company's products are also available to customers through its catalogs and online across the world.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: FAIL
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS
Detailed Analysis of WILLIAMS-SONOMA, INC.
Full Guru Analysis for WSM
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KFORCE INC. (KFRC) is a small-cap growth stock in the Business Services industry. The rating according to our strategy based on John Neff changed from 62% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Kforce Inc. (Kforce) is engaged in providing professional and technical specialty staffing services and solutions. The Company operates through three segments, which include Technology (Tech), Finance and Accounting (FA) and Government Solutions (GS). The Company's Tech segment includes the operations of its subsidiary Kforce Global Solutions, Inc. The FA segment is engaged in providing both temporary staffing and permanent placement services to its clients in areas, such as general accounting, business analysis and others. The GS segment is engaged in providing services and solutions to the Federal Government as both a prime contractor and a subcontractor in the fields of information technology, and finance and accounting. Kforce operates through field offices located throughout the United States and one office in Manila, the Philippines. The Company offers various staffing services that consist of temporary staffing services (Flex) and permanent placement services (Direct Hire).
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: FAIL
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS
Detailed Analysis of KFORCE INC.
Full Guru Analysis for KFRC
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SOUTHERN MISSOURI BANCORP, INC. (SMBC) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 60% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Southern Missouri Bancorp, Inc. is the holding company for Southern Bank (the Bank). The principal business of the Bank consists primarily of attracting retail deposits from the public and using such deposits along with wholesale funding from the Federal Home Loan Bank of Des Moines (FHLB), and brokered deposits. The Bank offers a range of deposit instruments, such as demand deposit accounts, negotiable order of withdrawal (NOW) accounts, money market deposit accounts, saving accounts, certificates of deposit and retirement savings plans. The Bank's lending activities consist of origination of loans secured by mortgages on one-to four-family and multifamily residential real estate, commercial and agricultural real estate, construction loans on residential and commercial properties, commercial and agricultural business loans and consumer loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: FAIL
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: FAIL
Detailed Analysis of SOUTHERN MISSOURI BANCORP, INC.
Full Guru Analysis for SMBC
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DAVITA INC (DVA) is a large-cap growth stock in the Healthcare Facilities industry. The rating according to our strategy based on John Neff changed from 62% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: DaVita Inc., formerly DaVita HealthCare Partners Inc., operates one division: DaVita Kidney Care (Kidney Care). The Kidney Care division consists of the Company's United States dialysis and related lab services, its ancillary services and strategic initiatives, including its international operations, and its corporate administrative support. The Company's segments include U.S. dialysis and related lab services and Other-Ancillary services and strategic initiatives. Its U.S. dialysis and related lab services line of business provide kidney dialysis services in the United States for patients suffering from chronic kidney failure, also known as an end-stage renal disease (ESRD). In addition, as of March 31, 2019, the Company operated or provided administrative services to 243 outpatient dialysis centers located in nine countries outside of the United States.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: FAIL
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS
Detailed Analysis of DAVITA INC
Full Guru Analysis for DVA
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UMB FINANCIAL CORP (UMBF) is a mid-cap growth stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 62% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: UMB Financial Corporation is a diversified financial holding company. The Company supplies banking services, institutional investment management, asset servicing and payment solutions to its customers in the United States and around the globe. The Company's segments include Bank, which provides a range of banking services to commercial, retail, government and correspondent bank customers through the Company's branches, call center, Internet banking and automated teller machine network; Institutional Investment Management, which provides equity and fixed income investment strategies in the intermediary and institutional markets, and Asset Servicing, which provides services to the asset management industry, supporting a range of investment products, including mutual funds, alternative investments and managed accounts. The Company's subsidiary includes UMB Fund Services, Inc. (UMBFS).
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS
Detailed Analysis of UMB FINANCIAL CORP
Full Guru Analysis for UMBF
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GLACIER BANCORP, INC. (GBCI) is a mid-cap growth stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 62% to 100% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Glacier Bancorp, Inc. is a bank holding company. The Company provides commercial banking services. It provides banking services in various locations including Montana, Idaho, Wyoming, Colorado, Layton Utah and Washington, through its bank subsidiary, Glacier Bank (the Bank) Kalispell, and its bank divisions: First Security Bank of Missoula; Valley Bank of Helena; Western Security Bank, Billings; First Bank of Montana, Lewistown; and First Security Bank. It offers a range of banking products and services, including retail banking, business banking, real estate, commercial, agriculture, and consumer loans and mortgage origination services. It serves individuals, small to medium-sized businesses, community organizations and public entities. It focuses lending activities primarily on types of loans, including first-mortgage, conventional loans secured by residential properties, particularly single-family; commercial lending, including agriculture that concentrates on targeted businesses.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS
Detailed Analysis of GLACIER BANCORP, INC.
Full Guru Analysis for GBCI
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MDU RESOURCES GROUP INC (MDU) is a mid-cap value stock in the Natural Gas Utilities industry. The rating according to our strategy based on John Neff changed from 60% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: MDU Resources Group Inc., formerly MDUR Newco, Inc., is engaged in regulated energy delivery and construction materials and services business. The Company's businesses segments are electric, natural gas distribution, pipeline and midstream, construction materials and contracting, and construction services. The electric segment generates, transmits and distributes electricity. The natural gas distribution segment distributes natural gas. The pipeline and midstream segment provides natural gas transportation, underground storage, processing and gathering services, as well as oil gathering. The construction materials and contracting segment mines aggregates and markets crushed stone, sand, gravel and related construction materials, including ready-mixed concrete, asphalt, liquid asphalt and other value-added products. The construction services segment provides utility construction services in constructing and maintaining electric and communication lines.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: FAIL
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: FAIL
EPS PERSISTENCE: PASS
Detailed Analysis of MDU RESOURCES GROUP INC
Full Guru Analysis for MDU
Full Factor Report for MDU
MYERS INDUSTRIES, INC. (MYE) is a small-cap growth stock in the Fabricated Plastic & Rubber industry. The rating according to our strategy based on John Neff changed from 62% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Myers Industries, Inc. is an international manufacturing and distribution company. The Company operates through two segments: Material Handling and Distribution. As of December 31, 2016, the Company operated 15 manufacturing facilities, 20 sales offices, four distribution centers and three distribution branches located throughout North, Central and South America. As of December 31, 2016, the Company had approximately 15,000 manufactured products and over 13,500 distributed products. The Material Handling segment designs, manufactures and markets a range of plastic and metal products. The Distribution Segment is engaged in the distribution of tools, equipment and supplies used for tire, wheel and under vehicle service on passenger, heavy truck and off-road vehicles, and the manufacturing of tire repair materials and custom rubber products. The product line includes categories, such as tire valves and accessories, and lifts and alignment equipment.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: FAIL
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS
Detailed Analysis of MYERS INDUSTRIES, INC.
Full Guru Analysis for MYE
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UNIVEST FINANCIAL CORP (UVSP) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 60% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Univest Financial Corporation, formerly Univest Corporation of Pennsylvania is the bank holding company of Univest Bank and Trust Co. (the Bank). The Bank is a Pennsylvania state-chartered bank and trust company. Its business segments include Banking, Wealth Management and Insurance. The Banking segment provides financial services, such as deposit taking, loan origination and servicing, mortgage banking, other general banking services and equipment lease financing. The Wealth Management segment offers trust and investment advisory services, guardian and custodian of employee benefits and other trust and brokerage services, as well as a registered investment advisory managing private investment accounts for both individuals and institutions. The Insurance segment includes a full-service insurance brokerage agency offering commercial property and casualty insurance, group life and health coverage, employee benefit solutions, personal insurance lines and human resources consulting.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: FAIL
Detailed Analysis of UNIVEST FINANCIAL CORP
Full Guru Analysis for UVSP
Full Factor Report for UVSP
AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 58% to 77% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ameris Bancorp is a financial holding company. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: FAIL
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: FAIL
EPS PERSISTENCE: FAIL
Detailed Analysis of AMERIS BANCORP
Full Guru Analysis for ABCB
Full Factor Report for ABCB
ALLIANCEBERNSTEIN HOLDING LP (AB) is a mid-cap value stock in the Investment Services industry. The rating according to our strategy based on John Neff changed from 62% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: AllianceBernstein Holding L.P. is engaged in providing research, investment management and related services to a range of clients through its three buy-side distribution channels: Institutions, Retail and Private Wealth Management, and its sell-side business, Bernstein Research Services. The Company offers a range of investment services, including equity strategies, with global and regional portfolios across capitalization ranges and investment strategies, including value, growth and equities; traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies; passive management, including index and enhanced index strategies; alternative investments, including hedge funds, fund of funds and private equity, and multi-asset solutions and services, including dynamic asset allocation, customized target-date funds and target-risk funds. The Company's services span various investment disciplines, including market capitalization, term and geographic locations.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: FAIL
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS
Detailed Analysis of ALLIANCEBERNSTEIN HOLDING LP
Full Guru Analysis for AB
Full Factor Report for AB
NATURAL GROCERS BY VITAMIN COTTAGE INC (NGVC) is a small-cap growth stock in the Retail (Grocery) industry. The rating according to our strategy based on John Neff changed from 42% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Natural Grocers by Vitamin Cottage, Inc. is a specialty retailer of natural and organic groceries, and dietary supplements. The Company's products in its stores include Body Care, Pet Care, Household and General Merchandise, and Books and Handouts. Its grocery products include Produce; Bulk Food and Private Label Products; Dry, Frozen and Canned Groceries; Meats and Seafood; Dairy Products, Dairy Substitutes and Eggs; Prepared Foods; Bread and Baked Goods, and Beverages. Additionally, it carries a range of products associated with special diets, such as gluten free, vegetarian and non-dairy. The Company operates both a service natural and organic grocery store, and a dietary supplement store. The Company sells organic produce and source from local and organic producers. The Company operates within the natural products retail industry.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS
Detailed Analysis of NATURAL GROCERS BY VITAMIN COTTAGE INC
Full Guru Analysis for NGVC
Full Factor Report for NGVC
FIRST INTERNET BANCORP (INBK) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 40% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: First Internet Bancorp is a bank holding company that conducts its business activities through its subsidiary, First Internet Bank of Indiana (the Bank). The Company offers a complement of products and services on a nationwide basis. The Company conducts its deposit operations primarily over the Internet. The Company also offers commercial real estate (CRE) lending, including nationwide single tenant lease financing and commercial and industrial (C&I) lending, including business banking/treasury management services. The Bank provides commercial and retail banking services, with operations conducted on the Internet at www.firstib.com. It offers residential real estate loans, home equity loans and lines of credit, and consumer loans, and loans to commercial clients, which include commercial loans, commercial real estate loans, letters of credit and single tenant lease financing. The Bank's subsidiary, JKH Realty Services, LLC manages real estate owned properties.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: FAIL
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: FAIL
EPS PERSISTENCE: PASS
Detailed Analysis of FIRST INTERNET BANCORP
Full Guru Analysis for INBK
Full Factor Report for INBK
CRITEO SA (ADR) (CRTO) is a small-cap growth stock in the Advertising industry. The rating according to our strategy based on John Neff changed from 60% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Criteo SA is a France-based company specializing in digital performance marketing. Its solution consists of the Criteo Engine, the Company's data assets, access to inventory, and its advertiser and publisher platforms. The Criteo Engine consists of various machine learning algorithms, such as prediction, recommendation, bidding and creative algorithms and the global hardware and software infrastructure. The Criteo Engine delivers advertisements through multiple marketing channels and formats, including display advertising banners, native advertising banners and marketing messages delivered to opt-in e-mail addresses. Advertisements are delivered on all devices and screens, including Web browsers on desktops and laptops, mobile Web browsers on smart phones and tablets, as well as mobile applications. It operates in approximately 90 countries through a network of over 30 international offices located in Europe, the Americas and the Asia-Pacific region.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: FAIL
FREE CASH FLOW: PASS
EPS PERSISTENCE: FAIL
Detailed Analysis of CRITEO SA (ADR)
Full Guru Analysis for CRTO
Full Factor Report for CRTO
DICKS SPORTING GOODS INC (DKS) is a mid-cap value stock in the Retail (Specialty) industry. The rating according to our strategy based on John Neff changed from 60% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Dick's Sporting Goods, Inc. is an omni-channel sporting goods retailer offering an assortment of sports equipment, apparel, footwear and accessories in its specialty retail stores primarily in the eastern United States. The Company also owns and operates Golf Galaxy, Field & Stream and other specialty concept stores, and Dick's Team Sports HQ, an all-in-one youth sports digital platform offering free league management services, mobile applications for scheduling, communications and live scorekeeping, custom uniforms and FanWear and access to donations and sponsorships. The Company offers its products through a content-rich e-commerce platform that is integrated with its store network and provides customers with the convenience and expertise of a 24-hour storefront. It offers products to its customers through its retail stores and online. The Company offers hardlines, which include items, such as sporting goods equipment, fitness equipment, golf equipment, and hunting and fishing gear.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: FAIL
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: FAIL
Detailed Analysis of DICKS SPORTING GOODS INC
Full Guru Analysis for DKS
Full Factor Report for DKS
ROGERS COMMUNICATIONS INC. (USA) (RCI) is a large-cap growth stock in the Communications Services industry. The rating according to our strategy based on John Neff changed from 60% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Rogers Communications Inc. is a diversified communications and media company. The Company provides wireless communications services, and cable television, Internet, information technology (IT) and telephony services to consumers and businesses. Its segments include Wireless, Cable and Media. The Wireless segment is engaged in wireless telecommunications operations for Canadian consumers and businesses. The Cable segment include cable telecommunications operations, including Internet, television and telephony (phone) services for Canadian consumers and businesses. The Media segment has a portfolio of media properties, including sports media and entertainment, multi-platform shopping, digital media and publishing.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: FAIL
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: FAIL
Detailed Analysis of ROGERS COMMUNICATIONS INC. (USA)
Full Guru Analysis for RCI
Full Factor Report for RCI
SOUTHSIDE BANCSHARES, INC. (SBSI) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 62% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Southside Bancshares, Inc. (Southside) is a bank holding company for Southside Bank (the Bank). The Company is a community-focused financial institution that offers a range of financial services to individuals, businesses, municipal entities, and nonprofit organizations in the communities. These services include consumer and commercial loans, deposit accounts, trust services, safe deposit services and brokerage services. As of December 31, 2016, the Company operated through 60 banking centers, 17 of which are located in grocery stores. The Company offers a range of deposit accounts with a range of interest rates and terms, including savings, money market, interest and non-interest bearing checking accounts and certificates of deposit (CDs).
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS
Detailed Analysis of SOUTHSIDE BANCSHARES, INC.
Full Guru Analysis for SBSI
Full Factor Report for SBSI
AMERICAN NATIONAL BANKSHARES INC (AMNB) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 60% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: American National Bankshares Inc. is a one-bank holding company. American National Bank and Trust Company (the Bank) is the only banking subsidiary of the Company. The Company operates through two segments: community banking, and trust and investment services. The Community banking segment involves making loans to and generating deposits from individuals and businesses. All assets and liabilities of the Company are allocated to community banking. Investment income from securities is also allocated to the community banking segment. Loan fee income, service charges from deposit accounts and non-deposit fees, such as automated teller machine fees and insurance commissions generate additional income for community banking. Trust and investment services include estate planning, trust account administration, investment management and retail brokerage. The trust and investment services division receives fees for investment and administrative services.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: FAIL
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: FAIL
Detailed Analysis of AMERICAN NATIONAL BANKSHARES INC
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INVESTORS BANCORP INC (ISBC) is a mid-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 62% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Investors Bancorp, Inc. is the holding company for Investors Bank (the Bank). The Bank is a New Jersey-chartered savings bank. The Bank is in the business of attracting deposits from the public through its branch network and borrowing funds in the wholesale markets to originate loans and to invest in securities. The Bank originates multi-family loans, commercial real estate loans, commercial and industrial (C&I) loans, one- to four-family residential mortgage loans secured by one- to four-family residential real estate, construction loans and consumer loans, the majority of which are home equity loans, home equity lines of credit and cash surrender value lending on life insurance contracts. Its securities primarily include mortgage-backed securities, the United States Government and Federal Agency obligations, and other securities. Deposits are the primary source of funds used for its lending and investment activities. In addition, it uses a significant amount of borrowings.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: FAIL
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS
Detailed Analysis of INVESTORS BANCORP INC
Full Guru Analysis for ISBC
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ARROW FINANCIAL CORPORATION (AROW) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 62% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Arrow Financial Corporation (Arrow) is a bank holding company. The Company's banking subsidiaries are Glens Falls National Bank and Trust Company (Glens Falls National) and Saratoga National Bank and Trust Company (Saratoga National). It operates in community banking industry segment. The Company's business consists primarily of the ownership, supervision and control of its two banks. It provides advisory and administrative services and coordinates the general policies and operation of the banks. The Company offers a range of commercial and consumer banking, and financial products. Its deposit base consists of deposits derived from the communities it serves. Through its banks' trust operations, the Company provides retirement planning, trust and estate administration services for individuals, and pension, profit-sharing and employee benefit plan administration for corporations.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: FAIL
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS
Detailed Analysis of ARROW FINANCIAL CORPORATION
Full Guru Analysis for AROW
Full Factor Report for AROW
More details on Validea's John Neff strategy
About John Neff: While known as the manager with whom many top managers entrusted their own money, Neff was far from the smooth-talking, high-profile Wall Streeter you might expect. He was mild-mannered and low-key, and the same might be said of the Windsor Fund that he managed for more than three decades. In fact, Neff himself described the fund as "relatively prosaic, dull, [and] conservative." There was nothing dull about his results, however. From 1964 to 1995, Neff guided Windsor to a 13.7 percent average annual return, easily outpacing the S&P 500's 10.6 percent return during that time. That 3.1 percentage point difference is huge over time -- a $10,000 investment in Windsor (with dividends reinvested) at the start of Neff's tenure would have ended up as more than $564,000 by the time he retired, more than twice what the same investment in the S&P would have yielded (about $233,000). Considering the length of his tenure, that track record may be the best ever for a manager of such a large fund.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Detailed Analysis of UNIVEST FINANCIAL CORP Full Guru Analysis for UVSP Full Factor Report for UVSP AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB Full Factor Report for ABCB ALLIANCEBERNSTEIN HOLDING LP (AB) is a mid-cap value stock in the Investment Services industry. The Company operates approximately 18 branches located in Cinnaminson, Cranbury, Delanco, Denville, Ewing, Flemington, Hamilton, Lawrence, Pennington, Randolph, Somerset and Williamstown, New Jersey, and Doylestown, Trevose, Warminster and West Chester, Pennsylvania. | Detailed Analysis of UNIVEST FINANCIAL CORP Full Guru Analysis for UVSP Full Factor Report for UVSP AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB Full Factor Report for ABCB ALLIANCEBERNSTEIN HOLDING LP (AB) is a mid-cap value stock in the Investment Services industry. The Company's segments include Bank, which provides a range of banking services to commercial, retail, government and correspondent bank customers through the Company's branches, call center, Internet banking and automated teller machine network; Institutional Investment Management, which provides equity and fixed income investment strategies in the intermediary and institutional markets, and Asset Servicing, which provides services to the asset management industry, supporting a range of investment products, including mutual funds, alternative investments and managed accounts. | Detailed Analysis of UNIVEST FINANCIAL CORP Full Guru Analysis for UVSP Full Factor Report for UVSP AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB Full Factor Report for ABCB ALLIANCEBERNSTEIN HOLDING LP (AB) is a mid-cap value stock in the Investment Services industry. The Company's segments include Bank, which provides a range of banking services to commercial, retail, government and correspondent bank customers through the Company's branches, call center, Internet banking and automated teller machine network; Institutional Investment Management, which provides equity and fixed income investment strategies in the intermediary and institutional markets, and Asset Servicing, which provides services to the asset management industry, supporting a range of investment products, including mutual funds, alternative investments and managed accounts. | Detailed Analysis of UNIVEST FINANCIAL CORP Full Guru Analysis for UVSP Full Factor Report for UVSP AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB Full Factor Report for ABCB ALLIANCEBERNSTEIN HOLDING LP (AB) is a mid-cap value stock in the Investment Services industry. It operates through Community Banking segment, which is engaged in providing a range of commercial and retail and related banking services. |
27810.0 | 2020-11-19 00:00:00 UTC | Why a Coronavirus Vaccine is Good News for Banks | ABCB | https://www.nasdaq.com/articles/why-a-coronavirus-vaccine-is-good-news-for-banks-2020-11-19 | nan | nan | There are some industries that will obviously benefit from the availability of a COVID-19 vaccine. For example, it's not difficult to see why airlines, casinos, and cruise line stocks soared when recent positive data was announced.
However, it might come as a surprise that banks could be among the biggest beneficiaries. In this Fool Live video clip from our Nov. 9 "Industry Focus: Financials" show, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss why bank stocks have performed well now that a vaccine looks like it could be coming soon.
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Jason Moser: Let's pivot over and talk about that a little bit in regard to banks, because you see banks are another sector today that are really feeling a rough. I'm looking at Bank of America (NYSE: BAC) here, for example, right now, as we're recording the show, Bank of America shares were up 14%. I was looking at Ameris Bancorp (NASDAQ: ABCB) earlier, Ameris Bank, 20-plus-percent today. You're seeing that covering everywhere from big banks to small banks and everywhere in between. This is an interest rate-related news, of course, but banks are going to benefit from positive economic news, they are going to benefit from a healthy economy. If this is one step closer to a healthier economy, then you can certainly understand the optimism and banks today as well.
Matt Frankel: Well, there's two reasons you're seeing banks benefit from this. No. 1 is interest rates. This is interest rates, specific news. But the 10-year Treasury sold its highest level since March today. That's a forward-looking indicator that the economy is going to be healthier than people thought. Higher interest rates means higher profits for banks, but that's really not the main driving force. The main driving force is that there is a fear that there's going to be a long tailed uptake in loan losses. People can't afford to pay their bills, things like that, that's going to go on until this pandemic is over. It's a well-founded fear. If you look at the numbers during the financial crisis when unemployment was elevated for a couple of years after the financial crisis, loan losses at some of these lenders stayed pretty high. There's that fear, and the sooner we can get back to business as usual, the sooner that fear goes away, and we're starting to see some of that today. If you look at some of the riskier consumer-facing lenders, you're seeing their gains even higher. You mentioned Ameris, which is pretty much a consumer-facing bank. American Express (NYSE: AXP) is up 21% today.
Jason Moser: Wow.
Matt Frankel: Making our friend Warren Buffett a lot of money in the process.
Jason Moser: Everybody, it's easy to forget. American Express is a bank. Yes, it's like credit card in your wallet, but it is technically a bank, and so it's behold and all of those capital requirements in those rules and whatnot that your Bank of America is with JPMorgan's (NYSE: JPM) had been here.
Matt Frankel: They are the lender for. If you use your Amex card, American Express is the Company lending you money. If you run into trouble, you lose your job, something like that and can't afford to pay it back, American Express is the one who gets left with uncollectible debt. As the fears of that start to go away, you're going to see those companies benefit. The more consumer-facing banks like American Express. Wells Fargo (NYSE: WFC) out of the big four, I think was the biggest mover today because it's a consumer-facing bank, not just an investment bank. If you look at some of the investment banks like Goldman Sachs (NYSE: GS), it's up by 7% today. The fact that it's up by 7%, it's like the worst gain in the sector, pretty impressive, that's because the investment banking businesses generally held up better during the pandemic. You're seeing all these consumer-facing banks really popped because of the experts are less fearful that you're going to see this long-tailed loan default where we've come through.
Jason Moser: Then you look even deeper into some of those numbers, and we've seen this over the past couple of quarters, at least with a lot of these banks. The themes during a lot of these calls have really revolved around those loan loss reserves, and these banks are reserving a lot of money. They're putting a lot of money aside for the possible losses that they could incur. Those losses don't materialize, or they don't materialize to the levels that those banks offer that they would, well, that's a lot of money they put aside. That is thinking to be able to go really right back down to the bottom line for these banks at the end of the day.
Matt Frankel: They called out a reserve release, and you see that you've still got a little bit in a few of the banks in the third quarter. There were setting aside billions and billions of dollars in the first half of the year, and It turned out the pandemic didn't turn out to a worst-case scenario economically. Part of that was due to the carriers act. Part of that was due to it didn't continue despite a lot of control in March. It's leveled off after the shutdowns and things like that. The economic impacts weren't a worst-case scenario. Twenty-twenty hasn't been a great economic year by any definition of the word, but we've definitely avoided a worst-case scenario. Banks were able to release a little bit reserves, some banks in during the third quarter. If there's a widely available vaccine and the pandemic ends, unemployment already is under 7% in this country. If it falls back to pre-pandemic levels which were 3% and 4% range, then you will see a lot of these reserves come back and be released and that turns into a big earnings boost for these banks. You saw that in the years following the financial crisis when they were finally allowed to release some reserves.
Jason Moser owns shares of Ameris Bancorp. Matthew Frankel, CFP owns shares of American Express, Bank of America, Goldman Sachs, and Wells Fargo and has the following options: short January 2021 $23 puts on Bank of America and short November 2020 $22.5 puts on Wells Fargo. The Motley Fool recommends Ameris Bancorp. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | I was looking at Ameris Bancorp (NASDAQ: ABCB) earlier, Ameris Bank, 20-plus-percent today. In this Fool Live video clip from our Nov. 9 "Industry Focus: Financials" show, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss why bank stocks have performed well now that a vaccine looks like it could be coming soon. If you run into trouble, you lose your job, something like that and can't afford to pay it back, American Express is the one who gets left with uncollectible debt. | I was looking at Ameris Bancorp (NASDAQ: ABCB) earlier, Ameris Bank, 20-plus-percent today. In this Fool Live video clip from our Nov. 9 "Industry Focus: Financials" show, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss why bank stocks have performed well now that a vaccine looks like it could be coming soon. If you run into trouble, you lose your job, something like that and can't afford to pay it back, American Express is the one who gets left with uncollectible debt. | I was looking at Ameris Bancorp (NASDAQ: ABCB) earlier, Ameris Bank, 20-plus-percent today. See the 10 stocks *Stock Advisor returns as of October 20, 2020 Jason Moser: Let's pivot over and talk about that a little bit in regard to banks, because you see banks are another sector today that are really feeling a rough. Wells Fargo (NYSE: WFC) out of the big four, I think was the biggest mover today because it's a consumer-facing bank, not just an investment bank. | I was looking at Ameris Bancorp (NASDAQ: ABCB) earlier, Ameris Bank, 20-plus-percent today. See the 10 stocks *Stock Advisor returns as of October 20, 2020 Jason Moser: Let's pivot over and talk about that a little bit in regard to banks, because you see banks are another sector today that are really feeling a rough. Wells Fargo (NYSE: WFC) out of the big four, I think was the biggest mover today because it's a consumer-facing bank, not just an investment bank. |
27811.0 | 2020-11-16 00:00:00 UTC | Dubai Aerospace Enterprise hires banks for dollar sukuk -document | ABCB | https://www.nasdaq.com/articles/dubai-aerospace-enterprise-hires-banks-for-dollar-sukuk-document-2020-11-16 | nan | nan | DUBAI, Nov 16 (Reuters) - Dubai Aerospace Enterprise (DAE), one of the world's biggest aircraft leasing companies, has hired banks to arrange investor calls ahead of a planned issuance of U.S. dollar-denominated sukuk, or Islamic bonds, a document showed on Monday.
DAE, owned by sovereign wealth fund Investment Corporation of Dubai, hired Bank ABC ABCB.BH, Commercial Bank of Dubai CBD.DU, Credit Agricole CAGR.PA, Deutsche Bank DBKGn.DE, Dubai Islamic Bank DISB.DU, Emirates NBD Capital ENBD.DU, First Abu Dhabi Bank FAB.AD, GIB, Goldman Sachs GS.N, HSBC HSBA.L, JPMorgan JPM.N, Mizuho 8411.T, Natixis CNAT.PA and Truist Securities TFC.N.
An issuance of 5-1/4-year senior unsecured sukuk will follow, subject to market conditions, the document from one of the banks on the deal said.
(Reporting by Yousef Saba; editing by Jason Neely)
((Yousef.Saba@thomsonreuters.com; +971562166204))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | DAE, owned by sovereign wealth fund Investment Corporation of Dubai, hired Bank ABC ABCB.BH, Commercial Bank of Dubai CBD.DU, Credit Agricole CAGR.PA, Deutsche Bank DBKGn.DE, Dubai Islamic Bank DISB.DU, Emirates NBD Capital ENBD.DU, First Abu Dhabi Bank FAB.AD, GIB, Goldman Sachs GS.N, HSBC HSBA.L, JPMorgan JPM.N, Mizuho 8411.T, Natixis CNAT.PA and Truist Securities TFC.N. DUBAI, Nov 16 (Reuters) - Dubai Aerospace Enterprise (DAE), one of the world's biggest aircraft leasing companies, has hired banks to arrange investor calls ahead of a planned issuance of U.S. dollar-denominated sukuk, or Islamic bonds, a document showed on Monday. An issuance of 5-1/4-year senior unsecured sukuk will follow, subject to market conditions, the document from one of the banks on the deal said. | DAE, owned by sovereign wealth fund Investment Corporation of Dubai, hired Bank ABC ABCB.BH, Commercial Bank of Dubai CBD.DU, Credit Agricole CAGR.PA, Deutsche Bank DBKGn.DE, Dubai Islamic Bank DISB.DU, Emirates NBD Capital ENBD.DU, First Abu Dhabi Bank FAB.AD, GIB, Goldman Sachs GS.N, HSBC HSBA.L, JPMorgan JPM.N, Mizuho 8411.T, Natixis CNAT.PA and Truist Securities TFC.N. DUBAI, Nov 16 (Reuters) - Dubai Aerospace Enterprise (DAE), one of the world's biggest aircraft leasing companies, has hired banks to arrange investor calls ahead of a planned issuance of U.S. dollar-denominated sukuk, or Islamic bonds, a document showed on Monday. (Reporting by Yousef Saba; editing by Jason Neely) ((Yousef.Saba@thomsonreuters.com; +971562166204)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | DAE, owned by sovereign wealth fund Investment Corporation of Dubai, hired Bank ABC ABCB.BH, Commercial Bank of Dubai CBD.DU, Credit Agricole CAGR.PA, Deutsche Bank DBKGn.DE, Dubai Islamic Bank DISB.DU, Emirates NBD Capital ENBD.DU, First Abu Dhabi Bank FAB.AD, GIB, Goldman Sachs GS.N, HSBC HSBA.L, JPMorgan JPM.N, Mizuho 8411.T, Natixis CNAT.PA and Truist Securities TFC.N. DUBAI, Nov 16 (Reuters) - Dubai Aerospace Enterprise (DAE), one of the world's biggest aircraft leasing companies, has hired banks to arrange investor calls ahead of a planned issuance of U.S. dollar-denominated sukuk, or Islamic bonds, a document showed on Monday. (Reporting by Yousef Saba; editing by Jason Neely) ((Yousef.Saba@thomsonreuters.com; +971562166204)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | DAE, owned by sovereign wealth fund Investment Corporation of Dubai, hired Bank ABC ABCB.BH, Commercial Bank of Dubai CBD.DU, Credit Agricole CAGR.PA, Deutsche Bank DBKGn.DE, Dubai Islamic Bank DISB.DU, Emirates NBD Capital ENBD.DU, First Abu Dhabi Bank FAB.AD, GIB, Goldman Sachs GS.N, HSBC HSBA.L, JPMorgan JPM.N, Mizuho 8411.T, Natixis CNAT.PA and Truist Securities TFC.N. DUBAI, Nov 16 (Reuters) - Dubai Aerospace Enterprise (DAE), one of the world's biggest aircraft leasing companies, has hired banks to arrange investor calls ahead of a planned issuance of U.S. dollar-denominated sukuk, or Islamic bonds, a document showed on Monday. An issuance of 5-1/4-year senior unsecured sukuk will follow, subject to market conditions, the document from one of the banks on the deal said. |
27812.0 | 2020-11-12 00:00:00 UTC | Why Coronavirus Vaccine News Is Great for Bank Stocks and REITs | ABCB | https://www.nasdaq.com/articles/why-coronavirus-vaccine-news-is-great-for-bank-stocks-and-reits-2020-11-12 | nan | nan | The positive COVID-19 vaccine news just released by Pfizer (NYSE: PFE) sent the stock market soaring, but to the surprise of many investors, real estate investment trusts, or REITs, and bank stocks are some of the best performers. In this episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss why mall REITs like Simon Property Group (NYSE: SPG) are soaring by more than 20% on the news and some of the biggest U.S. banks, including JPMorgan Chase, Bank of America (NYSE: BAC), and Wells Fargo (NYSE: WFC) are up by double digits as well. And let's not forget that we're still in earnings season -- we'll also discuss what investors should know about the latest results from Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), Square (NYSE: SQ), PayPal (NASDAQ: PYPL), and more.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on Nov. 9, 2020.
Jason Moser: It's Monday, November 9th. I'm your host Jason Moser. On this week's Financial show, we're going to dig into the news of some very encouraging vaccine results and how that could potentially impact our world of financials related stocks. We've got a few earnings reports to dig into, we've also got our ones to watch for the coming week. Joining me this week, as most weeks, glad to have him as always, Certified Financial Planner, Mr. Matt Frankel. Matt, how's everything going?
Matt Frankel: Well, pretty much every stock that I've ever mentioned on the show is up by more than 10% today, so I'm having a pretty good morning, I don't know about you.
Moser: [laughs] Yeah. Hey, listen, you know, I don't let the stock market dictate my attitude, but it's certainly nice when you see them go up, I mean, you don't see --
Frankel: I don't either, but today might be an exception. [laughs]
Moser: We're seeing certainly some of them are going down, and we'll get into that, the whole stay-at-home stock phenomenon and how that's playing out. That will be just one part of our broader discussion here, but you know, let's go ahead and jump into this discussion, because clearly the big news of the day, the drugmakers Pfizer and BioNTech have indicated that their COVID-19 vaccine is more than 90% effective.
Now, we don't want to get ahead of ourselves here. This could mean a lot of different things, but it really does seem, at the very core, it marks a major step in the right direction in this battle against COVID-19. And clearly, Wall Street is loving the news. Stocks across the board are feeling pretty good today, with the exception of the stay-at-home stocks; of course, we'll get to those.
But, Matt, one area of the market where we're seeing a big reaction, and it's something we talk a lot about here on the show, it's in Real Estate Investment Trusts, those REITs that we talk about a lot. Talk to us a little bit about why you think that the REIT segment of the market is receiving this news so positively?
Frankel: You got to remember there are many different subsectors of REITs that have kind of different, you know, dynamics here. So, there are some stay-at-home REITs, like, think of the data center REITs and things like that, and they're, kind of, not doing that great today. But most REITs own commercial properties that depend on people being able and willing to go places. So, when you look at just some of these numbers, and these were at 12:30, so they might have changed [laughs] by the time you are hearing this. Just some of the favorite ones we talk about on here, Empire State, the company that owns the Empire State Building, is up 30% today. Tanger Outlets that we talk about, they're up 23% today. Simon Property Group, the biggest mall REIT is up 26%. EPR Properties, about half of its portfolio is movie theaters, is up 41% today alone.
Moser: Yeah, that was the one I wanted to talk with you a little bit more about, I'll let you finish, but EPR that was one that struck me as standing out.
Frankel: Yeah. Welltower, which is healthcare REIT that owns a lot of senior housing -- which for obvious reasons, that hasn't been doing well -- is up 17% today. And last one, a lot of people are worried that people are going to leave cities if this pandemic keeps going, and AvalonBay, the big apartment REIT that owns a lot of urban apartment buildings, is up 12% today. So, across the board with all the, kind of, reopening REITs are doing phenomenally well today.
Moser: Yeah. And you're talking about people leaving the cities, you're talking about, sort of, that bigger picture idea that with going more toward a remote workforce or at least companies adopting the mindset that their employees can work offsite, perhaps permanently in many cases, I mean, that's going to maybe reduce the demand for living in these big cities. You talk about moving out toward the suburbs, and it sounds like apartment complex REITs, like the one you mentioned, that's got to be the reason for the optimism, I assume.
Frankel: Well, for sure. And also, take it with a grain of salt, because these are some of the most beaten down stocks during the pandemic. When I mentioned EPR, they're still roughly less than half of what they were trading for before the pandemic, even after today. So, a lot of these are really beaten down. And AvalonBay, the apartment one, I'm not saying there's going to be no remote work trend that prompts people to leave cities, but the stock is down 40% year-to-date, and the vacancy rate increased by 3%. So, that kind of just seems like it's not balanced correctly.
Moser: Yeah, it doesn't, you're right. And it's always worth remembering too, when we see headlines like this, because this is a headline we woke up to this morning, all across the country you could tell, I mean, there was plenty of excitement out there, because this is the news that you want to hear, right? This is not the magic bullet, so to speak, but this is definitely the news that you want to hear. It always strikes me too -- and I'm not trying to take the glass half empty perspective here, but when you see this type of reaction, it's always worth remembering, this isn't over, right? I mean, this marks a big step forward, but we're not through this yet. So, we still have a full Winter here, really, to go through.
And it feels like, let's try to temper everybody's expectations, you know, get questions throughout the morning on should I be buying these stocks or selling these stocks. And it's like, you know what, oftentimes, for investors, it's better to maybe take news like this, digest it through the course of the day, give yourself some time to think about things, the implications here, because it really, kind of, feels like this is great news. But there's most certainly going to be another bad headline at some point here in the next week, two weeks, one month, whatever it may be. So, it's always worth remembering, listen, this doesn't just mean everything is back to normal and everything is hunky-dory. I mean, this is good news, but we're not through this yet.
Frankel: Yeah, I mean, don't throw off your mask and run out into the streets to play just yet. But having said that, this was definitely good news, but this is going to take some time to really roll out. At a minimum, Pfizer said they will be ready to submit for emergency approval by the end of this month if everything goes well, that's two weeks after they have all their participants have gone through the trial for two months rather. After that, they're only going to make 50 million doses or so this year. So, even assuming they get all 50 million of those into people's arms by the end of this year, that's still roughly 80% of the U.S. population that is not going to be vaccinated. And then you have another few months, figure sometime in mid-2021, anyone who really needs a COVID vaccine will have one, so. And that's if things go well from here on. But this is definitely a step in the right direction, and these companies desperately needed some light at the end of the tunnel.
And another thing to mention is that a lot of this could be short covering that we're seeing today. You're seeing this spike. I mean, I looked right before we were on and some of the names I mentioned don't have a ton of short interest, but if you look at some of these numbers, they are just, kind of, off the charts. Tanger Outlets, for example, 51% of its shares are sold short right now. Seritage Growth Properties, 50% of its shares are sold short. EPR, it's over 10%. Almost 9% of Empire State Realty is sold short. So, you could see some of these, you know, people might be covering their shorts on this news too, which could be really fueling today's price action.
Moser: Yeah, and that's certainly not to take away from the gains that the stocks are seeing, but it's worth remembering, yeah, you said it, they've fallen a long way, short covering is what it is, but remember, that's not fundamentally really tied to the business. I mean, that's a short-term thing in nature anyway. And we're still really waiting for some form of stimulus package to come, hopefully sooner rather than later, because clearly, folks still need it, and it sounds like it's really just going to boil down to the President and the Senate negotiating some sort of a package there. I don't think it's really a matter of whether stimulus comes or not, it's really just a matter of how big the stimulus package really is.
So, let's pivot over and talk about that a little bit in regard to banks, because you see banks are another sector today that are really feeling the love. I'm looking at Bank of America here, for example. Right now, as we're recording the show, Bank of America shares are up 14%. I was looking at Ameris Bancorp (NASDAQ: ABCB) earlier, Ameris Bancorp up +20% today. So, you're seeing that covering everywhere from big banks to small banks and everywhere in between. This is interest rate related news, of course, but banks are going to benefit from positive economic news, I mean, they're going to benefit from a healthy economy, and if this is one step closer to a healthier economy then you can certainly understand the optimism in banks today as well.
Frankel: Right. Well, there's kind of two reasons you're seeing banks benefit from this. No. 1 is interest rates. This isn't interest rate specific news, but the 10-year Treasury soared to its highest level since March today. And so, that's kind of a forward-looking indicator that the economy is going to be healthier than people thought. You know, higher interest rates means higher profits for banks, but that's really not the main driving force. The main driving force is that there's a fear that there's going to be kind of a long-tailed uptick in loan losses, people can't afford to pay their bills, things like that, that's going to go on until this pandemic is over. And it's a well-founded fear, if you look at the numbers during the financial crisis when unemployment was elevated for a couple of years after the financial crisis, loan losses at some of these lenders stayed pretty high. So, there is that fear. And the sooner we can get back to business as usual, the sooner that fear goes away, and we're starting to see some of that today.
And if you look at some of the riskier consumer-facing lenders, you're seeing the gains are even higher, you mentioned Ameris, which is pretty much a consumer-facing bank. American Express is up 21% today, making our friend Warren Buffett a lot of money in the process.
Moser: [laughs] I mean, it's easy to forget, American Express is a bank. Yes, it's that credit card in your wallet, but it is technically a bank, and so it's beholden to all of those capital requirements and those rules and whatnot that your Bank of America and JPMorgans have to adhere to as well.
Frankel: They are the lender for -- if you use your AmEx Card, American Express is the company lending you money. So, if you run into trouble, you lose your job, something like that, and can't afford to pay it back, American Express is the one who gets left with an uncollectible debt. As the fears of that, kind of, start to go away, you're going to see those companies benefit. The more consumer-facing banks like Ameris, like, American Express. Wells Fargo, out of the big four, I think, was the biggest mover today, because it's a consumer-facing bank, not just an investment bank. And if you look at some of the investment banks, like Goldman Sachs, it's up by 7% today, which -- [laughs] the fact that it's up by 7% is, like, the worst gain in the sector, is pretty impressive. But that's because the investment banking businesses generally held up better during the pandemic, and you're seeing all these consumer-facing banks really pop because the experts are less fearful that you're going to see this long-tailed loan default wave come through.
Moser: And then you look even deeper into some of those numbers, and we've seen this over the past couple of quarters at least with a lot of these banks, the themes during a lot of these calls have really revolved around those loan loss reserves. These banks are reserving a lot of money, they're putting a lot of money aside for the potential for the possible losses that they could incur. If those losses don't materialize, or they don't materialize to the levels that those banks thought that they would. Well, that's a lot of money they put aside that is then going to be able to go, really, right back down the bottom-line for these banks at the end of the day.
Frankel: Yeah, they call that a reserve release, and you saw that a little bit in a few of the banks in the third quarter. You know, they were setting aside billions and billions of dollars in the first half of the year. And it turns out that the pandemic didn't turn out to a worst-case scenario economically, part of that was due to the CARES Act, part of that was due to just, I mean, it didn't continue to spiral out of control in March, it kind of leveled off after the shut downs and things like that. So, the economic impacts weren't a worst-case scenario.
2020 hasn't been a great economic year by any definition of the word, but we've definitely avoided a worst-case scenario. So, banks were able to release a little bit of their reserves, some banks, during the third quarter. If there is a widely available vaccine and the pandemic ends and, you know, unemployment already is under 7% in this country, if it falls back to pre-pandemic levels, which were in the 3% and 4% range, then you'll see a lot of these reserves come back and be released, and that turns into a big earnings boost for these banks. We saw that in the years following the financial crisis when they were finally allowed to release some reserves.
Moser: For sure. We're going to pivot into a little bit of a discussion here on the "stay-at-home" stocks, it's been a pretty unique phenomenon to 2020, I think, and an interesting one to discuss. And I guess to kick that discussion off, for me, really, it's interesting to see this disparity between four particular stocks. And if you look at MasterCard and Visa, for example. The market is rewarding those companies today, their stocks are doing very well. On the flip side of it, you look at Square and PayPal, those are companies where the stocks are actually selling off, and I think it's just interesting to note that, because we talk about this a lot, where MasterCard and Visa really -- I mean, at the end of the day, these aren't banks, they're not lenders, these are networks, these are toll booth models, they're really good proxies for the economy for consumer spending.
And if this is news that tells us that maybe the consumer is going to be able to come back a little bit more quickly, that things are going to start looking a little bit better, I can certainly understand why companies like MasterCard and Visa would be feeling some of the love today. But you flip it over, you look at PayPal and Square. PayPal and Square smaller companies, a little bit more diverse in what they do and what they offer. I wonder, perhaps some of the pullback on these stocks today is valuation related, they both had [laughs] really good years, but it seems like there would be something more to it. I mean, there's definitely the Square Capital side of the business. PayPal just chalked up a tremendous quarter, and again, it's had a tremendous year thus far. I wonder if those pull backs aren't just a little bit more valuation related than anything else.
Frankel: You got to think that Visa and MasterCard, they make the bulk of their money from a percentage of the transactions they process, they don't care whether those transactions are in-person or online, there might be a little difference in the pricing and the fees they make, but, you know, rise in consumer spending in any form is good for those companies. So, the fact that consumer spending is forecast to rise now, presumably because of a vaccine, is good for Visa and MasterCard just in general, it doesn't matter if people are doing e-commerce, if they're going out to the malls, things like that.
On PayPal especially, on the PayPal side of the equation, PayPal depends -- well, not just depends, but they benefit, specifically, from online spending. If you saw during the third quarter, PayPal added more subscribers, I think, than they ever have before, or their payment volume increased by more than it ever has before. And that's because people are -- for the most part -- I mean, we're venturing out a little bit to stores, but for the most part people are still staying home and shopping at home. And that's why Amazon's (NASDAQ: AMZN) sales are still through the roof and things like that. So, PayPal benefits when people are spending money online.
Square, their core business is still in-person payment processing, but they are a fintech company, they're building out their online capabilities, the Cash App definitely does better in a stay-at-home environment for the time being at least, with what it has to offer. You know, person-to-person money transfers aren't happening in-person right now, so people are using things like the Cash App. And like you said, a lot of it could be valuation.
These have been some of the best-performing stocks, so I think today's news could have triggered a rotation from those high flying tech stocks into these value stocks that we've been talking about, the REITs and the banks, that are all of a sudden seeming like a better value, because, you know, from a risk/reward perspective.
Moser: Well, that's definitely understandable. I mean, I think we've all probably [laughs] been looking at the market this year, at least the second half of the year, and thinking, it's nice to see it doing so well. But yeah, valuations become more and more a concern. I think that you're right in that rotation point there, because we're not seeing necessarily any real discrimination here in the selling of a lot of these stay-at-home stocks. Amazon and Netflix being down, obviously Wayfair, these businesses are not going to stop doing what they're doing, right? These are businesses that are still very much going to be serving consumers in good times and in bad, so I think it's worth noting for investors. It's very easy to sit out there and talk about all the stay-at-home stock fad or whatever you might call it is over, but let's try to look a little bit beyond that. I mean, the stay-at-home stock concept on its own, I think, was a bit misguided and that was very short-term focused.
Stay-at-home isn't going to last forever, we knew that back at the beginning of the year. I would argue, if you're an analyst and you're surprised about what's happening today, you probably need to work on being a little bit of a better analyst. We've been seeing this and talking about it for a long time here, so this isn't a surprise. To me, the surprise would be, if folks were looking at a lot of these businesses and saying, oh, now their day in the sun is over. Amazon, Wayfair, Netflix, I mean, we don't need to worry about Etsy, another great example. It's not like people are going to stop shopping online, but there's a psychology behind some of this today.
Frankel: Yeah, for sure. No one thought this was going to last forever. The reason today's news is so significant is that it looks like it could be over sooner than we thought. And it's not just that this came sooner than we thought, we thought we were going to see some stage three trial data in November, but it looks like no one predicted a 90% effectiveness rating from the first vaccine candidate.
Moser: That was really encouraging. [laughs] Really encouraging news.
Frankel: And I don't know about you, but I've been reading, kind of, horror stories about the side effect potential of these vaccines. There was one article I read from some trial participants, I don't think it was in Pfizer's trial, where they said after the second shot, they were just on their bed for two days. So, it's not only 90% effective, but it's doing it without any significant side effects, which is, just on both sides, much better than anyone thought it would be.
So, no one thought it was lasting forever, but this is really giving them hope that the pandemic could actually become a thing of the past before too long, you know, we might not have to wear masks and I might be able to come see you in HQ before we thought it might happen.
Moser: Well, we will keep our fingers crossed. Like you said, there is plenty of work left to do, it does feel like this was really meaningful news today though; for a lot of reasons that you just noted right there. And so, you know, all we can do is, is continue to hope for the best. Of course, thank you to all of the brightest minds out there who are working so hard on our behalf to really help us, as not only as a country, but really as a world, as a global society to get past this, because it doesn't discriminate, you know, the virus, you can't stop it. Until you can actually come up with a vaccine, you can't do anything other than try to mitigate it and manage it, and that's what we've been doing at this point. But definitely good news. It seems like the market is receiving it very well.
By the same token, folks out there, don't let this just make you think that everything is hunky-dory and get back to normal, this is one more step in the right direction, but it sounds like there's still some work to do. We'll continue to follow it and we'll pay attention to the companies that matter to you most.
Speaking of the companies that matter to you most, Matt, let's drop this discussion for a few minutes and let's get into what happened last week, which was another slew of earnings. And we got to talk about all of these companies all week last week, we talked about some of them on Motley Fool Money last week as well. But there were a lot of companies in our space, the financial space, that reported earnings, and we want to get into them and talk a little bit about the quarters. We have a lot of them, so we're going to get to them, we've going to give them their due attention in quick fashion here.
But let's go ahead and start with, really, you know, this guy likes talking about elephant guns, let's talk about the elephant in the room here, Berkshire Hathaway. And I'll let you talk about this quarter, but I'll just tell you, I was amazed at how much stock they bought back.
Frankel: Yeah. And you just hit the nail on the head, that's the big headline, Berkshire bought back $9.3 billion worth of stock. I just wrote something about it on Fool.com today, because Berkshire actually takes it one step further than most companies and breaks down its purchases by month, by class of shares. So, whether it bought back the A. shares or the B shares, and the average price it paid per month.
So, remember that Berkshire can only buy back stock if Buffett and Charlie Munger both agree that it's trading cheaply at any given time. And the average purchase price in September, when they bought back the most stock out of that three-month period, was in the $216 range, which is even after today's move, is not that far from where it is now. So, that's them telling the market that even at that price, the stock was much cheaper than its intrinsic value and was a really good just investment in general.
Berkshire's operating businesses really didn't give us any big surprises. The company still has about $140 billion of cash even after that buyback that we just mentioned. And I am really looking forward to its 13-F coming out this weekend, because remember, we don't get to see what they did in their stock portfolio yet, they're going to release their 13-F filing, it's called, which they have to release 45 days after the quarter ends, which adds up to the 14 of the month. So, we'll see that soon.
We do know that Berkshire's cost basis in its stock portfolio went up by $9 billion during the quarter from this earnings report, and the only thing that we know they bought is about $2 billion of Bank of America stock. What's with that other $7 billion, what they buy is what I'm, kind of, curious about? [laughs]
Moser: [laughs] Yeah. Well, I feel like we'll be able to talk about that next week maybe. What do you think that disagreement between Buffett and Munger looks like? Whenever they're deliberating the intrinsic value of that stock and whether it's worth the repurchase, what do you think that disagrees ... do you think they ever really, like, vehemently just disagree with one another?
Frankel: Well, this quarter, it doesn't look like they disagreed much at all. [laughs] But in general, who would you say is the more conservative out of the two? I'd have to go with Munger.
Moser: Yeah, I think you're probably right. Yeah, I think that's right.
Frankel: So, they're both very conservative investors, which is why when they're buying back stock and sending the message that they think it's cheap, that's why I take it very, very seriously, because they're both very conservative investors. But I mean, I'm sure they do have their own little closed door, you know -- well, now they're doing it probably through Zoom, but they probably have an argument about what the company is really worth and all that. Obviously, they didn't argue too much this quarter, they bought back a whole lot of stock. That's almost 2% of the outstanding in one quarter, which is a pretty aggressive buyback.
Moser: That is aggressive. Well, you know, that tells you a lot right there, so that's worth keeping in mind, and we'll look forward to learning a little bit more about the equity moves here next week and beyond as well.
Matt, Square, not surprisingly, reported another very impressive quarter. It was one that I felt like, you know, after PayPal's quarter earlier in the week, it seemed like, you know, Square was set up to report some good numbers, and they didn't disappoint. There are a lot of numbers here that really make you feel like this business just continues to do a lot of good things. Total net revenue crossed the $3 billion mark, it was up 148% if you exclude Caviar, which they sold off a while back. What stood out to you in this most recent quarter for Square?
Frankel: Well, I've been following Square's brokerage efforts for a while, because I love the Cash App. The Cash App users doubled year-over-year, which is really impressive at this stage considering how big it is. The gross profit generated by the Cash App -- remember, we said a few times during the, kind of, earlier stages of monetization still, the gross profit generated by the Cash App nearly tripled year-over-year. Remember, they rolled out their stock trading feature on the Cash App, 2.5 million people had bought-and-sold stock on the Cash App as of the end of the third quarter. That's pretty impressive. I don't know the stats, but I'm sure when TD Ameritrade was invented, for example, they didn't get to 2.5 million that quick.
Moser: It's a lot. And they said billions of dollars have already been traded by the end of the third quarter. I saw that snippet and that was one that was something that really stood out to me as well.
Frankel: Yeah. And I mean, not only is their growth impressive, but it's accelerating. Over the past six, seven quarters, they've grown consistently at 30% to 40% year-over-year revenue pace, or I'm sorry, gross profit rather. Gross profit was up 63% this quarter, so not only are they still keeping their growth trajectory alive, but it's kind of like, it's going kind of parabolic right now. [laughs]
So, Square is pretty impressive. I bought Square a while ago, I never really envisioned it would turn into what it has, I just thought it was a really interesting payment processing platform, to be honest with you. And my only problem with Square is that I didn't buy more back in 2015 or whenever the IPO was.
Moser: [laughs] Yeah. Clearly, I have been a very happy shareholder as well; my daughters own shares, they feel pretty good about that. I can't say that I found, really, anything in the quarter that concerned me. One thing to note, and this is not a mark against them, as a matter of fact, I think I really actually credit them for this, they're going to ramp up investments in the business next year. Talking about 2021, they're talking about ramping up investments in the business around 40% from this year. And that will impact profitability to the extent that revenue growth is impacted. So, we want to pay attention to that topline. The investments in the business could certainly play out on profitability. Again, that seems like a short-term thing in order to ensure the longer term success of the business, but you know, you keep those types of things in mind, because a company that's going to spend like that, who knows what the psychology of the market is going to be in 2021, but maybe that opens up a window to add to that position if the chance arises.
Frankel: Yeah, for sure. I've considered pulling the trigger on some more Square for a long time, including in March when it was down in the $30s for a brief time, then I just got cold feet. I'm learning my lesson with Square over-and-over that, you know, keep adding to your winners. [laughs] One of these days I'll actually take my own advice and do it. When I can stop talking about it for a few days, because that also has to happen.
Moser: Yeah, that's one of our hurdles, but hopefully, listeners that are listening, taking your advice into consideration. Well, another one of our favorite payments companies here that reported last week, PayPal. You know, I mentioned that I wasn't surprised with Square's numbers, because PayPal had lobbed up such a great quarter earlier in the week.
And to your point there in regard to the user growth, the thing that stood out to me, and I went back a couple of calls to really confirm this, because when I saw what I saw on the release, I thought, wait a minute, what? Because that sounded like it was a much larger number than what they had initially guided for, and it was. If you go back to January of this year during the fourth quarterearnings call management had set the target in that call for 2020 to add approximately 35 million net new active accounts. In this quarter three release, Matt, they upped that guidance. They now see adding 70 million net new active accounts for the year. So, essentially what's been going on all year long has more or less doubled the user growth that they had projected back at the beginning of the year. And to no one's surprise, they raised guidance pretty much across the board.
Frankel: Well, what's really standing out to me is, I wasn't surprised that they added a ton of users, say, in the second quarter when everything was shut down and people were only shopping online and that kind of thing. What really surprised me is they kept that momentum going into the third quarter, when for the most part, everything has reopened. So, they added over 15 million users in the third quarter alone, so I'm not surprised they raised their full-year guidance like that. And that they're keeping that momentum alive and, kind of, really building out their base even [laughs] when the economy is reopening. So, that really stood out to me.
Just a stat to show you just how big PayPal has gotten. They processed $247 billion of payments this quarter, that is almost $1 trillion of volume flowing through PayPal's system on an annual basis. That's about 10X what Square is doing, by the way. So, this is huge. And that's pretty much only online, they're not really in the brick-and-mortar space to a big extent.
Moser: Yeah, not to that extent. I mean, they added over 1.5 million merchants for the quarter; they now have 28 million total. The thing that I was really impressed with, Venmo continues to gain a lot of traction. 65 million users drove +$44 billion in total payment volume; that was up 61%. Forecasting $900 million in Venmo revenue in 2021, but the thing that really stood out to me was that Venmo, in 2021, will contribute positively to transaction margin dollars. So, we've been talking about this a lot, we've got listener questions in regard to Venmo on profitability. It sounds like 2021, where your profitable Venmo is, from what I could gather.
Frankel: Yeah. So, Venmo is obviously something Square doesn't have. I call that a big differentiator for PayPal. Just the Venmo and PayPal ecosystem is kind of ahead of where Square and Cash App is right now, I would call it. That may change. Square is trying to be a little different with its Cash App than PayPal is with Venmo. I mean, I don't think -- correct me if I'm wrong -- but I don't think PayPal has mentioned the need to, desire to put a stock trading platform on Venmo or to put bitcoin capability into it or anything like that ...
Moser: Yeah, not to my knowledge.
Frankel: So, it's two different animals. And PayPal, they're trying to build out the payment network. Square is trying to be, kind of, an all-in-one financial company for everybody. So, that's kind of the -- I mean, they can both coexist, they serve different use cases, and there's a lot of room for both of them to keep growing from this point. $1 trillion is not a ton when you think that the global card payment volume is in the $40 trillion to $50 trillion range. So, I mean, don't let that $1 trillion number scare you into thinking that PayPal has done growing.
Moser: Very good point, very good point. Yeah, I totally agree. It seems like there's still plenty of wide-open space ahead for both companies to capture. You know, another company that we talk about on the show here, and a company that I featured recently in the show when we talked about the stocks that we were going to buy next, Bill.com.
Bill.com reported for the quarter, and it was, again, another quarter of just what looked like impressive growth. Total revenue was $42.1 million, it was up 33% from the fourth quarter of fiscal 2019. We saw a nice little bump up in gross margin thanks to the business scaling and more volume going through the system. They serve 98,000 customers at the end of the fourth quarter of fiscal 2020, that was growth of 28%. Processed $25.4 billion in total payment volume on the platform in the quarter; that was up 26% from the year ago, and processed 5.6 million transactions for the quarter. At the end of the quarter they had 2.5 million network members; that was up almost 40% from the year ago.
So, again, for a business that's really focused on that small- to medium-sized business demographic and helping tighten up back office operations, eliminate paper, create more efficiencies using that artificial intelligence, as a shareholder in Bill.com I was certainly very encouraged by that quarter.
Speaking of businesses that we each follow pretty closely, Matt, Green Dot also announced earnings last week, tell me how that quarter went?
Frankel: Well, it was pretty good actually. Their revenue was up about 21% year-over-year, beating their own expectations. The primary driver of increasing revenue is, well, there's two actually, there's stimulus checks, which kind of prompted a whole lot, because they do prepaid debit cards. That's one of their big businesses; that prompted a whole lot of usage of those products. But their Banking-as-a-Service platform, which they let companies like Apple, and Intuit, and Uber use as, kind of, their banking network, because they are a chartered bank, unlike a lot of the fintechs we followed, let them use their infrastructure to offer their own banking products to their customers and employees. Like the feature that allows Uber drivers to instantly get paid is powered by Green Dot. So, that revenue was up.
And the real key thing to mention is that that's where you really want to see the growth momentum in Green Dot, because that's the higher margin of their revenue. So, that's growing, their margins are up, their margin expanded by 100 basis points year-over-year actually. The new CEO who took over a couple of quarters ago, Dan Henry, is doing a fantastic job. And I know everybody was rolling their eyes at me every time I mentioned Green Dot when it was down in the $20s earlier this year, and he's done a great job of turning the ship around since then and really focusing efforts on the Banking-as-a-Service offerings, which is where he should be focusing.
Moser: Yeah. And you know, Green Dot was dealing with its fair share of challenges earlier on, but it's really been a tremendous year for the stock. I know that the listeners appreciate you having been able to keep up with them, because they've made a lot of progress, and patient shareholders are really being rewarded in exercising that patience now. So, it's great to see that success with Green Dot.
What about MercadoLibre (NASDAQ: MELI), Matt? This is a company that we've often referred to as the Amazon of Latin America. To me, that is just such a small part of the story, it feels like when you look at the actual -- the fintech operations or the payment operations that they have there, not to mention things like fulfillment, logistics, and whatnot. But I mean, another just tremendous quarter from -- well, let's just call it, the Amazon of Latin America, right. [laughs]
Frankel: [laughs] Yeah. Well, I call them, like, the Amazon and Square of Latin America all-in-one, is kind of how I would put it. Because there's really two sides to their business, there's the e-commerce platform, which is the Amazon of Latin America, and then there is the payments platform, MercadoPago, which is, you know, kind of the Square or PayPal, if you will, of Latin America. The growth on both sides of the business was extremely impressive.
This is not Amazon where it's a really mature e-commerce marketplace, this is still in the earlier stages of growth. So, I'll call this, like, Amazon, you know, circa 2005, if I had to put a year on it. On the e-commerce side of the business, the gross merchandise volume sold on the platform was up to 117%, so that more than doubled year-over-year. 205 million items were sold on the platform, which sounds like a lot, but go look up how much Amazon sold on its platform and it'll seem like a tiny number.
On the payment side of the business, that's where it gets really impressive, they did $14.5 billion U.S. equivalent in payment volume, which as we just mentioned PayPal's numbers, that's about one-twentieth [5%] of what PayPal does. But it's growing at an off the charts pace, 161% year-over-year payments volume growth. And the best part is, that the payment volume that came from off of its e-commerce platform is growing even faster, that tripled year-over-year.
It's easy enough for MercadoLibre to promote its payments platform to people already selling on its platform. So, think of this as, you know, eBay getting people to use PayPal back when they were both the same company. But it was tougher for PayPal to get people who weren't on eBay to use their platform, and that's kind of what you're seeing MercadoLibre doing a great job of right now.
I became a shareholder during the pandemic, and I'd been meaning to pull the trigger on that one for years. I wish I had listened to myself a few years ago, but better late than never. And the recent results show me that this is still in the early stages.
Moser: Yeah. And, you know, I think for me, when I look at MercadoLibre, to me, it really is all about the boom in Latin America's middle class. And I think even the room that they have still to run there. I mean, if you look at the numbers between 2008 and 2018, Latin America's middle class expanded from 33 million households to 46 million households. And making up a far greater proportion of the overall household as well. It seems like that number is poised to continue growing, which obviously speaks volumes for the opportunity in front of MercadoLibre.
Do you think, and I tend to probably think not, but do you think there is ever the chance that they would spin that payment side of the business out as its own separate publicly traded company or do you feel like they would be better off keeping that in-house?
Frankel: For the time being, they should keep it in-house. I mentioned the PayPal-eBay example, I think when it becomes kind of a more mature business like PayPal and eBay, where the growth within the platform is kind of limited at that point, things like that, then it might be worth looking at spinning it out. But for right now, it's a very valuable asset that they're doing a great job of growing alongside their core business.
Moser: Yep, yep, it makes sense. Well, before we wrap things up, Matt, let's give our listeners one to watch for the coming week. What's your one to watch this coming week?
Frankel: Well, this is my -- when we did the recent stocks we want... you mentioned Bill.com, I'm going with Lemonade, which reports its earnings on Wednesday. That was my recent stock I bought. This will be their first earnings report as a publicly traded company. The performance has been pretty good for the stock right now. I want to see if their business results are backing that up, if they're still growing like I think they're capable of, and if management is still making the right moves. So, I'll report back next week after they report their earnings, but that's what I'm keeping my eye on this week.
Moser: Nice. Well, I'll go with a company that's a little bit less financial -- it's not directly financials related, but it is a company that is very much tied to the consumer, and one that's been dealing with a lot of, not bad news, but just a difficult situation. Disney earnings come out later this week on Thursday, clearly, they've been, you know, on the [laughs] one side of coin with their focus on streaming and entertainment, I mean, the business has really done very well. The flip side of the coin there is that, you know, the parks have been closed. And that has been a real anchor, particularly with what's going on in California. I mean, they can't get anything going out there.
You know, you were telling me the story, you guys went down there recently to Disney World, Orlando and it sounded like they were taking things very seriously and had a pretty good thing going there. So, it was encouraging to see that they were able, at least, to get some traffic going there. But the stock responding to this vaccine news today, obviously, very positively. Stock, right now as we're taping up, about 12%, [laughs] that's a big move for a company like Disney. So, I'm going to be very encouraged to see what their language is like on that call regarding this vaccine news and the state of the Park's business in general, so I'll be keeping an eye on that.
But, Matt, I think that is going to wrap it up for us this week. We had a little bit of a long show today. We had a lot to talk about. Man, I appreciate you sitting in and taking care of us today.
Frankel: I'm enjoying watching all the real estate stocks go up. You know, I'm the advisor on our new Real Estate Winners service, Real.Fool.com, if anyone wants to check it out. But, I mean, it's a great day for REITs, so we're having a fantastic time watching it today. Some of our Real Estate Winners they're really living up to their names.
Moser: [laughs] That's terrific. Well, man, more power to you, and I hope the ball keeps on going in that direction for you.
Remember folks, you can always reach out to us on Twitter @MFIndustryFocus or you can drop us an email at IndustryFocus@Fool.com.
As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.
Thanks, as always, to Tim Sparks for putting the show together for us. For Matt Frankel, I'm Jason Moser, thanks for listening and we'll see you next week.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jason Moser owns shares of Amazon, Ameris Bancorp, Bill.com Holdings, Inc., Etsy, Mastercard, PayPal Holdings, Square, Visa, and Wayfair. Matthew Frankel, CFP owns shares of American Express, Apple, Bank of America, Berkshire Hathaway (B shares), Empire State Realty Trust, EPR Properties, Goldman Sachs, Green Dot, Lemonade, Inc., MercadoLibre, Seritage Growth Properties (Class A), Simon Property Group, Square, Tanger Factory Outlet Centers, Walt Disney, and Wells Fargo and has the following options: short September 2022 $155 calls on Square, short January 2021 $23 puts on Bank of America, and short November 2020 $22.5 puts on Wells Fargo. The Motley Fool owns shares of and recommends Amazon, Apple, Berkshire Hathaway (B shares), Empire State Realty Trust, EPR Properties, Etsy, Intuit, Mastercard, MercadoLibre, Netflix, PayPal Holdings, Seritage Growth Properties (Class A), Square, Twitter, Visa, Walt Disney, and Wayfair. The Motley Fool owns shares of Lemonade, Inc. The Motley Fool recommends Ameris Bancorp, AvalonBay Communities, eBay, Tanger Factory Outlet Centers, and Uber Technologies and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), long January 2021 $60 calls on Walt Disney, long January 2021 $18 calls on eBay, short January 2021 $37 calls on eBay, short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, long January 2022 $75 calls on PayPal Holdings, short December 2020 $210 calls on Berkshire Hathaway (B shares), and short January 2021 $135 calls on Walt Disney. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | I was looking at Ameris Bancorp (NASDAQ: ABCB) earlier, Ameris Bancorp up +20% today. The main driving force is that there's a fear that there's going to be kind of a long-tailed uptick in loan losses, people can't afford to pay their bills, things like that, that's going to go on until this pandemic is over. On the flip side of it, you look at Square and PayPal, those are companies where the stocks are actually selling off, and I think it's just interesting to note that, because we talk about this a lot, where MasterCard and Visa really -- I mean, at the end of the day, these aren't banks, they're not lenders, these are networks, these are toll booth models, they're really good proxies for the economy for consumer spending. | I was looking at Ameris Bancorp (NASDAQ: ABCB) earlier, Ameris Bancorp up +20% today. Matthew Frankel, CFP owns shares of American Express, Apple, Bank of America, Berkshire Hathaway (B shares), Empire State Realty Trust, EPR Properties, Goldman Sachs, Green Dot, Lemonade, Inc., MercadoLibre, Seritage Growth Properties (Class A), Simon Property Group, Square, Tanger Factory Outlet Centers, Walt Disney, and Wells Fargo and has the following options: short September 2022 $155 calls on Square, short January 2021 $23 puts on Bank of America, and short November 2020 $22.5 puts on Wells Fargo. The Motley Fool owns shares of and recommends Amazon, Apple, Berkshire Hathaway (B shares), Empire State Realty Trust, EPR Properties, Etsy, Intuit, Mastercard, MercadoLibre, Netflix, PayPal Holdings, Seritage Growth Properties (Class A), Square, Twitter, Visa, Walt Disney, and Wayfair. | I was looking at Ameris Bancorp (NASDAQ: ABCB) earlier, Ameris Bancorp up +20% today. On the flip side of it, you look at Square and PayPal, those are companies where the stocks are actually selling off, and I think it's just interesting to note that, because we talk about this a lot, where MasterCard and Visa really -- I mean, at the end of the day, these aren't banks, they're not lenders, these are networks, these are toll booth models, they're really good proxies for the economy for consumer spending. Matthew Frankel, CFP owns shares of American Express, Apple, Bank of America, Berkshire Hathaway (B shares), Empire State Realty Trust, EPR Properties, Goldman Sachs, Green Dot, Lemonade, Inc., MercadoLibre, Seritage Growth Properties (Class A), Simon Property Group, Square, Tanger Factory Outlet Centers, Walt Disney, and Wells Fargo and has the following options: short September 2022 $155 calls on Square, short January 2021 $23 puts on Bank of America, and short November 2020 $22.5 puts on Wells Fargo. | I was looking at Ameris Bancorp (NASDAQ: ABCB) earlier, Ameris Bancorp up +20% today. Matt Frankel: Well, pretty much every stock that I've ever mentioned on the show is up by more than 10% today, so I'm having a pretty good morning, I don't know about you. But, Matt, one area of the market where we're seeing a big reaction, and it's something we talk a lot about here on the show, it's in Real Estate Investment Trusts, those REITs that we talk about a lot. |
27813.0 | 2020-11-08 00:00:00 UTC | Validea's Top Five Financial Stocks Based On Joel Greenblatt - 11/8/2020 | ABCB | https://www.nasdaq.com/articles/valideas-top-five-financial-stocks-based-on-joel-greenblatt-11-8-2020-2020-11-08 | nan | nan | The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. This value model looks for companies with high return on capital and earnings yields.
ALLIANCE DATA SYSTEMS CORPORATION (ADS) is a mid-cap value stock in the Consumer Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Alliance Data Systems Corp is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ALLIANCE DATA SYSTEMS CORPORATION
Full Guru Analysis for ADS>
Full Factor Report for ADS>
ARES COMMERCIAL REAL ESTATE CORP (ACRE) is a small-cap growth stock in the Misc. Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ares Commercial Real Estate Corporation is a specialty finance company. The Company is primarily engaged in originating and investing in commercial real estate (CRE) loans and related investments. The Company operates through principal lending segment. Its target investments include senior mortgage loans, subordinated debt, preferred equity, mezzanine loans and other CRE investment opportunities, including commercial mortgage-backed securities. These investments are generally held for investment and are secured, directly or indirectly, by office, multifamily, retail, industrial, lodging, senior-living, self-storage and other commercial real estate properties, or by ownership interests therein. Through the Company's manager, Ares Commercial Real Estate Management LLC, it has investment professionals located across the United States and Europe who directly source loan opportunities for the Company with owners, operators and sponsors of CRE properties.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ARES COMMERCIAL REAL ESTATE CORP
Full Guru Analysis for ACRE>
Full Factor Report for ACRE>
ARCH CAPITAL GROUP LTD. (ACGL) is a large-cap value stock in the Insurance (Prop. & Casualty) industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Arch Capital Group Ltd. provides insurance, reinsurance and mortgage insurance. The Company provides a range of property, casualty and mortgage insurance and reinsurance lines. The Company operates in five segments: insurance, reinsurance, mortgage, other and corporate. The insurance segment's product lines include construction and national accounts; excess and surplus casualty; lenders products; professional lines; programs; property, energy, marine and aviation; travel, accident and health, and other. The reinsurance segment's product lines include casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe, and other. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. The other segment includes the results of Watford Holdings Ltd.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ARCH CAPITAL GROUP LTD.
Full Guru Analysis for ACGL>
Full Factor Report for ACGL>
ACAMAR PARTNERS ACQUISITION CORP (ACAM) is a small-cap growth stock in the Misc. Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Acamar Partners Acquisition Corp is a blank check company. The Company is formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. The Company's target business is not limited to a particular industry or geographic region, but intends to acquire businesses in North America and Western Europe. The Company is focused on acquiring businesses in consumer and retail sectors, including travel retail, food and beverage, luxury goods, fashion, lifestyle, leisure products and services
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ACAMAR PARTNERS ACQUISITION CORP
Full Guru Analysis for ACAM>
Full Factor Report for ACAM>
AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ameris Bancorp is a financial holding company. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of AMERIS BANCORP
Full Guru Analysis for ABCB>
Full Factor Report for ABCB>
More details on Validea's Joel Greenblatt strategy
Joel Greenblatt Stock Ideas
About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. The "Magic Formula," as he called it, produced back-tested returns of 30.8 percent per year from 1988 through 2004, more than doubling the S&P 500's 12.4 percent return during that time. Greenblatt also produced exceptional returns as managing partner at Gotham Capital, a New York City-based hedge fund he founded. The firm averaged a remarkable 40 percent annualized return over more than two decades.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Detailed Analysis of ACAMAR PARTNERS ACQUISITION CORP Full Guru Analysis for ACAM> Full Factor Report for ACAM> AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. | Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. Detailed Analysis of ACAMAR PARTNERS ACQUISITION CORP Full Guru Analysis for ACAM> Full Factor Report for ACAM> AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. Detailed Analysis of ALLIANCE DATA SYSTEMS CORPORATION Full Guru Analysis for ADS> Full Factor Report for ADS> ARES COMMERCIAL REAL ESTATE CORP (ACRE) is a small-cap growth stock in the Misc. | Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. Detailed Analysis of ACAMAR PARTNERS ACQUISITION CORP Full Guru Analysis for ACAM> Full Factor Report for ACAM> AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs. | Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. Detailed Analysis of ACAMAR PARTNERS ACQUISITION CORP Full Guru Analysis for ACAM> Full Factor Report for ACAM> AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. |
27814.0 | 2020-10-24 00:00:00 UTC | Ameris Bancorp Just Beat EPS By 84%: Here's What Analysts Think Will Happen Next | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-just-beat-eps-by-84%3A-heres-what-analysts-think-will-happen-next-2020-10-24 | nan | nan | A week ago, Ameris Bancorp (NASDAQ:ABCB) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. Ameris Bancorp delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting US$322m, some 19% above indicated. Statutory EPS were US$1.67, an impressive 84% ahead of forecasts. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ameris Bancorp after the latest results.
NasdaqGS:ABCB Earnings and Revenue Growth October 24th 2020
After the latest results, the seven analysts covering Ameris Bancorp are now predicting revenues of US$936.9m in 2021. If met, this would reflect a solid 16% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 54% to US$2.99. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$945.4m and earnings per share (EPS) of US$2.91 in 2021. So the consensus seems to have become somewhat more optimistic on Ameris Bancorp's earnings potential following these results.
The consensus price target was unchanged at US$30.71, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Ameris Bancorp, with the most bullish analyst valuing it at US$35.00 and the most bearish at US$27.00 per share. This is a very narrow spread of estimates, implying either that Ameris Bancorp is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Ameris Bancorp's revenue growth is expected to slow, with forecast 16% increase next year well below the historical 24%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 1.4% next year. Even after the forecast slowdown in growth, it seems obvious that Ameris Bancorp is also expected to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Ameris Bancorp's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$30.71, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Ameris Bancorp going out to 2022, and you can see them free on our platform here.
Even so, be aware that Ameris Bancorp is showing 2 warning signs in our investment analysis , you should know about...
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | A week ago, Ameris Bancorp (NASDAQ:ABCB) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. NasdaqGS:ABCB Earnings and Revenue Growth October 24th 2020 After the latest results, the seven analysts covering Ameris Bancorp are now predicting revenues of US$936.9m in 2021. The consensus price target was unchanged at US$30.71, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. | NasdaqGS:ABCB Earnings and Revenue Growth October 24th 2020 After the latest results, the seven analysts covering Ameris Bancorp are now predicting revenues of US$936.9m in 2021. A week ago, Ameris Bancorp (NASDAQ:ABCB) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ameris Bancorp after the latest results. | NasdaqGS:ABCB Earnings and Revenue Growth October 24th 2020 After the latest results, the seven analysts covering Ameris Bancorp are now predicting revenues of US$936.9m in 2021. A week ago, Ameris Bancorp (NASDAQ:ABCB) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ameris Bancorp after the latest results. | A week ago, Ameris Bancorp (NASDAQ:ABCB) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. NasdaqGS:ABCB Earnings and Revenue Growth October 24th 2020 After the latest results, the seven analysts covering Ameris Bancorp are now predicting revenues of US$936.9m in 2021. Ameris Bancorp delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting US$322m, some 19% above indicated. |
27815.0 | 2020-10-23 00:00:00 UTC | Ameris Bancorp (ABCB) Q3 2020 Earnings Call Transcript | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-q3-2020-earnings-call-transcript-2020-10-23 | nan | nan | Image source: The Motley Fool.
Ameris Bancorp (NASDAQ: ABCB)
Q3 2020 Earnings Call
Oct 23, 2020, 9:00 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Good morning, and welcome to the Ameris Bancorp Third Quarter 2020 Financial Results Call. [Operator Instructions] Please note this event is being recorded.
I would now like to turn the conference over to Nicole Stokes, Chief Financial Officer. Please go ahead.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Great. Thank you, Irlene, and thank you to all who've 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'll discuss the details of our financial results before we open it up for Q&A.
Before we begin, I'll remind you that our comments may include forward-looking statements. These statements are subject to risks and uncertainty, and the actual results could vary materially. We list some of the factors that may 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 opening comments.
H. Palmer Proctor Jr. -- Chief Executive Officer
Thank you, Nicole, and thank you to everybody who has joined our call today. We've got some exciting news to talk about this morning. I closed last quarter's call with our new marketing campaign of back to business together and I think the third quarter results speak for themselves and reflect that commitment.
Nicole is going to update you a little bit later on some more detailed financial results in a minute. But before we get there, I did want to share some highlights from the quarter as well as a few other successes we've recently had, which positively impact our outlook as we go forward.
For the quarter, we earned $116.9 million or $1.69 per diluted share on an adjusted basis, which is up over 70% compared to the third quarter last year. This represents a 2.35% return on average assets and a 30.53% return on tangible equity. Our efficiency ratio improved, under 50%, which is the first time in our history, down to 47.34% on an adjusted basis.
For the year-to-date period, we earned $198.5 million or $2.86 per diluted share on an adjusted basis, which is consistent with the $2.85 reported for the same period last year. The big difference being this year, we've also provided over $130 million more to the loan loss reserve than we did last year, and that's important to note.
The 2020 results represented a year-to-date ROA of 1.39%, and a year-to-date return on average tangible equity of 17.84%. We're pleased with the organic growth and that's both on the loan and the deposit side. Loans grew over $330 million or 12.2% annualized during the third quarter and that leads our year-to-date annualized loan growth of 22.1%, and that's including PPP loans, and 11% excluding the PPP loans. We do have anticipated seasonal loan run-off in the fourth quarter and that will bring our loan growth closer to our original estimates of mid-single-digits for the full-year of 2020.
On the deposit side, we continue to see a lot of success there in growing non-interest bearing deposits, which is where our focus remains. And now we have accounts that -- non-interest bearing accounts equate to over 36% of total deposits.
As for capital, we've said for several quarters that we're focused on capital preservation, growth in TCE and growth in tangible book value. During the third quarter, we grew both TCE and tangible book value by over 7%, which is very meaningful. As you know, this quarter, we successfully issued a $110 million of sub debt at a low rate of 3.78%, and this will positively impact our total risk-based capital ratios by approximately 60 basis points.
While we remain focused on capital preservation, we announced in our release this morning that our Board did approve extending our share repurchase program through October 31st next year. While we don't anticipate executing on this during the remainder of 2020, we do like having the option to repurchase our shares if the right opportunity presents themselves. As for our dividend, we remain comfortable with where our dividend is today and do not anticipate any change at this time.
Moving on to credit. Jon Edwards, our Chief Credit Officer is with us today and he is available to take any questions after our prepared remarks, but I did want to hit a few highlights in terms of credit. We do believe that the heavy lifting of the reserve is complete now barring any further economic downturn and additional provision expense would solely be related to deterioration in specific credits. This brings our allowance coverage ratio, including the unfunded commitments, to 1.48% net of PPP loans.
Our annualized net charge-off ratio was 10 basis points of total loans and that compares to 27 basis points last quarter. Our NPAs as a percent of total assets increased to 83 basis points compared to 59 basis points last quarter, mostly due to increased nonaccrual loans in the residential real estate and commercial real estate loan categories.
And finally, the loans that remain on deferral at the end of the third quarter of 2020 were approximately 4.3% of total loans, which is down approximately 19% of total loans at the end of the second quarter of 2020.
Outside of our strong financial results, we've had a lot of other success around our Company. We announced several key commercial treasury hires in new and existing markets. In addition to that, we announced our new Diversity Inclusion Officer. We're excited to be able to identify a talent within the organization and promoted from within for this key leadership position.
As for COVID, all I can say is that we are definitely fortunate to have such a strong presence in the Southeast. We opened about half our retail lobbies in the branches this third quarter with minimal disruption. Our operations support staff is also beginning to return to work safely on a rotational basis and our customers, like many others, have learned to embrace the digital channels and mobile banking and we continue to have several initiatives there under way just to make that a better experience all the way around for our customers on a remote digital perspective.
Branch optimization, we touched on this last time. That has really allowed us to reallocate resources to pay for a lot of the innovation and the new hires that I mentioned earlier. We closed eight branches on October 1st, and we have one additional branch closure in process. That will bring our total branch count down to 161 from the pre-Fidelity acquisition pro forma of a 199 branches.
So these initiatives, like many others, have been well executed. It has been very thoughtful but yet expeditious and we continue with our cost save initiatives there.
I'll stop now and turn it over to Nicole to discuss our financial results.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Great, thank you, Palmer. For the third quarter, we're reporting net income of $116.1 million or $1.67 per diluted share. On an adjusted basis, we earned $116.9 million or $1.69 per diluted share, when you exclude merger and restructuring charges, servicing asset impairment, COVID-19 expenses, certain legal fees and the gain on sale of bank premises.
These financial results represent a 70% increase over the third quarter of 2019 adjusted earnings. Our adjusted ROA in the third quarter was 2.35%, which was an increase from the 89 basis points reported last quarter and $1.57 reported in the third quarter of last year. Our adjusted return on tangible common equity was 30.53% in the third quarter of this year compared to 11.66% last quarter and 18.95% in the third quarter of last year.
For the year-to-date period, our adjusted ROA is 1.39% compared to 1.55% last year-to-date. And also our 2020 adjusted ROTCE for the year-to-date is 17.84% compared to 18.87% last year. Both of these decreases are driven by the higher provision for credit losses recorded this year as well as the PPP loans also negatively affected the ROA.
We recorded $17.7 million of provision for credit losses in the third quarter compared to $88.2 million last quarter. This decrease in provision is primarily related to the improvement of our economic forecast offset by increased qualitative factors in our residential real estate, commercial real estate and hotel portfolios. For the year-to-date period, we've recorded $146.9 million of provision expense in the first nine months compared to $14.1 million in the same time period last year.
During the third quarter, we grew tangible book value by 7.5% from 20.90% at the end of the second quarter to 22.46% at the end of this quarter. Our tangible common equity ratio increased 57 basis points to 8.27% from 7.70% at the end of last quarter. And a reminder that this assets -- the asset growth from PPP loans negatively impacted that ratio by around 49 basis points.
So excluding the PPP loans from that ratio, our TCE would have been 8.76% at September 30. We continue to be well capitalized and we feel comfortable with our capital levels and our liquidity position remains strong.
Moving on to margin, while we did experienced margin compression this quarter, it was not unexpected. If you remember, back in the first quarter call of this year, we projected low-to-mid single-digit compression per quarter going forward. The margin expanded in the second quarter due to reduced deposit costs and the accretion income that we said was not expected to occur in future quarters. And this quarter we saw that margin compression that we had previously expected.
The non-recurring accretion in the second quarter attributed for over half or 9 basis point of the 19 basis point compression seen this quarter and the remaining 10 basis points was related to 5 basis points from PPP loans, 3 basis points in margin, and 2 basis points from excess cash.
Comparing the first quarter margin of 3.70% to the third quarter margin of 3.64%, the margin declined 6 basis points over those two quarters, which was exactly in line with our projections of low-to-single mid digit -- low-to-mid single-digit per quarter compression.
And our net interest spread actually increased from 3.33% in the first quarter of this year to 3.40% in the third quarter. During that same time period, the first quarter to the third quarter, our yield on earning assets declined by 55 basis points, but our funding cost decreased by 62 basis points.
Our core loan production yields declined to 4% for the quarter, against 4.16% last quarter. And on the deposit side, we continue to see success in growing non-interest bearing deposits such that our total deposits grew $474 million and over 66% [Phonetic] of that growth was in non-interest bearing.
Non-interest bearing, as Palmer said, now represent 36.8% of our total deposits compared to 29.9% this time last year. And while a portion of these deposits, less than 30%, are related to PPP loan proceeds, those PPP proceeds loan -- deposits have been stickier than we first expected.
As I previously mentioned, our third quarter provision expense was $18 million. Approximately $27 million was recorded for loan losses, $1 million was reported for other credit losses and then we reversed about $10 million of previously recorded, related to unfunded commitments. So our total net expense was the $18 million.
We had approximately $3.6 million of net charge-offs during the quarter and our ending allowance for loan loss was $239.1 million compared to $208 million at the end of the second quarter and $38 million last year. Including the unfunded commitment reserve, our total allowance was $260.4 million at the end of the quarter compared with $246 million at June 30 and $39.3 million at the end of the year.
Growth in our non-interest income was record breaking during the third quarter. Our mortgage group had record production efficiency and earnings due to the interest rate environment. Mortgage production hit new record levels at just over $2.9 billion for the quarter and our gain on sale increased to 3.92%, up from 3.53% last quarter. We anticipate that gain on sale to decrease back to normal levels in the 3% range.
Net income in the retail mortgage increased to $61 million for the quarter, and while our pipeline remained strong going into the fourth quarter, we do not expect this level of mortgage revenue to continue.
Total non-interest expense declined from $155.8 million to $153.7 million for the quarter. However, when you remove the COVID expenses, merger and restructuring, certain legal fees, and the loss on sale of branches that we adjust for adjusted earnings, our non-interest expense totaled $153 million, which is up $3 million from last quarter.
However, expenses in the retail mortgage segment increased $5.1 million due to the variable cost associated with the increased volume and are more than offset by the $29.9 million of increased revenues. All of our other segments, including the core bank, the administrative functions, premium finance, and SBA had a reduction of non-interest expense and improved efficiencies during the quarter.
This led us to be extremely pleased with our efficiency ratio this quarter. Our adjusted efficiency ratio improved to 47.34% compared to 51.08% last quarter. The additional mortgage revenue and the efficiency gained in the mortgage division significantly impacted this ratio and we do believe the ratio is going to increase back in the 53% to 55% range in future quarters as we don't anticipate the level of mortgage revenue and efficiency to be sustainable.
On the balance sheet side, we had cautious but solid organic growth both on loan and deposits. Loan growth was $440 million or 12% annualized and about half of that growth was related to the warehouse lines in mortgage. That brings loan growth for the year to $2.1 billion including PPP, and $1.1 billion or at 11% annualized excluding PPP.
As Palmer mentioned, we have several headwinds coming into the fourth quarter, such as cyclical warehouse payoffs, ag line seasonality, as well as indirect run-off. So we believe our full-year 2021 growth will come back in line with our original estimates of mid-single-digit for 2020.
More details of our loan production can be found in the Investor presentation. And as I mentioned, our total deposits increased by $474 million during the quarter, of which $313 million was in non-interest bearing. So that loan-to-deposit growth -- loan and deposit growth helps keep our loan-to-deposit ratios stable at 93%, which was consistent with what it was last quarter.
With that, I will turn it over to Irlene for any questions from the group.
Questions and Answers:
Operator
We will now begin the question-and-answer session. [Operator Instructions] Our first question today comes from Casey Whitman with Piper Sandler.
Casey Whitman -- Piper Sandler -- Analyst
Hey, good morning.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Good morning, Casey.
Casey Whitman -- Piper Sandler -- Analyst
Great quarter. I guess I'd start maybe just thinking about expenses within the banking segment, which were very well controlled this quarter. Just wondering if you could share your thoughts on how you expect expenses within that segment to trend from here, keeping in mind all the hires you've made to support your expansion and maybe update us as to whether or not there is any potential for further branch closures or rationalization?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Sure. Casey, that's a great question. So when we look at -- one of the things that we've really been focused on and we mentioned in several quarters is that we are trying to find a way internally, we're calling it a reallocation of resources to pay for some of these new hires and pay for the new innovation that we're doing.
So as we previously mentioned in June, we are closing -- we do have some branch closures. We actually had eight branches that closed October 1st. So those cost saves are not in these numbers yet and we have one additional branch closing that's in process, that's been announced and is in process. So those cost saves will come into the fourth quarter and then that will help offset any of the additional growth in expenses.
So, we are trying our best and I know some of the executive team is getting tired of me saying no to certain things, but we are really trying to keep our non-interest expense as stable as possible going forward and trying to find ways internally through efficiencies and technology to pay for those additional costs. So I guess [Speech Overlap] somewhat flat.
Casey Whitman -- Piper Sandler -- Analyst
Prefect. That's definitely very helpful, thank you. Okay, and then, maybe just starting or thinking about the movement in problem assets this quarter, can you give us some more color on the uptick, in particular on the residential mortgage non-accruals.
I think you noted the majority had expired deferral program. So, is that at the basket of small borrowers and are these borrowers just not able to make payments, and rather than keep extending deferrals, you move them to non-accrual or sort of what's going on within that bucket?
Jon S. Edwards -- Executive Vice President and Chief Credit Officer
All right, and I appreciate giving the opportunity to do provide a little of color on that. Let me say really three things and I'd really address all of the NPA changes here, not just really the residential ones. But let me say, virtually, all of the change was related to COVID. So, it's important to know that we really didn't have any surprises that came out of that. We've been saying for a while that hotels were going to be the issue. So changes in watch list, changes in TDRs and things like that are really highly concentrated in borrowers.
But from the NPA side, the commercial -- at least on the commercial side, there were really only two significant changes; one was a larger hotel loan and the other was a restaurant that we decided to close and is in the process of liquidating their real estate. And I look at the collateral position we have in each of those and I feel pretty confident that we won't really see any loss in those.
Specifically, and I know your question was on the residential side. So we saw an increase of about a 100 loans on the residential side, 106 loans that we added to the non-performing list. The average size in that portfolio was $425,000, so it's well diversified. It's not any loss that we might look at and that's not going to be that significant for us.
But really, what that represents, is our borrowers that had come out of a Cares Act deferral program but had not yet confirmed or told us their intentions to either resume payments on their loan or go back into another one of the several options that the Cares Act has. So we were in this middle point of not knowing whether they were going to resume payments or take up another Cares Act program. And so, we took the position that we would call those non-accrual until such time as we were -- that we were settled in the direction in which they were going.
Some may stay non-accrual, I do believe that a portion of those will enter a Cares Act. As you know, there is a longer-term period that they have programs available, so there are programs that they can enter into, again, several different options. And so, a portion of those may settle in the fourth quarter and come out of the NPA bucket, but I felt it was a very -- it was appropriate but a conservative approach, nonetheless, to consider those non-performers.
H. Palmer Proctor Jr. -- Chief Executive Officer
And Casey, this is Palmer. The other thing to note on these, as Jon said, I think it's a very conservative approach because the majority of these individuals are entitled to extend their payments another six months through all these different programs. But if they haven't declared that, we could have easily said, well, they've got another six months and came, have a [Indecipherable] what we were trying to do is take more conservative approach to it and if we've not heard from them, we are going ahead and calling it the way we saw it.
The other thing to note too is, we've really wanted to be consequential with the earnings we had this quarter. If you wrap all those loans up, we could have charged every one of those loans off and still hit consensus and made some meaningful money this quarter.
Casey Whitman -- Piper Sandler -- Analyst
Okay. So it sounds like these loans actually haven't missed a payment yet and this is just kind of a timing thing and we'll see which ones...
H. Palmer Proctor Jr. -- Chief Executive Officer
Yeah, they're still out of that Cares Act [Speech Overlap] yeah, they're entitled to additional deferments but they have not -- you have the option of either bringing the payments current or tacking them on to the end of your loan. And if they have not responded in such fashion in terms of their intent there, we just went ahead and took the conservative approach.
But like Jon said, I think what you'll find is a lot of these people will either tack it on to the end of the loan or make payments, and then all of a sudden, they come back off of non-accrual. But until that time, we just thought we'd be conservative and take that approach.
Casey Whitman -- Piper Sandler -- Analyst
Okay. And the 106 loans you referenced, how big is that bucket, dollar wise?
H. Palmer Proctor Jr. -- Chief Executive Officer
$40 million, $40.7 million.
Casey Whitman -- Piper Sandler -- Analyst
Okay. Makes sense. Okay, and then just one other quick one about, you referenced a larger hotel loan, is that the one that moved on to non-accrual or into TDRs and kind of how big was that, is that the $29 million?
H. Palmer Proctor Jr. -- Chief Executive Officer
It was a little less than that $17 million -- I'm sorry, $18.7 million is what we quoted on the slide deck. It was the -- it was non-accrual. It also created a TDR. So it's on our earnings table. It's in the nonperforming TDR category.
Casey Whitman -- Piper Sandler -- Analyst
Okay. And maybe just broadly, the movement of hotel into the performing TDR category this quarter, maybe you can speak to that too.
H. Palmer Proctor Jr. -- Chief Executive Officer
I can. So just TDRs in general over 80% of the newly created TDRs for the quarter were in hotels. I will say, on the other side though, the last slide deck we put out would have been I think sort of mid-September numbers and we had about $240 million worth of hotels that were, I think, noted as still being in Phase II of the payment deferrals. And we only added 130 of that to the watch list.
And so of that whole bucket, there was a significant portion of that group of hotel loans that did resume payments like we expected they would. But that last group and it's a -- for a variety of reasons and a variety of locations, just needed that longer runway. And I told our folks that I didn't want to do this, and for another 90 days, I really want it to -- I didn't think the hotel sector was going to heal in 90 days. So I told them that if we weren't willing to do something through the middle of next year, it really wasn't worth it.
So taking that stance, we certainly would have created the TDR, but we tried to work with our customers to a length of time that would give them the best opportunity to get back to some level of normalcy.
Casey Whitman -- Piper Sandler -- Analyst
Understood, thank you for all the answers and great quarter you guys.
H. Palmer Proctor Jr. -- Chief Executive Officer
Thank you.
Operator
Our next question comes from David Feaster with Raymond James.
David Feaster -- Raymond James -- Analyst
Hey, good morning everybody.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Good morning.
H. Palmer Proctor Jr. -- Chief Executive Officer
Hello, David.
David Feaster -- Raymond James -- Analyst
Again, congratulations on a stellar quarter. I just wanted to follow up real quick on that hotel portfolio. Do you have the reserve allocation to the hotel portfolio? And then, maybe do you have any upgraded debt service coverage ratio or LTV metrics based on current forecast evaluation?
H. Palmer Proctor Jr. -- Chief Executive Officer
As far as the reserve is concerned, I don't remember if we've made this comment before, but we determined that the forecast models that we were using, really I didn't think would cover the hotel sector that well, just because of the kind of the short-term improvement and versus really what is needed in the hotel sector is a lot longer than that.
So we did separate the hotels out of the normal commercial real estate and established that group in its own category, in the reserve, for the quarter and looked at it from that perspective and also a key factor overlay just because of the level of deferrals and the new watchlist loans and so on. So we did treat that as a separate category.
From an overall LTV perspective, I didn't go out and get all of those hotels reappraised. The valuations that we did get where -- they weren't materially different and I think that's just a factor of kind of thinking through stabilized. I -- honestly you take that date and time, and occupancies are hovering in the mid '40s to mid '50s, well clearly the valuations are going to come down.
A good part about good part about that is that and I've said this before, our hotel portfolio overall started -- or actually I should say pre-COVID was around 60%. So we have the capacity to see a revaluation even at 20% or 25% and only have that portfolio stretched to say 75% or 80% overall LTV. So it's a good portfolio from the collateral perspective and I'm not as worried about losses as I am about just getting the hotel sector healed.
David Feaster -- Raymond James -- Analyst
That makes sense. And then just switching gears to loan growth, you guys have had terrific organic loan growth. Great to see the new hires recently. I guess how do you think about the pace of growth as we enter 2021? I appreciate the color on the seasonality in the fourth quarter. But obviously we've got the tailwinds of the economic backdrop, the new hires hitting. Just curious how you think about organic growth as we enter 2021?
H. Palmer Proctor Jr. -- Chief Executive Officer
Yeah, I would tell you that the pace of the growth will be measured. I'll also tell you that the type of growth we're having -- a lot of it is, as you mentioned earlier, we had a lot of significant new hires, especially on the C&I front. And those individuals are going to be contributing in a meaningful way and a lot of that's going to just be taking business from other banks. So it's -- as I have said in the past, it is not going to be more aggressive. It's just going to be more active. And so that's where I see a lot of the opportunity for us as we go forward.
David Feaster -- Raymond James -- Analyst
Okay. And then just kind of what's the pipeline for new hires? You guys have done a tremendous job hiring new guys across your footprint, and even in this new market. Just -- what is the pipeline for new hires look like? And when -- do you think you're going to be able to continue to -- Truist has kind of been able to be a bit more defensive just given the pandemic. But just -- how do you think about starting to pick up more lenders from there and gaining share in that middle market from them?
H. Palmer Proctor Jr. -- Chief Executive Officer
Yeah, a good question. I think the defensive posture a lot of banks have been able to take or has is a luxury of COVID. I think that's coming to an end and -- at least in the Southeast because we are, as I've mentioned in my prepared remarks, we are fortunate to have a strong presence in Southeast because business here, it continues to improve.
That being said, the pipeline of new candidates is exciting in terms of the opportunities there, but we are also having to be measured and layering in those expenses and being mindful of the costs associated with that. So we will continue to layer in that expense and that overhead as we've got the expenses saves to cover it. But the pipeline will continue -- of talent continues to be robust and a lot of that has to do with the fact when you bring on the, I'll call them the influencers that we have, they've obviously got a pretty loyal following themselves, having come from other institutions. So a lot of that pipeline is made up of new talent from or potential new talent from the -- our new hires.
David Feaster -- Raymond James -- Analyst
All right. Thanks guys. Again, congrats on a great quarter.
H. Palmer Proctor Jr. -- Chief Executive Officer
Thank you.
Operator
Our next question comes from Brady Gailey with KBW.
Brady Gailey -- Keefe, Bruyette & Woods, Inc. -- Analyst
Hey, thanks. Good morning guys.
H. Palmer Proctor Jr. -- Chief Executive Officer
Good morning, Brady.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Good morning.
Brady Gailey -- Keefe, Bruyette & Woods, Inc. -- Analyst
So you all have done a pretty good job at holding the NIM relatively stable year-to-date, a lot better than peers. I know, you've talked about this kind of low-to-mid single-digit decline per quarter, which is what we've seen. Nicole, do you think the margin is close to a bottom here at 3.64% or do you think we should continue to think about NIM shrinkage going forward for the next year or so?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Brady, that's a great question. And I think that as much as I want it to be the bottom, I don't think it's there yet. So, as we model out and we are -- we've been very aggressive on the deposit side. And I'll tell you one of the things in this cycle is that everybody has been aggressive on the deposit side, which we don't really see any crazy competition out there, which has made it available so that we can be competitive and reduce on the deposit side.
So we continue to look for opportunities on the deposit side, but I do still see low single-digit compression for at least the next two quarters. So 5 basis points to 6 basis points over two quarters. When you look at our CD portfolio, we still have about $560 million that's currently at 1.36% that we'll reprice between now and the end of the year. Our production rates in the third quarter was 46 basis points.
So, if we can get that $560 million that's at 1.36% to reprice down significantly [Phonetic] that will be one of our biggest win for the fourth quarter. And then we have about another $1.3 billion over 2021 that will reprice and that's at a lower rate. That's actually at a weighted average of 98 basis points. So not as much room, but there is some room there for it to come down as well.
We continue to look on the other deposit size and deposit products. And then really the other thing is on the loan side is that we internally have said that we're kind of street-fighters looking for every basis point that we don't have to go -- we can -- we've said we'll compete on 1 basis point and not just necessarily the 25 basis point increment. So anything that we can do to protect the margin, our bankers have been very very cognizant of that, very successful in doing that. They've done a great job. But I do see a little bit more compression before we bottom out.
Brady Gailey -- Keefe, Bruyette & Woods, Inc. -- Analyst
Okay. And then on the buyback, I saw the extension of the date. You have about $86 million left in that authorization. Do you think you'll be active on the buyback in the near term? I mean the stock is still pretty cheap at 1.3 times [Phonetic] tangible. Is that something you plan to act on in the near term or not yet?
H. Palmer Proctor Jr. -- Chief Executive Officer
Not yet. As I said, I don't want to anticipate any activity there -- really there between now and end of the year. But it's -- we did want to have that readily available in the event that we chose to do so.
Brady Gailey -- Keefe, Bruyette & Woods, Inc. -- Analyst
And then, finally for me, Palmer, it's great to see all these talented hires that you've got this year. Maybe on the non-organic side, I know, related to M&A -- to me, it felt like you're a little more upbeat on M&A on the call last quarter. So just an update on kind of how you're thinking about M&A going forward?
H. Palmer Proctor Jr. -- Chief Executive Officer
Well, I'll tell you -- we're focused on growth and good, measured, controlled growth and whether that'd be organic or M&A if the right opportunity comes along. But I think as we look at M&A, the most important thing for us is just to be well positioned and to be in a position of offense regardless of what gets thrown our way.
And like I said, we like to focus on the things we can control, and then mitigate the things we can't control. So I think my comment last quarter really pertain to the industry. I think you're going to see some significant M&A activity as we get to the end of this pandemic. And a lot of that is activity that has been bottled up, quite frankly, for the last several quarters.
So I think you'll see a sudden surge in M&A activity. We are focused on growing the company organically. But if M&A opportunities come along that makes sense and they're accretive, and the earn-back, and where -- the currency is where it needs to be, to be allowing us to participate in M&A, we will certainly consider that.
Brady Gailey -- Keefe, Bruyette & Woods, Inc. -- Analyst
Okay. Great. Thanks guys.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Thanks, Brady.
Operator
Our next question comes from Kevin Fitzsimmons with D.A. Davidson.
Kevin Fitzsimmons -- D.A. Davidson & Co. -- Analyst
Hey, good morning everybody.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Good morning, Kevin.
Kevin Fitzsimmons -- D.A. Davidson & Co. -- Analyst
Nicole, I just wanted to follow up on the margin outlook. So the low-to-mid single-digit compression per quarter. Is the way to think about that is --you're talking more about the core margin, and then the PAA can swing within some kind of -- some range quarter-to-quarter, but is the way to think about that is staying roughly the same with what we've got this quarter?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
That's right. You got it exactly right.
Kevin Fitzsimmons -- D.A. Davidson & Co. -- Analyst
Got it. Okay. And then if I could just ask about PPP, I know, it's a moving target in terms of how the SBA is reacting to it. But if we were thinking last quarter that the dues of the origination fees would flow through to the margin mostly in fourth quarter, is it now reasonable to be pushing that mostly into first quarter if we're assuming that the forgiveness starts to heat up later this quarter, but the bulk of it, the loan payments end up happening in the first quarter?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
You know I think that -- I think the question of the day is, when do those forgiveness -- when do they start granting forgiveness and when do those loans get paid off and when do we take that in? So I have continued to model that with just the normal amortization. And so I do not have any of those -- that potential tailwinds or headwind -- tailwind, sorry. Any of that potential tailwind built into my guidance.
So I'd also kind of assume that as we get some of that tailwind of early pay off and we start having that income, I assume the Street and Analysts would kind of do an analysis and possibly exclude that. So, certainly as that comes in knowing that we still have $30 million or so of deferred revenue or fees that will come in as those are forgiven, that would certainly help the margin, but I don't have any of that build and when I say the margin compression.
And as far as your timing -- fourth quarter, first quarter, second quarter, I know, that's a three quarter window. But I think we're really going to see it starting to come in, probably fourth quarter or first quarter, you know just as fast as SBA where it's their kind of discretion as to how fast they work through those.
H. Palmer Proctor Jr. -- Chief Executive Officer
Less than a 100 people are...
Kevin Fitzsimmons -- D.A. Davidson & Co. -- Analyst
Right. Okay. And just -- I know there's been so much focus on the hotel exposure and industrywide and appropriately so, but I think for the banks, the real -- when investors look at the risk, it's more about if economic weakness spills over into commercial real estate more broadly.
And Palmer, you made the point earlier that the Southeast is really doing very well and it's been opened for quite some time, and that's benefiting it where I think there are certain pockets more like New York City and more urban areas that have more distinctive issues they're dealing with.
But what are your observations and expectations based on what you see today? I would assume you're keeping a close eye on that. Just what makes you feel comfortable or what gives you concern today on that subject?
H. Palmer Proctor Jr. -- Chief Executive Officer
No, you're exactly right and we keep an eye on each line of business, and more specifically, each individual vertical. And I think we kind of break it down, and Jon and his team do an excellent job in terms of getting granular to you know looking at retail centers versus office versus industrial.
The industrial market throughout the Southeast is extremely strong and robust. It's amazing how well that's performed. Obviously, the hospitality has impacted office -- dependent on the office where it is. But we don't see much impact there on a broader basis and a lot of that -- and dealing with a lot of the large commercial real estate firms that we get a lot of our data from, they -- while they're certainly people that are moving around in terms of square footage what they need. They are not seeing a lot in the way of defaults and nor have we on our portfolio.
Retail, I think, you have to look at each specific credit there. If you've got a credit tenant or an anchor tenant, a lot of ours are, for instance like a public shopping center, that's a very different type of scenario than one that's in a more suburban retail center. And so we keep a close eye on those. But overall, when you look at the Southeast, like I said, it's a very different market than a lot of the other banks are experiencing and most of our credits, as you well know, are in that South-eastern footprint.
So right now, we are cautiously optimistic. But certainly, we've got a very conservative credit culture here. And if we see anything that looks out of the ordinary, we're going to go ahead and address it. But right now, that being said, I think, Jon gets to report regularly in terms of the -- on the retail side, for instance, which is where we've got a lot of focus, in terms of the payments from the tenants to the landlords. And right now our collection rate is, it's still running around what 90% or better, which is pretty impressive. And so we feel cautiously optimistic is probably the best way to put it.
Kevin Fitzsimmons -- D.A. Davidson & Co. -- Analyst
Okay. Thanks very much.
Operator
Our next question comes from Christopher Marinac with Janney.
Christopher Marinac -- Janney Montgomery Scott LLC -- Analyst
Hey, thanks, good morning. Palmer, can you update us on the Augusta initiative and should we expect additional hires and new business flows there?
H. Palmer Proctor Jr. -- Chief Executive Officer
Yes. Augusta is going to be a bright spot for us when you look at 2021, somebody earlier had asked about growth. As you all know, Remer Brinson joined us and he is well known in that market and he's covering the Augusta Savannah, kind of the coast force there. And we will definitely have some additional meaningful hires there to take advantage of that opportunity.
I think Augusta oftentimes is overlooked when you look at Georgia because so many people have a tendency to focus on Atlanta. But Augusta is a vibrant market. It's got a tremendous amount of opportunity, and quite frankly, I think it's underserved in terms of banking. So Remer is going to take full advantage of that and we're going to take full advantage of his talent. So the answer to that is, yes, there will be additional hires in that market.
Christopher Marinac -- Janney Montgomery Scott LLC -- Analyst
Okay, great. Thank you for that. And then just back to the mortgage business in general. I mean, how sensitive do you think the mortgage business is to the 10-year rising a little bit? I mean, should we think of it as coming off of the bottom and that's an issue or is it more that it's still half of where it started the year?
H. Palmer Proctor Jr. -- Chief Executive Officer
Well, I think depending on the magnitude of the rising, how quickly it rises, you kind of get that shock and that does kind of have created a pull-back. But right now, rates are so low and inventory levels are so low that I think there is more of an impetus for people to go out and purchase a home today.
So I would look at, Chris, our lost [Phonetic] pipeline, and when I look at the lost pipeline even into the fourth quarter, it's very encouraging to see. And I don't see a lot of fallout and the pull-through rates continue. But I do think, if we had a shock to the 10-year and had a rapid escalation there, I think you have a lot of people that will get off the fence immediately. So you, quite frankly, you'd probably see a spike, and then you'd probably see somewhat of a pull-back.
Christopher Marinac -- Janney Montgomery Scott LLC -- Analyst
Got it Palmer. Thank you for the additional color. I appreciate it.
H. Palmer Proctor Jr. -- Chief Executive Officer
You bet.
Operator
Our next question comes from Brody Preston with Stephens Inc.
Brody Preston -- Stephens Inc. -- Analyst
Good morning, everyone.
H. Palmer Proctor Jr. -- Chief Executive Officer
Good morning.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Good morning.
Brody Preston -- Stephens Inc. -- Analyst
Okay. I just wanted to ask a question. I appreciate the slide you guys put in there on the CRE production. Just wanted to ask, it looks like you all, maybe over the last quarter or so, have gotten a little bit more conservative from an LTV perspective. Just wanted to know if that was intentional or if that's just how it worked out on the numbers?
H. Palmer Proctor Jr. -- Chief Executive Officer
Well, that's a great question, and actually appreciate you bringing it up, because it has been somewhat intentional. I think I mentioned, as COVID kind of came on us, that we made a few changes to our underwriting. And one of those things was that we were looking for a little more equity, and in a lot of cases, trying to get payment reserves that would take us out to place beyond what we thought at the time of COVID. So yes, it was somewhat intentional. It was intentional for us to do that.
Brody Preston -- Stephens Inc. -- Analyst
Okay. Thank you for that. And then, I'm assuming just given that those are new originations, that those are being underwritten at debt service coverage ratios and LTVs that are based on current values and cash flows. And so just wanted to better understand if you could give us a sense for how values for similar asset classes have changed over the course of the last year?
H. Palmer Proctor Jr. -- Chief Executive Officer
Well, that's a good question. And as I was mentioning earlier the economics, especially in our four-state footprint have not -- I mean, we're -- everybody is looking to underwrite a new hotel loan. So the sectors that had -- that we're still underwriting into are not -- haven't really been impacted enough to where valuations are coming in, minor, what you would expect from last year. So they've held up fairly well and we stick to those sectors that have been less impacted and we just haven't seen a material change in valuations there.
Brody Preston -- Stephens Inc. -- Analyst
Okay. Great. And then, I guess just one more around the sort of LTV topic. I did notice, just the grade five loans, which I know are performing, but they have LTVs that are above 100%, based on their current collateral. Those ticked up a bit. And so, I just wanted to get a sense for it. If you had started reappraising some of those loans, and if that's what drove it? And if so, if there was any specific asset class that drove the increase?
H. Palmer Proctor Jr. -- Chief Executive Officer
That's a good question. There are several reasons beyond that that we would grade a loan of risk rate 5. And honestly, the majority of what the change was during the quarter was the reflection of those loans that were still in deferral.
So yes, we did do updates on evaluations, certainly on the problem loans, potential problems. Grade 5s, on a few may be, but primarily what you see in that is just the fact that if we had a borrower that entered that second phase felt like that we would -- we wanted -- we would grade that a 5 at best until we got clarity as to whether they were going to come out fine on the other end or whether they were potentially going to see something else -- something worse happen.
Brody Preston -- Stephens Inc. -- Analyst
Okay. And you guys gave some pretty good color earlier on the mortgage portfolios that rolled out of deferral and into NPA. It seems like that was relatively idiosyncratic. And so I'm assuming that there is not -- there haven't been other asset classes that have immediately rolled out of deferral and into NPA. They just kind of started resuming normal payment, is that fair?
H. Palmer Proctor Jr. -- Chief Executive Officer
Yeah, that's fair. I mean, obviously, the two loans I mentioned on the commercial side rolled out of deferral and did not have the capacity to continue and needed a third. And so, those are on non-accrual. But nothing likes the residential side. It was not that widespread. It was just sort of loan-by-loan.
Brody Preston -- Stephens Inc. -- Analyst
Okay. I had a couple of -- just some clarification on the loan portfolio. Just wanted to better understand what drove the $125 million decrease in consumer installment? I'm sorry if I missed that. And then, the indirect auto run-off, how much of that do you expect to sort of run-off quarterly and when do you expect that portfolio to be completely run-off?
H. Palmer Proctor Jr. -- Chief Executive Officer
Yeah, that's a good question. Actually, I think that's a little bit one and the same answer, because the decrease -- a portion of the decrease in consumer loans was a reclass of about -- it's $40 million or $50 million, into held for sale?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
$50 million.
H. Palmer Proctor Jr. -- Chief Executive Officer
$50 million of reclass from held for investment to held for sale. But indirect portfolio amortization was about $120 million for the quarter. So that really hit the majority of the consumer portfolio. I think the decline is primarily in that.
As to the balance remaining and the amounts that it would run off, that amortization has been fairly consistent over the last few quarters. So you can kind of sort of just see that, I think over the next couple of years. It's probably the duration that we'll have remaining on it.
Brody Preston -- Stephens Inc. -- Analyst
Okay.
Jon S. Edwards -- Executive Vice President and Chief Credit Officer
We have obviously slowed down a little bit because it does -- it felt like clockwork and the portfolio there in credit has just held up extremely well during this downturn, very similar to the last one.
Brody Preston -- Stephens Inc. -- Analyst
Yeah. Understood. I do have a question on the SBA. You noted that the gain on sale for that had increased with you know and sort of refocusing post-PPP. Just wanted to understand is that sort of repeatable moving forward, and then, how big is the pipeline and where is pipe -- paper pricing right now given that we're coming out of a recession and still on a zero interest rate environment?
H. Palmer Proctor Jr. -- Chief Executive Officer
Yeah, the premiums are still pricing very favorably right now. You're looking at the 1.10 and above. And so that's still a very attractive option for us obviously to sell the guaranteed portion. But the -- we are rebuilding the pipeline. It can't build fast enough as far as I'm concerned, because I think that paper is very meaningful.
And during this cycle it's even that much more important to continue to build it. So our pipeline is getting close back to where it used to be, but obviously the focus has moved back from PPP to normal organic origination. We hope to see that continue to grow. And that's also an area where we hope to find some new originators to help supplement that SBA growth.
Brody Preston -- Stephens Inc. -- Analyst
Thank you for that. And then just the last one from me. Just wanted to get a sense if you had made additional mortgage hires to sort of help with the volume that you've seen or are you simply doing more with less? And then, as we think about next year, obviously, the efficiency ratio on that business line is probably best-in-class at 40%. And so as revenue kind of -- as those originations and the mortgage banking revenue declines, is it going to be dollar-for-dollar with expenses or should I expect some of the expenses to kind of stick around a little bit?
H. Palmer Proctor Jr. -- Chief Executive Officer
No. There's going to be a lag effect. But I will tell you, as quickly as we have moved to adapt and absorb the increase in production, we would move equally as quickly to eliminate the expense. And that's a very scalable business. But you do have to be -- you don't have to be premature, but you do have to be consequential. And right now, we have not added -- to answer your earlier question, we have not added any new additional teams.
This is really production with our existing teams and they're all just on a great run rate right now. And the pipeline going forward is reflective of that as well. And we continue to see a meaningful amount of purchase versus refi business. And that's always encouraging to me. I love seeing the purchase business continue to increase. So we're kind of even in this low rate environment, we're still running at about 50-50.
And I'd like to see that get up even higher on the purchase side, and I think it will. As Marinac mentioned earlier, if we start seeing rates come up a little bit. But I view that more as a positive. But that being said, because the business is scalable, you got to immediately react to that and cut accordingly to maintain the kind of efficiency ratios that we expect to have in a mortgage company. And the leadership there has proven that they are able and willing to do that.
Brody Preston -- Stephens Inc. -- Analyst
Awesome. Well, thank you for taking my questions. I appreciate the time everyone.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Thank you.
H. Palmer Proctor Jr. -- Chief Executive Officer
Thank you.
Operator
Your next question comes from Jennifer Demba with SunTrust.
Brandon King -- SunTrust Robinson Humphrey -- Analyst
Hey, this is Brandon King on for Jenny.
H. Palmer Proctor Jr. -- Chief Executive Officer
Hey.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Hey, Brandon.
Brandon King -- SunTrust Robinson Humphrey -- Analyst
Hey, hey. I just have one question. Is there any consideration of any potential bulk sales of problem loans, for instance, in the hotel book, has there been considered? Well, I just want to know your color on that.
H. Palmer Proctor Jr. -- Chief Executive Officer
As we look forward Brandon, that's certainly an option that we would consider. So much of that is obviously driven by pricing, and what kind of pricing we have in the market and what we're willing to accept. So that's certainly an arrow we will keep in our quiver, if it's appropriate to do so. So I wouldn't tell you it's out of the realm of possibilities, but it would have to be, we have to feel comfortable with sale price for that to happen.
Brandon King -- SunTrust Robinson Humphrey -- Analyst
Okay. Thanks. That's all I had.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Great, thank you.
Operator
This concludes our question-and-answer session. And I would like to turn the call back over to Palmer Proctor for any closing remarks.
H. Palmer Proctor Jr. -- Chief Executive Officer
Thank you. I'll wrap up, once again, by thanking everybody for listening in this morning. And in closing, I will share with you that we're extremely excited, as you can tell, about the future and the progress here at Ameris. It's nice to know we've got all our conversions, all our integrations, all of that is behind us. So we're at full speed ahead in terms of our opportunities that are in front of us.
And that sounds strange, but even during these uncertain times, we feel like we are extremely well positioned. We're focused and we're disciplined and we're focused on the things we can control. And as I mentioned earlier, we are still preparing for the things that we can't control. But the Ameris team remains strong, disciplined and focused on the future, and we see a lot of upside going forward and I just want to thank everybody, once again, for participating this morning. Thank you, operator.
Operator
[Operator Closing Remarks]
Duration: 55 minutes
Call participants:
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
H. Palmer Proctor Jr. -- Chief Executive Officer
Jon S. Edwards -- Executive Vice President and Chief Credit Officer
Casey Whitman -- Piper Sandler -- Analyst
David Feaster -- Raymond James -- Analyst
Brady Gailey -- Keefe, Bruyette & Woods, Inc. -- Analyst
Kevin Fitzsimmons -- D.A. Davidson & Co. -- Analyst
Christopher Marinac -- Janney Montgomery Scott LLC -- Analyst
Brody Preston -- Stephens Inc. -- Analyst
Brandon King -- SunTrust Robinson Humphrey -- Analyst
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp (NASDAQ: ABCB) Q3 2020 Earnings Call Oct 23, 2020, 9:00 a.m. Davidson & Co. -- Analyst Christopher Marinac -- Janney Montgomery Scott LLC -- Analyst Brody Preston -- Stephens Inc. -- Analyst Brandon King -- SunTrust Robinson Humphrey -- Analyst More ABCB analysis All earnings call transcripts 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. On an adjusted basis, we earned $116.9 million or $1.69 per diluted share, when you exclude merger and restructuring charges, servicing asset impairment, COVID-19 expenses, certain legal fees and the gain on sale of bank premises. | Davidson & Co. -- Analyst Christopher Marinac -- Janney Montgomery Scott LLC -- Analyst Brody Preston -- Stephens Inc. -- Analyst Brandon King -- SunTrust Robinson Humphrey -- Analyst More ABCB analysis All earnings call transcripts 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Ameris Bancorp (NASDAQ: ABCB) Q3 2020 Earnings Call Oct 23, 2020, 9:00 a.m. Our NPAs as a percent of total assets increased to 83 basis points compared to 59 basis points last quarter, mostly due to increased nonaccrual loans in the residential real estate and commercial real estate loan categories. | Ameris Bancorp (NASDAQ: ABCB) Q3 2020 Earnings Call Oct 23, 2020, 9:00 a.m. Davidson & Co. -- Analyst Christopher Marinac -- Janney Montgomery Scott LLC -- Analyst Brody Preston -- Stephens Inc. -- Analyst Brandon King -- SunTrust Robinson Humphrey -- Analyst More ABCB analysis All earnings call transcripts 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. The non-recurring accretion in the second quarter attributed for over half or 9 basis point of the 19 basis point compression seen this quarter and the remaining 10 basis points was related to 5 basis points from PPP loans, 3 basis points in margin, and 2 basis points from excess cash. | Ameris Bancorp (NASDAQ: ABCB) Q3 2020 Earnings Call Oct 23, 2020, 9:00 a.m. Davidson & Co. -- Analyst Christopher Marinac -- Janney Montgomery Scott LLC -- Analyst Brody Preston -- Stephens Inc. -- Analyst Brandon King -- SunTrust Robinson Humphrey -- Analyst More ABCB analysis All earnings call transcripts 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. And as far as your timing -- fourth quarter, first quarter, second quarter, I know, that's a three quarter window. |
27816.0 | 2020-10-22 00:00:00 UTC | Big Bank Earnings Recap | ABCB | https://www.nasdaq.com/articles/big-bank-earnings-recap-2020-10-22 | nan | nan | In this week's episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, dive into earnings from JPMorgan Chase (NYSE: JPM), Wells Fargo (NYSE: WFC), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), and Bank of America (NYSE: BAC) to look for the important points and trends investors need to know. And don't forget, earnings season is just getting started. Hear why Matt is keeping his eye on Live Oak Bancshares (NASDAQ: LOB) and Jason is watching Ameris Bancorp (NASDAQ: ABCB).
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on October 19, 2020.
Jason Moser: It's Monday, October 19th. I'm your host Jason Moser, and on this week's Financial show, we've got the biggest and baddest banks' earnings reviewed this side of the Mississippi. And thanks to technology, anyone on either side of the Mississippi can hear it. Joining me, to take us through it all, is my partner in crime, Certified Financial Planner, Matt Frankel. Matt, how is everything going?
Matt Frankel: Pretty good. That was the coolest intro to a show I've ever heard you do.
Moser: [laughs] You like that, huh! I mean, you know, you got to get creative; that's the fun part about doing these shows, you get a little bit of creative freedom to kind of go in there and do what you want, as long as it doesn't have to be bleeped out, right, that's the line.
Frankel: Exactly. That's something that's changed since we stopped doing them, you know, prerecorded. [laughs]
Moser: [laughs] Yeah, sometimes what happens in the studio, stays in the studio, and now it's all out there for everyone to see. But, ah! We digress. Matt, last week was a very big week, earnings-palooza kicked off, and as tradition is with every quarter, the big banks were the ones that really got us rolling here. We wanted to go ahead and devote today's show to actually taking a look back at five of the earnings reports that really stood out to us. We've got JPMorgan, we've got Wells Fargo, we've got Goldman Sachs, we've got Morgan Stanley, we've got Bank of America. And let's go ahead and kick it off with JPMorgan. This is a bank, Matt, and there's a lot to like about this bank. I think maybe what we like the most about it -- I think what I like the most about it, at least, is leadership. I think Jamie Dimon is certainly one of a kind. And I don't know about you, and I want to get your take on this, I don't know about you, but when I was reading through the call there was so much language in there that just leads me to believe that Jamie Dimon is taking such a broad approach to this point in time, this environment that the banks are dealing with the pandemic and whatnot, he is taking such a broad approach, JPMorgan is seemingly prepared for any and all outcomes regardless the scenario. Which, I mean, I'm not a shareholder, but if I were, I'd certainly be very encouraged. But I want to kick it to you, in regard to JPMorgan's earnings release, what were one or two of the things that stood out to you that this bank is doing really well.
Frankel: Well, first, you mentioned what Jamie Dimon said. I remember earlier in the year, kind of, similar to what you just said, during the height of the pandemic, they said they were in their own stress test, you remember that. You know, banks are required to run stress tests every year, the Federal Reserve requires it. They ran one day that was much more intense than what the Fed requires and still passed with flying colors. So, like you said, they are ready for anything. One thing that stood out to me that Jamie Dimon said this quarter, we've been talking a lot about brokerage consolidation in the past few weeks. And he said that JPMorgan Chase is very interested in acquisitions on the asset management front. So, I thought that was really interesting. So, we might see a lot more consolidation there.
But just getting to the numbers, JPMorgan Chase, they beat on the top- and bottom-line, which we don't pay that much attention to headline numbers, but it's interesting to know. If a stock moves one way or another that's usually why, and I mean, it kind of gives you the big picture of how the business is doing.
But digging in is a little bit more important. One reason JPMorgan is the most closely watched bank earnings report, it's not just because it's the biggest, it's because it's the first. Every earnings season they're the first of the big banks to report, I think, by like an hour. I think Citigroup was, like, an hour later. But even so, that's like, all eyes on JPMorgan to see how things are going.
Moser: You remember how it used to be based on Alcoa, it wasn't even that long ago, and Alcoa was what kicked this thing off. Talk about, like, who cares? I mean, I hate to throw nothing-burger out there, but it sure feels like Alcoa is just kind of a big nothing-burger these days.
Frankel: Right. I feel like for a long time they were famous because they kicked off earnings season.
Moser: [laughs] Yeah, I think you're right.
Frankel: But now it's pretty much JPMorgan Chase. So, they report, I think, 7:00 AM on earnings day. I think everyone else that reports, reports at 8:00.
But anyway, so the big thing the people were looking at was, how bad is the pandemic going to be on banks? And the way you've been able to tell that so far was how much they're setting aside to cover loan losses. Between the first and second quarters, for example, JPMorgan Chase set aside $15 billion or so in anticipation of loan losses, which if the COVID recession was really worse than expected, that might not have been enough, but it turns out that that was enough. Banks seem to be pumping the brakes on their loan loss reserves, and JPMorgan Chase actually released a little bit of reserves this quarter, instead of building it up, which is a really, really good sign. You know, they have pretty big investment banking operations, so, you know, trading tends to do better when the market is volatile, and that's exactly what we saw here. Bond trading revenue was up 30% year-over-year, their investment banking fee revenue was up double digits. So, the investment banking aspect of a lot of these banks we're going to talk about, including JPMorgan Chase, really kind of held them up in the face of a poor interest rate environment. You know, when interest rates are at rock-bottom levels, it's not exactly a great profit model for companies that loan money. But investment banking tends to do better during hard times, and that really helps balance out their second quarter results in terms of the losses in, like, interest margin, things like that.
Moser: Is there anything going on that gives you pause or something you feel like investors ought to be keeping their eyes on? I mean, this is really one of the best run banks out there, I think. So, this is kind of one that I put them in a little bit of a class of their own, but you know, nobody is perfect, I mean, there's got to be something out there that we want to be watching.
Frankel: Well, like you said, they're pretty much prepared for anything, but this could be a bad recession if things don't go well. If we don't get stimulus, for example. If the low interest environment continues to get worse, you know, mortgage rates plunge to, like, 1% or 2% from the current 3%, you know, that would be a problem. But what you want to keep an eye on really are the macroeconomic factors that govern bank profits. Like, I'm watching unemployment when I want to see how bad it's going to be for banks, and stimulus. I mean, the fact that they released some reserves is definitely a good sign, but you don't want to see that reverse course; it's really the number to keep an eye on.
Moser: Well, let's move over to Wells Fargo, this is the one that has, sort of, taken Bank of America's place as being, you know, the financial media's whipping post, so to speak. It just seems like they can't really do anything right. And, you know, this wasn't the greatest quarter in the world, I think we all kind of expected that, but then, of course, you have that whole PPP [Paycheck Protection Program] loan scandal, where you've got employees lying to obtain loans. It seems like it's just one thing after another. And a quote that came from the call basically said that their top priority continues to be the implementation of risk control and regulatory work. And I feel like that maybe is top priority 1A, and 1B, clearly, is the culture. I mean, there's stuff going on within this company that hasn't fully really been fixed yet. But let's go glass half-full here first. What about this quarter for Wells Fargo did you like?
Frankel: Well, to be fair, they are more closely scrutinized every other bank right now. So, you're going to find a lot more ...
Moser: It seems like they earned it, but go on... [laughs]
Frankel: Oh, they absolutely did. Like Buffett says, when you find a cockroach in the kitchen, there's usually not just one. So, now that they found the cockroach in the kitchen, which was the fake accounts scandal, now everything else they do is really scrutinized. And the latest thing was purely employees doing things on their own, it's worth mentioning. They didn't defraud anybody, it didn't affect any of Wells Fargo's customers, it was employees behaving badly.
Moser: Yeah. And it likely wasn't even really a faulty incentive structure. I mean, it seems like it really was, just like you said, I mean, just a few bad apples.
Frankel: Right. And because Wells Fargo is so scrutinized, they just kind of fell under the microscope. But this is a stock that trades for 60% of its book value, which is -- I mean, a while ago Wells Fargo, not a while ago, Wells Fargo was the most valuable bank stock by price-to-book. I mean, they were regularly trading at 1.5X book or even more. And so, they're trading for literally about [laughs] less than half of what they used to, so.
But going into this quarter, their net interest income was down by 90%, which Wells Fargo is purely a commercial bank, so this is to be expected in a low interest environment. They missed earnings, but they were profitable which is definitely a good sign. Remember the second quarter they had a big red hour there with profitability and remember, they had to cut their dividend because they had to set aside so much in reserves. That wasn't the case this quarter. They were profitable, they earned enough that if this continues, they'll be able to reinstitute their dividend where it was.
They did set aside loan losses. They were the only of the big banks, I think, that actually had to build their reserves this quarter, but it was by less than was expected. They were expected to set aside about $1.8 billion, they set aside about $0.8 billion. So, that was good news. That's compared to $9.5 billion in the second quarter that they had to set aside for losses. So, this is definitely [laughs] an improvement.
But like I said, Wells Fargo is, out of the five we're talking about, the closest thing to a pure savings and loan that we're getting out of the big banks. So, they are the most affected by the pandemic, because they don't have that investment banking revenue to really boost their bottom-line in tough times, like all the other big banks do. And it's really weighing on them. I mean, the fake accounts scandal was chapter one, and then the COVID pandemic was chapter two, in terms of just their underperformance of the market. And it doesn't seem to be letting up anytime soon.
Although, this quarter didn't look as bad as expected, it's still worse than the other banks, because they are purely on the commercial side of the business, and you know, the low interest rates are just punching them in the face right now.
Moser: Yeah. And you know, I was looking at this earlier before we started taping, just taking a look at all five of these banks, their year-to-date performance. And listen, [laughs] no one is lighting the world on fire. You've got Morgan Stanley leading the pack, and they're essentially flat for the year, all of them trailing the market, but Wells Fargo is just having just a really tough year, shares down close to 60%. And I guess my question with Wells Fargo, before we move on, you have to believe, given the scale of this bank, given its presence in the mortgage space, given its presence in the consumer banking space, I mean, this is not a bank that's just going to go away, it just, it can't happen. It feels like this really is a value play, right? I don't feel like this is a value trap. It may take a little bit longer, but given how far the stock has fallen, I mean, how are you looking at this? Are you looking at this more as a value play or do you feel like this is more like a value trap?
Frankel: Well, for all of their flaws, Wells Fargo has a pretty impressive history of low-risk lending. This is how they were able to pick up Wachovia at a fire sale price during the financial crisis, this is how they -- you know, their stock got hit worse than most in the '08, '09 period. They have a long history of responsible risk management. So, I don't think that's changed. And we thought just the loan losses, the reserves they had to set aside, were a lot less than expected this quarter because we're seeing this -- you know, the COVID losses began to play out a little bit more favorably than expected. I see them definitely at 60% of book value as a value play. I don't think Wells Fargo is going to go away, I don't even really think there's a good chance that any of the big banks are going to get acquired, I just think they're going to, you know, survive this storm and move on. I don't really think it's going to do that much permanent damage to their profitability. I mean, the bigger issue is, the interest rates for them, you know, the low interest environment is killing them, the Federal reserve penalty, the restriction where they're not allowed to grow, I think, is still in place. I know it was lifted temporarily for PPP reasons, but I think generally that Fed restriction is still in place. But I think they're going to make it; they're not going to go away anytime soon.
Moser: Yeah, I tend to agree. I mean, we love to give them a hard time here on the show for obvious reasons. [laughs] And you look just, not all that long ago, there's another example out there in Bank of America that, listen, they went through their own stretch, but, you know, focused leadership, obviously the scale of the company, brought things back around; that's worked out pretty well for investors. We'll talk about that in just a minute.
But before we get there, let's talk a little bit about Goldman Sachs, because this is kind of the opposite of Wells Fargo, right? This is going to be more a story really about the benefits of the investment banking operations, even while credit growth for Goldman remains a challenge.
Frankel: I mean, Goldman, we've talked about it before, is pushing more into the consumer space. But like you said, they're still mostly an investment bank. On the consumer side, their consumer banking revenue grew 50% year-over-year ...
Moser: There were a lot of good things about Marcus on that call, I saw.
Frankel: There was. And the biggest driver of that 50% was the Apple Card higher credit card lending balances. But just their revenue was off the charts, up 30% year-over-year, their earnings were almost $10/share, that is the biggest quarter Goldman's ever had. So, during the middle of the pandemic, to have [laughs] your record earnings, that's pretty impressive. I mean, that shattered expectations.
And the reason, like I said, is because a lot of investment banking operations do better during tough times. Goldman's trading revenue was up 29% year-over-year, asset management revenue was up 71%. I mean, they're firing on all cylinders. IPO underwriting was doing phenomenally well. I mean, anyone who's followed the market knows that the IPO market has just exploded this year. And equity underwriting is a big part of Goldman's business. So, the investment banking business is doing the complete opposite of what Wells Fargo's doing. I'm actually shocked that Goldman is not up for the year, after reading numbers like this. And not just this, the quarter before, if you remember, the second quarter was their second-best quarter ever.
So, when you're seeing these kinds of numbers, I mean, Goldman trades for about -- let me do the math real quick. Goldman trades for about 20X this quarter's earnings. [laughs] That's a crazy low valuation. And like I said, I'm shocked that Goldman is not a little more expensive than it is.
Moser: Yeah, that's it. You know, it struck me as well, like, looking at this chart, and the returns, I mean, Goldman down around 10% for the year and given the results that they've brought in, it certainly feels like they could be better, but I guess that also is, that speaks a little bit to just the general feeling in the market today regarding banks writ large. I mean, they're all dealing with the fair sets of challenges, it's just, you know, thankfully for Goldman Sachs, they have that investment banking operation to fall back on.
Frankel: Investment banking revenue is also less consistent, it's worth mentioning.
Moser: Yeah, that's a good point there. It's like Disney's theater division, right, it's lumpy. Sometimes it's good, sometimes it's not so great.
Frankel: Right. Trading revenue goes like this. Yeah, it's a rollercoaster ride from quarter-to-quarter. So, just because trading revenue was strong this year, has no bearing on what it's going to do next year. As opposed to commercial banking, you build your loan portfolio by $100 billion, that produces residual income that comes in quarter-after-quarter, whereas investment banking is a lot less predictable, so the market does discount that a little bit.
Moser: Excellent point. Well, speaking of investment banking, let's talk a little bit about Morgan Stanley. And I think the thing that stood out to me with Morgan Stanley really was the Eaton Vance acquisition they announced. I mean, that was a pretty big deal, it's going to bring a good chunk of change under their umbrella in regard to assets under management, and give them a little bit more of an ESG presence, which I think is very forward thinking. But what stood out to you from Morgan Stanley's quarter?
Frankel: You know, it's interesting that Goldman Sachs and Morgan Stanley are the two biggest investment banks in the country, and they're really going two different directions when it comes to bringing their brands to the masses. Goldman is doing the commercial thing with Marcus and the Apple Card and things like that, whereas Morgan Stanley is pushing into the brokerage space on the retail level. You know, they just finalized the acquisition of E*Trade, they're buying out Eaton Vance, the asset manager.
What really stood out to me, I mentioned equity underwriting when we were talking about Goldman, how IPOs have just, kind of, been off the chart. Morgan Stanley's equity underwriting revenue more than doubled from the same quarter a year ago. That's pretty impressive, it just kind of indicates just how active, I guess, you'd say the IPO market has been this year. Trading revenue was strong up 20% year-over-year. They earned more than the market had expected. The revenues were up 16% year-over-year. So, the, kind of, key takeaway I had from Morgan Stanley is that they had a very strong quarter, they weren't quite what Goldman was in terms of just, kind of, a blowout record-setting quarter, but that's just because some of their business works a little bit differently, especially on the investment side. Goldman has a big portfolio of investments, and Morgan Stanley relies a little bit less on things like that. But you know, I couldn't find that much I didn't like in Morgan Stanley's report.
Moser: Yeah, it seems like consolidation is certainly going to be a big theme of their strategy going forward, at least in the near term. I mean, that Eaton Vance acquisition they saw as essentially inevitable; if they didn't do it, someone else would. And I'd imagine, they're already looking around to see what else they might be able to bring into their universe as well.
Let's go ahead and wrap it up with what I think is probably your favorite bank out there today is an investment, given what we've talked about on the show here before, Bank of America. And again, this has been really an impressive story to watch from a number of different angles, but I think that Brian Moynihan, the CEO, has really done a tremendous job with the business, particularly given the situation that he stepped into. I mean, he did turn the conversation around here and shareholders are certainly reaping the benefits of that today.
And the quote that stood out to me on the call, because this really tells you what's on his mind, where he is thinking, he said, "The operating environment continues to require more operational excellence than ever before." So, it really feels like they're focusing not only on maintaining the culture of the business, but making sure that everything is in order and they're being as efficient and as effective as possible with what they have.
Frankel: Yeah, they've really done a fantastic job over the past decade, over the past few years especially, of just really prioritizing business efficiency, responsible lending, and it's really been reflected in their profitability. You mentioned that they're probably my favorite, and you're right. And it's because they're probably the best combination of profitability, and safety, and growth in the banking space at that kind of a valuation. They trade for a significantly lower price-to-book multiple than, say, a JPMorgan Chase. And I would put their operations, not necessarily on equal footing, but pretty close, at this point.
Bank of America is also a much more even mix of investment banking and consumer banking, which I really like, because in times like these, it really helps kind of boost their revenue. And then in times when it's a really good consumer environment, they get to benefit from that as well.
Just kind of running through some of the numbers that really stood out to me. Well, one, their charge-off ratio declined from the second quarter to the third, which is definitely an encouraging sign. Like JPMorgan Chase, they released some of their reserves instead of building their reserves, which is very encouraging, that means that the impact of COVID isn't going to be quite what they thought it was going to be. Revenue overall was down 11%, much better than Wells Fargo or pure commercial banks. Interest income was down 17%, but on the same time, consumer loans were up 5% year-over-year, which is pretty impressive given the environment. Consumer deposits, if you've been following that at all, people have been socking away money like crazy, which generally happens around a recession. So, consumer deposits are up 21% year-over-year.
They had their second-best investment banking quarter ever; this is where the investment banking, kind of, offset comes in. Investment banking fee income was up 15% year-over-year, it's just a really strong quarter on the investment side of the business. And they earned more than enough to cover their dividend, they beat expectations, but I wouldn't judge any of these banks on just the bottom-line number right now, you really have to look at what's going on, like I said, their loan loss trends, what's going on in the investment banking business, whether their interest income is holding up OK or not, and growth, I mean, growing your loan portfolio that's long-tailed income, deposit portfolio gives you more capital to lend.
And even before the pandemic, out of the big four, Bank of America was putting up the best growth numbers consistently, and growing their loan portfolio by 4% when everyone else was at 1% or 2%. They've been slowly outperforming for a little while. So, I like Bank of America for that reason. I think they're going to continue to improve their efficiency and this might even accelerate Moynihan's plans to do that. And I just see a very bright future for them. They're not quite at the JPMorgan Chase level, but I see them getting to equal footing before too long.
Moser: Nice. Well, I'm going to put you on the spot here then, as I love to do, Matt; [laughs] and this is neither here nor there. But you know, taking a look at this most recent quarter here, of all five banks right here, if you had to crown a winner of this earnings season out of these five, who would you give the crown to?
Frankel: I'd have to give it to Goldman. If I were to pick just one; just I mean, when you look at what was expected of them for the quarter -- we knew they were going to have a strong quarter, but they just kind of just destroyed expectations for the quarter. And I couldn't find anything in that report that wasn't impressive; not just that it was good, but that it just wasn't just like off the charts impressive. So, they had a great quarter, they're not going to keep it up. [laughs] They're not going to have, you know, record after record after record, this a product of the times. But as far as this earnings season, I have to give the title to Goldman.
Moser: All right. Well, for the quarter, Goldman takes the gold. Matt, before we wrap things up, as we like to do when time allows, we want to give our listeners one to watch for the coming week. And given that earnings season is now kicked into full gear, we should have plenty to watch. What is your one stock that you're watching this week?
Frankel: One of my favorite smaller banks is Live Oak Bancshares, ticker symbol is LOB. They are a small business lender; they also have a high-yield deposit platform online. They're really specialized small business lenders and one of the biggest Small Business Administration, SBA, lenders in the country. And they really got a nice tailwind from the PPP loans. They're really a relationship-focused bank, and I think that's going to really pay dividends in a time like this where they really know their customers well, they have a history of having a much lower default rate than their peers, and I think this is the environment where you really need that. So, I'm watching what they have to say when they put out their earnings; I think it's Wednesday, but I'm not sure exactly the date, I think it's Wednesday.
Moser: Yeah, we had the President of the bank, Huntley Garriott, on the show a little while back too; that was a lot of fun. Need to reach out to see if they want to come back on and talk about the state of banking these days, particularly for smaller banks.
I, too, am going to go with a smaller bank, shocker, Ameris Bancorp. I'm sure listeners remember that one; [laughs] I've mentioned it once or twice on the show. But yeah, Ameris Bancorp earnings will come out Thursday, this Thursday after the market closes. Then I believe they have a call Friday morning. So, I'm really just excited to see what is going on with the company. Metrics that we pay attention to, looking at total assets, total deposits. Looking at total assets there, just under $20 billion from a quarter ago. So, we'll see how growth is looking there.
Another point to focus on, I think, and this really had a lot to do with the Fidelity acquisition they made, is the percentage of deposits that are non-interest bearing. I mean, the more non-interest bearing deposits, the more they're able to bring down to the bottom-line, and that was part of that acquisition. They noted that last quarter noninterest bearing deposits made up 36% of total deposits, up 30% from a year ago. So, we'll see where that stands this quarter as well.
And then, for me, really the big point of focus, and they talked about this on the call a little bit is, now that they've digested the Fidelity acquisition, there is certainly the chance of another acquisition happening at some point or another. And they're thinking big, I mean, they're talking about anywhere from $2.5 billion up, so that could be a very interesting situation; kind of like Teladoc-Livongo, merger of equals, perhaps, in the future for Ameris. But we'll be very interested to see what management has to say there.
You know, it's not been the greatest time for banks, but I remain a very happy shareholder of Ameris, I'm happy to be patient with them, I like what they're doing, I trust management there, and I think that they have a lot of opportunity to grow. Very community focused, just like Live Oak, just like you talked about there, Matt.
But I think that's going to do it for us this week, folks. Matt, I appreciate you taking the time to jump on again and give us all of that great insight as to the five bigs from last week, what you thought of their quarters, I'm sure listeners are thankful as well for all that great information. I appreciate you taking the time.
Frankel: Of course. Always fun to talk about banks with you.
Moser: Yep, absolutely. And that's going to do it for us this week, folks. Remember, you can always reach out to us on Twitter @MFIndustryFocus or you can drop us an email at IndustryFocus@Fool.com. We always want to hear what you have to say.
As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.
Thanks, as always, to Tim Sparks for putting the show together for us. For Matt Frankel, I'm Jason Moser, thanks for listening, and we'll see you next week.
Jason Moser owns shares of Ameris Bancorp and Teladoc Health. Matthew Frankel, CFP owns shares of Apple, Bank of America, Goldman Sachs, Walt Disney, and Wells Fargo and has the following options: short January 2021 $23 puts on Bank of America and short November 2020 $22.5 puts on Wells Fargo. The Motley Fool owns shares of and recommends Apple, Live Oak Bancshares, Livongo Health Inc, Teladoc Health, Twitter, and Walt Disney. The Motley Fool recommends Ameris Bancorp and recommends the following options: long January 2021 $60 calls on Walt Disney. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Hear why Matt is keeping his eye on Live Oak Bancshares (NASDAQ: LOB) and Jason is watching Ameris Bancorp (NASDAQ: ABCB). Although, this quarter didn't look as bad as expected, it's still worse than the other banks, because they are purely on the commercial side of the business, and you know, the low interest rates are just punching them in the face right now. [laughs] And you look just, not all that long ago, there's another example out there in Bank of America that, listen, they went through their own stretch, but, you know, focused leadership, obviously the scale of the company, brought things back around; that's worked out pretty well for investors. | Hear why Matt is keeping his eye on Live Oak Bancshares (NASDAQ: LOB) and Jason is watching Ameris Bancorp (NASDAQ: ABCB). In this week's episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, dive into earnings from JPMorgan Chase (NYSE: JPM), Wells Fargo (NYSE: WFC), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), and Bank of America (NYSE: BAC) to look for the important points and trends investors need to know. Matthew Frankel, CFP owns shares of Apple, Bank of America, Goldman Sachs, Walt Disney, and Wells Fargo and has the following options: short January 2021 $23 puts on Bank of America and short November 2020 $22.5 puts on Wells Fargo. | Hear why Matt is keeping his eye on Live Oak Bancshares (NASDAQ: LOB) and Jason is watching Ameris Bancorp (NASDAQ: ABCB). In this week's episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, dive into earnings from JPMorgan Chase (NYSE: JPM), Wells Fargo (NYSE: WFC), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), and Bank of America (NYSE: BAC) to look for the important points and trends investors need to know. Bank of America is also a much more even mix of investment banking and consumer banking, which I really like, because in times like these, it really helps kind of boost their revenue. | Hear why Matt is keeping his eye on Live Oak Bancshares (NASDAQ: LOB) and Jason is watching Ameris Bancorp (NASDAQ: ABCB). Goldman trades for about 20X this quarter's earnings. And I couldn't find anything in that report that wasn't impressive; not just that it was good, but that it just wasn't just like off the charts impressive. |
27817.0 | 2020-10-21 00:00:00 UTC | Validea John Neff Strategy Daily Upgrade Report - 10/21/2020 | ABCB | https://www.nasdaq.com/articles/validea-john-neff-strategy-daily-upgrade-report-10-21-2020-2020-10-21 | nan | nan | The following are today's upgrades for Validea's Low PE Investor model based on the published strategy of John Neff. This strategy looks for firms with persistent earnings growth that trade at a discount relative to their earnings growth and dividend yield.
PEOPLES BANCORP INC. (PEBO) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 60% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Peoples Bancorp Inc. is a financial holding company. The Company operates principally through its subsidiary, Peoples Bank. Peoples Bank's operating subsidiaries include Peoples Insurance Agency, LLC (Peoples Insurance) and two asset management companies, PBNA, L.L.C. and Peoples Tax Credit Equity, LLC. Peoples Investment Company has one subsidiary, Peoples Capital Corporation. The Company offers banking, insurance, investment and trust solutions. Its products and services include various demand deposit accounts, savings accounts, money market accounts and certificates of deposit; commercial, consumer and real estate mortgage loans (both commercial and residential) and lines of credit; debit and automated teller machine (ATM) cards; credit cards for individuals and businesses; merchant credit card transaction processing services; corporate and personal trust services; a range of life, health and property and casualty insurance products, and brokerage services.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: FAIL
Detailed Analysis of PEOPLES BANCORP INC.
Full Guru Analysis for PEBO
Full Factor Report for PEBO
D. R. HORTON INC (DHI) is a large-cap value stock in the Construction Services industry. The rating according to our strategy based on John Neff changed from 62% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: D.R. Horton, Inc. is a homebuilding company. The Company has operations in 84 markets in 29 states across the United States. The Company's segments include its 44 homebuilding divisions, its financial services operations and its other business activities. In the homebuilding segment, the Company builds and sells single-family detached homes and attached homes, such as town homes, duplexes, triplexes and condominiums. The Company's 44 homebuilding divisions are aggregated into six segments: East Region, South Central Region, Midwest Region, West Region, Southwest Region and Southeast Region. In the financial services segment, the Company sells mortgages and collects fees for title insurance agency and closing services. The Company has subsidiaries that conduct insurance-related operations; construct and own income-producing rental properties; own non-residential real estate, including ranch land and improvements, and own and operate oil and gas-related assets.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: FAIL
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS
Detailed Analysis of D. R. HORTON INC
Full Guru Analysis for DHI
Full Factor Report for DHI
SUN LIFE FINANCIAL INC (SLF) is a large-cap value stock in the Insurance (Life) industry. The rating according to our strategy based on John Neff changed from 60% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Sun Life Financial Inc. is the holding company of Sun Life Assurance Company of Canada. The Company is an international financial services organization providing insurance, wealth and asset management solutions to individual and corporate clients. It has its operations in various markets including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda. It operates through five business segments: Canada, United States (U.S.), Asset Management, Asia, and Corporate. The Canada business segment is a provider of protection, health, and wealth solutions, providing products and services. The U.S. segment is the benefits providers in the U.S. market. Asset Management business segment is comprised of MFS and SLC Management. Asia segment consists of two business units: Insurance and Wealth and International.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: FAIL
Detailed Analysis of SUN LIFE FINANCIAL INC
Full Guru Analysis for SLF
Full Factor Report for SLF
CRA INTERNATIONAL, INC. (CRAI) is a small-cap value stock in the Business Services industry. The rating according to our strategy based on John Neff changed from 62% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: CRA International, Inc. is a global consulting firm. The Company provides economic, financial and management consulting services. The Company consulting services in two areas: litigation, regulatory, and financial consulting and management consulting. The Company provides services, such as economic capability, analyses and testimony in areas, such as Antitrust & Competition; Damages & Valuation; Financial Accounting & Valuation; Financial Economics; Forensic & Cyber Investigations; Insurance Economics; Intellectual Property; International Arbitration; Labor & Employment; Mergers & Acquisitions; Regulatory Economics & Compliance; Securities & Financial Markets, and Transfer Pricing. It offers management consulting in the areas, including Auctions & Competitive Bidding; Corporate & Business Strategy; Enterprise Risk Management; Environmental & Energy Strategy; Intellectual Property & Technology Management; Organization & Performance Improvement, and Transaction Advisory Services.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: FAIL
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: PASS
Detailed Analysis of CRA INTERNATIONAL, INC.
Full Guru Analysis for CRAI
Full Factor Report for CRAI
AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 58% to 77% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ameris Bancorp is a financial holding company. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: FAIL
EPS PERSISTENCE: FAIL
Detailed Analysis of AMERIS BANCORP
Full Guru Analysis for ABCB
Full Factor Report for ABCB
STOCK YARDS BANCORP INC (SYBT) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 60% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Stock Yards Bancorp, Inc. is the holding company for Stock Yards Bank & Trust Company (the Bank). The Bank is a state chartered bank. The Company operates through two segments: commercial banking, and wealth management and trust. The commercial banking segment provides a full range of loan and deposit products to individual consumers and businesses, plus origination of consumer mortgages and securities brokerage activity. The wealth management and trust segment provides investment management, trust and estate administration, and retirement plan services. The Bank provides commercial and personal banking services in the Louisville, Kentucky, Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets through 37 full service banking offices, as of December 31, 2016. The Bank also originates and sells single-family residential mortgages. Additionally, the Bank offers securities brokerage services via its branch network through an arrangement with a third party broker-dealer.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: FAIL
Detailed Analysis of STOCK YARDS BANCORP INC
Full Guru Analysis for SYBT
Full Factor Report for SYBT
More details on Validea's John Neff strategy
About John Neff: While known as the manager with whom many top managers entrusted their own money, Neff was far from the smooth-talking, high-profile Wall Streeter you might expect. He was mild-mannered and low-key, and the same might be said of the Windsor Fund that he managed for more than three decades. In fact, Neff himself described the fund as "relatively prosaic, dull, [and] conservative." There was nothing dull about his results, however. From 1964 to 1995, Neff guided Windsor to a 13.7 percent average annual return, easily outpacing the S&P 500's 10.6 percent return during that time. That 3.1 percentage point difference is huge over time -- a $10,000 investment in Windsor (with dividends reinvested) at the start of Neff's tenure would have ended up as more than $564,000 by the time he retired, more than twice what the same investment in the S&P would have yielded (about $233,000). Considering the length of his tenure, that track record may be the best ever for a manager of such a large fund.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Detailed Analysis of CRA INTERNATIONAL, INC. Full Guru Analysis for CRAI Full Factor Report for CRAI AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB Full Factor Report for ABCB STOCK YARDS BANCORP INC (SYBT) is a small-cap value stock in the Regional Banks industry. The following are today's upgrades for Validea's Low PE Investor model based on the published strategy of John Neff. | Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB Full Factor Report for ABCB STOCK YARDS BANCORP INC (SYBT) is a small-cap value stock in the Regional Banks industry. Detailed Analysis of CRA INTERNATIONAL, INC. Full Guru Analysis for CRAI Full Factor Report for CRAI AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. Detailed Analysis of SUN LIFE FINANCIAL INC Full Guru Analysis for SLF Full Factor Report for SLF CRA INTERNATIONAL, INC. (CRAI) is a small-cap value stock in the Business Services industry. | Detailed Analysis of CRA INTERNATIONAL, INC. Full Guru Analysis for CRAI Full Factor Report for CRAI AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB Full Factor Report for ABCB STOCK YARDS BANCORP INC (SYBT) is a small-cap value stock in the Regional Banks industry. Its products and services include various demand deposit accounts, savings accounts, money market accounts and certificates of deposit; commercial, consumer and real estate mortgage loans (both commercial and residential) and lines of credit; debit and automated teller machine (ATM) cards; credit cards for individuals and businesses; merchant credit card transaction processing services; corporate and personal trust services; a range of life, health and property and casualty insurance products, and brokerage services. | Detailed Analysis of CRA INTERNATIONAL, INC. Full Guru Analysis for CRAI Full Factor Report for CRAI AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB Full Factor Report for ABCB STOCK YARDS BANCORP INC (SYBT) is a small-cap value stock in the Regional Banks industry. The Company's segments include its 44 homebuilding divisions, its financial services operations and its other business activities. |
27818.0 | 2020-09-28 00:00:00 UTC | Ameris Bancorp (ABCB) Ex-Dividend Date Scheduled for September 29, 2020 | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-ex-dividend-date-scheduled-for-september-29-2020-2020-09-28 | nan | nan | Ameris Bancorp (ABCB) will begin trading ex-dividend on September 29, 2020. A cash dividend payment of $0.15 per share is scheduled to be paid on October 09, 2020. Shareholders who purchased ABCB prior to the ex-dividend date are eligible for the cash dividend payment. This marks the 5th quarter that ABCB has paid the same dividend. At the current stock price of $21.91, the dividend yield is 2.74%.
The previous trading day's last sale of ABCB was $21.91, representing a -51.2% decrease from the 52 week high of $44.90 and a 27.98% increase over the 52 week low of $17.12.
ABCB is a part of the Finance sector, which includes companies such as J P Morgan Chase & Co (JPM) and Bank of America Corporation (BAC). ABCB's current earnings per share, an indicator of a company's profitability, is $1.94. Zacks Investment Research reports ABCB's forecasted earnings growth in 2020 as -22.37%, compared to an industry average of -24.1%.
For more information on the declaration, record and payment dates, visit the ABCB Dividend History page. Our Dividend Calendar has the full list of stocks that have an ex-dividend today.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | ABCB is a part of the Finance sector, which includes companies such as J P Morgan Chase & Co (JPM) and Bank of America Corporation (BAC). Zacks Investment Research reports ABCB's forecasted earnings growth in 2020 as -22.37%, compared to an industry average of -24.1%. For more information on the declaration, record and payment dates, visit the ABCB Dividend History page. | Shareholders who purchased ABCB prior to the ex-dividend date are eligible for the cash dividend payment. ABCB's current earnings per share, an indicator of a company's profitability, is $1.94. Ameris Bancorp (ABCB) will begin trading ex-dividend on September 29, 2020. | Shareholders who purchased ABCB prior to the ex-dividend date are eligible for the cash dividend payment. This marks the 5th quarter that ABCB has paid the same dividend. For more information on the declaration, record and payment dates, visit the ABCB Dividend History page. | Shareholders who purchased ABCB prior to the ex-dividend date are eligible for the cash dividend payment. Ameris Bancorp (ABCB) will begin trading ex-dividend on September 29, 2020. This marks the 5th quarter that ABCB has paid the same dividend. |
27819.0 | 2020-09-24 00:00:00 UTC | AppFolio Deep Dive: Is This Real Estate SaaS Company Worth Buying? | ABCB | https://www.nasdaq.com/articles/appfolio-deep-dive%3A-is-this-real-estate-saas-company-worth-buying-2020-09-24 | nan | nan | In this week's episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, take a closer look at AppFolio (NASDAQ: APPF), a software-as-a-service company that offers a subscription-based solution for the property management industry. Plus, hear why Matt has Bank of America (NYSE: BAC) at the top of his watch list this week, while Jason is looking closely at Darden Restaurants (NYSE: DRI) ahead of earnings.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on September 21, 2020.
Jason Moser: It's Monday, September 21st. I'm your host Jason Moser. On this week's Financial show, we're going to dig a little bit deeper into a company called AppFolio. A software company targeting the real estate and legal markets. We've also got a couple of stocks for you to keep an eye on this week.
As always, joining me this week, it's Certified Financial Planner, Mr. Matt Frankel. Matt, how's everything going?
Matt Frankel: Just fine. I mean, it's not as great here as my sunny Florida background might suggest. But it's 70 and sunny in South Carolina; I can't go wrong.
Moser: Yeah, I was going to say it, I mean, that doesn't sound like that's all that different. So, you know, hey, listen ...
Frankel: There's no ocean right next to me.
Moser: Now, well, yeah. Well, that just makes the ocean better for when you want to go visit, right? If you're around the ocean all-day every day, it kind of gets boring and mundane. Well, I guess people like to believe that, but I grew up on the water down in Charleston and I can verify that it never really got boring and mundane, I always really [laughs] enjoyed being on the water, so. [laughs]
Hey, so, Matt, we're going to dig into a company today that you and I haven't really talked a whole heck of a lot about on the show. You know, I've seen it in passing and I've looked a little bit into it just because of the type of business that it is. But I'm excited about today, because we're going to learn a lot more about this business. And hopefully, our listeners as well will learn a lot more about it too. And this is a company called AppFolio.
And, Matt, this company that IPO'd back in June 2015, so it's not one of these more recent IPOs that is still just trying to get things going, right? I mean it's a business that's been in the public markets for a while, fairly well established. We'll get into this in a little bit, but it's "gasp!" profitable and "double-gasp!" free cash flow positive. I mean, I don't even know what I'm looking at here, even after backing out stock-based compensation. This is a SaaS company that actually has hit the stage of making money, and it's still growing. That alone has really caught my attention, but I think that once we dig in a little bit more, you realize the market opportunity this company is tapping into. It's an exciting opportunity I think, it's an exciting business to dig into and learn more about.
And so, let's just jump in here with AppFolio. First and foremost, let's start with just what the company does, what does AppFolio do, what markets is it focused on?
Frankel: So, AppFolio, it's a Software-as-a-Service company. They have cloud-based applications. As they put it, they develop cloud-based software for specific industries, but they're really only focused on real estate right now. So, they developed a cloud-based platform for property managers, meaning the companies that operate an apartment building or, you know, for investors like me who own houses, manage our houses on behalf of the property owners so they don't have to. So, they develop software for these companies. It allows the managers to analyze the business, how it's going, and track maintenance requests. For example, if you have a 500-unit apartment building, it can be really hard to track when someone needs an air-conditioner fixed or someone needs a toilet fixed, if you're using a paper-and-pencil ledger or just like an Excel spreadsheet. So, this is meant to simplify processes like that. It does things like online billing and online rent payments. It has marketing tools that property managers can use, because one of the things I pay my property manager for is to market the properties, because I don't have the resources or time to do it properly. And to just, kind of, service a portal for renters and owners to interact with the property manager.
Moser: Yeah. And that's a big market, that's a lot of work actually. And having owned a home that we used as a rental property for, I don't know, seven or eight years, and you yourself having that experience, just on the single unit side, if you then look at big complexes, payments services, tenant screening services, insurance services. I can remember we were very lucky, we had a friend in the real estate business down in Georgia who helped us in doing things like tenant screening and what not, so we were a little bit lucky from that perspective. But I could see immediately how valuable the services that she provided for us were, particularly on the frontend in things like tenant screening, because I think that part of being successful in that line of work is really making sure you get good tenants to begin with. But it does really tackle a lot of those different challenges in that line of work.
And that's a fairly reliable market to me. We talk about home ownership in this country, there's always going to be a large portion of society that needs to rent, that needs to lease places to live. And so, this is a company that's really honing in on that market and trying to make those businesses better with the software they provide. And it seems like they're doing a pretty good job of it.
It's still a relatively small company, market cap is still sub-$6 billion, it's $4 billion-$4.8 billion market cap today, and trailing 12-month revenue is not even $300 million. But with that said, when you look at those revenue numbers, they are growing that topline pretty nicely. I was looking at a five-year compound annual growth rate there on the revenue side, 37% annualized. Which, to me, you know, when you're looking for good ideas, I really always like to look at that topline first to see what kind of growth is happening there. It sounds like there is a lot of growth happening for AppFolio.
Frankel: Yeah, like you mentioned, AppFolio is profitable, which is definitely very nice to see. [laughs] I mean, especially in the context of these IPOs that are just hemorrhaging money. But on the same token, revenue is what is eventually going to translate to profit, especially in a high-growth company. So, AppFolio, as you mentioned, trailing 12-month revenue is under $300 million, which makes the company at about 17X sales today; that's not cheap by any definition of the word.
Moser: No, but it's not 130X sales like Snowflake either, so. [laughs]
Frankel: You mentioned a growth rate in the 30s over the past five years, and what's really interesting to mention is that they grew at 27% in the first half of 2020 when the pandemic was going on. So that's pretty impressive right there. I mean, it's slower than in the 30s, but when you consider what's going on and what the 2020 market environment has done to a lot of other companies, that's a pretty impressive number. And I mean, how long can you sustain a 37% growth rate for? With a market like this, the answer is, for quite a while if things are going well.
Moser: Yeah, I would think so. And when you look at the way they make their money, 90% of their annual revenue just comes from the software solutions services and the data analytics they offer to the real estate market. They touch on the legal services market a little bit, but really this is a real estate play for the most part. When you look at the numbers, I mean clearly, they're doing something right. At the end of the second quarter, they ended the quarter with just over 15,000 real estate property manager customers that were managing an aggregate of 4.9 million units, and that compared to 13,737 customers and 4.23 million units under management just a year ago. So, you can see, over the course of that last year, they've definitely added the customers and the units to their portfolio to help drive that topline. And I would figure that over time, you know, like this type of businesses, any of these other SaaS subscription-type businesses, it's really all about retention, keeping those folks in that network and growing out that network effect over time.
Frankel: Yeah, and I mean, 4.9 million aggregate rental units sounds like a huge number, and it is, but you know, there's roughly 50 million rental households in the U.S. And that's just the U.S.; if they don't expand anywhere else. So, this is a pretty big market. And just to, kind of, quickly run through how they make their money, like you said, right now it's about 90% real estate, that's actually going to go up to about 100% because they just announced they're selling the legal side of their business for $193 million in cash. So, that's going to help their balance sheet and it'll get them a more focused business model. Because, I mean, yes, it's great if they can have more than one software line, but I really like businesses that really are focused on what they do best. And that's, in this case, clearly real estate.
So, they make their money -- and it's surprisingly affordable for landlords -- I don't know if you want to get into pricing yet, but this is a surprisingly affordable software product for landlords.
Moser: Well, yeah, go ahead and jump into that. Yeah, let's talk about that.
Frankel: So, there's two versions of AppFolio's product. There is the basic property management product, it costs for residential property $1.25/unit per month. So, it's for each rental property roughly $15/year to have this software. If it saves you more than $15 worth of time as a property manager, it's worth it, it pays for itself. So, I'm not a property manager, like I said, I'm on the investment side of real estate, but I have to figure that my properties' manager spends more than an hour or two worth of time each year on each one of my properties when it comes to things like maintenance and coordinating vendors and things like that. So, if it saves them that time then a product like this would pay for itself.
There's a pro version meant for large landlords with 500 or more properties in their portfolio, that costs $3/unit per month, but it adds a lot more analytical capabilities and really lets them, kind of, up the functionality and coordination of the entire business, if you will. So, they only really have one core product right now. There's a regular version and what's called the PLUS version. But these are not that expensive, and that's, kind of, part of the investment thesis is, that this is a product that essentially sells itself. And we've seen a lot of that in the Software-as-a-Service space. If something can cost $200 and saves the company $300 then there's no good reason for them not to buy it. You know, it's like paying for tax prep software as opposed to doing my taxes by hand. You know, it saves me enough time that it essentially pays for itself. So, the same thing applies here for property managers.
Moser: Yeah. I mean, I think you said a keyword there that I think matters a lot for a lot of folks regardless of the line of work, and that's "time." I mean, we're certainly finding new ways to value our time, different ways to value our time than we did 20 years ago. And that's in no small part thanks to technology and the internet and just generally speaking how much all of that together has changed our lives and helped our lives in many ways. And so, to me, yeah, it does feel like this is a business where the longer they can go with these property managers in their network, they should, over time, as long as they bring a decent product to market, they should overtime be able to flex some modest pricing power, I guess. I would think that, first and foremost, you got to figure the switching costs there after a while. You know, property managers are going to feel a little bit less enthusiastic about leaving if they've been working with a company like AppFolio for three, four, five years.
And you've certainly seen, over the stretch of time here since they went public, I mean, that gross margin line, in just looking at it in 2015, just under 55%, the last 12 months here, trailing 12-months, they recorded 62.5% gross margin. So, it's nice to see that expansion. And clearly, bringing more of it to the bottom line as well over time. I think that further out even, you know, we start looking at that margin picture and see if there is any pricing power that's trickling through. I wouldn't be surprised to see if that were the case, but I guess, really, with companies like this, it goes back to -- I mean, they're not the only company in this space, they have plenty of competition out there.
A couple of companies that exist out there today, CoStar, which is a $34 billion market cap company. There's RealPage, which is a $6 billion market cap. And RealPage is interesting, I had looked into that business a number of years back when we were doing the real-money portfolio initiative on Fool.com, and I was attracted to RealPage, specifically because of the market they pursued and the value they were bringing. But with CoStar, with RealPage, now with AppFolio, you start to ask, why one or the other, right? I mean, what would be, perhaps, the competitive advantage for one over the other? I am wondering did you find anything that leads you to believe that AppFolio has a leg-up when it comes to the technology or some other type of competitive advantage that would encourage users to choose them over their competitors?
Frankel: Well, I can tell you that when I was researching for this segment, when I googled "best property management software," in virtually every list I could find, AppFolio was the No. 1 rated product. So, that alone is a competitive advantage [laughs] right there, if you ask me. I think the focus of the company on the property management software business is a big competitive advantage. You mentioned CoStar. Property management software is not the only thing they do. So, it's nice to have focus.
And don't underestimate good management as a competitive advantage. I'll give you, kind of, a quick story. When I do premium write-ups for The Fool, one thing I look at all the time when I'm trying to evaluate the management team is employer reviews, just how employees perceive the company and the management team. So, there's a site called Glassdoor that's really great for this. I'm sure Jason has been on there once or twice. So, there's two metrics there. They have the percentage of employees that say they would refer the company to a friend, and the percentage of employees that approve of the CEO. The percentage of AppFolio's employees that approve of the CEO's job performance is 99% based on more than 500 reviews. That is the single highest number I have ever seen on Glassdoor. [laughs] So, there you go.
As far as employees that would refer the company to a job-seeking friend, 93%; also, one of the highest metrics I've seen for that. So, that gives them a big competitive advantage. You're wondering why I'm discussing all that, who cares if they like the CEO? But this is a competitive advantage in the sense that really engaged and happy employees, it's a big competitive advantage when it comes to attracting and retaining the top talent. And that is what you need if you want to develop the best product in an industry. I mean, obviously, there's a lot more that goes into product development than just employee recruiting, but that's a big competitive advantage to have employees that don't want to leave their jobs, that love where they work and love what they're doing with the company. And if you read through some of those reviews, it seems like that's really the case here. And that's a very underutilized competitive advantage in stock analysis.
Moser: Yeah, I like what you're saying there. And I'll point to something I found in the 10-K in just a minute. Before I do, I think it was interesting you noted the difference between CoStar and AppFolio, in that, CoStar, they do more than just that one thing, right? And that is something to remember, and it makes me think a little bit of the conversations I've had with folks in comparing something like an Adobe to a DocuSign, right? It sounds like maybe your CoStar is like your Adobe; and then, you know, AppFolio is like your DocuSign. And having the smaller company that's focusing on that one specific market could be the advantage, or at least the advantage that they're working on. So, yeah, I think that just because it's smaller and does less that's not necessarily a bad thing, and certainly sometimes that can be a very good thing.
But going back to the management of the company as being a competitive advantage. And I agree with you, I think when you have a company with that type of reputation, a culture with a reputation like that, that attracts talent, and really talent is what it's all about; like you said. And reading through the 10-K, they even note in there, they believe in their culture, and they believe in their core values, they believe that culture is a competitive advantage.
And when you look at the culture and the values that they espouse, it's six simple values here. No. 1, simpler is better. No. 2, great innovative products are a key to a great business. No. 3, great people make a great company. No. 4, listening to customers is in our DNA. No. 5, small, focused teams keep us agile. And No. 6, we do the right thing, because it's good for business.
And so, yeah, I know on the surface, maybe those sound like anybody could come up with them or anybody could do that, but the fact of the matter is, there are plenty of companies out there that don't do that, right? Even though it may seem easy. You know, setting that stuff out may not be the most difficult thing in the world, but practicing it, incorporating it, ingraining that into your culture over a long period of time, that is difficult. And it really does feel like AppFolio has been able to do that based on the numbers that you were just telling us there.
Frankel: Yeah. And it's also worth noting, speaking of the management team, that between all of their key executives, they own 42% or so of the company's stock. That's a pretty big insider ownership. That means a lot of people there believe in the company. They also control 71% of the vote, which, if you like that or not, you know, that's an investor preference. But between all the co-founders, the directors, the key executives, owning 42% of the company is pretty big. Normally you see a number [laughs] like 5% when you see the combined ownership.
Moser: Yeah, that is a big number. And one of the Co-Founders is still involved as the CTO, and then one of the Co-Founders is also involved as a Director. And I notice too, just beyond that, you've got this massive stake held by the Investment Group of Santa Barbara, they own a 13% stake in the business, which, you know, you look at venture capital associations, you see they get any of those types of firms, they will get in with these investments early on, and eventually they're looking for an exit strategy, they want to liquidate and take their profits and go elsewhere. But it seems like [laughs] Investment Group of Santa Barbara is happy owning this big stake and I'm starting to understand why.
You know, with a company like this, one of the things I look for in any software company, they always need to keep up on getting better, right? They need to bring more to the market; they need to continue to evolve the relationship to bring more to their customers. And I'll look at things like R&D, research and development spend, for example, just to get an idea of what kind of money they are putting back into the business. And I did know that over the past several years we've seen R&D spend ramp up a little bit here from around 12% to more like 15% of sales.
Assuming that they just continue to focus on this real estate market, which it sounds like they will, I mean, at some point that R&D spend probably gets to level off and it's not something they have to focus on so much, that's when you might start to see them really be able to unlock some profitability in this business.
Frankel: Yeah. And you mentioned, their margins have expanded significantly over time already. And that's notwithstanding the R&D increase in spending. But an interesting thing that I like to look at is revenue growth versus expense growth, because that's going to tell you what direction it's trending in. In the first half of 2020, I mentioned that AppFolio's revenue increased by 27%. Their expenses, during the same period, only increased year-over-year by 22%. So, when your revenue is increasing faster than your expenses, one, it means your business might be maturing, because as you said, R&D spend and stuff like that is going to eventually level-off to where you're not in rapid growth mode, you're more in recurring revenue mode. Right now, they're definitely still in growth mode, but it's nice to see that their margins are expanding; even during the pandemic, it looks like, that's the case. We'll have to wait for the full-year numbers to see if it holds out, but it looks like they're still doing a great job of expanding margins and increasing efficiency of their business, which is definitely promising.
Moser: Yeah, it is. And the only other thing I've thought about with a business like this and its competitors, and the reason why I was thinking about this over the weekend, or really over the last week, I had been digging into a research presentation on Snowflake, learning more about the database management market opportunity, and one of the risks that we're finding, not only in that market, but I think in a number of markets, particularly in this pandemic economy where costs are certainly more under the microscope now than ever before, some customers -- I mean, a risk out there is that, for companies that have always relied on having the best tech or the best software, and you know, that's an advantage, right. I mean, you've built your business off of having a really great product and you bring more customers in. And that's an advantage that you can continue to grow over time.
But what we're seeing too, at the same point, is this threat of "good enough." And what I mean by that is, you know, companies aren't necessarily focused all the time on looking for the best product, the best service as a client, right? They're looking for something that gets the job done, and oftentimes good enough may be better than the best if the cost is attractive enough. You know, if the deal that they're being offered is attractive enough, they may not necessarily feel like they need to pay up for the best software, if there's something out there that's good enough, that's already getting the job done.
And I'm not saying I think that's a problem or something necessarily that AppFolio needs to be concerned with today, but I think generally speaking, in this SaaS market, in this SaaS and cloud-driven world, that's something at least to keep in mind, that "good enough" risk that exists out there today still.
Frankel: Yeah, for sure. And remember, it's not just good enough, it's what's easy, people like easy. And I mention that, because all those, you know, the top property management software list I read that all universally had AppFolio ranked No. 1. The biggest comment I saw was that it's user-friendly. No one wants a big, complicated clunky piece of software, even if it's the best in the business. And it sounds like that's one of the things that they're really good at, is user-friendliness and, kind of, simplifying the process.
There are probably more feature-rich analytics out there. I'm sure there are property management programs that beat AppFolio on one metric or the other, but if you have the overall one-stop software program that's easy to use -- because I was reading one of their customer stories that before they went to AppFolio, they had a paper-and-pencil ledger. And I can tell you my property manager uses primarily just old-school email, pencil and paper, Excel spreadsheets. Point being, this is not a high-tech field traditionally that they're going after. So, that's why user-friendliness is so important. If you're selling your database software to software engineers or to an engineering firm, then it could be a little complex, but if you're selling a software program to property managers who don't have engineering degrees then user-friendliness is a very important quality, and that's what it seems like AppFolio is really good at.
Moser: Yeah, I love that point; I totally agree. So, I guess, the $50,000 question here, Matt, is this a company, is this a stock that belongs on investors' radar? I mean, to me, I look at the history, the performance of the stock, it certainly had a good life thus far as a publicly traded company. It strikes me as keying in on a very important market, and it sounds like they do something and they do it really well, and they've built a company with a culture that is clearly resonating with a lot of folks. I mean, I look at a business like this, I have a feeling what you might say, but I still want to hear you say it. Is this stock that belongs on folks' radars or something you'd like to learn more about?
Frankel: Well, this got it on my radar. And I don't know what you think I'm about to say, but let me see if I could blow your mind a little bit here. Jason is definitely more the growth investor than I am; just from hearing, you know, his ones to watch versus my ones to watch each week.
Moser: I think that's fair to say, yeah.
Frankel: So, I am hesitant, and to a fault I'm hesitant to invest in businesses that trade at such high valuations, especially that have essentially one product. Like I said, having one product is a good thing in the sense that the business is very focused, but when you're trading at 17X sales and you just sold your only other viable product line, it causes me to pump the brakes a little bit. I like a lot about the business, but I probably want to keep it on my radar and, kind of, pay attention to what's going on for the next quarter or two before I would want to pull the trigger.
Moser: Yeah, no, not at all. That was right. Because I think I might surprise you with what I'm saying, I actually totally agree there. I mean, this to me, I might be a little bit more excited about this business perhaps than you, but not to the point where I feel like it's something that investors should be out there just buying today. And I mean, there are so many qualities about it that I like. I love that it focuses on that key market, I love the fact that they're profitable, they're cash flow positive. I mean, this is a business, they've really got some fundamentals that make it -- you know, just make it a little bit more. You can, sort of, see the light at the end of the tunnel there because of the fundamentals of the business.
To me, it's a competitive market clearly and there are other bigger players in the space, so they've got their work cut out for them, but I like so much about what they're doing and I really -- based on what you're saying about the culture, based on what I've read about the business just in googling around, it does seem like they've got a culture that matters.
I mean, this is a business that certainly I would have on my watchlist and, you know, if we see material pullback and that valuation starts to look a little bit more attractive -- I mean, I don't think this is a buy at any price business, but I certainly think it's one that focuses in on a large and growing market opportunity that sounds like they do something really well. And with that founder leadership there, that's another neat quality that we love to see. So, yeah, I mean if I'm an investor, I'm definitely interested. Maybe not pulling the trigger at today's valuation, but I'd keep this one on the shortlist there for the chance of any type of pullback that made the stock look a little bit more attractive.
Frankel: Yeah, I'd say that's fair. Like I said, it's on my radar now. Thank you to whoever has last week for putting it on my radar. But like I said, I'm not ready to pull the trigger on it just yet.
Moser: All right. Well, there you go, AppFolio. That's an interesting business with a lot of potential. And, Matt, I appreciate you digging in there and finding out that information for us.
Before we wrap up this week, let's go ahead and jump real quick into our one to watch, we'll just take a look at what's going on here this week in the market and have a stock for our listeners to get on their radar other than AppFolio. Matt, what's your one to watch this week?
Frankel: Given today's pullback especially, I have Bank of America on the top of my watchlist right now. I don't know if you read that JPMorgan headline. JPMorgan Chase is under scrutiny because they allegedly processed some illicit payments.
Moser: I did read that headline, yes.
Frankel: It's dragging the entire banking sector down now. If you remember, Warren Buffett added more than $2 billion to their Bank of America stake recently. And now after this pullback, you can actually get in for less than Buffett paid. So, yeah, it's an attractive valuation. I already own a lot of Bank of America but may add more if this current valuation persists.
Moser: Yeah, I like that. And you know, the bank that really crossed my radar here, because of this pullback, because it's certainly it's not discriminating, I mean, we've seen Ameris Bancorp also coming back to reality here a little bit, in what's been, obviously, a very difficult market for banks, both big and small. And it sounds like it's not going to get easier anytime soon based on the interest rate policy that we've heard. But Ameris is not my one to watch, so I don't want to drag on about that.
I'm actually taking a little bit of a different approach here. With earnings season more or less wrapped up, there is a company reporting earnings this Thursday and I'm going to be very fascinated just to hear their take on the general consumer economy, it's Darden Restaurants. And Darden Restaurants is best known as the owner of Olive Garden along with a number of other restaurants they've got in their portfolio. And you could see going into 2020, shareholders over the last five years have done very well with the company. Now they have not recovered all of their losses this year, and given what's gone on this year, it's certainly understandable why restaurants are having such a tough time.
But what I noticed in the call from last quarter is this management team is really playing offense. And I think in the restaurant space, the big picture restaurant space has been really, really brutal. I mean, I would not recommend, you know, going out there and just investing in all these restaurants on the dip. I think some restaurants are going to come out of this a lot stronger, and I think most of those restaurants will be the bigger ones that already had a lot of resources at their disposal and Darden is definitely one of those.
Last quarter they had noted 91% of their dine-in stores had reopened with some capacity, mostly that was Olive Garden and LongHorn, but still that's a lot of restaurants. They're doing very well with their to-go sales. And I think that, based on their language in the last call, they're looking at a lot of these restaurants that are closing down as unfortunate, but an opportunity to go out there and gain more presence, gain more physical real estate to open more restaurants to fill that void. Because once things do get back to normal somewhat here, and they will eventually, I mean, folks are going to want to start going back out to dinner more on the reg, and I think that Darden is going to be well-positioned to accommodate that demand. I think it's just going to be interesting to see their take on the consumer here in this next earnings report on Thursday.
So, Darden Restaurants and Bank of America, a couple of good ones to keep on your radar.
Matt, I appreciate you taking the time this week to join. As always, this was a fun one. I enjoyed digging into AppFolio and we'll definitely continue to follow it here on the show.
Frankel: For sure. Always fun to be here.
Moser: Well, that's going to do it for us this week, folks. Remember, you can always reach out to us on Twitter @MFIndustryFocus or you can drop us an email at IndustryFocus@Fool.com. Hey, I mean, listen, if you have any companies in the financial sector that you would like us to dig a little bit more into for a show, we're always open for ideas. Not going to make any promises, but, hey, we get some compelling ideas out there, you never know, that might make for a good show here in the near future, at least until we get back up to our next earnings-palooza! [laughs]
But as always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.
Thanks, as always, to Tim Sparks for putting the show together. For Matt Frankel, I'm Jason Moser, thanks for listening and we'll see you next week.
Jason Moser owns shares of Adobe Systems, Ameris Bancorp, and DocuSign. Matthew Frankel, CFP owns shares of Bank of America and has the following options: short January 2021 $23 puts on Bank of America. The Motley Fool owns shares of and recommends Adobe Systems, AppFolio, and DocuSign. The Motley Fool recommends Ameris Bancorp, CoStar Group, and Snowflake Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | And when you look at the way they make their money, 90% of their annual revenue just comes from the software solutions services and the data analytics they offer to the real estate market. There's a pro version meant for large landlords with 500 or more properties in their portfolio, that costs $3/unit per month, but it adds a lot more analytical capabilities and really lets them, kind of, up the functionality and coordination of the entire business, if you will. And so, to me, yeah, it does feel like this is a business where the longer they can go with these property managers in their network, they should, over time, as long as they bring a decent product to market, they should overtime be able to flex some modest pricing power, I guess. | In this week's episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, take a closer look at AppFolio (NASDAQ: APPF), a software-as-a-service company that offers a subscription-based solution for the property management industry. Plus, hear why Matt has Bank of America (NYSE: BAC) at the top of his watch list this week, while Jason is looking closely at Darden Restaurants (NYSE: DRI) ahead of earnings. At the end of the second quarter, they ended the quarter with just over 15,000 real estate property manager customers that were managing an aggregate of 4.9 million units, and that compared to 13,737 customers and 4.23 million units under management just a year ago. | It has marketing tools that property managers can use, because one of the things I pay my property manager for is to market the properties, because I don't have the resources or time to do it properly. So, I'm not a property manager, like I said, I'm on the investment side of real estate, but I have to figure that my properties' manager spends more than an hour or two worth of time each year on each one of my properties when it comes to things like maintenance and coordinating vendors and things like that. And the only other thing I've thought about with a business like this and its competitors, and the reason why I was thinking about this over the weekend, or really over the last week, I had been digging into a research presentation on Snowflake, learning more about the database management market opportunity, and one of the risks that we're finding, not only in that market, but I think in a number of markets, particularly in this pandemic economy where costs are certainly more under the microscope now than ever before, some customers -- I mean, a risk out there is that, for companies that have always relied on having the best tech or the best software, and you know, that's an advantage, right. | I think the focus of the company on the property management software business is a big competitive advantage. 6, we do the right thing, because it's good for business. You know, with a company like this, one of the things I look for in any software company, they always need to keep up on getting better, right? |
27820.0 | 2020-09-08 00:00:00 UTC | Bahrain's ABC joins race to buy Blom's Egypt business | ABCB | https://www.nasdaq.com/articles/bahrains-abc-joins-race-to-buy-bloms-egypt-business-2020-09-08 | nan | nan | By Saeed Azhar
DUBAI, Sept 8 (Reuters) - Bahrain's Bank ABC ABCB.BH said on Tuesday it was in preliminary talks to buy Blom Bank's BLOM.BY Egyptian subsidiary, pitting it against Dubai's Emirates NBD ENBD.DU which is also a potential bidder.
Blom has hired CI Capital to advise on a sale that could fetch $250 million to $300 million as the Lebanese lender tries to boost its capital, Reuters reported last month, citing two sources familiar with the deal.
Blom had approached potential bidders including Dubai's biggest bank, Emirates NBD, the sources said. Emirates NBD confirmed on Aug. 13 it was interested.
HSBC HSBA.L is advising Bank ABC on the talks, two sources familiar with the deal told Reuters. HSBC declined to comment.
Lebanese banks are trying to strengthen their finances as the country endures its worst financial crisis since the civil war.
Blom's domestic rival Bank Audi AUDI.BY tried to sell its Egyptian business, but the deal stalled in May after First Abu Dhabi Bank FAB.AD halted talks, citing the uncertain outlook relating to the COVID-19 pandemic.
FAB plans to restart talks to buy the Egyptian business of Bank Audi, Reuters reported this week
Both Emirates NBD and Bank ABC have an existing presence in Egypt, seen as a lucrative banking market because of the North African country's large population and consumer demand.
Bank ABC in Egypt has a network of 28 branches spread across major cities including Cairo, Alexandria, Sharm El-Sheikh and other key centres, according to its website.
In the Gulf region, low oil prices and weak economic growth are driving banks to merge and larger lenders to look outside the region for acquisition targets.
Ratings agency Moody's said in July it expects real non-oil GDP in the Gulf region to contract by between 3.5% and 5% in 2020, which will erode loan demand and banks' appetite to lend.
(Reporting by Saeed Azhar; Editing by Susan Fenton)
((Saeed.Azhar@thomsonreuters.com; +971 44536787; Reuters Messaging: saeed.azhar.reuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By Saeed Azhar DUBAI, Sept 8 (Reuters) - Bahrain's Bank ABC ABCB.BH said on Tuesday it was in preliminary talks to buy Blom Bank's BLOM.BY Egyptian subsidiary, pitting it against Dubai's Emirates NBD ENBD.DU which is also a potential bidder. Lebanese banks are trying to strengthen their finances as the country endures its worst financial crisis since the civil war. Bank ABC in Egypt has a network of 28 branches spread across major cities including Cairo, Alexandria, Sharm El-Sheikh and other key centres, according to its website. | By Saeed Azhar DUBAI, Sept 8 (Reuters) - Bahrain's Bank ABC ABCB.BH said on Tuesday it was in preliminary talks to buy Blom Bank's BLOM.BY Egyptian subsidiary, pitting it against Dubai's Emirates NBD ENBD.DU which is also a potential bidder. Blom had approached potential bidders including Dubai's biggest bank, Emirates NBD, the sources said. HSBC HSBA.L is advising Bank ABC on the talks, two sources familiar with the deal told Reuters. | By Saeed Azhar DUBAI, Sept 8 (Reuters) - Bahrain's Bank ABC ABCB.BH said on Tuesday it was in preliminary talks to buy Blom Bank's BLOM.BY Egyptian subsidiary, pitting it against Dubai's Emirates NBD ENBD.DU which is also a potential bidder. Blom's domestic rival Bank Audi AUDI.BY tried to sell its Egyptian business, but the deal stalled in May after First Abu Dhabi Bank FAB.AD halted talks, citing the uncertain outlook relating to the COVID-19 pandemic. FAB plans to restart talks to buy the Egyptian business of Bank Audi, Reuters reported this week Both Emirates NBD and Bank ABC have an existing presence in Egypt, seen as a lucrative banking market because of the North African country's large population and consumer demand. | By Saeed Azhar DUBAI, Sept 8 (Reuters) - Bahrain's Bank ABC ABCB.BH said on Tuesday it was in preliminary talks to buy Blom Bank's BLOM.BY Egyptian subsidiary, pitting it against Dubai's Emirates NBD ENBD.DU which is also a potential bidder. Blom had approached potential bidders including Dubai's biggest bank, Emirates NBD, the sources said. HSBC HSBA.L is advising Bank ABC on the talks, two sources familiar with the deal told Reuters. |
27821.0 | 2020-09-06 00:00:00 UTC | Validea's Top Five Financial Stocks Based On Joel Greenblatt - 9/6/2020 | ABCB | https://www.nasdaq.com/articles/valideas-top-five-financial-stocks-based-on-joel-greenblatt-9-6-2020-2020-09-06 | nan | nan | The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. This value model looks for companies with high return on capital and earnings yields.
AEGON N.V. (ADR) (AEG) is a mid-cap value stock in the Insurance (Life) industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Aegon N.V. (Aegon) is an international life insurance, pensions and asset management company. The Company's segments include the Americas, which includes the United States, Mexico and Brazil; the Netherlands; the United Kingdom; Central & Eastern Europe; Spain & Portugal; Asia, and Aegon Asset Management. It offers protection against mortality, morbidity and longevity risks, including traditional and universal life. It offers products with mortality, morbidity, and longevity risks, including traditional and universal life; mortgages; annuity products, and banking products. It offers individual protection products, such as annuities, term insurance, income protection and international/offshore bonds. It has activities in Hungary, Poland, Romania and Turkey. It offers life insurance marketed to high-net-worth individuals in Hong Kong and Singapore. It also offers investment products covering third-party customers, insurance-linked solutions.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of AEGON N.V. (ADR)
Full Guru Analysis for AEG>
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ALLIANCE DATA SYSTEMS CORPORATION (ADS) is a mid-cap value stock in the Consumer Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Alliance Data Systems Corp is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ALLIANCE DATA SYSTEMS CORPORATION
Full Guru Analysis for ADS>
Full Factor Report for ADS>
ARES COMMERCIAL REAL ESTATE CORP (ACRE) is a small-cap growth stock in the Misc. Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ares Commercial Real Estate Corporation is a specialty finance company. The Company is primarily engaged in originating and investing in commercial real estate (CRE) loans and related investments. The Company operates through principal lending segment. Its target investments include senior mortgage loans, subordinated debt, preferred equity, mezzanine loans and other CRE investment opportunities, including commercial mortgage-backed securities. These investments are generally held for investment and are secured, directly or indirectly, by office, multifamily, retail, industrial, lodging, senior-living, self-storage and other commercial real estate properties, or by ownership interests therein. Through the Company's manager, Ares Commercial Real Estate Management LLC, it has investment professionals located across the United States and Europe who directly source loan opportunities for the Company with owners, operators and sponsors of CRE properties.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ARES COMMERCIAL REAL ESTATE CORP
Full Guru Analysis for ACRE>
Full Factor Report for ACRE>
ARCH CAPITAL GROUP LTD. (ACGL) is a large-cap value stock in the Insurance (Prop. & Casualty) industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Arch Capital Group Ltd. provides insurance, reinsurance and mortgage insurance. The Company provides a range of property, casualty and mortgage insurance and reinsurance lines. The Company operates in five segments: insurance, reinsurance, mortgage, other and corporate. The insurance segment's product lines include construction and national accounts; excess and surplus casualty; lenders products; professional lines; programs; property, energy, marine and aviation; travel, accident and health, and other. The reinsurance segment's product lines include casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe, and other. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. The other segment includes the results of Watford Holdings Ltd.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ARCH CAPITAL GROUP LTD.
Full Guru Analysis for ACGL>
Full Factor Report for ACGL>
AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ameris Bancorp is a financial holding company. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of AMERIS BANCORP
Full Guru Analysis for ABCB>
Full Factor Report for ABCB>
More details on Validea's Joel Greenblatt strategy
Joel Greenblatt Stock Ideas
About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. The "Magic Formula," as he called it, produced back-tested returns of 30.8 percent per year from 1988 through 2004, more than doubling the S&P 500's 12.4 percent return during that time. Greenblatt also produced exceptional returns as managing partner at Gotham Capital, a New York City-based hedge fund he founded. The firm averaged a remarkable 40 percent annualized return over more than two decades.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Detailed Analysis of ARCH CAPITAL GROUP LTD. Full Guru Analysis for ACGL> Full Factor Report for ACGL> AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. | Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. Detailed Analysis of ARCH CAPITAL GROUP LTD. Full Guru Analysis for ACGL> Full Factor Report for ACGL> AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. Detailed Analysis of AEGON N.V. (ADR) Full Guru Analysis for AEG> Full Factor Report for AEG> ALLIANCE DATA SYSTEMS CORPORATION (ADS) is a mid-cap value stock in the Consumer Financial Services industry. | Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. Detailed Analysis of ARCH CAPITAL GROUP LTD. Full Guru Analysis for ACGL> Full Factor Report for ACGL> AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs. | Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. Detailed Analysis of ARCH CAPITAL GROUP LTD. Full Guru Analysis for ACGL> Full Factor Report for ACGL> AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The Company is primarily engaged in originating and investing in commercial real estate (CRE) loans and related investments. |
27822.0 | 2020-08-19 00:00:00 UTC | Analysts Predict 10% Upside For The Holdings of RNMC | ABCB | https://www.nasdaq.com/articles/analysts-predict-10-upside-for-the-holdings-of-rnmc-2020-08-19 | nan | nan | Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the Mid Cap US Equity Select ETF (Symbol: RNMC), we found that the implied analyst target price for the ETF based upon its underlying holdings is $22.79 per unit.
With RNMC trading at a recent price near $20.67 per unit, that means that analysts see 10.25% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of RNMC's underlying holdings with notable upside to their analyst target prices are Rexnord Corp (Symbol: RXN), Foot Locker, Inc. (Symbol: FL), and Ameris Bancorp (Symbol: ABCB). Although RXN has traded at a recent price of $29.41/share, the average analyst target is 21.27% higher at $35.67/share. Similarly, FL has 18.51% upside from the recent share price of $27.20 if the average analyst target price of $32.23/share is reached, and analysts on average are expecting ABCB to reach a target price of $29.43/share, which is 18.37% above the recent price of $24.86. Below is a twelve month price history chart comparing the stock performance of RXN, FL, and ABCB:
Below is a summary table of the current analyst target prices discussed above:
NAME SYMBOL RECENT PRICE AVG. ANALYST 12-MO. TARGET % UPSIDE TO TARGET
Mid Cap US Equity Select ETF RNMC $20.67 $22.79 10.25%
Rexnord Corp RXN $29.41 $35.67 21.27%
Foot Locker, Inc. FL $27.20 $32.23 18.51%
Ameris Bancorp ABCB $24.86 $29.43 18.37%
Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have a valid justification for their targets, or are they behind the curve on recent company and industry developments? A high price target relative to a stock's trading price can reflect optimism about the future, but can also be a precursor to target price downgrades if the targets were a relic of the past. These are questions that require further investor research.
10 ETFs With Most Upside To Analyst Targets »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Mid Cap US Equity Select ETF RNMC $20.67 $22.79 10.25% Rexnord Corp RXN $29.41 $35.67 21.27% Foot Locker, Inc. FL $27.20 $32.23 18.51% Ameris Bancorp ABCB $24.86 $29.43 18.37% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of RNMC's underlying holdings with notable upside to their analyst target prices are Rexnord Corp (Symbol: RXN), Foot Locker, Inc. (Symbol: FL), and Ameris Bancorp (Symbol: ABCB). Similarly, FL has 18.51% upside from the recent share price of $27.20 if the average analyst target price of $32.23/share is reached, and analysts on average are expecting ABCB to reach a target price of $29.43/share, which is 18.37% above the recent price of $24.86. | Three of RNMC's underlying holdings with notable upside to their analyst target prices are Rexnord Corp (Symbol: RXN), Foot Locker, Inc. (Symbol: FL), and Ameris Bancorp (Symbol: ABCB). Similarly, FL has 18.51% upside from the recent share price of $27.20 if the average analyst target price of $32.23/share is reached, and analysts on average are expecting ABCB to reach a target price of $29.43/share, which is 18.37% above the recent price of $24.86. Mid Cap US Equity Select ETF RNMC $20.67 $22.79 10.25% Rexnord Corp RXN $29.41 $35.67 21.27% Foot Locker, Inc. FL $27.20 $32.23 18.51% Ameris Bancorp ABCB $24.86 $29.43 18.37% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? | Similarly, FL has 18.51% upside from the recent share price of $27.20 if the average analyst target price of $32.23/share is reached, and analysts on average are expecting ABCB to reach a target price of $29.43/share, which is 18.37% above the recent price of $24.86. Three of RNMC's underlying holdings with notable upside to their analyst target prices are Rexnord Corp (Symbol: RXN), Foot Locker, Inc. (Symbol: FL), and Ameris Bancorp (Symbol: ABCB). Below is a twelve month price history chart comparing the stock performance of RXN, FL, and ABCB: Below is a summary table of the current analyst target prices discussed above: | Mid Cap US Equity Select ETF RNMC $20.67 $22.79 10.25% Rexnord Corp RXN $29.41 $35.67 21.27% Foot Locker, Inc. FL $27.20 $32.23 18.51% Ameris Bancorp ABCB $24.86 $29.43 18.37% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of RNMC's underlying holdings with notable upside to their analyst target prices are Rexnord Corp (Symbol: RXN), Foot Locker, Inc. (Symbol: FL), and Ameris Bancorp (Symbol: ABCB). Similarly, FL has 18.51% upside from the recent share price of $27.20 if the average analyst target price of $32.23/share is reached, and analysts on average are expecting ABCB to reach a target price of $29.43/share, which is 18.37% above the recent price of $24.86. |
27823.0 | 2020-08-06 00:00:00 UTC | Pick Up This Deal Even Lower Than CEO Proctor Jr. Did | ABCB | https://www.nasdaq.com/articles/pick-up-this-deal-even-lower-than-ceo-proctor-jr.-did-2020-08-06 | nan | nan | There's an old saying on Wall Street about insider buying: there are many possible reasons to sell a stock, but only one reason to buy. Back on March 13, Ameris Bancorp's CEO, H. Palmer Proctor Jr., invested $243,323.33 into 10,000 shares of ABCB, for a cost per share of $24.33. Bargain hunters tend to pay particular attention to insider buys like this one, because presumably the only reason an insider would take their hard-earned cash and use it to buy stock of their company in the open market, is that they expect to make money. In trading on Thursday, bargain hunters could buy shares of Ameris Bancorp (Symbol: ABCB) and achieve a cost basis even cheaper than Proctor Jr., with shares changing hands as low as $24.14 per share. It should be noted that Proctor Jr. has collected $0.30/share in dividends since the time of their purchase, so they are currently up 0.4% on their purchase from a total return basis. Ameris Bancorp shares are currently trading up about 0.1% on the day. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average:
Looking at the chart above, ABCB's low point in its 52 week range is $17.12 per share, with $44.90 as the 52 week high point — that compares with a last trade of $24.43. By comparison, below is a table showing the prices at which ABCB insider buying was recorded over the last six months:
PURCHASED INSIDER TITLE SHARES PRICE/SHARE VALUE
03/11/2020 Robert P. Lynch Director 5,000 $25.73 $128,658.54
03/11/2020 William D. McKendry EVP & CRO 900 $26.72 $24,048.00
03/13/2020 Michael T. Pierson EVP & Chief Operations Officer 2,000 $25.48 $50,950.00
03/13/2020 H. Palmer Proctor Jr. President & CEO 10,000 $24.33 $243,323.33
03/11/2020 Robert Dale Ezzell Director 1,000 $25.82 $25,824.56
03/12/2020 Ross L. Creasy EVP & Chief Innovation Officer 850 $23.67 $20,119.33
03/13/2020 Robert P. Lynch Director 5,000 $25.50 $127,500.00
08/03/2020 Elizabeth A. McCague Director 1,500 $23.44 $35,155.50
The current annualized dividend paid by Ameris Bancorp is $0.6/share, currently paid in quarterly installments, and its most recent dividend ex-date was on 06/29/2020. Below is a long-term dividend history chart for ABCB, which can be of good help in judging whether the most recent dividend with approx. 2.5% annualized yield is likely to continue.
Click here to find out which 9 other dividend bargains you can buy cheaper than insiders »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The chart below shows the one year performance of ABCB shares, versus its 200 day moving average: Looking at the chart above, ABCB's low point in its 52 week range is $17.12 per share, with $44.90 as the 52 week high point — that compares with a last trade of $24.43. By comparison, below is a table showing the prices at which ABCB insider buying was recorded over the last six months: Back on March 13, Ameris Bancorp's CEO, H. Palmer Proctor Jr., invested $243,323.33 into 10,000 shares of ABCB, for a cost per share of $24.33. | Back on March 13, Ameris Bancorp's CEO, H. Palmer Proctor Jr., invested $243,323.33 into 10,000 shares of ABCB, for a cost per share of $24.33. In trading on Thursday, bargain hunters could buy shares of Ameris Bancorp (Symbol: ABCB) and achieve a cost basis even cheaper than Proctor Jr., with shares changing hands as low as $24.14 per share. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average: Looking at the chart above, ABCB's low point in its 52 week range is $17.12 per share, with $44.90 as the 52 week high point — that compares with a last trade of $24.43. | In trading on Thursday, bargain hunters could buy shares of Ameris Bancorp (Symbol: ABCB) and achieve a cost basis even cheaper than Proctor Jr., with shares changing hands as low as $24.14 per share. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average: Looking at the chart above, ABCB's low point in its 52 week range is $17.12 per share, with $44.90 as the 52 week high point — that compares with a last trade of $24.43. Back on March 13, Ameris Bancorp's CEO, H. Palmer Proctor Jr., invested $243,323.33 into 10,000 shares of ABCB, for a cost per share of $24.33. | The chart below shows the one year performance of ABCB shares, versus its 200 day moving average: Looking at the chart above, ABCB's low point in its 52 week range is $17.12 per share, with $44.90 as the 52 week high point — that compares with a last trade of $24.43. Back on March 13, Ameris Bancorp's CEO, H. Palmer Proctor Jr., invested $243,323.33 into 10,000 shares of ABCB, for a cost per share of $24.33. In trading on Thursday, bargain hunters could buy shares of Ameris Bancorp (Symbol: ABCB) and achieve a cost basis even cheaper than Proctor Jr., with shares changing hands as low as $24.14 per share. |
27824.0 | 2020-07-29 00:00:00 UTC | Buffett's Latest Investment and Some Financial Sector Earnings | ABCB | https://www.nasdaq.com/articles/buffetts-latest-investment-and-some-financial-sector-earnings-2020-07-29 | nan | nan | Wall Street recently learned that Warren Buffett invested another $800 million of Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) capital in Bank of America (NYSE: BAC), and in this episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss what they know and what it could mean for investors.
Plus, the pair examines the latest results from American Express (NYSE: AXP) and Ameris Bancorp (NASDAQ: ABCB), and looks ahead to earnings from Markel (NYSE: MKL) and Mastercard (NYSE: MA) later this week.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on July 27, 2020.
Jason Moser: It's Monday, July 27th. I'm your host Jason Moser, and on this week's Financial show, we're going to dig into Warren Buffett's Bank of America crush. We've got a couple of earnings reports to get to with American Express and Ameris Bancorp. We've got a couple of stocks that we're watching this coming week.
Joining me, as always, it's the Certified Financial Planner. He's a year older, he's a year wiser, Mr. Matt Frankel. Matt, how is everything going?
Matt Frankel: Oh, not too bad from your friend down here, who's still in his late 30s. How is everything in Virginia?
Moser: [laughs] Yeah, it's a nice little thing to have. Everything is good. We're, you know, just keeping busy. It does seem like it's getting back to normal, somewhat, I mean, you know, people wearing masks and being a little bit more thoughtful of space and whatnot. But you can go do a lot of stuff, it seems like people appear generally doing OK. School is going to be starting out virtually for at least the fall semester. But you know, maybe that's the right decision, I don't know, I guess. You know, we'll figure out when we get there, but everybody is at least healthy and happy. How about you all?
Frankel: Yeah, same here. I mean, our day care; we actually never lost day care, which we're a big rarity. My kids go to a day care that's run by the hospital that my wife works at. So, they were never even able to close. So, the school thing, fortunately for us, is not really an issue to worry about. But I know here they're giving parents an option of in-person or online.
Moser: Yeah. They did. They actually -- Fairfax County in Virginia here is a very, very large county, and they let all of us vote, they let parents vote, would you want to do like an abbreviated being at school a couple of days a week or just do all virtual? And with close to 200,000 respondents, it came down, it was 60% voted for at least some physical time at school; 40% voted for just nothing but virtual. And when I saw those results, I thought, you know what, I think that's probably a little bit tighter than they were [laughs] hoping it would be. I think they were hoping for, like, a 75% one way or the other. So, they actually went, you know, a little bit against that decision and they decided to start things off virtually, at least. And figuring that, you know, you can slowly work our way back into it as the conditions improve. So, you know, we'll see. They're, you know, interesting times to say the least.
Interesting times for Berkshire Hathaway, too, Matt. Big headline last week, and you even wrote an article about this. The title of the article, "Warren Buffett Just Spent Another $800 Million on This Bank Stock," tell us what bank stock and why? What's going on here, Matt?
Frankel: Well, I mean, as a journalist, we want the headline to draw readers in. But $800 million actually isn't that big for Berkshire standards in the context of this bank stock; it is Bank of America. Bank of America, ticker symbol is BAC, for anyone watching at home, is Warren Buffett and Berkshire Hathaway's largest bank stock holding by a large margin, especially now.
So, what Buffett did, they bought about 34 million shares for an average price of just under $24/share, they did this last week. So, if you do the math, that works out to about $800 million they invested. This brought their stake in Bank of America up to 11.3% of the bank. To be clear, the only reason we know about this is because they're over that crucial 10% threshold. For example, if Buffett bought more of, say, Goldman Sachs right now, we wouldn't know.
Moser: So, over 10%, they have to announce that, like that's a regulatory filing that has to be...
Frankel: Yeah, it's a regulatory thing that they have to let us know right away. So, that's why we know about it. But anyway, the effect of it was, it brought the stake up to 11.3%. It was over 10% already. So, this wasn't a giant jump in ownership, but it does show that they're putting money to work and that they still believe very much in Bank of America. That's a big stake, it's worth about $24 billion right now. It's their second-largest investment of any kind; a distant second, I should say, the Apple investment is just huge. But other than Apple, Bank of America is Berkshire Hathaway's largest stock position. And so, an investment that big, I would have to believe that Buffett himself is behind it, not one of the other stock pickers.
Moser: Yeah, you'd figure. And I guess that was going to be one of my questions, given that this is such a large holding for him, and I mean he's got this portfolio of a lot of companies that he's held in there for a long period of time, in Coca-Cola, American Express, Wells Fargo -- I mean, Wells Fargo obviously has been plagued with its problems here. But you know, you look at Bank of America and how these banks have come out of this earnings season, certainly Bank of America strikes me as one that is not only doing well, but the market, I think, is giving it a little bit of credit there. I mean, it's a stock that is trading nicely above its tangible book value in an environment where we're seeing a lot of banks right now that are not necessarily witnessing that same good fortune.
Frankel: Sure, well I mean, one, it's still important to mention that it's way off the highs of the year. I mean, most banks are. Not only is the low interest rate environment, really, not conducive to profitability in banks, but, I mean, including Bank of America, all the big banks are setting aside billions of dollars in anticipation of loan losses. We just enhanced unemployment benefits just right now. And unemployment is still in the double digits in America. So, the combination of that could make a tough second half of the year for banks.
But at the same time, that mindset is driving the stocks down and creating long-term value for patient investors, which Buffett certainly is one of them.
Moser: Oh, yeah. And we'll talk about this a little bit more when we get into Ameris' most recent quarter, but also we won't neglect the possibilities and likelihoods of consolidation out there. I mean, there will be some more acquisitions here. You have to figure that, you know, some of these banks that are out there trading at below tangible book value, they start looking like some attractive investments out there. And certainly, Ameris made a mention of that on their call.
Yes, so when you look at Berkshire Hathaway going forward, I mean we've talked a lot about this over the last several years, it's just always seemed kind of odd that Buffett has been so clearly OK with Wells Fargo to date and what Wells Fargo has been doing, even though it doesn't [laughs] really feel like Wells Fargo has been doing a very good job. I mean, do you feel like -- I mean, it seems like maybe Bank of America is taking over that position as maybe the bank that Berkshire Hathaway wants to be best known in cahoots with, [laughs] so to speak.
Frankel: Yes. But, I mean, it's still worth mentioning that Berkshire, combined with Warren Buffett personally, because he owns some Wells Fargo in his personal stock portfolio, owns just under 10% of Wells Fargo. So, I wouldn't completely say that Buffett has lost faith in Wells Fargo, but it definitely seems that Bank of America has become his favorite bank stock. It's worth mentioning that -- I said earlier that the reason we know that he just bought a lot of Bank of America is because of the 10% thing. So, if you look at some of the other bank stocks in Berkshire's portfolio, the stakes are a lot less than 10%, like for example, Berkshire owns 1.9% of JPMorgan Chase, 2.2% of PNC Bank. So, this isn't to say that Bank of America is the only bank stock that Buffett is buying.
And in the past, when he's been buying one, he's been buying the other ones as well. A few quarters ago, I think he bought something like 10 different bank stocks. So, I wouldn't be surprised at all to see that he spent a lot of money to increase the JPMorgan stake, increase the PNC stake. Maybe he bought some more Wells Fargo, because he had sold some, now it's cheaper, maybe he bought a little more, I wouldn't be shocked. So, I wouldn't be surprised to see that Berkshire is finally starting to deploy some capital.
If you remember last quarter, investors were kind of disappointed when we got the earnings results that Berkshire was a net seller of stocks during the first quarter. And it kind of makes sense if you think about Buffett's mentality. I mean, for the most part, January and February were pretty normal months in terms of the economy and the stock market. I mean, the all-time highs were reached in February. So, March was really the "big opportunity," I guess, when we saw the market kind of plunge.
But at the end of the first quarter, at the end of March, it was still pretty chaotic. You know, the CARES Act hadn't been passed yet, or it hadn't been signed into law yet or totally implemented yet; I can't remember which. But you know, the stimulus checks didn't start going out till April. So, we really didn't have clarity as to where the economy was going and how bad the pandemic was going to get by the end of the first quarter. Buffett hates investing into panics. He likes investing after the panic has already kind of happened and the market is down. I mean, we're talking about Bank of America, that's considered one of his best financial crisis-era investments, that wasn't made till 2011. So, I mean, he didn't invest in Bank of America during the '08 panic, when he could have got it even cheaper, he waited till the dust settled and he found a good value and he invested. So, maybe that's what's happening now, and Buffett has finally just kind of -- now, that things have, kind of, stabilized, I guess you'd say, especially compared to March, we're seeing Buffett put a little bit more money in.
Moser: One more thing before we move on to American Express, just wondering about your opinion on this, given the status of Bank of America and Berkshire's world today, how much do you think that is due to Brian Moynihan? I mean, as the CEO of Bank of America, you know, he's been there for a while now, clearly knows what he's doing. Wells Fargo, it's the other side of the coin, right, just managerial crisis. And hopefully, Mr. Scharf is able to get that under control there. But clearly, it seems like Buffett is making his choice here.
Frankel: I mean, there's no argument you could make where Moynihan has done a bad job at Bank of America. I mean, I'd rank in the top two big-bank CEOs, Jamie Dimon being -- you know, those could go either way. But given what Moynihan was dealt -- the hand he was dealt after the financial crisis, the improvement in Bank of America in terms of efficiency, in terms of asset quality, in terms of getting rid of non-core assets, has just been incredible. I mean, before this, before the pandemic started, Bank of America's profit numbers were something you would've considered crazy a few years ago. Like, if I had told you they would be producing a double-digit return on equity, if I told you that [laughs] right after the financial crisis, you would have told me I was nuts. And they've been doing it for several years before the pandemic started, because of Brian Moynihan's focus on efficiency and closing underperforming branches and embracing technology.
Bank of America has won a ton of technology awards. We talk about Square and PayPal and fintechs like that, Bank of America's technology, you know, the recognition they've gotten for their technology has been just on par with any of the fintechs, and a lot of people don't realize that. So, that's been a big part of their efficiency. So, they've done a great job just all around.
Moser: Yeah, it really does feel like that. I mean, yeah, you make a great point there. He was dealt a really, really difficult situation. So, I mean, if anything, maybe for Wells Fargo shareholders, Bank of America is proof that it can be done. I mean, we were giving Bank of America a hard time several years ago. So, to see that those turntables have turned, [laughs] as Michael Scott might say, you know, you never know. Maybe there will be better days ahead for Wells Fargo.
Let's take a look at another one of your favorite companies out there. I know you like this company a lot. We've talked about it before as being potentially an addition to a war on cash Part Deux, but right now it's still on the outside looking in, American Express earnings, not the greatest year so far for the company, certainly understandable, I mean, it is a bank after all, too. But what stood out to you in the quarter?
Frankel: Well, first, let me just go over, kind of, the gloom-and-doom numbers of the situation. Profits were down 85% year over year, which, I was actually impressed they were still profitable; a lot of banks weren't. [laughs] Revenue dropped 29%. People just weren't -- I mean, you know American Express' slogan, "Never leave home without it." Well, people couldn't leave home at all, [laughs] so they couldn't really do a whole lot with their credit cards.
And when you think about -- I mean, do you have an American Express card, Jason?
Moser: I do. I am a proud card member, I guess, as they would say, for, I don't know, probably 15 years now or something.
Frankel: So, you understand that most of their perks are travel-oriented.
Moser: Yes. Yes, I do.
Frankel: And no one was traveling [laughs] in the first half of this year for the most part. But American Express, what stood out to me, and this isn't really part of the earnings report, I'll get to more of the gloom-and-doom numbers in a second, but American Express, really to me, just did a great job pivoting. When you think of -- you know, a lot of credit card companies gave people, you know, an extra percent back in rewards on groceries or something like that for the pandemic. American Express really pivoted their benefits entirely. My American Express card, I now get a $20 statement credit for having my streaming services billed to the card. A $20 monthly statement credit for having my mobile phone bill billed to the card. And that's on top of the other benefits that I -- and the rationale with that is, because I wasn't able to use my travel benefits, so they gave me something -- my business AmEx. I have the business version of the Delta card, they gave everybody a $75 loyalty credit, just a statement credit for $75 out of the blue.
So, they're doing a great job of customer retention. I have to believe that a lot of people canceled credit cards during the pandemic, especially ones with annual fees. You know, if you can't go out and use the benefits, what's the point of paying a fee for it? So, they did a great job. I think you're going to see great consumer retention numbers.
But year over year their credit card balances are down 36% at the end of the second quarter. That's a pretty big -- and that's balances, that's not just activity, that's -- because remember American Express is, at its heart, primarily a charge card company, not a carry-your-balance credit card. I mean, the AmEx Platinum is a charge card, you pay your balance every month for the most part. There are some pay-as-you-go options. But so, that's really hit them in terms of outstanding balances and things like that.
American Express, they built their loss reserves by almost $630 million during the quarter. But when you look a little deeper, that assumes that reserve build is assuming about a 10% unemployment rate at the end of this year, which I think might be a little bit of a stretch. It's assuming a 1.7% GDP drop in the fourth quarter of this year, which most experts are expecting the economy to rebound, especially by the fourth quarter if not in the third. So, the point is that that's a loss reserve, that's not based on actual losses that they've had. And that's reflected in their profitability numbers.
And we saw this at the end of the financial crisis, some banks overestimated their losses and eventually they released those reserves and they got counted back as earnings in the end. So, this isn't necessarily lost money. We still have to see how this plays out. The banks, including AmEx, are being cautious. Like I said, they've done a great job of cutting costs. The stock is still down over 20% year to date. I've been a shareholder of AmEx since before I was a cardholder of AmEx. It's one of the first stocks I bought. And I still hold it and I think it's a good value. And I think that the company is one of the most overlooked fintechs.
Moser: You know, I tend to agree with you on this, it does seem like it's overlooked in the sense that people think it's just sort of an old-school type of company in some ways, but it absolutely has one of the strongest brands out there that I can really think of. And, you know, I mean, I don't know, maybe it's not their secret sauce, but it's certainly something that really separates them is, their focus on the customer experience and customer service is really, really strong. I mean, it is one of those things that's a noticeable difference. I mean, they just have a different level, it seems like, of customer service. And maybe that is something that keeps people with them even if they're not spending. I mean, those credits, whatever it may be or waiving in an annual fee, whatever it may be, they just have a knack for doing that kind of stuff, and that does resonate with consumers in tough times like these for sure.
Frankel: Yeah. Like I said, they've just been really -- and they were focusing on the millennial group, that's kind of the streaming credit is, I think, that's, kind of, to replace the Uber credit, if you remember AmEx rolled that out, people can't use the Uber credit for the most part right now. I actually used mine this month. [laughs]
Moser: Oh, really?
Frankel: Yeah, I was up your way in Maryland, and I actually used my Uber credit for the first time this year.
Moser: Was that when you were out there gambling with Dan Kline?
Frankel: I was not. Dan Kline was nowhere to be found. And my wife has a sister that's 20 years younger and just got her driver's license, and we helped her get a car and I had to drive it up there. She lives up that way. So, I was up there, and then I had to Uber back to the airport. So, [laughs] I got to use my Uber credit.
But anyway, so the streaming credit was really to replace that for millennials. And they're doing a great job of just, kind of, thinking outside the box. Like you said, a lot of other credit card issuers are, you know, boosting their grocery reward rate from 2% to 3% or something like that. But you know, a benefit like, "OK, get a streaming service, it's on us," that's something that's really outside the box, and I think that really resonates with the younger generation, especially who doesn't really think in terms of cash back, they want perks, that's what you're paying for. You know, I'm not paying $500/year for my Platinum card for the cash back rate, I'm paying for the benefits that come with it that I'm currently not able to use. So, they're really doing a great job of still creating a value proposition for their credit cards. And I think that's really going to pay dividends over this year.
Moser: Good deal. Well, this morning Ameris Bancorp also released their second-quarter earnings report. And Ameris, that -- just a small little Georgia bank, right, it was based out of Monterey, I think they're based out of Atlanta now with the Fidelity acquisition being all taken care of. But a small-cap bank that has done, I think a really [laughs] good job, particularly in a very difficult time. I mean, we've talked a lot about the challenges with bigger banks in this interest rate environment.
You know, frankly, smaller banks, I think it's an even steeper uphill climb, because they're smaller and they don't have necessarily the same resources, but when you look at Ameris, what they continue to do, total assets up just a skosh under $20 billion. Now, total deposits of $15.6 billion, that was up from $14 billion at the end of 2019. It's important to note, and we talk about this every quarter, because it really matters, particularly these days, net interest margin actually expanded for the quarter, like, 13 basis points. I think expanding anything in this environment is probably worth writing home to. But I think it's important for them to note that part of the Fidelity acquisition, part of their philosophy is trying to make sure that noninterest-bearing deposits continue to be a substantial portion of their deposit base, right. That brings the expenses on those deposits down. The noninterest-bearing deposits made up 36% of total deposits this quarter; that's up from 30% from a year ago. So, I mean, you know, that is a way to really help combat the difficult interest rate environment, when you're not really making much on the money that you're lending out.
Frankel: Yeah, you'll really see that come into play when interest rates start to rise again. Because if they're still, you know, they're essentially borrowing money at 0%, in a noninterest-bearing deposit, and then as the amount they can make from loans goes up and up and up, the noninterest-bearing deposits really make a great profit spread.
Moser: Oh, yeah, absolutely. And I mean, you know, we talked about it with American Express and with all of the other banks, I mean, talking about these credit losses, these reserves that banks are putting forward to try to deal with this. I mean, Ameris, they've had a lot of the Paycheck Protection Plan lending going on. I mean, you know that has its puts and takes, it's not like it's some big profitable endeavor, but I mean, they're being a part of the solution, right? And that really is something where, you know, if you're a bank that's being seen as a part of the solution, you typically are going to emerge from a situation like this being a little bit stronger.
But when you look at the reserves that they're putting aside for potential losses. I mean, they recorded another $88.2 million this quarter compared to $41 million just in the first quarter. So, if all in total, if you look at the $130 million or so that they put aside so far, that's about 0.65% of their total assets. Now, the only reason I'm bringing this up is because I thought it would be interesting to take a look at a big bank and say, "OK, what kind of percentage of those total assets does it look like for Wells Fargo?" You know, they total about $20 billion right now on reserves for the year. And that's about 1% of their total assets. So, I mean, Wells Fargo, obviously a big bank, tremendous balance sheet, lots of assets, but you know, that's a company that's had a little bit of a tough time here and some self-inflicted injuries, and they've had to reserve a good bit more. So, it seems like, you know, Ameris' ratios, efficiency, all that stuff, they continue to run a tight ship, and that, for me, I think is really, really encouraging for shareholders.
The thing that stood out to me, though, Matt, in the call -- and you know, they just got done with this Fidelity acquisition; that was about a $750 million acquisition. But given the conditions in the banking space today, some of the valuations that are out there, you know, it could be argued there probably are some opportunities, and the questions of mergers and acquisitions are brought up on the call. And it sounds really [laughs] like the Ameris team is ready to get back to it. And they are looking, generally speaking, in that same geographical area, but I was really impressed with the target. They were saying that they can expect a deal from anywhere of $2.5 billion and up. Which I mean, really, you know, the Fidelity, that was a big deal for them. So, you're talking about something they're targeting now being considerably larger than that deal. I mean, while the bank is, kind of, trying to bide its time here, in this low interest rate environment, we forget sometimes they can grow via acquisition. It sounds like that might be, you know, on the horizon here for Ameris and they have a good track record of doing good deals to this point. So, you know, I don't know, cautiously optimistic, I guess.
Frankel: Yeah, I mean, I thought Ameris' quarter was pretty impressive. Their mortgage business, especially, was one that really stood out to me. The mortgage business is up $70 million quarter over quarter. You know, people are really taking advantage of the low mortgage rates and for a small bank, that's an impressive [laughs] number.
Moser: It is, yeah, and it sounds [laughs] like they may be getting bigger sooner or later, so we'll continue to keep an eye on it and, you know, continue to cover it here on the show.
OK, Matt, before we wrap it up this week, let's jump into earnings season here and give our listeners a stock that we'll be watching this coming week. What is a stock that you'll be watching?
Frankel: I am watching Markel; that's one that I mentioned a lot. That's the position I've added the most to during the pandemic. So, I'll tell you that much. I'm watching their insurance profitability. We mentioned before on the show that we really don't know what the pandemic is going to do to insurers in general. Markel was unprofitable insurance-wise last quarter, their investment portfolio didn't do particularly well. So, I'm keeping an eye on Markel's earnings. The stock has run up pretty good lately. I'm watching for signs that that valuation is justified. And I'm, you know, crossing my fingers and hoping that it is, so. What are you watching?
Moser: Yeah, that's one I own, too, and I like it a lot; I'll keep an eye on that one. But I'm going to watch out for another one that I own, Mastercard. Ticker is MA. Earnings are out on Thursday for Mastercard this week. Busy week, and Thursday is the day for Mastercard, really, you know, I'm just kind of -- based on what we were talking about with American Express and all these banks, I'm interested to see how the big dogs in the payment space are really handling what's going on? Because, you know, Mastercard and Visa, we talk about it all the time, not banks, right, they're not lending the money, little bit of a different business model there. So, their exposure is certainly tied more directly to consumer spending, but that's a really attractive high-margin business and I'll just be interested to see what they're seeing? Yeah, what their experience has been these last several months, and kind of, see if they have any ideas how the rest of the year is shaking out? But, yeah, another one that we like here, and one that I own and will continue to own, because, hey, Matt, you know that war on cash, it's real, it's real, man.
Frankel: [laughs] For sure.
Moser: That's going to do it for us this week, folks. Remember you can always reach out to us on Twitter @MFIndustryFocus; you can drop us an email at IndustryFocus@Fool.com. We always love hearing from you.
Matt, I appreciate you taking the time out of your schedule this week to join us, as always. Glad to hear you had a nice birthday, and hey, let's make this the best year yet, how about that?
Frankel: I hope so. As soon as 2020 is over, and it's going to get better. I think 2021 might be my best year yet. I don't want to call 2020 my best yet.
Moser: [laughs] Well, we'll just continue to check in week by week and see how things are?
Frankel: That's not setting the bar very high. [laughs]
Moser: All right, Matt, well, look forward to catching you next week.
Frankel: All righty.
Moser: As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.
A big thanks to Tim Sparks for making all of this happen for us each and every week. For Matt Frankel, I'm Jason Moser, thanks for listening and we'll see you next week.
Jason Moser owns shares of Ameris Bancorp, Markel, Mastercard, PayPal Holdings, Square, and Visa. Matthew Frankel, CFP owns shares of American Express, Apple, Bank of America, Berkshire Hathaway (B shares), Goldman Sachs, Markel, and Square and has the following options: short October 2020 $800 puts on Markel, long October 2020 $750 puts on Markel, short August 2020 $105 calls on Square, and short October 2020 $20 puts on Wells Fargo. The Motley Fool owns shares of and recommends Apple, Berkshire Hathaway (B shares), Markel, Mastercard, PayPal Holdings, Square, Twitter, and Visa. The Motley Fool recommends Ameris Bancorp and Uber Technologies and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), short September 2020 $70 puts on Square, long January 2022 $75 calls on PayPal Holdings, and short September 2020 $200 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Plus, the pair examines the latest results from American Express (NYSE: AXP) and Ameris Bancorp (NASDAQ: ABCB), and looks ahead to earnings from Markel (NYSE: MKL) and Mastercard (NYSE: MA) later this week. Moser: One more thing before we move on to American Express, just wondering about your opinion on this, given the status of Bank of America and Berkshire's world today, how much do you think that is due to Brian Moynihan? We've talked about it before as being potentially an addition to a war on cash Part Deux, but right now it's still on the outside looking in, American Express earnings, not the greatest year so far for the company, certainly understandable, I mean, it is a bank after all, too. | Plus, the pair examines the latest results from American Express (NYSE: AXP) and Ameris Bancorp (NASDAQ: ABCB), and looks ahead to earnings from Markel (NYSE: MKL) and Mastercard (NYSE: MA) later this week. Wall Street recently learned that Warren Buffett invested another $800 million of Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) capital in Bank of America (NYSE: BAC), and in this episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss what they know and what it could mean for investors. Matthew Frankel, CFP owns shares of American Express, Apple, Bank of America, Berkshire Hathaway (B shares), Goldman Sachs, Markel, and Square and has the following options: short October 2020 $800 puts on Markel, long October 2020 $750 puts on Markel, short August 2020 $105 calls on Square, and short October 2020 $20 puts on Wells Fargo. | Plus, the pair examines the latest results from American Express (NYSE: AXP) and Ameris Bancorp (NASDAQ: ABCB), and looks ahead to earnings from Markel (NYSE: MKL) and Mastercard (NYSE: MA) later this week. But you know, you look at Bank of America and how these banks have come out of this earnings season, certainly Bank of America strikes me as one that is not only doing well, but the market, I think, is giving it a little bit of credit there. Yes, so when you look at Berkshire Hathaway going forward, I mean we've talked a lot about this over the last several years, it's just always seemed kind of odd that Buffett has been so clearly OK with Wells Fargo to date and what Wells Fargo has been doing, even though it doesn't [laughs] really feel like Wells Fargo has been doing a very good job. | Plus, the pair examines the latest results from American Express (NYSE: AXP) and Ameris Bancorp (NASDAQ: ABCB), and looks ahead to earnings from Markel (NYSE: MKL) and Mastercard (NYSE: MA) later this week. So, this isn't to say that Bank of America is the only bank stock that Buffett is buying. But year over year their credit card balances are down 36% at the end of the second quarter. |
27825.0 | 2020-07-28 00:00:00 UTC | Validea John Neff Strategy Daily Upgrade Report - 7/28/2020 | ABCB | https://www.nasdaq.com/articles/validea-john-neff-strategy-daily-upgrade-report-7-28-2020-2020-07-28 | nan | nan | The following are today's upgrades for Validea's Low PE Investor model based on the published strategy of John Neff. This strategy looks for firms with persistent earnings growth that trade at a discount relative to their earnings growth and dividend yield.
UNIVEST FINANCIAL CORP (UVSP) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 60% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Univest Financial Corporation, formerly Univest Corporation of Pennsylvania is the bank holding company of Univest Bank and Trust Co. (the Bank). The Bank is a Pennsylvania state-chartered bank and trust company. Its business segments include Banking, Wealth Management and Insurance. The Banking segment provides financial services, such as deposit taking, loan origination and servicing, mortgage banking, other general banking services and equipment lease financing. The Wealth Management segment offers trust and investment advisory services, guardian and custodian of employee benefits and other trust and brokerage services, as well as a registered investment advisory managing private investment accounts for both individuals and institutions. The Insurance segment includes a full-service insurance brokerage agency offering commercial property and casualty insurance, group life and health coverage, employee benefit solutions, personal insurance lines and human resources consulting.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: FAIL
Detailed Analysis of UNIVEST FINANCIAL CORP
Full Guru Analysis for UVSP
Full Factor Report for UVSP
ORRSTOWN FINANCIAL SERVICES INC (ORRF) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 60% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Orrstown Financial Services, Inc. is the bank holding company for Orrstown Bank (the Bank). The Bank is engaged in commercial banking and trust business. The Company operates through Community Banking segment. The Bank's activities involve accepting demand, time and savings deposits, and granting loans. The Bank grants commercial, residential, consumer and agribusiness loans in its market areas of Cumberland, Franklin, Lancaster and Perry Counties in Pennsylvania and in Washington County, Maryland. The Company's securities available for sale include debt and equity instruments. Through its trust department, the Bank renders services as trustee, executor, administrator, managing agent, custodian, investment advisor and other fiduciary activities authorized by law under the trade name, Orrstown Financial Advisors (OFA). OFA offers retail brokerage services through a third-party broker or dealer arrangement with Cetera Advisor Networks LLC.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: FAIL
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: FAIL
EPS PERSISTENCE: PASS
Detailed Analysis of ORRSTOWN FINANCIAL SERVICES INC
Full Guru Analysis for ORRF
Full Factor Report for ORRF
AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 58% to 77% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ameris Bancorp is a financial holding company. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: FAIL
EPS PERSISTENCE: FAIL
Detailed Analysis of AMERIS BANCORP
Full Guru Analysis for ABCB
Full Factor Report for ABCB
HERITAGE COMMERCE CORP. (HTBK) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on John Neff changed from 60% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Heritage Commerce Corp is a bank holding company. The Company, through its subsidiary Heritage Bank of Commerce (the Bank), provides a range of banking services. The Bank is a California state-chartered multi-community independent bank that offers a range of commercial banking services to small and medium-sized businesses and their owners, managers and employees. The Company operates through approximately 19 service branch offices located in the southern and eastern regions of the general San Francisco Bay Area of California in the counties of Santa Clara, Alameda, Contra Costa and San Benito. The Company's subsidiary, CSNK Working Capital Finance Corp., doing business as Bay View Funding, provides business-essential working capital factoring financing to various industries across the United States. The Bank operates automated teller machines (ATMs) at approximately five different locations.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: PASS
EPS GROWTH: PASS
FUTURE EPS GROWTH: FAIL
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: PASS
EPS PERSISTENCE: FAIL
Detailed Analysis of HERITAGE COMMERCE CORP.
Full Guru Analysis for HTBK
Full Factor Report for HTBK
MARINEMAX INC (HZO) is a small-cap value stock in the Retail (Specialty) industry. The rating according to our strategy based on John Neff changed from 60% to 79% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: MarineMax, Inc. is a recreational boat and yacht dealer in the United States. Through 56 retail locations in Alabama, California, Connecticut, Florida, Georgia, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, and Texas, the Company sold new and used recreational boats, including pleasure and fishing boats, as of September 30, 2016. The Company also sells related marine products, including engines, trailers, parts and accessories. In addition, it provides repair, maintenance, and slip and storage services; arranges related boat financing, insurance, and extended service contracts; offers boat and yacht brokerage sales, and operates a yacht charter business. The Company primarily sells recreational boats, including pleasure boats and fishing boats. The Company offers marine engines and equipment and sells marine engines and propellers primarily to retail customers as replacements for their existing engines or propellers.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E RATIO: FAIL
EPS GROWTH: PASS
FUTURE EPS GROWTH: PASS
SALES GROWTH: PASS
TOTAL RETURN/PE: PASS
FREE CASH FLOW: FAIL
EPS PERSISTENCE: PASS
Detailed Analysis of MARINEMAX INC
Full Guru Analysis for HZO
Full Factor Report for HZO
More details on Validea's John Neff strategy
About John Neff: While known as the manager with whom many top managers entrusted their own money, Neff was far from the smooth-talking, high-profile Wall Streeter you might expect. He was mild-mannered and low-key, and the same might be said of the Windsor Fund that he managed for more than three decades. In fact, Neff himself described the fund as "relatively prosaic, dull, [and] conservative." There was nothing dull about his results, however. From 1964 to 1995, Neff guided Windsor to a 13.7 percent average annual return, easily outpacing the S&P 500's 10.6 percent return during that time. That 3.1 percentage point difference is huge over time -- a $10,000 investment in Windsor (with dividends reinvested) at the start of Neff's tenure would have ended up as more than $564,000 by the time he retired, more than twice what the same investment in the S&P would have yielded (about $233,000). Considering the length of his tenure, that track record may be the best ever for a manager of such a large fund.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Detailed Analysis of ORRSTOWN FINANCIAL SERVICES INC Full Guru Analysis for ORRF Full Factor Report for ORRF AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB Full Factor Report for ABCB HERITAGE COMMERCE CORP. (HTBK) is a small-cap value stock in the Regional Banks industry. The following are today's upgrades for Validea's Low PE Investor model based on the published strategy of John Neff. | Detailed Analysis of ORRSTOWN FINANCIAL SERVICES INC Full Guru Analysis for ORRF Full Factor Report for ORRF AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB Full Factor Report for ABCB HERITAGE COMMERCE CORP. (HTBK) is a small-cap value stock in the Regional Banks industry. Detailed Analysis of UNIVEST FINANCIAL CORP Full Guru Analysis for UVSP Full Factor Report for UVSP ORRSTOWN FINANCIAL SERVICES INC (ORRF) is a small-cap value stock in the Regional Banks industry. | Detailed Analysis of ORRSTOWN FINANCIAL SERVICES INC Full Guru Analysis for ORRF Full Factor Report for ORRF AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB Full Factor Report for ABCB HERITAGE COMMERCE CORP. (HTBK) is a small-cap value stock in the Regional Banks industry. The Banking segment provides financial services, such as deposit taking, loan origination and servicing, mortgage banking, other general banking services and equipment lease financing. | Detailed Analysis of ORRSTOWN FINANCIAL SERVICES INC Full Guru Analysis for ORRF Full Factor Report for ORRF AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB Full Factor Report for ABCB HERITAGE COMMERCE CORP. (HTBK) is a small-cap value stock in the Regional Banks industry. The Banking segment provides financial services, such as deposit taking, loan origination and servicing, mortgage banking, other general banking services and equipment lease financing. |
27826.0 | 2020-07-27 00:00:00 UTC | Ameris Bancorp (ABCB) Q2 2020 Earnings Call Transcript | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-q2-2020-earnings-call-transcript-2020-07-27 | nan | nan | Image source: The Motley Fool.
Ameris Bancorp (NASDAQ: ABCB)
Q2 2020 Earnings Call
Jul 27, 2020, 9:00 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Good morning, welcome to Ameris Bancorp Second Quarter 2020 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Nicole Stokes, Chief Financial Officer. Please go ahead.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Great, thank you, Kate, 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'll discuss the details of our financial results before we open it up for Q&A. I think I'm supposed to mention here that we're social distancing. Although we are in the same room, we're social distancing for sure.
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 may 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 opening comments.
H. Palmer Proctor Jr. -- Ameris Bank Chief Executive Officer, Ameris Bancorp Chief Executive Officer
Thank you, Nicole, and thank you to everyone who is joining our call today. I'm excited to share with you our second quarter results as we successfully navigate in this new environment. The call is going to update you on the detailed financial results in a few minutes, but I wanted to hit just a few of the highlights. For the second quarter, we reported net income of $32.2 million or $0.47 per diluted share, and that's inclusive of an $88 million provision for loan loss expense. We're pleased with our operating ratios as they moved in a positive direction this quarter. Our net interest margin improved by 13 basis points to 3.83%, as we lowered interest-bearing deposit costs by 43 basis points during the quarter. We also saw significant improvement in our adjusted efficiency ratio, which improved to 51.08%. Most of that was due to the efficiencies we garnered in our mortgage division during the quarter. We continue to identify additional cost saves as a way for us to self-fund future technology and innovation costs. We'll discuss some of this and these initiatives later on in the discussion today.
On the loan front, we exhibited cautious, but solid growth in the second quarter. We extended over $1 billion in PPP loans to about 8,200 customers and originated a record $2.9 billion in single-family mortgages. Excluding PPP loans, organic loan growth was just over $384 million. We also saw significant growth in deposit accounts. Noninterest-bearing deposits now account for over 35% of total deposits.
Next, I want to give you an update on business in this new environment. We've adapted to have another 75% of our staff working remotely and our lobbies remain closed except for appointments. We do continue to successfully serve our customers through digital channels and through the drive-thru capabilities. In fact, we're still opening more new DDA accounts in the current environment than we did in prior quarters despite our lobbies being closed, and we continue to see an increase in the number of mobile banking customers. We view this as a real opportunity going forward.
And while our customers are also learning the new norm in this COVID-19 world, they are persevering. As I previously mentioned, we continue to see loan demand, and to date, we have experienced marginal impact on our credit quality ratios. On our lastearnings call we said we have provided payment relief to almost 5,400 customers totaling $2.2 billion of outstanding loans across all loan types and markets. That equated about 17% of total loans. Those were the first to the 90-day modifications. The speed and level of requests have slowed down through July 15. We have provided payment relief to customers totaling $2.8 billion of outstanding loans. Thus far, customers requesting the additional 90-day extension totaled just over $290 million, with a high concentration of that in our hotel borrowers. But what is encouraging to see is that customers reverting back to the pre-COVID terms of their agreements now exceed to $1 billion through July 15.
As it pertains to capital, we remain highly focused on capital preservation and growing tangible book. And as for dividends, we are very comfortable with where we are with our dividends today, and do not anticipate any reduction at this time, but obviously, we continue to monitor this as an option. And finally, as you're aware, our stock buyback program remains suspended.
Jon Edwards, our Chief Credit Officer, is with us today and he is available for questions after our remarks, but I wanted to hit a few highlights in terms of credit. As previously mentioned, we recorded an $88 million provision for loan loss expense in the second quarter, primarily due to the updated economic forecast. As you can see on Slide 17 of our [Technical Issues], this brings our allowance coverage, including unfunded commitments, to 1.52% net of the PPP loans. Our annualized net charge-off ratio was 27 basis points of total loans. Our non-performing assets as a percentage of total assets decreased slightly to 59 basis points compared to 61 basis points prior quarter. We have no direct exposure, as we've stated before, to the oil and gas sector, and we've included additional details on our hotel and restaurant exposure in the slide deck as well as details on the diversification across loan types within our loan portfolio.
We've started to get some questions regarding M&A and whether we're ready to get back into the game. And I'll tell you with the uncertainty at COVID and the general economy, we're watching the market closely, and we will wait for the right opportunity, but we will be ready when that day comes.
And I'll stop there now and turn it over to Nicole for some further updates on the financials.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Great, thank you, Palmer. For the second quarter, we reported net income of $32.2 million or $0.47 per diluted share. As Palmer mentioned, this includes $88 million of provision for loan loss expense, primarily related to the update of our economic forecast and not related to any specific credits within our portfolio. On an adjusted basis, we earned $42.4 million or $0.61 per share, when you exclude the merger restructuring charges, servicing asset impairment, COVID-19 expenses, legal fees from the ongoing SEC investigation, and the loss on the sale of bank premises.
Our adjusted return on assets in the second quarter was 0.89%, which was a slight increase from the 0.87% reported last quarter, and our adjusted return on tangible common equity was 11.66% compared to 10.98%. Both of these ratios are less than historical levels due to the increased provision for loan loss expense. Tangible book value increased $0.46 from $20.44 to $20.90 during the quarter. Our tangible common equity ratio decreased 55 basis points to 7.70% from 8.25% from the end of last quarter. However, the asset growth from PPP loans negatively impacted that by 45 basis points. So, excluding the PPP loans from total assets, our TCE ratio would have been 8.15% at June 30.
We're extremely pleased with our positive rebound in the margin this quarter. Our net interest margin improved by 13 basis points from 3.70% to 3.83% during the quarter, as we were successful in quickly reducing funding costs. During the quarter, our yield on earning assets declined by 25 basis points, but our funding cost decreased by 49 basis points, and our total interest-bearing deposit costs decreased 43 basis points, as we continue to stay focused on our pricing, and we really didn't see the competitive delay with the March Fed cuts that we've seen in the past. We saw an increase in accretion income compared to last quarter, because of some pay-offs in the Fidelity portfolio that we don't anticipate to recur in future quarters.
Our core bank production yields declined to 4.16% for the quarter against 4.55% last quarter. And on the deposit side, we continued the momentum on noninterest-bearing deposits and improved our mix such that noninterest-bearing now represent 35.89% of our total deposit compared to 30.53% at the end of last quarter and 28.9% this time last year. A large portion of the increase is related to PPP deposits, and we anticipate this gradually running off and we've modeled that in our ALCO modeling.
As I previously mentioned, our second quarter provision expense was $88 million. Approximately $68 million of that was related to loan loss and $20 million was an increase for unfunded commitments. We had approximately $9.2 million of net charge-offs for the quarter. Our ending allowance for loan loss at June 30 was $208.8 million compared to $149 million at the end of last quarter and $38 million at the end of the year. If you add in the unfunded commitment reserve, our total allowance for credit losses was $246 million at the end of the quarter compared to $167 million at the end of the first quarter and $39 million at the end of last year.
Moving on, our growth in noninterest income was exceptional during the second quarter. Our mortgage group had record production efficiency and earnings due to the interest rate environment. Mortgage production hit record levels to just over $2.6 billion for the quarter, and the gain on sale increased to over 3.5%, up from 2.88% last quarter. Net income in the retail mortgage division increased to $53.5 million for the quarter.
Total noninterest expense was $155.8 million for the quarter. However, when you remove the COVID-19 expenses, the merger restructuring, the fees -- the attorney fees on the SEC investigation, and the loss on sale of branches, our adjusted noninterest expense totaled $149 million. That was up $14.7 million from last quarter. However, expenses in the retail mortgage segment increased $20.8 million due to the variable costs associated with the increased volume such as commission.
So, as you can see on Slide 11, all of the increase in expenses are related to the lines of business and are more than offset by increased revenue. And as we expected and as we discussed on this call last quarter, excluding the lines of business, our expenses in the core bank and administrative functions decreased by $7.4 million during the quarter. This led us to be extremely pleased with our efficiency ratio. Our adjusted efficiency ratio improved to 51.08% compared to 59.87% last quarter. The increase in mortgage revenue and the efficiency gain in the mortgage division significantly impacted this ratio, and we don't believe the ratio will increase -- we do believe the ratio will increase slightly in future quarters, as we don't anticipate this level of mortgage revenue and efficiency to be sustainable.
As Palmer mentioned, we've identified several areas for additional cost saves. We've identified nine branches that we'll be closing in the third quarter. We've identified several branches that will remain as drive-thru-only after the pandemic ends, and we're also having initiatives to reduce our lease expense on non-retail banking offices that we can eliminate or consolidate into other facilities. This is -- all of this is an addition to the 14 branches that we've already closed from the Fidelity acquisition. We've already terminated or negotiated out of 11 lease spaces for an annual cost saves of over $1.5 million going forward, and we continue to look for more opportunities. We've initiated an employee incentive program to share in the [Phonetic] cost base to really drive the cost save culture with our new employees. We view these cost saves as a way for us to pay for the growth in technology and innovation going forward, while we can maintain our efficiency ratio in the mid-to-low 50s.
On the balance sheet side, we were pleased with our organic growth, both on the loan and deposit side. Loan growth this quarter was $1.4 billion, including the $1.1 billion of PPP loans. So, excluding those loans, our organic loan growth was about $384 million, and that's about over -- just over 11% annualized. However, approximately half of that loan growth was seasonal growth in our warehouse and ag line, which we anticipate will normalize later in the year, and brings our loan growth back in line with our estimates of about 7% for the year. More details of our loan production can be found on Slides 21 and 22 in the investor presentation.
Our total deposits increased by $1.7 billion during the quarter, of which $1.4 billion was a noninterest-bearing and was positively impacted by PPP deposit as we discussed earlier. Our loan-to-deposit ratio ended at 93% compared to 94.6% at the end of the first quarter. Palmer mentioned we continue to be well capitalized. We feel comfortable with our capital level, and our liquidity position remains strong.
And with that, I'll turn it back over to Palmer for closing comments before the Q&A.
H. Palmer Proctor Jr. -- Ameris Bank Chief Executive Officer, Ameris Bancorp Chief Executive Officer
Thank you, Nicole. I'd like to thank everyone again for listening to our second quarter results. In closing, I'll share with you that we are obviously moving into second half of 2020, and we're coming up with the marketing strategy and campaign that back the business together and I think that's fitting for our Company as well as our customers and our communities. And while we think the COVID-19 pandemic is going to last longer than we had all anticipated, we're adapting and we continue to be business-oriented as we get back to business together. I remain very optimistic about the future even in these uncertain times, and that's primarily from just knowing the ability of our team and the power of our core operation. We will continue to remain diligent, well positioned, and focused on the future.
And with that, I'll turn it back over to Kate for any questions from the group.
Questions and Answers:
Operator
We will now begin the question-and-answer session. [Operator Instructions] Our first question is from David Feaster from Raymond James. Go ahead.
David Feaster -- Raymond James -- Analyst
Hey, good morning, everybody.
H. Palmer Proctor Jr. -- Ameris Bank Chief Executive Officer, Ameris Bancorp Chief Executive Officer
Good morning, Dave.
David Feaster -- Raymond James -- Analyst
I appreciate the commentary on redeferral rate. In the early read, what I guess, if I look at it, it's kind of a low-20% redeferral rate, if I'm doing that math correctly. I guess, how do you think about redeferrals going forward? I mean, did you just get any risk ratings for the redeferred loans and did you require any additional collateral or personal guarantees? Just any thoughts on those trends going forward.
H. Palmer Proctor Jr. -- Ameris Bank Chief Executive Officer, Ameris Bancorp Chief Executive Officer
David, the -- on the redeferrals, the -- we didn't -- we looked at each at them individually, and as they were in the hotel sector primarily, we pretty well knew -- because we stay in touch with our folks very closely, we pretty well knew [Technical Issues]. So, it wasn't a surprise anyway. We didn't go out and get an additional hotel's collateral and the personal guarantees are pretty well out there. That really I think is more of a function, and you know this, that the hotels just haven't come back yet. And even though Disney and Universal are open in Orlando, it's not impacted the hotels yet. So they just needed more time to get back on the right footing. And so, that's what the second round is really designed to do.
David Feaster -- Raymond James -- Analyst
Okay. Okay, that's helpful. And then I guess taking that into account, I mean, how do you think about reserve build going forward? It seems like most of the heavy-lifting has largely been done. But as you continue to see redeferrals and maybe some risk rating downgrades and some modest credit migration, would you expect to see additional reserve build in the back half of the year?
Jon S. Edwards -- Executive Vice President and Chief Credit Officer
I think what you said is absolutely the right thing. I think the heavy-lifting has been done and what you'll see from here are going to be more on the individual side. So, it will be one-offs that can't get back on their feet timely. It will be the TDR that we'll have to do going forward and so on and so forth. But from the economics and the [Technical Issues] in our CECL model, I think what you said is absolutely the right thing, the heavy-lifting has been done.
David Feaster -- Raymond James -- Analyst
Okay. Okay, good. And then, just any thoughts on origination activity going forward? Obviously, the PPP program was a major distraction in the quarter, but just curious, your appetite for originations in the pulse of the market. I mean, how much of the decline in originations were strategic? Were you tightening the credit box versus limited demand and where are you seeing demand? And just any thoughts on Florida, too. Obviously, investor concern is really spiked, given the increase in cadence here, but your footprint is pretty good compared to where the increase in South Florida. Just curious, any thoughts on loan growth origination activity, appetite for credit in your markets.
H. Palmer Proctor Jr. -- Ameris Bank Chief Executive Officer, Ameris Bancorp Chief Executive Officer
Dave, this is Palmer. Yes, good question. The -- right now, we kind of break it down by individual line of business and obviously by the demographics, different states. But I will tell you that there is still -- as I mentioned before, there is still solid loan demand out there. Customers and bank obviously are being more cautious. That being said, we will continue to see strong demand, obviously, in single-family residential mortgage lending. With some new commercial initiatives we have and some new hires we've got on board, I would expect to see continued growth in C&I. Residential construction lending remains robust and absorption, as you well know, absorption is very solid in all our markets across the board. And so, on the consumer side, we're obviously watching that very closely. Our indirect portfolio continues to run-off, but it continues to perform extremely well in terms of delinquencies and charge-offs there. So, all in all, we feel confident in our ability to still have cautious, but solid loan growth, as we look into half of this year.
David Feaster -- Raymond James -- Analyst
Okay, that's helpful. Great quarter, guys.
H. Palmer Proctor Jr. -- Ameris Bank Chief Executive Officer, Ameris Bancorp Chief Executive Officer
Thank you.
Operator
Our next question is from Christopher Marinac from Janney Montgomery Scott. Go ahead.
Christopher Marinac -- Janney Montgomery Scott -- Analyst
Thanks, good morning. Palmer and Nicole, can you talk about the mortgage gain on sale, how strong it was this quarter and kind of where that could go in the near term and then maybe over the sort of the longer-term kind of where do you think it should settle down under more normal circumstances?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Sure. So, the gain on sale percentage came in right around 3.53%. That was definitely elevated and some of that was -- we do anticipate that coming back down. And then just our volume and we did $2.6 billion in volume for the quarter. I feel like the third quarter, what we've seen so far in July, third quarter will be strong as well, but we definitely see that coming back down as we get in just the cyclicality of the fourth quarter and the first quarter. And then -- so, I definitely feel like that's coming down and that's why I warned in my comments on the efficiency ratio that I know everybody can get very excited about a 51% efficiency ratio, but it's going to take a lot of work as that mortgage revenue rolls off, diligent work on our side to keep that in the mid- to low-50s, as we see that revenue, and we were very cognizant of that and we're preparing for that.
Christopher Marinac -- Janney Montgomery Scott -- Analyst
Okay, great, thanks for that. And I guess, because the Company is now much larger as a combined entity a year later, does that allow the sort of downside risk to be less just because you have natural efficiencies in that margin? While it may go down, still can be better than it was historically for Ameris or Fidelity?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Yes.
Christopher Marinac -- Janney Montgomery Scott -- Analyst
Okay, great. And I guess the last question just has to do with local deposit activity. Do you think deposits may sort of give back some of the success you've had or do you continue to think that deposits will be positive next few quarters?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
I think that's a great question. So, we do have the PPP effect and we have probably about 70% of our, what we would call, PPP funding still on deposit base. So, between $650 million and $700 million of those deposits or PPP funds that we anticipate will be used under the PPP program and will eventually flow out of the bank. So, we have -- we're are prepared for that in that we are -- have been approved for the PPP LS program, so we can fund those loans through that program at 35 basis points. So -- and, of course, when you do the math on a $1 billion, roughly 35 basis points where it's [Phonetic] coming out of noninterest income and are coming out of noninterest-bearing deposit and going into a 35 basis points, that's about 2 basis points at the -- on the margin, 2-basis point compression on the margin from that impact, if those deposits run out as expected.
Christopher Marinac -- Janney Montgomery Scott -- Analyst
Great, thanks very much for the information this morning.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Sure. Great. Thank you, Christopher.
Operator
Our next question is from Brady Gailey from KBW. Go ahead.
Brady Gailey -- KBW -- Analyst
Hey, thanks. Good morning, guys.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Good morning, Brady.
Brady Gailey -- KBW -- Analyst
Good morning. So, I mean, you are one of the few that actually saw NIM expansion this quarter, which was great to see. A lot of that came from the reduction in the cost of deposits. But maybe just talk about your ability to continue to reduce the cost of deposits and then just the outlook for the net interest margin, and how much of the NIM was impacted from PPP this quarter.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Sure. These are great questions, Brady. I appreciate them. So, as far as the NIM, the greatest place that we have to protect the NIM is on the deposit side. So -- and I know I said last quarter expecting some single-digit compression in the margin and then we ended up expanding the margin and that really -- I've got to give a little bit of a shout out to our bankers who did a great job of controlling the deposit pricing. And really, as I said, we didn't have all the competitive pressure that we've sometimes felt in the past. So, I think all banks were in the same boat with the Fed cuts. So we did a great job of reducing deposit rates. Going forward, really, I think our money markets are citing those are -- there is a very little room to improve those. Our real place to improve is on our CDs. We have about 46%, it's probably [Phonetic] about $1 billion or 46% of our CDs will be priced over the next six months, the remainder of this year. Those are currently at a 1.58%. So, in our April through June production -- so our second quarter production was at 37 basis points. So again, I've got about $1 billion of CDs rolling off at 1.58%. And then, over 2021, I've got another 44% of the CD portfolio, about another -- just about another $1 billion that's currently at a 1.18%. So, our second quarter total cost was about 1.49%, our production was 37 basis points. So, that's really where I have the biggest ability to affect the margin and control it. Since we do have some additional loans, we expect some loans to reprice lower. And as that happens, kind of my defense is those CD costs.
So, summarize all that, I hate to be a repeat of last quarter, but I would still say single-digit -- the potential for some single-digit margin compression going into the second half of the year.
Brady Gailey -- KBW -- Analyst
Okay. All right, that's helpful. And then any color on where you think discount accretion will be going forward? I know it's lumpy and it sounds like you had some kind of one-time repayments this quarter, which pushed it up. But going forward, outside of any sort of large prepayments, any idea where accretable yield will run?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Well, I will -- we say accretable yield, how about if I kind of give you some guidance on the accretion income? I think that's what -- I'd normally give that guidance. So, we have previously said $12 million to $15 million for the year. We've hit that already because of those prepayments. So we anticipate about $4 million to $5 million a quarter going forward.
Brady Gailey -- KBW -- Analyst
All right. And then lastly for me, Palmer, listening to your M&A comments, it sounds like when M&A does come back for the industry, you guys will be ready. But maybe just update us on any specific geographies that you would be interested in longer term and what the ideal target size would be for Ameris.
H. Palmer Proctor Jr. -- Ameris Bank Chief Executive Officer, Ameris Bancorp Chief Executive Officer
Yes. If you look at our current footprint, Brady, there is a lot of opportunity I think within our existing footprint that we cover just through the core banking operations and the traditional bank in four different states. And then if you look at our loan production offices, that takes us up pretty much throughout the Southeast. So, I think it would be obviously Southeastern in nature in terms of our desire to grow some of those markets. In terms of deal size, for us right now, just given where we are, I would expect to deal anywhere from $2.5 billion up, $2.5 billion on the low end. So that's kind of what we would be. That would be our sweet spot.
Brady Gailey -- KBW -- Analyst
Great, thanks.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Thank you, Brady.
Operator
Our next question is from Jennifer Demba from SunTrust. Go ahead.
Jennifer Demba -- SunTrust -- Analyst
Thank you, good morning.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Good morning, Jennifer.
Jennifer Demba -- SunTrust -- Analyst
Two questions from me. First of all, Palmer, you talked about the talent you hired recently. Can you give us some more color on that and what the outlook is in terms of loan growth out of those individuals? And my second question, expenses. I think you had $149 million in core expenses in the second quarter. With the branch consolidation you announced, are we looking at sequentially lower expenses next quarter or in the third quarter?
H. Palmer Proctor Jr. -- Ameris Bank Chief Executive Officer, Ameris Bancorp Chief Executive Officer
We were pretty proactive in our approach on the branch optimization and we continue to look at that and we'll have some cost saves there in addition to the leases that Nicole mentioned. In terms of opportunities with new hires, we had hired Todd Shutley a few weeks ago. He was a former SunTrust banker. He is running our specialty lines and he comes to us with a vast amount of experience and breadth of knowledge of capital markets and of the specialty lending group. So we're excited to have him on board here in Atlanta. We also are excited to announce we got a new head of -- down in Florida that's going to run the Florida markets for us, a former SunTrust banker there as well, and who has been running big part of the state for SunTrust. So, he'll be coming off soon. We'll be having a press release on that coming out shortly. And then we've also got a new initiative -- relatively new initiative that will start for us in Augusta, Georgia. There is a former banker who ran commercial banking for the prior state bank [Indecipherable] going to join us in Augusta and build out the Augusta market of the bank. So we're excited to have those three core individuals that are focused on commercial growth for us as we move forward. And with that obviously is the expectation of continued deposit growth.
Jennifer Demba -- SunTrust -- Analyst
And on the expense side, Nicole?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Sure. So, on the expense side, when you look at the -- and you said the core expenses of about $150 million, about $55 million of that was mortgage and about $20 million to $23 million of that was elevated because of the origination income. So, if you will, and I'm looking at Slide 11, where I kind of look at just kind of the banking segment, that blue bar running about $83 million. I think that's a good number. And then mortgage and the lines of business are really what makes that fluctuate. As we have identified these cost saves, a lot of that will be reinvested to pay -- we're kind of finding a way to fund -- to self-fund our innovation, our technology, some additional costs that we have as we've grown. So, I think the core side will be fairly flat.
Jennifer Demba -- SunTrust -- Analyst
Okay. Can you give us a little more detail on what investments you are making that you're talking about?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Sure. So, those are across the board. We have digital technology that we're working on improving. We are also doing a significant ATM upgrade, so that our ATMs will be more compatible. We've invested in some new treasury personnel as well as innovation with our treasury products. And then we also -- we are innovating some of our risk practices and allocating some resources there as well.
H. Palmer Proctor Jr. -- Ameris Bank Chief Executive Officer, Ameris Bancorp Chief Executive Officer
Jennifer, one name I left at too, we've hired someone to head our Treasury for us who is coming from Regions Bank that will be also put in our press release that these going to be spearheading that initiative for us.
Jennifer Demba -- SunTrust -- Analyst
Thanks so much.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Thank you, Jennifer.
Operator
[Operator Instructions] Our next question is from Kevin Fitzsimmons from D.A. Davidson. Go ahead.
Kevin Fitzsimmons -- D.A. Davidson -- Analyst
Hey, good morning, everyone.
H. Palmer Proctor Jr. -- Ameris Bank Chief Executive Officer, Ameris Bancorp Chief Executive Officer
Good morning.
Kevin Fitzsimmons -- D.A. Davidson -- Analyst
Just wanted to see if we can get an update on PPP-related fees and this -- as you look out and I know it's not crystal clear, but as we get closer toward a forgiveness period on the loans. And just wanted to get your outlook on when your best guess that would occur and if that occurs, say in fourth quarter, what the remaining PPP fees would be and would you expect those to roll-in on the forgiven loans through the margin at that time. Thanks.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Kevin, that's a great question and I'll try to get out my crystal ball, but no, we still have about $35 million of fees that we've not taken into income yet. About 95% of the PPP loans have a two-year maturity and about 5% have the five-year maturity. So that kind of gives you an idea of when if there were no forgiveness and how that would roll-in. We do have, and I think we have it on Slide 16 in one of those bullet points, about 80% of the total and the number of loans, this is not the dollar, but in the number of lines, about 81% are less than $150,000. So, if there is a blanket forgiveness piece, there will be a pretty good chunk of ours that will come in factors. So, we have modeled our duration to be about a year. I anticipate that forgiveness coming in I think fourth quarter, first quarter, and maybe pushing into second quarter of next year. Just on a sheer rolling, the majority of ours were all May of 2020. So, from a one-year duration what we use for modeling, it has it all coming in kind of by May of 2021, if that helps. Did I answer all of your questions?
Kevin Fitzsimmons -- D.A. Davidson -- Analyst
Yes. Very helpful, thank you. And just one follow-on just beyond the COVID-sensitive buckets that we've talked about, more broad-based commercial real estate, just curious, I would assume you're watching that very closely and how you -- what your sense is there and how you see things going. Thanks.
H. Palmer Proctor Jr. -- Ameris Bank Chief Executive Officer, Ameris Bancorp Chief Executive Officer
That's a good question. Our customer base, we have a really good quality customer base, they are still fairly active in our markets, and so, we are seeing good deals that we have opportunity to do. Although we haven't sort of changed our underwriting bucket, we have certainly become a little more conservative in a couple of areas of down payment and interest reserves that we are asking our customers to put up. So, we're still active and we think our customer base continues to be active. We have then some sharpening of the pencil to be a little more conservative in our underwriting.
Kevin Fitzsimmons -- D.A. Davidson -- Analyst
Okay, thanks very much.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Thank you.
Operator
[Operator Closing Remarks]
Duration: 35 minutes
Call participants:
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
H. Palmer Proctor Jr. -- Ameris Bank Chief Executive Officer, Ameris Bancorp Chief Executive Officer
Jon S. Edwards -- Executive Vice President and Chief Credit Officer
David Feaster -- Raymond James -- Analyst
Christopher Marinac -- Janney Montgomery Scott -- Analyst
Brady Gailey -- KBW -- Analyst
Jennifer Demba -- SunTrust -- Analyst
Kevin Fitzsimmons -- D.A. Davidson -- Analyst
More ABCB analysis
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp (NASDAQ: ABCB) Q2 2020 Earnings Call Jul 27, 2020, 9:00 a.m. Davidson -- Analyst More ABCB analysis All earnings call transcripts {%sfr%} 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. In fact, we're still opening more new DDA accounts in the current environment than we did in prior quarters despite our lobbies being closed, and we continue to see an increase in the number of mobile banking customers. | Ameris Bancorp (NASDAQ: ABCB) Q2 2020 Earnings Call Jul 27, 2020, 9:00 a.m. Davidson -- Analyst More ABCB analysis All earnings call transcripts {%sfr%} 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. ET Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks: Operator Good morning, welcome to Ameris Bancorp Second Quarter 2020 Financial Results Conference Call. | Ameris Bancorp (NASDAQ: ABCB) Q2 2020 Earnings Call Jul 27, 2020, 9:00 a.m. Davidson -- Analyst More ABCB analysis All earnings call transcripts {%sfr%} 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. H. Palmer Proctor Jr. -- Ameris Bank Chief Executive Officer, Ameris Bancorp Chief Executive Officer We were pretty proactive in our approach on the branch optimization and we continue to look at that and we'll have some cost saves there in addition to the leases that Nicole mentioned. | Ameris Bancorp (NASDAQ: ABCB) Q2 2020 Earnings Call Jul 27, 2020, 9:00 a.m. Davidson -- Analyst More ABCB analysis All earnings call transcripts {%sfr%} 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Loan growth this quarter was $1.4 billion, including the $1.1 billion of PPP loans. |
27827.0 | 2020-07-05 00:00:00 UTC | Validea's Top Five Financial Stocks Based On Joel Greenblatt - 7/5/2020 | ABCB | https://www.nasdaq.com/articles/valideas-top-five-financial-stocks-based-on-joel-greenblatt-7-5-2020-2020-07-05 | nan | nan | The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. This value model looks for companies with high return on capital and earnings yields.
ALLIANCE DATA SYSTEMS CORPORATION (ADS) is a mid-cap value stock in the Consumer Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Alliance Data Systems Corp is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
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ARES COMMERCIAL REAL ESTATE CORP (ACRE) is a small-cap growth stock in the Misc. Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ares Commercial Real Estate Corporation is a specialty finance company. The Company is primarily engaged in originating and investing in commercial real estate (CRE) loans and related investments. The Company operates through principal lending segment. Its target investments include senior mortgage loans, subordinated debt, preferred equity, mezzanine loans and other CRE investment opportunities, including commercial mortgage-backed securities. These investments are generally held for investment and are secured, directly or indirectly, by office, multifamily, retail, industrial, lodging, senior-living, self-storage and other commercial real estate properties, or by ownership interests therein. Through the Company's manager, Ares Commercial Real Estate Management LLC, it has investment professionals located across the United States and Europe who directly source loan opportunities for the Company with owners, operators and sponsors of CRE properties.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
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ARCH CAPITAL GROUP LTD. (ACGL) is a large-cap value stock in the Insurance (Prop. & Casualty) industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Arch Capital Group Ltd. provides insurance, reinsurance and mortgage insurance. The Company provides a range of property, casualty and mortgage insurance and reinsurance lines. The Company operates in five segments: insurance, reinsurance, mortgage, other and corporate. The insurance segment's product lines include construction and national accounts; excess and surplus casualty; lenders products; professional lines; programs; property, energy, marine and aviation; travel, accident and health, and other. The reinsurance segment's product lines include casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe, and other. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. The other segment includes the results of Watford Holdings Ltd.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ARCH CAPITAL GROUP LTD.
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ALLEGIANCE BANCSHARES INC (ABTX) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Allegiance Bancshares, Inc. is a bank holding company. Through its subsidiary, Allegiance Bank (the Bank), the Company provides a range of commercial banking services primarily to Houston metropolitan area-based small to medium-sized businesses, professionals and individual customers. In addition to banking during normal business hours, the Company offers extended drive-in hours, automated teller machines (ATMs) and banking by telephone, mail and Internet. The Company also provides debit card services, cash management services and wire transfer services, and offers night depository, direct deposits, cashier's checks, letters of credit and mobile deposits. It also offers safe deposit boxes, automated teller machines, drive-in services and round the clock depository facilities. The Company maintains an Internet banking Website that allows customers to obtain account balances and transfer funds among accounts.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
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Full Guru Analysis for ABTX>
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AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ameris Bancorp is a financial holding company. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
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Joel Greenblatt Stock Ideas
About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. The "Magic Formula," as he called it, produced back-tested returns of 30.8 percent per year from 1988 through 2004, more than doubling the S&P 500's 12.4 percent return during that time. Greenblatt also produced exceptional returns as managing partner at Gotham Capital, a New York City-based hedge fund he founded. The firm averaged a remarkable 40 percent annualized return over more than two decades.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Detailed Analysis of ALLEGIANCE BANCSHARES INC Full Guru Analysis for ABTX> Full Factor Report for ABTX> AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. | Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. Detailed Analysis of ALLEGIANCE BANCSHARES INC Full Guru Analysis for ABTX> Full Factor Report for ABTX> AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. | Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. Detailed Analysis of ALLEGIANCE BANCSHARES INC Full Guru Analysis for ABTX> Full Factor Report for ABTX> AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs. | Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. Detailed Analysis of ALLEGIANCE BANCSHARES INC Full Guru Analysis for ABTX> Full Factor Report for ABTX> AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. |
27828.0 | 2020-06-25 00:00:00 UTC | Ex-Dividend Reminder: CareTrust REIT, Ameris Bancorp and Americold Realty Trust | ABCB | https://www.nasdaq.com/articles/ex-dividend-reminder%3A-caretrust-reit-ameris-bancorp-and-americold-realty-trust-2020-06-25 | nan | nan | Looking at the universe of stocks we cover at Dividend Channel, on 6/29/20, CareTrust REIT Inc (Symbol: CTRE), Ameris Bancorp (Symbol: ABCB), and Americold Realty Trust (Symbol: COLD) will all trade ex-dividend for their respective upcoming dividends. CareTrust REIT Inc will pay its quarterly dividend of $0.25 on 7/15/20, Ameris Bancorp will pay its quarterly dividend of $0.15 on 7/10/20, and Americold Realty Trust will pay its quarterly dividend of $0.21 on 7/15/20. As a percentage of CTRE's recent stock price of $17.02, this dividend works out to approximately 1.47%, so look for shares of CareTrust REIT Inc to trade 1.47% lower — all else being equal — when CTRE shares open for trading on 6/29/20. Similarly, investors should look for ABCB to open 0.66% lower in price and for COLD to open 0.57% lower, all else being equal.
Below are dividend history charts for CTRE, ABCB, and COLD, showing historical dividends prior to the most recent ones declared.
CareTrust REIT Inc (Symbol: CTRE):
Ameris Bancorp (Symbol: ABCB):
Americold Realty Trust (Symbol: COLD):
In general, dividends are not always predictable, following the ups and downs of company profits over time. Therefore, a good first due diligence step in forming an expectation of annual yield going forward, is looking at the history above, for a sense of stability over time. This can help in judging whether the most recent dividends from these companies are likely to continue. If they do continue, the current estimated yields on annualized basis would be 5.88% for CareTrust REIT Inc, 2.65% for Ameris Bancorp, and 2.29% for Americold Realty Trust.
In Thursday trading, CareTrust REIT Inc shares are currently up about 0.2%, Ameris Bancorp shares are down about 0.2%, and Americold Realty Trust shares are up about 0.3% on the day.
Click here to learn which 25 S.A.F.E. dividend stocks should be on your radar screen »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Looking at the universe of stocks we cover at Dividend Channel, on 6/29/20, CareTrust REIT Inc (Symbol: CTRE), Ameris Bancorp (Symbol: ABCB), and Americold Realty Trust (Symbol: COLD) will all trade ex-dividend for their respective upcoming dividends. Similarly, investors should look for ABCB to open 0.66% lower in price and for COLD to open 0.57% lower, all else being equal. Below are dividend history charts for CTRE, ABCB, and COLD, showing historical dividends prior to the most recent ones declared. | Looking at the universe of stocks we cover at Dividend Channel, on 6/29/20, CareTrust REIT Inc (Symbol: CTRE), Ameris Bancorp (Symbol: ABCB), and Americold Realty Trust (Symbol: COLD) will all trade ex-dividend for their respective upcoming dividends. CareTrust REIT Inc (Symbol: CTRE): Ameris Bancorp (Symbol: ABCB): Americold Realty Trust (Symbol: COLD): In general, dividends are not always predictable, following the ups and downs of company profits over time. Similarly, investors should look for ABCB to open 0.66% lower in price and for COLD to open 0.57% lower, all else being equal. | Looking at the universe of stocks we cover at Dividend Channel, on 6/29/20, CareTrust REIT Inc (Symbol: CTRE), Ameris Bancorp (Symbol: ABCB), and Americold Realty Trust (Symbol: COLD) will all trade ex-dividend for their respective upcoming dividends. CareTrust REIT Inc (Symbol: CTRE): Ameris Bancorp (Symbol: ABCB): Americold Realty Trust (Symbol: COLD): In general, dividends are not always predictable, following the ups and downs of company profits over time. Similarly, investors should look for ABCB to open 0.66% lower in price and for COLD to open 0.57% lower, all else being equal. | Looking at the universe of stocks we cover at Dividend Channel, on 6/29/20, CareTrust REIT Inc (Symbol: CTRE), Ameris Bancorp (Symbol: ABCB), and Americold Realty Trust (Symbol: COLD) will all trade ex-dividend for their respective upcoming dividends. Similarly, investors should look for ABCB to open 0.66% lower in price and for COLD to open 0.57% lower, all else being equal. Below are dividend history charts for CTRE, ABCB, and COLD, showing historical dividends prior to the most recent ones declared. |
27829.0 | 2020-06-16 00:00:00 UTC | FNK's Holdings Imply 14% Gain Potential | ABCB | https://www.nasdaq.com/articles/fnks-holdings-imply-14-gain-potential-2020-06-16 | nan | nan | Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the First Trust Mid Cap Value AlphaDEX Fund ETF (Symbol: FNK), we found that the implied analyst target price for the ETF based upon its underlying holdings is $32.92 per unit.
With FNK trading at a recent price near $28.84 per unit, that means that analysts see 14.14% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of FNK's underlying holdings with notable upside to their analyst target prices are AGCO Corp. (Symbol: AGCO), Ameris Bancorp (Symbol: ABCB), and Park Hotels & Resorts Inc (Symbol: PK). Although AGCO has traded at a recent price of $55.65/share, the average analyst target is 20.22% higher at $66.90/share. Similarly, ABCB has 18.75% upside from the recent share price of $24.14 if the average analyst target price of $28.67/share is reached, and analysts on average are expecting PK to reach a target price of $13.71/share, which is 18.74% above the recent price of $11.55. Below is a twelve month price history chart comparing the stock performance of AGCO, ABCB, and PK:
Below is a summary table of the current analyst target prices discussed above:
NAME SYMBOL RECENT PRICE AVG. ANALYST 12-MO. TARGET % UPSIDE TO TARGET
First Trust Mid Cap Value AlphaDEX Fund ETF FNK $28.84 $32.92 14.14%
AGCO Corp. AGCO $55.65 $66.90 20.22%
Ameris Bancorp ABCB $24.14 $28.67 18.75%
Park Hotels & Resorts Inc PK $11.55 $13.71 18.74%
Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have a valid justification for their targets, or are they behind the curve on recent company and industry developments? A high price target relative to a stock's trading price can reflect optimism about the future, but can also be a precursor to target price downgrades if the targets were a relic of the past. These are questions that require further investor research.
10 ETFs With Most Upside To Analyst Targets »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | First Trust Mid Cap Value AlphaDEX Fund ETF FNK $28.84 $32.92 14.14% AGCO Corp. AGCO $55.65 $66.90 20.22% Ameris Bancorp ABCB $24.14 $28.67 18.75% Park Hotels & Resorts Inc PK $11.55 $13.71 18.74% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of FNK's underlying holdings with notable upside to their analyst target prices are AGCO Corp. (Symbol: AGCO), Ameris Bancorp (Symbol: ABCB), and Park Hotels & Resorts Inc (Symbol: PK). Similarly, ABCB has 18.75% upside from the recent share price of $24.14 if the average analyst target price of $28.67/share is reached, and analysts on average are expecting PK to reach a target price of $13.71/share, which is 18.74% above the recent price of $11.55. | Three of FNK's underlying holdings with notable upside to their analyst target prices are AGCO Corp. (Symbol: AGCO), Ameris Bancorp (Symbol: ABCB), and Park Hotels & Resorts Inc (Symbol: PK). Similarly, ABCB has 18.75% upside from the recent share price of $24.14 if the average analyst target price of $28.67/share is reached, and analysts on average are expecting PK to reach a target price of $13.71/share, which is 18.74% above the recent price of $11.55. First Trust Mid Cap Value AlphaDEX Fund ETF FNK $28.84 $32.92 14.14% AGCO Corp. AGCO $55.65 $66.90 20.22% Ameris Bancorp ABCB $24.14 $28.67 18.75% Park Hotels & Resorts Inc PK $11.55 $13.71 18.74% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? | Similarly, ABCB has 18.75% upside from the recent share price of $24.14 if the average analyst target price of $28.67/share is reached, and analysts on average are expecting PK to reach a target price of $13.71/share, which is 18.74% above the recent price of $11.55. Three of FNK's underlying holdings with notable upside to their analyst target prices are AGCO Corp. (Symbol: AGCO), Ameris Bancorp (Symbol: ABCB), and Park Hotels & Resorts Inc (Symbol: PK). Below is a twelve month price history chart comparing the stock performance of AGCO, ABCB, and PK: Below is a summary table of the current analyst target prices discussed above: | First Trust Mid Cap Value AlphaDEX Fund ETF FNK $28.84 $32.92 14.14% AGCO Corp. AGCO $55.65 $66.90 20.22% Ameris Bancorp ABCB $24.14 $28.67 18.75% Park Hotels & Resorts Inc PK $11.55 $13.71 18.74% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of FNK's underlying holdings with notable upside to their analyst target prices are AGCO Corp. (Symbol: AGCO), Ameris Bancorp (Symbol: ABCB), and Park Hotels & Resorts Inc (Symbol: PK). Similarly, ABCB has 18.75% upside from the recent share price of $24.14 if the average analyst target price of $28.67/share is reached, and analysts on average are expecting PK to reach a target price of $13.71/share, which is 18.74% above the recent price of $11.55. |
27830.0 | 2020-06-08 00:00:00 UTC | The ABCB Paradox: Analysts Bullish But Forecast -3.42% Fall | ABCB | https://www.nasdaq.com/articles/the-abcb-paradox%3A-analysts-bullish-but-forecast-3.42-fall-2020-06-08 | nan | nan | Analyst ratings can sometimes be complicated, and we here at ETF Channel have noticed a bit of a paradox with Ameris Bancorp (Symbol: ABCB). The average 12-month price target for ABCB — averaging the work of 6 analysts — reveals an average price target of $28.67/share. That's a whopping -3.42% below where ABCB has been trading recently at $29.68/share. With this kind of downside potential (should ABCB fall to that price target), one might expect to see a high concentration of "hold" or even "sell" ratings on the stock. Yet, take a look at the bullishness:
RECENT ABCB ANALYST RATINGS BREAKDOWN
» Current 1 Month Ago 2 Month Ago 3 Month Ago
Strong buy ratings: 4 3 3 4
Buy ratings: 2 2 2 1
Hold ratings: 0 0 0 0
Sell ratings: 0 0 0 0
Strong sell ratings: 0 0 0 0
Average rating: 1.33 1.4 1.4 1.2
The average rating presented in the last row of the table above is from 1 to 5, where 1 would be a consensus Strong Buy and 5 would be a consensus Strong Sell. In the middle, 3 would be a Hold. So anything below 3 leans toward Buy as the average analyst sentiment. The average rating of 1.33 for ABCB leans strongly towards the bullish end of the spectrum, yet the ABCB price target paints a different picture. Clearly, there is something more to the story here that is worth investigating for investors looking at Ameris Bancorp. Of course, the average price target is just that — a mathematical average, and is only one metric. There are analysts with higher targets than the average, including one looking for a price of $35.00. And then on the other side of the spectrum one analyst has a target as low as $25.00. The standard deviation is $3.723.
But the whole reason to look at the average in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes — much like with guessing the number of jelly beans in a jar, where the average guess tends to be very close. And so with ABCB trading so far above that average target price of $28.67/share, the -3.42% downside to that average target does seem to be a paradox against the bullish analyst ratings. Might analysts be behind the curve with their targets and upward adjustments are forthcoming? Or, is it time for some of these analysts to turn bearish and downgrade on valuation? One thing is for sure: this apparent paradox makes for a good "signal" to investors in ABCB to spend fresh time assessing the company and deciding whether analysts have it right with their sentiment, or have it right with their price target for Ameris Bancorp. This article used data provided by Zacks Investment Research via Quandl.com. Get the latest Zacks research report on ABCB — FREE.
10 ETFs With Most Upside To Analyst Targets »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Analyst ratings can sometimes be complicated, and we here at ETF Channel have noticed a bit of a paradox with Ameris Bancorp (Symbol: ABCB). With this kind of downside potential (should ABCB fall to that price target), one might expect to see a high concentration of "hold" or even "sell" ratings on the stock. One thing is for sure: this apparent paradox makes for a good "signal" to investors in ABCB to spend fresh time assessing the company and deciding whether analysts have it right with their sentiment, or have it right with their price target for Ameris Bancorp. | The average 12-month price target for ABCB — averaging the work of 6 analysts — reveals an average price target of $28.67/share. The average rating of 1.33 for ABCB leans strongly towards the bullish end of the spectrum, yet the ABCB price target paints a different picture. Analyst ratings can sometimes be complicated, and we here at ETF Channel have noticed a bit of a paradox with Ameris Bancorp (Symbol: ABCB). | The average 12-month price target for ABCB — averaging the work of 6 analysts — reveals an average price target of $28.67/share. And so with ABCB trading so far above that average target price of $28.67/share, the -3.42% downside to that average target does seem to be a paradox against the bullish analyst ratings. Analyst ratings can sometimes be complicated, and we here at ETF Channel have noticed a bit of a paradox with Ameris Bancorp (Symbol: ABCB). | With this kind of downside potential (should ABCB fall to that price target), one might expect to see a high concentration of "hold" or even "sell" ratings on the stock. The average rating of 1.33 for ABCB leans strongly towards the bullish end of the spectrum, yet the ABCB price target paints a different picture. And so with ABCB trading so far above that average target price of $28.67/share, the -3.42% downside to that average target does seem to be a paradox against the bullish analyst ratings. |
27831.0 | 2020-06-07 00:00:00 UTC | Validea's Top Five Financial Stocks Based On Joel Greenblatt - 6/7/2020 | ABCB | https://www.nasdaq.com/articles/valideas-top-five-financial-stocks-based-on-joel-greenblatt-6-7-2020-2020-06-07 | nan | nan | The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. This value model looks for companies with high return on capital and earnings yields.
ACT II GLOBAL ACQUISITION CORP (ACTT) is a small-cap value stock in the Misc. Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Act II Global Acquisition Corp is a blank check company. The Company is focused on effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. It intends to focus on businesses that include the consumer packaged goods (CPG) and other consumables and hospitality, including restaurants. It has not conducted any business.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ACT II GLOBAL ACQUISITION CORP
Full Guru Analysis for ACTT>
Full Factor Report for ACTT>
ARES COMMERCIAL REAL ESTATE CORP (ACRE) is a small-cap growth stock in the Misc. Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ares Commercial Real Estate Corporation is a specialty finance company. The Company is primarily engaged in originating and investing in commercial real estate (CRE) loans and related investments. The Company operates through principal lending segment. Its target investments include senior mortgage loans, subordinated debt, preferred equity, mezzanine loans and other CRE investment opportunities, including commercial mortgage-backed securities. These investments are generally held for investment and are secured, directly or indirectly, by office, multifamily, retail, industrial, lodging, senior-living, self-storage and other commercial real estate properties, or by ownership interests therein. Through the Company's manager, Ares Commercial Real Estate Management LLC, it has investment professionals located across the United States and Europe who directly source loan opportunities for the Company with owners, operators and sponsors of CRE properties.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ARES COMMERCIAL REAL ESTATE CORP
Full Guru Analysis for ACRE>
Full Factor Report for ACRE>
ARCH CAPITAL GROUP LTD. (ACGL) is a large-cap value stock in the Insurance (Prop. & Casualty) industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Arch Capital Group Ltd. provides insurance, reinsurance and mortgage insurance. The Company provides a range of property, casualty and mortgage insurance and reinsurance lines. The Company operates in five segments: insurance, reinsurance, mortgage, other and corporate. The insurance segment's product lines include construction and national accounts; excess and surplus casualty; lenders products; professional lines; programs; property, energy, marine and aviation; travel, accident and health, and other. The reinsurance segment's product lines include casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe, and other. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. The other segment includes the results of Watford Holdings Ltd.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ARCH CAPITAL GROUP LTD.
Full Guru Analysis for ACGL>
Full Factor Report for ACGL>
ALLEGIANCE BANCSHARES INC (ABTX) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Allegiance Bancshares, Inc. is a bank holding company. Through its subsidiary, Allegiance Bank (the Bank), the Company provides a range of commercial banking services primarily to Houston metropolitan area-based small to medium-sized businesses, professionals and individual customers. In addition to banking during normal business hours, the Company offers extended drive-in hours, automated teller machines (ATMs) and banking by telephone, mail and Internet. The Company also provides debit card services, cash management services and wire transfer services, and offers night depository, direct deposits, cashier's checks, letters of credit and mobile deposits. It also offers safe deposit boxes, automated teller machines, drive-in services and round the clock depository facilities. The Company maintains an Internet banking Website that allows customers to obtain account balances and transfer funds among accounts.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ALLEGIANCE BANCSHARES INC
Full Guru Analysis for ABTX>
Full Factor Report for ABTX>
AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ameris Bancorp is a financial holding company. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of AMERIS BANCORP
Full Guru Analysis for ABCB>
Full Factor Report for ABCB>
More details on Validea's Joel Greenblatt strategy
Joel Greenblatt Stock Ideas
About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. The "Magic Formula," as he called it, produced back-tested returns of 30.8 percent per year from 1988 through 2004, more than doubling the S&P 500's 12.4 percent return during that time. Greenblatt also produced exceptional returns as managing partner at Gotham Capital, a New York City-based hedge fund he founded. The firm averaged a remarkable 40 percent annualized return over more than two decades.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Detailed Analysis of ALLEGIANCE BANCSHARES INC Full Guru Analysis for ABTX> Full Factor Report for ABTX> AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. | Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. Detailed Analysis of ALLEGIANCE BANCSHARES INC Full Guru Analysis for ABTX> Full Factor Report for ABTX> AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. Detailed Analysis of ACT II GLOBAL ACQUISITION CORP Full Guru Analysis for ACTT> Full Factor Report for ACTT> ARES COMMERCIAL REAL ESTATE CORP (ACRE) is a small-cap growth stock in the Misc. | Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. Detailed Analysis of ALLEGIANCE BANCSHARES INC Full Guru Analysis for ABTX> Full Factor Report for ABTX> AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. | Detailed Analysis of AMERIS BANCORP Full Guru Analysis for ABCB> Full Factor Report for ABCB> More details on Validea's Joel Greenblatt strategy Joel Greenblatt Stock Ideas About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. Detailed Analysis of ALLEGIANCE BANCSHARES INC Full Guru Analysis for ABTX> Full Factor Report for ABTX> AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. |
27832.0 | 2020-06-01 00:00:00 UTC | StoneCo Soars on Earnings; Real Estate Is Making a Comeback | ABCB | https://www.nasdaq.com/articles/stoneco-soars-on-earnings-real-estate-is-making-a-comeback-2020-06-01 | nan | nan | In this edition of Industry Focus: Wildcard, host Jason Moser and Fool.com contributor Matt Frankel start by discussing recent stock price action in the banking industry, and why some banks, like M&T Bank (NYSE: MTB) and Ameris Bancorp (NASDAQ: ABCB), are underperforming peers. Then, the pair dives into StoneCo (NASDAQ: STNE) earnings and discusses some positive surprises in the real estate market. And finally, you'll hear why Matt has his eye on U.S. Bancorp (NYSE: USB) and why Jason is watching Ulta Beauty (NASDAQ: ULTA) closely.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on May 27, 2020.
Jason Moser: It's Wednesday, May 27th. I'm your host Jason Moser, and I'm joined, as always, even though it's a Wednesday, by Certified Financial Planner, Matt Frankel.
Matt, it's a Wildcard Wednesday, but we weren't in the studio or even our virtual studio on Monday because of the holiday, so we decided to go ahead and take our financial show and bring that over to this Wildcard Wednesday, because we just always love doing the financial show, Matt. I mean, we got a good thing going here, and we want to do it every chance we can, right?
Matt Frankel: I agree. Hopefully, we'll be back in the actual studio before too, too long.
Moser: Yeah, I know. Well, it sounds, at least, like things are moving in the right direction. The state of Virginia was launched into phase one a couple of weeks ago, and the representatives from Northern Virginia felt like we weren't quite ready to make that leap. So, we were postponed for a little while, but it does sound like now, as of Friday, we will be in Northern Virginia also entering phase one. Which I think everybody is excited about. I know [laughs] my kids are excited just to see some progress.
I mean, they're doing a bang-up job, really, carrying their own weight, doing the school thing at home. But you know, kids, you get them separated from their friends, they just don't have that normal life, it's a challenge for everybody, I got to say.
Frankel: It is. I mean, I live in an area that's almost reopened right now. You know, we took the kids out to a restaurant the other night.
Moser: Oh, wow! man, I'm kind of jealous.
Frankel: And it was fine. [laughs] I mean, the servers were wearing masks, but other than that everything feels pretty normal here.
Moser: Yeah. I mean, it does feel like you can just take those normal precautions, you know, wear a mask where you can and just, sort of, keep a safe social distance. But if you can take those normal precautions, it does seem like things are starting to get better, so hopefully that trend will continue. But that's not what we're here to talk about today, folks.
We are here to talk about financials. So, on today's Financial show, we're going to dig into the latest quarterly results from StoneCo, we're going to talk a little about real estate. As always, we have a couple of stocks that we're watching this week.
But, Matt, let's start today by talking about what seems like the market's recent love fair with banks. The market was off on Monday, but Tuesday, and even into today -- I mean, on the whole the market has been performing quite nicely, but financials and banks, in particular, seem to be feeling a little extra boost there. Am I missing something?
Frankel: Yeah, well, you also have to remember that banks were pretty much the most beaten down part of the bad parts of the stock market this year. This morning the S&P was about 12% off of its all-time highs. The banking index was about 23% off of its all-time highs. And that's including this week's big rebound.
So, kind of, the reasons that the banks fell so bad were because no one knows how long this is going to last, no one knows when the government help will dry up, how bad loan defaults are going to get. No one knows how long the unemployment rate is going to stay over 15%. All those things that are really bad for banks, which is really what made them fall so badly in the beginning of the year, are now kind of serving as tailwinds as we start to reopen and, like, each day a new worst-case scenario seems like is being avoided.
Moser: Okay. So, basically, I guess, that my observation at the beginning of the show, if things are starting, maybe if we're turning a little bit of a corner, we're seeing more optimism in the headlines. If things could even be, just even if they're getting a little bit better, that probably is going to have a little bit more of an outsized impact or effect on the banks given what they've suffered going into this.
Frankel: Right. So, on bad days, when we have bad virus news, especially, you're going to see the banks move in the wrong direction. And conversely, when you see good news, like, you know, the vaccine news we saw the other day, you see news that economics are starting to reopen a little faster; I think, New York just mentioned that they're planning to move into phase one next month. And they were ground zero for this in America. So, you're really starting to see a wave of good news for the first time since early March, which is what's fueling the optimism.
And banks are really the beneficiaries of it. I mean, I own a few bank stocks and that's been, by far, the best performing part of my portfolio. And you're seeing the work-from-home stocks get, kind of, annihilated this week.
Moser: Yeah, I did notice that. I mean, you are starting to see some of that buying flowing out of those stay-at-home stocks where companies like Zoom and Teladoc, and I guess maybe even DocuSign, those companies really, it did seem like there was a flood of buying going in there, probably seeing a little bit of a purging, yeah, they're little bit of profit-taking, I guess. You know, that's not business-related, that seems a bit more market-related. But, yeah, as you said, that sentiment is flowing from one side of the market to the other it seems.
Frankel: Right. And you got to remember, a worst-case scenario for the economy is kind of a best-case scenario for Zoom or a company like that. You know, if people are stuck in their houses for another year and have no choice but to use Zoom Meetings that whole time, that's a good tailwind.
And for banks, it's kind of the opposite, where you're seeing the reopening is the best-case scenario for banks, because not only are people still going to be able to pay their bills, but you're going to see more loan demand, consumer confidence was higher than expected, so you're going to see more people willing to spend money and take on debt, things like that. So, it's a good environment. It's slowly looking like we're going to have a good environment for banks on the tail-end of this year.
Moser: Yeah. And we'll talk a little bit more about that loan demand in the housing market a little bit later in the show. I wanted to roll in a question we got here from a listener last week. Brian Long on Twitter, @bdark09, asked us, he said, "Guys, I was wondering if you could share your thoughts on why the regional banks like M&T Bank and Ameris Bancorp are getting hit harder than the rest of the financials? Is it because they support small business? Thanks for all the help."
And I will say, Matt, this question came in, again, I think, it was maybe a week or so, so it was at a point where the banks were feeling a little bit of a pinch. I think on the other side of this news when the uncertainty was a little bit higher.
And as an Ameris Bancorp shareholder myself and as one who's followed that company for a while, to me, it does strike me that those are banks that are going to be a little bit more susceptible to these sort of challenging times for banks simply because they're smaller. In banking, having that scale is a big advantage, isn't it?
Frankel: Well, it is. But the reason for those two in particular, it's not what you think it is. So, here's some numbers. I mentioned the overall financial sector is down by 23% year-to-date. Ameris and M&T Bank are down 40% and 35%. On the other hand, Bank of America is down 27%. Goldman Sachs and Morgan Stanley are each day only 10% year-to-date.
So, the big x-factor there is that banks like Ameris and M&T Bank don't have investment banking, which is kind of what's helping banks like Bank of America and JPMorgan Chase, kind of, weather the storm a little bit better, because a lot of parts of investment banking actually do better when the market is going crazy.
Moser: And that's a good point there. We saw that in those calls with those bigger banks. Their investment banking operations were shoring up some of the weakness in the other segments.
Frankel: Right. Look, at even the big banks that don't have investment banking operations, like Wells Fargo and U.S. Bancorp, those are getting crushed. I mean, Wells Fargo is down almost 50% year-to-date, so it's not just the size issue. U.S. Bank is down 37%, more than M&T, so.
And that's just because they're primarily commercial banks, they make their money, at the end of the day, by loaning out money and making a profit on it. Whereas banks like Goldman Sachs and Morgan Stanley are pretty much exclusively investment banks, which is why they're outperforming the sector so much right now, because investment banking is actually a pretty good business during times like this. I think '09 was, like, the best environment for trading revenue that we've ever seen. So, not that anyone wants an '09 to happen again.
But to answer your question, it's not because they have small business focus, a lot of these banks are small business focused. I mean, Bank of America is a pretty big small business lender. But the problem is that they don't have that investment banking division to offset the risk that's associated with a prolonged recession, bad unemployment, you know, high loan losses, because say your Investment Banking revenue goes up by $2 billion and you have $2 billion of loan losses from your Consumer division, it's kind of a wash, but if you only have the losses from your Consumer division then it's bad. So, that's kind of what you're seeing priced into these stocks. That's why you're also seeing stocks like M&T and Ameris really rebound faster in the past few days than some of the bigger ones that didn't underperform. So, it's more of an investment banking versus not, question.
Moser: Yeah. And to your point on small business, Live Oak Bank, another bank that we follow and that we've spoken with management there before, that's a business focused specifically on small business lending. And it doesn't have that investment banking angle as well. I guess you could extrapolate this to a greater investing lesson, in that, these bigger banks that have more diverse revenue streams are going to be a little bit better off because they have other areas where they can, sort of, make up for weakness.
And just as in investing, we think maintaining a portfolio of diversified holdings, you're going to have some that maybe don't perform as well as others in certain times, but that's kind of the idea behind diversification, it is being able to spread some of that risk around so that you can weather difficult storms. And it seems like the big banks with those robust investment banking operations, that seems like they have, sort of, that nice diversified investment portfolio, so to speak.
Frankel: Yeah. And investment banking is not just trading, that's things like -- it's IPOs and debt offerings, especially are doing really well right now. A lot of companies are raising capital through debt.
Moser: Debt is, and it seems like the IPOs have, sort of, fallen off a cliff. We haven't really seen many of those lately for understandable reasons. But, yeah, that's another really good source.
Frankel: Yeah. And in most of the investment banks, IPO writing is actually smaller than the debt underwriting revenue that they bring in. So, you know, for example, a hotel operator needs to raise $2 billion, they go to an investment bank to make a debt offering, and the investment bank gets a nice hefty fee for that. So, you're seeing a lot of that, kind of, serve as -- you know, offsetting the problems with the business for these banks that have both.
Moser: Yep, that makes a lot of sense. Well, let's move on to StoneCo. StoneCo is the Latin American payment processor in that fintech market that we love to talk so much about. And if you're a shareholder at StoneCo today, you're feeling pretty good. Share is up around 27%, 28% on what looks like pretty good quarterly results. Now, it's been a difficult year before coming into today's release. The stock was down 33%; it's made up a lot of that ground today, Matt.
But you and I have spoken before, we've talked about StoneCo. We had a show where we talked about StoneCo and [...] in that space and I think we also talked a little bit about MercadoLibre at that time.
You know, looking through the release there, I think the one thing that, kind of, stood out to me, the one thing that stands out to me with StoneCo -- but they're not the only ones here -- is really this is a Brazil story. So, it's actually -- I mean, it looked like it was a good quarter. I'm not surprised, really, at the market's reaction. But it does seem for a business that is so levered to Brazil, and knowing where we are right now with Brazil in this COVID-19 crisis, I mean, things are getting worse there it seems like. And management certainly made that point, they feel like, this current quarter, the second quarter they're in now, it's going to be their most difficult one. But what did you think of those results, did anything stand out to you?
Frankel: [laughs] The first thing I think is, I wish I would have bought StoneCo about a month-and-a-half ago when it was at, like, $17. And that's especially true today. I had been kicking myself a couple of times in the past few weeks for hesitating on -- there's a few stocks, StoneCo and MeLi is another one, MercadoLibre, that I wanted, I almost bought in the $400s, and I said, "Uh! let me give it a minute and now it's $800 or something like that."
But anyway, [laughs] so what my big takeaway is from the quarter; I mean, the numbers look great through the 15th of March, this is just before the pandemic began. Not only did their total payment volume increased by 52% year-over-year, but that was actually better than the year-over-year increase in the same period in 2019. So, not only are they growing, but they are accelerating. Accelerating growth when you're at that level is really impressive. In May, up until their earnings release, so far in May their payment volume is up 23% year-over-year. So, that's a slowdown, but people are still spending money and their platform is still pretty healthy, so.
And they're also still very profitable. They had a 22% net margin this quarter. And the thing that really, kind of, reassured me as, unfortunately not a stone-cold investor, but as someone who might invest in the company at some point; one thing that really reassured me was the discussion of their lending operation.
Like, think of them as, kind of, like a Square capital and they provide credit to businesses like that. They are specifically avoiding the riskier businesses. They mentioned, for example, they don't loan any money to airlines, they don't loan any money to seasonal businesses, things like that. So, they're taking, kind of, a smart approach to it, unlike a lot of these fintechs that just kind of make business loans.
So far, the management of StoneCo has not let me down once. And it's kind of the best way I should put it. I need to repeat that to myself next time that the stock price really takes a dive for no great reason, but --
Moser: -- well, it's not. I mean, it's easier said than done, right, the hindsight is 20/20, of course.
Frankel: Yeah. And I'm just seeing a comment right now that someone is in Brazil and StoneCo is huge in Brazil, they said. It's seriously, like, the Square of Brazil.
Moser: Yeah, I mean, this is a pure Brazil story.
Frankel: But even, like, Square Capital, they base their loans on just the payment volume that a merchant gets, not how risky they perceive the business to be. So, it's kind of like, when I see something like that, I get why Berkshire Hathaway owns a lot of StoneCo, like, when I see that kind of smart risk management.
So, for me, it's not about the numbers themselves, it's the steps they're taking, the kind of, you know, make risk OK, so they come out on the other side. And their growth isn't going anywhere. So, with a company like this, they just need to make it to the other side and pretty unscathed. And they'll do just fine long-term, and I think that's what the market is taking away from this earnings release.
Moser: Yeah. And to your point there, the one thing I noticed in reading through that release, they were, at the beginning of the year -- I mean, they're obviously a growth company, they're in growth mode, they're making those investments, and part of those investments they've been hiring a lot. They really had been hiring a lot going into this pandemic. And unfortunately, it's been a tough time for a lot of people on the employment front. And I know it was a difficult decision for management, but I mean, I did notice, they were, sort of, cutting 20% of their workforce.
And while that's obviously a hard pill to swallow for folks in need of a job, what it does also, it really right-sizes the business, it right-sizes that cost structure so that they're able to keep that expense line under control.
So, they're not only managing the risk side of the business and they're not only managing that total payments volume side of the business, but they're also managing that cost structure of the business, the actual overhead there in the form of jobs. I mean, when you start getting bloated, that can be really difficult.
We saw a little bit of different business, but earlier in the year or maybe it was last year, late last year, but remember Wayfair, they basically had to do the same thing. I mean, it was less a problem with the business, it was just bloated and they had to cut somewhere in the neighborhood of 600 jobs. And while you hate to see people losing jobs, from a business perspective, it's hard to argue against it, right? You got to keep that business right-sized in order to make the cost structure work. And it seems like in StoneCo's case they're keeping a focus on that.
Frankel: They are. Like I said, the tone of the whole earnings reports really screams responsible management to me --
Moser: -- man, good word there is "responsible."
Frankel: You know, being able to make tough decisions is important in business. And it just seems like they, even before this, they really set themselves up to -- I mean, no one set themselves up to be able to really thrive in a situation like this, except maybe, like, a Zoom or something like that. But they set themselves up and, you know, they survived a black swan event like this pretty well.
Moser: Yep. Absolutely. So, to all you StoneCo shareholders out there, congratulations on a good day and it does look like there are still plenty of good days to come. So, you know, keep focused on the forest and not the trees there.
Matt, let's jump into real estate a little bit. You are a part of a real estate team here at The Motley Fool with Millionacres in our service Mogul. We were looking through some of this data here, new home sales rose in April versus the expectations of, really -- I think, there were a lot of expectations out there for, I mean, a massive drop in home sales.
And then we also saw news here today that mortgage applications are also up 9% from a year ago and from the previous week. So, you know, it does seem like for a market that was set up to get hit pretty hard -- and housing, it's not necessarily been hit as hard as people thought it might have been.
Frankel: Well, no, and a lot of that has to do with, kind of, the overall theme of this crisis that the government is just printing trillions and trillions [laughs] of dollars and pumping it into the system. No, I mean, if people who are unemployed or making, in a lot of cases, more money being unemployed than when they were working, it's pretty easy to pay your mortgage.
And so, you're not seeing home prices fall like a lot of people thought they were, you're not seeing mortgage demand drop as a lot of people thought it was. And first of all, just to clarify, we said, home sales rose in April they rose?
Moser: Yeah.
Frankel: They rose compared to March, and they are still way down year-over-year, it's worth pointing out. But it was expected to be down 22% from March, so that's still a big surprise.
The big thing to know about that is it's really a shift in the type of homes that are selling. In other words, specifically, the lower end of the market is selling a lot better, the median home price out of those new homes was down over 8% this year. Homes under $300,000 are selling really well. Homes above $500,000 are not selling very well at all. So, you're seeing a lot of -- you know, this could be a lot of first-time homebuyers coming into the market, it could be a lot of people trying to downsize a little bit given the economy, so there's a lot of potential explanations.
And in the mortgage side of things it's not that surprising that people are viewing this as a good time to either refinance or buy a new home. I mean, the average mortgage rate is about 3.4% right now, which; I don't know what your mortgage is at, but it's not 3.4%.
Moser: [laughs] It's not quite the lowest low, but I'm looking at refinancing already. And, I mean, it's already as low as it is.
Frankel: Get in line, refinancing volume is up 176% year-over-year. So, you're not the only one who would think that. But purchase volumes up 9% year-over-year, which that's the thing that really stood out to me as a surprise that people were buying -- I'm sorry, up from a week ago, and up 54% since the beginning of April; which is really impressive. So, people are getting back and people were cautious and, kind of, pumped the brakes on their home searches, but it sounds like people are coming back into the economy. And this is just kind of the theme we're seeing with the overall economy. Like, credit card volumes are starting to pick up a little bit. We're seeing more people travel, slowly but surely, it seems like people are coming back into the economy and real estate is not an exception.
Moser: Well, let's hope that continues and let's hope everybody can stay healthy in the process. You know, we fell a long way in a short period of time. And to see things recovering regardless of how we're getting there, You know, I mean, you kind of say, you got to pull out all the stops and just help the recovery and then clean up the mess afterwards. And I feel like maybe we're on the right path, but certainly those numbers speak to that as well.
Okay, Matt, before we sign off today, we, as always, want to throw a couple stocks up on our radar, stocks that we're watching this week. You know, earning season has more or less come to a close, but there's still a few laggards out there that are reporting late. What's the stock that you're watching over the next few days?
Frankel: Well, mine reported earnings already and it's a bank stock that I recently bought, U.S. Bancorp, I mentioned them already. People who listen to our show for a while know that I'm always talking about Bank of America as my biggest bank stock investment. I think I've used that as "My one to watch" more than I'm legally allowed to, so.
But U.S Bancorp is one I've always really admired, but valuation has been a big obstacle. Up until this year, U.S. Bancorp consistently trades for well over double its book value.
Moser: And that's always been a big Berkshire holding too, hasn't it?
Frankel: Right, it's a big Berkshire holding, it was actually the only big bank, I'm pretty sure about this. They were the only big bank that never, their earnings never went negative during the financial crisis Which, they have very high asset quality, extremely high, which is why -- so, their valuation has been justified. I've just kind of thought that there have been better places to put my money in banking.
But now, U.S. Bancorp has been almost cut-in-half during this pandemic and I finally decided to pull the trigger. And I bet pretty big. I mean, normally when I buy-in a stock for the first time, I don't go all-in, but I pretty much bought a full position in U.S. Bancorp when this happened, so. And I'm watching to see how their earnings turn out for the second quarter, because I don't think it's going to be nearly as bad as expected.
Moser: Conviction buy, I like it. I love the conviction there.
Frankel: Hey, I put my money where my mouth is, man.
Moser: That's what you got to do in this line of work, Matt, you want people to take you seriously, bud. [laughs] Well, I am going to take a little bit of a different tack here. I'm actually watching Ulta Beauty. Their earnings come out tomorrow. And, to me, the reason why I'm focused on this business -- I mean, it's a good business, right? I mean, the cosmetics and makeup market, granted, I don't really have a whole heck of a lot of experience shopping for it, but I do have a house full of girls here and I see how they shop for it. And then how important it is in their day-to-day.
And so, it is a big market opportunity in a fairly resilient market. Obviously, with the pandemic and everything being closed down, one of Ulta's bigger advantages is having those onsite salons which, obviously, that traffic ceased to exist. But that's not the only part of the business, it's not the only dynamic of the business. I mean, they do have an e-commerce side of the business as well and a lot of relationships with folks out of the industry.
So, for me, I'm going to be really interested to see their take on the state of the consumer as they begin opening their stores back up. They are slowly but surely opening them back up. And, to me, they always just seem to be -- they give you a good sign as to how the consumer is feeling. And if they're starting to see folks willing to come back into the stores and go to the salons for appointments and whatnot, I mean, I think that'll just give us a better idea of maybe what we can look forward to here in the back-half of the year, assuming things keep progressing the way they do. So, I'll be keeping an eye on Ulta Beauty here earnings later this week.
But, Matt, I think that's going to do it for us this week. I appreciate you, as always, jumping in and talking shop with me.
Frankel: Of course. Hopefully, like I said, I get to see you soon; I know I say this every week, but hopefully, I get to see you guys in-person soon.
Moser: Sooner rather than later. We will work on it as hard as we can.
Remember folks, you can always reach out to us on Twitter @MFIndustryFocus, you can drop us an email at IndustryFocus@Fool.com, and let us know how things are going, let us know the stock you're buying, tell us the stocks that you're selling, or, hey, I mean, throw a show idea or two in there. If you've got a stock you want us to do a deep dive on. I can't promise to you we'll get to them all, but we certainly do appreciate the idea generation.
As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.
Thanks, as always, to our man, Austin Morgan, for making the magic happen behind the Zoom. For Matt Frankel, I'm Jason Moser, thanks for listening and we'll see you next week.
Jason Moser owns shares of Ameris Bancorp, DocuSign, Square, Teladoc Health, Twitter, and Wayfair. Matthew Frankel, CFP owns shares of Bank of America, Berkshire Hathaway (B shares), Goldman Sachs, Square, and US Bancorp and has the following options: short September 2020 $25 puts on US Bancorp. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), DocuSign, Live Oak Bancshares, MercadoLibre, Square, Teladoc Health, Twitter, Ulta Beauty, Wayfair, and Zoom Video Communications. The Motley Fool owns shares of Stoneco LTD. The Motley Fool recommends Ameris Bancorp and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), short September 2020 $70 puts on Square, short June 2020 $205 calls on Berkshire Hathaway (B shares), and short August 2020 $130 calls on Zoom Video Communications. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In this edition of Industry Focus: Wildcard, host Jason Moser and Fool.com contributor Matt Frankel start by discussing recent stock price action in the banking industry, and why some banks, like M&T Bank (NYSE: MTB) and Ameris Bancorp (NASDAQ: ABCB), are underperforming peers. I guess you could extrapolate this to a greater investing lesson, in that, these bigger banks that have more diverse revenue streams are going to be a little bit better off because they have other areas where they can, sort of, make up for weakness. And just as in investing, we think maintaining a portfolio of diversified holdings, you're going to have some that maybe don't perform as well as others in certain times, but that's kind of the idea behind diversification, it is being able to spread some of that risk around so that you can weather difficult storms. | In this edition of Industry Focus: Wildcard, host Jason Moser and Fool.com contributor Matt Frankel start by discussing recent stock price action in the banking industry, and why some banks, like M&T Bank (NYSE: MTB) and Ameris Bancorp (NASDAQ: ABCB), are underperforming peers. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), DocuSign, Live Oak Bancshares, MercadoLibre, Square, Teladoc Health, Twitter, Ulta Beauty, Wayfair, and Zoom Video Communications. The Motley Fool recommends Ameris Bancorp and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), short September 2020 $70 puts on Square, short June 2020 $205 calls on Berkshire Hathaway (B shares), and short August 2020 $130 calls on Zoom Video Communications. | In this edition of Industry Focus: Wildcard, host Jason Moser and Fool.com contributor Matt Frankel start by discussing recent stock price action in the banking industry, and why some banks, like M&T Bank (NYSE: MTB) and Ameris Bancorp (NASDAQ: ABCB), are underperforming peers. So, the big x-factor there is that banks like Ameris and M&T Bank don't have investment banking, which is kind of what's helping banks like Bank of America and JPMorgan Chase, kind of, weather the storm a little bit better, because a lot of parts of investment banking actually do better when the market is going crazy. Whereas banks like Goldman Sachs and Morgan Stanley are pretty much exclusively investment banks, which is why they're outperforming the sector so much right now, because investment banking is actually a pretty good business during times like this. | In this edition of Industry Focus: Wildcard, host Jason Moser and Fool.com contributor Matt Frankel start by discussing recent stock price action in the banking industry, and why some banks, like M&T Bank (NYSE: MTB) and Ameris Bancorp (NASDAQ: ABCB), are underperforming peers. So, the big x-factor there is that banks like Ameris and M&T Bank don't have investment banking, which is kind of what's helping banks like Bank of America and JPMorgan Chase, kind of, weather the storm a little bit better, because a lot of parts of investment banking actually do better when the market is going crazy. And in the mortgage side of things it's not that surprising that people are viewing this as a good time to either refinance or buy a new home. |
27833.0 | 2020-05-11 00:00:00 UTC | Monday's ETF Movers: XBI, KRE | ABCB | https://www.nasdaq.com/articles/mondays-etf-movers%3A-xbi-kre-2020-05-11 | nan | nan | In trading on Monday, the SPDR— S&P— Biotech ETF is outperforming other ETFs, up about 2.6% on the day. Components of that ETF showing particular strength include shares of Cytokinetics, up about 23.8% and shares of Allakos, up about 14.6% on the day.
And underperforming other ETFs today is the SPDR— S&P— Regional Banking ETF, down about 4.5% in Monday afternoon trading. Among components of that ETF with the weakest showing on Monday were shares of Ameris Bancorp, lower by about 8.4%, and shares of Peapack-gladstone Financial, lower by about 8.3% on the day.
VIDEO: Monday's ETF Movers: XBI, KRE
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Components of that ETF showing particular strength include shares of Cytokinetics, up about 23.8% and shares of Allakos, up about 14.6% on the day. Among components of that ETF with the weakest showing on Monday were shares of Ameris Bancorp, lower by about 8.4%, and shares of Peapack-gladstone Financial, lower by about 8.3% on the day. VIDEO: Monday's ETF Movers: XBI, KRE The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Components of that ETF showing particular strength include shares of Cytokinetics, up about 23.8% and shares of Allakos, up about 14.6% on the day. Among components of that ETF with the weakest showing on Monday were shares of Ameris Bancorp, lower by about 8.4%, and shares of Peapack-gladstone Financial, lower by about 8.3% on the day. VIDEO: Monday's ETF Movers: XBI, KRE The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Monday, the SPDR— S&P— Biotech ETF is outperforming other ETFs, up about 2.6% on the day. And underperforming other ETFs today is the SPDR— S&P— Regional Banking ETF, down about 4.5% in Monday afternoon trading. Among components of that ETF with the weakest showing on Monday were shares of Ameris Bancorp, lower by about 8.4%, and shares of Peapack-gladstone Financial, lower by about 8.3% on the day. | In trading on Monday, the SPDR— S&P— Biotech ETF is outperforming other ETFs, up about 2.6% on the day. Components of that ETF showing particular strength include shares of Cytokinetics, up about 23.8% and shares of Allakos, up about 14.6% on the day. And underperforming other ETFs today is the SPDR— S&P— Regional Banking ETF, down about 4.5% in Monday afternoon trading. |
27834.0 | 2020-04-29 00:00:00 UTC | 2 Smaller Banks to Watch and the COVID-19 Impact on Insurance | ABCB | https://www.nasdaq.com/articles/2-smaller-banks-to-watch-and-the-covid-19-impact-on-insurance-2020-04-29 | nan | nan | In this week's installment of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, take a deep dive into the latest earnings results from Live Oak Bancshares (NASDAQ: LOB) and Ameris Bancorp (NASDAQ: ABCB). The duo also discuss Travelers Insurance (NYSE: TRV) and how the COVID-19 pandemic could impact the insurance industry. Finally, Moser and Frankel discuss why Markel (NYSE: MKL) and Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) are on their radar this week.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on April 27, 2020.
Jason Moser: It's Monday, April 27th. I'm your host Jason Moser. On today's Financials show, we're going to dig into a few more earnings reports from small banks, we'll take a look at Travelers Insurance's most recent report to get a better idea of how the insurance industry is handling the current COVID environment. Of course, we've got a couple of stocks for you to watch this coming week. And joining me, as always, Certified Financial Planner Matt Frankel. Matt, how's everything going?
Matt Frankel: Hey, pretty good. Happy Monday to everybody listening. Hope you're having good weather, as we are in South Carolina.
Moser: [laughs] You know, Austin and I were talking about this just before taping. It seems like we're not having that same good weather, it's been kind of rainy here in Virginia in the past few days and it doesn't seem like it's really letting up, but who knows, maybe this is a sign of good things to come, maybe we're getting the bad weather out of the way first.
Frankel: [laughs] Yeah. Well, it's been in the 70s and sunny here. In South Carolina, and you used to live here, right?
Moser: Oh, yeah, grew up there.
Frankel: So, you know generally this time of year, it goes from cold immediately to about 100 degrees. [laughs] So, we're not having that this year, which is a really nice change.
Moser: [laughs] Yeah, there's normally no spring, you just go right from winter into summer. And then it's just like, what happened to spring? But it sounds like you're getting a little bit there, that's good. Hopefully, you're able to get out a little bit during this time. I mean, obviously, activity has ground to a halt.
But, Matt, last week we talked a lot about the big banks' earnings. You know, the big banks, JPMorgan, Bank of America, Wells Fargo, how those banks were dealing with the current environment here. This week we wanted to take a bit of a different direction and talk about how some of the small banks are doing, because we had a couple of earnings reports that came out for banks that we've covered on the show before. We had Live Oak Bancshares report and we also had Ameris Bancorp report as well.
So, let's jump right in, let's talk about Live Oak Bank. And this is a bank that you follow, it's one that I follow, and they announced earnings which -- it seemed like a pretty good quarter, we know they have a big focus on small business loans. And I mean, it's a tech-oriented bank with a pretty low capital structure, so to speak, no physical branches anywhere. But talk to us a little bit about Live Oak's quarter -- what stood out to you?
Frankel: Well, to say that they're a small business lender is, kind of, like a big understatement. They originate, just to kind of put it in context, they originated $1.3 billion in SBA loans -- Small Business Administration loans -- last year, that was almost double the No. 2 competitor. So, they're a pretty big deal when it comes to small business lending, they know the process and all that, which is giving them a really good advantage right now, which I'll get to in a second.
But just looking at the quarter. I mean, assets are up 30% year over year, deposits were up 32% year over year. If you're not too familiar, Live Oak is an online bank, they're very tech-focused. They have great profit margins on their loans, because they're a small business lender, about half of the portfolio is guaranteed by the government, because they're small business loans, that's just the nature of the product.
That's pretty nice. I mean, I bet a lot of other banks wish all their loans were government guaranteed and still profitable.
Moser: [laughs] Well, there are a lot of them, at least right now, that are having their loans somewhat guaranteed, because of the payroll protection program and other efforts the government is making to keep our economy afloat while it's ultimately shut down, right?
Frankel: Right. Well, Live Oak has that benefit even when we're not in a global health emergency, so you know, it's nice to have. And speaking of the SBA loans, we all know the Paycheck Protection Program loans. That was $350 billion of the original CARES Act bill, they just added $310 billion, I believe, to it. Live Oak is playing a pretty big role in that.
They announced that, as of their latestearnings call they'd closed almost 5,000 Paycheck Protection Plan loans -- it's kind of a tongue-twister.
Moser: [laughs] Yeah. 5,000, though, that's a good number.
Frankel: About 5,000 for almost $1 billion total. For a small lender, [laughs] that's pretty impressive to do in one quarter. When, like I said, their SBA loan volume in 2019, the whole year, was $1.3 billion. So, they want investors to know that they are well capitalized, they have about $1 billion of liquidity. They actually sold some of their existing small business loan portfolio during the quarter just for the purpose of shoring up the balance sheet. Because, I mean, we've mentioned this with the big banks, uncertainty is the name of the game right now.
We saw all the big banks posted pretty terrible profit numbers because they're building up their reserves in anticipation that losses might get pretty bad. We're seeing the same thing with Live Oak. I mean, it's obviously on a smaller scale than a Wells Fargo or something like that, but Live Oak set aside an extra $13 million to cover loan losses. I think they mentioned about a quarter of their clients have already requested and received loan deferrals during this.
And Live Oak, one thing to really keep in mind is they're a very industry-specific lender. Veterinary practices is one that they really focus on; just to kind of name a specific industry.
Moser: And craft brewers too, I saw, which interestingly enough, you know, I have been reading a lot lately about how craft brewers are really running into a buzz saw here, because, I mean, those businesses just rely on traffic. And no traffic, that really puts them between a rock and a hard place. They're literally just trying to buy any amount of time that they can.
Frankel: Right. So, craft brewers is one of their big ones that has potential exposure. Hotels, fitness centers are two other areas of the business. So, it's way too early to predict just how much these businesses will be affected longer. Like I said, they've already deferred most of their loan payments, in the troubled industries anyway. And historically, Live Oak has a really good record of making high-credit-quality loans, their debt charge-off rate was about one-third of what the average big bank was last year. [...]
It's way too early to predict what the actual impact will be. I guess, a lot of these are on six-month deferrals, whether or not that's going to be enough to get back to normal is a big question mark at this point. My hope is that all the banks are, kind of, planning for the worst, but in reality we're not going to get a worst-case scenario here when it comes to loan defaults, which eventually, the procedure in that case would be some of these reserves would be released over time and would show back up in the bank's earnings. But for the time being, they are being cautious. They're a big, big part of the Paycheck Protection Plan. I'm going to say that to myself, like, 10 times after this.
Moser: [laughs] The PPP.
Frankel: [laughs] The PPP loans, they're a big part of that. And while that's probably not going to produce a ton of interest income, it will, A. expand their business relationships, and 2, bring in a nice little stream of fee income, because these aren't fee-free loans, they're just forgivable loans that have low interest rates.
Moser: Yeah. And I mean, you make a good point there. And that while these PPP loans aren't some big profit driver, I mean, it does a couple of things for them. No. 1, it shows that they are able to be a part of the solution, they can be a reliable partner in a time of crisis. But also, there are relationships they can build from those loans. I mean, perhaps borrowers who didn't have a relationship with the bank before. And we've seen that, I mean, a lot of borrowers are having trouble with their primary banks getting exposure to that PPP program and so then they end up having to go to other banks, which ultimately can work out pretty well for those other banks, if they can end up bringing that level of service that customers really remember.
Frankel: Right. I mean, Live Oak is all about customer service, all about streamlined easy loan procedures, too, which is another thing that they can, kind of, showcase to these borrowers. Like I said, they are a small-business-focused lender, so this is what they do. I was reading the latest conference call transcript and they said something like, just one of the small -- in the SBA's loan programs, the manual is over 500 pages long. So, there's a lot of rules and regulations involved in these. And as the biggest SBA lender before the crisis, they had a lot less getting up to speed to do that as opposed to some of these other banks. So, I think this is going to be a net positive in the long run for Live Oak.
Moser: Yeah, it sounds like going into this. I mean, we obviously like this business going in, given the near-term challenges. Live Oak isn't the only bank, right? I mean, we're all kind of in the same boat here. All financial institutions are essentially in the same boat. So, it sounds like coming into this and when we ultimately get out of it, it sounds like Live Oak is a bank that you still like for the long haul, is that safe to assume?
Frankel: Yeah, for sure. And I mean, 30% year-over-year asset growth is a pretty impressive number, not that they're going to get that this year or -- have a great profit-wise year. But I mean, the stock is down 25% in 2020 and that's a lot better than a lot of the rest of the financial sector. So, I mean, the market is kind of reflecting that -- I don't want to say the pandemic is going to be good for them, but it could be -- I mean, the way they are part of the solution could be a positive catalyst for their business.
Moser: Yeah, I think that makes sense. And you know, we'll pivot over to Ameris Bancorp and talk a little bit about their earnings report, because I think there's a very similar theme here with Ameris, as was with Live Oak there. When you look at the actual numbers, the bank is performing very well. Total assets as of the end of March were at $18.2 billion, which was essentially unchanged from the end of the year. Total deposits of around $13.8 billion, that was a little bit lower than a quarter ago when they recorded just a little bit over $14 billion in deposits.
But you know, we were talking about that common theme with the big banks in their reports and the theme being reserves. All these banks are really preparing for the coming storm. And it sounds like Live Oak was the same way, certainly Ameris was, as well. Their current allowance for loan losses ended the quarter at $149 million -- that was up from $38 million at year-end. And so, you can see they were building up that reserve early on. And I think that makes a lot of sense, but the bank is still in a good capital position.
If we talk about that PPP program. And Ameris has lent $685 million under that program to just under 3,200 customers. And they're going to be participating in the second round here, too. They anticipate ultimately the same number of units of loans; so, around 3,200 units. Now, the dollar volume might be a little bit lower, but again, it kind of goes back to the smaller community and regional banks are finding ways to be a part of the solution.
And ultimately -- you know, management referred to this on the call for Ameris, when they were talking about the fact that there are plenty of customers out there where their primary banks were simply not allowing them to participate in that program. If they didn't get there in time, so they weren't able to receive the funding. And so, management has seen this play out, they are getting a lot of non-Ameris customers coming into Ameris' bank looking for help.
And ultimately, Ameris, they're proving to be one part of that solution. So, you can bring in borrowers who may not necessarily have been Ameris customers from the get-go, but they're finding that you really amp up that customer service -- you help these people in need -- it creates a relationship there. And it starts to give some of these customers this idea that, "Hey, maybe the big banks aren't the only solution, maybe there are other opportunities out there." So, I think they're seeing Ameris and Live Oak as two of those types of banks.
And we're seeing, again, in a very difficult time, the numbers are still holding up for Ameris. Tangible book value just a little over $20. And it was just down a tick from the end of the year. So, you can see, I mean, the stock today trading around $23, $24 dollars, it's been pretty volatile but it's trading just a little bit over tangible book value today. But we even saw it take a dip under that tangible book value over the quarter, which again, as a shareholder of Ameris Bancorp, I'm going to be hanging on to my shares. I really was noodling [laughs] buying a few more shares during that dip, but I'm also trying to be a little bit patient here.
Because I feel like maybe next earnings season might be a bit more telling because we get a better idea of how bad bad really is. But you know, at the end of the day, you've got a bank here, they have no exposure to oil and natural gas, I mean, you got to love that. They do have some modest exposure to hotels, never talking about that in the call. But all in all, a very diversified real estate portfolio.
And the acquisition of Fidelity, that merger that closed recently I think is going to be something that gives them a little bit more of that commercial exposure and diversity that will ultimately, I think, lead this bank to many happy days to come down the road here, especially as we work our way through what is obviously just a time of crisis for everyone.
So, yeah, again, I think with Live Oak and with Ameris, I think we're seeing a theme here, that big banks aren't the only solution. We're certainly seeing small, regional banks step up to the plate and show that they've got something to offer here, too. And I think that the Federal government realizes that, which is why they have the access to these PPP loans and whatever financial aid may come down the road, as we work our way through this coronavirus crisis.
Frankel: Yeah. And you make a good point about not putting too much stock in the first-quarter numbers, and that second quarter is going to be the most telling. Like we said with the big banks, January and February were, you know, largely pretty normal in terms of the U.S. economy.
I know when I was up there in February, the coronavirus was a thing, but it wasn't, you know, there weren't shutdowns, there wasn't, you know. We were in HQ that day and it wasn't really a thing yet.
So, you're seeing one month of, kind of, sort of, having an effect in the first quarter. The second quarter is going to be really interesting in that regard. And I mean, I will say, I wish I had bought shares of both of those in mid-March when they were trading for, like -- you know all banks were trading for pennies on the dollar at one point, so.
Moser: Yeah, they were. And I mean, I think we may see those days, again, that's certainly very possible. Now, I think that this quarter really shines a light on how healthy these banks really are, right? So, maybe we don't see the market react quite so negatively based on these reports that we saw this past quarter. I think they've proved their mettle a little bit here over this past quarter. And I think that we'll probably continue to see the same as the year plays out. I think, if the opportunity arises for either one of these two banks, I think that's going to be because of an overarching theme that's playing out on the overall economy, as opposed to just playing out on smaller banks, in particular.
But I do think that we're seeing this play out here, where these smaller banks are certainly stepping up and providing big solutions, for not only their current customers but for customers that they never had before. So, you said earlier, when we were talking about Live Oak, we're not saying that coronavirus is a good thing for these banks; I mean, it's simply not a good thing at all. But you can also see how this is going to be an opportunity for these banks, to not only grow their customer base but really to gain more credibility, to gain more respect in the overall banking environment and showing that big banks aren't the only solution in town.
And I think that with Live Oak and with Ameris -- I mean, these are two banks that you and I like a lot. And I think, when you look over these numbers for the quarter, it makes a lot of sense as to why we like them. You know, I think it's going to be a little bit tough in the near term, but I think these are two banks that will certainly emerge from this time, ultimately in better shape. And I think they're creating a lot of long-term goodwill with a lot of people.
Frankel: Yeah, and I would definitely agree with that. And the second quarter is going to be an interesting one, as you just said.
Moser: Yes, it will. Well, before we continue, just a reminder for all of you out there looking for more stock ideas that now is a great time to check out our Stock Advisor service where you get stock recommendations from David and Tom Gardner every month, you get Best Buys Now and a whole lot more.
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OK, Matt, pivoting away from banks for a few minutes, because we saw another big financial company out there report earnings recently, but this is the insurance space, another space that you and I like to follow closely. Travelers Insurance, the big red umbrella, they reported earnings and, you know, going through the release, going through the call, I leave this quarter feeling cautiously optimistic that Travelers is one of those strong companies that will emerge from this in a stronger position.
But you know, I will tell you, Matt, when I read through that call, I left with just this concern, it feels like to me the biggest risk for the foreseeable future for these big insurers is ultimately going to be COVID-related litigation. It sounds like the litigation has already started and it sounds like the litigation may only grow in time and ultimately that litigation is going to be revolving around coverage, right?
Insurance companies may be not necessarily covering virus-related losses based on the language in the contracts. Now, I'm not a lawyer, I won't even pretend to go down that rabbit hole, so to speak, but I do know insurance, I worked at an insurance company and understand how that works. And I could see litigation dragging out for a long period of time for all of these big insurers given the hardship that everybody is feeling today.
And that's not to take anything away from how the company performed, I think the company performed very well. What did you think about the quarter for Travelers?
Frankel: Yeah, I mean, the quarter is solid. Like we just said, that January and February were pretty normal. They had, they said, $86 billion worth of COVID-19-related charges, which is not that big of a number for Travelers in the grand scheme of things. But just kind of, to echo what you were just saying, we mentioned, I think, with one of the other insurers that a lot of insurance policies, we were talking about business interruption the other show about, I think, one of the mall REITs. And a lot of business interruption policies and workers' compensation policies and underemployment policies, things like that, specifically have language that exclude anything related to a virus. That's a big issue with some of these retailers who're having business interruption.
So, on the call, Travelers' CEO pretty much made it clear that they don't foresee anything changing retroactively with that. In other words, they don't think anyone's going to really have success adding virus coverage into a policy that specifically excluded viruses. But that's not to say people won't try, as you said. [laughs]
Moser: [laughs] Well, but, yeah, it's not just the virus, right? It's talking about -- I mean, the virus is the reason why we've ultimately been shut down, but the shutdown was more or less implemented by regulators, by the government. So, the argument could be made that it's not a virus loss, but it's a regulated loss. And I think that's where that litigation gets really murky. And I'm with you, in that, I feel like the burden to make that argument is pretty high, but you said it, I mean, it's not going to stop people from trying.
Frankel: Right. And there's a lot of other, kind of, interesting dynamics in Travelers' business, because as you know, they write insurance in a wide range of the insurance business. Just, for example, their auto insurance business, they're giving 15% rebate in April and May because people aren't driving right now. They're probably still coming out ahead in that. I mean, I'm driving a lot more than 15% less than I, you know, I mean, I think, I haven't put gas in my car since March.
Moser: I'm with you. And that was a neat point they made on the call there and being able to offer those rebates. But by the same token, they're not seeing the same level of losses because people simply aren't driving as much, you're not going to see as many high-speed accidents, so they can afford to give those rebates, because those losses aren't going to be there and as they would be in normal times, too.
Frankel: Right. So, the company said that there will be some COVID-19 losses, we already saw some, like I just mentioned, in the first quarter, but they said that their exposures will also decrease somewhat as well. And auto is probably the most easy to understand example of that. You know, they're going to have some COVID-19 losses, but exposure, like, you know, less driving means fewer auto accidents they have to pay out and things like that.
So, it's a big question, like I said, uncertainty is the name of the game here. So, it's a big question as to whether the COVID-19 losses or the reduced exposure wins in the end and whether or not the net losses or the net gains are going to move one way or the other. You know, the loss ratio, as they put it in the insurance business, whether that's going to be higher or lower as a result of this. Because those are two, kind of, competing dynamics here.
The company said they're going to make expense adjustments accordingly, so they're not worried too much about the impact. I mean, insurance companies deal with assessing risk and handling unknown situations. Obviously, this is an unprecedented crisis, but in terms of the impact to an insurance company and them navigating through this, is it really that much different than a major hurricane or whatever --
Moser: Well, yeah, the hurricane, they talked about tornado season pending or wildfires. I mean, there's a litany of opportunities for loss out there; this is clearly another one, but probably it's something that's not going to occur with the consistency of something like a tornado season or a hurricane season either.
Frankel: Right. So, I mean, it's an unprecedented situation in and of itself, but insurance companies are really good at navigating this. And like I said, there's a lot of things that are going to hurt the insurance companies and a lot of things that are going to help the insurance companies. Like, I can go on from auto insurance, but there's -- like, you know, I mean, workers' comp claims, fewer people are getting hurt at work. So, that's something that's going to be, you know, less an exposure. So, it's going to be interesting to see how it plays out for the rest of the year.
Moser: Yeah, it'll be one that we follow for sure. I mean, Travelers being one of the majors out there. I got to believe that they're going to be pretty well prepared going into this. They have a tremendous fixed-income portfolio that should help them get through this as well and protect them from some of that market volatility.
Real quick, Matt, I know you got to go, what is the stock you are watching this coming week?
Frankel: Yes, sorry, I got to stop early, because Dan Kline voluntold me to be on Fool TV with him this afternoon. [laughs] I'm watching Berkshire. I know I've mentioned that one a couple of times in this, but this week is going to be especially interesting, not just because they're having a fully online meeting for the first time ever. Obviously, I was supposed to go to Omaha, so obviously, that's not going to happen.
Online meeting is being live-streamed on Yahoo! Finance.
That morning, however, they're releasing their first-quarter earnings, and we'll get a first look at how Berkshire's cash hoard was affected by the first quarter. If you see that number go down, you can bet that Buffett had a pretty active quarter buying stocks. I'm hoping it went down. Pretty much my whole investment thesis with Berkshire is that he's really good at putting money to work at the right times. March was one of the right times, so I want to see that he put some money to work.
Moser: I think that's probably a pretty safe bet, but yeah, we'll have to wait and see. In line with the insurance, I'm going to be keeping an eye on Markel, their earnings report comes out on Wednesday. Focusing a lot on the same kinds of things we focused on with Travelers. It's less about the past quarter, more about how they see the rest of the year unfolding, and how, you know, it's going to look toward the lines of coverage that they write.
It'll be exceptionally interesting for them, because they're such a specialized underwriter. But yeah, certainly Markel will be another one on our radar, those earnings on Wednesday.
So, with that, Matt, I know you gotta get going. I appreciate you taking the time out this week and maybe you can kick some of that good weather down there in South Carolina up our way.
Frankel: I hope so, and I hope I can come up there myself with it, too.
Moser: Well. Soon enough, soon enough, right? Glass half full.
Frankel: Exactly.
Moser: Well, that's going to do it for us this week, folks. Remember, you can always reach out to us on Twitter @MFIndustryFocus or you can drop us an email at IndustryFocus@Fool.com.
As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.
Thanks, as always, to our man Austin Morgan for keeping it real behind the Zoom. For Matt Frankel, I'm Jason Moser, thanks for listening and we'll see you next week.
Jason Moser owns shares of Ameris Bancorp, Markel, and Twitter. Matthew Frankel, CFP owns shares of Bank of America, Berkshire Hathaway (B shares), and Markel. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Live Oak Bancshares, Markel, Twitter, and Zoom Video Communications. The Motley Fool recommends Ameris Bancorp and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), short May 2020 $120 calls on Zoom Video Communications, and short June 2020 $205 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In this week's installment of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, take a deep dive into the latest earnings results from Live Oak Bancshares (NASDAQ: LOB) and Ameris Bancorp (NASDAQ: ABCB). Moser: [laughs] Well, there are a lot of them, at least right now, that are having their loans somewhat guaranteed, because of the payroll protection program and other efforts the government is making to keep our economy afloat while it's ultimately shut down, right? And historically, Live Oak has a really good record of making high-credit-quality loans, their debt charge-off rate was about one-third of what the average big bank was last year. | In this week's installment of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, take a deep dive into the latest earnings results from Live Oak Bancshares (NASDAQ: LOB) and Ameris Bancorp (NASDAQ: ABCB). The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Live Oak Bancshares, Markel, Twitter, and Zoom Video Communications. The Motley Fool recommends Ameris Bancorp and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), short May 2020 $120 calls on Zoom Video Communications, and short June 2020 $205 calls on Berkshire Hathaway (B shares). | In this week's installment of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, take a deep dive into the latest earnings results from Live Oak Bancshares (NASDAQ: LOB) and Ameris Bancorp (NASDAQ: ABCB). And this is a bank that you follow, it's one that I follow, and they announced earnings which -- it seemed like a pretty good quarter, we know they have a big focus on small business loans. And we've seen that, I mean, a lot of borrowers are having trouble with their primary banks getting exposure to that PPP program and so then they end up having to go to other banks, which ultimately can work out pretty well for those other banks, if they can end up bringing that level of service that customers really remember. | In this week's installment of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, take a deep dive into the latest earnings results from Live Oak Bancshares (NASDAQ: LOB) and Ameris Bancorp (NASDAQ: ABCB). But, Matt, last week we talked a lot about the big banks' earnings. So, yeah, again, I think with Live Oak and with Ameris, I think we're seeing a theme here, that big banks aren't the only solution. |
27835.0 | 2020-04-24 00:00:00 UTC | Ameris Bancorp (ABCB) Q1 2020 Earnings Call Transcript | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-q1-2020-earnings-call-transcript-2020-04-24 | nan | nan | Image source: The Motley Fool.
Ameris Bancorp (NASDAQ: ABCB)
Q1 2020 Earnings Call
Apr 24, 2020, 9:00 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Good day and welcome to the Ameris Bancorp First Quarter 2020 Financial Results Conference Call. [Operator Instructions] Please note today's event is being recorded.
I would now like to turn the conference over to Nicole Stokes, Chief Financial Officer. Please go ahead.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Great. Thank you, Eric, 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 will discuss the details of our financial results before we open it up for Q&A.
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 result 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 development 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 opening comments.
H. Palmer Proctor -- President and Chief Executive Officer
Thank you, Nicole, and thank you to everyone who has joined our call today. Obviously, today's discussion is going to be a little bit different than prior quarters because these are unusual times and things are changing daily. As I've said in the press release during the first quarter, this has been unprecedented this quarter, given that we've had COVID, we had CECL, Fed cuts and the stimulus package, but I wanted to start off by talking about COVID-19 and, first and foremost, thanking our front-line and all our teammates for their herculean efforts to accommodate our customers and our communities.
Certainly our investment in technology that we've made over the years has served us well. We've got about 75% of our teammates working remotely. And more importantly, they're working effectively, including our call center, in this environment. All of our drive-thru locations are open and we've been able to perform business through the drive-thru. Our branch lobbies are obviously closed, except for appointment-only.
I am pleased to say that we've experienced about a 23% increase in the growth of our number of mobile banking customers since the beginning of the pandemic, and we've seen a lot of strong increases in the number of remote deposits taken through the mobile banking app as you would expect. But we continue to see people opening up, checking accounts via our online portal, and then also using our drive-thru facilities, and we believe that these are some of the positive impacts quite frankly that the pandemic may have created for us in terms of the future outlook, primarily in migrating a lot of the late adopters and hold out to digital banking. So we are pleased with that.
I'll say, I'll just emphasize that through the pandemic, we continue to serve our customers and our communities. Beginning on March 11th, we enacted our DR program, which allows borrowers impacted by the COVID-19 the opportunity to extend their payments for 90 days. And this is quite frankly the same program we enacted after the hurricanes, more specifically Irma and Michael. So we've treated these extensions similar to those which adhere to the published regulatory guidance.
As of April 15th, we provided payment relief to almost 5,400 customers totaling $2.2 billion of outstanding loans across all types in all markets. This equates to about 17% of total loans as referenced on the slide deck on Page 15 of the presentation. In addition, we've been an active participant in the Paycheck Protection Program, the amount of work that all the participating banks quite frankly have done to serve the customers during this time has been amazing. I've heard from many other CEOs talking about how much time and energy it took to get this program up and going, and not certainly echo those statements. But if you ever want to see the teams come together, this is a perfect example of that.
We were successful during the first round having about 3,200 loans approved for a total of $685 million. And then we expect to do about the same number of units during the second round, and hopefully the President will sign that around lunchtime today, and we'll get started on that. But as it pertains to capital, we have suspended our stock buyback program. We did purchase approximately $7 million earlier in the quarter before we suspended the program, but our focus remains on capital preservation and growing tangible book value as we look forward.
As it pertains to dividends, we are obviously very comfortable where we are today, but we'll continue to monitor that with the economy and the environment. Pleased to say Jon Edwards, our Chief Credit Officer, is with us today and he is available to take any questions after our prepared remarks. But I did want to hit a few main points in terms of credit before I turn it back over to Nicole for the financial performance.
Our annualized net charge-off ratio was 14 basis points of total loans. Our non-performing assets as a percentage of total assets increased slightly to 61 basis points, and that compares to 56 basis points last quarter. We have no exposure to oil and gas, and we've included additional details on our hotel and restaurant exposure in the slide deck of our investor presentation, as well as kind of shown you the diversification across all the loan types within our portfolio.
I'll stop there and turn it over to Nicole now to discuss our financial results.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Thank you, Palmer. For the first quarter, we earned $19.3 million or $0.28 per diluted share. That includes a $41 million pre-tax provision for loan loss expense and a $22 million pre-tax writedown of our mortgage and SBA servicing asset. Both of these items are largely due to general economic conditions driven by the COVID-19 pandemic and market interest rate, and are not a reflection of our underwriting standards which we adhere to throughout the cycle.
On an adjusted basis, we earned $39.2 million or $0.56 per diluted share, and that's when you exclude the merger charges, the servicing asset impairment, COVID-19 charges, some legal fees from the ongoing SEC investigations and the loss on sale of bank premises. It does not however exclude the large provision for loan loss expense related to the economic forecast and COVID-19 impact.
As Palmer mentioned, we implemented CECL on January 1 of this year. So, our Day 1 adjustment increased the allowance for credit losses by $91 million and reduced our capital by a little over $56 million. Our first quarter provision expense, or the Day 2 adjustment as it's been called, was $41 million. Approximately $37 million of that expense was related to loan credit losses and $4 million was an increase for unfunded commitment. We had approximately $4.4 million of net charge-offs during the quarter, and our ending allowance for loan loss at March 31 was $149.5 million compared to $38.2 million at the end of the year. Including the unfunded commitment reserve, our total allowance for credit losses was $167.3 million at March 31 compared to $39.3 million at the end of the year. Our adjusted return on assets in the first quarter was 87 basis points, which was a decrease from the 147 basis points reported last quarter, and our adjusted return on tangible common equity was 10.98% compared to 18.45% last quarter. Those declines in these ratios are due to the increased provision for loan loss expense just described.
Tangible book value declined $0.37 from $20.81 to $20.44 during the quarter. The CECL Day 1 impact was $0.81 of dilution. That was partially offset by the $0.12 of retained earnings, $0.31 of unrealized gains in the securities portfolio and $0.01 from everything else, including the stock buyback completed during the quarter before it was suspended. Out tangible common equity ratio decreased 15 basis points to 8.25% from 8.40% at the end of the year.
Our net interest margin declined by 16 basis points from 3.86% to 3.70% during the quarter. Our yield on earning assets declined by 26 basis points, while our funding costs only decreased 9 basis points. However, our total interesting-bearing deposit cost decreased 12 basis points as we continue to stay focused on deposit cost. We saw a decline in accretion income compared to last quarter because, if you recall, we had a large acquired non-performing loan that was resolved last quarter, and that non-accretable discount came into income through margin. Going forward under CECL, those similar circumstances, those favorable outcomes would run through provision instead of margins.
Our core bank production yields declined to 4.55% for the quarter against 4.70%. On the deposit side, we continued the momentum on non-interest-bearing deposits and improved our mix so that non-interest-deposits now represent over 30.5% of our total deposit compared to 29.9% at the end of the year and 28% last year -- the same time last year. Non-interest-bearing deposit production was over 27% of our total deposit production. And excluding the writedown of mortgage and SBA servicing assets, our growth in non-interest income was exceptional during the quarter. Our mortgage group continues to have strong production and earning due to the interest rate environment. Excluding the MSR writedown during the first quarter, revenue in our retail mortgage division grew over 40%, while the non-interest expense in that division grew just a little over 11%, causing significant improvement in their efficiency ratio. We also saw an increase in the gain on sale percentage as we expected. It went up to 2.88% this quarter, up from 2.60% last quarter.
For the company, our adjusted efficiency ratios increased to 59.87% for the quarter compared to 55.61% last quarter. The reduction in net interest income from the margin compression accounted for about 45% or 190 basis points of the increase. Total non-interest expenses were $138.1 million. However, when you exclude those adjusted management items such as COVID-19, merger and conversion, our adjusted non-interest expense was $135 million, up about $16.8 million from last quarter. Approximately $4 million of that increase was in the lines of business and are attributable to income growth mostly in the mortgage area that I just discussed.
As you can see on Slide 11, the remaining $13 million of increased expense is related to the core bank and administrative functions and includes things such as close to $3 million of FDIC insurance that we didn't have in the fourth quarter because of the credit, $2 million of additional audit and legal fees, almost $2 million of cyclical payroll taxes and 401(k) match that are always elevated in the first quarter, a little over $1 million of problem loan and OREO expense and $1 million related to FDIC call back. Both of those -- majority of those are related to one of the loss share agreement, and then $1 million of increased fraud, forgery and DDA charge-offs. Many of these items are not expected to reoccur in future quarters. We're pleased with where we are in the fidelity cost savings, but we're committed to cost saving strategies and improving our efficiency ratio to offset that margin squeeze.
On the balance sheet side, we were pleased with our organic growth both on the loan and deposit side as our loan-to-deposit ratio ended at about 94.5%. Organic loan growth this quarter was $275 million -- a little over $275 million or just about 8.5% annualized. The details of that production is in the investor presentation, but it was split among our bank segment and our lines of business. Our total deposits declined by $182 million, but we reduced our broker deposits by almost $200 million. So really core deposits grew during the first quarter, which is when we usually have seasonal run-off of municipal and ag deposits.
We remain focused on core deposit growth and, as stated earlier, our non-interest-bearing deposit production was over 27% of our total deposit production, which is exceptional. We continue to be well capitalized and feel comfortable with our capital level, and our liquidity position remained strong. As Palmer mentioned earlier, we were approved through the PPP LS program and plan to use that to fund the PPP loans. In addition, our current liquidity ratio is over 21%, which is more than double our policy minimum, and we had ample liquidity available to us.
With that, I'll turn the call back over to Palmer for closing comments before the Q&A.
H. Palmer Proctor -- President and Chief Executive Officer
Great. Thank you, Nicole. Q1 was certainly an interesting quarter when you think about it, January and February for everybody is showing great promise for growth in earnings, and along came March with COVID. And now, we are all focused obviously on the safety and security of our teammates and our customers. And while we're certainly operating in a new world, I think it's important for everyone to think in terms of probabilities and not binary outcomes. At Ameris, we remain well-capitalized, well-focused and well-positioned to ride out the storm and of course we're in this for the long haul, and I remain very confident in our ability and our strength to get through this.
Now, I'll turn it back over to Eric now so we can jump into any questions the group might have.
Questions and Answers:
Operator
Thank you. [Operator Instructions] Our first question today comes from Tyler Stafford of Stephens. Please go ahead with your question.
Tyler Stafford -- Stephens, Inc. -- Analyst
Thanks for taking the question.
H. Palmer Proctor -- President and Chief Executive Officer
Good morning, Tyler.
Operator
I think we may have just lost Tyler. Oh, there he is.
Tyler Stafford -- Stephens, Inc. -- Analyst
Can you guys hear me?
Operator
Tyler, we can hear you.
Tyler Stafford -- Stephens, Inc. -- Analyst
Okay. Perfect. Well, good morning, and thanks for taking the questions. I wanted to start on credit, for either Palmer or Jon. And just, I guess, to better understand your assessment of the risk of the portfolio today, you've got -- obviously you've built the reserve this quarter, and you've got some portfolios that historically don't have any losses, and then others that do. Just where do you see the biggest potential loss content driving from and then conversely can you highlight some of the areas that have historically not had any losses that you expect to withstand the storm relatively better?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Tyler, sure, we'll take that. The portfolio, we've spent a number of years remaking the portfolio into what it is today, well-diversified, quality sponsors, good equities, in the right places, in the right deals, I have confidence that our portfolio is going to withstand this in terms of concern or questions, I guess, we've got an unprecedented time in what comes out on the backend of this is what we don't know yet. So, will there be changes to codes in hotels that are going to have to be handled and things of that nature.
So, my focus really right now kind of relates to our retail portfolio, and that includes accommodation, that includes the individual store locations, the strip centers, anchored stuff. I mean, we've got -- on that side, I'm not -- we've had a lot of our customer base that has taken advantage of the payment extensions. And so, we really need to see -- we really need to see the retailers back open customers in and business getting back to usual. I mean, that sounds pretty obvious, but I mean that's where it lies at the moment.
H. Palmer Proctor -- President and Chief Executive Officer
And Tyler, the only thing I'll add to that is, I do think that when you look at the path of the virus and the economic recovery, I don't think it's a one-size-fits-all. I think a lot of it is going to be specific to certain geographies. Obviously, as many of you know, Georgia is opening back up today for the most part. So it'll be an interesting test case quite frankly to see how everything performed. But people are anxious to get back to work. I don't think people fully appreciate the long-term damaging effects that this pandemic has had on companies, those certain types of sectors long-term, and I think that's to come. I think there are certain sectors that will immediately get back into business, I don't want to say they'll rebound to where they were, but I think there's going to be a lot of pain to be felt longer term than most people anticipate as we look out over the next several quarters.
Tyler Stafford -- Stephens, Inc. -- Analyst
Okay. Great. Jon, maybe I guess sticking with you or Nicole, I was hoping you guys could provide a little color on the underpinnings of your CECL assumptions and what went into the -- especially the economic forecasted portion of the reserve build this quarter?
Jon S. Edwards -- Executive Vice President and Chief Credit Officer
Certainly. So we use the Moody's forecast, that was March 27th date, I believe. I know you all have heard that over and over. That was the date that we utilized for the forecast model. We looked at several scenarios, of course, that we believe had -- we used some judgment after sort of taking that model at its pace to determine whether we thought things would be a little better, a little worse or whether that model was right on the money. So, of course, we made some adjustments. I don't think at that time the full impact of many of the government programs, you can list them out from the PPP to the stimulus checks, the payment extensions that of course the banks have made, the SBA stepping up to make payments for those loans for six months. All of that was -- we needed to consider the impact of that, and when that might would impact the loan portfolio. So we exercised a little judgment on the scenarios that we reviewed and determine the one that we felt like was most representative of the forecast period that we were looking at.
So that's the one we went with. We looked at -- and Nicole and I have been talking about it from the most severe one that we reviewed for the upper band of the seasonal range that we reviewed was about $180 million in terms of the loan loss reserve and another $29 million in unfunded, so $210 million-ish. And so, we were within those $43 million on the upper hand, but we were kind of right in the middle of the ranges that we reviewed based on that model.
Tyler Stafford -- Stephens, Inc. -- Analyst
Okay. That's helpful, Jon. And then lastly, Nicole, I wanted to shift gears over to the expenses. Obviously lots of moving pieces here this quarter, but they were kind of well ahead of expectations. And I appreciate the details in the slide deck of what potentially may fall out in the run rate here. And I get that expenses from the mortgage comp inflated, but it does look like those other expenses were higher as well. So, can you just kind of help us better triangulate kind of the -- what should stick around, what's going to be in the run rate, what's going to fall out and kind of how you see the expense and efficiency migration kind of moving forward throughout the year?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Sure. I appreciate that, Tyler. So -- and hopefully on Slide 10 in the presentation, I tried to break that down. I did go over fairly quickly in the script. So, about $4 million of the increase was related to mortgage. And when you look at the income statement for mortgage, that number -- the $34 million, that excludes -- I mean, that includes the MSR writedowns. So if you added that back into the segment mortgage and then look at their -- their expenses went up about $4 million, but their income increased significantly more than that. And that's really where we were able to finish the cost saves in the mortgage area, and didn't really get their efficiency going.
So, inclusive of that $4 million, there was about another $30 million -- about $3 million of it with the FDIC insurance that we didn't have in the fourth quarter because we had the credit. The $2 million is increase in audit and legal fees that we don't anticipate recurring, some of that had to do with the end of the year audits, and some additional testing and some additional work that went in because of the material weakness. The payroll taxes in the 410(k) match, that's always very cyclical and has always increased in the first quarter. The problem loan, OREO and the FDIC loss share callback, those as well, those were related to one of the loss share agreements that expired and there was some lingering expenses that were deemed -- that were not going to be reimbursed by the FDIC, and then also some additional callback.
And then, the fraud, forgery, DDA loss, that was about almost close to $1 million increase that we are diligently working on -- working through, I mean there were some things. Sometimes you can't -- I hate to say like this, but you can't control some of the fraud and the forgery or DDA loss. And we are certainly very cognitive of that, and we put additional resources toward that. As a management team, we're committed to continually looking for cost saves and to become more efficient and to use technology, especially knowing that we have that margin squeeze that we need to -- we either have to grow revenue or reduce expenses to get our efficiency ratio back in line. We're very cognizant of that and we're reacting to that actively.
Tyler Stafford -- Stephens, Inc. -- Analyst
Okay. So if I just, I guess, add up some of those items that you highlighted here on Slide 10, is that around $4 million to $5 million that should not persist in the run rate going forward, is that a rough ballpark?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
I would say, it's closer to $7 million to $8 million...
Tyler Stafford -- Stephens, Inc. -- Analyst
Okay.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
...the increased audit, the payroll taxes, the problem loand and FDIC and the fraud.
Tyler Stafford -- Stephens, Inc. -- Analyst
Okay.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
And obviously the FDIC insurance is recurring.
Tyler Stafford -- Stephens, Inc. -- Analyst
Got it. Okay. So, 1Q is inflated by $7 million to $8 million and should fall out. Okay. [Speech Overlap] Go ahead.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Actually on this slide, I had it broken down even more all the way down to some items that were like $200,000 that I've decided that was way too granular, and it really caused up [Phonetic] the slide, but there are some other things that were smaller and we still had some consulting fees related to CECL that will go away. We had some -- we actually had about $200,000 of an FHLB prepayment penalty that we were able to reduce that when the rates fell so quickly. And we already recouped that. So there was some other noise in there that were smaller pieces that would add up to get you closer to the $9 million to $10 million.
Tyler Stafford -- Stephens, Inc. -- Analyst
Okay. Very helpful. Thanks, Nicole.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Great. Thank you, Tyler.
Operator
Our next question will come from David Feaster of Raymond James. Please go ahead with your questions.
David Feaster -- Raymond James -- Analyst
Hey. Good morning, guys.
H. Palmer Proctor -- President and Chief Executive Officer
Good morning, David.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Good morning.
David Feaster -- Raymond James -- Analyst
I just wanted to follow-up on the CECL discussion and the factors that drove it. I mean, I guess, given your commentary, Palmer, and just some of the continued weakness in economic data that we've got in the second quarter, I guess, how do you think about future reserve build near-term? Do you think you maybe get toward the higher end of that range that you were just talking about?
H. Palmer Proctor -- President and Chief Executive Officer
Well, we will obviously continue to watch the economic forecast that -- from Moody's that we adhere to for CECL. I will say -- and we will make the adjustment as needed, of course, based on our portfolio. I will say, and I did mention Tyler is that there is a -- we're still at $50 million worth of accretable discounts that are in the portfolio that are there to help support the reserve, if necessary, on those particular loans. So, there is an additional piece of that. But I think it's a little early to see as we are maybe on the cusp of reopening certain places at least here in Georgia to know for certain that we would need to have a reserve build up to that range. But obviously we will watch it closely enough and make the adjustments as necessary.
David Feaster -- Raymond James -- Analyst
Okay. That's helpful. Thank you. And then, just on the PPP program, appreciate the commentary that you kind of expect a similar size in the second round. Are you talking in terms of dollars or loans? And then, I guess, generally are you looking at this as a way to gain share or are you only focused on your existing clients and are you using this as a way to potentially drive deposits as well?
H. Palmer Proctor -- President and Chief Executive Officer
Well, I will tell you, the second round will be -- what I quoted there was more on the units, not the dollars.
David Feaster -- Raymond James -- Analyst
Okay.
H. Palmer Proctor -- President and Chief Executive Officer
The second round, what we found is the dollar limit is actually lower than the first round. But we have done a very good job, the team has been focusing in on taking care of our clients first and foremost, and offering this program. And we do have some external non-customers too that participated in the program. But the majority of the loans that we've extended so far are existing customers with deposit relationships. They don't have a deposit relationship. Certainly this is a prime opportunity to ensure that you've got that deposit relationship for all the banks.
David Feaster -- Raymond James -- Analyst
Okay. That makes sense. And just last one from me, and there's a lot of moving parts that just -- with FHLB balances being up, lower rates, CECL, just any commentary that you could provide us on the core NIM to help us think through how that might progress going forward, just in light of all the moving parts would be helpful?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Sure. This is a Nicole. That's a great question, David. I'm going to be cautious on guidance, but I will tell you that since mid-single digit compression is possible going forward, and I'll split it up into kind of three components. First, on the loan side. About half of our variable rate loans have floors and about 75% of those have hit the floors. Production held in at 4.55% compared to 4.70% last quarter, and early slow -- early pay-offs have slowed because of the economy. So those three things all affect the margin going forward.
On the funding side, you think about the Fed cuts -- the drastic Fed cuts coming in very, very late in the quarter. We made wholesale deposit reductions in March when the Fed cut. And we really continue to grind down any remaining above-market deposits down at the -- kind of the Fed is that zero rate environment, it becomes more acceptable kind of in the competitive landscape. In addition, we have a CD book that's repricing around 70 basis point average to where we are right now. And we're able to retain -- historically we've been retaining about 75% of that as it reprices down. And then, you mentioned FHLB, that's a great point. The first quarter was about 1.62%, and that's dropping to about 50 basis points. I already mentioned about $200,000 are prepayment penalty that was a non-interest expense in order to get that to reprice down.
And then the third component that I wanted to talk about was the PPP program, and the impact that that would have on our margins. We've put in a slide deck kind of a breakdown of the fee categories. About 50% of ours are the 3% loans, about roughly 15% or so is the 1%, and then about 35% to 37% is the 5%. So that gives us an average fee of about 3.44%. I know that the government has said these could be longer-term, but we've done all of ours basically two years. And that would be the technical duration. We believe that they are going to pay off as the program anticipates that they will pay off less than that. So, if we assume the weighted average duration of the year, that would be a 3.44% fee, plus a 1% rate. And we're going to spend that with the PPP program at 35 basis points. So that nets about 4% to 4.50% yield on $685 million of loan growth. So that will also affect the margin. So those are kind of three key components looking at the margin going forward.
Does that help clarify or maybe more color to what you wanted?
David Feaster -- Raymond James -- Analyst
No, that's very helpful. So you're thinking the PPP loans will stay on closer to a year?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
I don't -- I'm being very -- and I think -- I would [Indecipherable] -- I mean I think that the expectation for most is that these are six to nine months. The technical duration is two years for us, or the coupon duration is two years. So I kind of went middle of the road on that and say, if we average the duration of a year, assume that that pay comes in over a year, that would be 3.40 -- around 3.44 [Phonetic].
H. Palmer Proctor -- President and Chief Executive Officer
And David, it will be interesting too to see how the secondary market opens up for the -- potentially for the sale of some of these. And if it allow the banks to sell the loans or to retain them, but that's yet to be seen.
David Feaster -- Raymond James -- Analyst
Absolutely. That's great color. Thank you very much.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Thank you, David.
Operator
Our next question will come from Woody Lay of KBW. Please go ahead with your questions.
Woody Lay -- KBW -- Analyst
Hey. Good morning, guys.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Good morning, Woody.
Woody Lay -- KBW -- Analyst
Hey. Just a follow-up on the margin. You mentioned CDs were repricing about 75 basis points lower. I was just curious what percent of the CD portfolio was set to reprice in 2Q and what percent would reprice in 2020?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
I do not know that I have that exact number in front of me, Woody. But, I -- actually, I do, I'm sorry. So you need to know -- you want o know how much it's in Q2? About 20%. And then the remaining for 2020?
Woody Lay -- KBW -- Analyst
Yeah.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Greater than 50%.
Woody Lay -- KBW -- Analyst
Okay, that's great. Thanks for that. And then, looking at the loan deferral program, I was just curious for any color surrounding the pace that these deferral requests came in. I would assume it was front-loaded around the mid-March period when the program was first initiated. But are you starting to see a slowdown in these requests over the past couple of weeks?
H. Palmer Proctor -- President and Chief Executive Officer
That's a great question. The answer is absolutely. In the first two weeks, we probably have had 75% of what we did. And it has everyday seems to be less and less, but it is -- the pace of that is well below what it was in that first two weeks.
Woody Lay -- KBW -- Analyst
Okay. That makes sense. And then, last for me, it was interesting to see the 23% increase in the mobile banking users since self-quarantine. I was wondering if you have a sense if consumer behavior might be changing long-term. And if so, would you reconsider Ameris' brand strategy, especially in the Atlanta MSA where Fidelity had significant scale in that market? So I was just curious around that.
H. Palmer Proctor -- President and Chief Executive Officer
Yeah, absolutely, the answer to that. And I think, what's encouraging for us is, as I mentioned in my comments earlier, there were a lot of late adopters to the digital technology. And a lot of it had been forced to utilize that in today's environment, and quite frankly have become accustomed to it and like it. And I think it kind of changes behaviors across the board in many of our markets. And I think all banks right now are realizing they can do a lot more with less in terms of their full scope branches. So you may find branches that you may keep open, but it may be drive-thru only. And then you can utilize the lobby for other initiatives, for instance, the mortgage office or investment group rather than having the full overhead and staffing in the branches. But branch optimization is something that all banks are looking at now. And this is a good opportunity for us to take a look at it.
Woody Lay -- KBW -- Analyst
That's really interesting. Thanks, guys. That's all I had.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Thank you, Woody.
Operator
[Operator Instructions] Our next question will come from Christopher Marinac of Janney Montgomery Scott. Please go ahead with your question.
Christopher Marinac -- Janney Montgomery Scott -- Analyst
Hey, good morning. Just want to drill down on the large amount of deferrals. How do you think about that as it pertains to risk ratings in the portfolio? Are these loans that kind of come and go from risk ratings or would they ultimately become kind of future classified? Just kind of curious how you think about that in the big picture.
Jon S. Edwards -- Executive Vice President and Chief Credit Officer
Well, it's a great question. And my take on the grading, and you see it in the press release and not so much in the slide deck, but is an increase -- you can see an increase in what is our grade 5, which is the lowest pass grade. I felt like that we needed to identify if there was weakness in the industry or the borrower to go ahead and make a great change on it. But that doesn't necessarily mean that those are going to the watchlist this next quarter. We're trying to be very purposeful in how we deal with customers and what their issue is, and so we will evaluate those as we go. And several -- the deferrals, I know Palmer has made this comment in the past, several, what he would say, very strong customers took advantage of the payment deferral because of the fact that when it was available and it was prudent to conserve cash during this period of time. So I don't it's necessarily just was an automatic negative across the board is what I'm trying to say. We didn't want to just say everybody is treated the same, but because of just looking at them as they came available, we did make some movement on the internal grades but within the past category.
I don't know -- I'm going to tell you that 20% of those will migrate on to the watchlist for whatever. But when the 90 days is up and we have to consider whether to extend that further, we'll know more about -- hopefully by that time, we'll know more about the economics, the reopening of the economy and so on and so forth to be able to make a little bit better judgment.
Christopher Marinac -- Janney Montgomery Scott -- Analyst
Okay.
H. Palmer Proctor -- President and Chief Executive Officer
Chis, this is Palmer. I think, during the last downturn, deferment was kind of a bad word. And I think the difference is in this go around is, I view it more as a positive, especially when you start seeing a lot of these in front-end loaded because these are generally companies that are being proactive rather than reactive and in anticipation of preserving liquidity and cash flow, and that's really what we saw a lot of our commercial customers doing on the front-end, similar to a lot of the drawdowns you're seeing on some of the lines of credit. But to me that's good cash management for them. And I view that as a positive as opposed to Alaska around where you were getting the call at the 11th hour. And all of a sudden they couldn't pay. So, if we start seeing this continue to escalate in terms of the percentage of deferment, I think that takes it into a different category. But right now, I think a lot of this was good business planning on part of a lot of our companies.
Christopher Marinac -- Janney Montgomery Scott -- Analyst
Got it. Okay. That's very helpful. I appreciate both your comments there. And I know it's early, but can you talk about kind of the new opportunities you're seeing with customers either your existing ones where you can deepen your wallet or just even new customers coming in the door that are getting overlooked by your competitors?
H. Palmer Proctor -- President and Chief Executive Officer
Well, the biggest opportunity we've got right now is probably the PPP plan and not so much in terms of participating in the plan as there are a lot of non-customers that are upset with their primary banks that were not able to allow them to participate in the program or they did not receive funding. So, we have received and have accepted numerous, I touched on earlier, the non-customers that we had allowed to participate in the program. And the way that work was, you'd receive a call and several of these are meaningful companies with meaningful deposits, and they had not gotten any response or communication from their primary bank, and it's one of the situations that listen, if you can get us in this plan, we will move our entire relationship over. And we have certainly taking advantage of that. I think that's one of the benefits a lot of the smaller banks will have and regional banks will have from some of the other competition.
So we've capitalized on that. We certainly will capitalize on the growth from the PPP plan. Mortgage continues to be a busy bright spot for us. And quite frankly, when I look at the -- even the commercial opportunity, companies right now are open to having discussions with other banks, and we certainly keep that in mind from a defensive posture as well. But I think you'll find that while the growth component may not be there as much as we'd all like for banks as we look over the next couple of quarters, the retention component is going to be far more favorable, so you won't have a run off that we had all been experiencing earlier this year and in the fourth quarter of last year. So, I think retention is key, and quite frankly this environment kind of allows us to do a better job of the retention fees. We've seen it on the deposit front. We've also seen it on the renewal front when it comes to loans and competition.
Christopher Marinac -- Janney Montgomery Scott -- Analyst
Great. That's very helpful. And then, just one quick one for Nicole. You mentioned the liquidity, I think they double your policy. Does that sort of stay in effect, Nicole, this quarter or do you think that will kind of add back down as this quarter plays out?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
No, I hate to give any guidance because if you had asked me last quarter, if we would have had a pandemic, I would have never said yes. So, we anticipate keeping our liquidity keeping as fluid as can for a little while so we get through this.
Christopher Marinac -- Janney Montgomery Scott -- Analyst
Got it. That makes sense. Thanks very much.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Great. Thank you, Chris.
Operator
[Operator Closing Remarks]
Duration: 42 minutes
Call participants:
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
H. Palmer Proctor -- President and Chief Executive Officer
Jon S. Edwards -- Executive Vice President and Chief Credit Officer
Tyler Stafford -- Stephens, Inc. -- Analyst
David Feaster -- Raymond James -- Analyst
Woody Lay -- KBW -- Analyst
Christopher Marinac -- Janney Montgomery Scott -- Analyst
More ABCB analysis
All earnings call transcripts
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp (NASDAQ: ABCB) Q1 2020 Earnings Call Apr 24, 2020, 9:00 a.m. Operator [Operator Closing Remarks] Duration: 42 minutes Call participants: Nicole S. Stokes -- Executive Vice President and Chief Financial Officer H. Palmer Proctor -- President and Chief Executive Officer Jon S. Edwards -- Executive Vice President and Chief Credit Officer Tyler Stafford -- Stephens, Inc. -- Analyst David Feaster -- Raymond James -- Analyst Woody Lay -- KBW -- Analyst Christopher Marinac -- Janney Montgomery Scott -- Analyst More ABCB analysis All earnings call transcripts {%sfr%} 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. But we continue to see people opening up, checking accounts via our online portal, and then also using our drive-thru facilities, and we believe that these are some of the positive impacts quite frankly that the pandemic may have created for us in terms of the future outlook, primarily in migrating a lot of the late adopters and hold out to digital banking. | Operator [Operator Closing Remarks] Duration: 42 minutes Call participants: Nicole S. Stokes -- Executive Vice President and Chief Financial Officer H. Palmer Proctor -- President and Chief Executive Officer Jon S. Edwards -- Executive Vice President and Chief Credit Officer Tyler Stafford -- Stephens, Inc. -- Analyst David Feaster -- Raymond James -- Analyst Woody Lay -- KBW -- Analyst Christopher Marinac -- Janney Montgomery Scott -- Analyst More ABCB analysis All earnings call transcripts {%sfr%} 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Ameris Bancorp (NASDAQ: ABCB) Q1 2020 Earnings Call Apr 24, 2020, 9:00 a.m. ET Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks: Operator Good day and welcome to the Ameris Bancorp First Quarter 2020 Financial Results Conference Call. | Operator [Operator Closing Remarks] Duration: 42 minutes Call participants: Nicole S. Stokes -- Executive Vice President and Chief Financial Officer H. Palmer Proctor -- President and Chief Executive Officer Jon S. Edwards -- Executive Vice President and Chief Credit Officer Tyler Stafford -- Stephens, Inc. -- Analyst David Feaster -- Raymond James -- Analyst Woody Lay -- KBW -- Analyst Christopher Marinac -- Janney Montgomery Scott -- Analyst More ABCB analysis All earnings call transcripts {%sfr%} 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Ameris Bancorp (NASDAQ: ABCB) Q1 2020 Earnings Call Apr 24, 2020, 9:00 a.m. As you can see on Slide 11, the remaining $13 million of increased expense is related to the core bank and administrative functions and includes things such as close to $3 million of FDIC insurance that we didn't have in the fourth quarter because of the credit, $2 million of additional audit and legal fees, almost $2 million of cyclical payroll taxes and 401(k) match that are always elevated in the first quarter, a little over $1 million of problem loan and OREO expense and $1 million related to FDIC call back. | Operator [Operator Closing Remarks] Duration: 42 minutes Call participants: Nicole S. Stokes -- Executive Vice President and Chief Financial Officer H. Palmer Proctor -- President and Chief Executive Officer Jon S. Edwards -- Executive Vice President and Chief Credit Officer Tyler Stafford -- Stephens, Inc. -- Analyst David Feaster -- Raymond James -- Analyst Woody Lay -- KBW -- Analyst Christopher Marinac -- Janney Montgomery Scott -- Analyst More ABCB analysis All earnings call transcripts {%sfr%} 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Ameris Bancorp (NASDAQ: ABCB) Q1 2020 Earnings Call Apr 24, 2020, 9:00 a.m. It went up to 2.88% this quarter, up from 2.60% last quarter. |
27836.0 | 2020-04-15 00:00:00 UTC | Warren Buffett's Moves and Big News for Fintechs | ABCB | https://www.nasdaq.com/articles/warren-buffetts-moves-and-big-news-for-fintechs-2020-04-15 | nan | nan | We recently learned that Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) sold shares of three of its major stock holdings. Is Warren Buffett losing faith in these investments, or is there more to the story? And we recently found out that some of our favorite fintech companies like PayPal (NASDAQ: PYPL) will be participating in the $350 billion Paycheck Protection Program.
Finally, host Jason Moser and Fool.com contributor Matt Frankel, CFP, answer some listener questions and discuss why they're watching JPMorgan Chase (NYSE: JPM) and Live Oak Bancshares (NASDAQ: LOB) this week.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on April 13, 2020.
Jason Moser: It's Monday, April 13. I'm your host, Jason Moser, and on today's Financials show, we're going to take a look at fintech's growing role in the coronavirus response. We're going to dig into why Warren Buffett is selling stocks, and we got some listener questions to get to as well as some stocks that we're watching here for the coming week.
Joining me, as always, Certified Financial Planner Mr. Matt Frankel. Matt, did you have a good weekend?
Matt Frankel: Pretty good. I'm about a month past needing a haircut, so other than that, I'm doing all right. I'm getting close to letting my wife buzz my hair.
Moser: You know, I think we're all probably getting to that point. [laughs] I was thinking at one point, it actually crossed my mind to take my beard trimmer to my head, but then I thought, maybe that wouldn't be the best idea. I think that might result in a broken beard trimmer, so I'm just going to kind of just kind of let it go until we get back to work, you know, whenever that may be.
Frankel: Yeah, I'd appreciate any home hair-cutting tips our listeners might want to tweet at us.
Moser: Yeah, absolutely. We'll make sure to get that email address and Twitter for you out there [laughs] by the end of the show for you.
Well, let's jump into really the lead story today. This is some news that broke over the weekend, and it's not really a surprise. We were hoping this would materialize. But the news came out over the weekend that PayPal and Intuit, among others, have been approved by the small business administration to take part in the paycheck protection program, and that PPP, that program that has been one of the government's responses to really try to help small, medium-size businesses and larger businesses, I guess. The businesses that need it the most to help them cope with what has obviously been an unprecedented, at least for our lifetime, type of shutdown of the economy.
And you know, Matt, when I saw this news break over the weekend, I thought, finally, I mean, this is good. I was excited to see it. Not even from a shareholder perspective, but just from that I use these tools an awful lot, whether it's PayPal or Square, we know the benefits that these fintech companies provide to consumers from a liquidity perspective, from the perspective of access to funds, how quickly they're able to turn. So for me, personally, I saw this news, I was pretty excited about it. I don't know, what do you think about this?
Frankel: Yeah. Well, I mean, these companies have been lobbying to be included on this since pretty much before it was even signed into law. So it's a natural fit, it's kind of my take on it. It's not, they're going to be a giant money maker. I mean, I think these loans have what, 1% interest, maybe a small origination fee, they're not going to be big cash cows. I mean, banks are making a whole lot more loaning on autos and mortgages than they are on this. But it's a real natural fit.
I mean, PayPal, obviously, has a great relationship with millions of small businesses, especially those that primarily operate online. You know it's like the leading online payment company. Intuit has got QuickBooks, so they have a lot of insight into payroll figures. And the whole small business, the PPP loans are all based on payroll figures, they're meant to keep payroll going. And that's a part of the loan that could actually be forgiven.
And Square is the latest one. We're starting to hear rumbles that they're being included in this. And I checked, and it's not official news yet, but Square has a payment-protection program part of its website up already that pretty much indicates that they're going to be accepting these types of loans through Square Capital. So not only do they have the Square Capital lending division, but Square, obviously, has relations with millions of, I think, it was well over 2 million small businesses in America that use Square services. So it's a natural extension, I would say. And these companies are really good at getting money places fast, which is important.
Moser: Yeah. And to your point about Square, Jack had fired off a tweet back on April 10 that just said, "Simple and fast instructions on how to get your $1,200 stimulus check from the U.S. government. And, yes, you can deposit it directly to your cash app for instant use, no bank account needed." And we had noted on a show previously that he was getting out there on Twitter and saying, "Hey, listen, U.S., this is what we do. We're really good at this type of thing, let us help." And so, it's really nice to see, because I think you're right. I mean, on the one hand, this isn't some big cash cow for these companies. It's not like they're going to make a ton of money doing this, but that's really not the point. I mean, they're being seen as the solution. I think it's one more link in the chain toward this idea that they really are part of the future of our banking system. These are essentially banks of the future, I think, right?
Frankel: You've actually brought up a really good point that they're letting people deposit their stimulus checks right to the cash app. I think that could be the biggest benefit to Square in this. Thousands of dollars coming into the cash app right after they launch their investing platform, remember, could eventually be a nice little catalyst for that.
But, no, these companies, they need to be part of the solution. The brick-and-mortar banks are. We've talked about it. I love Bank of America, I love Wells Fargo as a business, but they're historically inefficient at getting money in the hands of consumers fast.
So these companies need to be part of the solution, because when it comes to the cash burn that some of these small businesses are seeing from keeping their payroll going, like, time is a factor here.
Moser: It is. I'm glad you said that. That's a keyword, I think, is time. And that's what this really all boils down to is, we're just trying to buy time. Because as we've talked before, what's going on right now, this isn't a fundamental flaw in the economy. What we're seeing right now is something well beyond the economy. There's a public health issue. And so, I think the response, generally speaking, has been the right. You have to shut things down to the extent that you can. And to see our government getting out there and utilizing tools they can to buy as much time as they can, because that's ultimately what we really need, it's encouraging to see.
And we've talked before about companies like PayPal and Square. And while all of these companies are withdrawing guidance and they really don't have any clarity as to how revenues are shaping up for 2020, it was a pretty safe assumption that there are going to be fewer dollars flowing through their networks for the foreseeable future. Just due to the lack of commerce, due to the fact that all of these businesses were closed and people aren't spending money quite the same way. This certainly counters that at least a little bit. It does help make up for some of those lost dollars flowing through their networks now that they're able to participate.
Frankel: Right. The whole point of the stimulus was to not necessarily replace all lost economic activity but to definitely give the economy a bigger shot in the arm than it would have otherwise, especially with the stimulus payments. But the small business lending, this is going to go to payroll, this is going to go to paying vendors to keep the business going. It's money flowing through the system.
As earnings season really kicks in over the next few weeks, we'll start to see how much this has affected PayPal, Square, and this could definitely keep money flowing through their platforms much more than otherwise would have.
Moser: Yeah. And I feel like there's some brand equity that they earned from this, probably boosts the switching costs somewhat. I think it really does, sort of, solidify these companies and their status, the role that they play in our economy going forward. I mean, the one thing -- every bull has its bear. Is there a downside to these companies doing this? Do you feel like there are risks involved here that we should be concerned with?
Frankel: Well, not really. I mean, I mentioned these aren't high-interest loans, but the flip side of that is that they are guaranteed by the Small Business Administration, which essentially takes all the risk off the lender. In this case, I don't think the lenders are retaining any of the loans. I know with the Fed's new lending initiative, has nothing to do with this, I think the banks keep 5% of the loan and sell 95% back to the Federal Reserve. There's no split in this case. The banks are just going to get some interest, they're going to maybe get a little origination fee. Not a ton of money, but not a ton of risk either.
Moser: No. So yeah, not a lot of upside, maybe not a lot of -- I mean, not a lot of obvious upside, but not a lot of obvious downside either. It does seem like just a great, sort of, long-term catalyst for these businesses, really solidifying their role for the future. And ultimately that's what investing is, investing is about how we view the future. And I think that for a lot of us, we feel like companies like Intuit and PayPal and Square and the like are going to be a big part of the future. And so, it's certainly nice to see them participating in this.
Let's take a turn here and talk a little bit about this Warren Buffett guy, because we talk a lot about Buffett and Munger and Berkshire. I mean they are our north star in a lot of ways as investors. And it's been very interesting to see, in all of this chaos, what he's been doing. Now, you published an article about this on Fool.com today, and so I want to jump into it from that perspective, because Buffett is making some interesting moves here. And there are three key moves that you were focusing here on, and it sounds like selling is the theme here for the most part.
Frankel: Right. Well, first of all, I apologize if anyone hears my dog growling in the background. These days there is someone literally walking by my house every 10 seconds.
Moser: [laughs] We're just adding the personalized touch during the coronavirus crisis.
Frankel: [laughs] But anyway, to bring back to that point, two of the three big moves Buffett has made have been sells. But before you take the word "big" there with a grain of salt. The first one, he sold shares in two of the major airline stocks. They own Delta and Southwest. And the third is he sold about $30 million worth of Bank of New York Mellon shares.
Now, let's start with the airlines. Buffett owns shares in all four airlines, and here are the percentages. He owns just under 10% of American Airlines, 9.2% of Delta, 9.9% of Southwest, and 8.8% of United. So those percentages are not accidents. It's not desirable to own more than 10% of any company; it creates more regulatory requirements. Once you own over 10%, you have -- the whole reason we knew about these transactions is only because they own more than 10% and had to disclose it. So it's not that desirable. So these were relatively small sales, and they brought both positions just under the 10% threshold. So my gut is, that's why.
On the bank side, a $30 million sale of a $3.3 billion position is nothing. [laughs] It is the first key point. And this is another kind of 10% thing. Bank of New York, Buffett didn't own more than 10% of this up till recently. They owned about 8.5%, as at the end of the year, but Bank of New York has been buying its shares back until the coronavirus crash, had been buying its shares back at kind of a breakneck pace, a rate of about 10% per year of their stock. So that 8.5% stake crept over the 10% threshold, through no fault of his own, so this looked like he was just paring back the stake a little bit to get under that. Because a bank, especially, is not very desirable to own more than 10%, unless you really want to have an active role in the business, which Buffett really doesn't. He has no desire to run Bank of America. He wants to invest in it, or Goldman Sachs or any of those for that matter.
So this is one of Buffett's bank positions. This is one of, I think, his favorite bank stocks out of all his bank positions. And like I said, he sold less than 1% of the position. And the two key dates to know with Buffett, I don't think he's selling stocks at all other than for regulatory reasons right now. The two key dates to know are the Berkshire meeting that comes up the first week of May, the first Saturday of May. When we get Berkshire's latest earnings report, we'll get a glimpse at how much that giant cash stockpile has changed.
Remember, Buffett ended the year with $128 billion worth of cash. We'll get a nice little glimpse of where that changed. And with no big purchase announcements, if that dropped to say, like, $70 billion or $80 billion, we'd pretty much know he's been buying stocks. Though, you're not going to get a glimpse at what actual stocks he bought until the second important date, which is when Berkshire's 13-F filing with the SEC comes out, which happens May the 15.
So that always happens 45 days after the end of the quarter in question. So we'll see what Buffett did in the first quarter then. So when you look at these, you'll see headlines, oh, Buffett is selling all his stocks and things like that, nothing could be further from the truth. These are minor sales, they brought all three positions down under a key threshold.
And by the way, the third thing, where I said, the third move Buffett made, he's actually raising money on the European debt markets where he can borrow for literally 0% in Europe. So even if they can earn a 2% or 3% return on that money, it's kind of a no-brainer.
So not only did Buffett have $128 billion in cash, but it looks like they're raising more money for presumably investment purposes. So we'll see when these things come up, but don't make the mistake of thinking that Buffett has given up on the stock market or thinks it's going to crash more, any of those, you know, sky-is-falling headlines you read with this.
Moser: Yeah. And for listeners who want to check that article out, we will make sure to tweet that out on the Industry Focus feed today. That was a really great take there, Matt. I appreciate that. And before we continue, a reminder for those of you looking for more stock ideas, that now is a great time to check out our Stock Advisor service, where you'll get stock recommendations from David and Tom Gardner every month, Best Buys Now, and a whole lot more.
Why is it a great time? It's a great time because if you go to IF.Fool.com, you can take advantage of a special 50% discount that we have for our Industry Focus listeners, that's right 50% discount for all of you awesome listeners, who keep chiming in there with so many kind words during this time. We really appreciate that. So make sure to check it out: IF.Fool.com.
Okay, Matt, let's jump into a few listener questions here. We had a listener that reached out to us on Twitter, we got a couple of emails that I thought would be fun to hit on today. Now, this first question we got from Derek Main, a friend of ours, he reached out on Twitter. And this is right up your alley, Matt, so I'm going to look forward to your answer here.
Derek asks, he says, "For my portfolio management class... " and Derek is at Clemson University by the way, so shout-out to Clemson out there. Even though I went to Wofford, I'm not going to hold that against you, Derek.
Frankel: I went to Carolina, which is the direct rival, so.
Moser: [laughs] And my wife went to Fermont. So we've got the bases covered. But Derek says, "For my portfolio management class, we're doing a stock-picking project, and I got assigned REITs, which is nice, because they're easy to identify, but on the other hand, they're a lot different from normal stocks. My initial screening was small- and mid-cap, with anything under 100% payout ratio, just to cut the list down, which got me to around 25. Any suggestions on what would be some of the better metrics to use for screening REITs? Once we get down to the final three, we do a thorough analysis of each one, but I'm trying to figure out the best parameters to work with. I was thinking about using either debt-to-equity or return-on-equity and return-on-assets. Any thoughts?"
So Matt, you're our REIT guy here, you study these things all the time. What do you feel like some of the better metrics there for screening REITs?
Frankel: Sure. Well, debt-to-equity is OK. My favorite debt metric with REITs is called interest coverage, meaning, how many times does the company's earnings cover its debt obligations? In other words, if it pays out, if it costs $200 million a year to make its debt payments and it's earning $1 billion, then it would be 5X interest coverage. So that's a good one to look at if you want to go the debt route.
With REITs, I like to look at 10-year dividend growth history, especially if that 10 years -- which it doesn't anymore, but, well, actually, now it will -- includes both a bull market and a bear market. You want to see how a REIT raises its dividend, which is a great indicator of financial health, if it can keep raising its dividend year after year. But you want to see that it's able to do that in every market. So a 10-year dividend growth rate is a really good one to look at.
Like I said, interest coverage is good on the debt front. And, yes, so, that's kind of where I'm at with that, he's on the right track with under 100% payout ratio. Well, because remember, REITs have high payout ratios. By definition, they pay out almost all of their income. So make sure you're looking at the FFO payout ratio, but you're a Clemson student, I'm sure you're a smart guy, so.
Moser: [laughs] Yeah. No question there. And actually, as soon as this lockdown is lifted, I'm going to get to go down to Clemson and meet with Derek and students and teachers down there and talk more about stocks. So looking forward to eventually getting back down there. But I do like that the coverage ratio, that's something that's really handy to look at with, really, any business.
And you know, we talked about this a little bit on Motley Fool Money, it's really nice to look at that coverage ratio or look at how many times you can push that interest expense into that operating income or free cash flow number. And instead of looking at the trailing 12 months, I like your idea of looking at it over a long period of time and see how it covers both ends of the spectrum there. And also thinking about it going forward, what are some of these businesses, what are their finances look like over the course of the next year or two years from now? Because there are going to be some major disruptions. And so some companies I think would be a little bit more prepared than others.
We got an email from Heidi Gilroy, and Heidi says, "Hello! I love your show." Thanks, Heidi. "Thanks for doing what you do. I've been hearing a lot about stock buybacks. Can you explain why a company might go into debt to buy back stocks and why stock buybacks in general might be seen as negative? Thanks."
And thanks again, Heidi, a very good question there. Stock buybacks, in general, are always a good question. I do really love the angle there, why companies would go into debt to do that. And how do you generally view that, Matt, if a company goes into debt to fund buybacks?
Frankel: Well, if a company goes into debt to fund buybacks, that means they really think their stock is worth more than it's trading for. If your stock is trading for $30 a share and you just know that you have $50 worth of assets for every share, it could actually make sense to -- you know, you're borrowing $10 to essentially buy $20. So that's why.
As far as why buybacks are considered negative, they're portrayed that way a lot in the news and it all comes down to, 1, are the buybacks done responsibly? Meaning, is the company spending so much on buybacks that they have no so-called emergency fund, which is what we're seeing with the airlines. That's why we're seeing so much -- I forget which one said 96% of free cash flow was used on buybacks. That's a little excessive, [laughs] so.
But if a buyback is done responsibly and for the right reasons, meaning you're using 20% of your free cash flow to buy back shares that you think are worth more than they're trading for, there's nothing inherently wrong with a buyback. That's a very common way that companies return capital to shareholders. And actually, it has some advantages over dividends, being that, if a company pays you dividends, that's taxable income. If it uses that money instead to buy back its own shares, it increases the value of your investment, but then it doesn't produce taxable income for you. So that's the big advantage of buy backs.
I don't necessarily think it's a negative, but it can be used negatively, like most financial instruments.
Moser: Well, yeah, and it's been a real headline here lately because of this perception. There is some reality to it in that some companies are obviously in very difficult financial times right now. And you can look back to, "Well, they spent all this money on share buybacks, and now they have no money to be prepared for what's going on right now." I mean, there's a greater truth to that, right.
I mean, we've even seen companies that in normal times will buy back stock with excess cash and they've suspended those programs to make sure that they can look out for the stakeholders that matter most. I think we're seeing more and more this all stakeholders' mentality. Starbucks is a great example of a company that, you know, make it fund those share buybacks if they want, but the more important and pressing issue right now is to make sure that their partners, their stakeholders and employees, are taken care of first-and-foremost, because the company ultimately doesn't exist without them. I mean, they can start that share buyback program back up whenever they want.
I've never been a fan of a company going into debt to buy back shares, because to me, it seems almost a little bit too greedy. And there's a lot of data out there that just shows that companies tend to get buybacks wrong, they do tend to buy their shares back at pretty elevated levels.
I was always a big fan of Buffett's line that he drew, I think it was 1.2X or less than book value or something like that, where he would actually consider buying back. And now they've resorted to more of Warren's and Charlie's discretion, but they've also earned that goodwill, I think, with a lot of us too.
So yeah, share buyback is a very interesting philosophical discussion. We could probably have an entire show on that and still not really cover it all. But a very good question nonetheless, Heidi. Thanks so much for asking.
And we have one more question here from Roy Klazowski. Roy says, "Hey, there. I'm looking to take a trick out of the Jason Moser playbook and taking a basket approach to the emerging-market fintech space. I already have MercadoLibre and PagSeguro. To complete my basket, I'm looking into StoneCo and was hoping to add one more. Any suggestions? Thanks a bunch. Financials Monday is a can't miss every week."
Roy, thank you for those kind words. Really appreciate you saying that. And, hey, listen, you know I love the basket approach. The war-on-cash basket has been one that has worked out very well, but this sounds like Roy is looking for an emerging-markets war-on-cash basket, Matt, and he's got a few good ideas in there. Do you have one more for him?
Frankel: I know this is kind of a boring answer, but I think if you're looking for an emerging-markets payment basket, it wouldn't be complete without either Visa or Mastercard. Both of those are really pressing the cross-border payments, especially into emerging markets.
Those are countries where most people don't have credit cards yet, things like that. When credit cards start to take over Latin America, for example, they're going to have Visa or Mastercard logos on them. So I'd say the three you have are great. I love StoneCo especially, it's one of my favorites, but I don't think that basket would be complete without a Visa or Mastercard in there.
But since you're a regular listener, I'm inclined to believe you own one of those already. Just a hunch.
Moser: Probably so. I'll throw one, sort of, unconventional answer out there, because it's not necessarily a payments provider on its own, but Shopify is really interesting in that it gives you open access to Stripe. And while Stripe is not a publicly traded company as of today, and it may be down the road, no one really knows, I think we'd all love to see it at some point, but Stripe is the backbone of Shopify's payment processing. And so owning Shopify gives you exposure to that Stripe network. And Stripe is a Square-like business in the metrics that it's turning in, in the market share, and in the neat, innovative ways that it's approaching the fintech space.
So if you want to get a little exposure to Stripe, you could do that through owning some Shopify. And I'll tell you, as a Shopify shareholder myself, I'm very happy that I own those shares. And you kind of get a two-for-one there. You get the e-commerce play and you get the payments, all rolled into one, man.
Frankel: I like that call.
Moser: All right. Well, let's wrap up this week with our Ones to Watch. And earnings season is just getting ready to kick-off here, Matt. So what's your One to Watch this week?
Frankel: Well, in the spirit of earning season, I'm looking at JPMorgan Chase. They're the first big bank to report -- tomorrow actually. So I'll be watching that one. I like JPMorgan's business a lot. They're kind of on the forefront of most major banking trends. Just recently, we saw that they're increasing their mortgage standards to I think a 700 credit score to try to get ahead of the increased risk that comes with this.
Moser: I like that move actually a lot.
Frankel: I do. It's a necessary move. I'm curious to see what they have to say on the conference call about it maybe, and how it might affect the business. We're seeing homebuilders get absolutely crushed today, and I think that's a big reason why, because the banks are tightening up their lending.
And JPMorgan just has the ability to kind of set the tone for bank earnings. So that's one I'm watching this week. It's not in my portfolio yet.
Moser: Qualify that. That's cool. Okay, well, I'm going to actually go with a smaller bank. I'm going to keep an eye out on Live Oak Bank. And that's one that we've talked about before on the show, one I know that you know very well, Matt. And we were very fortunate to interview the president of the bank there, Huntley Garriott, on the show a little while back.
And just given their tech nature and given their Small Business Administration focus, their focus on supporting the small businesses out there, I'm just going to be really fascinated. They have earnings coming up on April 22. I really can't wait to read, to hear how they're seeing the current landscape, how they're able to help, what they've got planned for the near future here to be a part of the solution, because I do feel like that's a bank that is going to be a big part of the solution as well.
And I'll tell you, Matt, Live Oak is -- I only own one small bank in Ameris Bancorp (NASDAQ: ABCB), but Live Oak is, I like that bank a lot, I've got that on my watch list, Matt. I think about adding a few shares to my portfolio on that one, but we'll see. Earnings season is going to shape up to be a doozy, I'm sure. But, Matt, we really appreciate you taking the time out this week to join. I hope you had a nice Easter weekend with your family and everybody is staying healthy.
Frankel: We did. We actually got good weather up until last night, so we were very fortunate; we were able to play outside and stuff like that.
Moser: Good deal. We'll make sure to keep you guys in mind, and we'll see you next week.
And that's going to do it for us this week, folks. Remember, you can always reach out to us on Twitter @MFIndustryFocus or drop us an email at IndustryFocus@Fool.com and let us know how things are going.
As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Thanks, as always, to our man Austin Morgan for keeping us on the rails. For Matt Frankel, I'm Jason Moser. Thanks for listening, and we'll see you next week.
Jason Moser owns shares of Ameris Bancorp, Mastercard, PayPal Holdings, Shopify, Square, Starbucks, Twitter, and Visa. Matthew Frankel, CFP owns shares of Bank of America, Berkshire Hathaway (B shares), Goldman Sachs, and Square. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Delta Air Lines, Intuit, Live Oak Bancshares, Mastercard, MercadoLibre, PagSeguro Digital, PayPal Holdings, Shopify, Southwest Airlines, Square, Starbucks, Twitter, and Visa. The Motley Fool owns shares of Stoneco LTD. The Motley Fool recommends Ameris Bancorp and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), short September 2020 $70 puts on Square, and short June 2020 $205 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | And I'll tell you, Matt, Live Oak is -- I only own one small bank in Ameris Bancorp (NASDAQ: ABCB), but Live Oak is, I like that bank a lot, I've got that on my watch list, Matt. Finally, host Jason Moser and Fool.com contributor Matt Frankel, CFP, answer some listener questions and discuss why they're watching JPMorgan Chase (NYSE: JPM) and Live Oak Bancshares (NASDAQ: LOB) this week. And while all of these companies are withdrawing guidance and they really don't have any clarity as to how revenues are shaping up for 2020, it was a pretty safe assumption that there are going to be fewer dollars flowing through their networks for the foreseeable future. | And I'll tell you, Matt, Live Oak is -- I only own one small bank in Ameris Bancorp (NASDAQ: ABCB), but Live Oak is, I like that bank a lot, I've got that on my watch list, Matt. Finally, host Jason Moser and Fool.com contributor Matt Frankel, CFP, answer some listener questions and discuss why they're watching JPMorgan Chase (NYSE: JPM) and Live Oak Bancshares (NASDAQ: LOB) this week. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Delta Air Lines, Intuit, Live Oak Bancshares, Mastercard, MercadoLibre, PagSeguro Digital, PayPal Holdings, Shopify, Southwest Airlines, Square, Starbucks, Twitter, and Visa. | And I'll tell you, Matt, Live Oak is -- I only own one small bank in Ameris Bancorp (NASDAQ: ABCB), but Live Oak is, I like that bank a lot, I've got that on my watch list, Matt. They owned about 8.5%, as at the end of the year, but Bank of New York has been buying its shares back until the coronavirus crash, had been buying its shares back at kind of a breakneck pace, a rate of about 10% per year of their stock. And before we continue, a reminder for those of you looking for more stock ideas, that now is a great time to check out our Stock Advisor service, where you'll get stock recommendations from David and Tom Gardner every month, Best Buys Now, and a whole lot more. | And I'll tell you, Matt, Live Oak is -- I only own one small bank in Ameris Bancorp (NASDAQ: ABCB), but Live Oak is, I like that bank a lot, I've got that on my watch list, Matt. And I think that for a lot of us, we feel like companies like Intuit and PayPal and Square and the like are going to be a big part of the future. This is one of, I think, his favorite bank stocks out of all his bank positions. |
27837.0 | 2020-04-08 00:00:00 UTC | 4 Stocks to Consider Right Now | ABCB | https://www.nasdaq.com/articles/4-stocks-to-consider-right-now-2020-04-08 | nan | nan | In this episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, dig into two major stories in the real estate sector.
First, they look at how badly hotel REITs are hurting and which are the best for long-term investors. Then they talk about the fact that some retailers have said they won't pay rent during closures, while one major mall operator has said rent is still expected, setting up a battle between the two sides. Plus, they discuss why they think Bank of America (NYSE: BAC), Square (NYSE: SQ), Ameris Bank (NASDAQ: ABCB), and Mastercard (NYSE: MA) could be great buys right now.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
This video was recorded on March 30, 2020.
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Jason Moser: It's Monday, March 30th. I'm your host Jason Moser, and on today's Financials show, we're going to take a look back at the recent Millionacres and Mogul member event, talk about some of the hot topics of discussion there in the world of real estate investing, and we're also going to take a look at REIT Taubman Centers. So, the real estate investment trust is telling tenants that rent is due, while insurance companies are trying to figure out their own way through today's crisis.
And because we're glass half full guys here on Industry Focus, you know us, we've got four stocks that investors should keep on their radar through these turbulent times. Joining me, as always, this week remotely, as we all, are certified financial planner, Matt Frankel. Matt, how's everything going?
Matt Frankel: Pretty good. I've been used to this remote thing for a few years now; are you starting to get used to it a little bit?
Moser: [laughs] Well, I don't know that I'm used to it, I think I'm really impressed with how it works, it's a nice little set up, I mean, nothing's perfect, but it's a really nice alternative knowing that we have this available when we need it. So, this whole thing has thrown a monkey-wrench in, I think, everybody's plans and routines and work schedules and whatnot, but it's really nice to be able to keep some semblance of normalcy here, man. I'm happy that we can still do this.
Frankel: Yeah, we're both very fortunate that we're still plugging away.
Moser: Yeah, and that's, golly, I'm sure, you know, with the family at home every day and everybody just trying to, kind of, work through this. We reiterate with our daughters every day, you know, listen to me, we are in a good situation, we're fortunate, there are a lot of other people that are not as fortunate right now.
It is just always worth remembering, this is a trying time not only nationally, but really, globally. I mean this is something that has just taken the whole world by storm, unfortunately. And it's not something that's going to end anytime soon. I think it's something that's going to probably be a little bit more drawn-out than some people might hope. But by the same token, you know when I was thinking about this over the weekend, I think a lot of good will ultimately come from this and I think there's a lot of innovation and ideas and new ways of thinking, hopefully, empathy and understanding that come from all of this. You know, it goes back to that glass half full thing, right?
Frankel: Yeah, I think there will be a lot of good that comes through it. It's a great time to get some more exercise compared to what you normally do. And I'm starting a new diet plan; you probably see my shake bottle in the video. Those are best for times when you can just kind of put your life on pause and that's, you know, we got the opportunity to do that for the most part.
I heard a bunch of reports that pollution is way down around the world and you know things like that, so there is some silver lining here.
Moser: Yeah. And you know what another thing I noticed. And this is just neither here nor there, I guess, but I just noticed that our bank account isn't draining quite as quickly as it usually does. There's just not as much spending going on. That much is clear, I think, just from looking at the state of the economy, but, man, you take a look at your checking account, all of a sudden, you realize, "Dang! we're not really spending a whole heck of a lot of money right now." So, you know what we're doing, we're saving it.
Frankel: Yep, and, well, investing more, more precisely.
Moser: Well, that too. We're investing and we're saving and we're trying to plan for the future, right? You always got to figure something's coming down the pike here that'll make you wish you were prepared. And so, if you are fortunate enough to see that maybe your bank account isn't being drained as quickly, well, hopefully, you're able to put some of that money aside and put a reserve together and maybe get some of that money working for you, because it certainly is a good time to get it working.
Although, we were talking about this before we started taping, it's really difficult to make sense of this market today and what's going on.
Frankel: Yeah, it's going to be a bumpy road for a while. And we'll get into what we're talking about in a minute, but here's, kind of, one I want to leave you. I described the market volatility and the reason for it to somebody recently in this way. About two weeks ago, Elon Musk tweeted out that the coronavirus panic is dumb, if you remember that.
Moser: I do remember that, yeah.
Frankel: Then a little while later, the Governor of California came out and said that he's expecting a million deaths or something like that in his state alone, even though that there is a pretty much a full lockdown in all the major cities. So, the truth is probably somewhere between this is dumb and there's a million deaths in one state. The fact that we don't know where in the middle it is, is the reason the markets are going so crazy, just nobody knows at this point. If you tell everybody this is going to end May 1st, you're going to have X number of deaths, X amount of unemployment ... then it would be a little more stable, but we just simply have no idea at this point.
Moser: Yeah, I think that's right. And given that way of thinking, I think it's fair to assume that we'll probably see more of this type of behavior in the market, I think really for the foreseeable future. So, as we always [...] with our Foolish style of investing, I mean, we look at things with a much longer timeline, three to five years, if not longer, investing in good businesses. I think these are the times that really support that philosophy. And I would encourage folks out there, don't worry about calling the market bottom. Don't try to figure out, is this the bottom or things only going to go back up now? Because No. 1, chances are, it's probably not, but even if it is, it doesn't really matter in the grand scheme of things, you want to just keep on finding good businesses.
Frankel: And I should say that Elon Musk did walk back his comments a little bit and he's kind of helping in the effort now instead of just poking fun at it, so.
Moser: Yeah. Well, and I think a lot of us probably initially -- I mean, certainly, I know in the very beginning of this, it was hard to really wrap your mind around something could be this serious, I mean I think I honestly felt like --
Frankel: Right. So, given those two extremes, it's probably closer to a serious situation than this is dumb, so. And I'm pretty sure everybody's on board, everyone gets the seriousness of this at this point. The point is, we don't know exactly how serious it is.
Moser: And a good lesson there, there's a great investing lesson there is, you need to keep an open mind and be willing to change your mind when the facts change and as soon as more facts come to light and the picture becomes more clear, you need to be open to changing your mind and maybe taking on new way of looking at things. And so, hopefully, that's what people are doing here, and continue to be safe out there.
But enough about the state of affairs today, let's talk about what went on recently. Matt, you all had your Millionacres and Mogul member event. Now, this was something that was initially set to take place in California. Obviously, plans changed, and thankfully, you all were still able to hold the event virtually. How did everything go?
Frankel: It's good. We actually canceled the in-person version about a month before. So, I say, we canceled before it was trendy to cancel stuff, we were kind of industry leaders there. And at the time people didn't understand why we were cancelling and then as it got closer, yeah, oh. But it was supposed to be in San Diego, it was supposed to be my first time in California actually. I've never been. But you know, the times being what they are, it was definitely the right call.
We ended up doing a virtual event. My part was pretty much just going over our REIT recommendations and kind of the state of the REIT industry. Because we keep telling members how during tough times real estate performs pretty well, and that's just simply has not been the case. You know, real estate, it's a physical place, people have to physically go to it for it to make sense as a business and people aren't going anywhere right now and it's just a situation, no one, including our members, could have planned for.
But one of the most encouraging things I heard from members -- so, it was pretty much a live Q&A -- is that people weren't, like, mad that our recommendations have done poorly, they weren't, you know, "You guys suck! you recommend bad stocks." It's been more, "What's the best thing to buy right now?" Which is such a great attitude. I think we made 11 recommendations so far out of those, which are the best ones to buy, which one should you be loading up on and taking advantage? And that was overwhelmingly the attitude of the members, so that was definitely an encouraging sign to see.
Moser: That is a very encouraging sign. I mean, that's right in line with that Warren Buffett mentality of being a net buyer of stocks, right. I mean, if you're going to be buying more than you're selling than you need to look at these times as the opportunities, so that says a lot about the job that you guys are doing there and setting appropriate expectations and setting that right investing mentality. So, good work there to you and the team.
Now, specifically, you know, we were talking about this before we started taping, you mentioned that hotel REITs have been a real hot topic of conversation lately. I'm not exactly sure why, but I'm hoping that you'll tell us. What is the interest there specifically with hotel REITs?
Frankel: Well, for one thing, most hotels are closed down right now. So, I talked about the uncertainty going on a little while ago and how we just don't know how bad this is yet. And hotels are really bearing the brunt of that right now.
Just to name one, I recently bought a company called Ryman Hospitality Properties, I mentioned them on the show before. They own the Gaylord chain of hotels. There's one right there in D.C., I think you guys had Fool Fest there one year, if I'm not mistaken, or somewhere near there, but it's right on the National Harbor. They have five Gaylord hotels nationwide that are just landmark properties. I think three of them are actually the three biggest non-gaming convention centers in the country. So, you know, big landmark properties.
They're closed right now. They were down to something like a single-digit occupancy rate, at which point it's probably costing them more to keep the places open than to just close them. So, they made this painful but correct decision to close their properties indefinitely recently. But they're a company that has a lot going for them in the long-term. In other words, they have, I think, something like, over 6 million room nights booked for the next few years, because it's all this group business, like, conventions, things that are planned years in advance.
So, although pretty much they're losing all of their business for the next couple of months, it's a big long-tailed business with, I don't want to say guaranteed, but, reservations on the books. They're going to be just fine when this is done. The Gaylord [...] has the famous Christmas display, that's not going to change, that's still going to bring in business.
So, when it comes to hotels, there's two big baskets I put them in, those that are going to bounce back right away from this, like, the Gaylords I think are a good example of that, that as soon as we get the all-clear, people are going to have conventions, group business. It can last for several months before anything starts to get back to normal, but at the end of the day they will.
And then you have hotels that are pretty much non-operational right now and rely on pretty much family travel, like, short notice business travel, I would say, that are going to have a tough time bouncing right back from this, especially with no future revenue already on the books. So, I would put hotels in two different categories. The casino hotels are another good example of things that kind of have a lot of long-term business on the books, because I mean no bigger convention centers of the world than in some Vegas casinos. So, they have a lot of group business, and should be fine long-term. And with all of them, it's a big question of do they have the money to make it through the tough times.
So, balance sheet analysis is so much more important than looking at the last year's earnings. It's, do they have enough liquidity, meaning, cash plus borrowing capacity to get through this. With a company like Rymen, the answer is an unequivocal, yes. They have something, like, $1 billion in liquidity. They could shut down and pay their bills for the next year-and-a-half if they had to.
With a casino company like MGM or Caesars or something like that, where they have about $10 billion in debt, the answer might not be, yes, if it lasts significantly longer than expected. So, I'd say, see who can make it through the tough times and who has business on the books already when we get to the other side?
Moser: Yeah, that's a good way of looking at it right there. I mean, it's easy to forget about the balance sheet in the good times, because they're good times. When you're growing that top-line and even if you're not profitable, there's that promise of profitability because you've got that top-line driving it. And you got ta have that liquidity, you got to have the resources to deal when the chips are down like they are now.
Well, let's talk a little bit more about that in Real Estate Investment Trust, because we saw the headline this morning that another REIT here, domestically, U.S. mall owner Taubman is telling tenants that they're going to need to pay rent during this crisis. Now, for background Taubman is a Real Estate Investment Trust, around $3 billion market cap, but also, we just saw recently where Taubman is going to be acquired by Simon Property Group, which is another company we talk about here a number of times on the show, another Real Estate Investment Trust, one that you actually like, I believe.
Frankel: Yeah, I'm a big fan of Simon.
Moser: Yes. So, let's talk about this for a few minutes because you know this runs a little bit counter to another story that came out late last week when the Cheesecake Factory essentially said, listen, we're telling our landlords we can't pay rent this month, we don't have it. And that's, of course, understandable. I mean, restaurants are one of the markets here that have taken the biggest hit from all of this, because their traffic went from fairly normal to basically nothing, save any takeout or delivery orders that they can manage to scrounge up there. And, obviously, it's become a little bit more of a competitive market with just that in mind there.
But Cheesecake Factory being a restaurant where people tend to go, that's that casual dining space, that's not your quick service space. And so, with Cheesecake Factory getting up there and saying, "Hey, we're not going to be able to pay rent, so we're not going to do it." Well, you've got, now, a landlord who's saying, "Hey, you know what, tenants are going to need to pay their rent."
And just one other point before I let you take it away here, there was one Cheesecake Factory in Taubman properties, but I believe Simon had closer to something like 30, maybe a little bit --
Frankel: Yeah, 28.
Moser: Yeah. So, there is some exposure there. So, it's interesting to see the two sides of this. You can certainly understand both sides of it, but how are we supposed to look at this here with Taubman and Simon going forward. Is it wise of them to take that firm stance as opposed to trying to be a little bit more understanding for what is kind of an unprecedented time?
Frankel: Well, we're definitely seeing a battle shaping up between landlords and tenants in the retail space right now, and both of them have points. So, let's think from the perspective of, like, Taubman and Simon first.
They still have mortgages on most of their properties, they still have to pay their loans. I mean REITs are a debt-heavy business, they take out loans to finance the properties. So, they count on rent coming in to be able to pay those loans. So, they still have to pay their mortgages, they think the tenants should still pay rent.
On the other hand -- and Cheesecake Factory, No. 1, could pay rent if they wanted to, I don't buy for a second that they can't pay their April rent, especially now that the stimulus thing is passed and there's forgivable loans for the purpose of paying rent.
Moser: So, there's an avenue you think, at least a way they could get that cash together.
Frankel: The business loans that are being given out are specifically for making payroll and paying rent obligations. So, I don't totally buy that they couldn't pay rent if they wanted to. However, they have a point, usually in your lease, whatever kind of lease you're talking about, if you're renting an apartment, if you're a business like Cheesecake Factory, there's usually some clause in your lease that says you'll have 24-hour unrestricted access to the property. Now, if you're located in a mall that's closed, you don't have access to the property. So, technically you could interpret it as the landlord is in violation of that lease. And I doubt Cheesecake Factory is going to be the only one that's going to pull a move like that.
Moser: I mean, now is the time to try to find every little letter of the law that you can to figure out what the options you have.
Frankel: I see some sort of compromise being reached. I see this as some sort of a standoff. You know, for example, maybe Simon says, "Okay, you don't have to pay your full April rent, but we expect half of it while we're closed down," or something to that extent, something both parties could financially live with, that could help both of them get through this a little better. I could see something like that happening. Now, I haven't heard of any talks going on, I've no factual basis to say that, but I could definitely see something like that happening.
Moser: Well, yeah, I mean something is better than nothing, right. It all boils down -- because if you think about, "Okay, well, the Real Estate Investment Trust, they have bills to pay, well, they're making those payments to the bank." And then you could say, "Well, the bank is going to need to forgive folks for a certain stretch of time," I mean, we're already seeing that certainly in the residential mortgage market. Big banks are jumping in to say, "Listen, we want to be a part of the solution here and it's not a matter of if we get our money, it's just going to be a matter of when, and so we extend the timeline a little bit." So, yeah, I tend to agree with you there, it seems like there's a way forward for everybody where, again, something is better than nothing.
But we go back to the liquidity conversation that we were just having there a minute ago, because I think that's a really important point I want to revisit, particularly when we consider here what Taubman is saying and therefore what Simon is saying as well. Do you view Simon as a Real Estate Investment Trust with that liquidity, is this a REIT that is going to be able to withstand any type of a stretch?
Frankel: Oh, Simon is going to be just fine. They're one of the biggest REITs in the world of any kind. At one point, before e-commerce sent retail all plunging down or whatever the past few years, Simon was actually the biggest. So, they have an A credit rating, they're one of the best credit ratings in the real estate space and they can borrow very cheaply. And we're talking, they probably have a $10 billion borrowing capacity if they wanted it. So, they're going to be just fine. They don't need their tenants -- if they missed out on a month or two of rent, they'd probably be fine.
I think it's more just the principle of it that Taubman is really talking about.
Moser: That's understandable. I mean, I do get that.
Frankel: Right. I mean, Taubman now is financially tied to Simon. So, they would be fine if they missed out on a couple of months of rent. They don't want to, for obvious reasons. And I mean, they're not just being, they have a fiduciary obligation to their shareholders to maximize revenue and to look out for their shareholders. So, like I said, I see this being a bit of a standoff for a couple of months, but I see a kind of middle ground agreement being reached between, especially mall tenants. If you're a freestanding retail business, I guess you can make the argument that you still have access to the building even though you're closed, but if you're a mall retailer, and I mean all of Simon's malls are closed right now, I'm pretty sure Taubman's the same.
Moser: Yeah, I'd have to imagine. I think I saw where maybe one of them might have been open for a stretch, but yeah, it would strike me that they all probably have to be closed at this point.
Okay. So, speaking of standoffs, let's take this conversation from Real Estate Investment Trust than to insurance companies, because we were reading an article in The Wall Street Journal this morning that is talking about the pressure that is mounting on insurance companies to actually payout for claims that are tied to these issues with coronavirus, yet these are not necessarily obligations that insurance companies are on the hook for. So, we're seeing lawmakers and regulators actually now getting out there and saying, "Listen, insurance companies, we know that maybe the coronavirus isn't necessarily something that's covered in the policy, but given what's going on today, this is ... " you know, to use an old Office favorite, I mean " ... it's essentially threat level midnight here. So, we're asking you to perhaps rewrite the language or make an exception here in trying to payout or help at least in this liquidity crunch in regard to all the losses that a lot of these businesses are taking."
I mean, there isn't really a lot of coverage it seems for something of a pandemic nature, yet here we are. And so now, it seems like we're kind of in that same position where I don't even know. I mean, I guess the insurance companies could take a really firm stance here and just say "No," but I don't know that necessarily is the wisest thing to do. We're seeing some states trying to push forward some legislation, but that legislation is getting tabled, because it is a very hot button issue. But we're seeing companies like Allstate, Berkshire Hathaway with GEICO and Progressive, we're seeing some companies step up and say, "You know what, we're going to be just like the banks here. We want to be a part of the solution.? Is that something we should worry about in regard to investing in insurance companies? Is this something that could snowball out of control, do you think?
Frankel: Well, I'm not sure, it's going to snowball out of control. We're specifically talking about a type of insurance called business interruption insurance, for the most part. Yeah, I mean there's some implications for, like, auto insurance and things like that, but for the most part this is business interruption insurance which companies buy. You know, let's say you have a restaurant, you would buy business interruption insurance to protect against having to close down. Which sounds like it would apply here, but a lot of these policies specifically have specific language to exclude virus-related closings.
Now, the intention of these aren't necessarily for a pandemic like this, it's, you know, let's say you have a restaurant and your whole crew gets the flu and you have to shut down, your insurance probably wouldn't cover that. So, there's not necessarily a gray area, the language is clear that it's not covered, but like you said, the question is, is that the right thing to do? And, there is some gray area there.
Moser: [laughs] Well, there is a lot of gray area, because, listen, having worked in the insurance business for at least a stretch, insurance is funny, it's one of those things that we need as consumers. But I'll tell you, you see very quickly when you work at an insurance company, even the reputable ones, at most they want to pay what they owe. They're not really all that keen on paying out money though.
Frankel: Right. [laughs] No, they definitely don't want to pay any more than they have to, and this could be a very slippery slope, how many businesses are closed right now. So, this could get really big, really fast, so they don't really want to pay anything more than they have to. And even if it's just one business, because then it will lead to two, which will lead to a hundred.
So, some states could force them to pay though. That's one big issue to keep an eye on. Like you said, there's a lot of legislation trying to make it through the legal system right now, state congresses and things like that, that could force businesses to pay this. So, it's a very fluid situation, I don't see it really doing much damage to the insurance sector. I hate to keep bringing up the stimulus, but there's provisions that protect businesses that have had to shut down right in the stimulus bill. So, I see that taking some of the weight off of this issue too.
Moser: Yeah. And the other thing to remember with insurance companies, these are far different than a restaurant, for example, but insurance companies, that's a pretty reliable stream of revenue. I mean, even if something is -- we hit a bump here along the way, their revenue stream might be interrupted, but generally speaking insurance is a pretty reliable revenue stream, and so they always have that to look forward to, as well.
So, yeah, it's a slippery slope for sure, it is, by the same token, nice to see a lot of those familiar names getting out there and saying, "Hey, we'd rather be part of the solution then try and cause more problems." So, again, just a testament to the time that we're living in right now.
Before we continue, as a reminder for all of you listeners out there who are likely looking for more stock ideas, because if you're listening to the show, of course, you're looking for more stock ideas. So, why not check out our Stock Advisor service? You'll get stock recommendations from David and Tom Gardner every month, you get Best Buys Now, you get a whole lot more. If you just got to IF.Fool.com and you can take advantage of a special 50% discount for listeners.
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Okay, Matt, let's wrap up the show this week with a little bit of a different twist here. We normally give our listeners one to watch, this week we decided to give our listeners four to watch. And these are actually four stocks we want to get on listeners' radars because we feel like these are four stocks that we think represents some potential opportunity during what is obviously a downtime in the market. Companies related to the financial space in one way, shape or form. And, Matt, I'll go ahead and let you kick it off here, but what are a couple of companies that you think investors should be keeping a close eye on?
Frankel: Well, this is tough, because I have 48 stocks on my watchlist right now.
Moser: [laughs] Okay. You got to give us two.
Frankel: [laughs] So, just to name two in the financial sector. I'd say Bank of America is my favorite in the banking space right now. They're down 37% year-to-date, and for good reason. Their interest rates have fallen, the recessions lead to lower demand, higher defaults on loans, but the bank is trading for 80% of its book value, which is pretty crazy right now.
Moser: That is, that is, wow! yeah.
Frankel: And it's a well-run bank, this is not the same Bank of America that existed before the financial crisis. They have a pretty nice loan portfolio. They've done a great job of increasing efficiency by embracing technology. I love their management team, it's one of my biggest financial holdings in my portfolio and I don't see myself getting rid of it anytime soon.
The other one is Square, which probably shouldn't surprise a lot of people. Square has lost 34% in March alone. I would say, "Wow!" but what stock hasn't lost 30% in March right now. [laughs]
Moser: [laughs] They've all lost a lot.
Frankel: And another one for good reason, Square's main business is small business. Small businesses are largely closed right now, unless they are essential, so this will hurt them in payment volume, they have their Square Capital lending platform, people might not be able to pay back the loans. But there's a lot of good things going for it. Square just got a banking charter, for example, that will also allow it to set up a low-cost deposit account platform that would help fund its loans.
The cash app is still a phenomenal piece of the puzzle. 24 million active users. The stimulus checks that are about to go out could actually be a big benefit to the cash app. I was reading that the cash app generally gets a big bump around tax refund time, for example. So, they could see kind of a double tax refund bump this year.
And the new investment platform, their CFO said that the investing users generate 2X to 3X as much revenue for cash app than non-investing customers. And with the market like it is, there's a ton of investing opportunities, so I could see that being an uptick.
And we've actually had this discussion where now that they've got the bank charter and Square Capital is a small business lending platform and small businesses are going to be in need, we could actually see Square having a big part in their recovery when this is all said and done.
Moser: I couldn't agree with you more there, I think we've been both looking at that thinking the same thing. And I mean, part of that is attributable to the network and part of that is attributable to Jack Dorsey and just his general nature. And I saw a tweet from Jack the other day.
I think there are some concerns with this stimulus as it rolls out, I mean, there's going to be a delay in getting people money and getting money from point A to point B. And while a lot of these companies like Square and PayPal do that really well, they could do it a lot more quickly. And Jack was saying something to the extent of, "Hey, listen we can get this money into people's hands more quickly, to people that need it most, let us help." And so, it'll be interesting to see if the government does look to companies like Square to help.
But two very good picks there, I like that, Bank of America and Square. I am going to run with Ameris Bancorp, which is certainly a business I know listeners are familiar with, because I've talked about it before here. You know, back in November 2010, when I first actually recommended Ameris for the Rising Stars Real-Money Portfolios that we did back in the day there, it was trading at that time around 1X book value and it had gotten a little bit below book value, this was in the middle of the Financial Crisis, it was just a little bank in Southwest Georgia, but they are very well managed and they were seen by the FDIC as a part of the solution in kind of rolling up some of those failed institutions.
Fast forward to today, I mean, this is unarguably a better and even stronger bank today. And we've essentially roundtripped back to those levels, the stock is trading at around 1X book value again. So, I think if you're looking for some small bank exposure, this really is a good one. It's well-run, it's well-capitalized, plenty of opportunity down the line as we see any kind of a recovery, no matter how long that takes really. And I think the Fidelity acquisition that they just closed on recently is going to pay off very handsomely down the line as well. So, Ameris Bancorp is one that I'm going with there.
And then another one, to me, it's kind of a no-brainer, I guess, but war-on-cash favorite MasterCard. I think anytime you see these shares in that 30X earnings range, you need to be taking a closer look. And this is a time, we will look back on this time, I think, most certainly as a catalyst for digital payments and a cashless economy. I don't know that we're ever going to fully move toward that, but I think this is only going to accelerate that concept and more people buying into the idea that you don't necessarily need cash to be able to spend money; a lot of different ways to do it now.
And then it's just a little bonus there, Matt, you know my penchant for immersive technology, and with MasterCard working on releasing their augmented reality app for their rewards program, I just thought that was really cool, I like to see that kind of forward-thinking and I can't wait to fiddle around on that just to check it out.
But those are the four for you there, Bank of America, Square, Ameris Bancorp and MasterCard. Matt, we'll keep track of these, right, I mean, we might as well?
Frankel: Absolutely. We might even have another four next week.
Moser: Yeah, maybe this is like the start of an Industry Focus basket, maybe we can look at it that way. But, hey, listen, that's going to do it for us this week, folks. Remember, you can always reach out to us on Twitter @MFIndustryFocus, you can drop us an email at IndustryFocus@Fool.com.
Again, thanks for bearing with us during this difficult time, I know the show quality is a little bit hit-and-miss sometimes, but it's all going remotely and over the internet, and you know, Matt, we're doing our thing, but none of this works without Austin and we can't thank Austin Morgan enough for all of his talent here behind the glass, so to speak, the proverbial glass, even if it's not behind the glass, maybe it's behind the Zoom, maybe that's we'll just say, it's the man behind the Zoom, Austin Morgan.
So, Matt, I appreciate you taking the time out of the day to join us. Again, it was great talking to you.
Frankel: Yeah, always.
Moser: Alright. We'll see you next week.
As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.
Thanks again to Austin Morgan for keeping the wheels turning for us as always. For Matt Frankel, I'm Jason Moser, thanks for listening and we'll see you next week.
Jason Moser owns shares of Ameris Bancorp, Mastercard, PayPal Holdings, Square, and Twitter. Matthew Frankel, CFP owns shares of Bank of America, Berkshire Hathaway (B shares), Ryman Hospitality Properties, and Square. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Mastercard, PayPal Holdings, Ryman Hospitality Properties, Square, and Twitter. The Motley Fool recommends Ameris Bancorp and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), short September 2020 $70 puts on Square, and short June 2020 $205 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Plus, they discuss why they think Bank of America (NYSE: BAC), Square (NYSE: SQ), Ameris Bank (NASDAQ: ABCB), and Mastercard (NYSE: MA) could be great buys right now. In this episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, dig into two major stories in the real estate sector. Well, let's talk a little bit more about that in Real Estate Investment Trust, because we saw the headline this morning that another REIT here, domestically, U.S. mall owner Taubman is telling tenants that they're going to need to pay rent during this crisis. | Plus, they discuss why they think Bank of America (NYSE: BAC), Square (NYSE: SQ), Ameris Bank (NASDAQ: ABCB), and Mastercard (NYSE: MA) could be great buys right now. Matthew Frankel, CFP owns shares of Bank of America, Berkshire Hathaway (B shares), Ryman Hospitality Properties, and Square. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Mastercard, PayPal Holdings, Ryman Hospitality Properties, Square, and Twitter. | Plus, they discuss why they think Bank of America (NYSE: BAC), Square (NYSE: SQ), Ameris Bank (NASDAQ: ABCB), and Mastercard (NYSE: MA) could be great buys right now. Now, for background Taubman is a Real Estate Investment Trust, around $3 billion market cap, but also, we just saw recently where Taubman is going to be acquired by Simon Property Group, which is another company we talk about here a number of times on the show, another Real Estate Investment Trust, one that you actually like, I believe. So, let's talk about this for a few minutes because you know this runs a little bit counter to another story that came out late last week when the Cheesecake Factory essentially said, listen, we're telling our landlords we can't pay rent this month, we don't have it. | Plus, they discuss why they think Bank of America (NYSE: BAC), Square (NYSE: SQ), Ameris Bank (NASDAQ: ABCB), and Mastercard (NYSE: MA) could be great buys right now. Frankel: Well, for one thing, most hotels are closed down right now. And just one other point before I let you take it away here, there was one Cheesecake Factory in Taubman properties, but I believe Simon had closer to something like 30, maybe a little bit -- Frankel: Yeah, 28. |
27838.0 | 2020-04-05 00:00:00 UTC | Validea's Top Five Financial Stocks Based On Joel Greenblatt - 4/5/2020 | ABCB | https://www.nasdaq.com/articles/valideas-top-five-financial-stocks-based-on-joel-greenblatt-4-5-2020-2020-04-05 | nan | nan | The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. This value model looks for companies with high return on capital and earnings yields.
ALLIANCE DATA SYSTEMS CORPORATION (ADS) is a small-cap value stock in the Consumer Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Alliance Data Systems Corp is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
EARNINGS YIELD: NEUTRAL
RETURN ON TANGIBLE CAPITAL: NEUTRAL
FINAL RANKING: FAIL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ACT II GLOBAL ACQUISITION CORP (ACTT) is a small-cap value stock in the Misc. Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Act II Global Acquisition Corp is a blank check company. The Company is focused on effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. It intends to focus on businesses that include the consumer packaged goods (CPG) and other consumables and hospitality, including restaurants. It has not conducted any business.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
EARNINGS YIELD: NEUTRAL
RETURN ON TANGIBLE CAPITAL: NEUTRAL
FINAL RANKING: FAIL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ARCH CAPITAL GROUP LTD. (ACGL) is a large-cap value stock in the Insurance (Prop. & Casualty) industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Arch Capital Group Ltd. provides insurance, reinsurance and mortgage insurance. The Company provides a range of property, casualty and mortgage insurance and reinsurance lines. The Company operates in five segments: insurance, reinsurance, mortgage, other and corporate. The insurance segment's product lines include construction and national accounts; excess and surplus casualty; lenders products; professional lines; programs; property, energy, marine and aviation; travel, accident and health, and other. The reinsurance segment's product lines include casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe, and other. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. The other segment includes the results of Watford Holdings Ltd.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ALLEGIANCE BANCSHARES INC (ABTX) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Allegiance Bancshares, Inc. is a bank holding company. Through its subsidiary, Allegiance Bank (the Bank), the Company provides a range of commercial banking services primarily to Houston metropolitan area-based small to medium-sized businesses, professionals and individual customers. In addition to banking during normal business hours, the Company offers extended drive-in hours, automated teller machines (ATMs) and banking by telephone, mail and Internet. The Company also provides debit card services, cash management services and wire transfer services, and offers night depository, direct deposits, cashier's checks, letters of credit and mobile deposits. It also offers safe deposit boxes, automated teller machines, drive-in services and round the clock depository facilities. The Company maintains an Internet banking Website that allows customers to obtain account balances and transfer funds among accounts.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ameris Bancorp is a financial holding company. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
Since its inception, Validea's strategy based on Joel Greenblatt has returned 23.55% vs. 93.86% for the S&P 500. For more details on this strategy, click here
About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. The "Magic Formula," as he called it, produced back-tested returns of 30.8 percent per year from 1988 through 2004, more than doubling the S&P 500's 12.4 percent return during that time. Greenblatt also produced exceptional returns as managing partner at Gotham Capital, a New York City-based hedge fund he founded. The firm averaged a remarkable 40 percent annualized return over more than two decades.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. Company Description: Alliance Data Systems Corp is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a small-cap value stock in the Regional Banks industry. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. |
27839.0 | 2020-03-27 00:00:00 UTC | First Week of ABCB May 15th Options Trading | ABCB | https://www.nasdaq.com/articles/first-week-of-abcb-may-15th-options-trading-2020-03-27 | nan | nan | Investors in Ameris Bancorp (Symbol: ABCB) saw new options become available this week, for the May 15th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the ABCB options chain for the new May 15th contracts and identified one put and one call contract of particular interest.
The put contract at the $20.00 strike price has a current bid of $2.05. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $20.00, but will also collect the premium, putting the cost basis of the shares at $17.95 (before broker commissions). To an investor already interested in purchasing shares of ABCB, that could represent an attractive alternative to paying $21.67/share today.
Because the $20.00 strike represents an approximate 8% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 70%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 10.25% return on the cash commitment, or 76.35% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Ameris Bancorp, and highlighting in green where the $20.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $22.50 strike price has a current bid of $2.10. If an investor was to purchase shares of ABCB stock at the current price level of $21.67/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $22.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 13.52% if the stock gets called away at the May 15th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if ABCB shares really soar, which is why looking at the trailing twelve month trading history for Ameris Bancorp, as well as studying the business fundamentals becomes important. Below is a chart showing ABCB's trailing twelve month trading history, with the $22.50 strike highlighted in red:
Considering the fact that the $22.50 strike represents an approximate 4% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 56%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 9.69% boost of extra return to the investor, or 72.19% annualized, which we refer to as the YieldBoost.
The implied volatility in the put contract example is 109%, while the implied volatility in the call contract example is 96%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $21.67) to be 49%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Of course, a lot of upside could potentially be left on the table if ABCB shares really soar, which is why looking at the trailing twelve month trading history for Ameris Bancorp, as well as studying the business fundamentals becomes important. Below is a chart showing ABCB's trailing twelve month trading history, with the $22.50 strike highlighted in red: Considering the fact that the $22.50 strike represents an approximate 4% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Ameris Bancorp (Symbol: ABCB) saw new options become available this week, for the May 15th expiration. | Below is a chart showing ABCB's trailing twelve month trading history, with the $22.50 strike highlighted in red: Considering the fact that the $22.50 strike represents an approximate 4% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Ameris Bancorp (Symbol: ABCB) saw new options become available this week, for the May 15th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the ABCB options chain for the new May 15th contracts and identified one put and one call contract of particular interest. | Below is a chart showing ABCB's trailing twelve month trading history, with the $22.50 strike highlighted in red: Considering the fact that the $22.50 strike represents an approximate 4% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Ameris Bancorp (Symbol: ABCB) saw new options become available this week, for the May 15th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the ABCB options chain for the new May 15th contracts and identified one put and one call contract of particular interest. | At Stock Options Channel, our YieldBoost formula has looked up and down the ABCB options chain for the new May 15th contracts and identified one put and one call contract of particular interest. Below is a chart showing ABCB's trailing twelve month trading history, with the $22.50 strike highlighted in red: Considering the fact that the $22.50 strike represents an approximate 4% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Ameris Bancorp (Symbol: ABCB) saw new options become available this week, for the May 15th expiration. |
27840.0 | 2020-03-19 00:00:00 UTC | Market Volatility: Fools Answer Your Questions | ABCB | https://www.nasdaq.com/articles/market-volatility%3A-fools-answer-your-questions-2020-03-19 | nan | nan | With the stock market about 30% off its all-time highs as of this recording, and four-digit moves in the Dow Jones Industrial Average every day for more than a week, we were certain that our Industry Focus: Financials listeners had quite a few questions. And we were right!
In today's episode, host Jason Moser and Fool.com contributor Matt Frankel, CFP, spend nearly 50 minutes answering questions that our listeners asked about the downturn and how to invest during it.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on March 16, 2020.
Jason Moser: It's Monday, March 16th. I'm your host Jason Moser, and on today's show, we're going to dive into some listener Q&A. You know, it's obviously a unique time right now with COVID-19 bringing everything to a virtual standstill. So, over the weekend we reached out on Twitter to see what questions you listeners have given everything that's going on? And we thought we'd dive into them today.
Joining me, as always, is Certified Financial Planner, Matt Frankel. Matt, how's everything going?
Matt Frankel: Pretty good. It's really weird talking to you face-to-face because normally we don't see each other while we're recording.
Moser: [laughs] Yeah, it's a little bit of a different time. And, for listeners, if you're wondering, if the audio is a little different, it is a little bit different. We, right now, have closed Fool HQ for nonessential stuff. And while I'm sure you all view your podcasts as essential, as we do as well, you know, we have technology on our side here to be able to record in trying times like these. And so, I'm actually at my house, Matt is at his house, but thanks to our man Austin Morgan, he's going to make all this work for us. And I think this ought to work out well.
So, Matt, let's just go ahead and jump right into it. The first question we have here on Twitter is from @RoseSelavy2, who asks, "Will the corona pandemic be the great paradigm shift to boost digital payments? And while the EU gets punched in the face, what's your view on Adyen?"
So, let's just go ahead and start that question of, first-and-foremost. It seems like the main question here is in regard to the shift toward digital payments. And I certainly do think this is another one of those periods in time where, it does seem like, logically speaking, it makes more sense to use less cash and rely more on digital payments in times like these. I was looking at some different takes here over the weekend, and there's no question you're looking at situations, they are talking about how pathogens and viruses can live on most surfaces for around 48 hours, but paper money can reportedly transport live flu virus for up to 17 days.
That just goes to say that paper money and even coins definitely can transmit those germs, those viruses. And I could see why that would prompt people to want to use less cash. And definitely physicians out there, the World Health Organization, have warned that the virus can be transmitted to customers via banknotes and coins. And so, regardless of your location, using cash is going to, in some cases, probably up the risk there and consequently I think we'll probably see more of the option of digital payments as time goes on. I don't know that this is something that we'll necessarily forget so quickly.
But in regard to Adyen, I did look into Adyen over the weekend and I had not looked at it before, it's a relatively new company on the market. But they call themselves a tech company trying to redefine the payments business. And so, it plays an interesting role in that value chain of payments, but I'd have to dig into it more to get a full understanding of what they view as their competitive advantage.
But there are a lot of things in its favor, strong balance sheet with more than $1 billion in cash. The Co-Founder, Pieter van der Does, is the CEO of the company. The value proposition seems to be that it's a single platform to serve from transaction, to initiation, to risk management, to processing. And they certainly are processing their fair share of currency. I mean, there's about €160 billion processed through Adyen networks in 2018. So, not making a call on the stock, but definitely one that I'm going to get on my radar to learn more about, because playing in this massive payment space, it does look like Adyen could be another way to do that. So, thanks for the question there.
Next question up, we have from @Namredla5, who asks, "When the market sells-off like this, what's the best way to differentiate between the business stock price just going down with the overall market or a business that might actually have its earnings and revenue take a hit in the coming quarters? Airlines are obvious, but others aren't."
Matt, you had a chance to take a look at this, what's your thinking there?
Frankel: Well, first of all, I want to make it perfectly clear, most businesses are likely to take a pretty big earnings hit because of this. There are a very few stocks I could point to that I would say are just going down because of the overall market, most businesses are going to be affected in one way or another. I mean, the U.S. economy is essentially ground to a halt, that's why we're both sitting in our houses right now instead of in offices. [laughs]
But having said that, I would focus the most on companies that have strong balance sheets, companies that have clear competitive advantages, lots of demand for their products. I mean, Apple is one that just immediately comes to mind, no one's going to stop buying iPhones after this. They might stop temporarily, but once the dust settles, you're going to see demand pick up. Their revenues and earnings are certainly going to take a hit, at least for the first few quarters of the year, but in the long run they're going to be just fine. They have a ton of cash, big brand name, competitive advantage. And those are the types of businesses I'm looking at, I'm not looking for businesses that aren't going to take an earnings hit, because you're fighting a losing battle there, so.
Moser: Yeah, it does really feel like. This is a true bear market. I mean, these event-driven bear markets. I mean, they just don't discriminate, and it's just amazing to see even a company, like, Apple selling off the way it has. And we've talked a lot about Apple, going into this year the stock has performed so well. And that's really been a function of multiple expansion, more than anything. It's not, like, the company is growing its profits at some breakneck speed, but the market is just giving it a lot of credit for the dominant company that it is, right?
Frankel: Right. And it's just that I would avoid companies that are really going to take a hit. I mean, airlines look really enticing right now, but I wouldn't go anywhere near them. Same with things like cruise lines, there's so many moving parts there. And if you think a stock like a major airline couldn't possibly go to $0, I can guarantee you that it's a possibility. It's happened before. [laughs]
Moser: Yeah, we've seen it before. And just because it goes down, doesn't mean it's necessarily going to come up. And it's always helpful to try to identify the catalyst that ultimately will bring it back up. With some companies, the catalyst is very obvious, and with others, it's not so obvious.
So, we have another question here from @deedubya78, who asks, "The online bankers, like, Axos Financial, shouldn't have coronavirus fears, but they dropped significantly as well. How do we evaluate them in comparison to banks that have brick-and-mortar components?" What say ye, Matt?
Frankel: I would say, you're thinking about it wrong. The banks aren't dropping because people don't want to go to branches and things like that. The banks are dropping for a couple of reasons. One, a big one, interest rates have plunged, especially if you look at the treasury yields, the 10-year treasury yield is roughly one-fourth of what it was at its peak not much more than a year ago. Banks make their money by loaning out to customers and getting paid interest, if they're charging less interest on loans, then they're going to make less money. No. 2, and probably more importantly in this scenario, if we do get a big global recession, which is looking increasingly likely, it's going to really decrease demand for loans, it's going to cause defaults to rise. And that's true whether you're an online bank or a brick-and-mortar bank. Online banks do have an inherent cost advantage, but they're not at all immune to the effects of a recession.
Moser: Yeah, that's a really good point. And I was thinking about another bank that lacks the bricks-and-mortar presence. And remember, not all that long ago, we had the President of Live Oak Bank, Huntley Garriott. We interviewed him for the show and we talked a little bit more about Live Oak Bank and what its value proposition was. Pretty much a bank built on technology and their focus is really on small business lending, and they don't have any physical branches either.
Another stock that has just gotten really trounced here in this sell-off, in this bear market, and yet to your point, I mean, hey, there is no physical presence to worry about, but is this "a baby with the bathwater" situation? It could be, particularly, if we think that maybe as we recover from this, banks like Live Oak are going to play a pivotal role in making sure a lot of these small businesses that really feel the pinch from this, making sure they actually are able to get back up on their feet. That remains to be seen.
I mean, I think that could be seen as potentially a catalyst for something like Live Oak, and that maybe starts the conversation of, is this a time to be looking at a company like that? But, yeah, to your point, it's just not discriminating, it's everything is getting hammered here. And that's just what happens with bear markets, and we've seen this before and we'll see it again.
A question here from @TMFBowman, who asks, "Will there be widespread bankruptcies, and what companies will go first?"
And, you know, I think that's an interesting question. I think the market right now, you know, what we're seeing, because we saw, obviously, the Fed drop rates to basically 0% here over the weekend and introducing new quantitative easing, trying to get more money into the system and free up the financial system. So, that access to funding is not so difficult. But it, kind of, feels like to me, they're missing the point.
The market, to me, wants reassurance, not rate cuts. And so, I think until it actually gets reassurance, we're going to see this thing going bonkers. And I mean, when I say reassurance, that's either going to come in the form of virus abatement later, which hopefully will happen at some point here sooner or later, or financial aid to support the millions of jobs and lives that are being put on hold here.
And I think that perhaps where we're not seeing enough done is actually the commitment to the financial aid to help people meet payrolls, to help people that are dealing with hiatus from employment, that hasn't really happened yet. Now, I know Congress is working on passing a bill here to help move things along, but we haven't gotten anything yet. And I imagine, once they get that passed, it's going to feel like we need more.
If companies do go bankrupt, I would suspect it would be the small and medium sized businesses first. I think the companies that just don't have the financial resources to deal with any kind of extended time like this, any kind of extended stretch, those are probably going to be the companies that do go first. I do feel like we will probably have somewhat of a safety net pulled in here that will keep bankruptcy still minimum, but there will likely be some.
Airlines I think is one of the markets we keep on talking about, Matt. And clearly, D.C. is already talking about ways to help keep the airlines propped up, because it does seem like the situation is only getting worse for them.
Frankel: Yeah, and I mean, like you said, if I were just to look at the numbers right now, you know, obviously, I would have to bet on airlines or cruise lines or something to that effect to go bankrupt, but there are so many moving parts here. We don't know what a bailout bill could look like. I mean, going into the financial crisis, you would have bet on the banks to go bankrupt but they got so much capital injected into them. And the system kind of propped them up that the big ones were all OK in the end. So, I think the same thing is going to happen here.
Moser: Yeah. And, you know, that's interesting, I'm glad you brought that example up, because I remember very vividly, back at that time, you remember Washington Mutual, and back in the time of the financial crisis Washington Mutual was one of the big players in the mortgage space. I mean, this was one of those companies that were kicking around, is this too big to fail? And then you have this conversation of, "Well, are they going to nationalize banks? If they do, what does that look like?" And at the end of the day, you saw some financial institutions go belly up but most didn't, but some did and Washington Mutual was one of them.
Frankel: Yeah, it's really too early to tell, I'd say another week or so, we'll have a lot more clarity from the legislative standpoint of it.
Moser: Yeah, I think that's a good point. And I do think, you know, this is one of these environments where after the dust all settles here, this is one of those situations where we're going to look back on this period of time here. And the strong really do get stronger in times like these. I mean, companies that go into bear markets, economic pullbacks like this, a crisis like this, the companies that go in here with the strength, the competitive advantage, they come out oftentimes a lot stronger. So, maybe that helps make some sense of what your watchlist should look like.
Frankel: Look at JPMorgan ...
Moser: Yeah, a good example. Very good example.
Frankel: ... before and after the financial crisis. They went from being, well, one of the big players, but to being, you know, the powerhouse in the industry. They were, I'd say, the strongest of the Big Four going into that.
Moser: Yep, absolutely. Okay, we have a question from @Sandeep and David who asks, "On which companies do you think Warren Buffett is spending his $120 billion?" Matt, I know you have a couple of thoughts here.
Frankel: [laughs] As much as he can get his hands on, I'm hoping. A few things I hope he's buying right now. I hope, first of all, he's buying a lot of Berkshire shares back because Berkshire's getting hit just like the regular market. It was down 10% this morning. I hope he's taking advantage. I mean, they bought shares back at about $218 last quarter, which remember, to buy back shares they have to, both him and Munger have to agree it's trading cheaply. And if they thought it was cheap at $218 then the $170s, I'm sure they really think it's cheap.
But beyond that, I hope they're buying some of their favorite bank stocks because financials have -- as we just mentioned a little while ago -- have really gotten hit. I hope they're adding to the positions like Goldman; Bank of America is another one that they own a lot of that they could buy some more; AmEx; our war-on-cash stocks, Visa (NYSE: V) and MasterCard (NYSE: MA), Buffett owns a little bit of. His energy stocks, Occidental is looking terrible. And as most people who speculated with the airlines, I would love to see Buffett take this opportunity to acquire a whole airline cheaply. But I honestly, as much as this is an unpopular opinion, I don't see that actually happening.
Moser: Yeah. I would be kind of surprised actually to see that. It does feel like he would buy a lot more Apple in a situation like this. And I'm just going to offer up my periodic reminder that McCormick is still looking really, really nice out there. Market cap is now pulled back below $17 billion. This could be a meaningful acquisition, you know, from that elephant gun perspective, without having to spend all your money in one place. And you know how I feel about McCormick, Matt.
Frankel: Yeah. I'd like to see Buffett acquire, that's a very Buffett business. It's a timeless business. I mean, they sell their products no matter what kind of economy is going on.
Moser: Yeah, that's right, good or bad, they still sell a lot of it. Okay. How about this question from @tara98333, she says, "Jemo, thanks for listening to us." You're welcome, Tara. "Analysis of fintech companies that will hurt versus benefit the most, also, who has enough cash and debt to survive this crisis?"
So, Matt, let's tackle the fintech companies that you think walk out of here looking better versus the ones that are going to have some trouble to deal with. What are some of the companies that you feel like are hurt more from a bear market like this?
Frankel: Well, most will hurt. The companies that are going to get hurt the most are the ones that, both, process payments and lend money. If you think of, like, a Visa and MasterCard, they're essentially the middleman. They get a small percentage of each transaction they process and in a recession the payment volume is going to drop but their risk is limited because they don't actually loan any money, they're just the middleman. Whereas when you think of a company that actually makes loans, like, I hate to say it, one of my favorites in the world, Square (NYSE: SQ).
Moser: [laughs] I was going to go to that one eventually.
Frankel: They not only are, kind of, a middleman processing payments, but they have a pretty substantial business lending program.
Moser: With Square Capital, you're talking ...
Frankel: ... With Square Capital. Now, having said that Square Capital is not your average loan program. I worry more about a company, like, an AmEx or a Discover in this environment with actual consumer lending exposure. But at the same time, the companies that do both sides of the fintech business, the loans and the processing are likely to feel a sting. But on a good note, most of our favorite fintechs really don't have a ton of debt, they're mostly cash-rich companies.
I mean, Square, PayPal, Visa, MasterCard, all of them have solid balance sheets. So, I don't see any of them getting hurt to the point where they're going to have to raise capital or shut down or anything like that. But they could get hurt in the short-term and it's really a question of how quickly this pandemic really works itself through the system and how quickly the economy rebounds afterwards that's really going to name the winners.
Moser: Yeah. And you know, I'm glad you brought up Square and its two-sided network there, because it does a lot. And on the one hand, it's nice it has that diversified business, but on the other, you can see its exposure to – I mean, most of its clients, most of its customers are the small- and medium-sized businesses that are really starting to feel the pain from this and will feel the pain for some time to come. And so, in the near-term, I can see that being a problem, obviously, it's going to result in fewer dollars flowing through that network and probably fewer customer signing up, because fewer businesses are starting in conditions like these.
However, I do also think that maybe this is a little bit of a light at the end of the tunnel here, but I do feel like with Square and Square Capital, they're going to be seen as part of the solution to this. I mean, this is going to be part of the solution and being able to help people recover. And we know how Jack Dorsey is, he's a good person, I think this is going to be something that really becomes central to his focus here in the coming year and beyond, is helping all of the small business customers get back on their feet and they'll use Square Capital to do that. And, perhaps, that expands their customer base, because they're seen as a way to work through what is, obviously, a big problem for a lot of small- and medium-sized businesses out there today.
Frankel: I'd agree. In tough times, I'd rather owe money to Jack Dorsey than to Bank of America or one of those. [laughs] It's just a better situation to be in.
Moser: Yeah. He seems to be a little bit more empathetic. [laughs] Alright. Well, let's take a look here at a question from @Chris63130109. Man, you got to get all those numbers out of that user ID, buddy, but anyway, here we go, "My brother works for a popular SaaS company. He gave everyone $15,000 worth of stock for Christmas." Damn! that's a nice brother. "We moved $4,000 out and diversified into other stocks, and we've been adding every two weeks since. Should I lower the SaaS position more? Is the portfolio still too weighted? Thanks for any help."
So, everybody's risk tolerance is going to be different. I mean, when you look at that on the numbers there, you're close to 33% there that you've only taken out of that $15,000 position. In other words, you kept essentially, it sounds like, about 65% or so of that position in that one company; if I'm reading that correctly. In any case, if you have that much exposure in your portfolio to one particular company, that's a lot. Now, I'm not saying, it's right or wrong, it's just you need to be aware of the fact that you've got a lot of eggs in one basket there.
Now, if this is just one part of your overall investment portfolio, Chris, I'm not sure. And I don't know what SaaS company this is, so take this with a grain of salt. My initial reaction here though, is that you probably would want to diversify that money out into some other holdings. I think that we've certainly seen the benefits of diversification over the last few weeks here as the market generally has been feeling so much pain. But, yeah, I would definitely at least look at that and see if there are not some other places for that money to go.
Next question here from @SherifMarcos, who asks, "What do you think about a company like Spirit Airlines (NYSE: SAVE), trading for less than cash-on-hand. $900 million market cap versus $1 billion in cash ... " That has changed since he asked the question; it is a little bit cheaper today, but " ... with gas where it's at and interest in debt being next to free, do you see a multi-bagger from here?"
And I would just say here, Sheriff, that while Spirit is a company that has been recommended in a couple of our Foolish services, you know it has not performed very well, unfortunately, and obviously, this is a very difficult time for a small airline. And you made a good point there, it's a small company that's less than $1 billion market cap now.
They do have a balance sheet rich with cash, however, in some instances, I don't count that cash in some cases. In the cases where I don't really count that cash are situations like this, where you know that airline is going to need that cash. It's going to be lucky if it can make it through without any assistance. Chances are it's probably going to need some type of a bailout, given what we know about the state of the airline industry right now. I mean, there's talk of putting all flights in the U.S. on hold, which is, I can't even fathom what that would look like. I mean, I know we had to harken back to the days of 9/11 when that feeling, I think, last existed.
But I look at Spirit today and I don't know that I would view that as a multi-bagger opportunity because of all of the headwinds on the horizon. And I wouldn't count that balance sheet as anything other than some cash that they're going to need and they're going to need more. So, I would not value the company based on that cash at all. I would instead try to understand a little bit better what moves the airline industry forward from this. We go back to talking about [how] the strongest survive. I don't know that Spirit Airlines is necessarily the strongest out there right now, and I'm not saying that it's going to go out of business, but I'm saying from an investor's perspective, I don't know that I would have this top on the list, and I certainly wouldn't be looking at that $1 billion on the balance sheet as really any type of an asset that investors would ultimately see.
Frankel: Right. And being an airline is a capital-intensive business, it costs a lot to put a plane in the air, it costs a lot to just own and maintain a plane. Airlines are set to lose billions of dollars from this. You've probably seen pictures being tweeted of flights with, like, three people in them, the airlines lose a ton of money when that happens.
Moser: Yeah. I mean I saw a flight. There was a video the other day, I'm assuming this is real, but it was a flight to France and there was, like, one guy on the entire plane. He was doing the worm up-and-down the aisle. [laughs] Which was just bizarre-looking. But, yeah, you just think the airlines are taking a bath on that, but that's just the situation that we're in right now.
Frankel: You'd be surprised how quickly an airline can run through $1 billion of cash when that happens.
Moser: Yeah, absolutely, it disappears in the blink of an eye. Okay, Matt, we have another question here from, I love this, @UnderdogIsHere1. Danny asks, "Any insights into the huge swings in Green Dot (NYSE: GDOT) the last couple of days? If you could add one company to the war-on-cash basket who would it be? Thanks for all that you both do."
Danny, thanks for the question and the kind words. And, Matt, I knew you were thrilled to see a question on Green Dot, so I'm going to let you take it.
Frankel: I am. I would actually put the second-half of that question to you, but we'll get to that. For Green Dot, my take on it is that Green Dot's core business of prepaid cards could get hit really hard in the recession. It's just a business that, No. 1, is just declining in general, but No. 2, it depends on consumer spending, like we've been talking about a lot of them.
And on the other hand, I think the market doesn't really know how to value the Banking-as-a-Service side of Green Dot's business, the infrastructure it sets up for companies like Apple and Intuit and Stash and things like that. And it's such a new concept to provide third-party banking services to other companies that I just don't really think the market knows what to do with that.
But it's worth mentioning that Green Dot is still after a 30% market drop, well off its lows. Today it's actually one of the better performers in the entire financial sector. Remember it dropped a lot a little while ago when the CEO announced his retirement unexpectedly. Green Dot is still about 30% higher than its low when we were talking about it last time. So, it's holding up pretty nicely. It's been pretty volatile, along with the rest of the financial sector, but it's actually been one of the better performers.
As far as a company to add to the war-on-cash basket, that's kind of your basket, so I was going to put that one over to you.
Moser: Well, I'll give you one name I would throw out there, and then to see if you have one too, I'm always interested in what you have to say. You know, for a long time, thought I would just go with MercadoLibre, but you know what the other company, I feel like I probably put in there before MercadoLibre, is Shopify. And really, just, you know, learning more about Shopify and the business opportunity that exists for a company like this, the Shopify payments part of the business, and they work in conjunction with Stripe to run a lot of money through their networks.
I think I might actually put Shopify in there over MercadoLibre, but it's a really close call there, I don't know, do you have one in mind?
Frankel: I mean, I don't disagree with that. Maybe AmEx is one that I would add to it just because I like a lot of what they're doing. Especially because they're a unique kind of credit card company in the sense that they're being interactive in embracing millennials and that sort of thing. Their Lounge network is obviously a play toward millennial travelers and things like that. And I think it's going to be a good opportunity to pick them up right now.
Moser: Yeah, I think you're right. And what we're seeing with American Express too is that they've been able to pivot, more or less, their business toward that younger demographic. They've been able to expand their product offering and change the whole perception of what it means to be an American Express cardholder. I mean, for the longest time you were a high-cut if you had an American Express card, but now it's really, it's a card for everyone. They've got a lot of different products out there that can fit a lot of different needs. And so, I do applaud them for being able to do such a good job with that. And I think the brand, obviously, there's tremendous amount of brand equity there that would be hard to overcome as a competitor.
Okay. Let's take a look here, another question from @BrockHBriggs, who asks, "Rates have continued to go lower over the last little bit and successful banks have found other ways to make money besides interest to continue their growth, is this sustainable for them over the long-term because the Fed seems to think lowering rates is the answer to everything?" [laughs]
You're right, Brock, they definitely do figure that is the answer to everything, as we've seen here over the weekend as well, but, Matt, what's your take here?
Frankel: And this question was posted before the Fed decided to chop interest rates to 0%. So, that was a happy coincidence there. But, yes, banks could definitely make money in a zero-interest rate environment, they're still going to charge interest on loans, you might see mortgage rates drop to 3% or even 2.5%. You know, it's the same with auto loans, personal loans and pretty much every other banking product. Like, for example, credit card interest rates are directly tied to the Federal funds rate, but this was just – I mean, I say, just, but this was a 100-basis point cut, meaning that, if your credit card was charging you 17% interest, it's now charging you 16%. So, banks are still making money, it's not like interest is being eliminated totally.
So, profit margins are definitely going to be squeezed when interest rates fall and the Fed lowers rates. I don't see the Fed going negative, despite what some people in the media have said. This is a not-so-bold prediction in my mind that the Fed is not going to even entertain the thought of negative interest rates despite what the President has said.
So, this will be a profitable environment for banks. In the long run, like you said, they'll come out of it, I think, even stronger than before because they're very financially sound. If you remember that since the financial crisis, banks have had to be stress-tested. So, we know that the big banks, especially, can really survive even a much more terrible downturn than even the worst-case scenario of this could be.
I forget the exact requirements for the stress testing, but it's something, like, 20% unemployment or something like that. So, the banks are fine. They're going to make money. It won't be as much money for a little while, but they're still going to be profitable.
And it's also worth mentioning, for all of the banks that have investment banking divisions, which is pretty much all of the big ones, volatility is actually usually a positive for trading revenue. I want to say, for Goldman Sachs, 2009 was its most profitable year ever and volatility is a big reason for it. So, you're right, they do have other ways to make money, interest rates are going to hurt profits but not by as much as you may think.
Moser: Okay. And let's piggyback on that discussion there into this next question from @TeddyMacGaron, and Teddy asks, "What should I think about banks in a zero-interest rate environment, which could come very soon?"
And clearly that day is today. But his question, kind of, gets to another important issue here, what about the differences between big banks and small regional banks: Buy, sell or hold? And so, I just wanted to talk a little bit with you about how you feel about big banks versus the smaller banks today. Because you and I both love the small banks. One that I talk about all the time, Ameris Bancorp (NASDAQ: ABCB), I found Ameris back in the depths of the financial crisis and the Great Recession back in 2010 or something like that, when it felt like the whole world was coming to an end there. And their stock had gotten hammered, but it was a well-run bank that kind of just kept on doing what it was doing and it recovered nicely.
But lo-and-behold, now, here in this bear market, Ameris is getting hit along with all of the other small banks; we talked about Live Oak just a little while ago. So, I see opportunity in both. I mean, it does feel like the leaders, the big dogs, come out of times like these in better positions, but that doesn't mean that smaller players, smaller regional banks can't come out of here looking better as well. Do you tilt toward one over the other in a time like this?
Frankel: I tend to agree. As far as my investment dollars go, I tend to gravitate toward the big banks in environments like this, just because they've been so stress-tested and so scrutinized that we know that they can make it through. It just seems like a little bit more of a safer play, I mean, a well-run regional bank can be a great investment in any environment. Like you said, Ameris, I don't think is anything to worry about. Just to kind of disclose one of mine, I bought Goldman Sachs about a week ago, after the downturn started, because I think it's a great value and because I think it can really make it through pretty much anything the market throws at it.
Moser: Yeah. And I'd tell you, I was looking at the sell-off in Ameris today and part of me was thinking, "Man! you know what, I really want to buy some more shares of this bank." Then the other part of me said, "You know what, I think we're probably going to talk about it on today's show, so I better hold off."
And for listeners who don't know, we do have trading guidelines here at The Fool, so whenever we talk about these businesses, we have periods of silence we need to maintain before and after we make any transactions buying or selling. So, anytime you don't hear us talking about something that may be why we're being silent in a period of heavy news.
But, yeah, I feel like Ameris, if this sell-off holds, this is one I own shares in today and I think I'd like to add to it, because you're right, I do think they are in a good position. They just finished that acquisition with Fidelity. Financially, in great shape. I mean, this is just one of those things that just, again, these bear markets don't discriminate.
Talking about bear markets, Brian here @bsc082 asks, "Can this current scenario be compared to anything in the past?"
The short answer is, yes, I think you can compare it to anything and everything, it's just a matter of trying to figure out what the similarities and what the differences are. And I came across some interesting research recently from Goldman Sachs that was talking about bear markets like the one we're in, event-driven bear markets, because there is a difference between an event-driven bear market or a secular bear market that's a bit more tied toward economic performance.
But these types of bear markets tend to result, on average, in 29% declines and take about 15 months to get back to their previous levels. And so, I mean, clearly, we're in that 29% range now. I think the Dow is down around 30% from its highs. And the 15-month thing, I mean, it's important to note too 15-months to get back to where they were, to where things were. So, you have to recognize that all along the way, getting back up to that point where it used to be, that also represents opportunity. I mean, you want to be buying all the way up. That's why investing in that 401(k) all along the way here is so important, because that recovery is also an opportunity. Don't you think, Matt?
Frankel: Oh, absolutely. And directly there's no comparison to this event, especially in the modern age. I think, in 1918, there was a big disease – don't quote me on that year – but it's happened before where a health outbreak has, kind of, rocked the nation, but not in the past hundred years or so.
Moser: No. And there was SARS, it wasn't that long ago when the SARS crisis hit, but that was so much smaller in comparison. I mean, that was a virus that ultimately was contained. Something that's very similar to the coronavirus, but the numbers there were just a fraction of the numbers that we're dealing with now. And so, it's difficult to compare.
I mean, the last time I felt like this in the market, it was back in '08-09 during the housing crisis and the Great Recession that followed. This is what feels about like I felt back then.
Frankel: Right. And I think I'm just going to avoid the market in March from here on out.
Moser: [laughs] Well, I mean, it's just these times are – they're tough to deal with, but by the same token, they can be a tremendous benefit, you can learn so much from them. And I've just, I've said it so much. I mean, going through that Great Recession, it was just a great educational tool as an investor. I pull back from that experience, all the time, lessons that I learned and ways to look at companies, how to invest. One thing I've kept on saying to people is, take it slow, now especially with no commission cost, you don't have to go in there and invest everything at once, you can invest slowly. There's just no reason to try to put everything to work at once, because as we can see, it's not something that just fixes itself overnight.
But, yeah, I mean you can compare and contrast, I think, to really anything, but it does feel like, this is a unique situation, I don't know that there's anything that I can pull from that really necessarily correlates, given the numbers that we know today.
So, here is another question from @Eric_Albee, who asks, "Are there any specific companies that you have changed your long-term, five-year-plus outlook on as a result of the past few weeks?"
And you know, Matt, when I read this question first, my inclination was to think, "Okay, what companies am I less bullish on now than I was before?" And then it started kind of striking me. You know what?! I don't know that there really are any companies that -- when I look at a five-year-plus time horizon -- there aren't companies that I've really changed my outlook on from that perspective, from a negative perspective. But I do feel like, on the upside, I do look at some of our favorite companies, and I think, you know what, they come out of situations like these a lot stronger, in a lot better position.
So, it actually does make me feel a little bit more optimistic about what the future holds for a business like Booking.com; I think I've used as an example on MarketFoolery before. Easy to see today why Booking.com is getting shellacked. I mean, travel is ground to a halt, people aren't going anywhere. But if you believe that in time this virus abates and we get back to life as normal, more people will eventually start traveling again and Booking.com is going to be still that massive network that has a global presence and a massive presence in the travel industry. It's going to be a stronger business, after all is said and done here. And that's one that kind of comes to mind from that question there from Eric.
I don't know, Matt, did you have any examples?
Frankel: Yeah, I'm not sure that my long-term thesis on any stocks that I liked have really changed, but you have to think of some of the things that this is kind of bringing out the use-case for. I mean, just to give one example that we could tell you all too well is Zoom. We're on a Zoom meeting right now. A lot of people thought their jobs weren't possible to do from home until this past couple of weeks. And it's really kind of – yeah, I think Zoom is going to see a nice uptick in business. Especially, I think that I read that Zoom was giving away their services to students who were at home.
Moser: I didn't read that, but that's distinctly possible, that certainly sounds like something Founder and CEO, Eric Yuan would do. A very, very strong culture there. And his focus, you know he always uses that word "Happy," he's just trying to make his customers happy. And I would imagine that he would look at something like this and say, "You know what, this is a time where we all need to band together and fight this thing as a team." And that will have a long-term impact on their business. The brand equity that comes from doing something like that is tremendous.
And speaking of Zoom, I was reading through a note here earlier on Teladoc Health (NYSE: TDOC), that was saying that they experienced a 50% spike in patient visit volume over the previous week. Times like these really, I think, make the argument for telemedicine, why virtual healthcare can work and why it should be a fundamental part of our healthcare system. And so, you see a company like Teladoc, I feel like they're going to come out of this even stronger.
Frankel: Right. And I mean that 50% is not going to be permanent. People are going to start going back to the doctor after this, but at the same time, it's a matter of getting your product in front of more eyeballs, which is what Teladoc and Zoom are doing right now.
Moser: Exactly, exactly. And I think, as a society, we're starting to buy into this notion that, "Hey, you know what, we can actually get a lot of work done at home," and "Hey, you know what, maybe logging into the app there and opening up my doctor's visit from my phone is the better first step to make, in some cases." And so, yeah, it was just interesting for me, I felt like it makes me more bullish on a lot of the companies that I love, but I don't know that there are any companies that I really feel are terribly threatened from this. But a good question, nonetheless.
And let's go ahead and wrap it up, we have one more question here from @WilliamWadbrant, and he asks, "When buying equities, especially in worried markets like this one, it's vital to own quality businesses, as they survive and flourish, while weaker ones fail. How do you evaluate that quality and determine if a business will be able to handle the difficult environment ahead?"
And that's a good question, it lines up with one we took a little bit earlier, "What are some of the qualities you look for in businesses? What makes a quality business to you?" And for me, Matt, one of the first things I go to is the balance sheet and financial resources. I mean, you see a company that has the financial resources to deal with an extended downturn like this, they're going to be the ones that you feel like are going to be in better shape, right?
Frankel: Yeah, that's definitely the first thing I'd look at. But finances being equal, I see which has the more valuable brand name, which one has the services that people can't live without? You mentioned Teladoc, that's a service that people need. Balance sheet aside, Square and PayPal, all our favorite war-on-cash stocks, that's a service that's needed. Visa and MasterCard are some of the most essential companies that I could think of. How many payment transactions would you say go through their system every day? Billions, right?
Moser: Yeah. You get to those absurd numbers like Apple's balance sheet and Facebook's users, the numbers are so big, it's almost difficult to comprehend at times.
Frankel: Right. And so, in things like that, I tend to gravitate toward the bigger companies, the sector leaders during these times as companies that have a better shot of making it through anything unscathed, like I mentioned, the big banks already. In the airlines, I would avoid the Spirit or one like the listener said. And if you were going to go with any, stick with the most financially sound and best brands, like, Southwest or Delta or something like that; not that I'm recommending any of those. But if I was going to pick an airline, it would probably be one of the bigger ones in the sector. So, yeah, you got to start with the financials, as you said.
Moser: Yeah. And I think, you know, another thing that I find helpful is, I like to look at who the company's customers are, and then further, who are the customers' customers. And the one that kind of came to mind was Square, thinking, well, Square's customers are, for the most part, small businesses, and then those small business customers are people like us. You can connect the dots there and see if there're going to be some problems there in the near-term that will impact that business. That doesn't necessarily make it a less quality business, but it shows you, at least, what you might expect here on the near-term horizon, the challenges the business may deal with.
And so, we like Square a lot. It has the financial resources to be able to deal with periods of time like this, and that's great, but it's also worth noting who the customers are. And then, I think, ultimately, look toward leadership as well. There are leaders that inspire, there are leaders that don't, there are leaders that we can look at and we think, "You know what, these are the smartest guys and girls in the room." And other ones, that you really kind of don't want to be around. And so, I think leadership is another one you can take a look at and that can help make some more sense of it.
Eric Yuan with Zoom. I mean, a leader that I feel like is a tremendous asset and certainly helps make the argument for the favor that Zoom is a quality business.
Okay, Matt, that wraps it up for the questions this week. I know that was a lot, but we feel like this is a unique time and a trying time, and one where we wanted to make sure our listeners knew that we were listening to you all as much as that you, thankfully, are listening to us. And we're very grateful for the questions that you threw out there on Twitter for us.
So, before we wrap it up this week, we do want to get back to our ones to watch. Matt, what is a stock that you're going to be watching this week?
Frankel: I am watching Berkshire. I think Buffett is about to do his biggest buying spree of all time, if it's not already under way, it very well may be.
Moser: [laughs] I like that. I like that a lot. I'm going to be keeping an eye on Globant (NASDAQ: GLOB), the ticker there for Globant is GLOB. But they are an IT consulting firm and what really is only becoming a more tech-driven world. And Globant has some really big-time customers in their network, including, Disney and Google [Alphabet,] and Electronic Arts.
For me, really, my interest was piqued on the augmented reality and the immersive technology side of things. And one of one of our colleagues, TJ Piquet had introduced me to this company. As a matter of fact, I think, back on an Industry Focus episode many, many months ago, he was one of the newer analysts at the time, when we had some of the new analysts on the show and interviewed them. And TJ got this on our radar. So, that's one I'll be watching this coming week as well.
But for now, I think that's going to do it for us this week. Folks, remember you can always reach out to us on Twitter @MFIndustryFocus or you can drop us an email at IndustryFocus@fool.com. Let us know how things are going, let us know how you're coping with this time. We know it's not easy, but that's why we're here. Reach out to us on Twitter, let us know what stocks you're buying, ask any questions you have, that's why we're here folks.
So, as always, Matt, very, very happy to join you this week and I'm glad we were able to make all the tech work here. Maybe a few more weeks where we're doing this remotely, but it's good to know that we've got a process figured out.
Frankel: Yep. Always good to be here and I hope that you're enjoying the work-from-home stuff as much as I do.
Moser: [laughs] Well, you know it's got its good time, it's got its moments. Sometimes it's nice and other times you feel like you gotta get up and walk around and maybe get outside for a bit. But certainly, understand the situation and acting in an overabundance of caution is probably the right way to go. So, we'll be back up-and-running in the studio as soon as we're able to, that might be a little while, folks, but for now, we will stick to the remote and be thankful that we can at least deliver the podcast to you and thankful that you'll continue listening to them.
So, as always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.
Thanks to Austin Morgan for taking his production skills to the next level during these trying times. We won't forget this, Austin. For Matt Frankel, I'm Jason Moser, thanks for listening and we'll see you next week.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jason Moser owns shares of Alphabet (C shares), Ameris Bancorp, Apple, Booking Holdings, Mastercard, McCormick, PayPal Holdings, Shopify, Square, Teladoc Health, Twitter, Visa, and Walt Disney. Matthew Frankel, CFP owns shares of American Express, Apple, Bank of America, Goldman Sachs, Green Dot, Occidental Petroleum, and Square. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, Axos Financial, Inc., Booking Holdings, Delta Air Lines, Intuit, Live Oak Bancshares, Mastercard, MercadoLibre, PayPal Holdings, Shopify, Southwest Airlines, Spirit Airlines, Square, Teladoc Health, Twitter, Visa, and Walt Disney. The Motley Fool recommends Ameris Bancorp, Electronic Arts, and McCormick and recommends the following options: long January 2021 $60 calls on Walt Disney, short April 2020 $135 calls on Walt Disney, and short March 2020 $70 puts on Square. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | One that I talk about all the time, Ameris Bancorp (NASDAQ: ABCB), I found Ameris back in the depths of the financial crisis and the Great Recession back in 2010 or something like that, when it felt like the whole world was coming to an end there. In today's episode, host Jason Moser and Fool.com contributor Matt Frankel, CFP, spend nearly 50 minutes answering questions that our listeners asked about the downturn and how to invest during it. And I mean, when I say reassurance, that's either going to come in the form of virus abatement later, which hopefully will happen at some point here sooner or later, or financial aid to support the millions of jobs and lives that are being put on hold here. | One that I talk about all the time, Ameris Bancorp (NASDAQ: ABCB), I found Ameris back in the depths of the financial crisis and the Great Recession back in 2010 or something like that, when it felt like the whole world was coming to an end there. Jason Moser owns shares of Alphabet (C shares), Ameris Bancorp, Apple, Booking Holdings, Mastercard, McCormick, PayPal Holdings, Shopify, Square, Teladoc Health, Twitter, Visa, and Walt Disney. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, Axos Financial, Inc., Booking Holdings, Delta Air Lines, Intuit, Live Oak Bancshares, Mastercard, MercadoLibre, PayPal Holdings, Shopify, Southwest Airlines, Spirit Airlines, Square, Teladoc Health, Twitter, Visa, and Walt Disney. | One that I talk about all the time, Ameris Bancorp (NASDAQ: ABCB), I found Ameris back in the depths of the financial crisis and the Great Recession back in 2010 or something like that, when it felt like the whole world was coming to an end there. I think the companies that just don't have the financial resources to deal with any kind of extended time like this, any kind of extended stretch, those are probably going to be the companies that do go first. I don't know that there really are any companies that -- when I look at a five-year-plus time horizon -- there aren't companies that I've really changed my outlook on from that perspective, from a negative perspective. | One that I talk about all the time, Ameris Bancorp (NASDAQ: ABCB), I found Ameris back in the depths of the financial crisis and the Great Recession back in 2010 or something like that, when it felt like the whole world was coming to an end there. The banks aren't dropping because people don't want to go to branches and things like that. Airlines I think is one of the markets we keep on talking about, Matt. |
27841.0 | 2020-03-13 00:00:00 UTC | Notable Friday Option Activity: M, BLK, ABCB | ABCB | https://www.nasdaq.com/articles/notable-friday-option-activity%3A-m-blk-abcb-2020-03-13 | nan | nan | Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Macy's Inc (Symbol: M), where a total volume of 79,633 contracts has been traded thus far today, a contract volume which is representative of approximately 8.0 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 43.6% of M's average daily trading volume over the past month, of 18.3 million shares. Especially high volume was seen for the $8.50 strike call option expiring March 20, 2020, with 34,295 contracts trading so far today, representing approximately 3.4 million underlying shares of M. Below is a chart showing M's trailing twelve month trading history, with the $8.50 strike highlighted in orange:
Blackrock Inc (Symbol: BLK) saw options trading volume of 4,709 contracts, representing approximately 470,900 underlying shares or approximately 43.5% of BLK's average daily trading volume over the past month, of 1.1 million shares. Especially high volume was seen for the $290 strike put option expiring April 17, 2020, with 374 contracts trading so far today, representing approximately 37,400 underlying shares of BLK. Below is a chart showing BLK's trailing twelve month trading history, with the $290 strike highlighted in orange:
And Ameris Bancorp (Symbol: ABCB) saw options trading volume of 2,310 contracts, representing approximately 231,000 underlying shares or approximately 42.7% of ABCB's average daily trading volume over the past month, of 540,540 shares. Especially high volume was seen for the $45 strike call option expiring April 17, 2020, with 1,000 contracts trading so far today, representing approximately 100,000 underlying shares of ABCB. Below is a chart showing ABCB's trailing twelve month trading history, with the $45 strike highlighted in orange:
For the various different available expirations for M options, BLK options, or ABCB options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Especially high volume was seen for the $45 strike call option expiring April 17, 2020, with 1,000 contracts trading so far today, representing approximately 100,000 underlying shares of ABCB. Below is a chart showing BLK's trailing twelve month trading history, with the $290 strike highlighted in orange: And Ameris Bancorp (Symbol: ABCB) saw options trading volume of 2,310 contracts, representing approximately 231,000 underlying shares or approximately 42.7% of ABCB's average daily trading volume over the past month, of 540,540 shares. Below is a chart showing ABCB's trailing twelve month trading history, with the $45 strike highlighted in orange: For the various different available expirations for M options, BLK options, or ABCB options, visit StockOptionsChannel.com. | Below is a chart showing BLK's trailing twelve month trading history, with the $290 strike highlighted in orange: And Ameris Bancorp (Symbol: ABCB) saw options trading volume of 2,310 contracts, representing approximately 231,000 underlying shares or approximately 42.7% of ABCB's average daily trading volume over the past month, of 540,540 shares. Especially high volume was seen for the $45 strike call option expiring April 17, 2020, with 1,000 contracts trading so far today, representing approximately 100,000 underlying shares of ABCB. Below is a chart showing ABCB's trailing twelve month trading history, with the $45 strike highlighted in orange: For the various different available expirations for M options, BLK options, or ABCB options, visit StockOptionsChannel.com. | Below is a chart showing BLK's trailing twelve month trading history, with the $290 strike highlighted in orange: And Ameris Bancorp (Symbol: ABCB) saw options trading volume of 2,310 contracts, representing approximately 231,000 underlying shares or approximately 42.7% of ABCB's average daily trading volume over the past month, of 540,540 shares. Especially high volume was seen for the $45 strike call option expiring April 17, 2020, with 1,000 contracts trading so far today, representing approximately 100,000 underlying shares of ABCB. Below is a chart showing ABCB's trailing twelve month trading history, with the $45 strike highlighted in orange: For the various different available expirations for M options, BLK options, or ABCB options, visit StockOptionsChannel.com. | Below is a chart showing BLK's trailing twelve month trading history, with the $290 strike highlighted in orange: And Ameris Bancorp (Symbol: ABCB) saw options trading volume of 2,310 contracts, representing approximately 231,000 underlying shares or approximately 42.7% of ABCB's average daily trading volume over the past month, of 540,540 shares. Especially high volume was seen for the $45 strike call option expiring April 17, 2020, with 1,000 contracts trading so far today, representing approximately 100,000 underlying shares of ABCB. Below is a chart showing ABCB's trailing twelve month trading history, with the $45 strike highlighted in orange: For the various different available expirations for M options, BLK options, or ABCB options, visit StockOptionsChannel.com. |
27842.0 | 2020-03-08 00:00:00 UTC | Validea's Top Five Financial Stocks Based On Joel Greenblatt - 3/8/2020 | ABCB | https://www.nasdaq.com/articles/valideas-top-five-financial-stocks-based-on-joel-greenblatt-3-8-2020-2020-03-08 | nan | nan | The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. This value model looks for companies with high return on capital and earnings yields.
ALLIANCE DATA SYSTEMS CORPORATION (ADS) is a mid-cap value stock in the Consumer Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Alliance Data Systems Corp is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
EARNINGS YIELD: NEUTRAL
RETURN ON TANGIBLE CAPITAL: NEUTRAL
FINAL RANKING: FAIL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ARES COMMERCIAL REAL ESTATE CORP (ACRE) is a small-cap value stock in the Misc. Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ares Commercial Real Estate Corporation is a specialty finance company. The Company is primarily engaged in originating and investing in commercial real estate (CRE) loans and related investments. The Company operates through principal lending segment. Its target investments include senior mortgage loans, subordinated debt, preferred equity, mezzanine loans and other CRE investment opportunities, including commercial mortgage-backed securities. These investments are generally held for investment and are secured, directly or indirectly, by office, multifamily, retail, industrial, lodging, senior-living, self-storage and other commercial real estate properties, or by ownership interests therein. Through the Company's manager, Ares Commercial Real Estate Management LLC, it has investment professionals located across the United States and Europe who directly source loan opportunities for the Company with owners, operators and sponsors of CRE properties.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ARCH CAPITAL GROUP LTD. (ACGL) is a large-cap value stock in the Insurance (Prop. & Casualty) industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Arch Capital Group Ltd. provides insurance, reinsurance and mortgage insurance. The Company provides a range of property, casualty and mortgage insurance and reinsurance lines. The Company operates in five segments: insurance, reinsurance, mortgage, other and corporate. The insurance segment's product lines include construction and national accounts; excess and surplus casualty; lenders products; professional lines; programs; property, energy, marine and aviation; travel, accident and health, and other. The reinsurance segment's product lines include casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe, and other. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. The other segment includes the results of Watford Holdings Ltd.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ALLEGIANCE BANCSHARES INC (ABTX) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Allegiance Bancshares, Inc. is a bank holding company. Through its subsidiary, Allegiance Bank (the Bank), the Company provides a range of commercial banking services primarily to Houston metropolitan area-based small to medium-sized businesses, professionals and individual customers. In addition to banking during normal business hours, the Company offers extended drive-in hours, automated teller machines (ATMs) and banking by telephone, mail and Internet. The Company also provides debit card services, cash management services and wire transfer services, and offers night depository, direct deposits, cashier's checks, letters of credit and mobile deposits. It also offers safe deposit boxes, automated teller machines, drive-in services and round the clock depository facilities. The Company maintains an Internet banking Website that allows customers to obtain account balances and transfer funds among accounts.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ameris Bancorp is a financial holding company. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
Since its inception, Validea's strategy based on Joel Greenblatt has returned 78.14% vs. 134.96% for the S&P 500. For more details on this strategy, click here
About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. The "Magic Formula," as he called it, produced back-tested returns of 30.8 percent per year from 1988 through 2004, more than doubling the S&P 500's 12.4 percent return during that time. Greenblatt also produced exceptional returns as managing partner at Gotham Capital, a New York City-based hedge fund he founded. The firm averaged a remarkable 40 percent annualized return over more than two decades.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. Company Description: Alliance Data Systems Corp is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. The Company operates in five segments: insurance, reinsurance, mortgage, other and corporate. |
27843.0 | 2020-02-26 00:00:00 UTC | Ameris Bancorp Enters Oversold Territory (ABCB) | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-enters-oversold-territory-abcb-2020-02-26 | nan | nan | Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.
In trading on Wednesday, shares of Ameris Bancorp (Symbol: ABCB) entered into oversold territory, hitting an RSI reading of 29.8, after changing hands as low as $37.77 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 35.4. A bullish investor could look at ABCB's 29.8 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABCB shares:
Looking at the chart above, ABCB's low point in its 52 week range is $32.91 per share, with $44.90 as the 52 week high point — that compares with a last trade of $37.83.
Find out what 9 other oversold stocks you need to know about »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Wednesday, shares of Ameris Bancorp (Symbol: ABCB) entered into oversold territory, hitting an RSI reading of 29.8, after changing hands as low as $37.77 per share. A bullish investor could look at ABCB's 29.8 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABCB shares: Looking at the chart above, ABCB's low point in its 52 week range is $32.91 per share, with $44.90 as the 52 week high point — that compares with a last trade of $37.83. | A bullish investor could look at ABCB's 29.8 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABCB shares: Looking at the chart above, ABCB's low point in its 52 week range is $32.91 per share, with $44.90 as the 52 week high point — that compares with a last trade of $37.83. In trading on Wednesday, shares of Ameris Bancorp (Symbol: ABCB) entered into oversold territory, hitting an RSI reading of 29.8, after changing hands as low as $37.77 per share. | In trading on Wednesday, shares of Ameris Bancorp (Symbol: ABCB) entered into oversold territory, hitting an RSI reading of 29.8, after changing hands as low as $37.77 per share. A bullish investor could look at ABCB's 29.8 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABCB shares: Looking at the chart above, ABCB's low point in its 52 week range is $32.91 per share, with $44.90 as the 52 week high point — that compares with a last trade of $37.83. | In trading on Wednesday, shares of Ameris Bancorp (Symbol: ABCB) entered into oversold territory, hitting an RSI reading of 29.8, after changing hands as low as $37.77 per share. A bullish investor could look at ABCB's 29.8 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABCB shares: Looking at the chart above, ABCB's low point in its 52 week range is $32.91 per share, with $44.90 as the 52 week high point — that compares with a last trade of $37.83. |
27844.0 | 2020-02-26 00:00:00 UTC | Interesting ABCB Put And Call Options For October 16th | ABCB | https://www.nasdaq.com/articles/interesting-abcb-put-and-call-options-for-october-16th-2020-02-26 | nan | nan | Investors in Ameris Bancorp (Symbol: ABCB) saw new options begin trading this week, for the October 16th expiration. One of the key inputs that goes into the price an option buyer is willing to pay, is the time value, so with 233 days until expiration the newly trading contracts represent a potential opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the ABCB options chain for the new October 16th contracts and identified one put and one call contract of particular interest.
The put contract at the $30.00 strike price has a current bid of 20 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $30.00, but will also collect the premium, putting the cost basis of the shares at $29.80 (before broker commissions). To an investor already interested in purchasing shares of ABCB, that could represent an attractive alternative to paying $37.83/share today.
Because the $30.00 strike represents an approximate 21% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 90%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 0.67% return on the cash commitment, or 1.04% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Ameris Bancorp, and highlighting in green where the $30.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $40.00 strike price has a current bid of 85 cents. If an investor was to purchase shares of ABCB stock at the current price level of $37.83/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $40.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 7.98% if the stock gets called away at the October 16th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if ABCB shares really soar, which is why looking at the trailing twelve month trading history for Ameris Bancorp, as well as studying the business fundamentals becomes important. Below is a chart showing ABCB's trailing twelve month trading history, with the $40.00 strike highlighted in red:
Considering the fact that the $40.00 strike represents an approximate 6% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 57%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 2.25% boost of extra return to the investor, or 3.52% annualized, which we refer to as the YieldBoost.
The implied volatility in the put contract example is 49%, while the implied volatility in the call contract example is 33%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $37.83) to be 25%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Of course, a lot of upside could potentially be left on the table if ABCB shares really soar, which is why looking at the trailing twelve month trading history for Ameris Bancorp, as well as studying the business fundamentals becomes important. Below is a chart showing ABCB's trailing twelve month trading history, with the $40.00 strike highlighted in red: Considering the fact that the $40.00 strike represents an approximate 6% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Ameris Bancorp (Symbol: ABCB) saw new options begin trading this week, for the October 16th expiration. | Below is a chart showing ABCB's trailing twelve month trading history, with the $40.00 strike highlighted in red: Considering the fact that the $40.00 strike represents an approximate 6% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Ameris Bancorp (Symbol: ABCB) saw new options begin trading this week, for the October 16th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the ABCB options chain for the new October 16th contracts and identified one put and one call contract of particular interest. | Below is a chart showing ABCB's trailing twelve month trading history, with the $40.00 strike highlighted in red: Considering the fact that the $40.00 strike represents an approximate 6% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Ameris Bancorp (Symbol: ABCB) saw new options begin trading this week, for the October 16th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the ABCB options chain for the new October 16th contracts and identified one put and one call contract of particular interest. | At Stock Options Channel, our YieldBoost formula has looked up and down the ABCB options chain for the new October 16th contracts and identified one put and one call contract of particular interest. Below is a chart showing ABCB's trailing twelve month trading history, with the $40.00 strike highlighted in red: Considering the fact that the $40.00 strike represents an approximate 6% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Ameris Bancorp (Symbol: ABCB) saw new options begin trading this week, for the October 16th expiration. |
27845.0 | 2020-02-24 00:00:00 UTC | Ameris Bancorp (ABCB) Shares Cross Below 200 DMA | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-shares-cross-below-200-dma-2020-02-24 | nan | nan | In trading on Monday, shares of Ameris Bancorp (Symbol: ABCB) crossed below their 200 day moving average of $39.86, changing hands as low as $38.83 per share. Ameris Bancorp shares are currently trading down about 2.8% on the day. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average:
Looking at the chart above, ABCB's low point in its 52 week range is $32.91 per share, with $44.90 as the 52 week high point — that compares with a last trade of $39.19.
Click here to find out which 9 other stocks recently crossed below their 200 day moving average »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Monday, shares of Ameris Bancorp (Symbol: ABCB) crossed below their 200 day moving average of $39.86, changing hands as low as $38.83 per share. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average: Looking at the chart above, ABCB's low point in its 52 week range is $32.91 per share, with $44.90 as the 52 week high point — that compares with a last trade of $39.19. Click here to find out which 9 other stocks recently crossed below their 200 day moving average » The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Monday, shares of Ameris Bancorp (Symbol: ABCB) crossed below their 200 day moving average of $39.86, changing hands as low as $38.83 per share. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average: Looking at the chart above, ABCB's low point in its 52 week range is $32.91 per share, with $44.90 as the 52 week high point — that compares with a last trade of $39.19. Click here to find out which 9 other stocks recently crossed below their 200 day moving average » The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Monday, shares of Ameris Bancorp (Symbol: ABCB) crossed below their 200 day moving average of $39.86, changing hands as low as $38.83 per share. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average: Looking at the chart above, ABCB's low point in its 52 week range is $32.91 per share, with $44.90 as the 52 week high point — that compares with a last trade of $39.19. Click here to find out which 9 other stocks recently crossed below their 200 day moving average » The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Monday, shares of Ameris Bancorp (Symbol: ABCB) crossed below their 200 day moving average of $39.86, changing hands as low as $38.83 per share. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average: Looking at the chart above, ABCB's low point in its 52 week range is $32.91 per share, with $44.90 as the 52 week high point — that compares with a last trade of $39.19. Ameris Bancorp shares are currently trading down about 2.8% on the day. |
27846.0 | 2020-02-20 00:00:00 UTC | Validea Peter Lynch Strategy Daily Upgrade Report - 2/20/2020 | ABCB | https://www.nasdaq.com/articles/validea-peter-lynch-strategy-daily-upgrade-report-2-20-2020-2020-02-20 | nan | nan | The following are today's upgrades for Validea's P/E/Growth Investor model based on the published strategy of Peter Lynch. This strategy looks for stocks trading at a reasonable price relative to earnings growth that also possess strong balance sheets.
SOUTHWEST AIRLINES CO (LUV) is a large-cap value stock in the Airline industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Southwest Airlines Co. (Southwest) operates Southwest Airlines, a passenger airline that provides scheduled air transportation in the United States and near-international markets. The Company provides point-to-point service. The Company offers ancillary service offerings, such as Southwest's EarlyBird Check-In and transportation of pets and unaccompanied minors, in accordance with Southwest's respective policies. Southwest's Rapid Rewards frequent flyer program enables program members (Members) to earn points for every dollar spent on Southwest fares. Its Internet Website, Southwest.com, is an avenue for Southwest customers to purchase and manage travel online. As of December 31, 2016, Southwest operated a total of 723 Boeing 737 aircraft and served 101 destinations in 40 states, the District of Columbia, the Commonwealth of Puerto Rico, and eight near-international countries: Mexico, Jamaica, The Bahamas, Aruba, Dominican Republic, Costa Rica, Belize, and Cuba.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
INVENTORY TO SALES: PASS
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
THERMO FISHER SCIENTIFIC INC. (TMO) is a large-cap growth stock in the Medical Equipment & Supplies industry. The rating according to our strategy based on Peter Lynch changed from 0% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Thermo Fisher Scientific Inc. develops, manufactures and sells a range of products. The Company operates through four segments: Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics, and Laboratory Products and Services. It offers its products and services through various brands, including Thermo Scientific, Applied Biosystems, Invitrogen, Fisher Scientific and Unity Lab Services. Life Sciences Solutions segment provides a portfolio of reagents, instruments and consumables used in biological and medical research, discovery and production of new drugs and vaccines. Analytical Instruments segment provides a broad offering of instruments, consumables, software and services that are used for a range of applications in the laboratory. Specialty Diagnostics segment offers a wide range of diagnostic test kits, reagents, culture media, instruments and associated products. Its Laboratory Products and Services segment offers products and solutions needed for the laboratory.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: FAIL
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
BANCO BILBAO VIZCAYA ARGENTARIA SA (ADR) (BBVA) is a large-cap value stock in the Money Center Banks industry. The rating according to our strategy based on Peter Lynch changed from 0% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) is a diversified financial company engaged in retail banking, wholesale banking, asset management and private banking. Its segments include Banking Activity in Spain, Real Estate Activity in Spain, the United States Turkey, Mexico, South America and Rest of Eurasia. Its Banking Activity in Spain segment includes Retail Network in Spain, Corporate and Business Banking (CBB), and BBVA Seguros and Asset Management units in Spain. Its Real Estate Activity in Spain segment covers specialist management of real-estate assets in the country. In the United States it offers services through, BBVA Compass Bancshares Inc. and the BBVA New York branch. The Turkey segment represents its stake in the Turkish bank, Turkiye Garanti Bankasi A.S. It offers banking and insurance businesses in Mexico. In South America, it provides banking and insurance businesses. The Rest of Eurasia segment includes business activity in the rest of Europe and Asia.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
SALES: PASS
YIELD COMPARED TO THE S&P 500: PASS
YIELD ADJUSTED P/E/GROWTH (PEG) RATIO: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: FAIL
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
CISCO SYSTEMS, INC. (CSCO) is a large-cap growth stock in the Communications Equipment industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Cisco Systems, Inc., is engaged in designing and selling a range of technologies across networking, security, collaboration, applications and the cloud. It operates through three geographic segments: Americas; Europe, Middle East, and Africa; and Asia Pacific, Japan, and China. Its product and technologies includes infrastructure platforms; applications; security and other products. It also offers technical support services and advanced services. Infrastructure Platforms consists of its core networking technologies of switching, routing, data center products and wireless that are designed to work together to deliver networking capabilities and transport and store data. Application product category consists primarily of software-related offerings that utilize the core networking and data center platforms to provide their functions. Security product category primarily includes Company's unified threat management products, advanced threat security products, and web security products.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
INVENTORY TO SALES: PASS
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
BANK OF MONTREAL (USA) (BMO) is a large-cap value stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 0% to 85% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Bank of Montreal (the Bank) is a financial services provider. The Bank provides a range of personal and commercial banking, wealth management and investment banking products and services. The Bank conducts its business through three operating groups: Personal and Commercial Banking (P&C), Wealth Management and BMO Capital Markets. The P&C business includes two retail and business banking operating segments, such as Canadian Personal and Commercial Banking (Canadian P&C), and the United States Personal and Commercial Banking (U.S. P&C). The Bank's Wealth Management business serves a range of client segments, from mainstream to ultra-high net worth and institutional, with an offering of wealth management products and services, including insurance. BMO Capital Markets is a North American-based financial services provider offering a range of products and services to corporate, institutional and government clients. The Bank has over 900 bank branches in Canada and the United States.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: FAIL
FREE CASH FLOW: BONUS PASS
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
HERMAN MILLER, INC. (MLHR) is a mid-cap value stock in the Constr. - Supplies & Fixtures industry. The rating according to our strategy based on Peter Lynch changed from 72% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Herman Miller, Inc. is engaged in the research, design, manufacture, sale and distribution of office furniture systems, seating products, home furnishings and related services, among others. The Company's segments include North American Furniture Solutions, which includes the design, manufacture and sale of furniture products for work-related settings, including office, education and healthcare environments, across the United States and Canada; EMEA, Latin America, and Asia Pacific (ELA) Furniture Solutions, which includes the operations associated with the design, manufacture, and sale of furniture products, primarily for work-related settings, in the Europe, Middle East and Africa (EMEA), Latin America and Asia-Pacific geographic regions, among others; Specialty segment, which includes the design, manufacture and sale of furniture products and textiles, and Consumer segment, which includes the sale of modern design furnishings and accessories to third-party retail distributors.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
INVENTORY TO SALES: PASS
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
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ENBRIDGE INC (USA) (ENB) is a large-cap growth stock in the Natural Gas Utilities industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Enbridge Inc. is an energy infrastructure company with business platforms that include a network of crude oil, liquids and natural gas pipelines, regulated natural gas distribution utilities and renewable power generation. It operates through five segments: Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution, Green Power and Transmission, and Energy Services. Liquids Pipelines consists of pipelines and related terminals that transport various grades of crude oil and other liquid hydrocarbons. Gas Transmission and Midstream consists of its investments in natural gas pipelines and gathering and processing facilities, including US Gas Transmission, and Canadian Gas Transmission and Midstream. Gas Distribution consists of its natural gas utility operations. Green Power and Transmission consists of investments in renewable energy assets and transmission facilities. The Energy Services businesses undertake physical commodity marketing activity and logistical services.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
INVENTORY TO SALES: PASS
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
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MCGRATH RENTCORP (MGRC) is a small-cap growth stock in the Real Estate Operations industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: McGrath RentCorp is a diversified business-to-business rental company. The Company operates through four business segments: modular building and portable storage segment (Mobile Modular); electronic test equipment segment (TRS-RenTelco); a subsidiary providing containment solutions for the storage of hazardous and non-hazardous liquids and solids segment (Adler Tanks), and a subsidiary classroom manufacturing business selling modular buildings used primarily as classrooms in California (Enviroplex). The Mobile Modular business segment includes Mobile Modular Portable Storage division. As of December 31, 2016, the Company's TRS-RenTelco rented and sold electronic test equipment nationally and internationally from three facilities located in Grapevine, Texas (the Dallas facility), Dollard-des-Ormeaux, Canada (the Montreal facility) and Bangalore, Karnataka, India (the Bangalore facility). Adler Tanks purchases tanks and boxes from various manufacturers located throughout the country.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
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NAPCO SECURITY TECHNOLOGIES INC (NSSC) is a small-cap growth stock in the Security Systems & Services industry. The rating according to our strategy based on Peter Lynch changed from 87% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: NAPCO Security Technologies, Inc. is a manufacturer of security products, encompassing access control systems, door-locking products, intrusion and fire alarm systems and video surveillance products. These products are used for commercial, residential, institutional, industrial and governmental applications, and are sold across the world principally to independent distributors, dealers and installers of security equipment. The Company manufactures and markets various products for alarm systems, which include automatic communicators, control panels, combination control panels/digital communicators and digital keypad systems, fire alarm control panel and area detectors. It manufactures a range of door locking devices, including microprocessor-based electronic door locks with push button, card reader and bio-metric operation, door alarms, mechanical door locks and simple dead bolt locks. It also markets peripheral and related equipment manufactured by other companies.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ROGERS CORPORATION (ROG) is a mid-cap growth stock in the Semiconductors industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Rogers Corporation manufactures and sells engineered materials and components for mission critical applications. The Company's segments are Advanced Connectivity Solutions (ACS), Elastomeric Material Solutions (EMS), Power Electronics Solutions (PES) and Other. The ACS segment manufactures and sells circuit materials and solutions for applications in wireless communications infrastructure, automotive, connected devices, consumer electronics and aerospace/defense. The EMS segment manufactures and sells elastomeric material solutions for critical cushioning, sealing, impact protection and vibration management applications, including general industrial, portable electronics, consumer goods, automotive, construction and printing applications. The PES segment manufactures and sells ceramic substrate materials for power module applications, laminated bus bars for power inverter and interconnect applications, and micro-channel coolers. Its other business consists of elastomeric components.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
CALLAWAY GOLF CO (ELY) is a small-cap growth stock in the Recreational Products industry. The rating according to our strategy based on Peter Lynch changed from 87% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Callaway Golf Company designs, manufactures and sells golf clubs, golf balls, golf bags and other golf-related accessories. The Company has two segments: the golf clubs segment and golf balls segment. The golf clubs segment consists of its woods, hybrids, irons and wedges, and Odyssey putters. This segment also includes other golf-related accessories, royalties from licensing of its trademarks and service marks and sales of pre-owned golf clubs. The golf balls segment consists of Callaway Golf and Strata balls that are designed, manufactured and sold by the Company. It sells its products to retailers, directly and through its subsidiaries, and to third-party distributors. It sells pre-owned golf products through its Website, www.callawaygolfpreowned.com. In addition, it sells Callaway Golf and Odyssey products, including Toulon Design by Odyssey, directly to consumers through its Websites, www.callawaygolf.com and www.odysseygolf.com.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
CNA FINANCIAL CORP (CNA) is a large-cap value stock in the Insurance (Prop. & Casualty) industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: CNA Financial Corporation is an insurance holding company. The Company's segments include Specialty, Commercial, International, Life & Group Non-Core, and Corporate & Other Non-Core. Its Specialty segment provides a range of professional, financial, and specialty property, and casualty products and services. The Commercial segment includes property and casualty insurance products and services to small, middle-market and large businesses. Its International segment provides management and professional liability coverages, as well as a range of other property and casualty insurance products and services. The Life & Group Non-Core segment primarily includes the results of its individual and group long term care businesses that are in run-off. Its Corporate & Other Non-Core segment primarily includes certain corporate expenses, including interest on corporate debt, and the results of certain property and casualty business in run-off.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
COOPER COMPANIES INC (COO) is a large-cap growth stock in the Medical Equipment & Supplies industry. The rating according to our strategy based on Peter Lynch changed from 0% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: The Cooper Companies, Inc. is a global medical device company. The Company operates through two business units: CooperVision, Inc. and CooperSurgical, Inc. CooperVision offers soft contact lenses for the vision correction market. CooperVision develops, manufactures and markets a range of single-use, two-week and monthly contact lenses. CooperVision services three primary regions: the Americas; Europe, the Middle East and Africa (EMEA), and Asia Pacific. CooperVision offers spherical, aspherical, toric, multifocal and toric multifocal lens products in various modalities. CooperVision's products are primarily manufactured at its facilities located in the United Kingdom, Puerto Rico, Hungary, Costa Rica and New York. CooperSurgical offers an array of products and services focused on advancing the health of families through a portfolio of products and services focusing on women's health, fertility and diagnostics.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: FAIL
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
GLAXOSMITHKLINE PLC (ADR) (GSK) is a large-cap growth stock in the Major Drugs industry. The rating according to our strategy based on Peter Lynch changed from 72% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: GlaxoSmithKline PLC is a global healthcare company. The Company operates through two segments: Pharmaceuticals and Vaccines. The Company focuses on its research across six areas: Respiratory diseases, human immunodeficiency virus (HIV)/infectious diseases, Vaccines, Immuno-inflammation, Oncology and Rare diseases. The Company makes a range of prescription medicines and vaccines products. The Pharmaceuticals business discovers, develops and commercializes medicines to treat a range of acute and chronic diseases. The Vaccines business provides vaccines for people of all ages from babies and adolescents to adults and older people. It has a portfolio of medicines in respiratory and HIV. Its Pharmaceuticals business includes Respiratory, HIV, Specialty products, and Classic and Established products. Its Vaccines business has a portfolio of over 40 pediatric, adolescent, adult, older people and travel vaccines.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: FAIL
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
HELEN OF TROY LIMITED (HELE) is a mid-cap growth stock in the Medical Equipment & Supplies industry. The rating according to our strategy based on Peter Lynch changed from 0% to 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Helen Of Troy Limited is a global consumer products company that offers a range of solutions for its customers through a range of brands. The Company is a global designer, developer, importer, marketer and distributor of a portfolio of brand-name consumer products. The Company has three segments. The Housewares segment provides a range of consumer products for the home. The Health & Home segment focuses on healthcare devices, such as thermometers, humidifiers, blood pressure monitors and heating pads; water filtration systems, and small home appliances, such as portable heaters, fans, air purifiers, and insect control devices. The Beauty segment's products include electric hair care, beauty care and wellness appliances; grooming tools and accessories, and liquid-, solid- and powder-based personal care and grooming products.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
FUNKO INC (FNKO) is a small-cap value stock in the Recreational Products industry. The rating according to our strategy based on Peter Lynch changed from 0% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Funko, Inc. is a pop culture consumer products company. The Company is engaged in selling a broad range of pop culture consumer products, featuring characters from a range of media and entertainment content, including movies, TV shows, video games, music and sports. Its products combine its proprietary brands and designs into properties it licenses from content providers. Its product categories include figures, plush, accessories and other. It also offers different types of bags and wallets. It offers its products under various brands, including Pop!, Mystery Minis, Dorbz, Pint Size Heroes, Rock Candy, Galactic or Hero Plushies, SuperCute, MyMoji and Loungefly. The Company has licensed properties into four categories: classic evergreen, movie release, current TV and current video game.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: FAIL
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
MAGNOLIA OIL & GAS CORP (MGY) is a mid-cap growth stock in the Misc. Financial Services industry. The rating according to our strategy based on Peter Lynch changed from 74% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Magnolia Oil & Gas Corp, formerly TPG Pace Energy Holdings Corp, is an oil and gas exploration and production company. The Company owns assets located in the Eagle Ford Shale and Austin Chalk formations in South Texas. The Company operates in Karnes County and Giddings Field. It operates 14, 070 net acres in Karnes County and approximately 3,60,000 net acres in Giddings Field.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
WILLIS TOWERS WATSON PLC (WLTW) is a large-cap growth stock in the Insurance (Miscellaneous) industry. The rating according to our strategy based on Peter Lynch changed from 0% to 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Willis Towers Watson Public Limited Company (Willis Towers Watson) is a holding company. The Company operates as a global advisory, broking and solutions company. It is engaged in offering risk management, insurance broking, consulting, technology and solutions, and private exchanges. The Company operates through eight segments: Willis International; Willis North America; Willis Capital, Wholesale & Reinsurance (CWR); Willis GB; Towers Watson Benefits; Towers Watson Exchange Solutions; Towers Watson Risk and Financial Services; and Towers Watson Talent and Rewards. The Willis GB segment comprises four business units: Property and Casualty, Transport, Financial Lines and Retail Networks. The Willis Capital Wholesale and Reinsurance segment includes Willis Re; Willis Capital Markets & Advisory; Willis' wholesale business, and Willis Portfolio Underwriting Services. The Willis North America segment provides risk management, insurance brokerage and related risk services.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
FS KKR CAPITAL CORP (FSK) is a mid-cap value stock in the Misc. Financial Services industry. The rating according to our strategy based on Peter Lynch changed from 74% to 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: FS KKR Capital Corp, formerly FS Investment Corporation is an externally managed, non-diversified, closed-end management investment company. The Company's investment objectives are to generate current income and long-term capital appreciation. Its portfolio consists primarily of investments in senior secured loans and second lien secured loans of the private United States middle market companies and subordinated loans of the private United States companies. It may purchase interests in loans or make other debt investments, including investments in senior secured bonds, through secondary market transactions in the over-the-counter market or directly from target companies as primary market or directly originated investments. It invests in a range of industries, including capital goods; consumer services; consumer durables and apparel; materials; commercial and professional services, and diversified financials. Its investment advisor is FB Income Advisor, LLC.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
AARON'S, INC. (AAN) is a mid-cap growth stock in the Rental & Leasing industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Aaron's, Inc. (Aaron's) is an omnichannel provider of lease-purchase solutions. The Company engages in the sales and lease ownership and specialty retailing of furniture, consumer electronics, home appliances and accessories through its Company-operated and franchised stores in Canada, as well as its e-commerce platform, Aarons.com. Its segments include Sales and Lease Ownership, Progressive Finance Holdings, LLC (Progressive), Dent-A-Med, Inc., doing business as the HELPcard (DAMI), Franchise and Manufacturing. Its stores carry brands, such as Samsung, Frigidaire, Hewlett-Packard, LG, Whirlpool, Simmons, Philips, Ashley and Magnavox. As of December 31, 2016, it had 1,864 Aaron's stores, consisted of 1,165 Company-operated stores in 28 states, the District of Columbia and Canada, and 699 independently-owned franchised stores in 46 states and Canada. It owns trademarks and trade names used in business, including Progressive, Dent-A-Med, the HELPcard and Woodhaven Furniture Industries.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
SARATOGA INVESTMENT CORP (SAR) is a small-cap value stock in the Misc. Financial Services industry. The rating according to our strategy based on Peter Lynch changed from 74% to 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Saratoga Investment Corp. is a specialty finance company. The Company is an externally managed, closed-end, non-diversified management investment company. The Company invests primarily in leveraged loans and mezzanine debt issued by private middle-market companies in the United States. Its investment objective is to generate current income and, to a lesser extent, capital appreciation from its investments. It purchases mezzanine debt and makes equity investments in middle market companies. It may invest in other investments, such as investments in distressed debt, including securities of companies in bankruptcy, foreign debt, private equity, securities of public companies that are not thinly traded and structured finance vehicles, such as collateralized loan obligation funds. Its leveraged loan portfolio consists primarily of first lien and second lien term loans. The Company's investment activities are externally managed and advised by Saratoga Investment Advisors, LLC.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
KNOWLES CORP (KN) is a small-cap growth stock in the Audio & Video Equipment industry. The rating according to our strategy based on Peter Lynch changed from 0% to 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Knowles Corporation is a global supplier of micro-acoustic, audio processing and specialty component solutions, serving the mobile consumer electronics, communications, medical, military, aerospace and industrial markets. The Company operates through two segments: Mobile Consumer Electronics (MCE) and Specialty Components (SC). MCE designs and manufactures acoustic products, including microphones and audio processing technologies used in mobile handsets, wearables and other consumer electronic devices. SC specializes in the design and manufacture of specialized electronic components used in medical and life science applications, as well as solutions and components used in communications infrastructure and a range of other markets. It has sales, support and engineering facilities in North America, Europe and Asia, and manufacturing facilities in Asia. It also offers acoustics components used in hearing aids, as well as high-end oscillators (timing devices) and capacitors.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
MICHAELS COMPANIES INC (MIK) is a small-cap value stock in the Retail (Specialty) industry. The rating according to our strategy based on Peter Lynch changed from 59% to 78% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: The Michaels Companies, Inc. (Michaels) is an arts and crafts specialty retailer in North America. The Company's segments include Michaels-U.S., Michaels-Canada, Aaron Brothers, Pat Catan's and Darice. As of January 28, 2017, the Company operated 1,223 Michaels retail stores in 49 states and Canada, with approximately 18,000 average square feet of selling space per store. It operated 109 Aaron Brothers stores in nine states, with approximately 5,500 average square feet of selling space and 35 Pat Catan's stores in five states, with approximately 32,000 average square feet of selling space, as of January 28, 2017. The Company also operates an international wholesale business under the Darice brand name. The Company's stores purchase custom frames, framing supplies and mats from its framing operation and subsidiary, Artistree, Inc. (Artistree), which consists of a manufacturing facility and four regional processing centers.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: FAIL
FREE CASH FLOW: BONUS PASS
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
VERITEX HOLDINGS INC (VBTX) is a small-cap growth stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 72% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Veritex Holdings, Inc. is a bank holding company. The Company, through its subsidiary, Veritex Community Bank (the Bank), a Texas state chartered bank, provides relationship-driven commercial banking products and services tailored to meet the needs of small to medium-sized businesses and professionals. It operates through community banking segment. The Bank provides a range of banking services to individual and corporate customers, which include commercial and retail lending, and the acceptance of checking and savings deposits. It offers a suite of online banking solutions, including access to account balances, online transfers, online bill payment and electronic delivery of customer statements, as well as automated teller machines, and banking by telephone, mail and personal appointment. It also offers debit cards, direct deposit, cashier's checks and letters of credit, as well as treasury management services, including wire transfer services and automated clearinghouse services.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
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STORE CAPITAL CORP (STOR) is a mid-cap growth stock in the Real Estate Operations industry. The rating according to our strategy based on Peter Lynch changed from 0% to 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: STORE Capital Corporation is an internally managed net-lease real estate investment trust. The Company is engaged in the acquisition, investment and management of single tenant operational real estate (STORE) properties. As of December 31, 2016, the Company owned a portfolio that consisted of investments in 1,660 property locations operated by 360 customers across 48 states. Its customers operate across a range of industries within the service, retail and manufacturing sectors of the United States economy, with restaurants, early childhood education centers, movie theaters, health clubs and furniture stores. The Company's portfolio includes investments in approximately 1,330 property locations operated by over 300 customers across approximately 50 states. The Company provides real estate financing solutions principally to businesses that own STORE properties and operate within the broad-based service, retail and industrial sectors of the United States economy.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
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NEWTEK BUSINESS SERVICES CORP (NEWT) is a small-cap value stock in the Consumer Financial Services industry. The rating according to our strategy based on Peter Lynch changed from 72% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Newtek Business Services Corp. is an internally managed non-diversified closed-end management investment company. The Company's investment objective is to generate both current income and capital appreciation primarily through loans originated by its small business finance platform and its equity investments in certain portfolio companies that it controls. The Company is a national non-bank lender that provides, together with its controlled portfolio companies, a range of business services and financial products under the Newtek brand to the small and medium-sized business (SMB) market. The Company issues debt and makes equity investments in portfolio companies in various industries. Its products and services include Business Lending including the United States Small Business Administration (SBA) 7(a) and 504 lending, Electronic Payment Processing, Managed Technology Solutions (Cloud Computing), Data Backup, and Payroll and Benefits Solutions to SMB accounts across all industries.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
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WALGREENS BOOTS ALLIANCE INC (WBA) is a large-cap value stock in the Retail (Drugs) industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Walgreens Boots Alliance, Inc., is a holding company. The Company is a pharmacy-led health and wellbeing company. The Company operates through three segments: Retail Pharmacy USA, Retail Pharmacy International and Pharmaceutical Wholesale. The Retail Pharmacy USA segment consists of the Walgreen Co. (Walgreens) business, which includes the operation of retail drugstores, care clinics and providing specialty pharmacy services. The Retail Pharmacy International segment consists primarily of the Alliance Boots pharmacy-led health and beauty stores, optical practices and related contract manufacturing operations. The Pharmaceutical Wholesale segment consists of the Alliance Boots pharmaceutical wholesaling and distribution businesses. The Company's portfolio of retail and business brands includes Walgreens, Duane Reade, Boots and Alliance Healthcare, as well as global health and beauty product brands, including No7, Botanics, Liz Earle and Soap & Glory.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
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GREAT AJAX CORP (AJX) is a small-cap value stock in the Investment Services industry. The rating according to our strategy based on Peter Lynch changed from 72% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Great Ajax Corp. is an externally managed real estate company. The Company is focused on acquiring, investing in and managing a portfolio of re-performing and non-performing mortgage loans secured by single-family residences and single-family properties. Its segment is focused on non-performing mortgages and re-performing mortgages. It also invests in loans secured by multi-family residential and commercial mixed use retail/residential properties, as well as in the properties directly. It also holds real estate-owned properties (REO) acquired upon the foreclosure or other settlement of its owned non-performing loans, as well as through outright purchases. It is managed by Thetis Asset Management LLC, an affiliated entity. Its mortgage loans and other real estate assets are serviced by Gregory Funding LLC, an affiliated entity. The Company conducts its business through its operating partnership, Great Ajax Operating Partnership L.P.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
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NEXTGEN HEALTHCARE INC (NXGN) is a small-cap growth stock in the Software & Programming industry. The rating according to our strategy based on Peter Lynch changed from 0% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: NextGen Healthcare, Inc., formerly Quality Systems, Inc., provides technology-based solutions and services to the ambulatory care market in the United States. The Company is engaged in developing and marketing software and services that automate certain aspects of practice management (PM) and electronic health records (EHR) for medical and dental practices. The Company operates through three segments: the NextGen Division, the RCM Services Division and the QSI Dental Division. It also provides implementation, training, support and maintenance for software and complementary services, such as revenue cycle management (RCM) and electronic data interchange (EDI). The Company's clients include single and small practice physicians, networks of practices, such as physician hospital organizations (PHOs), management service organizations (MSOs), accountable care organizations (ACOs), ambulatory care centers, community health centers, and medical and dental schools.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: FAIL
SALES AND P/E RATIO: NEUTRAL
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ARCOSA INC (ACA) is a mid-cap growth stock in the Construction Services industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Arcosa, Inc. is focused on manufacturing and producing infrastructure-related products and services. The Company provides its products to a spectrum of markets throughout construction, energy, and transportation. The Company operates through three segments: Construction Products Group, Energy Equipment Group, and Transportation Products Group. The Construction Products Group segment produces and sells construction aggregates and manufactures and sells trench shields and shoring products and services for infrastructure-related projects. The Energy Equipment Group segment manufactures and sells products for energy-related businesses, including structural wind towers, steel utility structures for electricity transmission and distribution, and storage and distribution containers. The Transportation Products Group segment manufactures and sells products for the inland waterway and rail transportation industries including barges, barge-related products, axles, and couplers.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
CIGNA CORP (CI) is a large-cap growth stock in the Insurance (Accident & Health) industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Cigna Corporation is a health services company. The Company offers medical, dental, disability, life and accident insurance and related products and services. The Company's segments include Global Health Care, Global Supplemental Benefits, Group Disability and Life, and Other Operations and Corporate. Its Global Health Care segment aggregates the commercial and Government operating segments. Its commercial operating segment encompasses the United States commercial and certain international healthcare businesses serving employers and their employees, other groups, and individuals. Its Global Supplemental Benefits segment offers supplemental health, life and accident insurance products in selected international markets and in the United States. Its Group Disability and Life segment provides group long-term and short-term disability insurance, group life insurance, accident and specialty insurance and related services.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
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WATFORD HOLDINGS LTD (WTRE) is a small-cap value stock in the Insurance (Life) industry. The rating according to our strategy based on Peter Lynch changed from 72% to 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Watford Holdings Ltd is a holding company. The Company, through its subsidiaries, is a global property and casualty (P&C), insurance and reinsurance company. Its four lines of business includes casualty reinsurance, other specialty reinsurance, property catastrophe reinsurance and insurance programs and coinsurance. It has operations across Bermuda, the United States and Europe. Its main operating subsidiary is Watford Re Ltd. (Watford Re), which is focused on writing business. Watford Re also writes mortgage insurance and reinsurance. In the United States, the Company is authorized to write commercial P&C lines of business through its Watford Insurance Company (WIC) and Watford Specialty Insurance Company (WSIC) subsidiaries. In Europe, it writes direct insurance and coinsurance business, primarily in personal P&C lines, through insurers and program managers that develop and distribute specialized insurance products for its WICE subsidiary.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
LEVI STRAUSS & CO. (LEVI) is a mid-cap growth stock in the Apparel/Accessories industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Levi Strauss & Co. is an apparel company. The Company designs, markets and sells its products under the Levi's, Dockers, Signature by Levi Strauss & Co. and Denizen brands directly or through third parties and licensees. Its products include jeans, casual and dress pants, tops, shorts, skirts, jackets, footwear, and related accessories for men, women and children across the world. The Company's trademarks include Arcuate Stitching Design, the Tab Device, 501, the Two Horse Design, the Housemark and the Wings and Anchor Design. The Company operates in three geographic segments: the Americas, Europe and Asia. The Company's products are sold in more than 110 countries. The Company licenses its Levi's and Dockers trademarks for a range of product categories in markets in each of its regions, including footwear, belts, wallets and bags, outerwear, sweaters, dress shirts, kidswear, sleepwear and hosiery.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
STERIS PLC (STE) is a large-cap growth stock in the Medical Equipment & Supplies industry. The rating according to our strategy based on Peter Lynch changed from 0% to 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Steris plc, formerly Steris Ltd, is a provider of infection prevention and other procedural products and services. The Company offers a mix of capital equipment products, such as sterilizers and washers, surgical tables, lights and equipment management systems and connectivity solutions, such as operating room integration; consumable products, such as detergents and gastrointestinal endoscopy accessories and other products; services, including equipment installation and maintenance, microbial reduction of medical devices, instrument and scope repair solutions, laboratory services and outsourced reprocessing. The Company operates through four reportable business segments: Healthcare Products, Healthcare Specialty Services, Life Sciences, and Applied Sterilization Technologies. It's Corporate and other segment includes the Defense and Industrial business unit. The Company serves the customers in the United Kingdom, the United States and many other countries throughout the world.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
GREIF, INC. (GEF) is a mid-cap value stock in the Containers & Packaging industry. The rating according to our strategy based on Peter Lynch changed from 72% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Greif, Inc. is a producer of industrial packaging products and services. The Company's segments are Rigid Industrial Packaging & Services; Paper Packaging & Services; Flexible Products & Services, and Land Management. The Rigid Industrial Packaging & Services segment is engaged in the production and sale of rigid industrial packaging products, and services, such as container life cycle management, filling, logistics, warehousing and other packaging services. The Paper Packaging & Services segment is engaged in the production and sale of containerboard, corrugated sheets, corrugated containers and other corrugated products. The Flexible Products & Services segment is engaged in the production and sale of flexible intermediate bulk containers and related services on a global basis. The Land Management segment is involved in the management and sale of timber. As of October 31, 2016, the Company had operations in over 45 countries.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: FAIL
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 72% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ameris Bancorp is a financial holding company. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
WNS (HOLDINGS) LIMITED (ADR) (WNS) is a mid-cap growth stock in the Computer Services industry. The rating according to our strategy based on Peter Lynch changed from 0% to 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: WNS (Holdings) Limited is a global provider of business process management (BPM) services. The Company offers data, voice, analytical and business transformation services. The Company's segments include WNS Global BPM and WNS Auto Claims BPM. Its operating segments include travel, insurance, banking and financial services, healthcare, utilities, retail and consumer products groups, auto claims and others. The WNS Global BPM includes the Company's business activities with the exception of WNS Auto Claims BPM. WNS Auto Claims BPM is the Company's automobile claims management business. The Company focuses on various industry verticals, such as insurance; travel and leisure; diversified businesses, including manufacturing, retail, consumer packaged goods (CPG), media and entertainment, and telecommunication (telecom); utilities; consulting and professional services; banking and financial services; healthcare, and shipping and logistics.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
HAYNES INTERNATIONAL, INC. (HAYN) is a small-cap growth stock in the Iron & Steel industry. The rating according to our strategy based on Peter Lynch changed from 0% to 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Haynes International, Inc. (Haynes) is a producer of nickel- and cobalt-based alloys in flat product forms, such as sheet, coil and plate forms. The Company also produces its products as seamless and welded tubulars, and in slab, bar, billet and wire forms. It focuses on developing, manufacturing, marketing and distributing alloys, which are sold in the aerospace, chemical processing and industrial gas turbine industries. Its products consist of high-temperature resistant alloys (HTA) products and corrosion-resistant alloys (CRA) products. Its HTA products are used in manufacturing components for the hot sections of gas turbine engines. Its CRA products are used in a range of applications, such as chemical processing, power plant emissions control, hazardous waste treatment, sour gas production and pharmaceutical vessels. The Company has a four-high Steckel rolling mill used in hot rolling high-performance alloys. The Company has operations in the United States, Europe and China.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
AVIS BUDGET GROUP INC. (CAR) is a mid-cap value stock in the Rental & Leasing industry. The rating according to our strategy based on Peter Lynch changed from 72% to 78% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Avis Budget Group Inc. is a provider of vehicle rental and car sharing services. The Company operates three brands, which include Avis, Budget and Zipcar. Avis and Budget are rental car suppliers. It also owns Payless, which is a car rental brand; Apex, which is a car rental brand in New Zealand and Australia; Maggiore, a vehicle rental brand in Italy, and France Cars, which operates light commercial vehicle fleets in France. The Company operates in two segments: Americas and International. The Americas segment provides and licenses the Company's brands to third parties for vehicle rentals and ancillary products and services in North America, South America, Central America and the Caribbean, and operates its car sharing business in certain of these markets. The International segment provides and licenses the Company's brands to third parties for vehicle rentals and ancillary products and services in Europe, the Middle East, Africa, Asia, Australia and New Zealand.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: FAIL
FREE CASH FLOW: BONUS PASS
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
FUJIFILM HOLDINGS CORP. (ADR) (FUJIY) is a large-cap value stock in the Medical Equipment & Supplies industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: FUJIFILM Holdings Corporation is a Japan-based holding company engaged in the business related to photography, medical care & printing & liquid crystal display materials and copying machines. The Company operates in three business segments. Imaging Solutions segment develops, manufactures and sells color films, digital cameras, color paper services for photographic prints, instant printing equipment and optical devices mainly for general consumers. Healthcare & Materials Solutions segment provides medical system equipment, cosmetics and supplements, pharmaceutical products, biopharmaceutical manufacturing development contract, regenerative medicine products, chemical products, graphic system equipment, inkjet equipment, display materials, recording media and electronic materials for commercial use. Document Solutions segment provides digital multi-functional peripherals, publishing systems, document management software and related solution services mainly for commercial use.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
INVENTORY TO SALES: PASS
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
LOGITECH INTERNATIONAL SA (USA) (LOGI) is a mid-cap growth stock in the Computer Peripherals industry. The rating according to our strategy based on Peter Lynch changed from 0% to 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Logitech International S.A. is a holding company. The Company designs, manufactures and markets products that allow people to connect through music, gaming, video, computing, and other digital platforms. The Company operates through peripheral segment. The Company offers its products to a network of domestic and international customers, including direct sales to retailers, e-tailers, and indirect sales through distributors. The Company's retail network across the world includes consumer electronics distributors, retailers, mass merchandisers, specialty electronics stores, computer and telecommunications stores, value-added resellers and online merchants. Its music solutions are focused primarily on mobile speakers, including its UE BOOM family of mobile wireless speakers, its Jaybird wireless audio wearables for sports and active lifestyles, and its custom in-ear headphones. It offers a range of gaming gear for gamers, including mice, keyboards, headsets, gamepads and steering wheels.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
MELLANOX TECHNOLOGIES, LTD. (MLNX) is a mid-cap growth stock in the Semiconductors industry. The rating according to our strategy based on Peter Lynch changed from 72% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Mellanox Technologies, Ltd. is a fabless semiconductor company. The Company is an integrated supplier of interconnect products and solutions based on the InfiniBand and Ethernet standards. The Company operates in the development, manufacturing, marketing and sales of interconnect products segment. Its products facilitate data transmission between servers, storage systems, communications infrastructure equipment and other embedded systems. It operates its business globally and offers products to customers at various levels of integration. The products it offers include integrated circuits (ICs), adapter cards, switch systems, multi-core and network processors, cables, modules, software, services and accessories. Together these products form a networking solution, focused on computing, storage and communication applications used in multiple markets, including high-performance computing (HPC), cloud, Web 2.0, storage, financial services, and enterprise data center (EDC).
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: FAIL
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
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RADIANT LOGISTICS INC (RLGT) is a small-cap growth stock in the Misc. Transportation industry. The rating according to our strategy based on Peter Lynch changed from 72% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Radiant Logistics, Inc. operates as a third-party logistics company, providing multi-modal transportation and logistics services. The Company is organized in two geographic operating segments: United States and Canada. Its transportation services for both the United States and Canada segments are placed into categories of freight forwarding and freight brokerage services. The Company services an account base consisting of consumer goods, food and beverage, manufacturing and retail customers, which the Company supports from a network of operating locations, as well as an integrated international service partner network. As of June 30, 2016, it provided these services through a multi-brand network, including 18 Company-owned offices. As of June 30, 2016, it had approximately 10,000 asset-based transportation companies, including motor carriers, railroads, airlines and ocean lines in its carrier network. Its brands include Radiant, Wheels, Airgroup, Adcom, DBA and Service By Air.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
INVENTORY TO SALES: FAIL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
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PACWEST BANCORP (PACW) is a mid-cap value stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 72% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: PacWest Bancorp is a bank holding company for Pacific Western Bank (the Bank). The Company is focused on relationship-based business banking to small, middle-market and venture-backed businesses. As of October 23, 2017, the Bank offered a range of loan and deposit products and services through 83 branches located throughout the state of California, one branch located in Durham, North Carolina, and several loan production offices located in cities across the country. The Company provides commercial banking services, and deposit and treasury management services to small and middle-market businesses. It offers products and services through its CapitalSource and Square 1 Bank divisions. In addition, the Company provides investment advisory and asset management services to select clients through Square 1 Asset Management, Inc., a subsidiary of the Bank.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
SALES: PASS
YIELD COMPARED TO THE S&P 500: PASS
YIELD ADJUSTED P/E/GROWTH (PEG) RATIO: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
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GRAND CANYON EDUCATION INC (LOPE) is a mid-cap growth stock in the Schools industry. The rating according to our strategy based on Peter Lynch changed from 72% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Grand Canyon Education, Inc. is engaged in the provision of postsecondary education. The Company is a regionally accredited university. The Company offers the degrees, including Doctor of Education, Doctor of Business Administration, Doctor of Nursing Practice, Doctor of Philosophy, Education Specialist, Master of Divinity, Master of Arts, Master of Education, Master of Business Administration and Master of Public Administration, Master of Public Health, Master of Science, Bachelor of Arts, Bachelor of Science, and a range of programs for its degrees. It also offers certificate programs, which consist of a series of courses focused on a particular area of study for both the post-baccalaureate and post-graduate students. The Company offers its ground-based programs to students through three 15-week semesters in a calendar year and to online students in courses that generally range from 5 to 16 weeks throughout the calendar year.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
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VIRTUS INVESTMENT PARTNERS INC (VRTS) is a small-cap value stock in the Investment Services industry. The rating according to our strategy based on Peter Lynch changed from 72% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Virtus Investment Partners, Inc. (Virtus) is a provider of investment management and related services to individuals and institutions. The Company provides its products in various forms and through multiple distribution channels. Its retail products include open-end mutual funds, closed-end funds, exchange traded funds, variable insurance funds, undertakings for collective investments in transferable securities (UCITS) and separately managed accounts. Its open-end mutual funds are distributed through intermediaries. Its closed-end funds trade on the New York Stock Exchange. Its variable insurance funds are available as investment options in variable annuities and life insurance products distributed by life insurance companies. Separately managed accounts consists of intermediary programs, sponsored and distributed by unaffiliated brokerage firms, and private client accounts, which are offered to the high net-worth clients of its affiliated managers.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
MVB FINANCIAL CORP (MVBF) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 72% to 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: MVB Financial Corp. (MVB) is a financial holding company. Through its subsidiaries, MVB Bank, Inc. (the Bank), MVB Mortgage and MVB Insurance, LLC, the Company provides community banking, mortgage banking, insurance and wealth management services to individuals and corporate clients in the Mid-Atlantic region. It operates through four segments: commercial and retail banking, mortgage banking, financial holding company, and insurance services. The Bank offers its customers a range of products, such as checking accounts, negotiable order of withdrawal (NOW) accounts, money market and savings accounts, time certificates of deposit, commercial, installment, commercial real estate and residential real estate mortgage loans, debit cards, and safe deposit rental facilities. The Bank provides services through its walk-in offices, automated teller machines (ATMs), drive-in facilities, and Internet and telephone banking. The Bank also offers non-deposit investment products.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
HYATT HOTELS CORPORATION (H) is a mid-cap growth stock in the Hotels & Motels industry. The rating according to our strategy based on Peter Lynch changed from 74% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Hyatt Hotels Corporation is a global hospitality company. The Company develops, owns, operates, manages, franchises, licenses or provides services to a portfolio of properties. The Company operates through four segments: owned and leased hotels; Americas management and franchising (Americas); ASPAC management and franchising (ASPAC), and EAME/SW Asia management and franchising (EAME/SW Asia). The owned and leased hotels segment consists of its owned and leased full service and select service hotels. The Americas segment consists of its management and franchising of properties located in the United States, Latin America, Canada and the Caribbean. The ASPAC segment consists of its management and franchising of properties located in Southeast Asia, as well as China, Australia, South Korea, Japan and Micronesia. The EAME/SW Asia segment consists of its management and franchising of properties located in Europe, Africa, the Middle East, India, Central Asia and Nepal.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
FABRINET (FN) is a mid-cap growth stock in the Semiconductors industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Fabrinet provides optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers (OEMs) of products, such as optical communication components, modules and sub-systems, industrial lasers, medical devices and sensors. The Company offers a range of optical and electro-mechanical capabilities across the manufacturing process, including process design and engineering, supply chain management, manufacturing, complex printed circuit board assembly, advanced packaging, integration, final assembly and test. The Company's customer base includes companies in industries that require precision manufacturing capabilities, such as optical communications, industrial lasers, automotive, medical and sensors. Its customers in these industries support end-markets, including automotive, biotechnology, communications, materials processing, medical devices, metrology and semiconductor processing.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
GOLDMAN SACHS GROUP INC (GS) is a large-cap value stock in the Investment Services industry. The rating according to our strategy based on Peter Lynch changed from 63% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: The Goldman Sachs Group, Inc. is an investment banking, securities and investment management company that provides a range of financial services to corporations, financial institutions, governments and individuals. The Company operates in four business segments: Investment Banking, Institutional Client Services, Investing & Lending, and Investment Management. The Investment Banking segment consists of financial advisory and underwriting. The Institutional Client Services segment makes markets and facilitates client transactions in fixed income, equity, currency and commodity products. The investing and lending activities, which are typically longer-term, include its investing and relationship lending activities across various asset classes, primarily debt securities and loans, public and private equity securities, infrastructure and real estate. The Investment Management segment provides investment and wealth advisory services. As of December 2016, it had offices in over 30 countries.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: FAIL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
WHITE MOUNTAINS INSURANCE GROUP LTD (WTM) is a mid-cap value stock in the Advertising industry. The rating according to our strategy based on Peter Lynch changed from 74% to 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: White Mountains Insurance Group, Ltd. is a holding company. The Company's principal businesses are conducted through its insurance subsidiaries and other affiliates. Its segments include HG Global/BAM and Other Operations. The HG Global/BAM segment consists of the operations of HG Global Ltd. (HG Global) and Build America Mutual Assurance Company (BAM). The Other Operations segment consists of the Company and its intermediate holding companies, its investment management subsidiary, White Mountains Advisors LLC, and certain consolidated and unconsolidated private capital investments.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ROYAL BANK OF CANADA (RY) is a large-cap value stock in the S&Ls/Savings Banks industry. The rating according to our strategy based on Peter Lynch changed from 0% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Royal Bank of Canada is a diversified financial services company. The Company provides personal and commercial banking, wealth management services, insurance, investor services and capital markets products and services on a global basis. The Company serves personal, business, public sector and institutional clients in Canada, the United States and approximately 34 other countries. The Company's business segments include Personal and Commercial Banking, Wealth Management, Insurance, Investor and Treasury Services, Capital Markets, and Corporate Support. The Company, through its segments, serves various lines of businesses, which include Personal Financial Services, Business Financial Services, Cards and Payment Solutions, Caribbean and United States Banking, Canadian Wealth Management, United States and International Wealth Management, Global Asset Management, Canadian Insurance, International Insurance, Corporate and Investment Banking, Global Markets and Other.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: FAIL
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
FIRSTENERGY CORP. (FE) is a large-cap growth stock in the Electric Utilities industry. The rating according to our strategy based on Peter Lynch changed from 0% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: FirstEnergy Corp. is a holding company. The Company is engaged in holding, directly or indirectly, all of the outstanding equity of its principal subsidiaries. Its segments include Regulated Distribution, Regulated Transmission, Competitive Energy Services (CES) and Corporate/Other. As of December 31, 2016, the Regulated Distribution segment distributed electricity through the Company's 10 utility operating companies, serving approximately six million customers, and purchased power for its provider of last resort (POLR), standard offer service (SOS), standard offer service (SSO) and default service requirements in Ohio, Pennsylvania, New Jersey and Maryland. The Regulated Transmission segment transmits electricity through transmission facilities owned and operated by American Transmission Systems, Incorporated (ATSI) and Trans-Allegheny Interstate Line Company (TrAIL). The CES segment primarily supplies electricity to end use customers through retail and wholesale arrangements.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: FAIL
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
OSI SYSTEMS, INC. (OSIS) is a small-cap growth stock in the Scientific & Technical Instr. industry. The rating according to our strategy based on Peter Lynch changed from 0% to 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: OSI Systems, Inc., through its subsidiaries, is a vertically integrated designer and manufacturer of specialized electronic systems and components for critical applications. The Company sells its products and provides related services in diversified markets, including homeland security, healthcare, defense and aerospace. The Company operates in three segments, which include Security, which provides security and inspection systems, turnkey security screening solutions and related services; Healthcare, which provides patient monitoring, diagnostic cardiology, anesthesia delivery and ventilation systems and defibrillators, and Optoelectronics and Manufacturing, which provides electronic components and electronic manufacturing services for the Security and Healthcare divisions, as well as to external original equipment manufacturer (OEM) customers and end users for applications in the defense, aerospace, medical and industrial markets, among others.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
BANK OF NOVA SCOTIA (BNS) is a large-cap value stock in the Regional Banks industry. The rating according to our strategy based on Peter Lynch changed from 0% to 81% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: The Bank of Nova Scotia is an international bank and a financial services provider in North America, Latin America, the Caribbean and Central America, and Asia-Pacific. The Bank offers a range of advice, products and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. Its segments include Canadian Banking, which provides a suite of financial advice and banking solutions to retail, small business, commercial and wealth management customers in Canada; International Banking, which provides a range of financial products, solutions and advice to retail and commercial customers in select regions outside of Canada; Global Banking and Markets, which provides corporate banking, investment banking, capital markets and transaction banking solutions, and Other, which represents smaller operating segments, including Group Treasury.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
SALES: PASS
YIELD COMPARED TO THE S&P 500: PASS
YIELD ADJUSTED P/E/GROWTH (PEG) RATIO: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: FAIL
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
GERDAU SA (ADR) (GGB) is a mid-cap growth stock in the Iron & Steel industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Gerdau S.A. (Gerdau) is a manufacturer of long steel in the North and South America. The Company is engaged in the production and commercialization of steel products in general, through its mills located in Argentina, Brazil, Canada, Chile, Colombia, Spain, the United States, Guatemala, India, Mexico, Peru, the Dominican Republic, Uruguay and Venezuela. Its segments are Brazil Operations, which includes operations of steel and iron ore in Brazil, except Special Steels, and the operation of metallurgical coal and coke in Colombia; North America Operations, which includes all operations in North America, except those of Mexico and Special Steels; South America Operations, which includes operations in South America, except Brazil and the operation of metallurgical coal and coke in Colombia, and Special Steel Operations, including special steel operations in Brazil, Spain, the United States and India. It supplies its customers a range of products, including iron ore semi-finished products.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
SMITH & NEPHEW PLC (ADR) (SNN) is a large-cap growth stock in the Medical Equipment & Supplies industry. The rating according to our strategy based on Peter Lynch changed from 0% to 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Smith & Nephew plc is a medical technology company. The Company is engaged in developing, manufacturing, marketing and selling medical devices and services. Its products and services include Sports Medicine Joint Repair, Arthroscopic Enabling Technologies (AET), Trauma & Extremities, Other Surgical Businesses, Knee Implants, Hip Implants, Advanced Wound Care, Advanced Wound Bioactives and Advanced Wound Devices. The Sports Medicine Joint Repair franchise offers surgeons a range of instruments, technologies and implants necessary to perform minimally invasive surgery of the joints, including the repair of soft tissue injuries and degenerative conditions of the knee, hip and shoulder. The AET franchise offers an array of minimally invasive surgery-enabling systems and devices. The Trauma & Extremities franchise supports healthcare professionals with solutions used by surgeons to stabilize severe fractures, correct bone deformities, treat arthritis and heal soft tissue complications.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
SUN LIFE FINANCIAL INC (SLF) is a large-cap value stock in the Insurance (Life) industry. The rating according to our strategy based on Peter Lynch changed from 0% to 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Sun Life Financial Inc. is the holding company of Sun Life Assurance Company of Canada. The Company is a financial services company providing a range of insurance, wealth and asset management solutions to individuals and corporate Clients. It operates through five segments. The Sun Life Financial Canada segment provides retail insurance andinvestment advice products and services to people across Canada. The SLF U.S. segment has three business units: Group Benefits, International and In-force Management. Its Sun Life Financial Asset Management segment consists of MFS Investment Management and Sun Life Investment Management. The SLF Asia segment operates through subsidiaries in the Philippines, Hong Kong, Indonesia and Vietnam, as well as through joint ventures and associates with local partners in the Philippines, India, China and Malaysia. Its Corporate segment includes SLF U.K. and Corporate Support. Corporate Support operations consist of its Run-off reinsurance business.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
YIELD ADJUSTED P/E TO GROWTH (PEG) RATIO: PASS
EARNINGS PER SHARE: PASS
TOTAL DEBT/EQUITY RATIO: NEUTRAL
EQUITY/ASSETS RATIO: PASS
RETURN ON ASSETS: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
POSCO (ADR) (PKX) is a large-cap growth stock in the Iron & Steel industry. The rating according to our strategy based on Peter Lynch changed from 74% to 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: POSCO is a Korea-based company principally engaged in the manufacture and distribution of steel products. The Company operates in four segments: steel, trading, construction, and others. The steel segment includes production of steel products and sale of such products. The trading segment consists of global trading activities of POSCO Daewoo Corporation, exporting and importing a range of steel products that are both obtained from and supplied to it, as well as between other suppliers and purchasers in Korea and overseas. The construction segment includes planning, designing and construction of industrial plants, civil engineering projects, and commercial and residential buildings, both in Korea and overseas. The others segment includes power generation, liquefied natural gas (LNG) logistics, and network and system integration.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: PASS
INVENTORY TO SALES: PASS
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: PASS
FREE CASH FLOW: NEUTRAL
NET CASH POSITION: NEUTRAL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
DENNY'S CORP (DENN) is a small-cap value stock in the Restaurants industry. The rating according to our strategy based on Peter Lynch changed from 56% to 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Denny's Corporation (Denny's), incorporated on September 29, 1988, operates a franchised full-service restaurant chain. The Company, through its subsidiary, Denny's, Inc., owns and operates the Denny's brand. Denny's brand consists of approximately 1,706 restaurants, which includes franchised/licensed restaurants and company operated. In addition to its breakfast-all-day items, Denny's offers a selection of lunch and dinner items including burgers, sandwiches, salads and skillet entres. It also offers assortment of beverages, appetizers and desserts. It also offers items for children and seniors. The Company's purchasing department administers programs enables procurement of food and non-food products. Its franchisees also purchase food and non-food products directly from its vendors under these programs. The Company's restaurants are operated in the District of Columbia, United States territories, California, Texas, and Florida.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
P/E/GROWTH RATIO: PASS
SALES AND P/E RATIO: NEUTRAL
EPS GROWTH RATE: PASS
TOTAL DEBT/EQUITY RATIO: FAIL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
Since its inception, Validea's strategy based on Peter Lynch has returned 420.89% vs. 240.63% for the S&P 500. For more details on this strategy, click here
About Peter Lynch: Perhaps the greatest mutual fund manager of all-time, Lynch guided Fidelity Investment's Magellan Fund to a 29.2 percent average annual return from 1977 until his retirement in 1990, almost doubling the S&P 500's 15.8 percent yearly return over that time. Lynch's common sense approach and quick wit made him one of the most quoted investors on Wall Street. ("Go for a business that any idiot can run -- because sooner or later, any idiot probably is going to run it," is one of his many pearls of wisdom.) Lynch's bestseller One Up on Wall Street is something of a "stocks for the everyman/everywoman", breaking his approach down into easy-to-understand concepts.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. As of December 31, 2016, Southwest operated a total of 723 Boeing 737 aircraft and served 101 destinations in 40 states, the District of Columbia, the Commonwealth of Puerto Rico, and eight near-international countries: Mexico, Jamaica, The Bahamas, Aruba, Dominican Republic, Costa Rica, Belize, and Cuba. Company Description: Knowles Corporation is a global supplier of micro-acoustic, audio processing and specialty component solutions, serving the mobile consumer electronics, communications, medical, military, aerospace and industrial markets. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The Company's segments include North American Furniture Solutions, which includes the design, manufacture and sale of furniture products for work-related settings, including office, education and healthcare environments, across the United States and Canada; EMEA, Latin America, and Asia Pacific (ELA) Furniture Solutions, which includes the operations associated with the design, manufacture, and sale of furniture products, primarily for work-related settings, in the Europe, Middle East and Africa (EMEA), Latin America and Asia-Pacific geographic regions, among others; Specialty segment, which includes the design, manufacture and sale of furniture products and textiles, and Consumer segment, which includes the sale of modern design furnishings and accessories to third-party retail distributors. Its segments include Canadian Banking, which provides a suite of financial advice and banking solutions to retail, small business, commercial and wealth management customers in Canada; International Banking, which provides a range of financial products, solutions and advice to retail and commercial customers in select regions outside of Canada; Global Banking and Markets, which provides corporate banking, investment banking, capital markets and transaction banking solutions, and Other, which represents smaller operating segments, including Group Treasury. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The Company's segments include North American Furniture Solutions, which includes the design, manufacture and sale of furniture products for work-related settings, including office, education and healthcare environments, across the United States and Canada; EMEA, Latin America, and Asia Pacific (ELA) Furniture Solutions, which includes the operations associated with the design, manufacture, and sale of furniture products, primarily for work-related settings, in the Europe, Middle East and Africa (EMEA), Latin America and Asia-Pacific geographic regions, among others; Specialty segment, which includes the design, manufacture and sale of furniture products and textiles, and Consumer segment, which includes the sale of modern design furnishings and accessories to third-party retail distributors. The Company, through its segments, serves various lines of businesses, which include Personal Financial Services, Business Financial Services, Cards and Payment Solutions, Caribbean and United States Banking, Canadian Wealth Management, United States and International Wealth Management, Global Asset Management, Canadian Insurance, International Insurance, Corporate and Investment Banking, Global Markets and Other. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The Company has three segments. The Company operates in three business segments. |
27847.0 | 2020-02-09 00:00:00 UTC | Validea's Top Five Financial Stocks Based On Joel Greenblatt - 2/9/2020 | ABCB | https://www.nasdaq.com/articles/valideas-top-five-financial-stocks-based-on-joel-greenblatt-2-9-2020-2020-02-09 | nan | nan | The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. This value model looks for companies with high return on capital and earnings yields.
ALLIANCE DATA SYSTEMS CORPORATION (ADS) is a mid-cap value stock in the Consumer Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Alliance Data Systems Corp is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
EARNINGS YIELD: NEUTRAL
RETURN ON TANGIBLE CAPITAL: NEUTRAL
FINAL RANKING: FAIL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ARES COMMERCIAL REAL ESTATE CORP (ACRE) is a small-cap value stock in the Misc. Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ares Commercial Real Estate Corporation is a specialty finance company. The Company is primarily engaged in originating and investing in commercial real estate (CRE) loans and related investments. The Company operates through principal lending segment. Its target investments include senior mortgage loans, subordinated debt, preferred equity, mezzanine loans and other CRE investment opportunities, including commercial mortgage-backed securities. These investments are generally held for investment and are secured, directly or indirectly, by office, multifamily, retail, industrial, lodging, senior-living, self-storage and other commercial real estate properties, or by ownership interests therein. Through the Company's manager, Ares Commercial Real Estate Management LLC, it has investment professionals located across the United States and Europe who directly source loan opportunities for the Company with owners, operators and sponsors of CRE properties.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ARCH CAPITAL GROUP LTD. (ACGL) is a large-cap value stock in the Insurance (Prop. & Casualty) industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Arch Capital Group Ltd. provides insurance, reinsurance and mortgage insurance. The Company provides a range of property, casualty and mortgage insurance and reinsurance lines. The Company operates in five segments: insurance, reinsurance, mortgage, other and corporate. The insurance segment's product lines include construction and national accounts; excess and surplus casualty; lenders products; professional lines; programs; property, energy, marine and aviation; travel, accident and health, and other. The reinsurance segment's product lines include casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe, and other. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. The other segment includes the results of Watford Holdings Ltd.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ALLEGIANCE BANCSHARES INC (ABTX) is a small-cap growth stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Allegiance Bancshares, Inc. is a bank holding company. Through its subsidiary, Allegiance Bank (the Bank), the Company provides a range of commercial banking services primarily to Houston metropolitan area-based small to medium-sized businesses, professionals and individual customers. In addition to banking during normal business hours, the Company offers extended drive-in hours, automated teller machines (ATMs) and banking by telephone, mail and Internet. The Company also provides debit card services, cash management services and wire transfer services, and offers night depository, direct deposits, cashier's checks, letters of credit and mobile deposits. It also offers safe deposit boxes, automated teller machines, drive-in services and round the clock depository facilities. The Company maintains an Internet banking Website that allows customers to obtain account balances and transfer funds among accounts.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ameris Bancorp is a financial holding company. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
Since its inception, Validea's strategy based on Joel Greenblatt has returned 99.30% vs. 163.04% for the S&P 500. For more details on this strategy, click here
About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. The "Magic Formula," as he called it, produced back-tested returns of 30.8 percent per year from 1988 through 2004, more than doubling the S&P 500's 12.4 percent return during that time. Greenblatt also produced exceptional returns as managing partner at Gotham Capital, a New York City-based hedge fund he founded. The firm averaged a remarkable 40 percent annualized return over more than two decades.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. Company Description: Alliance Data Systems Corp is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. The Company operates in five segments: insurance, reinsurance, mortgage, other and corporate. |
27848.0 | 2020-02-04 00:00:00 UTC | Analysts Expect RNMC To Hit $25 | ABCB | https://www.nasdaq.com/articles/analysts-expect-rnmc-to-hit-%2425-2020-02-04 | nan | nan | Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the Mid Cap US Equity Select ETF (Symbol: RNMC), we found that the implied analyst target price for the ETF based upon its underlying holdings is $25.32 per unit.
With RNMC trading at a recent price near $23.09 per unit, that means that analysts see 9.68% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of RNMC's underlying holdings with notable upside to their analyst target prices are Brooks Automation Inc (Symbol: BRKS), New Jersey Resources Corp (Symbol: NJR), and Ameris Bancorp (Symbol: ABCB). Although BRKS has traded at a recent price of $38.56/share, the average analyst target is 28.63% higher at $49.60/share. Similarly, NJR has 22.64% upside from the recent share price of $42.40 if the average analyst target price of $52.00/share is reached, and analysts on average are expecting ABCB to reach a target price of $49.00/share, which is 21.08% above the recent price of $40.47. Below is a twelve month price history chart comparing the stock performance of BRKS, NJR, and ABCB:
Below is a summary table of the current analyst target prices discussed above:
NAME SYMBOL RECENT PRICE AVG. ANALYST 12-MO. TARGET % UPSIDE TO TARGET
Mid Cap US Equity Select ETF RNMC $23.09 $25.32 9.68%
Brooks Automation Inc BRKS $38.56 $49.60 28.63%
New Jersey Resources Corp NJR $42.40 $52.00 22.64%
Ameris Bancorp ABCB $40.47 $49.00 21.08%
Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have a valid justification for their targets, or are they behind the curve on recent company and industry developments? A high price target relative to a stock's trading price can reflect optimism about the future, but can also be a precursor to target price downgrades if the targets were a relic of the past. These are questions that require further investor research.
10 ETFs With Most Upside To Analyst Targets »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Mid Cap US Equity Select ETF RNMC $23.09 $25.32 9.68% Brooks Automation Inc BRKS $38.56 $49.60 28.63% New Jersey Resources Corp NJR $42.40 $52.00 22.64% Ameris Bancorp ABCB $40.47 $49.00 21.08% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of RNMC's underlying holdings with notable upside to their analyst target prices are Brooks Automation Inc (Symbol: BRKS), New Jersey Resources Corp (Symbol: NJR), and Ameris Bancorp (Symbol: ABCB). Similarly, NJR has 22.64% upside from the recent share price of $42.40 if the average analyst target price of $52.00/share is reached, and analysts on average are expecting ABCB to reach a target price of $49.00/share, which is 21.08% above the recent price of $40.47. | Three of RNMC's underlying holdings with notable upside to their analyst target prices are Brooks Automation Inc (Symbol: BRKS), New Jersey Resources Corp (Symbol: NJR), and Ameris Bancorp (Symbol: ABCB). Similarly, NJR has 22.64% upside from the recent share price of $42.40 if the average analyst target price of $52.00/share is reached, and analysts on average are expecting ABCB to reach a target price of $49.00/share, which is 21.08% above the recent price of $40.47. Mid Cap US Equity Select ETF RNMC $23.09 $25.32 9.68% Brooks Automation Inc BRKS $38.56 $49.60 28.63% New Jersey Resources Corp NJR $42.40 $52.00 22.64% Ameris Bancorp ABCB $40.47 $49.00 21.08% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? | Similarly, NJR has 22.64% upside from the recent share price of $42.40 if the average analyst target price of $52.00/share is reached, and analysts on average are expecting ABCB to reach a target price of $49.00/share, which is 21.08% above the recent price of $40.47. Three of RNMC's underlying holdings with notable upside to their analyst target prices are Brooks Automation Inc (Symbol: BRKS), New Jersey Resources Corp (Symbol: NJR), and Ameris Bancorp (Symbol: ABCB). Below is a twelve month price history chart comparing the stock performance of BRKS, NJR, and ABCB: Below is a summary table of the current analyst target prices discussed above: | Mid Cap US Equity Select ETF RNMC $23.09 $25.32 9.68% Brooks Automation Inc BRKS $38.56 $49.60 28.63% New Jersey Resources Corp NJR $42.40 $52.00 22.64% Ameris Bancorp ABCB $40.47 $49.00 21.08% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of RNMC's underlying holdings with notable upside to their analyst target prices are Brooks Automation Inc (Symbol: BRKS), New Jersey Resources Corp (Symbol: NJR), and Ameris Bancorp (Symbol: ABCB). Similarly, NJR has 22.64% upside from the recent share price of $42.40 if the average analyst target price of $52.00/share is reached, and analysts on average are expecting ABCB to reach a target price of $49.00/share, which is 21.08% above the recent price of $40.47. |
27849.0 | 2020-01-27 00:00:00 UTC | RSI Alert: Ameris Bancorp (ABCB) Now Oversold | ABCB | https://www.nasdaq.com/articles/rsi-alert%3A-ameris-bancorp-abcb-now-oversold-2020-01-27 | nan | nan | Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.
In trading on Monday, shares of Ameris Bancorp (Symbol: ABCB) entered into oversold territory, hitting an RSI reading of 29.6, after changing hands as low as $40.14 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 49.2. A bullish investor could look at ABCB's 29.6 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABCB shares:
Looking at the chart above, ABCB's low point in its 52 week range is $32.91 per share, with $44.90 as the 52 week high point — that compares with a last trade of $40.14.
Find out what 9 other oversold stocks you need to know about »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Monday, shares of Ameris Bancorp (Symbol: ABCB) entered into oversold territory, hitting an RSI reading of 29.6, after changing hands as low as $40.14 per share. A bullish investor could look at ABCB's 29.6 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABCB shares: Looking at the chart above, ABCB's low point in its 52 week range is $32.91 per share, with $44.90 as the 52 week high point — that compares with a last trade of $40.14. | A bullish investor could look at ABCB's 29.6 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABCB shares: Looking at the chart above, ABCB's low point in its 52 week range is $32.91 per share, with $44.90 as the 52 week high point — that compares with a last trade of $40.14. In trading on Monday, shares of Ameris Bancorp (Symbol: ABCB) entered into oversold territory, hitting an RSI reading of 29.6, after changing hands as low as $40.14 per share. | In trading on Monday, shares of Ameris Bancorp (Symbol: ABCB) entered into oversold territory, hitting an RSI reading of 29.6, after changing hands as low as $40.14 per share. A bullish investor could look at ABCB's 29.6 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABCB shares: Looking at the chart above, ABCB's low point in its 52 week range is $32.91 per share, with $44.90 as the 52 week high point — that compares with a last trade of $40.14. | In trading on Monday, shares of Ameris Bancorp (Symbol: ABCB) entered into oversold territory, hitting an RSI reading of 29.6, after changing hands as low as $40.14 per share. A bullish investor could look at ABCB's 29.6 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABCB shares: Looking at the chart above, ABCB's low point in its 52 week range is $32.91 per share, with $44.90 as the 52 week high point — that compares with a last trade of $40.14. |
27850.0 | 2020-01-24 00:00:00 UTC | Ameris Bancorp (ABCB) Q4 2019 Earnings Call Transcript | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-q4-2019-earnings-call-transcript-2020-01-24 | nan | nan | Image source: The Motley Fool.
Ameris Bancorp (NASDAQ: ABCB)
Q4 2019 Earnings Call
Jan 24, 2020, 9:30 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Good day, and welcome to the Ameris Bancorp Fourth Quarter 2019 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded.
I would now like to turn the conference over to Nicole Stokes, Chief Financial Officer. Please go ahead.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Thank you, Sarah, 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 I will discuss the details of our financial results before we open up for Q&A.
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 may cause result 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 development 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 opening comments.
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Thank you, Nicole, and thank you to everybody who's joined our call this morning. I'm excited to share a few highlights about the quarter in the year and then I'd like to spend some time discussing the plan and opportunities we have going into 2020.
For the quarter, we earned $66.6 million, or $0.96 per diluted share on an adjusted basis. This represents a 1.47% return on average assets and an 18.45% return on tangible equity. As expected, our efficiency ratio improved this quarter to 55.61% as we continue to realize our cost saves from the Fidelity acquisition. And for the year 2019, we earned $22.9 million, or $3.80 per diluted share on an adjusted basis and this is up 12% over 2018. This represents a year-to-date return on assets of 1.52% and an improvement from the 1.50% reported last year. I'm also pleased to report that our efficiency ratio improved during the year from 56.19% last year to 55.67% this year.
On our third quarter call, I reviewed, what we said we were going to do when we announced the Ameris and Fidelity merger and how we were tracking with those plans. And I'm pleased to say that we continue to be on track with the plans. The core data conversion, as many of you know was completed in November. It was planned as any conversion. We certainly identified some things we can do better next time, but overall, the conversion went very well. We also closed two additional branches in the fourth quarter, bringing the total branches closed to 29. We've had very little to no attrition of core deposits from these closures.
And one final example I want to share on how close we are to the stated plan is, we previously guided, we expected double-digit growth in tangible book value in 2019 and that's even with the Fidelity dilution. And our actual growth in tangible book value was 10.5% for the year. That announcement we had modeled our tangible book value would be right at $20.80 and at the end of the year, we came in at $20.81, which was exactly in line with projections and this is quite an accomplishment and we remain focused on that tangible book growth.
Now I'd like to turn our attention to the current plans. We recently spent several days with our Board of Directors on our strategic planning, and I have to say, we all walked away extremely energized about the future. When you look at the markets we operate in, we have critical mass and we've got tremendous opportunity. In many of our markets, as you know are high-growth areas with estimate growth rates of anywhere from 9% to 11% such as the Atlanta, Orlando, Jacksonville, Colombia, of course, the list goes on. Yet we still have the stability in the core strength of our non-metro stable markets as well. Everyone keeps talking about disruption and how they're going to capitalize on it, and while we remain opportunistic and our markets are fully aware that we are in control of our own destiny.
We continue to look for and recruit top talent that also had the luxury of knowing that we can be successful on 2020 with our current A-Team [Phonetic] that we have in place. So our focus remains for the execution of our organic growth strategy without distraction of M&A at this time. And that focus really includes four core strategies. First one, being the core deposit funding; second is asset quality; third is operating efficiencies; and last but not least is growth in the tangible book value. And these are all strategies that will continue to drive shareholder value for the Company.
And I'll stop there now and turn it over to Nicole to discuss our financial results in more detail.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Thank you, Palmer. As you mentioned, we're reporting adjusted earnings of $66.6 million, or $0.96 per share for the fourth quarter compared to $45.9 million, or $0.96 for the fourth quarter of last year. These adjusted results primarily exclude the merger charges, the losses on the sale of branch buildings, a partial reversal of the gain on BOLI, MSR impairment and expenses related to the government investigations that we announced in the fourth quarter. Including these items we're reporting GAAP earnings of $61.2 million, or $0.88 per share. The $66 million of adjusted net income represents a 45% increase over the fourth quarter of last year and the 96% -- $0.96 per share EPS is consistent with what we reported last year. Our adjusted return on assets in the fourth quarter was 1.47%, which was a slight decrease from the 1.57% reported last quarter and the 1.61% reported in the fourth quarter of last year. Our return on assets was negatively impacted during this quarter by elevated loans held for sale balances as we integrated our mortgage delivery teams and they had record production levels.
For the full year 2019, our adjusted ROA was 1.52%, compared to 1.50% last year. Our adjusted return on tangible common equity was 18.45% in the fourth quarter of '19, compared to 18.95% last quarter and 20.95% in the fourth quarter of last year. For the full year, our 2019 adjusted return on tangible common equity is 18.74%, compared to 19.18% last year. As Palmer mentioned, we remain focused on tangible book value. For the quarter, we saw an increase in tangible book of $0.52 in the quarter to $20.81. Ironically, this is the exact table book value per share that we had at June 30, 2019, the day before the Fidelity acquisition. For the full year of 2019, we had over 10% increase in tangible book value of $1.98 per share from $18.83 at the end of last year to $20.81 at the end of this year. We're pleased with the increase in tangible book value, considering it absorbed the Fidelity as well as the repurchase of about $18.5 million of stock during the year.
During the fourth quarter, our net interest margin increased by 2 basis points from 3.84% to 3.86%. This increase is mostly due to additional accretion income during the quarter related to the workout of a problem loans that had a large discount tied to it and also early payoffs from acquisitions. I don't think the future in accretion income will be as high as the fourth quarter and I think it will normalize in 2020 to about an average of $3 million per quarter. Also in the fourth quarter, the elevated mortgage loans held for sale negatively impacted our margin by 8 basis points.
I know I said last quarter that we expected to shrink that during the fourth quarter, but based on production, it actually increased. Basically, our mortgage group refill the bucket faster than they were selling. I don't want to sound like a broken record. So we are monitoring that level daily, and we have sales currently pending to bring that balance down by the middle of the first quarter. I believe the ongoing balance going forward to be in the closer to the $900 million range, as previously guided that in the $500 million to $600 million range, but I think with the two mortgage companies coming together and our elevated level of production will stay in that $900 million range going forward.
During the fourth quarter, our yield on earning assets declined by 4 basis points while our interest-bearing deposits and total funding costs both decreased by 10 basis points. And for the year-to-date, our margin declined 4 basis points from 3.92% to 3.88% even with the three Fed cuts throughout the year. And during the year, our yield on earning assets increased by 17 basis points, while our funding costs increased by 34 basis points. Non-interest income grew over 80% from the fourth quarter of '18 to the fourth quarter of '19. The increase in service charge income due to the additional deposit account from Fidelity was partially offset by the Durbin impact and our mortgage revenue grew over 179% this quarter, compared to fourth quarter last year. Mortgage production was strong in the fourth quarter at $1.6 billion, compared to $414 million in fourth quarter last year. We saw a slight decline in the gain on sale percentage and we anticipate that we'll return to higher levels in 2020 as we continue to manage product mix and pricing models between Fidelity and Ameris.
Our adjusted efficiency ratio improved to 55.61% this quarter from 57.25% last quarter. And for the full year 2019, our adjusted efficiency ratio improved from 56.19% to 55.67%. We completed, as Palmer said, the core system conversion in November and we anticipate the realization of all cost saves by the end of the first quarter 2020 as we still had some administrative cost overhang in the fourth quarter numbers. However, some of these costs in the first quarter will be offset by typical first quarter cyclicality such as the increased payroll taxes that we will see in the first quarter. Total non-interest expenses were $122.6 million for the quarter. However, when you remove the management adjusted such as the merger and conversion charges that I already mentioned, our adjusted non-interest expenses totaled $118.3 million, down $8.5 million from the third quarter. Approximately half of that decrease within the core bank and administrative functions while the other half within the mortgage line of business, mostly in salaries and commissions.
On the balance sheet side, we ended the year with total assets of $18.2 billion, compared to $17.8 billion last quarter and $11.4 billion last year. We were pleased with our organic growth both on the loan and deposit side. Excluding the Fidelity acquisition, organic loan growth was $751 million, or 9.16% for the year. Organic loan growth this quarter slowed mostly due to seasonality and the continued repositioning of various portfolios. Total loan production in the bank was actually $1.1 billion, up over 81% from the fourth quarter of last year. Yields were down on new production, which was we expected due to the recent Fed cuts.
On the deposit side, we continued the momentum on non-interest-bearing deposits and improved our mix, so the non-interest bearing deposits now represent 29.94% of total deposits, compared to 26.12% a year ago. And for the full year of 2019, our non-interest bearing deposit growth was just over 15%, as our bankers continue to be focused on core deposit growth to fund the overall bank growth. At the end of 2019, our loan to deposit ratio was 91%, compared to 94% at the end of the third quarter and 88% at the end of last year. And credit quality remained strong. As you recall from our last call, we saw a slight bump in NPAs due to the Fidelity acquisition during the third quarter.
Our team was able to liquidate a significant portion of Ginnie Maes that caused that bump. So we're pleased to report that our non-performing assets as a percentage of total assets decreased 17 basis points, down to 56 basis points at the end of the year. This compares to 73 basis points last quarter and 55 basis points this time. For the quarter, our annualized net charge-off ratio was 9 basis points of total loans, 17 basis points of non-purchased loans. For the full-year 2019, our annualized net charge-off ratio was 10 basis points of total loans and 15 basis points of non-purchased loans, compared to 18 basis points of total loans last year and 27 basis points of non-purchased.
With that -- that was a lot of numbers. With that, I'll turn the call back over to Palmer.
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Great. Thank you, Nicole. As said in the earnings release and I'll mention it again here, we went through a tremendous amount of change this year, including the largest conversion and integration in our Company's history. And to execute on our plan and deliver these types of financial results while having the distraction of everything that's happened this year is quite an accomplishment and I couldn't be more proud of our team. From the support staff to our customer facing teammates, these results are truly a group effort of the new combined Ameris team. And as we look forward into 2020, we remain up optimistic about the opportunities for growth and especially in the diversified lines of business that we have. However, that being said, we do operate in a very competitive market and we will not compromise the asset quality for the sake of growth.
So I'll close with this message again is that, you will see the Ameris continue to become more and more active but not more aggressive I'd like to thank everyone for listening to our fourth quarter earnings results and we look forward to 2020.
Now, I'll turn it back over to Sarah for any questions from the group.
Questions and Answers:
Operator
We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Tyler Stafford with Stephens. Please go ahead.
Tyler Stafford -- Stephens -- Analyst
Hey, good morning, guys and thanks for taking the questions.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Good morning, Tyler.
Tyler Stafford -- Stephens -- Analyst
I hopped on a couple minutes late, so I apologize if you covered this in the prepared comments, but Nicole just I did hear the outlook about the held for sale balance is coming back down toward around $900 million. So my question is, one, how quickly do you think it will get back toward that level? Is that to happen in the first quarter? And then, just in terms of the held for investment growth expectations for the year, can you guys comment on what you are expecting there?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Sure. Hey, first, I'll talk about the mortgage loans held for sale. So we have sales in progress today. So we anticipate that will come down by the end of the first quarter, and I realize that I said that at the end of the third quarter that we have allocated some additional resources to make sure that does happen in the first quarter. And like I said, we are monitoring that daily. We're still funding that with short-term FHLB advances. So as soon as that comes down, the FHLB advances can go back to normal levels as well. And I don't no, just to reiterate that that was about an 8 basis point decrease on the margin in the fourth quarter, having those lines go up instead of down.
So, and then your second question was on loan growth. And I think this goes a little bit to what Palmer has has alluded to, is that we are going to become more active but not more aggressive and then we are very cognizant of credit quality. So as we see things in the market changing, we will react accordingly. So I think in the past, we have guided loan growth in the 7% to 9%. I think that will soften a little bit, and could come more in the 5% to 7%. I think all of the -- all of our analysts are close to that 7%, but I definitely think that could come down a little bit from those 7% to 9% that I previously guided. We'll be closer in the, say, 5% to 7%, 6% to 7%.
Tyler Stafford -- Stephens -- Analyst
And just to be clear Nicole, is that 5% to 7% solely for held for investment growth or is that in the totality point to point total loan growth, which includes the run-off or the declines in held for sale?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
No, that is just the held for investment.
Tyler Stafford -- Stephens -- Analyst
Okay. All right, perfect. Thanks for clearing that up. So with that, I guess reversion of the held for investment, excuse me, held for sale balances by the end of the first quarter, can you just talk about the kind of margin expectations given continued if there is continued funding cost relief with -- you guys were funding that held for investment I think with FHLB advances, I assume those are going to come down and then the held for sale balances will come down. So lots of kind of moving pieces there. Can you just give us a little bit of color on where you see the margin from here?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Sure. And I think that's a great question, and you said that very well. So you've got several components. So we've got the mortgage loans held for sale piece, if that comes down and the FHLB borrowings come down, again, that was 8 basis points in the fourth quarter, assuming that we get that for at least half the quarter. So I think that could be a 3 basis point to 4 basis point pick up in the first quarter based on when I think those loans -- when I think our balance is going to normalize in the first quarter.
Again, that's on --- we were talking about GAAP margin. And I don't necessarily focus on the margin, excluding accretion just because that's a non-GAAP measure, but when you look at our core margin -- I'm sorry, when you look at our GAAP margin this quarter that went up 2 basis points. We did have that elevated accretion in the quarter that we observed. We also had the loan for sale hit. So the net of those two was the positive two. When you look at our margin, excluding accretion that fell during the quarter by 11 basis points, but that had -- did not have the accretion pick up, but it only had the held for sale pick up or decline. So our margin excluding accretion could potentially increase next quarter because that accretion bound is already out of that number, but we will have to pick up from held for sale.
And when we look at our balance sheet, we really do you have, especially if the Fed hold with no additional rate, we are very much asset neutral in both the short-term and the long term. We actually have some positive momentum coming in on the deposit side. We were pleased with our reduction in rates there. But to give you an example, we have about 62% of our upcoming CDs that are maturing are greater than wholesale funding cost today. And just to give you an update on December, as an example, our CD production in December -- so our maturing CDs that rolled into new CDs they averaged 56 basis point decline in those CDs. So that is, when you think about fourth quarter, really we absorb two Fed cuts, we absorb the September Fed cut and the December because September was so late and then also the December. So, to be able to say that our December CDs reprice 56 basis points, that's a greater than 100% data on this repricing of CDs, which we were very pleased with. That was probably too many details, but just to kind of give you some color on the momentum that we have going in.
Tyler Stafford -- Stephens -- Analyst
Yes. Okay. So maybe just to summarize the margin excluding the accretion as we head into 2020 should have a few basis points of upward movement giving the lower held for sale balances. Is that -- is that few basis points of tailwind the right kind of way to think about that for the first quarter?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
That's exactly right. For the net interest margin, excluding accretion.
Tyler Stafford -- Stephens -- Analyst
Yes.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
And then our GAAP margin, I anticipate being fairly consistent.
Tyler Stafford -- Stephens -- Analyst
Got it. Okay. I will hop out and let somebody ask questions. Thanks.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Great. Thank you, Tyler.
Operator
Our next question comes from Casey Whitman with Piper Sandler. Please go ahead.
Casey Whitman -- Piper Sandler -- Analyst
Good morning, Palmer and Nicole. How are you?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Good morning.
Casey Whitman -- Piper Sandler -- Analyst
Just I guess, first I'd touch on capital. So you bought back small amount of shares in the quarter, but maybe just update us on your thoughts around capital management here and the use of of buybacks as we think about 2020?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Sure. So our stock buyback, we did in -- to timber our Board renewed for another $100 million of stock buyback. And then we realize it and we are seeing, you're saying that we are very cognizant of tangible book value and we want to preserve the capital at this point. And so a stock buyback is a little bit counter intuitive that but I think we will be opportunistic, we like having that in our tool belt. I don't think that we will go out, if we have $100 million approved. Our plan is not to go out and buy $25 million a quarter. But if we can buy a little bit each quarter, bring back a little bit of shares, but be able to absorb that tangible book value along the way, that's kind of what we're doing again, it's not our Number 1 strategy, but we'll be opportunistic if the opportunity comes up to buy stock of $6 million [Phonetic] worth a quarter.
Casey Whitman -- Piper Sandler -- Analyst
Understood. And then just thinking about expenses. I guess my first question would be, are there more like one-time cost to come between additional merger charges sale of bank premises anything like that that you expect going forward or is a pretty clean kind of run rate going forward here?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
We feel like it's a clean run rate going forward. The only thing that we still have, when you look at what we adjusted for management adjusted the things that will go forward unfortunately, or the government investigation legal fees concerning that will continue to be there and then also the branch sales. I mean, if we have empty branch buildings and we have an opportunity to sell, we have current appraisals on all those and we feel like they are valued correctly, but you always have the opportunity that if one came along and we had a sale on -- I mean a loss on that. But as far as merger and acquisition, we feel like all of that is behind us, we've got all of that accrued and recorded in 2019.
Casey Whitman -- Piper Sandler -- Analyst
Okay. And then just to be clear on just the remaining cost saves coming out, are those coming out of the bank segment, mortgage segment or kind of a combination of both?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
It's a combination of both. We have still, I would say, of what's left, we've got, it's probably a split 70-30 in kind of what I'd say lines of business being whether that's mortgage and then the other 30%. Well, actually, I'd unlike the back and look at the numbers, it's closer to 60-40, 60 in mortgage and 40 in administrative and bank side.
Casey Whitman -- Piper Sandler -- Analyst
Okay. I guess, and then just one last question I'll ask on credit. Do you guys have a preliminary estimate for the loan loss adjustment for CECL or any kind of commentary around what the day to impact might be on provisioning levels?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Sure. We actually have got, we are working on the disclosures for the 10-K so that will be much more robust. So I'm going to be a little bit hesitant until we get all of that out in the 10-K in just a few weeks. But we have all of our day one, day two entry. So we have a lower boundary and upper boundary. In our lower boundary, we're going to give a range is about $30 million range that we'll put in the 10-K. In that range, the lower range of that is very, very close to what we said all along being our total allowance plus our total discounts. However, there is a portion of those discount that are not on PCI, PCD loans. So that will continue into our accretion. And that rolls into that $3 million accretion number I gave. So there will be a day one entry to retained earnings for the portion of going into the CECL allowance that was not in our discounts. Just to get -- I will say on our unfunded commitments, that's a new component for CECL that range we believe it's $12 million to $17 million and that was not covered in our allowance or our discounts previously. So that is definitely a day one. And then we also had an additional that will come in as well in the first quarter, but we believe that the total adjust -- we know that the total adjustment in the first quarter is in line with our expectations and will be absorbed by earnings in the first quarter. We shouldn't see capital go down at the end of the first quarter like some banks might.
Casey Whitman -- Piper Sandler -- Analyst
Okay. Great, thank you for taking my questions.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Thank you, Casey.
Operator
Our next question comes from Brady Gailey with KBW. Please go ahead.
Brady Gailey -- KBW -- Analyst
Hey, thanks, good morning guys.
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Good morning.
Brady Gailey -- KBW -- Analyst
When we're talking about 5% to 7% loan growth just held for investment loans, does that include the impact of continued shrinkage of the indirect auto book?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
It does. That 5% to 7% is net of that run-off.
Brady Gailey -- KBW -- Analyst
Okay, great. And then looking at mortgage fees, I know fourth quarter is a seasonally soft quarter for mortgage, but we've seen some mortgage peers have relatively good mortgage quarters this quarter. Looking at your mortgage fees, they were down about 37% linked quarter on an annualized, but was there anything -- is there anything to note that would be included in those mortgage fees, I thought they would come a little better. So is there anything one time or anything to know within that mortgage fee line?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
No, I think it's actually at the third quarter was such an anomaly. The third quarter was very, very high for us. I mean it was higher than we had projected with the Ameris and the Fidelity combined and so I think fourth quarter was in line. I know that there was an article that there is another bank that picked up some of our mortgage bankers and I think I have that number right in front of me of what our Florida production lies. But there was not a decline in our Florida production. When you look at production in a mortgage, our overall -- I mentioned, it is also well -- I'm jumping around a little bit, I don't need to do that. So fourth -- third quarter, our production was $1.8 billion and our fourth quarter production was $1.6 billion. So that's a very small decline and a lot of that is just fourth -- normal fourth quarter cyclicality. Our gain on sale percentage dropped from about 7 basis points. So, that accounted for some of that. And like I said, we anticipate that going back up, if we kind of work through some of the product mix and the pricing.
Brady Gailey -- KBW -- Analyst
All right.
H. Palmer Proctor Jr. -- President & Chief Executive Officer
More specifically, your question -- mortgage is still extremely robust for us and the Florida production this month was a record high. With that we did more volumes this month and for this quarter in Florida than we have historically in Florida. With the exit of several of those operations folks and a few of the originators. So we feel good about the production. And if you look more importantly, one of the things we always focused on and pride ourselves on is the purchase originations and if you compare last year's purchase origination volume fourth quarter to this year's is almost triple. So that kind of gives you an idea of the magnitude of the volume that we've been able to generate, especially, when you combine two large mortgage operation. So Robert Odom and his team have done an excellent job of doing the just that.
Brady Gailey -- KBW -- Analyst
All right, that's helpful. And then finally for me Palmer, I hear you on that M&A pause. We have seen several notable Southern merger of equals, and it's not the traditional one bank by another but kind of a MOE style deal. Is that -- when you say an M&A pause, are you more talking about you guys just continuing to buy other banks or would you consider some sort of a big picture strategic MOE with a life-size bank at this point?
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Well, I think we've been pretty consistent in our response there. Our focus remains on the organic opportunities we've got in the incredible markets we're blessed to be in. So, we just don't need that distraction right now. We're getting the Fidelity acquisition fully integrated, we've got all of our right people in the right seats, and there's just tremendous opportunity here and we just don't need any distract from the M&A right now. And that's very consistent with the four to six quarters that we had said from the inception. So nothing has changed there.
Brady Gailey -- KBW -- Analyst
Okay. Got it. Thanks for the color guys.
Operator
Our next question comes from Jennifer Demba with SunTrust. Please go ahead.
Jennifer Demba -- SunTrust -- Analyst
Thank you. Good morning.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Good morning, Jennifer.
Jennifer Demba -- SunTrust -- Analyst
Nicole, question on expenses, you said, obviously there is seasonality in first quarter every year. But you'll realize the rest of your cost savings from LION. So as a result, do you think expenses will be flattish sequentially between fourth and first quarter?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
I don't -- I think there is still room for a slight decline from the second -- from the fourth quarter of this year to the first quarter of next year. I do think it will be a slight decline as we continue to have -- like I said, we had an administrative overhang, so even though conversion was November 1, we held a lot of employees -- retained a lot of employees to make sure that that was all clear before they were displaced. And so, we do anticipate, but I just wanted to warn everybody, we always seems like every first quarter there is always -- you've got payroll taxes and some various other things that increase. One thing I wanted to -- maybe it will help when we were looking back and kind of going through some of our budgeting and strategic planning, when you look at Ameris and Fidelity combined, from 2018 to the 2020 expectations, our non-interest expense is about a 6% to 7% increase, but our revenue growth is greater than 15%. And I think that's really where we are working really hard to make sure that we execute on all of those cost saves. And then we continue to drive revenue, but there were a little -- there are a few other projects that will help efficiencies where we're reallocating some resource, and so we're definitely working to keep that efficiency ratio in the 54% range, to continue to drive that down below 54%.
Jennifer Demba -- SunTrust -- Analyst
Yes. Okay. And can I had to hop on a few minutes late. Can you talk about any merger disruption opportunities you guys have been able to capitalize on thus far?
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Yes. We remain, Jennifer, focused on the customer side of that equation. Obviously, we continue to look and interview for opportunities with talent. But as I mentioned earlier, we were just fortunate to already have boots on the ground and talent in place to capitalize from the customer side. So a lot of the growth you're seeing, we've had some really good success on the core deposit funding side from the disruption and the loan side remains extremely competitive, but we are getting a lot of looks at deals, some are probably a little too rich for us in terms of pricing but those opportunities I think will continue to exist as we move forward with the disruption in the market. We did hire, just -- this quarter, we focused -- the new hires we had on the lending side has been predominantly on the C&I side, and there are a couple down in Florida and then we've got two or three in Georgia that we hire this quarter.
Jennifer Demba -- SunTrust -- Analyst
Okay. Great, thank you.
Operator
[Operator Instructions] Our next question comes from David Feaster with Raymond James. Please go ahead.
David Feaster -- Raymond James -- Analyst
Hey, good morning, guys.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Good morning, David.
David Feaster -- Raymond James -- Analyst
Just a quick one. Following up on the seasonal expenses, do you have a -- could you quantify what the FICA and the payroll taxes are just kind of on a combined basis? The expectations for the first quarter?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
We can. I need to -- give me one second. Maybe I should sing and dance. I don't have it right in front of me, but I will have it in just a few...
David Feaster -- Raymond James -- Analyst
And I guess if there is -- on the FDIC credit if you guys have any remaining and when you expect that to normalize?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
We do have a little bit remaining and we'll use that in the first quarter. And so you'll see that bump come in the first quarter as well. That is another thing that will come out.
David Feaster -- Raymond James -- Analyst
I guess just, I'll ask something on the hiring front. Have you seen any change in the tone of conversations or the pace of conversations? Anecdotally, I've heard that things that might have picked up now that some of the deals have closed. And I guess just what are your expectations for new hires in 2020?
H. Palmer Proctor Jr. -- President & Chief Executive Officer
I'll tell you, our expectations are probably different than others in terms of our dependencies. We have less of a dependency on having to hire lenders, as many others did, that are new entrants into the market just because, as I mentioned earlier, we've got so many people already in place to take advantage of the opportunity. But I do think, to your point there is some acceleration and discussions, a lot of these payouts with the larger disruption, meaning the Church hit, those are February and March, and so I think you'll start seeing some movement first quarter there, end of the first quarter, and that's something I think will start to shift a little bit more, but the -- right now, the main thing we've got our existing team focused on are the customer opportunities. In addition, obviously looking for new talent. But I think that shift will continue to accelerate this quarter.
David Feaster -- Raymond James -- Analyst
Got it.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
And David, that payroll tax is a little shy of $2 million.
David Feaster -- Raymond James -- Analyst
Okay. Terrific. And then just kind of -- we talked about it briefly, but credit's been very benign for you all. But I'd be interested to hear your thoughts on credit, whether you're seeing anything in the market that's causing you any concern either in Florida or Atlanta, it just kind of the competitive landscapes in your markets?
Jon S. Edwards -- Executive Vice President & Chief Credit Officer
Sure, David. The market is still pretty robust in general, especially in our four-state footprint, and there are really very few lending opportunities that we are really looking at right now. But the competitiveness as Palmer put it, we are more active in less and not more aggressive. So the competitiveness of the landscape is may be on the more aggressive side and we've had to kind of really look hard at that. But from a market perspective, there's plenty of new investment going on, there's plenty of new growth, there's plenty of new folks coming in. So the market is still remain pretty robust.
David Feaster -- Raymond James -- Analyst
Are there any specific segments where you're seeing that aggressiveness? And do you see it more in Florida or Atlanta? And I guess, from whom? Is it the big guys or non-bank lenders?
H. Palmer Proctor Jr. -- President & Chief Executive Officer
I think you have to kind of define what the growth aggressiveness [Phonetic] is. I mean if it's pricing that's consistent throughout the markets in which we operate. A lot of that is because we are in some very competitive market. From an asset quality standpoint, most of the banks have been pretty disciplined from what we've seen out there. Where you start tinkering with structure though in terms of amortization or REIT non-recourse, that's where we're starting to see a little pickup on deals that we did not see in the past. But in terms of cash flow and operations and solid sponsors that seems to be pretty consistent throughout, I'm not seeing a large or small banks kind of get too aggressive on that front.
David Feaster -- Raymond James -- Analyst
Okay. Perfect.
H. Palmer Proctor Jr. -- President & Chief Executive Officer
It's mainly on the structure and terms.
David Feaster -- Raymond James -- Analyst
Okay. Thanks for the color.
Operator
[Operator Closing Remarks]
Duration: 38 minutes
Call participants:
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Jon S. Edwards -- Executive Vice President & Chief Credit Officer
Tyler Stafford -- Stephens -- Analyst
Casey Whitman -- Piper Sandler -- Analyst
Brady Gailey -- KBW -- Analyst
Jennifer Demba -- SunTrust -- Analyst
David Feaster -- Raymond James -- Analyst
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp (NASDAQ: ABCB) Q4 2019 Earnings Call Jan 24, 2020, 9:30 a.m. Operator [Operator Closing Remarks] Duration: 38 minutes Call participants: Nicole S. Stokes -- Executive Vice President & Chief Financial Officer H. Palmer Proctor Jr. -- President & Chief Executive Officer Jon S. Edwards -- Executive Vice President & Chief Credit Officer Tyler Stafford -- Stephens -- Analyst Casey Whitman -- Piper Sandler -- Analyst Brady Gailey -- KBW -- Analyst Jennifer Demba -- SunTrust -- Analyst David Feaster -- Raymond James -- Analyst More ABCB analysis All earnings call transcripts 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. These adjusted results primarily exclude the merger charges, the losses on the sale of branch buildings, a partial reversal of the gain on BOLI, MSR impairment and expenses related to the government investigations that we announced in the fourth quarter. | Operator [Operator Closing Remarks] Duration: 38 minutes Call participants: Nicole S. Stokes -- Executive Vice President & Chief Financial Officer H. Palmer Proctor Jr. -- President & Chief Executive Officer Jon S. Edwards -- Executive Vice President & Chief Credit Officer Tyler Stafford -- Stephens -- Analyst Casey Whitman -- Piper Sandler -- Analyst Brady Gailey -- KBW -- Analyst Jennifer Demba -- SunTrust -- Analyst David Feaster -- Raymond James -- Analyst More ABCB analysis All earnings call transcripts 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Ameris Bancorp (NASDAQ: ABCB) Q4 2019 Earnings Call Jan 24, 2020, 9:30 a.m. ET Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks: Operator Good day, and welcome to the Ameris Bancorp Fourth Quarter 2019 Financial Results Conference Call. | Operator [Operator Closing Remarks] Duration: 38 minutes Call participants: Nicole S. Stokes -- Executive Vice President & Chief Financial Officer H. Palmer Proctor Jr. -- President & Chief Executive Officer Jon S. Edwards -- Executive Vice President & Chief Credit Officer Tyler Stafford -- Stephens -- Analyst Casey Whitman -- Piper Sandler -- Analyst Brady Gailey -- KBW -- Analyst Jennifer Demba -- SunTrust -- Analyst David Feaster -- Raymond James -- Analyst More ABCB analysis All earnings call transcripts 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Ameris Bancorp (NASDAQ: ABCB) Q4 2019 Earnings Call Jan 24, 2020, 9:30 a.m. And then looking at mortgage fees, I know fourth quarter is a seasonally soft quarter for mortgage, but we've seen some mortgage peers have relatively good mortgage quarters this quarter. | Operator [Operator Closing Remarks] Duration: 38 minutes Call participants: Nicole S. Stokes -- Executive Vice President & Chief Financial Officer H. Palmer Proctor Jr. -- President & Chief Executive Officer Jon S. Edwards -- Executive Vice President & Chief Credit Officer Tyler Stafford -- Stephens -- Analyst Casey Whitman -- Piper Sandler -- Analyst Brady Gailey -- KBW -- Analyst Jennifer Demba -- SunTrust -- Analyst David Feaster -- Raymond James -- Analyst More ABCB analysis All earnings call transcripts 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Ameris Bancorp (NASDAQ: ABCB) Q4 2019 Earnings Call Jan 24, 2020, 9:30 a.m. As you mentioned, we're reporting adjusted earnings of $66.6 million, or $0.96 per share for the fourth quarter compared to $45.9 million, or $0.96 for the fourth quarter of last year. |
27851.0 | 2020-01-09 00:00:00 UTC | Why These 3 Bank Stocks Can Take Off in 2020 | ABCB | https://www.nasdaq.com/articles/why-these-3-bank-stocks-can-take-off-in-2020-2020-01-09 | nan | nan | Bank stocks underperformed the broader market in 2019. A changing landscape with increasing competition from fintech disruptors, low interest rates, and one-off credit events all played their part in stifling the industry’s growth. While the BANK index generated returns of more than 20%, the number still fell short of the S&P 500’s 29% increase.
2020 brings with it new uncertainties, too; A U.S. presidential election, EPS volatility expected from CECL (current expected credit loss), the unavoidable change in the credit cycle, all attaching risk to financial stocks.
While the sector is trading at one of the lowest multiples over the last two decades compared to the S&P 500, there are particular banking stocks that present a compelling opportunity.
Investment firm Stephen sees several important stock plays in the banking industry for investors to consider in coming months. Using TipRanks’ Stock Comparison, we were able to read the fine print on 3 top picks the firm thinks investors should take note of in 2020. Additionally, we’ve confirmed that Stephen is in the majority on Wall Street in recommending these equities.
Sterling Bancorp (STL)
We’ll start off with a trip down to Montebello, New York, the home of regional bank holding company, Sterling Bancorp. STL focuses on providing financial services to small and midsize business owners, families, and consumers, primarily in the greater New York metropolitan area. Sterling stock beat the financial sector’s returns in 2019 and matched the S&P 500’s yearly 29% gain.
Stephen’s Matthew Breese believes Sterling’s “profitability metrics as measured by ROA and ROTCE remain in the top quartile of peers.” The 4-star analyst argued these have helped drive “first/second quartile EPS and TBV growth over the last year and five years, respectively.”
Furthermore, the analyst points out that Sterling’s balance sheet and EPS growth could be bolstered by portfolio purchases as well as further M&A activity. Historically, STL has been opportunistic in this regard and could pursue a similar strategy through 2021.
Breese added “With accretable yield expected to fall to ~15bp of the NIM by early 2020, we anticipate net interest income will fall by ~2% in 2020 before inflecting and growing in 2021 by ~2%. Helping drive the inflection point is organic loan growth, anticipated at ~6%-8% through 2021… We think shares of STL are undervalued trading at~9x 2021 EPS vs. its historical 10-year P/E of 13.7x. In addition, when we compare STL to less profitable peers, the stock looks attractive, trading at a 3x-4x discount to peers on a P/E basis despite a ROA that’s superior by ~30bp.”
Accordingly, the 4-star analyst reiterated an Overweight rating on STL. The accompanying price target of $25 suggests upside potential of 23%. (To watch Breese’s track record, click here)
In general, the rest of the Street is on the same page. 5 "buy" ratings compared to 1 "hold" assigned in the last three months give it a Strong Buy analyst consensus. At the $25.75 average price target, shares could surge 24% over the next twelve months. (See Sterling Bancorp stock analysis on TipRanks)
Spirit Of Texas Bancshares (STXB)
Moving to the south, we head over to the Lone Star State, the home of Spirit Of Texas Bancshares. STXB is a fellow holding company with 36 locations across the state.
The bank has been busy on the shopping front and in November, completed the acquisition of Chandler Bancorp, a deal which cost Spirit $17,900,000 million. The purchase marks Spirit’s tenth acquisition in Texas and third since going public in 2018. Full integration is expected by mid-2020, and Stephens’ Matt Olney believes that following the merger STXB “can improve its efficiency ratio to below 60% (currently at 62%).”
An additional positive indicator for Olney is STXB’s loan portfolio, the majority of which is a combination of fixed rate or variable rate currently at a floor rate. Olney expects “earning asset yields to remain relatively stable which should help protect the Bank's strong NIM (net interest margin) of 4.63%.”
Following a 3Q19 secondary equity capital raise, STXB’s “capital position remains strong.” Olney further added, “We believe STXB remains well capitalized for M&A opportunities and we expect the company to remain acquisitive and is targeting banks in the $300 million-$1billion in asset range. We estimate there are 100+ banks in their footprint within this specific range. Assuming the next deal is well structured, we anticipate the EPS accretion could be between mid to high-single-upper digits to low double digits.”
As a result, the analyst left his Overweight rating and $28 price target as is. Should the target be met, investors’ boots will be stuffed with a 22% gain over the next 12 months. (To watch Olney’s track record, click here)
Where do other analysts stand on the Spirit of Texas’ prospects for 2020? While the rest of the Street remains fairly quiet, the two fellow analysts chiming in with a view both put Spirit in the Buy category. The bank’s Strong Buy consensus rating comes with an average price target of $26.17 and indicates upside potential of 14%. (See STXB stock analysis on TipRanks)
Ameris Bancorp (ABCB)
For our final stock, we head up to Georgia, the base of regional bank, Ameris Bancorp. With $17.8 billion in total assets, the financial holding company has a foothold in the Southeastern states, with retail and commercial customers in Georgia, Alabama, Florida, South Carolina, and Tennessee.
In July ’19, Ameris completed the acquisition of Fidelity Southern Corporation in a deal valued at $750.7 million. The deal adds Fidelity’s 62 bank branches to Ameris’ roster, 46 of which are located in Georgia and 16 in Florida. Stephen analyst Tyler Stafford believes the merger “added a high-quality deposit base (0.65% cost) and provides substantial liquidity.”
Ameris had a highly profitable ROA (return on assets) of 1.54% in 2019. Stafford thinks this will “accelerate to 1.58% in 2021 given the added benefits of the LION acquisition.” The 4-star analyst also notes that “ABCB should see tailwinds in its mortgage division in the current interest rate environment.” Stafford models for mortgage fees/total revenue of 18%/16% in 2020 and 2021.
“While ABCB has grown from about $5 billion to $17 billion in assets over the past 4 years (organically and through M&A), we believe the company is on the M&A sidelines over the next ~4-6 quarters as it focuses on capitalizing on the LION acquisition/Atlanta market disruption,” Stafford added.
Based on the above, Stafford reiterated an Overweight rating on Ameris alongside a price target of $51, which implies potential upside of 19% from current levels. (To watch Stafford’s track record, click here)
Overall, the Georgia bank has three other analysts currently following its progress, and all rate ABCB a Buy. Thus, Ameris qualifies as a Strong Buy. The average price target comes in at $50 and indicates upside potential of 17%. (See Ameris price targets and analyst ratings on TipRanks)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | (See STXB stock analysis on TipRanks) Ameris Bancorp (ABCB) For our final stock, we head up to Georgia, the base of regional bank, Ameris Bancorp. Stafford thinks this will “accelerate to 1.58% in 2021 given the added benefits of the LION acquisition.” The 4-star analyst also notes that “ABCB should see tailwinds in its mortgage division in the current interest rate environment.” Stafford models for mortgage fees/total revenue of 18%/16% in 2020 and 2021. “While ABCB has grown from about $5 billion to $17 billion in assets over the past 4 years (organically and through M&A), we believe the company is on the M&A sidelines over the next ~4-6 quarters as it focuses on capitalizing on the LION acquisition/Atlanta market disruption,” Stafford added. | (See STXB stock analysis on TipRanks) Ameris Bancorp (ABCB) For our final stock, we head up to Georgia, the base of regional bank, Ameris Bancorp. Stafford thinks this will “accelerate to 1.58% in 2021 given the added benefits of the LION acquisition.” The 4-star analyst also notes that “ABCB should see tailwinds in its mortgage division in the current interest rate environment.” Stafford models for mortgage fees/total revenue of 18%/16% in 2020 and 2021. “While ABCB has grown from about $5 billion to $17 billion in assets over the past 4 years (organically and through M&A), we believe the company is on the M&A sidelines over the next ~4-6 quarters as it focuses on capitalizing on the LION acquisition/Atlanta market disruption,” Stafford added. | (See STXB stock analysis on TipRanks) Ameris Bancorp (ABCB) For our final stock, we head up to Georgia, the base of regional bank, Ameris Bancorp. Stafford thinks this will “accelerate to 1.58% in 2021 given the added benefits of the LION acquisition.” The 4-star analyst also notes that “ABCB should see tailwinds in its mortgage division in the current interest rate environment.” Stafford models for mortgage fees/total revenue of 18%/16% in 2020 and 2021. “While ABCB has grown from about $5 billion to $17 billion in assets over the past 4 years (organically and through M&A), we believe the company is on the M&A sidelines over the next ~4-6 quarters as it focuses on capitalizing on the LION acquisition/Atlanta market disruption,” Stafford added. | (See STXB stock analysis on TipRanks) Ameris Bancorp (ABCB) For our final stock, we head up to Georgia, the base of regional bank, Ameris Bancorp. (To watch Stafford’s track record, click here) Overall, the Georgia bank has three other analysts currently following its progress, and all rate ABCB a Buy. Stafford thinks this will “accelerate to 1.58% in 2021 given the added benefits of the LION acquisition.” The 4-star analyst also notes that “ABCB should see tailwinds in its mortgage division in the current interest rate environment.” Stafford models for mortgage fees/total revenue of 18%/16% in 2020 and 2021. |
27852.0 | 2020-01-05 00:00:00 UTC | Validea's Top Five Financial Stocks Based On Joel Greenblatt - 1/5/2020 | ABCB | https://www.nasdaq.com/articles/valideas-top-five-financial-stocks-based-on-joel-greenblatt-1-5-2020-2020-01-05 | nan | nan | The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. This value model looks for companies with high return on capital and earnings yields.
ALLIANCE DATA SYSTEMS CORPORATION (ADS) is a mid-cap value stock in the Consumer Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Alliance Data Systems Corp is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
EARNINGS YIELD: NEUTRAL
RETURN ON TANGIBLE CAPITAL: NEUTRAL
FINAL RANKING: FAIL
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ARES COMMERCIAL REAL ESTATE CORP (ACRE) is a small-cap value stock in the Misc. Financial Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ares Commercial Real Estate Corporation is a specialty finance company. The Company is primarily engaged in originating and investing in commercial real estate (CRE) loans and related investments. The Company operates through principal lending segment. Its target investments include senior mortgage loans, subordinated debt, preferred equity, mezzanine loans and other CRE investment opportunities, including commercial mortgage-backed securities. These investments are generally held for investment and are secured, directly or indirectly, by office, multifamily, retail, industrial, lodging, senior-living, self-storage and other commercial real estate properties, or by ownership interests therein. Through the Company's manager, Ares Commercial Real Estate Management LLC, it has investment professionals located across the United States and Europe who directly source loan opportunities for the Company with owners, operators and sponsors of CRE properties.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ARCH CAPITAL GROUP LTD. (ACGL) is a large-cap value stock in the Insurance (Prop. & Casualty) industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Arch Capital Group Ltd. provides insurance, reinsurance and mortgage insurance. The Company provides a range of property, casualty and mortgage insurance and reinsurance lines. The Company operates in five segments: insurance, reinsurance, mortgage, other and corporate. The insurance segment's product lines include construction and national accounts; excess and surplus casualty; lenders products; professional lines; programs; property, energy, marine and aviation; travel, accident and health, and other. The reinsurance segment's product lines include casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe, and other. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. The other segment includes the results of Watford Holdings Ltd.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ALLEGIANCE BANCSHARES INC (ABTX) is a small-cap growth stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Allegiance Bancshares, Inc. is a bank holding company. Through its subsidiary, Allegiance Bank (the Bank), the Company provides a range of commercial banking services primarily to Houston metropolitan area-based small to medium-sized businesses, professionals and individual customers. In addition to banking during normal business hours, the Company offers extended drive-in hours, automated teller machines (ATMs) and banking by telephone, mail and Internet. The Company also provides debit card services, cash management services and wire transfer services, and offers night depository, direct deposits, cashier's checks, letters of credit and mobile deposits. It also offers safe deposit boxes, automated teller machines, drive-in services and round the clock depository facilities. The Company maintains an Internet banking Website that allows customers to obtain account balances and transfer funds among accounts.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ameris Bancorp is a financial holding company. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
Since its inception, Validea's strategy based on Joel Greenblatt has returned 93.94% vs. 151.99% for the S&P 500. For more details on this strategy, click here
About Joel Greenblatt: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. The "Magic Formula," as he called it, produced back-tested returns of 30.8 percent per year from 1988 through 2004, more than doubling the S&P 500's 12.4 percent return during that time. Greenblatt also produced exceptional returns as managing partner at Gotham Capital, a New York City-based hedge fund he founded. The firm averaged a remarkable 40 percent annualized return over more than two decades.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. Company Description: Alliance Data Systems Corp is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through two segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty) and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP (ABCB) is a mid-cap value stock in the Regional Banks industry. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt. The Company operates in five segments: insurance, reinsurance, mortgage, other and corporate. |
27853.0 | 2019-12-27 00:00:00 UTC | Ex-Dividend Reminder: State Street, Fulton Financial and Ameris Bancorp | ABCB | https://www.nasdaq.com/articles/ex-dividend-reminder%3A-state-street-fulton-financial-and-ameris-bancorp-2019-12-27 | nan | nan | Looking at the universe of stocks we cover at Dividend Channel, on 12/31/19, State Street Corp. (Symbol: STT), Fulton Financial Corp. (Symbol: FULT), and Ameris Bancorp (Symbol: ABCB) will all trade ex-dividend for their respective upcoming dividends. State Street Corp. will pay its quarterly dividend of $0.52 on 1/16/20, Fulton Financial Corp. will pay its quarterly dividend of $0.13 on 1/15/20, and Ameris Bancorp will pay its quarterly dividend of $0.15 on 1/10/20. As a percentage of STT's recent stock price of $80.22, this dividend works out to approximately 0.65%, so look for shares of State Street Corp. to trade 0.65% lower — all else being equal — when STT shares open for trading on 12/31/19. Similarly, investors should look for FULT to open 0.74% lower in price and for ABCB to open 0.35% lower, all else being equal.
Below are dividend history charts for STT, FULT, and ABCB, showing historical dividends prior to the most recent ones declared.
State Street Corp. (Symbol: STT):
Fulton Financial Corp. (Symbol: FULT):
Ameris Bancorp (Symbol: ABCB):
In general, dividends are not always predictable, following the ups and downs of company profits over time. Therefore, a good first due diligence step in forming an expectation of annual yield going forward, is looking at the history above, for a sense of stability over time. This can help in judging whether the most recent dividends from these companies are likely to continue. If they do continue, the current estimated yields on annualized basis would be 2.59% for State Street Corp., 2.94% for Fulton Financial Corp. , and 1.40% for Ameris Bancorp.
In Friday trading, State Street Corp. shares are currently up about 0.5%, Fulton Financial Corp. shares are down about 0.1%, and Ameris Bancorp shares are off about 0.4% on the day.
Click here to learn which 25 S.A.F.E. dividend stocks should be on your radar screen »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Looking at the universe of stocks we cover at Dividend Channel, on 12/31/19, State Street Corp. (Symbol: STT), Fulton Financial Corp. (Symbol: FULT), and Ameris Bancorp (Symbol: ABCB) will all trade ex-dividend for their respective upcoming dividends. Similarly, investors should look for FULT to open 0.74% lower in price and for ABCB to open 0.35% lower, all else being equal. Below are dividend history charts for STT, FULT, and ABCB, showing historical dividends prior to the most recent ones declared. | Looking at the universe of stocks we cover at Dividend Channel, on 12/31/19, State Street Corp. (Symbol: STT), Fulton Financial Corp. (Symbol: FULT), and Ameris Bancorp (Symbol: ABCB) will all trade ex-dividend for their respective upcoming dividends. State Street Corp. (Symbol: STT): Fulton Financial Corp. (Symbol: FULT): Ameris Bancorp (Symbol: ABCB): In general, dividends are not always predictable, following the ups and downs of company profits over time. Similarly, investors should look for FULT to open 0.74% lower in price and for ABCB to open 0.35% lower, all else being equal. | Looking at the universe of stocks we cover at Dividend Channel, on 12/31/19, State Street Corp. (Symbol: STT), Fulton Financial Corp. (Symbol: FULT), and Ameris Bancorp (Symbol: ABCB) will all trade ex-dividend for their respective upcoming dividends. State Street Corp. (Symbol: STT): Fulton Financial Corp. (Symbol: FULT): Ameris Bancorp (Symbol: ABCB): In general, dividends are not always predictable, following the ups and downs of company profits over time. Similarly, investors should look for FULT to open 0.74% lower in price and for ABCB to open 0.35% lower, all else being equal. | Looking at the universe of stocks we cover at Dividend Channel, on 12/31/19, State Street Corp. (Symbol: STT), Fulton Financial Corp. (Symbol: FULT), and Ameris Bancorp (Symbol: ABCB) will all trade ex-dividend for their respective upcoming dividends. Similarly, investors should look for FULT to open 0.74% lower in price and for ABCB to open 0.35% lower, all else being equal. Below are dividend history charts for STT, FULT, and ABCB, showing historical dividends prior to the most recent ones declared. |
27854.0 | 2019-12-27 00:00:00 UTC | Ameris Bancorp (ABCB) Ex-Dividend Date Scheduled for December 30, 2019 | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-ex-dividend-date-scheduled-for-december-30-2019-2019-12-27 | nan | nan | Ameris Bancorp (ABCB) will begin trading ex-dividend on December 30, 2019. A cash dividend payment of $0.15 per share is scheduled to be paid on January 10, 2020. Shareholders who purchased ABCB prior to the ex-dividend date are eligible for the cash dividend payment. This represents an 50% increase over prior dividend payment. At the current stock price of $43.12, the dividend yield is 1.39%.
The previous trading day's last sale of ABCB was $43.12, representing a -3.96% decrease from the 52 week high of $44.90 and a 43.88% increase over the 52 week low of $29.97.
ABCB is a part of the Finance sector, which includes companies such as J P Morgan Chase & Co (JPM) and Bank of America Corporation (BAC). ABCB's current earnings per share, an indicator of a company's profitability, is $2.88. Zacks Investment Research reports ABCB's forecasted earnings growth in 2019 as 12.87%, compared to an industry average of 4.8%.
For more information on the declaration, record and payment dates, visit the ABCB Dividend History page. Our Dividend Calendar has the full list of stocks that have an ex-dividend today.
Interested in gaining exposure to ABCB through an Exchange Traded Fund [ETF]?
The following ETF(s) have ABCB as a top-10 holding:
Invesco S&P SmallCap Financials ETF (PSCF)
SPDR S&P 600 Small Cap Value ETF (based on S&P SmallCap Value (SLYV)
Vanguard S&P Small-Cap 600 Value ETF (VIOV)
iShares S&P SmallCap 600 Value ETF (IJS).
The top-performing ETF of this group is SLYV with an increase of 13.84% over the last 100 days. PSCF has the highest percent weighting of ABCB at 1.51%.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shareholders who purchased ABCB prior to the ex-dividend date are eligible for the cash dividend payment. ABCB is a part of the Finance sector, which includes companies such as J P Morgan Chase & Co (JPM) and Bank of America Corporation (BAC). Zacks Investment Research reports ABCB's forecasted earnings growth in 2019 as 12.87%, compared to an industry average of 4.8%. | Shareholders who purchased ABCB prior to the ex-dividend date are eligible for the cash dividend payment. ABCB's current earnings per share, an indicator of a company's profitability, is $2.88. Ameris Bancorp (ABCB) will begin trading ex-dividend on December 30, 2019. | Shareholders who purchased ABCB prior to the ex-dividend date are eligible for the cash dividend payment. For more information on the declaration, record and payment dates, visit the ABCB Dividend History page. The following ETF(s) have ABCB as a top-10 holding: Invesco S&P SmallCap Financials ETF (PSCF) SPDR S&P 600 Small Cap Value ETF (based on S&P SmallCap Value (SLYV) Vanguard S&P Small-Cap 600 Value ETF (VIOV) iShares S&P SmallCap 600 Value ETF (IJS). | Shareholders who purchased ABCB prior to the ex-dividend date are eligible for the cash dividend payment. ABCB's current earnings per share, an indicator of a company's profitability, is $2.88. Ameris Bancorp (ABCB) will begin trading ex-dividend on December 30, 2019. |
27855.0 | 2019-12-09 00:00:00 UTC | Notable Monday Option Activity: AXTA, ABCB, TCBI | ABCB | https://www.nasdaq.com/articles/notable-monday-option-activity%3A-axta-abcb-tcbi-2019-12-09 | nan | nan | Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Axalta Coating Systems Ltd (Symbol: AXTA), where a total volume of 13,466 contracts has been traded thus far today, a contract volume which is representative of approximately 1.3 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 60.5% of AXTA's average daily trading volume over the past month, of 2.2 million shares. Particularly high volume was seen for the $31 strike call option expiring December 20, 2019, with 5,928 contracts trading so far today, representing approximately 592,800 underlying shares of AXTA. Below is a chart showing AXTA's trailing twelve month trading history, with the $31 strike highlighted in orange:
Ameris Bancorp (Symbol: ABCB) options are showing a volume of 1,571 contracts thus far today. That number of contracts represents approximately 157,100 underlying shares, working out to a sizeable 56.7% of ABCB's average daily trading volume over the past month, of 276,870 shares. Particularly high volume was seen for the $35 strike put option expiring July 17, 2020, with 444 contracts trading so far today, representing approximately 44,400 underlying shares of ABCB. Below is a chart showing ABCB's trailing twelve month trading history, with the $35 strike highlighted in orange:
And Texas Capital Bancshares Inc (Symbol: TCBI) options are showing a volume of 1,817 contracts thus far today. That number of contracts represents approximately 181,700 underlying shares, working out to a sizeable 56.4% of TCBI's average daily trading volume over the past month, of 322,070 shares. Especially high volume was seen for the $55 strike put option expiring June 19, 2020, with 500 contracts trading so far today, representing approximately 50,000 underlying shares of TCBI. Below is a chart showing TCBI's trailing twelve month trading history, with the $55 strike highlighted in orange:
For the various different available expirations for AXTA options, ABCB options, or TCBI options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Particularly high volume was seen for the $35 strike put option expiring July 17, 2020, with 444 contracts trading so far today, representing approximately 44,400 underlying shares of ABCB. Below is a chart showing AXTA's trailing twelve month trading history, with the $31 strike highlighted in orange: Ameris Bancorp (Symbol: ABCB) options are showing a volume of 1,571 contracts thus far today. That number of contracts represents approximately 157,100 underlying shares, working out to a sizeable 56.7% of ABCB's average daily trading volume over the past month, of 276,870 shares. | Below is a chart showing AXTA's trailing twelve month trading history, with the $31 strike highlighted in orange: Ameris Bancorp (Symbol: ABCB) options are showing a volume of 1,571 contracts thus far today. That number of contracts represents approximately 157,100 underlying shares, working out to a sizeable 56.7% of ABCB's average daily trading volume over the past month, of 276,870 shares. Particularly high volume was seen for the $35 strike put option expiring July 17, 2020, with 444 contracts trading so far today, representing approximately 44,400 underlying shares of ABCB. | Particularly high volume was seen for the $35 strike put option expiring July 17, 2020, with 444 contracts trading so far today, representing approximately 44,400 underlying shares of ABCB. Below is a chart showing AXTA's trailing twelve month trading history, with the $31 strike highlighted in orange: Ameris Bancorp (Symbol: ABCB) options are showing a volume of 1,571 contracts thus far today. That number of contracts represents approximately 157,100 underlying shares, working out to a sizeable 56.7% of ABCB's average daily trading volume over the past month, of 276,870 shares. | Particularly high volume was seen for the $35 strike put option expiring July 17, 2020, with 444 contracts trading so far today, representing approximately 44,400 underlying shares of ABCB. Below is a chart showing TCBI's trailing twelve month trading history, with the $55 strike highlighted in orange: For the various different available expirations for AXTA options, ABCB options, or TCBI options, visit StockOptionsChannel.com. Below is a chart showing AXTA's trailing twelve month trading history, with the $31 strike highlighted in orange: Ameris Bancorp (Symbol: ABCB) options are showing a volume of 1,571 contracts thus far today. |
27856.0 | 2019-11-22 00:00:00 UTC | Financial Sector Update for 11/22/2019: ABCB,IIIV,STNE,FUTU | ABCB | https://www.nasdaq.com/articles/financial-sector-update-for-11-22-2019%3A-abcbiiivstnefutu-2019-11-22 | nan | nan | Top Financial Stocks
JPM +0.60%
BAC +0.90%
WFC +1.35%
C +1.12%
USB +0.74%
Financial stocks remain moderately higher in late-afternoon trading, with the NYSE Financial Index rising just over 0.3while the shares of financial companies in the S&P 500 were climbing more than 0.5%. The Philadelphia Housing Index was slipping 0.1%.
Among financial stocks moving on news:
(-) Ameris Bancorp (ABCB) declined fractionally Friday after the bank holding company said it received a subpoena from the US Office of the Securities and Exchange Commission and the US Attorney for the Northern District of Georgia seeking documents and other materials relating to its July 1 acquisition of US Premium Finance and the sale of loans to CEBV, an entity controlled by former US Premium Finance owner William Villari.
In other sector news:
(+) StoneCo (STNE) shares rose almost 20% after the Brazilian financial technology company said its Q3 net income more than doubled compared with year-ago levels, rising nearly 112% to BRL191.3 million and beating the Capital IQ consensus looking for a GAAP profit of BRL189.1 million for the three months ended Sept. 30. Revenue increased 62.1% year-over-year to BRL671.1 million, also exceeding the BRL656.6 million Street view.
(+) i3 Verticals (IIIV) climbed more than 16% on Friday after the payments processor reported better-than-expected Q4 financial results and projected FY20 revenue also exceeding analyst estimates. Excluding one-time items, it earned $0.24 per share during the three months ended Sept. 30 on $108.6 million in revenue, topping the Capital IQ consensus by $0.01 per share and $2.4 million, respectively.
(-) Futu Holdings (FUTU) dropped 5% after the Hong Kong-based online broker reported mixed Q3 financial results, earning HKD0.17 per American depository share during the three months ended Sept. 30, improving on a HKD0.11 per ADS profit during the same quarter last year but still lagging the single-analyst estimate compiled by Capital IQ.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among financial stocks moving on news: (-) Ameris Bancorp (ABCB) declined fractionally Friday after the bank holding company said it received a subpoena from the US Office of the Securities and Exchange Commission and the US Attorney for the Northern District of Georgia seeking documents and other materials relating to its July 1 acquisition of US Premium Finance and the sale of loans to CEBV, an entity controlled by former US Premium Finance owner William Villari. (+) i3 Verticals (IIIV) climbed more than 16% on Friday after the payments processor reported better-than-expected Q4 financial results and projected FY20 revenue also exceeding analyst estimates. (-) Futu Holdings (FUTU) dropped 5% after the Hong Kong-based online broker reported mixed Q3 financial results, earning HKD0.17 per American depository share during the three months ended Sept. 30, improving on a HKD0.11 per ADS profit during the same quarter last year but still lagging the single-analyst estimate compiled by Capital IQ. | Among financial stocks moving on news: (-) Ameris Bancorp (ABCB) declined fractionally Friday after the bank holding company said it received a subpoena from the US Office of the Securities and Exchange Commission and the US Attorney for the Northern District of Georgia seeking documents and other materials relating to its July 1 acquisition of US Premium Finance and the sale of loans to CEBV, an entity controlled by former US Premium Finance owner William Villari. Financial stocks remain moderately higher in late-afternoon trading, with the NYSE Financial Index rising just over 0.3while the shares of financial companies in the S&P 500 were climbing more than 0.5%. Excluding one-time items, it earned $0.24 per share during the three months ended Sept. 30 on $108.6 million in revenue, topping the Capital IQ consensus by $0.01 per share and $2.4 million, respectively. | Among financial stocks moving on news: (-) Ameris Bancorp (ABCB) declined fractionally Friday after the bank holding company said it received a subpoena from the US Office of the Securities and Exchange Commission and the US Attorney for the Northern District of Georgia seeking documents and other materials relating to its July 1 acquisition of US Premium Finance and the sale of loans to CEBV, an entity controlled by former US Premium Finance owner William Villari. Financial stocks remain moderately higher in late-afternoon trading, with the NYSE Financial Index rising just over 0.3while the shares of financial companies in the S&P 500 were climbing more than 0.5%. In other sector news: (+) StoneCo (STNE) shares rose almost 20% after the Brazilian financial technology company said its Q3 net income more than doubled compared with year-ago levels, rising nearly 112% to BRL191.3 million and beating the Capital IQ consensus looking for a GAAP profit of BRL189.1 million for the three months ended Sept. 30. | Among financial stocks moving on news: (-) Ameris Bancorp (ABCB) declined fractionally Friday after the bank holding company said it received a subpoena from the US Office of the Securities and Exchange Commission and the US Attorney for the Northern District of Georgia seeking documents and other materials relating to its July 1 acquisition of US Premium Finance and the sale of loans to CEBV, an entity controlled by former US Premium Finance owner William Villari. Top Financial Stocks Revenue increased 62.1% year-over-year to BRL671.1 million, also exceeding the BRL656.6 million Street view. |
27857.0 | 2019-10-22 00:00:00 UTC | A Rundown of Third-Quarter Bank Earnings and More | ABCB | https://www.nasdaq.com/articles/a-rundown-of-third-quarter-bank-earnings-and-more-2019-10-22 | nan | nan | Earnings season is now in full swing, and most major U.S. banks have reported. In today's Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss the results from 10 of the most important banks and what investors need to know. Plus, the pair discusses Schwab's (NYSE: SCHW) decision to allow trading of fractional shares of stock, as well as the potential implications of the WeWork saga.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on Oct. 21, 2019.
Jason Moser: Welcome to Industry Focus, the podcast that dives into a different sector of the stock market each day. It's Monday, October 21st. Joining me in the studio via Skype: Certified Financial Planner Matt Frankel. Matt, how's everything going?
Matt Frankel: Great! Nothing smells better than bank earnings in the morning!
Moser: [laughs] Well, if that's truly the case, on today's Financials show, we have got a lot to offer. We are digging into what's been a very big week of earnings from companies like Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), Ameris Bancorp (NASDAQ: ABCB), American Express (NYSE: AXP). Seriously, I could keep on going. I'll stop there, but rest assured, we've got plenty more. We're also going to check in on Schwab's latest effort to bring more value to its trading platform. We're going to check in with the Millionacres team and see what they're thinking about the recent WeWork fallout and how that's impacting the commercial real estate space. Of course, we'll have a couple of "What's the last stock you bought and why? and a couple of Ones to Watch for you for the coming week as well.
As you may have gathered to this point, we have got a jam-packed show. Somewhat limited time. So, folks, let's get right into it.
Matt, let's start with Bank of America. This is a company, obviously, you like a lot, you talk a lot about it. You've chosen it a number of times as your One to Watch. I think you own shares personally, if I'm not mistaken. It did look like it was a strong quarter for them. Particularly, the investment banking side of the business seems to be doing well. What were some of your takeaways from Bank of America's most recent quarter?
Frankel: Yes, investment banking was great. Consumer lending was great. The biggest takeaway from Bank of America is that unlike any of the other ones, there wasn't anything I could find that was really disappointing. We're about to talk about JPMorgan (NYSE: JPM). Even if you dig into that, you'll find a few things where it missed. I think equities trading, they missed, or something like that. Bank of America was good all around.
Just like last quarter, they have the best consumer loan growth, the best deposit growth. They grew their earnings 14% year over year despite the interest rate environment. They're buying back stock hand over fist. They repurchased 8% of their outstanding shares over the past year. Mortgage originations is another thing that stood out. That's an area of the business that really benefits from lower interest rates. Mortgage originations were up 58% year over year for them. That was a big deal. But, yeah, they beat expectations pretty much all around. In my mind, they're the winner of bank earnings so far.
Moser: What struck me, we were talking about this last week, I believe on Market Foolery for a spell, having gone through the presentation, looking at the transcript and everything, the thing that struck me was the success that they're having with Zelle. We've talked about Zelle on the show here. It always takes a bit of a backseat to the PayPals and Squares of the world. That's probably our fault more than anyone's. But the fact of the matter is that Zelle is actually bringing some results for Bank of America. They're gaining some traction where this is concerned. When you talk about the digital opportunity that exists there, 38 million users. Zelle transactions are growing. They have 8.9 million users of the Zelle platform that were responsible for just under 81 million person-to-person transactions for the quarter. That essentially doubled from a year ago. The amount of money that was flowing through that network of $21 billion almost doubled from a year ago as well. So, while we don't put Zelle on the forefront of how it impacts the bank in the big picture, clearly, their investments in technology are paying off, to a degree at least.
Frankel: Yeah, and people don't often think of Bank of America as a fintech company. But when you look at the numbers, they've consistently been a leader in mobile banking growth, consistently been a leader in the amount of transactions taking place online, how many consumers they have signed up for their online portal, things like that. Zelle, you just mentioned. Bank of America has won No. 1 mobile app in terms of functionality several times. I use Bank of America's app, and I think it's extremely functional.
Moser: I agree. I use it as well, and I'm impressed. We've been using it for a long time, and it really does work well.
Frankel: It's not just the fintech-y things like Zelle. They've invested in technology all around. In my opinion, that's why their efficiency is one of the best in the banking business. Five, six years ago, that would have been unheard of. It's a lot cheaper to make a transaction through a mobile app or an online portal for the bank as opposed to going through a teller. It's translated to a much more efficient operation, and at a faster pace than most of its rivals.
Moser: Let's talk about a bank that's making some more investments on the consumer side. Certainly, CEO Jamie Dimon sees that as a big opportunity, as well as the digital space. JPMorgan, what'd you see with their most recent quarter?
Frankel: Like I said, JPMorgan's quarter was good. It wasn't perfect, but they're a good barometer for how the overall industry is doing just because of, one, the diversification of their business. They are the biggest bank in the world. Their assets grew to $2.7 trillion this quarter. That's an amount of money that I personally can't fathom, and I'm a math person.
Moser: [laughs] Yeah, it's like Apple's balance sheet and Facebook's total user base. Numbers that don't make any sense anymore.
Frankel: Right. Just like I mentioned with Bank of America, they're doing a good job of migrating their consumer base to mobile and online technology. I saw active mobile customers were up 12% year over year, similar to Bank of America's results. That's been a driver of efficiency. JPMorgan's the most profitable of the big four. Return on equity of 15%. Pretty outstanding for such a big bank.
There are just a couple of things that I didn't really like. Trading revenue's been a weak spot throughout the industry. Most peers actually beat expectations. JPMorgan beat expectations on the fixed income side but not on the equities trading side. Not that it's that concerning. Trading revenue, I've talked about on previous shows, is probably the least predictable part of bank earnings. So take that with a big grain of salt. And it wasn't a giant miss. But trading revenue remains weak throughout the industry.
Return on equity, I mentioned 15%, the highest of the big banks. That's actually down from 16% in the second quarter. Net interest margin compression is probably to blame for that. Just something worth keeping an eye on. Again, unlike Bank of America, not perfect, but definitely more good than bad.
Moser: A bank we've known for a long time as being the leader in the mortgage space, but unfortunately, we've been talking more about it recently due to its failures of leadership and culture issues, and then you top it all off with essentially regulators telling them to hit pause on growth, Wells Fargo has had a tough go of it here the past couple of years. It does feel like maybe they're finally going to be able to turn the page here with new leadership getting going. What did you see in regard to Wells Fargo's quarter? And even more interestingly, the road forward for them now that they have that leadership question answered?
Frankel: I mentioned that falling rates are generally bad for bank interest margins. Wells Fargo's were even worse than people thought. That combined, they took a $1.6 billion legal charge in regards to their bad behavior over the past few years. There's no guarantee that's the last of the cost of their scandals.
But on the path-forward side, it's actually worth mentioning their new CEO Charles Scharf starts today. So, today is the new day for Wells Fargo. I honestly think the Fed is going to lift its penalty pretty soon because they put a non-Wall-Street-er in. They went outside the bank for the new hire. I thought previous leadership had done pretty much everything they could have done to move the bank forward without actually bringing in new leadership. This is the last stone to turn over in that case. There could be some more legal risk, but I think the bank's done pretty much everything that they could have done to get past what was wrong.
It's worth mentioning also that their asset quality is still the best of the big banks. At the core, they've always been known for responsible lending decisions, things like that. That hasn't changed. Their asset quality is still fantastic.
The business is doing OK. It's just the interest rate environment and the legal risks that are weighing on Wells Fargo right now.
Moser: Yeah. And a lot of that stuff is known. Not a lot left to be discovered, I would think, at this point. You have to believe that the market is starting to look a little bit more forward, particularly to that time where that cap is lifted. There's a nice tailwind there, perhaps, for Wells Fargo in the coming quarters.
Let's take a look at Goldman Sachs (NYSE: GS) real quick. Goldman Sachs, obviously better known for the investment banking side of the business. I thought it was interesting in the call how they talked about the Apple Card specifically in partnership with Apple and MasterCard. They feel like this is the most successful card rollout ever. Now, it's worth noting, they provided zero data to back that up, so it's just a feeling I guess we're going to have to trust them on. Whatever, that's fine. I think Apple Card is a great value-add for iPhone users. I think it's another tremendous form of engagement that should benefit Apple over the long haul. It's nice to see Goldman Sachs and MasterCard as partners in that venture.
What struck you? What stood out to you here with Goldman Sachs' report?
Frankel: Goldman has a pretty consistent history of shattering expectations when it comes to earnings, and they didn't do it this quarter. They actually missed earnings. You saw the stock go straight down the morning right after they made the report. The big culprit was their investments performed poorly. Goldman has a stake in WeWork, for example. They have a big investment portfolio.
Moser: That's not good.
Frankel: The main reason Goldman underperformed was because they had a 40% year-over-year decline in their investment revenue, from their investment portfolio. On the note of the Apple Card, as soon as they mentioned that on the call, the stock shot higher.
Moser: It's fascinating to me that you can say stuff like that and not back it up. It's just funny, the psychology that goes with investing. Sometimes it's shoot first and aim second, but there you go.
Frankel: It's worth mentioning, when did they start rolling out the Apple Card? I know Dan Kline was on the show, and he discussed just getting it. But it was during the third quarter. Even if someone got the card and charged a bunch of stuff on the Apple Card, the bill isn't due until essentially the fourth quarter. So none of this is reflected in their earnings yet. If anything, marketing costs and things like that would make this negative for earnings in the third quarter.
Moser: They talked about that as a drag also in the coming quarters. They're going to be investing in that product and that relationship. I think we can look forward, for lack of a better term, to that dragging down or being a little bit of a headwind. But it's all in the name of progress. It's seeing the forest for the trees, I guess.
Frankel: Yeah. Credit cards, you're not exactly selling a product right away. You're planning on getting it in the hands of as many consumers as possible, and then they're going to gradually build up balances over time on average, and it's going to be a gradual add of a few billion dollars of loans. It's not going to be nothing, but for the time being, it's pretty much nothing on their revenue.
Moser: Well, all right, those are the big four there that we wanted to talk about. Now, we'll pivot over into a couple of companies that reported, and we wanted to lump Ameris Bancorp and BB&T (NYSE: BBT) together because these are banks that are dealing with some big acquisitions here recently now. Ameris just wrapped up this Fidelity acquisition. That's closed. BB&T, still working to close the SunTrust deal. In looking at Ameris, I go into any quarter with Ameris and I'm looking for the red flags first and foremost. It's a well-run bank. They continue to lob up good metrics. Efficiency ratio continues to remain in check. It, for me, is all a matter of, are they integrating this Fidelity acquisition? Are the two cultures working together? And how do they see this playing out down the road? Ameris, the acquisition added considerable assets to the combined entity. It added $5.2 billion in total assets, $3.8 billion in total loans, and $4 billion in total deposits. Those numbers now stand, total deposits at $13.7 billion, total assets just under $18 billion. You can see that the bank is a good bit larger than it was thanks to this deal.
One point I wanted to note, this was part of the justification for this acquisition of Fidelity. One of the justifications was, it's going to give Ameris this access to this very attractive commercial real estate space. That's true. It's going to. They also noted it's going to give them access to a lower-cost deposit base. They lobbed this metric out in the call, and they talked about the deposit mix such that non-interest-bearing deposits represented just about 30% of total deposits, up from a little bit over 25% a year ago. To me, that's important to note because that was the justification for the acquisition, was getting access to a lower cost of deposits. For a bank, particularly in a low interest rate environment, that's going to be important. As they continue to scale up and get bigger, it does seem like new CEO former Fidelity president Palmer Proctor has stepped into the role nicely and has a good grip on the business. I suspect we're going to continue to see good things from Ameris in the coming quarters. And really, that's what we're paying attention to, is making sure that Fidelity acquisition is rolling in nicely.
On the BB&T side, there's still some questions to be answered there as far as the actual integration. But right now, this is all about SunTrust. If you don't like the name Truist, which is ultimately what this is going to become, if you don't like that name, TS, because they got shareholder approval and this deal is basically done now. The acquisition's green-lighted and the name is green-lighted as well. It's going to be something that closes in quarter four.
We got an interesting tweet, a fun tweet from @chasesfish earlier in the week. He says, "Could the market finally be tired of quarter after quarter of 'adjusted' EPS on BB&T? I would love to hear your thoughts on Industry Focus." Listen, let me tell you, you may be tired of adjusted, but I've been saying for a while, it feels like we live in an adjusted world now. Every earnings report -- banks, tech companies, restaurants -- they're all reporting adjusted numbers. BB&T, which will eventually become Truist, get used to adjusted and pro forma because that's going to be part of the earnings reports here for the foreseeable future.
But the underlying business is fine. Modest earnings growth of 3.7%, adjusted. Return on assets 1.5%. Not bad. They've been able to keep that return-on-assets number at that 1% or better range over the last several years, which is nice. Efficiency ratio ticked down a little bit. Average total deposits up 5.2%. So I think BB&T is in a good position. There's going to be a lot more certainty once this acquisition is finished up. Then it'll be kind of like Ameris. We're really just paying attention to the two cultures, making sure they wring out the efficiencies that they're promising to wring out. But thus far, it does seem like things are going well for both Ameris and BB&T.
Matt, let's jump over into the other four names that we had been talking about here last week. First and foremost, let's jump into Morgan Stanley (NYSE: MS). Not a heck of a lot out there for investors to worry about as far as Morgan Stanley, but what was one of the takeaways you had from their quarter?
Frankel: They definitely had a stronger quarter than Goldman Sachs. They're not as reliant on an investment portfolio as Goldman is. They didn't have that hurt them as much. They actually grew revenue year over year as opposed to most other investment bank-related companies. They beat trading estimates handily across the board. A really strong quarter overall. Like you said, Morgan Stanley investors don't have a whole lot to worry about.
Moser: U.S. Bancorp, how'd that report look to you?
Frankel: Boring in the best way.
Moser: [laughs] That's good. Does Berkshire still have a big stake in that?
Frankel: Yeah. They've raised it a few times in the past year.
Moser: It's right up Buffett's alley.
Frankel: Right. They always put up the best numbers of any of the big banks. Return on equity over 15%. Return on assets, almost 1.6%. Efficiency ratio about 53%. Lower is better in that most banks are happy to run under 60%. And it's consistent. You'll see these numbers quarter after quarter after quarter. Like I said, their earnings reports are almost boring, because what you're going to read before you even look at them.
Moser: Boring is good in a lot of cases, right? The most successful investing, as Charlie Munger says, you just sit back and not worry about anything. The less you do, the better it works.
American Express. I've always been torn on this one. I felt like they were going to be in a little bit of a bind as these card wars started to heat up, and it becomes more and more about the incentives and the rewards. Certainly American Express is paying a little bit more on the reward side to make their card offerings more attractive for the members. But, I said that word there, members. American Express still is a strong membership business at the end of the day. I do like that. I feel like they've adapted very quickly in the face of what has been a changing card environment.
It's worth noting, this marked the ninth straight quarter of currency adjusted revenue growth of at least 8%. They are hanging in there. The stock hasn't lit the world on fire, but it's been a good one to own over the past several years. I like to see the tie-up now with companies like PayPal. They're doing things here now with PayPal and Venmo so you can split card purchases. They're even enabling it to where customers can pay with American Express points where PayPal is accepted. That's a good forward-thinking company, don't you think?
Frankel: Yeah, they're definitely putting out some new, innovative products. Like you said, they are paying for it. This quarter, actually marketing and benefit costs went up a little bit more than revenue did. Not a cause for alarm. You have to spend money to make money. These are customers they're acquiring potentially. I know a lot of people who have never been a high-dollar credit card person who are getting the Platinum card because they're seeing the value in it. I have a platinum card in my wallet. It sounds expensive until I don't have to pay for Ubers when I go up to HQ, I don't have to pay for baggage fees when I fly. There's a lot of good benefits to it, and that's on top of the rewards it earns. They're really doing a great job of getting millennials. The Uber benefit especially is something that attracts millennials. The airport lounges are just nice, being honest with you. I have personally scheduled longer layovers intentionally a few times since I got the Amex Platinum just to be able to use the lounge benefit.
Moser: The last time that I had Dan on the show, we were talking about Apple Card, and he had gone back to a couple of stories that you were telling him about the benefits of that Platinum card.
Frankel: He actually got it last week.
Moser: Did he?! OK, so he bit the bullet! I have the American Express Gold Card. I've had it for, I don't know, 10 years or something. A lot of my spending has migrated over to my Amazon Prime Visa card, but I do keep the American Express card. Traveling, it's great. There are perks that you get when you travel with it. I do find it to be a very helpful, reliable card. It's one I'll likely have for the rest of my days. And they're going to get that membership fee from me every year along the way.
Frankel: Don't be too worried that they're spending to get new customers, because these are going to be customers for life. If they're getting these high-dollar cards, they're generally good-spending customers. They're spending money in the right way, this is the takeaway.
Moser: Yeah. Good brand power there, too. Talk a little bit about Citibank (NYSE: C). Citigroup, Citibank, whatever. Do you feel like this is a company investors need on their radar? Remember, it was 10 years ago, these guys were reverse splitting just to make their stock price look a little bit more palatable.
Frankel: Well, I'd say yes. They're the cheapest of the big four banks. There's a good reason. They're much more international than the others. They have a whole other level of risk. But they are on a lot of investors' radars because they trade for a big discount to book value. They actually had a pretty decent quarter. The biggest red flag I saw was that their net interest margins were even worse than we thought they would be. They dropped a full 10 basis points more than the market expected. Not necessarily cause for alarm. They're not my favorite bank stock. I'm not a swing-for-the-fences guy when it comes to bank investing. Citigroup, I feel, is the highest-risk, highest-reward of the big four. If you're right about it and the global economy really does well -- because remember, Citigroup is a very global bank -- Citigroup investors are going to be in a really good position. But remember, it's not just about the U.S. like it is with a lot of the other banks.
Moser: I'm curious to know your opinion here. When we talk about a lot of these big banks, and we're talking about companies like Bank of America and Wells Fargo and Goldman Sachs and U.S. Bancorp, American Express, these are all banks, I believe every one that I just named there, that Warren Buffett and Berkshire Hathaway still have significant ownership stakes in these banks. Do you feel like, in some cases, perhaps, is it worth investors looking for that bank exposure? Is it worth buying a few shares of Berkshire Hathaway and calling it a day? Or is that a little bit too simplistic in thinking?
Frankel: There's nothing wrong with buying a few shares of Berkshire in any case. But Buffett's bank portfolio is under $100 billion. It's well under 20% of the company's value. I wouldn't call it a bank investment per se. The banks have a ton of potential to produce great returns. Like I mentioned, some of them are buying back almost 10% of their shares per year. That's a 10% return on your investment before you think about increased profits or dividend or anything like that. There's a lot of long-term profits to be made. I would not be surprised if banks were the best-performing sector over the next decade or so. And I would invest directly. To better answer your question, I would invest directly.
Moser: All right. I'm sure investors and our listeners will appreciate that.
Let's take a quick look here at some recent news from Schwab. I want to open this up with a tweet that we got from @natetheblade. @natetheblade says, "I'm patting myself on the back, worth discussing on Financial Industry Focus to see if other brokerages will follow suit." The point that @natetheblade is patting himself on the back for is that Schwab has now introduced the ability to purchase fractional shares on their platform, which is something we were all hoping we'd see at some point as we race down to this zero-cost commission model. What do you think this means for Schwab?
Frankel: For Schwab and its investors, it means two big things. One, it makes it practical to invest any amount of money. If I have an extra $2 and want to buy Berkshire stock, I can do that if I'm buying fractional shares. So it really helps you put more of your money to work. It makes dividend reinvestment not as necessary, because in my mind, that's been one of the big perks of enrolling in dividend reinvestment, as I get commission-free fractional shares. Now I can do that anyway. And it makes high-dollar stocks investable to smaller investors. A lot of people just starting out can't afford a share of Markel or Amazon, for example.
The better question I pose to you and to our listeners is, does this make stock splits obsolete?
Moser: I was just wondering about that as well. I was going to ask you that. Thanks for beating me to it! I think that's a really good question. We had that question posed to us from a number of different people on Twitter over the course of the last couple of weeks. I don't know that companies are going to split or not split based on what platforms will accept fractional share purchases, but it sure does seem like this is one more reason a company could say, "We don't need to split our shares because we don't need to open ourselves up to a larger investor base."
Frankel: Apple, for example. A few years back, when Apple did a seven-to-one split, a lot of new, smaller investors, especially, were cheering because now the stock price went from about $700 to $100 and it became more accessible. But now, if you could take your $100 and buy one-seventh of a share, why does the company need to go through the hassle of splitting? I don't know this off the top of my head, the numbers, but I'd imagine there's quite a bit of regulatory costs involved with doing a stock split.
Moser: That's the main downside. You have to pay to do it. There are transaction costs that are affiliated with doing that. They're just rounding errors at the end of the day when you talk about a lot of these big businesses. We've talked about some of these companies before, Amazon or Markel, where leadership maybe would rather have that high stock price because it encourages a shareholder base that's able to focus a little bit more on the long haul. That's all fine and dandy. I remember back in the day, many years ago, when I was able to finally get enough to buy my first share of Berkshire Hathaway B stock before it had split. It was a $3,500 share price. That was an aspirational goal, but I got there, and I did it, and it was cool and everything. And then of course, shortly thereafter, they went ahead and split for that acquisition and opened it up to an entirely new shareholder base as well.
But, yeah, if you have that ability to buy fractional shares, I don't know why a company would then say, "Let's go ahead and split our stock." That's one more problem that you're not trying to solve.
Frankel: Definitely. And the dividend reinvestment thing that I brought up a little bit, that could be obsolete for investors now, too. The two biggest benefits of dividend reinvestment were that you avoided commissions, your money was automatically reinvested, and you were able to put all your money to work in fractional shares, both of which you can do now with Schwab. And I have a feeling they're not going to be the last brokerage to roll out fractional shares.
Moser: No, I think you're right. We're seeing the trends, they're very clear. This is a big win for investors in both cases. It gives you the opportunity to invest in many more businesses than you ever might have been able to invest in before. I don't think we'll see a lot in the way of splitting. I think that with a lot of these big businesses that have the big share prices, those are big share prices for a reason. Those businesses are doing really well. I think we'll continue to see them grow.
Let's jump into real estate here real quick. The world of Millionacres. You mentioned WeWork earlier in the show. This fallout with WeWork has been nothing short of phenomenal. We've gone from a multibillion-dollar potential IPO now to a company that's essentially in need of a bailout to keep existing. It's going to have some impacts on the commercial real estate market. This is right up your alley. This is what you guys are doing over at Millionacres. What's the feeling on the team right now in regard to WeWork and these potential implications on the commercial real estate market?
Frankel: It's definitely something we're watching closely. I'm not going to go through the whole IPO saga because it's not that long of a show. But to make a long story short, they released a prospectus ahead of a proposed IPO. The financial conditions pretty much made investors run away. To name one scary statistic that I would never go near, they had $34 billion in lease obligations they're committed to. That's on top of $1.4 billion in other debt that they've racked up.
Moser: Good lord!
Frankel: They're not making any money. They're running out of money fast. They were counting on the IPO to have enough money to keep operating for more than a couple of more months. It's something we're watching really closely because -- a lot of people are surprised -- they're the largest private-sector office tenant in a lot of major markets, specifically New York and London. They have 5.3 million square feet of New York real estate. Now, that's only about 1% of the market, but it represents a much more substantial percentage, about 5% or 6%, of the total new office space that has been absorbed in the market. I was reading a statistic that New York especially, without WeWork over the past few years, new office space would actually have a negative absorption rate, meaning that supply would outpace demand. For the time being, we're in OK shape because there's talk of either JPMorgan or SoftBank leading a round to save the company and keep the lights on, so they're not going to have to break all their leases. But if pretty much the big reason that we've had positive market trends for the past few years goes away, that could set off a big chain reaction in markets like New York, London, everywhere else they have a big presence. We invest in one office REIT through Millionacres or through Mogul, rather, that has no exposure to WeWork, and that was one of the specific reasons we picked it. But most of the real estate investment trusts that own New York office space have some WeWork exposure. We could see a little ripple effect if WeWork actually does happen to go under.
Moser: We'll be keeping an eye on that one, for sure. I know you will, too. We'll follow up with you over the coming weeks to see exactly what transpires here.
Let's move over to what's quickly becoming a very popular feature on the show: "What's the last stock you bought and why?" We have a couple of more for you this week. One from @cricket99238, Neeraj Kapoor. Neeraj says, "I bought Shockwave Medical as I have too much biotech but needed to diversify to a product development company with a moat. I heard even Abiomed has a 6% stake in it." Neeraj, that's true. I did confirm that on Cap IQ. Abiomed does have a 6% stake in Shockwave. Hoping that works out for you!
From @imcn90, not only does he say we had an interesting podcast with TD Ameritrade and its loss of revenue from commissions, could their dividend be in danger of a cut? I answered that question, I don't think so. But then he goes on to say, "My last stock I bought, Vail Resort. Fresh air, experiences, dividend." I like that one. Vail Resorts, that's one we're looking at here for a couple of other services as well. Man, I tell you, land is limited. When you talk about all of those mountains, they did make this interesting acquisition recently that gives them a lot more exposure here on the East Coast. It'll be interesting to see how that plays out for them. Regardless, it is a company that's done very well for a long time. Shareholders have benefited from hanging onto those shares.
Great stuff, folks! Thanks for chiming in there! Hey, listen, we want to read the last stock you bought and why. Make sure and email us at industryfocus@fool.com, or hit us up on Twitter @MFIndustryFocus. Let us know the last stock you bought and why. We'll read it on the air.
OK, Matt, it's been a long show. We've got one more segment here. Let's make it count! We got One to Watch for our listeners. What is a stock you'll be watching here for the coming week?
Frankel: Every earnings season I do this, but I'm going to go with my winner of bank earnings, Bank of America. Like you, it's a stock I've owned for a long time. One that I plan to own for the foreseeable future. I think the repurchase is going to give investors a nice return on their investment all by itself. That's not including any future earnings growth or the dividend, which is actually pretty decent right now. Bank of America has raised their dividend tremendously in the past few years. It's about 3% and rising. I think banks are still undervalued. I think Bank of America is really still undervalued. If you want some banking exposure, that's the way I would go.
Moser: All right. Post-earnings, you have to take that to heart, man. I know you liked what you saw. I did too.
I'm going to be taking a look at Live Oak Bank shares, ticker LOB. It's not one we talk about a lot here. Live Oak has earnings coming out on Wednesday. It's a little small-cap bank based out of North Carolina. Interestingly, it looks like we're going to have the bank president and former Goldman Sachs partner, Huntley Garriott, on the show here in November. Excited to dig into the company, learn more about it and Huntley, and bring that interview to our listeners eventually. That's Live Oak Bank. One I'm going to be paying attention to for the coming week and beyond.
Hey, listen, Matt, thank you for digging in and being a part of this big Earningspalooza festival that we had today on Monday's Industry Focus! This was a big one! We may not have quite the same volume of companies to cover here in the coming weeks. But, no doubt, earnings season is just getting started. I bet you we'll have a few more to cover as the weeks go on.
Frankel: Definitely! Looking forward to it!
Moser: All right. You have a great week! We'll talk to you next week. As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Today's show was produced by Austin Morgan. For Matt Frankel, I'm Jason Moser. Thanks for listening! And we'll see you next week!
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jason Moser owns shares of Amazon, Ameris Bancorp, Apple, Markel, Mastercard, PayPal Holdings, Square, and Visa. Matthew Frankel, CFP, owns shares of American Express, Apple, Bank of America, Berkshire Hathaway (B shares), Markel, and Square. The Motley Fool owns shares of and recommends Abiomed, Amazon, Apple, Berkshire Hathaway (B shares), Facebook, Markel, Mastercard, PayPal Holdings, ShockWave Medical, Square, and Visa. The Motley Fool has the following options: short January 2020 $155 calls on Apple and long January 2020 $150 calls on Apple. The Motley Fool recommends Ameris Bancorp, Uber Technologies, and Vail Resorts and recommends the following options: long January 2020 $150 calls on Apple, short January 2020 $155 calls on Apple, long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short January 2020 $70 puts on Square. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | We are digging into what's been a very big week of earnings from companies like Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), Ameris Bancorp (NASDAQ: ABCB), American Express (NYSE: AXP). In today's Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss the results from 10 of the most important banks and what investors need to know. Moser: A bank we've known for a long time as being the leader in the mortgage space, but unfortunately, we've been talking more about it recently due to its failures of leadership and culture issues, and then you top it all off with essentially regulators telling them to hit pause on growth, Wells Fargo has had a tough go of it here the past couple of years. | We are digging into what's been a very big week of earnings from companies like Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), Ameris Bancorp (NASDAQ: ABCB), American Express (NYSE: AXP). Jason Moser owns shares of Amazon, Ameris Bancorp, Apple, Markel, Mastercard, PayPal Holdings, Square, and Visa. The Motley Fool owns shares of and recommends Abiomed, Amazon, Apple, Berkshire Hathaway (B shares), Facebook, Markel, Mastercard, PayPal Holdings, ShockWave Medical, Square, and Visa. | We are digging into what's been a very big week of earnings from companies like Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), Ameris Bancorp (NASDAQ: ABCB), American Express (NYSE: AXP). When we talk about a lot of these big banks, and we're talking about companies like Bank of America and Wells Fargo and Goldman Sachs and U.S. Bancorp, American Express, these are all banks, I believe every one that I just named there, that Warren Buffett and Berkshire Hathaway still have significant ownership stakes in these banks. I don't know that companies are going to split or not split based on what platforms will accept fractional share purchases, but it sure does seem like this is one more reason a company could say, "We don't need to split our shares because we don't need to open ourselves up to a larger investor base." | We are digging into what's been a very big week of earnings from companies like Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), Ameris Bancorp (NASDAQ: ABCB), American Express (NYSE: AXP). Frankel: Yes, investment banking was great. Moser: Let's talk about a bank that's making some more investments on the consumer side. |
27858.0 | 2019-10-22 00:00:00 UTC | Netflix Concerns and Retail Woes | ABCB | https://www.nasdaq.com/articles/netflix-concerns-and-retail-woes-2019-10-22 | nan | nan | In this episode of Motley Fool Money, host Chris Hill and analysts Andy Cross, Jason Moser, and Emily Flippen hit on some of the biggest recent business news. Why does Amazon (NASDAQ: AMZN) make up such a large chunk of the digital ad world? How can parents get their kids interested in investing? American Express (NYSE: AXP) reported a good quarter, so why did the stock drop? How does Netflix (NASDAQ: NFLX) proceed in the face of tons of new competition? Plus, updates from Ameris Bancorp (NASDAQ: ABCB), Yum! Brands (NYSE: YUM), UnitedHealth Group (NYSE: UNH), Coca-Cola (NYSE: KO), Intuitive Surgical (NASDAQ: ISRG), monthly retail industry sales numbers, and more. And, as always, the analysts share some stocks on their radar.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on Oct. 18, 2019.
Chris Hill: Hey, thanks for listening to Motley Fool Money. We have a lot going on this week. We have earnings season starting to heat up. We're going to dip into the Fool mailbag.
It's the Motley Fool Money radio show! I'm Chris Hill. Joining me in studio this week, senior analysts Jason Moser, Emily Flippen, and Andy Cross. Good to see you as always! We've got the latest headlines from Wall Street. We will dip into the Fool mailbag. And as always, we'll give you an inside look at the stocks on our radar.
But with earnings season starting to heat up, we're going to start with Netflix. Third-quarter results for Netflix were not perfect, but profits look good. International subscriber growth was stronger than expected. Andy, shares of Netflix down ever so slightly this week. I'm a little surprised because I thought, in part because of the international subscriber growth, this was pretty good.
Andy Cross: Well, don't forget that the last quarter was so bad, where they came out with their new additions far below expectations. It was nice to see that they at least moved in the right direction this quarter. Sales were up 31%. Actually up 35% if you back out some of the currency effects. Nice growth on the profit picture. Paying additions at 6.77 million, just slightly below the guidance they had at 7 million, but it was the second consecutive quarter where the paid subscriber additions were below what they estimated. I haven't seen that at least in four years. So, from that perspective, that was a little concerning. Hopefully, when they look forward to the fourth quarter, we see that number reverse, and they actually can beat some of the guidance.
Chris, as you mentioned, the strength is all on the international side. Tons of investments going into the international programming. They continue to get a little bit of a boost on the pricing they put forth when it comes to the revenue per user. Reed Hastings, the founder and CEO, talks about how the increase they put forth on the U.S. side has impacted the additions on the U.S. side of the business. So really, it's all growth about the international side. That was the bright picture.
Overall, it was an OK report. I was glad to see they had the growth come back compared to last quarter. But clearly, so much competition, as we've all talked about, that is heating up. That's the big thing to watch for Netflix.
Hill: Jason, Reed Hastings also being very up-front about what he called modest headwinds in the near term, just the amount of attention that's going to be paid to the launch of Disney+ next month, and then Apple+ coming on line.
Jason Moser: Going to be a lot of platforms out there with a lot of really good content. The thing about Netflix, this is the challenge that Netflix faces, is because they're a pure play, they can't hide behind any other part of the business. When you look at some of the numbers, they're projecting negative $3.5 billion in free cash flow this year. They continue to talk about that slow march toward positive free cash flow. That sounds like it's going to be a long time coming. All along the way, that share count continues to go up as well. They're going to continue tapping the capital markets. Share count's likely going to continue to go up because they have to keep paying for that content, those obligations now are closing in on $20 billion. For me, it goes back to pricing power, and we're already seeing some challenges there when they start to try raising prices. That's affecting the growth. So, while I think it's going to be a core offering a lot of people will keep, I feel like we're entering this new stage, and the financials, I think, are going to come under more scrutiny now.
Emily Flippen: I actually think that Netflix has more pricing power than people give it credit for. I tend to be a little bit more of a Netflix bull, even in this environment. And that's because they still have a lot of levers to pull, the way that they can monetize the service. The way they historically monetized it is by whatever's going to get them the greatest number of eyes. And the reason why we're seeing that customer growth starting to slow down is because of the fact that they've already saturated at least the U.S. market. So now, the growth then becomes you saturating the international market. And once they have all the eyes that they wanted to aggregate, that's when they get their pricing power. I actually think that, while there's been a lot of critiques over Netflix's originals, Netflix's TV shows, they're one of the only platforms that's giving a platform to international producers, international TV shows. And I think people misunderstand how much power that has for the international markets in particular. There's lots of different ways they can monetize it. I think they'll get to profitability. They'll be free-cash-flow positive. It's just a matter of figuring out when they want to make that move from attracting the greatest number of consumers with a low price point to upping the price point.
Cross: Well, yeah, it'll be a while until they're free-cash-flow positive. They are nicely profitable, but they're investing so much, and they have content obligations north of $19 billion now. But Emily is absolutely right, the international platform -- the contribution margin on the international side is half of what we have on the U.S. side. They're ramping up so much of their spending and their programming around international. That's an advantage. Hopefully the profitability curve internationally continues to ramp up, and that drives the stock price eventually higher.
Moser: And that international dynamic makes a lot of sense, why Amazon, too, is investing so much in that market as well.
Hill: From video streaming to surgical robots. Intuitive Surgical's third quarter was better than expected, and the stock up more than 6% on Friday, Jason.
Moser: Yeah, the investment case for Intuitive is that management's going to keep finding new ways to get its robotic systems into hospitals to perform more procedures. Honestly, when you look at the numbers, it does seem like everything is working out quite well. Global procedure growth was 20% for the quarter. In the U.S., it was 18%. They placed an additional 275 da Vinci Surgical systems. That was up from 231 in the third quarter of 2018. Their installed base now stands at 5,406. Total recurring revenue for the quarter $817 million. That represents 72% of the total revenue of the company. That's one of the attractive parts of this business, is that razor-and-blade model. You get those machines in the hospitals and then you continue to benefit from the recurring revenue that comes from servicing them and using them. From a personal point of view here, I enjoyed spotting the phrase "augmented reality" in the call this quarter, talking about their IRIS system. Just a reminder for everyone, it is the integration of pre-operative imaging and 3D imaging into real-time case studies for doctors. It's helping train physicians on using the da Vinci robots. And again, I think this is a company that is based on technology, very forward-looking, and you know healthcare is a market that I like a lot. There's just so much opportunity there, particularly as technology continues to evolve.
Hill: Shares of UnitedHealth Group up 10% this week after the healthcare giant posted third-quarter profits of $5 billion. Emily, UnitedHealth still down a bit from its 52-week high, but I feel like a couple of more quarters like this should do the trick.
Flippen: I think there's a lot of pessimism in the market right now for healthcare -- maybe not for Intuitive Surgical, but for UnitedHealth, definitely. That's largely because of the macro environment we're in right now, heading into 2020. It's hard not to see healthcare being a cornerstone issue, and UnitedHealth in a lot of ways is positioned right in the middle of that. While the stock price hasn't reflected the strong performance for this quarter, UnitedHealth actually owes a lot of its strong performance to its new Optum business. I will buy someone lunch if they could name all the different businesses within their Optum business. Can anyone?
Hill: No.
Moser: I could go find them on the website and read them off to you, but it's a lot.
Flippen: Honestly, good luck! I tried. Here's what I got. Optum Health, OptumRx, OptumInsight, Optum Bank, OptumCare. I don't know if that's all the Optums out there.
Hill: Is there Optum Web Services?
Flippen: Yeah, probably.
Moser: Sounds like they're Optumizing their business model.
Flippen: [laughs] But, all of their Optum businesses grew at double-digits last quarter, which is really impressive for a company this large whose overall revenue grew about 8% year over year. The Optum businesses are definitely performing well. They're doing a great job of increasing shareholder value. They issue dividends, they have share buybacks. It's overall a good, stable business. The macro environment right now might continue to see a company like this pressured, though.
Cross: Over the last decade, UnitedHealth is up more than 10 times in value, has a nice little dividend. A very stable stock, as Emily mentioned, the volatility is much lower than the market. At $230 billion market cap, it's a pretty stable company to be able to stick in your portfolio.
Moser: It's nice that Teladoc Health is partnering up with Optum too, right, Mac?
Hill: Third-quarter profits and revenue for American Express came in higher than expected, but shares not moving on Friday. Jason, you look at Amex, it's up around 15% for the past year. Is what we're seeing with this latest quarter a valuation thing?
Moser: Maybe. You know I love a good membership business. American Express is essentially a membership business. You pay a membership fee, in most cases, to have the card. A couple of years ago, we had some real concerns. I know I specifically did, in the face of this tech threat in payments and card services. Amex seemed like a legacy provider that might be missing that next wave. But you fast-forward to today, the business continues to chalk up good results. Excluding currency, adjusted revenue was up 9%. That marks the ninth straight quarter of revenue growth of at least 8% for the company. I think that's really impressive. They're paying a little bit more on the reward side, making sure that they invest in co-branded partnerships to keep their card users, their card holders using the cards. Those are good long-term decisions in my opinion. That is seeing the forest for the trees, knowing you're going to take a little short-term pain in order to make that network bigger and get people spending more with them. Very cool to see them saddling up with PayPal and Venmo to do more things like splitting card purchases, and even enabling customers to pay with Amex points where PayPal is accepted.
From the stock perspective, over the past three years, it's been a really good performer. The stock has basically doubled. When you compare that to other companies in the space like PayPal, it's still lagging. To me, Amex is more like a bank investment at this point. They're doing a lot of good things to keep up with the times. As a card holder, I love it. I'm not terribly enthusiastic on it as an investment, given the other options that are out there today.
Hill: For more earnings news, we will start Down Under with Atlassian, the Australian-based enterprise software company, out with first-quarter results that were better than expected. Atlassian also raised guidance for the second quarter. Andy, why are shares down 7% on Friday? This is what we like to see!
Cross: I think the reason they are down is probably more about the general malaise around some SaaS companies, some software, cloud businesses this year. There were some comments from other SaaS companies that clients are pushing back some of their purchases, are a little bit slower to develop them. So, I think there might just be some concerns there.
But Atlassian, this is one of my favorite management teams. The two co-founders that own almost 30% of the stock are very involved in the business. Sales were up 36%. They have their Jira software. They have Trello, which we use around the office here. They're continuing to innovate into those businesses. But also, on the pricing side, they now have been more aggressive on the free-to-premium side. They have these different free offers that clients are gravitating to. It helps continue to grow their revenues. Their expected revenue growth will continue going forward. You look long-term, $30 billion business. Very large market for them to be able to play in. We're getting more and more collaborative as organizations work together. They serve 160,000 global clients. I see the growth just continuing for Atlassian. It's very well run. They actually generate, when you adjust for some of the heavy stock compensation, they generate some nice free cash flow.
Flippen: You hit it on the head there, too, about how well run this company is. They're the type of co-founders that you look for in an investment, people who can lead a company for the long term and have its best interests in mind -- and, as a result, have your best interests in mind. I will just add that Atlassian is interesting because, when you think about SaaS companies, you talk a lot about the idea of being developer-focused, so, the people who are actually the ones using the technology, making it friendly to them. Atlassian does a great job of being developer-focused. Unfortunately, that makes it a little bit harder for them to get into other areas of the business. They have a lot of product suites that, once you have one, and once you've made that decision, your developers have gotten Atlassian, it's easy to expand it, but you have to convince them. The developers have to convince the company to bring it Atlassian in in the first place. They've been doing great doing that so far, but I do think it comes down to the fact that if you're a developer, their products are just so much easier to use than the competition's.
Cross: Yeah, I agree. They make these little acquisitions. They bought Code Barrel, which makes automation for Jira, which partners very well with their large Jira business. And they bought Opsgenie last year. That's an incident response and management software. That's been plugging in. And they're very patient. They let the businesses grow that they acquire and they slowly integrate them. That's good long-term.
Hill: Coca-Cola's third quarter was fueled by strong sales of Coke Zero. Shares of Big Red up on Friday, and Emily, close to an all-time high.
Flippen: You're actually missing the big story here, Chris.
Hill: Do tell.
Flippen: The big story here is the fact that they launched coffee-infused soda in 20 markets across the world. Sure, while the great results were associated with Coke Zero and lots of people buying little tiny cans of Coke -- I know you'd like to do that, Chris.
Cross: I do!
Flippen: Little tiny cans of Coke. Well, the big story to me is the idea that there is, in fact, coffee-infused Coke out there in 20 markets. I don't believe the U.S. is one of them yet. But if memory serves, I think they tried to do something like this maybe a decade ago, and it really fell flat on its face. But based off this quarter, maybe it's being more successful in other markets.
Hill: You know what's better than coffee-infused soda?
Flippen: Nothing?
Hill: Coffee.
Flippen: [laughs] I challenge that.
Cross: Straight to the source.
Moser: Coffee-infused stout, that's a good one. Founders Breakfast Stout.
Hill: Third-quarter profits and revenue for Ameris Bancorp came in higher than expected, but shares of the Southeastern bank not moving on the results. Jason, I know you're a fan of this one. But you look at Ameris Bancorp's stock over the past year, and it's basically flat.
Moser: Yeah. I think a lot of that is tied to this Fidelity acquisition and the general challenges in banking given the interest rate environment. Small banks have a tougher time dealing with that. You go into a quarter like this, you really are looking for the red flags. I don't see any. The metrics that matter most are all looking very strong. The Fidelity acquisition added $5.2 billion dollars in total assets, $3.8 billion in total loans, and $4 billion in total deposits. You put all that together now, and they stand at total deposits of $13.7 billion. Total assets now just under $18 billion. For the quarter, net interest margin staying in check. It was down just a tick to 3.84%. A good number, given the interest rate environment.
I think that one of the key justifications for the acquisition was this access to a lower-cost deposit base. When you look at that, you see this non-interest-bearing deposits representing almost 30% of total deposits. Now, that's up from 25% a year ago. That's important because it was a key justification of the acquisition. The president of Fidelity, Palmer Proctor, he's now stepped in to fill the CEO role. Seems like he's got a good grip on the business. Excited to hopefully get him on Industry Focus soon for an interview. But as a shareholder in Ameris, I'd feel very good about what they're doing.
Hill: Emily made the comment about healthcare probably going to be a spotlight issue in the 2020 election. Feels like big banks are going to be in the spotlight as well. Do you think that is even more of a bull case for smaller banks like Ameris Bancorp? Let's face it, to the extent that banks get attention from politicians thinking that they're too big, we're talking about a bank here that's less than $3 billion.
Moser: If I'm going to prioritize the list, I feel like tech is at the center of the bull's-eye for this election season. Banks will probably play second fiddle there. To your point, yes, big banks obviously possess a lot of advantages there. I think ultimately, that's where we're going to continue to see consolidation in this space. I think a lot of bigger banks look at Ameris today and think, boy, they'd love to swallow that thing up at the right price. But for now, I'd love to see this team get the room to keep on doing what they're doing.
Hill: It's not necessarily a name that flows off the tongue, but it's not also not Truist.
Moser: Listen, money's money, and people like money.
Hill: This week, it took less than two hours for KFC to completely sell out of its Seasoned Tickets promotion. For just $75, the deal entitles the holders of the Seasoned Ticket to have four dozen made-to-order chicken wings delivered to their home every week for 10 straight weeks. Emily, I feel like this can only be a win for parent company Yum! Brands.
Flippen: It's only a lose for the people who missed out on buying the Seasoned Tickets. It's a win for everybody else, undoubtedly. This was referred to as the Netflix of chicken wings. I don't know how that connection was made. I see it as a Stitch Fix of chicken wings, except I'm a lot more bullish on these wings.
Cross: [laughs] A box!
Flippen: Exactly. This is what I want, though. I want them to customize the boxing like Stitch Fix does. I want them every week to send me -- what is it, 48 wings a week?
Hill: Yeah.
Flippen: 48 wings, every week, and I want the flavors customized to me. I've had a bad week, maybe send me some spicy wings, spice up your life a little bit. And the ones I don't like, maybe I can send back, get a little refund, I don't know. There's an idea here, though.
Cross: I think they should also include a card for a local cardiologist, as well, too.
Hill: If you're getting four dozen wings delivered every week for 10 weeks, hopefully you've got some friends over, right?
Cross: I guess so.
Moser: Either that or perhaps a Peloton membership.
Cross: You'll need it.
Flippen: I will say, to be serious about it, though, they're definitely losing money on this deal. For $75, 528 wings, that's about $0.14 a wing if my math is correct. There's probably somebody out there who's crunching the numbers saying, "That's not right." But, generally, that's really, really cheap wings, so they're probably losing money on this deal.
Hill: Let's talk retail for a moment. The retail sales in the month of September fell by 0.3%. Jason, that doesn't seem like a big number, but this is getting a lot of attention, and I think it's reasonable that it gets a lot of attention, in part because it's the first drop since February, but also because we're going into the holidays. You've got the National Retail Federation coming out and saying, "Everything's going to be great around the holidays! Consumer spending growth is going to be double what it was last year!" And then you have some economists saying...I don't know. You take this, you combine it with contraction in manufacturing, and others. When you take this data point and you look at retail, what goes through your mind?
Moser: It seems to me like they're trying to make this the Lego holiday season. Everything is awesome, and let's just keep on doing it. Maybe that's how it works out. I'm taking a little bit of a counter view to that, though. A year ago, we were just getting into this whole trade war thing, and the ramifications of it, thinking it would probably be resolved by this point. Doesn't look like that's going to happen. Uncertainty makes retail a little bit more of a difficult space. And then there's data out there that says, while unemployment is great, wages are still a little stagnant. Personal consumption expenditures have slowed a little bit. When you look at the state of the consumer, there's some telling data out there in regard to the state of consumer credit card debt. We talked about this earlier during the week on MarketFoolery. On average, households with the lowest net worth are the ones with the most credit card debt. That ultimately is the fuel that feeds this retail fire. At some point, that slows down. I feel like we're seeing some signs that things are starting to slow down. I'm not saying that we're on the tip of a recession or whatever, but I can certainly see how maybe this is a slower holiday season than some might expect.
Flippen: I'll play devil's advocate to that a little bit. That quote in particular was year-over-year growth. Looking at this time last year, there was a lot of fear in the market, a lot of concern about the economy. Maybe that led to lower spending last year than what should have been seen. I think it was just earlier this week, was it JPMorgan Chase that reported? And the real big story was that Jamie Dimon came out and said, "Yeah, manufacturing has been weak, but the American consumer is still extremely healthy." So, while we're seeing this weird contraction with the manufacturing industry, at the same time, it seems like American consumers are still willing to spend. So I tend to think that maybe we're going into a good holiday season for retailers.
Cross: Also, the monthly number is the change from last month. When you look year over year just on that month, we're still up more than 4% on the overall consumer spending. That's a little bit below the long-term historical average of about 4.2%. It's down from where it was last month year over year. Consumers are still spending 4% more than we spent last year in the month. I think we have to take the month-to-month results all with a grain of salt.
I think the trade issue is going to cause some longer-term ramifications for the consumer spending. But Emily is right, the consumer is the driver of the U.S. economy, still spending money. That's a good thing to see, especially with the manufacturing economy not working at all.
Moser: And not all retail is created equal. That's a big market with a lot of players. There are plenty of names we could look at, plenty of companies we could say, "Well, I'm not terribly optimistic." But look at a company like Etsy, for example. Admittedly a smaller niche market, but man, did they own it. It just seems like quarter in and quarter out, that consumer stays very healthy.
Hill: Well, and you think about all the retailers out there, it seems like either you need to be big, or you need to have a moat. When we look at Amazon, Walmart, Target, and I'll throw Costco in there as well, they're probably OK weathering any type of storm here. And I think Etsy is a good example of a smaller retailer with a good moat.
Moser: To your point on those big retail names, look at companies that benefit from those names. Something like a Hasbro. Over the past several years, Hasbro has separated itself from the other competitors in that space. I suspect Hasbro will continue to do very well, because we know that holiday season is the biggest month for these toymakers.
Flippen: We talk a lot about some of these bigger retailers. It's important not to forget the discount retailers, too, which have also been performing really well. That's the TJ Maxxes of the world, the Burlingtons of the world. These are businesses that have actually done really well in their niches. When it comes down to it, when you think about what retailers are going to do poorly this holiday season, it's probably the same retailers that have been doing poorly for the past few years.
Hill: Let's move on to online advertising. The latest forecast indicates that Google and Facebook will continue to dominate, as they have. Most noteworthy in the forecast, Jason, was Amazon's ad business looking like it's going top $7 billion in 2019. That's roughly 30% growth year over year. I shouldn't be surprised by this, but that's a pretty big number in terms of growth.
Moser: It is a big number, particularly when you consider that the space is ruled by Google and Facebook, Alphabet and Facebook. With Amazon, you've got the ad opportunity on the commerce site, but also, there's the entertainment side with the Fire TV Stick and Fire TV Box, the way people are getting their entertainment now. There's a big opportunity there, there's no question about it. We talk about The Trade Desk a lot. The Trade Desk is even a company looking at this as a big opportunity, because they recently came to an agreement with Amazon to be able to sell ads on that platform with all of the third-party providers for that Amazon entertainment platform.
Amazon is going to capture their fair share. I don't think this is ultimately a major threat to something like a Google. I think Facebook is dealing with a lot of their own challenges right now. It's hard for me to imagine five years from now, we're still not looking at Google and Alphabet as the kings of online advertising. But, it's a massive market.
Cross: At that point, it's more than a $730 billion market, the total advertising market. Digital is still a very small part of that. Digital search is even a smaller part of that. You have Google and Amazon definitely making inroads. We've talked about this. Search on Amazon's platform, a huge opportunity. They saw that and now they have the advertising for it. Jason mentioned The Trade Desk. One reason we continue to like that is because of the programmatic side, so, matching up, a very algorithmic, much more efficient way to do this, in the non-walled-gardens -- so, not the Facebooks, not the YouTubes of the world, but elsewhere, on other media platforms. A company like The Trade Desk has an opportunity because that market is growing much faster than the overall digital market.
Flippen: It also begs the question, what are regulators going to do about this market that increasingly seems to be focused around what is only a few of the biggest companies here in the United States? To Jason's point about Amazon allowing third-party ad providers on their platform, it feels like that's almost by force. They know if they don't, then they can have some antitrust suit against them regarding preventing third parties from advertising, or providing advertising support on their platform. It poses an interesting problem for regulators. Typically, monopolies are by force. This is a monopoly by choice. Google, Facebook, Amazon, they're monopolies because consumers use them. They're not monopolies by nature. From a lot of perspectives, it's hard to imagine regulating these advertisers because the place that naturally aggregates eyes would receive advertising credits.
Hill: Although it did make me think, when I was looking at this story initially, and to your point, Jason, about how big tech is going to be in the spotlight for politicians in 2020, this is one more reason to go after Amazon -- their increasingly dominant ad business.
Moser: Oh, yeah. It also makes you appreciate a business like Roku. When it first came public, we looked at it as a hardware play. But clearly, that's taking a back seat to what is becoming a very robust partnership and advertisement-based model. Again, I would imagine The Trade Desk will be able to benefit from that. I'm sure that Amazon's opening up of its walled garden, so to speak, is partly in response to that competition.
Hill: We've talked before about start-up beverage companies, whether it's a small craft brewery or even a non-alcoholic beverage company; more often than not, the business plan of whoever is starting that business is, "I just want to get bought by a giant. I want Budweiser to buy me. I want Coca-Cola or Pepsi to buy me." Do you think that's now the play for small start-up digital advertising businesses? That this is now so dominated by Facebook, Google, and increasingly Amazon that, for start-ups out there, they just think, "Hopefully we can catch their attention and they'll buy us out."
Cross: Jeff Green, the founder of The Trade Desk, did sell his first advertising business, I think to Microsoft eventually. I mentioned that $730 billion-plus market. That's obviously total advertising spend. But, the way this business is evolving, yes, they do have big players, but when you start moving outside those walled gardens, you have companies like The Trade Desk, if they can be more efficient and more friendly to their clients, and independent, that's important, and independent, there's a huge opportunity for them.
Moser: I'm not going to lie, I zoned out after you said craft brewery.
Hill: [laughs] You can email us. Radio@fool.com is our email address. Or, you can be like Derek in Japan, who sent a physical letter to us here at Fool global headquarters in Alexandria, Virginia. Derek writes, "I've been listening since 2010. The majority of that time I've been in Japan, stationed here while on active duty, and after that, working with the military here. It's a great show. Keep up the good work. My question is, how do I get my kids more interested in investing? I started investing for them years ago, but I'd like to get them more involved when it comes to picking stocks. Should I have them focus on companies that actually make something? It might be easier to understand what a company like Disney does as opposed to what a company like JPMorgan Chase does. Would that be easier for them? Or should I stick to the financials, as I do when I invest? P.S., enclosed is this fall's versions of Kit Kat from Japan. Enjoy."
First of all, thank you for listening for so long, Derek! Thank you for a great question, which we'll get to in a moment. But thank you also for the green tea Kit Kats and the toasted green tea Kit Kats. I think the consensus around the table here is slight favoring of the straight-up, traditional green tea one. Is that fair to say?
Cross: Yeah. In fact, I'm going to grab one...
Hill: By all means, just chew into the microphone.
Cross: I'm not going to chew into the microphone! I just wanted to look at it! Yeah, the green tea is, I think, a little better than the other one.
Hill: Jason, let me start with you. It's a great question! It's always great to get your kids involved in investing, but chances are, they're going to be more interested if it's a business that they can understand like Disney as opposed to, well, JPMorgan Chase.
Moser: Yeah. Hats off, first and foremost, for getting your kids into investing. I'm not sure how old your kids are at this point. But I will say, my wife and I have worked on making sure our girls are financially literate and aware of what's going on in the world. Part of that is investing. They've been owning stocks for several years now. Two things I always come back to when it involves kids and investing. It's companies they know. It's also taking the business owner's mentality. I think that the more you're able to get companies on their radar that they know -- and I'm not saying understand their business model fully. Understanding generally what the company does. But also, give them this understanding that owning their stock is actually only owning the business. And once they've got companies they know and like on their radar, and then there's this possibility of actually being an owner of that business, that lights a fire, I think, in a lot of people. I know it definitely piqued my girls' interest as well. So, that's one thing we've continued to do with our girls, is trying to make sure the businesses that we're shooting across their radars are ones that they run across every day, and then create that ownership mentality.
Flippen: Jason's giving you the wise answer. I'm going to give you what I think is the more realistic answer. That is to say, kids and parents, sometimes things that parents try to get you into, you're going to hate automatically. I don't know how old your kids are. Maybe if they're younger, this doesn't apply. But I remember when I was growing up, I came from a family, my father's a history professor, my mother was a lawyer. I am now working in finance, if that tells you anything about my desire to get into history or law. I will say, I like the idea of buying companies that your kids can understand, and owning businesses. What got me started investing was buying a biotech fund that I knew nothing about, and then watching it go up 50% and absolutely losing my high school mind based on how much money I suddenly had. Depending on how your kids view the world. Maybe they're like Jason's kids, and they're more business-minded, well-rounded children than I was. But I was very excited by the idea of capital appreciation.
Moser: Let me make sure, first and foremost, "the wise answer," was that code for old? Are you calling me old, Emily?
Hill: That's how I took it.
Moser: No, I think, an important point here -- I think you're right. With kids, that interest, it's not like we sit there and talk stocks all the time. They take a look at their portfolio maybe four times a year. We look at their portfolio to see what it's doing. So, keep your expectations in check as a parent. This isn't about getting your kids talking stocks every day. I think that's an unrealistic expectation. But yeah, set the expectations appropriately, and understand it's a marathon, not a sprint.
Cross: Yeah, I think it's getting your kids interested in the inquisitive nature of learning about businesses and understanding the products they use or enjoy every day, and how that basically manifests itself into a business and capitalism and how that grows. Emily's right. I think sometimes, you start lecturing them, they're not going to listen to you. So, I think the approach of trying to get them started into the products and the businesses in what they enjoy, as much as the finance and the actual stock side. I'm just starting to do the stock part to it, and I get a lot of glazed eyes from my kids right now.
Hill: To Emily's point, if you have a couple of stocks that they're interested in, that's great. If there are a couple of stocks that you know as a parent are going to be monster winners over the next 20 years, don't let that stop you from buying. Don't let your kids' ignorance or lack of caring about the business stop you.
Let's go back to Jan. 4th of this year. It was our preview for the year ahead. If you're a longtime listener, you know on our preview show, we talk about stocks to watch in the coming year, CEOs on the hot seat. We also make reckless predictions about anything, not just business. Let's go to our man behind the glass, Dan Boyd, for my reckless prediction for 2019 that I made on Jan. 4th.
"Hill: I'm just going to say that regardless of where free agent Bryce Harper ends up, the Washington Nationals are going to the World Series."
Hill: You're welcome, everybody!
Cross: Strong!
Hill: I didn't put money on that. I probably should have. That's what I get for not taking my own advice.
All right, let's get to the stocks on our radar. Our man behind the glass, Dan Boyd, is going to hit you with a question. Emily Flippen, you're up first. What are you looking at this week?
Flippen: I'm looking at a company called Avalara, ticker AVLR. It's a cloud-based tax compliance software business. Its flagship products include tax processors that allow companies to better calculate sales tax. If anyone remembers the 2018 Supreme Court case, I believe it was South Dakota vs. Wayfair, they require people who sell online to start calculating sales tax for the jurisdictions in which they operate. Avalara simplifies that process. It's a relatively small business, but expanding quickly.
Hill: Dan Boyd, question about Avalara?
Dan Boyd: Generally it's Ron Gross who brings the most boring stuff to the table here on Motley Fool Money. I want to thank Emily for picking up the slack while he's not on the show this week.
Flippen: [laughs] Always looking out!
Hill: Jason Moser, what are you looking at?
Moser: I'm going to try to one-up her, Dan. I have Masimo, ticker MASI. Earnings coming out next week from Masimo. This is the company that is in the business of -- say with me, folks -- pulse oximetry and other non-invasive blood monitoring equipment.
Flippen: Well, of course.
Moser: [laughs] Last quarter, again, shipments were up. They have now an installed base of almost 2 million worldwide. A lot of parallels to Intuitive Surgical that we were talking about earlier with the razor-and-blade model, recurring revenue dynamic. Massive market opportunity in healthcare. I'll be very interested to see how this latest quarter shakes out.
Hill: Dan, question about Masimo?
Boyd: Jason, Chris clued me in before the show that there is another company called Massimo in the world, but I believe this one is a coffee company. To our earlier discussion about coffee, who you got, Jason? Blood or coffee?
Moser: My blood is fully enriched with coffee 24/7.
Hill: A little thing we call fusion. Andy Cross, what are you looking at?
Cross: I'm looking at Manhattan Associates, symbol MANH. It has nothing to do with Manhattan, New York. It is actually a software logistics, inventory management business. It's making this big push to the cloud. Five billion dollar market cap. They report earnings next week. For them, it was a legacy business. They've shifted to the cloud. It's really helped the stock price. I want to see how that continues to grow their overall business.
Hill: Manhattan Associates, Dan?
Boyd: OK, Andy, if it's not associated with New York or New York City -- with Manhattan, of course, being the most iconic part of New York City -- what Manhattan is it associated with?
Cross: I think it's actually from Manhattan Beach, California.
Hill: Not Kansas? I immediately went to Manhattan, Kansas.
Cross: Could be Kansas.
Hill: Three very different businesses, Dan. Maybe not the most scintillating trio. Avalara, Masimo, Manhattan Associates. You have one you want to add to your watch list?
Boyd: It seems like we can't live without blood or coffee, so I'm going with Masimo.
Moser: That's two weeks in a row, folks! Thanks!
Hill: Also worth pointing out, you know that's just bragging rights, right?
Moser: Listen, I have to have something to go home to, Chris.
Hill: [laughs] Jason Moser, Andy Cross, Emily Flippen, thanks for being here! That's going to do it for this week's edition of Motley Fool Money! Our engineer is Dan Boyd. Our producer is Mac Greer. I'm Chris Hill. Thanks for listening! We'll see you next week!
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Andy Cross owns shares of Facebook, Netflix, and PepsiCo. Chris Hill owns shares of Amazon, PayPal Holdings, and Walt Disney. Emily Flippen has no position in any of the stocks mentioned. Jason Moser owns shares of Alphabet (C shares), Amazon, Ameris Bancorp, Apple, Etsy, Hasbro, Masimo, PayPal Holdings, Teladoc Health, The Trade Desk, and Walt Disney. The Motley Fool has the following options: long January 2020 $150 calls on Apple, short January 2020 $155 calls on Apple, long January 2020 $115 calls on Costco Wholesale, short January 2020 $180 calls on Costco Wholesale, long January 2021 $60 calls on Walt Disney, long January 2021 $85 calls on Microsoft, long January 2020 $60 calls on The Trade Desk, and short January 2020 $125 calls on The Trade Desk. The Motley Fool recommends Alphabet (A shares), Alphabet (C shares), Amazon, Ameris Bancorp, Apple, Atlassian, Costco Wholesale, Etsy, Facebook, Hasbro, Intuitive Surgical, Masimo, Microsoft, Netflix, PayPal Holdings, Roku, Stitch Fix, Teladoc Health, The TJX Companies, The Trade Desk, UnitedHealth Group, Walt Disney, and Wayfair. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Plus, updates from Ameris Bancorp (NASDAQ: ABCB), Yum! In this episode of Motley Fool Money, host Chris Hill and analysts Andy Cross, Jason Moser, and Emily Flippen hit on some of the biggest recent business news. Hill: Although it did make me think, when I was looking at this story initially, and to your point, Jason, about how big tech is going to be in the spotlight for politicians in 2020, this is one more reason to go after Amazon -- their increasingly dominant ad business. | Plus, updates from Ameris Bancorp (NASDAQ: ABCB), Yum! Jason Moser owns shares of Alphabet (C shares), Amazon, Ameris Bancorp, Apple, Etsy, Hasbro, Masimo, PayPal Holdings, Teladoc Health, The Trade Desk, and Walt Disney. The Motley Fool has the following options: long January 2020 $150 calls on Apple, short January 2020 $155 calls on Apple, long January 2020 $115 calls on Costco Wholesale, short January 2020 $180 calls on Costco Wholesale, long January 2021 $60 calls on Walt Disney, long January 2021 $85 calls on Microsoft, long January 2020 $60 calls on The Trade Desk, and short January 2020 $125 calls on The Trade Desk. | Plus, updates from Ameris Bancorp (NASDAQ: ABCB), Yum! In this episode of Motley Fool Money, host Chris Hill and analysts Andy Cross, Jason Moser, and Emily Flippen hit on some of the biggest recent business news. Flippen: [laughs] But, all of their Optum businesses grew at double-digits last quarter, which is really impressive for a company this large whose overall revenue grew about 8% year over year. | Plus, updates from Ameris Bancorp (NASDAQ: ABCB), Yum! Cross: At that point, it's more than a $730 billion market, the total advertising market. Hill: Jason Moser, what are you looking at? |
27859.0 | 2019-10-18 00:00:00 UTC | Ameris Bancorp (ABCB) Q3 2019 Earnings Call Transcript | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-q3-2019-earnings-call-transcript-2019-10-18 | nan | nan | Image source: The Motley Fool.
Ameris Bancorp (NASDAQ: ABCB)
Q3 2019 Earnings Call
Oct 18, 2019, 9:00 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Good morning and welcome to the Ameris Bancorp Third Quarter 2019 Financial Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Nicole Stokes, Chief Financial Officer. Please go ahead.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Thank you, Ally. 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 will discuss the details of our financial results. Before we open up for Q&A.
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 of our presentation.
And with that, I will turn it over to Palmer for opening comments.
Palmer Proctor -- President, Chief Executive Officer & Director
Thank you, Nicole, and good morning to everyone who's joined our call today. I wanted to share a few highlights about the quarter and why we're excited about the rest of 2019. And then the opportunities we see coming into 2020.
For the quarter, we earned $68.5 million or $0.98 per diluted share on an adjusted basis. Which is up over 8% compared to the third quarter of last year. This represents a 1.57% return on average assets and 18.95% return on tangible equity.
Our efficiency ratio increased to just over 57%, which was expected as the cost saves from the Fidelity acquisition aren't fully realized yet, and we're still running two core systems until November of this year with the conversion.
For the year-to-date period. We earned $156.3 million or $2.85 per diluted share on an adjusted basis which is actually up 19% over 2018 results and this represents a year-to-date, return on assets of 1.55%, 7% [Phonetic] improvement from the same period last year.
We've been very pleased with our organic growth on both the loan and the deposit side. Our loan to deposit ratio has been very stable at 94% and if you exclude the Fidelity acquisition, our loans actually grew over $283 million or almost 13% annualized during the third quarter alone. So that leaves our year to date annualized loan growth at 13.75% for the year and our annualized non-interest bearing deposit growth at 13.58% for the year, which is pretty impressive.
Our loan production in the Banking segment was up 151% this quarter over the third quarter of last year. Yields of course, were down on the new production as we would all expect with the recent Fed cuts but the pipelines are encouraging, they are strong as we look into the fourth quarter. So we feel very encouraged about that.
As expected, we did see some dilution in tangible book value this quarter compared to last quarter and that's really due to the Fidelity acquisition, but we anticipate that consistent growth in tangible book that you will see going forward, as we're still haven't paused on the M&A activity, but even with the dilution from the acquisition, we have tangible book growth of over 14% growth since September of last year, which is certainly noteworthy.
Nicole is going to get into the financial details in a few minutes, but I did want to hit on a few things first. And looking back at and we like to do look backs, what do we say versus what we did. And looking back at what we said, we were going to do last December, when the Ameris Fidelity merger was announced, and where we are today. I'm really proud of our team's accomplishments.
We announced the deal, we had pro forma branches at about 199 branches combined. By the end of the third quarter, we're down to 172 branches, which is a net reduction of 27 branches, since the announcement of the merger and we've done this very strategically and with very little attrition in terms of our core funding.
And then also at announcement of the deal, we said there'd be $0.18 dilution on the EPS during 2019 that would then bring single digit accretion in 2020 with the built-in cost saves and we've actually had better than expected results so far, based on our execution and accelerated execution of some of the cost saves strategies earlier than we had initially expected.
We projected our pro forma TCE to tangible asset ratio to be at 8.37% post-acquisition and we're reporting 8.43% TCE ratio today, which is slightly above our projections. And I mentioned, all these things really to reinforce how serious we are about executing the strategy and ensuring that we're on track with the plans that we had outlined.
So far, we've hit all the targets we're looking for and we've delivered on the goals we've established and we're confident that hitting our targets is what's going to continue to create franchise value for our Company and our investors and it's going to position us exceptionally well for any economic environment that we operate in. One other noteworthy milestone that I'll mention in our Company's history, is that we, we have officially moved the bank charter and the holding company offices to Atlanta and we will become the largest bank holding company headquartered in Atlanta, Georgia, after the truest [Phonetic] deal closes.
We initiated the formal launch of our rebranding, hopefully some of you have seen that in terms of our strategy there this month. It's been very well received and we remain deliberate in terms of our efforts to drive that brand in all of our markets.
One big point to mention is the integration, it's in full swing, it's going well, we've already -- the SBA Group has already been through conversion. The mortgage integration is about 75% complete as I sit here today and it will be fully completed by the time we do our core system conversion at first week in November.
But the way our operations and technology colleagues that have worked through this integration has been amazing and we're right on track. And as I said in our press release, being able to deliver these kind of financial results that we did this quarter, while also working through one of the largest integrations that our Company has done is -- it really a true direct reflection of the team and how hard all our bankers are working and I look forward to have an integration behind us in the fourth quarter, so we can get back to business, it's been 100% of our time on the organic growth opportunities and continuing to execute the strategies that we have in front of us.
But I'll stop there now and then turn it over to Nicole and let her discuss the financial results in more detail.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Great, thank you, Palmer. As you mentioned, Palmer, today, we're reporting adjusted earnings of $68.5 million or $0.98 per share for the third quarter and that's compared to $43.3 million or $0.91 for the third quarter of last year. These adjusted results primarily exclude about $65 million [Phonetic] of merger charges, a $4 million gain on a BOLI proceeds about $1 million recovery of MSR impairment from prior quarters and $889,000 of loss on branch sale building -- or branch -- the sale of branch building.
Including these items, we're reporting total GAAP earnings of about $21.4 million or $0.31 per share. The $0.98 per share adjusted EPS represents an 8.5% increase over the $0.91 we earned in the third quarter last year and the income -- the $68 million of income represents a 58% increase over the third quarter of 2018 adjusted earnings.
Our adjusted return on assets in the second quarter was 1.57%, which was an increase from the 1.56% reported last quarter and the 1.53% reported in the third quarter of last year. For the year-to-date period. Our adjusted ROA is 1.55% compared to 1.46% last year-to-date. And as previously stated, we continue to aim for an ROA between 1.55% and 1.65% going forward.
Our adjusted return on tangible common equity was 18.95% in the third quarter compared to 18.79% last quarter and 20.50% in the third quarter of last year. For the year-to-date period, our 2019 adjusted return on tangible common equity is 18.87% compared to 18.47% last year. As expected, we saw a decline in tangible book value this quarter due to the Fidelity acquisition. We ended the quarter with tangible book value per share at $20.29, down $0.52 from the $20.81 at the end of June. While this dilution in tangible book value was larger than anticipated and it was a -- and is a result of additional contract termination fees from certain vendor contract, tangible book value is still up over 14% from this time last year.
All of our additional merger expense -- expenses that are related to the contract terminations will result in future cost savings as we work to improve processes going forward. We believe that all significant merger and conversion charges have been recorded in the third quarter, and no material additional expenses are anticipated going forward related to the Fidelity integration.
Our tangible common equity ratio decreased 25 basis point to 8.43% from 8.68% at the end of the second quarter, which was also in line with our projections. We expect that our capital build will continue, and we still plan on finishing 2019 with double-digit growth in tangible book value per share.
Our GAAP net interest margin declined by 7 basis points from 3.91% to 3.84% during the quarter. There was a lot of moving parts, so I'm going to try to take this below and I apologize some of this is going to be repeat from last quarter, but I just want to make sure that I'm clear on the margin.
So if you go back to last quarter, we anticipated the Fidelity acquisition was going to negatively impact our margin by 11 basis point. We anticipated that every 25 basis point [Phonetic] cut would reduce our margin by another 5 basis point to 6 basis point, except for that first cut in July because we had enough tailwind to absorb that.
Well, we did a little better than expected. The Fidelity merger impacted our margin by approximately 9 basis point and the first Fed cut in July impacted our margin by approximately 3 basis point. You notice on the balance sheet, we had extra loans held for sale, and we also used FHLB borrowings to fund that held for sale activity, because of the mortgage, we're going to talk about that a little bit later, but the impact of having those extra held for sale loans to holding those loans longer at a smaller spread that impacted our margin by about 4 basis point.
And then we had tailwinds including purchase accounting in the quarter that offset about 9 basis points of margin compression. So we ended up with, really only 7 basis points of margin compression rather than the 11 basis points that we had anticipated. During the third quarter, our yield on earning assets declined by 9 basis points while our funding costs only decreased 4 basis point. However, our total interest-bearing deposit costs decreased 11 basis point as we continue to stay focused on our deposit costs.
And we continue to believe that every 25 basis point cut by the Fed will squeeze our margin by 5 basis points to 6 basis points that we plan or hope to manage to 45 basis point. Our core bank production yields declined to 5.08% for the quarter against 5.49% in the second quarter. On the deposit side, we continue the momentum on noninterest-bearing deposit and improved our mix such that noninterest-bearing now represent 29.85% of our total deposit compared to 28.9% at the end of the second quarter and 25.4% this time last year.
Noninterest-bearing deposit production was over 13% of our total deposit production. Growth in non-interest income was exceptional during the third quarter as we talked about just a second ago, in addition to the increase in service charges because of the additional deposit account from Fidelity and that was partially offset by the Durbin impact this quarter, but our combined mortgage group had record production in earnings due to the interest rate environment.
During the third quarter, mortgage revenue grew over 186% compared to the second quarter of this year and over 276% from the same period last year and a large portion of that is with the addition of the new Fidelity team.
Mortgage production continue to hit record levels. Although, we saw a decline in the gain on sale to 2.67%, down from 3.11% last quarter and that gain on sale spread was impacted by a shift in product mix as well as the transition of the Fidelity pricing model and the Ameris pricing model.
Loan production in the retail mortgage segment was 278% higher than the third quarter because of the addition of the Fidelity bankers to the team as well as the increased productivity from the low interest rate environment.
We do not anticipate mortgage activity to stay at this high level and we believe will return to a more normal historical volume in the fourth quarter.
Historically, Ameris did about $2 billion of production a year and Fidelity did about $3 billion a year for a combined production of $5 billion. They did $1.8 billion just in the third quarter, which is about a 48% combined increase in production over historical third quarter level.
And they did this production while being distracted with the integration, because of this volume and operational strain of the integration, we ended the quarter with higher than anticipated mortgage loans held for sale, which we funded with short-term FHLB advances. We believe these loans will be packaged and sold as quickly as possible in the fourth quarter and our held for sale numbers as well as wholesale borrowings to fund those will come back down during the fourth quarter and as I already discussed that will help with the margin in the fourth quarter. As Palm already mentioned, the mortgage integration is approximately 75% complete. Our adjusted efficiency ratio increased to 57.25% this quarter, because we do not have the full system integration complete and we still have administrative cost overhang from the Fidelity acquisition. We previously guided that we plan to maintain an efficiency ratio below 60% for the remainder of 2019 and we're well in line with that expectation.
We actually did a little better than expected because of earlier execution of some of the cost saves.
Total non-interest expense were $192.7 million for the quarter. However, when you remove the merger and conversion charges and the loss on sale of branches, our adjusted non-interest expense was about $127 million, which is up $51.5 million from the second quarter, approximately $26 million or half of that increase was in the core bank and administrative functions due to the Fidelity acquisition.
Income in this area also increased by about $42 million equating to a 62% efficiency ratio in that growth without a fully realized cost saves that we'll realize after data conversion in the fourth quarter. Most of the remaining $25 million increase in non-interest expense was in the retail mortgage division mostly in salaries and commissions. This increase is attributable to increased production, both because of the Fidelity acquisition as well as the low interest rate cycle this quarter.
As I already stated, production increased by over 200% in that division, and revenue increased to over $39 million, which is more than enough to cover this increased expense. On the balance sheet side, organic loan growth was about $283 million or just over 12% annualized. The details of this production have been included in the investor presentation, but it was split among our bank segment and our lines of business with approximately 35% of the growth in the core bank and the remaining growth split evenly between mortgage and warehouse, premium finance and specialty lines.
I sound like a broken record on credit -- credit quality but they remains strong. I'm sitting next to Jon Edwards, our Chief Credit Officer who is available to take any questions during the Q&A, but I will hit just a few high point.
Our annualized net charge-off ratio was 7 basis points of total loans and 19 basis points of non-purchased loans. Our non-performing assets as a percent of total assets increased to 73 basis points compared to 51 basis points last quarter and this was due to the Fidelity acquisition.
The quarter-end NPA number was 19 basis points less than the projected number from our original due diligence and also the diversification across loan type and geography can be seen in the loan slides as well. And then the final thing, I'd like to touch on -- before I turn it back over to Palmer is the integration, but not just the data conversion, but the actual team integration and I have to tell you that things are going very well.
As Palmer mentioned earlier, we moved the holding company headquarters to Atlanta earlier this month. The majority of the executive team members are living in Atlanta with several of us relocating ourselves and our families there recently. I personally closed on my home last week in Atlanta. And that -- it had more stress on quarter end by buying a new home and I'm learning all about what real traffic really -- what traffic really means, but honestly and seriously, we're all committed to Ameris and what the future holds for us. The relationships we have as a team and the leadership we've received from Palmer has really made the team dynamics and this transition easier than any of us anticipated.
With that, I'll turn it back over to Palmer for closing comments.
Palmer Proctor -- President, Chief Executive Officer & Director
Thank you, Nicole. I'd like to conclude with this comment. As you know, so much of life and opportunity it's about timing and I can tell you that our timing for bringing everything together here at Ameris whether it'd be our teammates, our Board, our systems or the overall integration, it couldn't be better as we position the bank to take advantage of the tremendous opportunity we have in front of us in the markets in which we operate and we're definitely in the right place at the right time and more importantly, we have the right teammates to make it happen.
So with that, I'd like to thank everyone again for listening in for our third quarter earnings results as we look forward to the rest of 2019 and to what 2020 hold for us.
I'll turn it back over now to Ally for any questions from the Group.
Questions and Answers:
Operator
[Operator Instruction] The first question comes from Casey Whitman with Sandler O'Neill.
Casey Whitman -- Sandler O'Neill -- Analyst
Good morning.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Good morning, Casey.
Casey Whitman -- Sandler O'Neill -- Analyst
Great quarter. Just a few questions, with regards to loan growth, I just more broadly, I was wondering if you could just talk to us about the organic loan growth at the bank segment and production this quarter. Is a lot of that being driven by the Atlanta market, or are you seeing good growth throughout your markets. I guess, my question will just be what markets are growing more than others or are there many in [Phonetic] particular markets for you guys.
Palmer Proctor -- President, Chief Executive Officer & Director
Yeah, Casey. Good morning. Right now, where we're seeing most of the loan growth. The predominant loan growth this last quarter, and the activity in terms of production is coming out of Atlanta and then parts of our Florida market in that order.
Casey Whitman -- Sandler O'Neill -- Analyst
Okay, all right. And then also you referenced the sale of a I think a Corporate Finance Group portfolio in the quarter, can you just give us an idea of the timing of that sale, and kind of the decision there?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Sure, Casey, that was the Corporate Finance division that we got with the Hamilton acquisition last year. And from a credit and a risk, we really -- we're not big fans of that portfolio. So that had been planned for a while to dispose of that and, or to sell those loans. They had been moved to held for sale at the end -- during the second quarter and then we closed on that during the third quarter -- September.
Casey Whitman -- Sandler O'Neill -- Analyst
September. All right. Helpful. Thank you. And lastly on the loan growth, would just be, the indirect auto, I guess how is the runoff been trending in that? And can you just remind us of what we can expect the run-off to be per quarter in that book?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Sure. So when we did the acquisition of Fidelity, it was about $1.2 billion, $1.3 billion. Today or at the end of September, it was down to $1.05 billion and we -- the run [Phonetic] that is about $130 million to $150 million a quarter.
Palmer Proctor -- President, Chief Executive Officer & Director
And it's paying off just as we had -- as it always has. That's one thing about that line of business is very predictable in terms of cash flow and and it continues to perform that way. And asset quality remains pristine.
Casey Whitman -- Sandler O'Neill -- Analyst
Great, thank you. I'll just ask one more and let somebody else jump on. Just with regard to expenses, you mentioned some accelerated cost saves in your prepared remarks. Can you just sort of remind us, or walk us through how much more on cost savings you have to come out of line between the fourth quarter and first quarter between the bank and the mortgage groups? And just sort of help us out with how we should think about the timing of all those cost saves heading?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Sure, so we had anticipated about 20% of those coming into the third quarter, coming out of the third quarter, I should say. And then about 30% coming out in the -- another 30% coming out in the fourth quarter and then the rest of it coming out in 2020.
So we have our data conversion set for the first weekend of November and so we still have what I call kind of some of that that overhang of expenses from running two systems and so that's really the pick up in the fourth quarter over the third quarter is that we will have lot of those administrative costs gone and the duplicate of systems by the end of November.
So we were a little bit ahead of our cost saves. We had projected 20%, we're closer to 25% to 30%. And then we anticipate another 20% to 25% in the third quarter which is or sorry in the fourth quarter, which is similar to what we had said before, it's just, we picked up 5% more in the third quarter and then the rest will be coming out in the first quarter.
Casey Whitman -- Sandler O'Neill -- Analyst
Very helpful. Thank you guys for the questions. Go ahead, Nicole.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Thank you, Casey.
Casey Whitman -- Sandler O'Neill -- Analyst
Okay.
Operator
Our next question comes from Jennifer Demba with SunTrust.
Jennifer Demba -- SunTrust -- Analyst
Thank you. Good morning.
Palmer Proctor -- President, Chief Executive Officer & Director
Good morning.
Jennifer Demba -- SunTrust -- Analyst
Question, will any of this mortgage production activity bleed into fourth quarter?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Jennifer, the piece that might bleed. So we have -- it's the bundling and the selling of that, but we have those market fair value. So we don't anticipate -- now there could still be, I mean, I don't think, all of the volume just shut off September 30. So there will be some overhang some -- like a little bit. But we really think the fourth quarter is going to come back to more normal volumes.
The biggest impact in the fourth quarter is going to be bundling and selling of those loans. But there shouldn't be an income statement impact for that.
Palmer Proctor -- President, Chief Executive Officer & Director
As Nicole said to Jennifer. The momentum is certainly there. And so that will carry us into the fourth quarter, but it will be at a much more normalized rate than what we've experienced this quarter.
Jennifer Demba -- SunTrust -- Analyst
Okay. Nicole, do you guys have a preliminary estimate for your loan loss reserve adjustment for CECL?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
That's a great question -- and Jennifer. And what we have not given out guidance in the past with a specific number with the Fidelity acquisition coming on. We have run that that third quarter run, and we're still analyzing that. I think there will be some additional guidance in the 10-Q about that. What we have said and we'll continue to say, even with this knowing that it's only October 18 and to get all of the Fidelity data from two systems into the CECL model is that we still are not surprised and that what the model is showing is still in line with our projection, so we are certainly not surprised with the results and I think there will be more guidance in our third quarter queue that we file with the SEC.
Jennifer Demba -- SunTrust -- Analyst
Okay, one last question, any hiring done during the third quarter, you mentioned disruption opportunities, just give some more color there.
Palmer Proctor -- President, Chief Executive Officer & Director
Well, you know for us fortunately, just given our position in the market. The disruption, we're able to take advantage of with our existing teammates without having to really bring in a lot of new folks. But that being said, we are constantly in front of a lot of folks right now. I think, we'll start seeing more movement there as we move into the fourth quarter. We have made a few new hires -- couple then in Florida in particular but that we've got a very active pipeline to answer your question.
Jennifer Demba -- SunTrust -- Analyst
Thanks so much.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Thank you, Jennifer.
Operator
Our next question comes from Tyler Stafford with Stephens.
Tyler Stafford -- Stephens Inc -- Analyst
Hey, good morning, guys.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Good morning, Tyler.
Tyler Stafford -- Stephens Inc -- Analyst
Hey, I wanted to start on the mortgage business and you mentioned a couple of times expecting fourth quarter to return to a more normalized level. So just to be clear. Are you, are you kind of saying, go forward is roughly $5 billion. But with the normal kind of bell curve seasonality in the summer months so then we should see $5 billion roughly annually with fourth quarter kind of dropping off seasonally.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
That's right. That's right. And so the third quarter results were about 43% elevated over. If you look at the historical third quarter Ameris and the third quarter Fidelity, you put those together, we're elevated -- were elevated about 60% and we think about 43% of that is related to the kind of the low rate environment, we saw a little bump in our repurchase. I mean our refinance as we proposed to purchase and so fourth quarter we're expecting to go back down to, if you took the Fidelity fourth quarter run rate of September and the Ameris fourth quarter run rate, historically kind of go back to that plus maybe a 10% to 15% bump just because of the year-over-year growth.
Tyler Stafford -- Stephens Inc -- Analyst
Okay, got it. And then Nicole, do you have what the purchase first refi mix was in the third quarter?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
I do. So we typically both run about 85%. Well actually Fidelity was a little bit higher. Ameris ran about 85% purchase and 15% refi and Fidelity ran about 89% purchase. And this quarter, it dropped to 70% -- about 71%, 72% purchase.
Tyler Stafford -- Stephens Inc -- Analyst
On a combined basis?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
On a combined basis. That's right.
Tyler Stafford -- Stephens Inc -- Analyst
Got it. And is this kind of 2.67% gain on sale margin that you saw in the third quarter? Is that what you'd expect going forward as a normalized level?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
I think it will normalize over time. So that in 2020, it will get closer back to the normal -- a little bit -- higher closer to the Ameris gain on sale number. But I don't think that'll be instantaneous in the fourth quarter.
Tyler Stafford -- Stephens Inc -- Analyst
Okay, got it. And then the mortgage business had I think $1.3 million servicing rent recovery. I guess, how much servicing income did you realize this quarter and then any thoughts on what you plan to do with that servicing portfolio?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
The servicing portfolio at this point, we've looked at several different functions of opportunities to do that. And as of right now, the plan is to retain that and to continue to service that through today and Tyler, I am sorry, I don't have that number right in front of me. I'll have to get with you on that.
Tyler Stafford -- Stephens Inc -- Analyst
That's fine.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
So I may disclose separately.
Tyler Stafford -- Stephens Inc -- Analyst
That's fine. And I guess lastly just on kind of mortgage-related, you mentioned the held for sale balances coming back down. Is there a normalized level of HFS that you plan to keep now with Fidelity in the fold?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Yes, we think that that normalized level is somewhere between 400 and 450 [Phonetic] will be a normalized number combined. And just to kind of -- it's a great, great -- it's not really necessarily your question, but I mean, it's a great time for me to talk about that. One of the things with our mortgage companies coming together going through the integration. One thing that they really focused on was continuing to service the customer, so they didn't slow production. They were able to continue and the piece that did get kind of slowed down with that backroom of packaging and getting them sold. So that's really why that number grew.
But again, we expect that to go down, probably a more normalized number is between 4 and 4.50 [Phonetic].
Tyler Stafford -- Stephens Inc -- Analyst
Perfect. Okay. I will hop out. Thanks.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Thank you, Tyler.
Operator
Our next question comes from David Feaster with Raymond James.
David Feaster -- Raymond James -- Analyst
Hey. Good morning, guys.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Good morning, David.
David Feaster -- Raymond James -- Analyst
So I'd like to just start on the margin. So I guess, looking -- looking at the fourth quarter with the held for sale wind down that you talked about being about 4 basis point help. And then the indirect runoff offset by a September cut. It sounds like you think you can hold your core NIM fairly steady here?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
So well and you think about that September cut that really was even though it was a third quarter event. We don't have the -- really impact of that in the third quarter because it was so late in the third quarter and then if we had another cut. So we're still guiding that we could have a, you know 4 basis points, 4 basis points to 5 basis points of margin compression in the fourth quarter and then there, it could potentially be another cut.
David Feaster -- Raymond James -- Analyst
Okay, OK. That's helpful. And then do you have any expectation -- could you just give us some thoughts on your accretion expectations going forward?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Sure. So the only guidance that we've given in for 2019 because we're being cautious because of CECL impact for next year. So and you'll see that our accretion income went up this quarter by about $1 million, $1.1 million. And so that that's about the normal run rate for the fourth quarter as well.
David Feaster -- Raymond James -- Analyst
Okay and then just following up on the -- the loan origination strength that you're seeing in Atlanta, obviously there is a lot of disruption there as you've mentioned. Could you just talk about, we've talked before about you wanting to get more in that middle market there, which is a huge opportunity, how's that going? What -- what success have you've seen in the middle market in Atlanta?
Palmer Proctor -- President, Chief Executive Officer & Director
Yeah, Tyler. We're starting to see success there. You know, obviously there is a lead time on those relationships and a lot of them, been locked down for years, but we're starting to see some movement there and it -- on the lower-middle market end and that's where we're really focused. And so I think as we move into especially into 2020 that's where we'll start seeing more of that lift but the migration of those relationships certainly is -- there is a lead-time. We're encouraged by the, not just the opportunities, but the execution on that especially in the Atlanta market.
David Feaster -- Raymond James -- Analyst
Okay. And then I guess just high level. Could you just talk about what you're seeing in the markets. Anecdotally, we've heard that pricing competition increase in that underwriting standards are loosening with less recourse and lower levels of leverage. Are you seeing a similar phenomenon and are there any segments or markets where you're seeing that more?
Palmer Proctor -- President, Chief Executive Officer & Director
No. I will tell you, competition is fierce in terms of pricing, but -- but I will tell you that that all the banks that we run into in terms of competition, nobody is compromising on the asset quality itself. Structures are getting a little bit looser in terms of duration and pricing, but there aren't any deals out there that we're seeing other banks do that that just don't make sense, which is encouraging for us as an industry. That being said, there is still a lot of movement out there and in terms of the different sectors. We have certainly pulled back a little bit. I just threw a discipline and a caution on a lot of our commercial construction. But that's more just us positioning ourselves in terms of capital as a percentage of some of these construction loans, not because we're seeing any cracks or inherent cracks in any sectors out there.
I mean, if you look at absorption, especially on the multifamily side and on the single-family side, it's all still very strong. There is actually a lack of inventory in a lot of our metro markets. So we still feel very encouraged by what we're seeing and right now, do not see any or anticipate any cracks in the near future.
David Feaster -- Raymond James -- Analyst
Okay, that's helpful. Thanks, guys.
Operator
Our next question comes from Woody Lay with KBW.
Woody Lay -- KBW -- Analyst
Good morning, guys.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Good morning, Woody.
Woody Lay -- KBW -- Analyst
So it's good to see the interest bearing deposit costs come down. I was just wondering, what impact Fidelity had on that number and sort of what impact was just legacy Ameris cost of deposit?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
That's a great question. So the Fidelity impact was included in that. Their deposit costs were about 25 basis point less than ours. And then also we dropped deposits across the board. So it's a little bit hard to give an exact number, because Fidelity, we dropped their rates with the July cut and the Ameris rate with the July cut as well.
So it was absolutely a blend of both items.
Woody Lay -- KBW -- Analyst
Got it. And I think, last quarter, you said you were assuming a 50% deposit beta in your margin guidance. Is that still holding true?
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Yes.
Woody Lay -- KBW -- Analyst
Okay, that's it for me. Thanks, guys.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Great, thank you.
Operator
[Operator Instructions] Our next question comes from Christopher Marinac with Janney Montgomery Scott.
Christopher Marinac -- Janney Montgomery -- Analyst
Hey, good morning. Palmer or Nicole. I want to drill back down on the competition comment of a few minutes ago. How often do you have price concessions either on deposits or loans? And as you move relationships in the future, is that going to be part of the equation or something that you can avoid?
Palmer Proctor -- President, Chief Executive Officer & Director
Well it's, some we try -- certainly try to avoid. And I would tell you, we have less concessions on the deposit side and more concessions on the loan side. So as a result, because we look at it from a relationship standpoint, Chris. And so we are, we do feel the pressure more on the loan side, than people trying to beat us down on the deposit side. So we look at it holistically.
But that being said, I think the important thing is to make sure we aren't looking at just transactions and looking at the entire relationship which is how the bankers are. We're getting floors in some of our deals, wherever we can, which just [Phonetic] on hard to believe, I didn't think, we'd be saying that again, but we are getting floors and people now borrowers in particular are more sensitive to that and aware of that, but we have been successful in implementing some of the floors, especially if we're being competitive on the REIT.
Christopher Marinac -- Janney Montgomery -- Analyst
Over time, is there a percentage of the portfolio that you think will have floors. I know it's kind of an evolution as you reset.
Palmer Proctor -- President, Chief Executive Officer & Director
Well I would love for a higher percentage to have those floors, but right now, I think where we're able -- we're more successful in obtaining the floors is obviously on the residential construction lending on the commercial side, as we're trying to take business and take more market share and having to be more competitive. That's where we're having less success in terms of the floors. But we're having more success and, where you'll see it is on the liability side. In terms of bringing over that core funding. So if you look at the balance there in terms of the NIM pressure, while we may be given a little bit of a yield up on the loan side, we're hopefully garnering more on the low-cost funding side to offset that.
Christopher Marinac -- Janney Montgomery -- Analyst
Got it. That's helpful. Okay, great. And the last question just has to do with the systems conversion. Once that's behind you, to what extent are there new products and sales that you can implement. Are there things kind of in the wings that you'll see next year?
Palmer Proctor -- President, Chief Executive Officer & Director
Well, the exciting part of that is more looking at the -- the efficiencies. We are a big user of the sales force and in CNO [Phonetic] and fortunately both companies, legacy Fidelity and Ameris utilize that technology and you will see us leveraging more and more of that, not only in specific areas but throughout the bank. Obviously, new online account openings. We're focused on streamlining that process with a lot of what we're going to be focused on is tweaking the current technology we have. It's just making it more efficient, and the process more efficient. If banks today still have way too much bureaucracy in terms of action and the fun thing about being a $17 billion, $18 billion bank is being able to make small tweaks here and there that can be meaningful in the overall scheme of things, whether it's just reduction of paper or just efficiency through less printer use, just a lot of simple technologies there that we're going to, we're zeroing in now and so our Chief Innovation Officer, which is our CIO obviously is -- is sole mission right now.
Christopher Marinac -- Janney Montgomery -- Analyst
Great, thanks again, guys. I appreciate the color.
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Thank you.
Operator
[Operator Closing Remarks]
Duration: 39 minutes
Call participants:
Nicole S. Stokes -- Executive Vice President & Chief Financial Officer
Palmer Proctor -- President, Chief Executive Officer & Director
Casey Whitman -- Sandler O'Neill -- Analyst
Jennifer Demba -- SunTrust -- Analyst
Tyler Stafford -- Stephens Inc -- Analyst
David Feaster -- Raymond James -- Analyst
Woody Lay -- KBW -- Analyst
Christopher Marinac -- Janney Montgomery -- Analyst
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp (NASDAQ: ABCB) Q3 2019 Earnings Call Oct 18, 2019, 9:00 a.m. Operator [Operator Closing Remarks] Duration: 39 minutes Call participants: Nicole S. Stokes -- Executive Vice President & Chief Financial Officer Palmer Proctor -- President, Chief Executive Officer & Director Casey Whitman -- Sandler O'Neill -- Analyst Jennifer Demba -- SunTrust -- Analyst Tyler Stafford -- Stephens Inc -- Analyst David Feaster -- Raymond James -- Analyst Woody Lay -- KBW -- Analyst Christopher Marinac -- Janney Montgomery -- Analyst More ABCB analysis All earnings call transcripts 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. We earned $156.3 million or $2.85 per diluted share on an adjusted basis which is actually up 19% over 2018 results and this represents a year-to-date, return on assets of 1.55%, 7% [Phonetic] improvement from the same period last year. | Operator [Operator Closing Remarks] Duration: 39 minutes Call participants: Nicole S. Stokes -- Executive Vice President & Chief Financial Officer Palmer Proctor -- President, Chief Executive Officer & Director Casey Whitman -- Sandler O'Neill -- Analyst Jennifer Demba -- SunTrust -- Analyst Tyler Stafford -- Stephens Inc -- Analyst David Feaster -- Raymond James -- Analyst Woody Lay -- KBW -- Analyst Christopher Marinac -- Janney Montgomery -- Analyst More ABCB analysis All earnings call transcripts 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Ameris Bancorp (NASDAQ: ABCB) Q3 2019 Earnings Call Oct 18, 2019, 9:00 a.m. ET Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks: Operator Good morning and welcome to the Ameris Bancorp Third Quarter 2019 Financial Results Conference Call. | Operator [Operator Closing Remarks] Duration: 39 minutes Call participants: Nicole S. Stokes -- Executive Vice President & Chief Financial Officer Palmer Proctor -- President, Chief Executive Officer & Director Casey Whitman -- Sandler O'Neill -- Analyst Jennifer Demba -- SunTrust -- Analyst Tyler Stafford -- Stephens Inc -- Analyst David Feaster -- Raymond James -- Analyst Woody Lay -- KBW -- Analyst Christopher Marinac -- Janney Montgomery -- Analyst More ABCB analysis All earnings call transcripts 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Ameris Bancorp (NASDAQ: ABCB) Q3 2019 Earnings Call Oct 18, 2019, 9:00 a.m. Nicole S. Stokes -- Executive Vice President & Chief Financial Officer Sure, so we had anticipated about 20% of those coming into the third quarter, coming out of the third quarter, I should say. | Operator [Operator Closing Remarks] Duration: 39 minutes Call participants: Nicole S. Stokes -- Executive Vice President & Chief Financial Officer Palmer Proctor -- President, Chief Executive Officer & Director Casey Whitman -- Sandler O'Neill -- Analyst Jennifer Demba -- SunTrust -- Analyst Tyler Stafford -- Stephens Inc -- Analyst David Feaster -- Raymond James -- Analyst Woody Lay -- KBW -- Analyst Christopher Marinac -- Janney Montgomery -- Analyst More ABCB analysis All earnings call transcripts 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Ameris Bancorp (NASDAQ: ABCB) Q3 2019 Earnings Call Oct 18, 2019, 9:00 a.m. Tyler Stafford -- Stephens Inc -- Analyst Hey, I wanted to start on the mortgage business and you mentioned a couple of times expecting fourth quarter to return to a more normalized level. |
27860.0 | 2019-09-27 00:00:00 UTC | Friday's ETF Movers: KRE, CQQQ | ABCB | https://www.nasdaq.com/articles/fridays-etf-movers%3A-kre-cqqq-2019-09-27 | nan | nan | In trading on Friday, the SPDR S&P Regional Banking ETF (KRE) is outperforming other ETFs, up about 0.5% on the day. Components of that ETF showing particular strength include shares of Heartland Financial USA (HTLF), up about 1.7% and shares of Ameris Bancorp (ABCB), up about 1.7% on the day.
And underperforming other ETFs today is the Invesco China Technology ETF (CQQQ), off about 2.7% in Friday afternoon trading. Among components of that ETF with the weakest showing on Friday were shares of Momo (MOMO), lower by about 7.2%, and shares of Autohome (ATHM), lower by about 6.5% on the day.
VIDEO: Friday's ETF Movers: KRE, CQQQ
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Components of that ETF showing particular strength include shares of Heartland Financial USA (HTLF), up about 1.7% and shares of Ameris Bancorp (ABCB), up about 1.7% on the day. Among components of that ETF with the weakest showing on Friday were shares of Momo (MOMO), lower by about 7.2%, and shares of Autohome (ATHM), lower by about 6.5% on the day. VIDEO: Friday's ETF Movers: KRE, CQQQ The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Components of that ETF showing particular strength include shares of Heartland Financial USA (HTLF), up about 1.7% and shares of Ameris Bancorp (ABCB), up about 1.7% on the day. And underperforming other ETFs today is the Invesco China Technology ETF (CQQQ), off about 2.7% in Friday afternoon trading. Among components of that ETF with the weakest showing on Friday were shares of Momo (MOMO), lower by about 7.2%, and shares of Autohome (ATHM), lower by about 6.5% on the day. | Components of that ETF showing particular strength include shares of Heartland Financial USA (HTLF), up about 1.7% and shares of Ameris Bancorp (ABCB), up about 1.7% on the day. In trading on Friday, the SPDR S&P Regional Banking ETF (KRE) is outperforming other ETFs, up about 0.5% on the day. And underperforming other ETFs today is the Invesco China Technology ETF (CQQQ), off about 2.7% in Friday afternoon trading. | Components of that ETF showing particular strength include shares of Heartland Financial USA (HTLF), up about 1.7% and shares of Ameris Bancorp (ABCB), up about 1.7% on the day. In trading on Friday, the SPDR S&P Regional Banking ETF (KRE) is outperforming other ETFs, up about 0.5% on the day. And underperforming other ETFs today is the Invesco China Technology ETF (CQQQ), off about 2.7% in Friday afternoon trading. |
27861.0 | 2019-09-11 00:00:00 UTC | Bullish Two Hundred Day Moving Average Cross - ABCB | ABCB | https://www.nasdaq.com/articles/bullish-two-hundred-day-moving-average-cross-abcb-2019-09-11 | nan | nan | In trading on Wednesday, shares of Ameris Bancorp (Symbol: ABCB) crossed above their 200 day moving average of $36.89, changing hands as high as $37.53 per share. Ameris Bancorp shares are currently trading up about 0.9% on the day. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average:
Looking at the chart above, ABCB's low point in its 52 week range is $29.97 per share, with $49.90 as the 52 week high point — that compares with a last trade of $37.14.
Click here to find out which 9 other stocks recently crossed above their 200 day moving average »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Wednesday, shares of Ameris Bancorp (Symbol: ABCB) crossed above their 200 day moving average of $36.89, changing hands as high as $37.53 per share. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average: Looking at the chart above, ABCB's low point in its 52 week range is $29.97 per share, with $49.90 as the 52 week high point — that compares with a last trade of $37.14. Click here to find out which 9 other stocks recently crossed above their 200 day moving average » The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Wednesday, shares of Ameris Bancorp (Symbol: ABCB) crossed above their 200 day moving average of $36.89, changing hands as high as $37.53 per share. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average: Looking at the chart above, ABCB's low point in its 52 week range is $29.97 per share, with $49.90 as the 52 week high point — that compares with a last trade of $37.14. Click here to find out which 9 other stocks recently crossed above their 200 day moving average » The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Wednesday, shares of Ameris Bancorp (Symbol: ABCB) crossed above their 200 day moving average of $36.89, changing hands as high as $37.53 per share. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average: Looking at the chart above, ABCB's low point in its 52 week range is $29.97 per share, with $49.90 as the 52 week high point — that compares with a last trade of $37.14. Click here to find out which 9 other stocks recently crossed above their 200 day moving average » The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Wednesday, shares of Ameris Bancorp (Symbol: ABCB) crossed above their 200 day moving average of $36.89, changing hands as high as $37.53 per share. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average: Looking at the chart above, ABCB's low point in its 52 week range is $29.97 per share, with $49.90 as the 52 week high point — that compares with a last trade of $37.14. Ameris Bancorp shares are currently trading up about 0.9% on the day. |
27862.0 | 2019-08-22 00:00:00 UTC | KBE's Holdings Imply 19% Gain Potential | ABCB | https://www.nasdaq.com/articles/kbes-holdings-imply-19-gain-potential-2019-08-22 | nan | nan | Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the SPDR S&P Bank ETF (Symbol: KBE), we found that the implied analyst target price for the ETF based upon its underlying holdings is $48.53 per unit.
With KBE trading at a recent price near $40.86 per unit, that means that analysts see 18.78% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of KBE's underlying holdings with notable upside to their analyst target prices are Popular Inc. (Symbol: BPOP), Ameris Bancorp (Symbol: ABCB), and Cadence Bancorporation (Symbol: CADE). Although BPOP has traded at a recent price of $52.02/share, the average analyst target is 27.84% higher at $66.50/share. Similarly, ABCB has 27.66% upside from the recent share price of $36.62 if the average analyst target price of $46.75/share is reached, and analysts on average are expecting CADE to reach a target price of $18.86/share, which is 19.80% above the recent price of $15.74. Below is a twelve month price history chart comparing the stock performance of BPOP, ABCB, and CADE:
Below is a summary table of the current analyst target prices discussed above:
Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have a valid justification for their targets, or are they behind the curve on recent company and industry developments? A high price target relative to a stock's trading price can reflect optimism about the future, but can also be a precursor to target price downgrades if the targets were a relic of the past. These are questions that require further investor research.
10 ETFs With Most Upside To Analyst Targets »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Below is a twelve month price history chart comparing the stock performance of BPOP, ABCB, and CADE: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of KBE's underlying holdings with notable upside to their analyst target prices are Popular Inc. (Symbol: BPOP), Ameris Bancorp (Symbol: ABCB), and Cadence Bancorporation (Symbol: CADE). Similarly, ABCB has 27.66% upside from the recent share price of $36.62 if the average analyst target price of $46.75/share is reached, and analysts on average are expecting CADE to reach a target price of $18.86/share, which is 19.80% above the recent price of $15.74. | Three of KBE's underlying holdings with notable upside to their analyst target prices are Popular Inc. (Symbol: BPOP), Ameris Bancorp (Symbol: ABCB), and Cadence Bancorporation (Symbol: CADE). Similarly, ABCB has 27.66% upside from the recent share price of $36.62 if the average analyst target price of $46.75/share is reached, and analysts on average are expecting CADE to reach a target price of $18.86/share, which is 19.80% above the recent price of $15.74. Below is a twelve month price history chart comparing the stock performance of BPOP, ABCB, and CADE: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? | Similarly, ABCB has 27.66% upside from the recent share price of $36.62 if the average analyst target price of $46.75/share is reached, and analysts on average are expecting CADE to reach a target price of $18.86/share, which is 19.80% above the recent price of $15.74. Below is a twelve month price history chart comparing the stock performance of BPOP, ABCB, and CADE: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of KBE's underlying holdings with notable upside to their analyst target prices are Popular Inc. (Symbol: BPOP), Ameris Bancorp (Symbol: ABCB), and Cadence Bancorporation (Symbol: CADE). | Three of KBE's underlying holdings with notable upside to their analyst target prices are Popular Inc. (Symbol: BPOP), Ameris Bancorp (Symbol: ABCB), and Cadence Bancorporation (Symbol: CADE). Similarly, ABCB has 27.66% upside from the recent share price of $36.62 if the average analyst target price of $46.75/share is reached, and analysts on average are expecting CADE to reach a target price of $18.86/share, which is 19.80% above the recent price of $15.74. Below is a twelve month price history chart comparing the stock performance of BPOP, ABCB, and CADE: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? |
27863.0 | 2019-07-26 00:00:00 UTC | Ameris Bancorp (ABCB) Q2 2019 Earnings Call Transcript | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-q2-2019-earnings-call-transcript-2019-07-27 | nan | nan | Image source: The Motley Fool.
Ameris Bancorp (NASDAQ: ABCB)
Q2 2019 Earnings Call
Jul 26, 2019, 10:00 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Good day, and welcome to the Ameris Bancorp's Second Quarter 2019 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded.
I would now like to turn the conference over to Ms. Nicole Stokes, Chief Financial Officer. Please go ahead.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Thank you, Nicole, 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 new CEO; and Jon Edwards, our Chief Credit Officer. Palmer will begin with some opening general comments, and then I will discuss the details of our financial results before we open up for Q&A. 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, its early developments or otherwise, except as required by law. Also during the call, we will discuss certain non-GAAP financial measures in reference to our 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 opening comments.
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Thank you, Nicole, and thank you to everyone who's joined our second quarter 2019earnings calltoday. This is my firstearnings callas CEO of Ameris, and I'm excited to share not only my thoughts on earnings, but also my thoughts on strategy and integration as we go forward. Nicole is going to get into financial details in a minute, and I don't want to steal her thunder, but I do want to hit some of the highlights for the quarter.
We are in $45.2 million or $0.96 per diluted share on an adjusted basis, which is up 30% compared to the second quarter last year. This represents a 1.56% return on average assets and an 18.79% return on tangible equity. Our efficiency ratio improved to under 54% in the second quarter compared over 57% at the same time in 2018. We had strong loan growth in the quarter as well as organic deposit growth, which I know Nicole will elaborate on.
And in summary, we're very pleased with these operating ratios, and I'm proud to be a part of the team that deliver these types of results in the future. In addition to the strong financial results in the second quarter, there's a lot of activity at Ameris. During the quarter, both Ameris and Fidelity received all approvals, both shareholder and regulatory, to complete our merger, and we officially merged on July 1. As you know, on that same day, I became just the fourth CEO in the company's history, but my Ameris story started well before July 1.
For the past six months, I have had the pleasure of working with the management teams on both the Fidelity and the Ameris side as we integrated our plans. And one of the things that made this merger work so well was our similar cultures and our willingness to look at all the processes and to put the egos beside us and decide the best integration option for the combined company, which is exactly what we're doing, and being so involved in those discussions makes it easy for me to say that I remain 100% committed to our original plans as we've stated.
On that note, I did want to speak briefly on our integration process with the legal close behind us, we have definitely turned our attention to system conversions and data integration. Our primary focus being mitigating the potential customer impact, I have been very impressed with how our operations teams are working together to be successful on that front, and we're on track for system conversion in the first weekend of November as we had originally planned. And that's a great lead into the inevitable M&A question.
So I may as well touch on that right now. We as a management team are fully focused on the Fidelity integration and also on our organic opportunities we have within our markets due to a lot of the disruption. That being said, we are out for the M&A market for at least 4 to 6 quarters. We have a plan for successful integration and realization of cost saves identified by our combined management teams, and we intend to maintain our focus on that opportunity so that we can deliver consistent, disciplined results for several quarters. There is a tremendous amount of work to be done to be successful, and we don't plan on getting distracted with any M&A opportunities that may be out there.
Now I'll stop there and turn it over to Nicole to discuss some of our financial results in more detail.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Great. Thank you, Palmer. As you mentioned, today, we're reporting adjusted earnings of $45.2 million or $0.96 per share for the second quarter. These adjusted results primarily exclude about $3.5 million of merger charges, $2.8 million of loss on branch buildings and a $1.5 million MSR impairment. Including these items, we're reporting total GAAP earnings of $38.9 million or $0.82 per share. The $0.96 per share operating or adjusted EPS represents a 30% increase over the $0.74 per share we earned in the second quarter last year.
And as we stated previously, we projected that the Atlantic Coast and the Hamilton acquisitions that we completed in second quarter of last year would be 12% accretive to EPS. This is similar to the first quarter. We had better-than-expected results with that 30% increase, especially considering that we had Atlantic Coast for part of the second quarter last year. Our adjusted return on assets in the second quarter was 1.56%, which was an increase from the 1.38% reported second quarter last year and above our goal of 1.50%. Our adjusted return on tangible common equity was 18.79% in the second quarter of this year compared to 17.26% for the same period last year.
And I was really pleased with our increase in tangible book value this quarter. We ended the quarter with tangible book value per share at $20.81. That's an increase of $1.8 per share during this quarter and an increase of $3.69 when compared to the same time last year. That's a 20% increase year-over-year in tangible book value, while absorbing the effect of 2 acquisitions last year and approximately $10 million of stock buyback during the most recent quarter. Our tangible common equity ratio increased 22 basis points to 8.68% and even with the small amount of dilution we expect from Fidelity, we expect that our capital build will continue and that we will still plan on finishing 2019 with growth in tangible book value at somewhere in the mid-double-digit range.
Our GAAP net interest margin declined by 4 basis points during the quarter. We're turning to the 3.91% that we reported in the fourth quarter of last year. Margin excluding accretion decreased the same 4 basis points coming in at 3.79% compared with 3.83% last quarter. During the second quarter, our yield on earning assets remained steady at 4.95%, while our funding costs increased 5 basis points during the quarter. We continue to remain focused on our deposit costs, but we do believe we will seek some margin compression in the short term as we work to integrate Fidelity.
When you look at our margin as we grow the rates up, our margin was stable. We had a few basis point increase here and there and then a decline, but we were consistently stable due to our balance sheet sensitivity being so close to neutral. Our core bank production yields declined to 5.49% for the quarter against 5.78% in the first quarter that increased from the same quarter last year. As we talked about last quarter, we became a little more competitive on pricing this quarter to offset some of the large payoffs we incurred in the first quarter while maintaining our underwriting standards.
On the deposit side, we continued the momentum on noninterest-bearing deposits and we improved our mix such that noninterest-bearing deposits now represent almost 29%. I have to say 28.92%, but I'd like to round that to 29% of our total deposits compared to just 28% at the end of the first quarter and less than 27% this time last year. Noninterest-bearing deposit production was 20% of our total deposit production this quarter. Noninterest income was strong as our lines of business continue to provide exceptional financial results.
During the second quarter, mortgage revenue grew over 26% compared to the first quarter of this year and over 20% from the same period last year. Mortgage production actually hit an all-time high for us, although we saw a small decline in the gain on sale percentage to 3.11% this quarter, down from 3.18% in the first quarter, but significantly better than the 2.94% seen at the same time last year. Our warehouse lending division continues to deliver top results as they increase production by over 39%. The production was at a slightly lower rate, but they still improve their profitability by over 12%.
We believe these mortgage divisions combined with the Fidelity mortgage groups can continue to provide strong financial results for us as they're in full swing of integration to become the mortgage leader in the southeast. Our adjusted efficiency ratio continue to see improvement and was 53.77% in the second quarter of 2019 compared with 57.53% in the second quarter of last year and 55.12% in the first quarter of this year. Total noninterest expense was $81.3 million for the quarter. However, when you remove the margin targets in the loss on sale branches, adjusted noninterest expense was $74.9 million, up slightly about $2.6 million from the first quarter.
The cyclical increase in mortgage salaries and commissions in the second quarter was $3.9 million of that difference and more than explains it. However, the company also did incur approximately $1.1 million of extra consulting fees during the quarter. That related to fee for implementation, call center integration and other consulting services, which we do not anticipate to be recurring in the future. I feel the need to add some color here on the integration of Fidelity and the cost savings that we've identified. We've mentioned the 40% cost savings numerous times and I realize that, that's a big number and can look unreasonable. However, I assure you that we're fully aware of the tax at hand and we have a plan.
We're going into this with an integration state of mind and not a data conversion state of mind. This is a full integration of like-minded cultures with repositioning of the balance sheet and operating processes to maintain our financial goals and efficiencies without affecting customer service. The 40% cost saves can be split into 3 general categories. Approximately 45% of the cost saves will be gained through administrative overlap and efficiencies; approximately 25% of the cost saves are driven from retail overlaps, which includes some branch closings as well as efficiencies in our branches from process changes.
These process changes will not affect customer service or the managed approach away during business. The remaining 30% of the cost saves are result of lines of business integration such as mortgage, indirect auto and SBA lending. There are some things that Fidelity does more efficiently than ours and there are some things that we did more efficiently than them. We are working together to insert that we hit the target on the cost-saving plan, and these savings include not only personnel changes, but also system and technology changes. Moving on to our tax rate. Our effective tax rate increased to just over 23.5% this quarter, but that was really due to the nondeductible acquisition costs, and we continue to expect that our tax rate will be in the 22.5% to 23.5% going forward.
On the balance sheet side, we had exceptional loan growth this quarter as organic loan growth came in at $581 million or just over 28% annualized. The details of this production have been added to the slides in the investor presentation, but it would split among our bank segment and our lines of business. Net growth was divided across the banks with about 30% of it in the core bank and the remaining gross split between Mortgage and warehouse, Premium Finance and our specialty lines or C&I. Credit quality remains strong, although we continue to monitor it very closely. Our annualized net charge-off ratio was 7 basis points of total loans and 11 basis points of non-purchased loans.
Our nonperforming assets as a percent of total assets decreased to 51 basis points compared to 67 basis points at the same time last year. The diversification across loan type and geography as well as how the Fidelity acquisition continues to help its diversification can be seen in the loan slides in our investor presentation. We continue to see strong deposit growth in the second quarter. We had approximately $310 million of brokered CD matured in the last 2 weeks of the quarter that we did not renew. Excluding those maturities, our core deposits increased $91.4 million during the quarter.
Our year-to-date loan growth was $538 million, and our year-to-date deposit growth was $254 million including the outflow of seasonal deposits that will flow back in before year-end at approximately $275 million. So I say all that to show how we continue to fund our growth organically through both loan and deposit growth.
With that, I will turn the call back over to Palmer for closing comments.
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Great. Thank you, Nicole. I have a few general closing comments that I would like to make kind of as the new CEO that I'd like to share with you this morning, and there are couple of attributes that I've always admired about Ameris from afar over the years and first and foremost is the strong established culture that this bank has had.
Second is the -- I am honored to be working with this management team. I mean when I look at the depth and the expertise that we have here, it's incredible and it excites me. And of course, last but not least is their financial acumen. The kinds of results that we're discussing today, they don't come easy, and it's a result of a lot of planning, dedication and training, and it is important to us that everybody in the company understand our financial results and how their decisions impact those results from our bankers to our LION business to our operations and administrative support.
This is the culture and the financial discipline that we intend to fiercely protect. And while there's a lot of change and integration at our company right now, the one thing that will not change is the Ameris drive for success, as we remain dedicated to delivering solid results for our shareholders. I'd like to thank everyone again for listening to our second quarter earnings results, and we look forward to the rest of 2019 and what it holds for us.
And I'll now turn it back over to Nicole for any questions from the group.
Questions and Answers:
Operator
[Operator Instructions] Our first question comes from Tyler Stafford of Stevens. Please go ahead.
Tyler Stafford -- Stevens -- Analyst
Hey, good morning guys.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Good morning, Tyler.
Tyler Stafford -- Stevens -- Analyst
Hey, I wanted to start on slide 23 with the net interest margin expectation in the third quarter with the impact of Fidelity. So low double-digit margin compression with a 25 basis point cut that includes the PAA impact. So that should be clear, so the GAAP margin of 3.91% in the second quarter you expect, call it, 10 to, I guess, 13 basis points, somewhere in that range step down inclusive of the rate cut in the third quarter?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Sure. Tyler, that's a great question. So I'll touch a little bit more on the margin. So our GAAP margin was 3.91% in the second quarter and when you roll in second quarter Fidelity into that, our margin would have been 3.80%. So we have about a 11 basis point compression there. We have some tailwinds coming into the third quarter as well as some headwinds coming into the third quarter. Some of our tailwinds coming in is that we have our direct runoff, the indirect auto runoff that's going to come into some higher-yielding loan mix. We also have the increase in our noninterest-bearing DDA, our non-rate-bearing DDA, sorry, and then also our wholesale funding that I touched on.
We have about $500 million of brokered CD that were at a 2.50% rate. $310 million of that decline paid off in the end of the second quarter and the remaining $190 million all matured already this year -- this quarter so far in July. So that's about $500 million that we've put into a short-term FHLB, advanced with about a 20 to 25 basis point compression and that will reprice almost immediately when -- if the Fed cut. So we've got some good tailwind coming in there. We also have when you think about the indirect auto there at 3.50% margin, you think about basically 1/3 of that portfolio is being funded by this 2.30% -- say, 2.30% FHLB event.
That's only about 100 and 120 basis point spread on that piece. So if we do not redeploy that into higher-yielding assets, we can pay off those short-term FHLB advances and pick up a little bit on our spread and our margin there as well. So kind of 2 options, both are tailwinds. We do have some pullback or some headwinds. We do have in that, like you said, a 25 basis point Fed cut included. So we do have the headwinds and the tailwinds. And then on the accretion side, so that was kind of a GAAP margin that you're exactly right that would come into low double-digit in that 10 to 11 range.
And then on the kind of core margin excluding accretion, we do have some additional accretion coming in with Fidelity. It has slowed a little bit. We're still -- obviously, we're only 25 days into the acquisition, and we're still finalizing all of our day 1 purchase accounting with our third-party consultant that helps us on our fair value, but I will say that the indirect auto portfolio, when we first modeled this, we had a larger discount and there is good and bad to that. The bad being is that, that will decrease our accretion going forward. The good being we don't have that mark upfront, and it saved some tangible book value, day 1. We kind of -- we get that back day 1 as opposed to over the course of those -- that portfolio. That was probably a long-winded answer to your margin question.
Tyler Stafford -- Stevens -- Analyst
Yes, that was great. I just want to clarify a couple of things. So what would be the roughly ballpark kind of scheduled accretion that you expect to see in the third quarter?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
So we have it penciled right now between -- we were about $3.1 million in the second quarter, and we have that penciled next quarter to be between $4 million -- roughly $4 million to $4.5 million.
Tyler Stafford -- Stevens -- Analyst
Okay. So similar, I guess, 12 basis point accretion impact to the overall GAAP margin somewhere to the second quarter. So then the core -- I just want to make sure I'm understanding this right, so the core margin would step down in tandem with the GAAP margin step down about 10 to 11 basis points.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Yes. I think the GAAP -- the core margin excluding accretion might be 1 or 2 basis point better than the GAAP margin, that decline. So I said in the slides low double-digit excluding purchase accounting, so that would be on the very low end of double-digit and then GAAP margin to be a little bit 11 to 13.
Tyler Stafford -- Stevens -- Analyst
Got it. Okay. And then just, Nicole, how should we think about future rate cuts and the impact of the margin that does not have...
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Sure. Yes. So future rate cuts, we use just about a 50% deposit data for those rate cuts. It's about 6 to 7 basis points for every rate cut. But again, I do want to caution that, that would be, if the balance sheet was static going forward when I look at fourth quarter into first quarter. Again, we have the indirect auto running off, we have some deposit growth, we always have deposits that come in -- the cyclical deposits that come in, in the fourth quarter. So I don't -- I would guide less than 6 basis point with second rate cuts.
Tyler Stafford -- Stevens -- Analyst
Okay. It's very helpful. And then just going back to, I guess, one of the earlier slides. slide four, just the headline of the slide of confidence in 2020 financial expectation. I just want to, I guess, get kind of the frame of reference for that tax. Is that pointing to, I guess, consensus 2020 estimates that you guys have confidence in that number right now because around $450 million, is that what you are alluding to? Or is it just more underlying fundamentals of the combined franchises?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
It is both. But yes, that is showing that we still believe that we are able to obtain that.
Tyler Stafford -- Stevens -- Analyst
Okay. Very helpful. Palmer, welcome aboard. And we'll talk to you guys soon.
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Thanks, Tyler.
Operator
Our next question comes from Casey Whitman of Sandler O'Neill. Please go ahead.
Casey Whitman -- Sandler O'Neill -- Analyst
Good morning.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Good morning, Casey.
Casey Whitman -- Sandler O'Neill -- Analyst
Nice quarter. Nicole, last quarter, you gave an expense guidance 2020. I think it was around $420 million to $430 million. Has that moved up a bit just with new hires? Are you still comfortable in that range? And then another question on expenses would just be, sort of, what's your outlook for the efficiency ratio with the cost takes fully in there?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Sure. So Casey, the $420 million to $430 million that is still our guidance going forward. We did have bake in already about 10 -- I'd say, 10 bankers. Some of that is attrition and some of that is new bankers, but some of that attrition we might reallocate those resources from other markets into a more metropolitan, might be a little bit more extensive market, but all of that was built into that $420 million, $430 million, so we still support that. Again, I think your question was efficiency ratio going forward.
And we got it in the slide that we are -- we foresee, obviously, third and fourth quarter, we still have that overhang, especially third quarter. With the Fidelity acquisition, we still have 2 loan operations, 2 accounting departments, 2 with a lot of functions. And then the data conversion is set for November 1. So keeping our efficiency ratio under 60% for this year and the next year 2020, 52% to 54% efficiency ratio fully baked in cost base.
Casey Whitman -- Sandler O'Neill -- Analyst
Got it. And then the 10 bankers or so you just referenced, is that on top of the -- I think you guys last quarter were talking about hiring maybe 20 or so or is that included in that?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
That's the same. That's kind of a net 10.
Casey Whitman -- Sandler O'Neill -- Analyst
Okay, understood.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
So talking to maybe 20, but we know we have some of that are retiring. We'll have some natural attrition and so that would be a net 10.
Casey Whitman -- Sandler O'Neill -- Analyst
Okay. Got it. And then just a question about the growth here. Can you remind us just how much you're expecting from the auto runoff from LION? And then what you sort of expect going forward the split to be in growth between the bank segment versus the various lines of businesses?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Absolutely. So the indirect runoff is about -- expected this year about $300 million for the rest of this year and then about $700 million for next year. That portfolio was around $1.3 billion, $1.4 billion at the end of June or beginning of July. And so we still -- so that will take it down about $1 billion by the end of 2020, so about 2/3 of it will be gone by 2020. And then as far as segment growth for the future, when you take the Fidelity, our mortgage area has grown about 17%, warehouse is about another 5% to 6%, so that's about 20% to 22% mortgage and warehouse lines combined.
When you put Fidelity in that, that bumps up to about 25% to 27%. We really are comfortable with that staying more in the 20% to 22%. So we do expect the bank to have additional -- to grow the bank further. We also add in -- the Fidelity has a wealth department, so that will pick up about 1% of our earnings. Premium Finance is about 5%. SBA is about 5%. And then, again, mortgage in the bank is remaining. About 70% to 75% bank and then 20% to 25%. Mortgage is about 20% and warehouse is about 5%.
Casey Whitman -- Sandler O'Neill -- Analyst
All right. Great. Helpful. And then -- and the last question for me, I'll let someone else to hop on. You guys repurchased some shares this quarter. Just maybe can you talk about how aggressive you plan to be in using that actually in the future?
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Yes, Casey, I'll answer. This is Palmer. As we said last time, I wouldn't be surprised we did or didn't show up with additional purchases, we got the authorization out there and clearly executed on some of that this past quarter. At the same time, we're aware of capital preservation as well, so we've got that as a trigger to pull if we feel it's appropriate. But right now don't anticipate any buybacks at the moment.
Casey Whitman -- Sandler O'Neill -- Analyst
Thanks for taking my questions.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Thank you, Casey.
Operator
Our next question comes from Brady Gailey of KBW. Please go ahead.
Brady Gailey -- KBW -- Analyst
Hey, good morning guys.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Good morning, Brady.
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Good morning.
Brady Gailey -- KBW -- Analyst
So I just wanted to ask about the loan growth in the quarter. We saw flat loan balances for the last couple of quarters and then almost 30% growth this quarter, which was great to see. Maybe just talk about the dynamics as far as what boosted loan growth so much this quarter? I think I heard you talk about how maybe you are a little more competitive on the pricing side. What drove the outsized loan growth in 2Q versus kind of flat before that?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Sure. That's a great question, Brady, and I want to make sure everybody understands that, that 28% annualized loan growth that we had in the second quarter is not expected for the rest of the year, and we did add some color in our slides as well because I think that the great concern is that people might have is that sounds like a really aggressive loan growth and it really came from several segments. So we have the bank.
We had quite a bit of production in the first quarter that did not find until the second quarter. If you remember when we talked about first quarter, we had all those large pay-offs that came in right at the end of the quarter and we had a great quarter of production, but some of that doesn't fund. We fund about 68% of our production, and so we are working toward figuring out products that have a little bit higher production rate or funding rate from production. So a lot of that was just production from the first quarter. We also had an outstanding month of -- quarter of production at the bank level.
So that was about 30% of the production. Warehouse loans was about $165 million of the production, and that's really what warehouse and mortgage together just a really strong, which is very cyclical. Second and third quarter is always strongest for those. So we have that coming in. And then we also had C&I picked up and Premium Finance has picked up. We've kind of got some of the -- we have a new sales manager. We have a new President. That's really picked back up where we kind of had some -- a little bit of runoff in that division prior, and they've really picked back up. So again, it's diversified. It's not all in one place. It's not -- I think Jon did a great job of adding some details in the slides about that production, loan size, credit quality of those loans and that it's really diversified, it's not one big bucket anywhere.
Brady Gailey -- KBW -- Analyst
All right. That's helpful. And then I heard in your prepared remarks your ROA target had been 1.50%. You're operating over that now and that's going to go up as you integrate LION. You're comfortable with 2020 numbers, which -- and if you look at that $450 million in 2020, I think that is roughly like a 1.75%, maybe even a little bit better ROA. So is that the right way to think about kind of the ROA going forward somewhere in that 1.75% range plus or minus a little bit?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
No. Brady, it pains me to say this, that, that's how the math works out. And it's almost goes back to that same thing that it's hard for me to commit to an ROA that high just like it's hard for me to commit to an efficiency ratio below 50%. 1.30% ROA is good. A 1.50% ROA makes our people uncomfortable. A 1.60% is difficult. A 1.70% is painful. And -- so I think there is a happy medium somewhere between 1.50% and 1.65%. I don't know that we would be at a 1.75%. Though there will be something that will come up. There will be some resource, some area, some new compliances. There will be something that we need to dedicate resources.
Brady Gailey -- KBW -- Analyst
Okay, great. Thanks for the color.
Operator
Our next question comes from Jennifer Demba of SunTrust. Please go ahead.
Jennifer Demba -- SunTrust. -- Analyst
Thank you. Good morning.
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Good morning, Jennifer.
Jennifer Demba -- SunTrust. -- Analyst
Looking at your slide deck, on one of your slides, it says -- did you purchase some loans during the second quarter as well?
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Yes, we did, Jennifer, about $130 million worth.
Jennifer Demba -- SunTrust. -- Analyst
Okay. Can you give us some details on these loans just some color and your likelihood to purchase in the future?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Part of this as well and I'm going to let Jon deliver some of this credit, but I did want to mention some of this was an opportunity that we had in knowing that that's going to be about the runoff of indirect in this next that we've got some of that. So some of this loan purchase was a little bit of starting of the balance sheet repositioning from the indirect into a higher-yielding asset. And then Jon, I didn't mean to interrupt you, if you want to?
Jon S. Edwards -- Executive Vice President and Director
No, it's quite all right. And this purchase had been in the works for a while, Jennifer, so it just materialized in the second quarter. It doesn't mean necessarily that we're out looking for portfolios to purchase every quarter. It just happened to be one that we'd been working on for a little while. On page -- on slide 20 though, Jennifer, at the bottom right-hand corner, I'll try to give a little color about what those loans were. Average loan size is less than $100,000. The rates are good. We didn't buy any past dues or problem loans with those. And it fit into a risk profile that we'd -- it looks a lot like loans that we make today organically. So we were OK with the purchase.
Jennifer Demba -- SunTrust. -- Analyst
Okay. And was -- were those from a former Georgia Bank?
Jon S. Edwards -- Executive Vice President and Director
Yes.
Jennifer Demba -- SunTrust. -- Analyst
Okay, OK. Thank you so much.
Operator
Our next question comes from David Feaster of Raymond James. Please go ahead.
David Feaster -- Raymond James -- Analyst
Hey, good morning guys.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Good morning, David.
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Hello, David.
David Feaster -- Raymond James -- Analyst
I just wanted to clarify the loan growth guidance. Is that mid-single-digit growth guidance annualized? And it's on total loans pro forma for Fidelity ex warehouse?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
No, it's not ex warehouse. It's ex the -- well, loans held for sale. Is that what you mean by warehouse?
David Feaster -- Raymond James -- Analyst
Yes. Yes.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Yes. Yes. So -- yes, that's correct.
David Feaster -- Raymond James -- Analyst
Okay. So it's mid-single digits annually. Got it. Okay. And then -- I'd like to -- your noninterest-bearing deposit growth has been really impressive. Could you just talk about your deposit growth strategy? What's driving the noninterest-bearing growth? And I guess as a follow-on, given the brokered CD pay down and everything, do you think deposit costs have peaked here? And I guess just where you -- where do you think about -- where do you think deposits -- how do you think about deposit growth going forward? And where you're comfortable with that loan-to-deposit ratio?
H. Palmer Proctor Jr. -- President & Chief Executive Officer
David, I'll take that one. This is Palmer. The -- we're encouraged by -- and part of the reason we're encouraged by is when you look at a lot of the growth that we are experiencing, a lot of it's coming in on the commercial side, which historically and traditionally for both our banks has brought in good core funding in terms of relationship deposits. And at the same time, we've been successfully running off a lot of our higher cost deposits. I do think with the anticipated debt cuts that we'll be able to make some adjustments there on our cost side. I do think deposit costs for us will continue to improve, as we move forward through the remainder of this year. And in terms of the loan deposit ratio, it did increase this quarter, but we're very comfortable with where we are.
David Feaster -- Raymond James -- Analyst
Okay. Terrific. And then, I guess, just on asset quality, is there anything in your footprint that you're seeing that you're kind of slowing down. You've talked in the past about seeing some stretching on terms and underwriting standards. Is that abate at all in the quarter? Or again just kind of your general pulse in the market?
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Well, I think you have to look at each market individually, but the 2 primary markets for us been Atlanta and, obviously, Jacksonville and parts of Florida. We are seeing a lot of competition out there in terms of structure, but in terms of underwriting and asset quality, we aren't seeing many people compromise on that front. You are seeing extended terms and obviously, aggressive pricing, but fortunately for most of our competitors out there, we're not seeing people making loans that they shouldn't be making. It's just the structure of those is far more competitive in today's market.
David Feaster -- Raymond James -- Analyst
Okay, thank you.
Operator
[Operator Instructions] Our next question comes from Christopher Marinac of Janney Montgomery Scott. Please go ahead.
Christopher Marinac -- Janney Montgomery Scott -- Analyst
Hey, thanks. Good morning. Nicole, you had mentioned in the ROA comment a few callers ago just about the idea of resources. And I was curious if that is more systems-based than it is branches or would it be kind of all the above?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
No. We don't see any really growth in our branch network. There may be some analysis as far as if we have one branch in a area then another branch possibility in a better area that we might have a mover branch potentially. I mean that would be the closest that we would come to any new branches. And so it really would be on the kind of resource side, the administrative, compliance, technology, any kind of resources that we need to allocate there to become more efficient.
Christopher Marinac -- Janney Montgomery Scott -- Analyst
Okay. Great. And then Palmer, as you think about capital allocation in the future way beyond the next couple of next quarters, to what extent, the dividends play a role of decisions you may make, I'm just sort of wondering -- if you could elaborate more on buybacks just well beyond the conversion time?
H. Palmer Proctor Jr. -- President & Chief Executive Officer
I mean, to address the buyback upfront, that right now is certainly, as I mentioned, we've got the availability to do so, but -- and that's a trigger we can always pull, but I don't anticipate any buybacks in the near future right now. And in terms of our capital allocation moving forward, I think what you'll see is, look at the balance sheet and that's one of the most intriguing things about this opportunity here with a combined companies is the diversification in the balance sheet. But -- where we'll start a channel and a lot of that capital is allocated toward the commercial front. That's where you'll see the probably the strongest allocation on a go-forward basis.
Christopher Marinac -- Janney Montgomery Scott -- Analyst
And as that happens, that could be sort of margin-friendly for you as you sort of rightsize various parts of the loan and owning asset mix. Is that kind of a fair impression?
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Yes, from both sides of the balance sheet, right? Because unlike our indirect portfolio, which generated very little in the way of core funding, the commercial side certainly contributes to that and improve -- helps improve the NIM.
Christopher Marinac -- Janney Montgomery Scott -- Analyst
Great. Thank you both. Appreciate it.
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Thank you.
Operator
[Operator Instructions] [Operator Closing Remarks]
Duration: 38 minutes
Call participants:
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
H. Palmer Proctor Jr. -- President & Chief Executive Officer
Jon S. Edwards -- Executive Vice President and Director
Tyler Stafford -- Stevens -- Analyst
Casey Whitman -- Sandler O'Neill -- Analyst
Brady Gailey -- KBW -- Analyst
Jennifer Demba -- SunTrust. -- Analyst
David Feaster -- Raymond James -- Analyst
Christopher Marinac -- Janney Montgomery Scott -- Analyst
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp (NASDAQ: ABCB) Q2 2019 Earnings Call Jul 26, 2019, 10:00 a.m. -- Analyst David Feaster -- Raymond James -- Analyst Christopher Marinac -- Janney Montgomery Scott -- Analyst More ABCB analysis All earnings call transcripts 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. And one of the things that made this merger work so well was our similar cultures and our willingness to look at all the processes and to put the egos beside us and decide the best integration option for the combined company, which is exactly what we're doing, and being so involved in those discussions makes it easy for me to say that I remain 100% committed to our original plans as we've stated. | -- Analyst David Feaster -- Raymond James -- Analyst Christopher Marinac -- Janney Montgomery Scott -- Analyst More ABCB analysis All earnings call transcripts 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Ameris Bancorp (NASDAQ: ABCB) Q2 2019 Earnings Call Jul 26, 2019, 10:00 a.m. ET Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks: Operator Good day, and welcome to the Ameris Bancorp's Second Quarter 2019 Financial Results Conference Call. | Ameris Bancorp (NASDAQ: ABCB) Q2 2019 Earnings Call Jul 26, 2019, 10:00 a.m. -- Analyst David Feaster -- Raymond James -- Analyst Christopher Marinac -- Janney Montgomery Scott -- Analyst More ABCB analysis All earnings call transcripts 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Our adjusted efficiency ratio continue to see improvement and was 53.77% in the second quarter of 2019 compared with 57.53% in the second quarter of last year and 55.12% in the first quarter of this year. | Ameris Bancorp (NASDAQ: ABCB) Q2 2019 Earnings Call Jul 26, 2019, 10:00 a.m. -- Analyst David Feaster -- Raymond James -- Analyst Christopher Marinac -- Janney Montgomery Scott -- Analyst More ABCB analysis All earnings call transcripts 10 stocks we like better than Ameris Bancorp When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Our core bank production yields declined to 5.49% for the quarter against 5.78% in the first quarter that increased from the same quarter last year. |
27864.0 | 2019-07-12 00:00:00 UTC | 2 Bank Stocks We're Watching Now | ABCB | https://www.nasdaq.com/articles/2-bank-stocks-were-watching-now-2019-07-12 | nan | nan | Each week on Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss a stock on their radar. This week, Frankel has his eye on Deutsche Bank (NYSE: DB), while Moser is watching Ameris Bancorp (NASDAQ: ABCB). Here's what investors should know about the recent developments within these two banks.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. A full transcript follows the video.
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This video was recorded on July 8, 2019.
Jason Moser: Okay, Matt, let's wrap up this week here. We've got One to Watch time. What is your one to watch for this coming week?
Matt Frankel: I'm looking at Deutsche Bank, ticker DB. They announced a giant restructuring plan. They're cutting 18,000 jobs over the next few years. If you're curious, that is a big number, but they have 92,000 right now, so they're not cutting 80% of their workforce. They're closing their global equities sales desk and their trading desk. They're creating a so-called bad bank, kind of like Citigroup did at the end of the financial crisis with Citi Holdings. The goal, obviously, is to improve profitability and stability. They say that this plan will cut costs by a quarter. Market's not thrilled with it, the stock was down by 6% this morning when I checked. I'm not saying it's a buy, but it's definitely one to keep an eye on as this progresses. If you are a long-term investor and want to take a risk and think that this is going to be a great institution 10 years from now, it could be worth a look.
Moser: Yeah. Anytime you see companies right-sizing their cost structure, there are lives are impacted by that, but from a business perspective, from the investor's perspective, it's usually a good thing. Always something to keep in mind there.
I'm going to go with Ameris Bancorp, a company that obviously we've talked about a lot before here. They just closed the Fidelity deal. We were talking about the big acquisition of Fidelity Bank in Atlanta. That's good. They finally got that knocked out. A bit of a surprise recently in CEO Dennis Zember -- you may remember that we interviewed Dennis back in February on this show -- Dennis Zember has stepped down according to the company base. There were some personal and some family issues, and he felt he needed to step away. It sounds like Palmer Proctor, who is with Fidelity, he served as the president of Fidelity, will be taking over as the CEO of the newly combined bank there, which will continue to be known as Ameris Bancorp. So, we'll have a new CEO to get to know. This wasn't quite a merger of equals, Ameris was the bigger of the two, but I do like the exposure. It gets to some very lucrative lending markets. Banks need to get bigger in order for investors to benefit from that, and it does seem like Ameris is doing the right stuff here to get bigger. Who knows? We'll reach out to Ameris and see if we can't maybe speak with Palmer Proctor one day. That'd be a nice interview to get on the show here. But again, I think it's good they've got that acquisition all wrapped up there, and now it's onward and upward, hopefully. We'll be keeping an eye on it.
Jason Moser owns shares of Ameris Bancorp. Matthew Frankel, CFP has no position in any of the stocks mentioned. The Motley Fool recommends Ameris Bancorp. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | This week, Frankel has his eye on Deutsche Bank (NYSE: DB), while Moser is watching Ameris Bancorp (NASDAQ: ABCB). Each week on Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss a stock on their radar. They're creating a so-called bad bank, kind of like Citigroup did at the end of the financial crisis with Citi Holdings. | This week, Frankel has his eye on Deutsche Bank (NYSE: DB), while Moser is watching Ameris Bancorp (NASDAQ: ABCB). Each week on Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss a stock on their radar. A bit of a surprise recently in CEO Dennis Zember -- you may remember that we interviewed Dennis back in February on this show -- Dennis Zember has stepped down according to the company base. | This week, Frankel has his eye on Deutsche Bank (NYSE: DB), while Moser is watching Ameris Bancorp (NASDAQ: ABCB). A bit of a surprise recently in CEO Dennis Zember -- you may remember that we interviewed Dennis back in February on this show -- Dennis Zember has stepped down according to the company base. It sounds like Palmer Proctor, who is with Fidelity, he served as the president of Fidelity, will be taking over as the CEO of the newly combined bank there, which will continue to be known as Ameris Bancorp. | This week, Frankel has his eye on Deutsche Bank (NYSE: DB), while Moser is watching Ameris Bancorp (NASDAQ: ABCB). They say that this plan will cut costs by a quarter. It sounds like Palmer Proctor, who is with Fidelity, he served as the president of Fidelity, will be taking over as the CEO of the newly combined bank there, which will continue to be known as Ameris Bancorp. |
27865.0 | 2019-07-10 00:00:00 UTC | Job Growth and Bank Earnings: What Investors Need to Know | ABCB | https://www.nasdaq.com/articles/job-growth-and-bank-earnings%3A-what-investors-need-to-know-2019-07-10 | nan | nan | The June jobs report showed that our economy is creating far more jobs than expected, and this could make the Federal Reserve hesitant to cut interest rates. In this episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss the jobs report, the upcoming wave of bank earnings, and how these stories tie together. Plus, they address the downsides to the "War on Cash" and share what stocks they're watching now.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. A full transcript follows the video.
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This video was recorded on July 8, 2019.
Jason Moser: Welcome to Industry Focus, the podcast that dives into a different sector of the stock market each day. It's Monday, July 8th. I'm your host, Jason Moser. On today's Financials show, we're going to dig into the recent jobs report. Earnings season is getting ready to start, so we're going to talk about what that means for banks. We've also got another interesting listener question to deliberate this week. And as always, we've got ones to watch for you.
As mostly usual, I guess, we've had a little bit of a stretch here, Matt, where we've been missing each other. But joining me in the studio today is Certified Financial Planner Matt Frankel. Matt, how's everything going?
Matt Frankel: Pretty good. Yeah, I haven't talked to you in forever, I feel like.
Moser: It does feel like it's been a while.
Frankel: I had Dylan in the studio, then we had a week off, then you did one with Dan instead.
Moser: There's been this void in my life. I was wondering what it was. Now I'm feeling a little happier. Obviously, I was missing you, Matt.
Frankel: To be fair, Dan's probably as fun as me when it comes to hosting a podcast.
Moser: [laughs] Well, I think we've got a very good team. It's nice that there's no real single point of failure. That ultimately is the goal here. Okay, Matt, let's kick it because we've got a lot to talk about this week. Last week, we got the jobs report in. The headline there, I think, was ultimately a good one. Nonfarm payrolls rose 224,000 in the month of June, beating the market's expectations of 165,000. Now, we know that really, the story when it comes to the jobs report is all about the adjusted numbers. A few months from now, they'll look back, they'll make some adjustments, and that'll paint a little bit more of a picture of what really is going on. But generally speaking, it feels like it was a pretty good report there. What did you take away from this? Worth noting, too, that the unemployment rate actually ticked up slightly. That's just more of a math problem than anything else. But overall, what was your take on the report?
Frankel: Obviously, it was a big upside surprise. But the point is that there's so much talk of, "A recession's coming, a recession's coming, the economy is going to slow down, etc." But it hasn't really been reflected in the data. A lot of people were expecting it to be reflected in this June jobs number, and it just wasn't. The market's really expecting the Fed to start cutting rates and to start doing it soon, as in this month's meeting. In fact, there is a pretty decent chance of a double rate cut, according to the market. They're expecting either at 25- or 50-basis-point rate cut before this jobs report. With great jobs numbers, it's really tough to justify cutting rates.
It's really interesting to mention, however, that currently, there's a 0% percent chance that the Fed won't cut rates priced into the market. I wouldn't be as surprised if they didn't as the market seems they would be.
But the biggest change is that the expectation for a double rate cut, a 50-basis-point rate cut, has really gone down. It's gone down from 20% to a 7% chance based on the futures markets over the past week in a direct response to this jobs report. So expectations are definitely tapering as far as what the Fed's going to do. But I don't know if they've tapered enough, to be honest with you.
Moser: To your point about the recession, we sit there and we talk about it, it feels like we've been talking about this market that's been overvalued for the better part of...I don't know, seven years, maybe, now, it feels like we've been having that conversation? And we haven't seen any type of a material pullback. Certainly, that recession hasn't occurred yet. I have a feeling that we're going to keep on talking about it, and then one day, it's going to happen, and we're going to be like, "See! I told you so! We were just waiting for it!" I mean, a recession is a matter of when, not if. But it really does seem like, today, at least, the politicians in D.C. are trying to figure out a way to not ever have a recession at all.
I guess I get that, but by the same token, we know how the market's ebbs and flows work. It's a cycle. You do look at some of these companies out here today -- these companies are doing great things, but a lot of these valuations still don't make a lot of sense. They're really baking in a tremendous amount of success with businesses that haven't shown or proven any long-term sustained success. They just haven't been around that long. So, I'm feeling like, I really would love to see the Fed butt out of this for a minute and let things go, let the chips fall where they may. We're at a point where I don't know that unemployment can get much better, right? And even still in today's job market, you still have people who are feeling like they're being somewhat left behind when it comes to wages.
Frankel: Right. I can understand, like you said, why all the politicians in Washington don't seem to want a recession ever. No one gets reelected while a recession is going on.
Moser: No they do not.
Frankel: It's very tough to do. So, that's definitely easy to understand. I can get the case for a rate cut. The Fed's there to maximize employment and control inflation. We have no inflation. So, from that part of the dual mandate, it's really tough to make the case that a rate cut is not a good idea. The Fed wants 2% inflation. They're not getting that. So, a rate cut could theoretically help boost that a little bit.
But we are at pretty much full employment. Like you said, some stock valuations are just astronomical right now. There's some that I won't touch just on valuation alone. Not banks. Banks are actually pretty nicely valued right now.
But the other thing is, I'd love to see the Fed not cut rates, I'd like to see them save some ammunition for when there's actually a recession, like when we actually get some real negative data. Right now, they have, what, nine rate cuts they could possibly make to try to combat any slowing economy. I'd like them to save that for when the economy actually appears to be slowing down.
Moser: Well, right. To that point, assuming we hit a point where the you-know-what does hit the fan, if the Fed starts utilizing all of the tools that has in its toolbox today, what if they run out of ammo when they really need it? What are the options that are left there? I don't know that you have a whole heck of a lot left, other than you just start jumping back into that whole quantitative easing cycle, and it doesn't feel like we've fully gotten out of that to begin with.
Frankel: They've been winding down the balance sheet, they could potentially end that and cut rates at the same time, if they want to do a neutral-ish option. But yeah, there's always quantitative easing, but no one wants it to get to that point. That's essentially like lowering rates past zero. Nobody wants it to come to that. I personally would like them to keep a lot of ammunition. And, as a bank investor, keeping rates a little bit higher for longer would be a good catalyst for bank earnings, too. I'd like to see them hold steady. But it doesn't look like the market's expecting that at all. Right now, there's a 93% chance priced in of one cut, a 100% chance of at least one cut, in the July meeting. The market's not expecting them to hold steady.
Moser: Well, I guess we will find out soon enough. But let's jump over to earnings. You brought up bank earnings, and we've got Earningspalooza getting ready to start up again. This is always a fun time for stock nerds like us because it gives us something to do, something to read, something to talk about. It's always interesting to find out what's going on under the hood, so to speak. We look at some of the data that comes out. FactSet Data shows that third-quarter S&P 500 earnings are forecast to actually show a decline now versus a modest gain not all that long ago. We talk on this show a lot about the bank earnings and how banks had been working in somewhat of a challenging environment with these low interest rates. It just hasn't given them a lot of wiggle room in regard to profitability. It doesn't seem like that is going to be getting any easier anytime soon. What's your headline here as we go into earnings season, for the banks in particular?
Frankel: First of all, the banks are not going to be part of that earnings decline that you're talking about. Not the big banks anyway, for the most part. The point to remember with the banks is that they've been buying back stock hand over fist over the past year. If you buy back, say, 10% of your outstanding shares, and your earnings per share jumps up by 10% as a result, you didn't earn any more money. Buybacks are very distortive of bank earnings.
Moser: We call that putting lipstick on a pig, Matt. Is that too harsh?
Frankel: I've heard that expression. Citigroup is the first one to report on Monday. They're expected to report a nice earnings gain. I want to say that the consensus is for about 18% year over year. But the majority of that is going to be due just to buybacks. So, with the banks, the thing to keep in mind is, when it comes to the actual headline number and how it compares with the year before, take that with a big grain of salt.
The thing I would pay most attention to is how interest rate dynamics and any economic headwinds are affecting the bank's profitability. For example, as the Fed has been raising rates over the past couple years, we've seen interest margins expand for the most part at these big banks. That's a great side effect of rising rates. The Fed hasn't cut rates yet, but the market's expecting them to. So, we want to see if that's factoring into anything at all, if they say anything about it during their conference calls.
The other thing is any economic headwinds. Are loan volumes picking up or slowing down? Swelling loan volumes, especially when it comes to credit cards and things like that, can be a really good indicator that consumer confidence is starting to tick downward a little bit. It's always important to read between the lines when it comes to earnings, but with banks, because of the massive buybacks, it's really important this time to read between the lines and see how the major indicators are playing out.
Moser: Yeah. I think we're going to hear a lot of the rhetoric starting to pick up here as we inch closer to 2020. It is obviously a very big election season. It's going to be very, very interesting to see all of these forces at play here. It certainly seems like everybody's on a different page.
Frankel: Definitely. I would definitely keep an eye on what's going on in these banks all next week. We're lucky in the banking sector because we get to see the first glance of how everything's doing this quarter. You have Citigroup kicking things off on Monday. Tuesday, you've got JPMorgan, Wells Fargo, Goldman Sachs. Wednesday, Bank of America and U.S. Bank. Thursday, Morgan Stanley, Capital One, BB&T. Theirs will be interesting because of the merger coming up. And Friday, you have American Express and Regions, just to name the big ones. And that's all next week. We will be glued to our televisions and news feeds next week, I can tell you that much.
Moser: Oh, for sure. Yeah, we'll have a lot to talk about on this show for the coming month. Keep your Slack channel open, because I'm sure we'll be kicking around some ideas.
Okay, let's jump out of the banks here for a second. I want to talk about a listener question. I feel that recently at Fool Fest, we've talked about our big investor conference, I guess the best way to put it here, that we had recently. Fool Fest is a great event we have every year, and somewhere in the neighborhood of 1,000 members descended on our area here this year for us. One of those members, Bob Claude, he and I were speaking one day, talking about our show here. He had a lot of nice things to say about the show. One thing that he was asking us to consider discussing, we talk a lot about the war on cash and this move toward a cashless society, and all of the great things that come from it. Bob's question was, "Hey, you're not talking about the flip side of that necessarily as much as I'd like to hear." And I think there's some valid observations to take away from that. I agree with him. We want to talk a little bit about the drawbacks of going to a cashless society.
Matt, I'll go ahead and let you kick it off here. We do talk all the time about these investments in these companies that are helping spearhead this move toward a cashless society. But there are some side effects there from less cash. I wonder, what's the first thing that comes to your mind there, one of the problems or drawbacks of a cashless society?
Frankel: When I was kicking around this idea before we started recording, there's three big ones I can think of. The first one, from a consumer standpoint, is the vulnerability of your money. Obviously, cash can get stolen out of your wallet. But the flip side of that is all these data breaches, the hacking incidents, banks' electronic portals go down all the time. I had trouble getting into my bank this morning, actually. If that's your only money, if there's no cash and all of your money is electronic, it creates like a big risk, like having all your eggs in one basket. If your bank crashes one day, and all of your money has to do with electronic transactions, that's a problem. So, that's No. 1.
No. 2, also from the consumer perspective, a transition to cash -- we've talked about this on the show before -- disproportionately affects certain groups of the population, particularly lower-income individuals and older individuals who may be reluctant to switch to new technologies or not understand how they work. They call this the underbanked population. It could leave a lot of this group of the population behind and make day-to-day transactions a little more difficult for them.
Third, from a merchant's point of view, paying transaction fees. Right now, let's say you own a small business. Let's say Jason owns a restaurant. I'd go to Moser's Cafe.
Moser: Of course you would. I mean, there is Jason's Deli out there, but listen, that's not mine.
Frankel: It'd be cool if it was.
Moser: I'd probably have a sandwich on that menu named after you, Matt.
Frankel: That'd be awesome. But, let's say he owns Jason's Cafe, not to be confused with Jason's Deli. Let's say half of the customers pay with cards right now and half pay with cash. On average, he's paying about a 3% interchange fee for every card transaction. If 100% of those transactions were now in the form of cards, he's now paying a fee on 100% of his business. That doesn't sound like much, a 3% fee, but when it's replacing all of your cash business, which you're currently paying no fee on, from a merchant, that's a pretty big deal, especially in a low-profit-margin business like a restaurant or a convenience store or something like that. So, there are some downsides for everybody.
Moser: Yeah. To your point there, there are a lot of costs involved with this electronic money system that we're working with today. The thing is, you don't feel or see those costs, necessarily, from the consumer side all that often. But when you put the shoe on the other foot there, as the merchant, you're counting every penny, I would imagine. We've seen small businesses make that attempt to go to no cash accepted, it's cards and electronic payments only. To me, if I'm a small business owner, if I own my own business, I would open myself up to cash and cashless options. I want my customer base to be as big as it possibly can be. You do want to accept everyone. Just, you have to understand that managing a cash drawer, there are downsides that come with that, obviously. You're having to deal with running to the bank every so often, or deal with the threat of someone robbing your shop one day. So, I do see the benefits there of going cashless. But by the same token, it does seem like you're cutting out a valuable customer base.
One thing that Bob and I were talking about, and this comes from the parent's perspective, cash is a great educational tool for kids. I think back to when I was younger, and I think about the lessons that I learned in dealing with money, making money, spending money, managing money. It all centered around cash. I had my own little business where I mowed lawns in the neighborhood every summer. My dad made a deal with me one summer, where if I saved up enough money to pay for half of this new set of golf clubs that I wanted, then he would match the other half and help me get them. So, I went by, I was mowing yards. And listen, these people weren't paying me with Venmo, it was 1978 or 1982 or whatever. I was getting cash. I would take that cash home, and I would give it to my dad. And then when the time came, I had to actually hand him that cash in order to go get those golf clubs. So, there was the feeling of that exchange, there was that transaction. I was giving up something to get something in return. Today, you don't necessarily have that. Kids are clicking a button and getting something immediately. There's not that same sense of loss. That can have an impact, I think. You don't learn, perhaps, the value of a dollar, so to speak, quite as easily as maybe we did before.
As parents, I think piggy banks are wonderful educational tools there, and getting some cash involved with that kid's life so they can understand how money does work. I'm sure every parent out there has dealt with giving their kid five bucks and then finding that $5 sitting on their floor of their room, with all of their dirty clothes. And you're thinking, "Oh my god, does this kid not understand this is actual money here, and if you destroy it, then it's gone?" So, yeah, I think there's an educational purpose there that cash serves. I certainly try to incorporate that into our girls' lives still, but it's just not as easy.
Frankel: Definitely. My three-year-old daughter has a piggy bank in her room and I can't wait for the day in like 10 years when one of her friends comes over and doesn't know what's inside of it.
Moser: [laughs] "Is that candy?" "No, close." Hey, listen, for all of y'all out there, we love to talk about the merits of a cashless society, but I will stand firm, I do believe cash still serves a purpose. I am not rooting for cash to disappear. I just like the convenience and having the options. Good question. Thanks for the topic, Bob. I hope we gave you something to think about there.
Okay, Matt, let's wrap up this week here. We've got One to Watch time. What is your one to watch for this coming week?
Frankel: I'm looking at Deutsche Bank (NYSE: DB), ticker DB. They announced a giant restructuring plan. They're cutting 18,000 jobs over the next few years. If you're curious, that is a big number, but they have 92,000 right now, so they're not cutting 80% of their workforce. They're closing their global equities sales desk and their trading desk. They're creating a so-called bad bank, kind of like Citigroup did at the end of the financial crisis with Citi Holdings. The goal, obviously, is to improve profitability and stability. They say that this plan will cut costs by a quarter. Market's not thrilled with it, the stock was down by 6% this morning when I checked. I'm not saying it's a buy, but it's definitely one to keep an eye on as this progresses. If you are a long-term investor and want to take a risk and think that this is going to be a great institution 10 years from now, it could be worth a look.
Moser: Yeah. Anytime you see companies right-sizing their cost structure, there are lives are impacted by that, but from a business perspective, from the investor's perspective, it's usually a good thing. Always something to keep in mind there.
I'm going to go with Ameris Bancorp (NASDAQ: ABCB), a company that obviously we've talked about a lot before here. They just closed the Fidelity deal. We were talking about the big acquisition of Fidelity Bank in Atlanta. That's good. They finally got that knocked out. A bit of a surprise recently in CEO Dennis Zember -- you may remember that we interviewed Dennis back in February on this show -- Dennis Zember has stepped down according to the company base. There were some personal and some family issues, and he felt he needed to step away. It sounds like Palmer Proctor, who is with Fidelity, he served as the president of Fidelity, will be taking over as the CEO of the newly combined bank there, which will continue to be known as Ameris Bancorp. So, we'll have a new CEO to get to know. This wasn't quite a merger of equals, Ameris was the bigger of the two, but I do like the exposure. It gets to some very lucrative lending markets. Banks need to get bigger in order for investors to benefit from that, and it does seem like Ameris is doing the right stuff here to get bigger. Who knows? We'll reach out to Ameris and see if we can't maybe speak with Palmer Proctor one day. That'd be a nice interview to get on the show here. But again, I think it's good they've got that acquisition all wrapped up there, and now it's onward and upward, hopefully. We'll be keeping an eye on it.
Matt, thanks a lot for joining this week! It was good talking to you again.
Frankel: Always good to be here!
Moser: Okay. As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Today's show was produced by Austin Morgan. For Matt Frankel, I'm Jason Moser, thanks for listening and we'll see you next week.
Jason Moser owns shares of Ameris Bancorp. Matthew Frankel, CFP owns shares of BAC. The Motley Fool recommends Ameris Bancorp. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | I'm going to go with Ameris Bancorp (NASDAQ: ABCB), a company that obviously we've talked about a lot before here. In this episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss the jobs report, the upcoming wave of bank earnings, and how these stories tie together. So, with the banks, the thing to keep in mind is, when it comes to the actual headline number and how it compares with the year before, take that with a big grain of salt. | I'm going to go with Ameris Bancorp (NASDAQ: ABCB), a company that obviously we've talked about a lot before here. In this episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss the jobs report, the upcoming wave of bank earnings, and how these stories tie together. I think back to when I was younger, and I think about the lessons that I learned in dealing with money, making money, spending money, managing money. | I'm going to go with Ameris Bancorp (NASDAQ: ABCB), a company that obviously we've talked about a lot before here. In this episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss the jobs report, the upcoming wave of bank earnings, and how these stories tie together. Moser: To your point about the recession, we sit there and we talk about it, it feels like we've been talking about this market that's been overvalued for the better part of...I don't know, seven years, maybe, now, it feels like we've been having that conversation? | I'm going to go with Ameris Bancorp (NASDAQ: ABCB), a company that obviously we've talked about a lot before here. I wouldn't be as surprised if they didn't as the market seems they would be. The Fed hasn't cut rates yet, but the market's expecting them to. |
27866.0 | 2019-06-27 00:00:00 UTC | Bullish Two Hundred Day Moving Average Cross - ABCB | ABCB | https://www.nasdaq.com/articles/bullish-two-hundred-day-moving-average-cross-abcb-2019-06-27 | nan | nan | In trading on Thursday, shares of Ameris Bancorp (Symbol: ABCB) crossed above their 200 day moving average of $38.85, changing hands as high as $38.95 per share. Ameris Bancorp shares are currently trading up about 1.8% on the day. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average:
Looking at the chart above, ABCB's low point in its 52 week range is $29.97 per share, with $54.55 as the 52 week high point — that compares with a last trade of $38.94.
Click here to find out which 9 other stocks recently crossed above their 200 day moving average »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Thursday, shares of Ameris Bancorp (Symbol: ABCB) crossed above their 200 day moving average of $38.85, changing hands as high as $38.95 per share. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average: Looking at the chart above, ABCB's low point in its 52 week range is $29.97 per share, with $54.55 as the 52 week high point — that compares with a last trade of $38.94. Click here to find out which 9 other stocks recently crossed above their 200 day moving average » The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Thursday, shares of Ameris Bancorp (Symbol: ABCB) crossed above their 200 day moving average of $38.85, changing hands as high as $38.95 per share. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average: Looking at the chart above, ABCB's low point in its 52 week range is $29.97 per share, with $54.55 as the 52 week high point — that compares with a last trade of $38.94. Click here to find out which 9 other stocks recently crossed above their 200 day moving average » The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Thursday, shares of Ameris Bancorp (Symbol: ABCB) crossed above their 200 day moving average of $38.85, changing hands as high as $38.95 per share. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average: Looking at the chart above, ABCB's low point in its 52 week range is $29.97 per share, with $54.55 as the 52 week high point — that compares with a last trade of $38.94. Click here to find out which 9 other stocks recently crossed above their 200 day moving average » The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Thursday, shares of Ameris Bancorp (Symbol: ABCB) crossed above their 200 day moving average of $38.85, changing hands as high as $38.95 per share. The chart below shows the one year performance of ABCB shares, versus its 200 day moving average: Looking at the chart above, ABCB's low point in its 52 week range is $29.97 per share, with $54.55 as the 52 week high point — that compares with a last trade of $38.94. Ameris Bancorp shares are currently trading up about 1.8% on the day. |
27867.0 | 2019-05-21 00:00:00 UTC | Commit To Purchase Ameris Bancorp At $30, Earn 5.3% Annualized Using Options | ABCB | https://www.nasdaq.com/articles/commit-purchase-ameris-bancorp-30-earn-5.3-annualized-using-options-2019-05-21 | nan | nan | Investors considering a purchase of Ameris Bancorp (Symbol: ABCB) shares, but tentative about paying the going market price of $36.43/share, might benefit from considering selling puts among the alternative strategies at their disposal. One interesting put contract in particular, is the January 2020 put at the $30 strike, which has a bid at the time of this writing of $1.05. Collecting that bid as the premium represents a 3.5% return against the $30 commitment, or a 5.3% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Selling a put does not give an investor access to ABCB's upside potential the way owning shares would, because the put seller only ends up owning shares in the scenario where the contract is exercised. And the person on the other side of the contract would only benefit from exercising at the $30 strike if doing so produced a better outcome than selling at the going market price. (Do options carry counterparty risk? This and six other common options myths debunked). So unless Ameris Bancorp sees its shares fall 16.9% and the contract is exercised (resulting in a cost basis of $28.95 per share before broker commissions, subtracting the $1.05 from $30), the only upside to the put seller is from collecting that premium for the 5.3% annualized rate of return.
Worth considering, is that the annualized 5.3% figure actually exceeds the 1.1% annualized dividend paid by Ameris Bancorp by 4.2%, based on the current share price of $36.43. And yet, if an investor was to buy the stock at the going market price in order to collect the dividend, there is greater downside because the stock would have to lose 16.9% to reach the $30 strike price.
Always important when discussing dividends is the fact that, in general, dividend amounts are not always predictable and tend to follow the ups and downs of profitability at each company. In the case of Ameris Bancorp, looking at the dividend history chart for ABCB below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 1.1% annualized dividend yield.
Below is a chart showing the trailing twelve month trading history for Ameris Bancorp, and highlighting in green where the $30 strike is located relative to that history:
The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the January 2020 put at the $30 strike for the 5.3% annualized rate of return represents good reward for the risks. We calculate the trailing twelve month volatility for Ameris Bancorp (considering the last 251 trading day closing values as well as today's price of $36.43) to be 30%. For other put options contract ideas at the various different available expirations, visit the ABCB Stock Options page of StockOptionsChannel.com.
In mid-afternoon trading on Tuesday, the put volume among S&P 500 components was 1.12M contracts, with call volume at 1.36M, for a put:call ratio of 0.82 so far for the day, which is unusually high compared to the long-term median put:call ratio of .65. In other words, there are lots more put buyers out there in options trading so far today than would normally be seen, as compared to call buyers. Find out which 15 call and put options traders are talking about today.
Top YieldBoost Puts of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Investors considering a purchase of Ameris Bancorp (Symbol: ABCB) shares, but tentative about paying the going market price of $36.43/share, might benefit from considering selling puts among the alternative strategies at their disposal. Selling a put does not give an investor access to ABCB's upside potential the way owning shares would, because the put seller only ends up owning shares in the scenario where the contract is exercised. In the case of Ameris Bancorp, looking at the dividend history chart for ABCB below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 1.1% annualized dividend yield. | Selling a put does not give an investor access to ABCB's upside potential the way owning shares would, because the put seller only ends up owning shares in the scenario where the contract is exercised. Investors considering a purchase of Ameris Bancorp (Symbol: ABCB) shares, but tentative about paying the going market price of $36.43/share, might benefit from considering selling puts among the alternative strategies at their disposal. In the case of Ameris Bancorp, looking at the dividend history chart for ABCB below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 1.1% annualized dividend yield. | Investors considering a purchase of Ameris Bancorp (Symbol: ABCB) shares, but tentative about paying the going market price of $36.43/share, might benefit from considering selling puts among the alternative strategies at their disposal. Selling a put does not give an investor access to ABCB's upside potential the way owning shares would, because the put seller only ends up owning shares in the scenario where the contract is exercised. In the case of Ameris Bancorp, looking at the dividend history chart for ABCB below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 1.1% annualized dividend yield. | Investors considering a purchase of Ameris Bancorp (Symbol: ABCB) shares, but tentative about paying the going market price of $36.43/share, might benefit from considering selling puts among the alternative strategies at their disposal. Selling a put does not give an investor access to ABCB's upside potential the way owning shares would, because the put seller only ends up owning shares in the scenario where the contract is exercised. In the case of Ameris Bancorp, looking at the dividend history chart for ABCB below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 1.1% annualized dividend yield. |
27868.0 | 2019-05-06 00:00:00 UTC | Financial Sector Update for 05/06/2019: ABCB,LION,AMG,WFC,BBD | ABCB | https://www.nasdaq.com/articles/financial-sector-update-for-05-06-2019%3A-abcblionamgwfcbbd-2019-05-06 | nan | nan | Top Financial Stocks
JPM -0.63%
BAC -0.49%
WFC -0.06%
C -0.18%
USB +0.10%
Financial stocks have trimmed some of their earlier gains, with the NYSE Financial Index slipping slightly more than 0.5% while shares of financial companies in the S&P 500 were falling nearly 0.4%. The Philadelphia Housing Index was dropping slightly more than 0.2%.
Among financial stocks moving on news:
(-) Ameris Bancorp (ABCB) was narrowly lower this afternoon, erasing most of a 2.5% decline earlier Monday after the bank holding company said its shareholders have voted to approve its prospective merger with Fidelity Southern Corp (LION). Fidelity shareholders Monday also approved the proposed transaction, which is now expected to close later during the current quarter ending June 30, subject to the receipt of additional regulatory approvals and other customary closing conditions.
In other sector news:
(-) Wells Fargo & Co (WFC) was fractionally lower after the bank company Friday disclosed in its Form 10-Q for the three months ended March 31 it may pay up to $3.1 billion to resolve all of its legal matters, up nearly 15% from its year-end estimate expecting around $2.7 billion.
(-) Banco Bradesco (BBD) declined 3% on Monday after announcing a $500 million deal to acquire privately held BAC Florida Bank, expanding its offerings for high net worth clients. The transaction is subject to regulatory approvals in the United States and Brazil.
(-) Affiliated Managers Group (AMG) dropped 11% on Monday. The asset manager said it has promoted company president Jay Horgen to CEO, replacing Nathaniel Dalton, who is becoming a senior advisor to the company in addition to keeping his board seat. It also reported a decline in Q1 revenue compared with year-ago levels but still topped the $541.4 million analyst consensus.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among financial stocks moving on news: (-) Ameris Bancorp (ABCB) was narrowly lower this afternoon, erasing most of a 2.5% decline earlier Monday after the bank holding company said its shareholders have voted to approve its prospective merger with Fidelity Southern Corp (LION). (-) Banco Bradesco (BBD) declined 3% on Monday after announcing a $500 million deal to acquire privately held BAC Florida Bank, expanding its offerings for high net worth clients. It also reported a decline in Q1 revenue compared with year-ago levels but still topped the $541.4 million analyst consensus. | Among financial stocks moving on news: (-) Ameris Bancorp (ABCB) was narrowly lower this afternoon, erasing most of a 2.5% decline earlier Monday after the bank holding company said its shareholders have voted to approve its prospective merger with Fidelity Southern Corp (LION). Top Financial Stocks Fidelity shareholders Monday also approved the proposed transaction, which is now expected to close later during the current quarter ending June 30, subject to the receipt of additional regulatory approvals and other customary closing conditions. | Among financial stocks moving on news: (-) Ameris Bancorp (ABCB) was narrowly lower this afternoon, erasing most of a 2.5% decline earlier Monday after the bank holding company said its shareholders have voted to approve its prospective merger with Fidelity Southern Corp (LION). Financial stocks have trimmed some of their earlier gains, with the NYSE Financial Index slipping slightly more than 0.5% while shares of financial companies in the S&P 500 were falling nearly 0.4%. Fidelity shareholders Monday also approved the proposed transaction, which is now expected to close later during the current quarter ending June 30, subject to the receipt of additional regulatory approvals and other customary closing conditions. | Among financial stocks moving on news: (-) Ameris Bancorp (ABCB) was narrowly lower this afternoon, erasing most of a 2.5% decline earlier Monday after the bank holding company said its shareholders have voted to approve its prospective merger with Fidelity Southern Corp (LION). Top Financial Stocks Fidelity shareholders Monday also approved the proposed transaction, which is now expected to close later during the current quarter ending June 30, subject to the receipt of additional regulatory approvals and other customary closing conditions. |
27869.0 | 2019-04-23 00:00:00 UTC | Ameris Bancorp (ABCB) Q1 2019 Earnings Call Transcript | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-q1-2019-earnings-call-transcript-2019-04-23 | nan | nan | Image source: The Motley Fool.
Ameris Bancorp (NASDAQ: ABCB)
Q1 2019 Earnings Call
April 23, 2019, 10:00 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator --
Good morning, and welcome to the Ameris Bank First Quarter 2019 Financial Results Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note, this event is being recorded.
I would now like to turn the conference over to Nicole Stokes, Chief Financial Officer. Please go ahead.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Thank you, Gavi. 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 Dennis Zember, President and CEO of Ameris Bancorp; and Jon Edwards, our Chief Credit Officer. Dennis will begin with some opening general comments, and I will discuss the details of our financial results, before we open up for Q&A.
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 may 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 statement as a result of new information, early development 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 Dennis Zember for opening comments.
Dennis J. Zember -- President and Chief Executive Officer
Thank you, Nicole, and thank you to everyone who has joined our call today. I want to share a few highlights about the quarter and why I'm excited about the rest of 2019, and I'll give you an update on our merger with Fidelity Bank.
For the quarter, we earned $0.90 per share on an adjusted basis, which is up 23% compared to this time last year. Since the end of the first quarter of last year, we've closed both the Atlantic Coast transaction and the Hamilton State transaction. And in those merger announcements, we said the two deals combined for about a 12% lift in earnings per share.
The economics on those deals call for us to get cost savings, balance sheet restructure and some modest growth in Atlanta and Orlando. We've hit all of those targets that we were looking for and we've delivered on the opportunity from those deals. The other half of the growth in our earnings per share, about 12%, resulted from organic growth, internal cost controls -- internal cost control strategies and growth in non-interest income lines of business.
Growing earnings at a double-digit pace in this rate environment, especially during the integration of those two deals, is a solid achievement by our staff and our bankers, and I'm very proud and thankful to be reporting these earnings.
Our margins, net of accretion, expanded this quarter to about 3.83%, resulting from several quarters of higher loan production yields and a move in overall loan yields. The move in the margin would have been nice to have reported on its own, but we accomplished this by having -- at the same time having more deposit growth than loan growth by a considerable amount, actually, over last year. We've moved our loan-to-deposit ratio back to 86% from 96% at this time in 2018 and done so without impacting our margins or our profitability.
Our other operating ratios were strong this quarter as well, with our adjusted return on assets coming in at 1.51% against 1.44% in the same quarter a year ago. Our efficiency ratio moved to 55.5% in the first quarter of this year against 60% the same time in 2018. And our return on tangible capital came in at almost 19% from 17% in the same quarter a year ago.
From an operating perspective, the first quarter is always, by far, a toughest quarter. And for us to have these ratios to start out the year speaks to the kind of momentum and energy we have for 2019. The softer parts of our quarter centered on two areas: operating expenses and softer than expected loan growth. On the expense side consensus, operating expenses was about $70 million -- were about $70 million. Nicole has a reconciliation of mostly one-time items or cost savings that lags, that's actually more than the difference from our reported results and she'll cover that shortly.
Growth in the quarter was a mixed result. We had outstanding growth in deposits with checking accounts remaining our main focus and our key success. Loan growth was slower than we hoped, both in average balances and those at the end of the quarter. I'm not worried about the flat loans for the quarter, because I know that's not a trend that we'll experience for the rest of the year. This month already, in fact right before Easter weekend, we were up about $110 million in loans from the end of the quarter.
Our production levels and our pipelines are higher by about 50% from this time last year. We have about $800 million of unfunded commitments compared to about $347 million at the same time in 2018, so more than a double there. Given all of that, I'm confident that we're going to have the growth we need, and that we're going to be able to find it very profitably.
Trend-wise, I feel like our markets are very strong and there is plenty of loan demand. I get lots of questions about when we will know that it's the right time to pull back or to slow down on our efforts, and so this quarter I kept a running tally of the 50 largest deals that we had a leading shot at doing, but for whatever reason we didn't (inaudible).
Nicole's presentation shows we did about $613 million of loan production, which is really just in the bank, not the lines of business, with a yield of about 5.78%. The 50 largest deals that we did not do totaled just over $600 million in sales. And while this information is only anecdotal, really at best, I think it's informative. Of that lost production, 52% of the dollars dealt solely with sponsors wanting either complete non-recourse or some level of non-recourse that we just couldn't stomach. Only 6% of that lost production related to borrowers that wanted leverage that was outside of our policy limits, and only 14% related -- and only 14% of that production was lost, because we couldn't hit our profitability targets. The remaining 27% related to some structural issue or a product or collateral type that we just weren't comfortable offering.
I collected this data and I'm offering it, not because I'm trying to illustrate our discipline necessarily. I'm encouraged, and I think investors should be too, that such a small percentage of our deals are of the deals that we've missed, for us only 6% have sponsors with limited cash or investment in the deal.
I'm really encouraged that very few deals don't hit our profitability targets. We've always been pretty tight when it comes to recourse, to wanting borrowers to be on the hook. And we've been able to hit our growth goals in spite of that. Atlanta, Orlando and Tampa may be a little different kind of markets with respect to the level of recourse that you can find. And so we are looking at our policy, and of course, we're willing to make exceptions where we need to, but I'm pretty cautious stepping out too far at this stage of the cycle.
I like where we are in our growth goals, I like how conservative we are on our concentration limit -- level, and I like how diversified we are on the whole portfolio. Right now, I don't feel like I have to step any harder on the gas to get a higher level of growth only to hit a certain EPS or profitability target, and I think that's encouraging.
We saw a nice move in tangible book value to $19.73, which is higher by 17% against the same quarter in 2018. Our tangible common equity ratio increased to almost 8.5%, which is the highest level we've seen in almost two years. And looking forward and even with the small amount of dilution we expect from Fidelity, I expect our capital build will allow us to finish 2019 with growth in tangible book somewhere in the mid- double-digit range.
I'll let Nicole give you more color about the numbers in the quarter, while I give you an update on Fidelity. Right now, even with the protest out there, we expect that the deal will close sometime during the second quarter of 2019. The integration of the two companies is proceeding at a very fast pace. And once the legal merger is consummated, we will be very far down the road putting the two companies together financially and culturally.
On Page 25 of the investor presentation, we've listed six key areas that we are communicating about internally that we believe will -- that we believe summarizes what it takes to call this combination a success. And I'm putting this out there, because I have this much confidence that we're going to deliver. The first on the cost savings. We've identified every single penny of our announced cost savings already, and we'll have made every decision to realize those savings during 2019, such that we will start 2020 on a full run rate.
Secondly, our efforts to recruit additional bankers and invest behind the ones we already have is impressive, with us talking to about 20 commercial lenders about joining our team. The quality of these additions, their customer base, their experience level is impressive. Success on the recruiting front looks very promising and so I'm confident about being able to redeploy the proceeds from the order book as we get the paydowns we expect.
Our presence and our image in Atlanta is driving the inbound phone calls from customers and bankers that we hoped it would and we're working to still better refine and drive our image with branding and marketing efforts that will be blunt and will coincide with our legal close and conversion.
Fidelity and Ameris Bank both have solid and profitable mortgage teams. Fidelity's mortgage team is very recognizable in Atlanta and that's important to our future there.
We've made announcements internally about management structure and our background support and the result will be an integration of the two teams that achieves all of our cost savings, increases the product offering for the Fidelity Mortgage Banker and materially protects their comp and incentive plans.
Lastly, the conversion of the Fidelity customers onto the Ameris Bank platform. We're fine-tuning all of the expertise that we need in both companies, as well as our product and service offerings. This is the last item on the list, but it's the most important, or at least as important as the cost savings. Across our Company, everybody knows what this conversion means to our reputation, and we'll get it right and impress the new customer base.
Once we close this deal and execute on our six items, we'll be -- we'll have a $17 billion balance sheet with top quartile operating ratios and a franchise that cannot be replicated. Hitting these targets is going to create franchise for our Company and our investors at an impressive pace and position us exceptionally well for any economic environment, I'm pretty excited about that opportunity.
I will stop there with respect to results and Fidelity, I'll turn it over to Nicole to discuss more the financials.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Great. Thanks, Dennis. As he mentioned today, we're reporting adjusted earnings of $42.6 million or $0.90 per share for the first quarter. These adjusted results primarily exclude about $2 million of merger charges and $1 million of restructuring and loss on branch buildings. Including these items, we're reporting total GAAP earnings of $39.9 million or $0.84 per share. The $0.90 per share EPS represents a 23% increase over the $0.73 per share we earned in the first quarter last year.
And as Dennis mentioned, we projected the Atlantic Coast and our Hamilton acquisitions. Remember, we completed both of those in the second quarter of 2018 and we projected that those would be 12% accretive to EPS. That means that we almost doubled our result from our original expectations through both acquisitions combined with the organic changes.
Our history of outperforming initial deal expectations remain consistent. This exceptional result is because of our bankers and our lines of business are contributing beyond our modeling.
Our adjusted return on asset in the first quarter, which is normally a slower quarter for us, was 1.51%, which was an increase from the 1.44% reported first quarter last year. We stated for several quarters that we strive for a 1.50% ROA, and we believe that obtaining an ROA north of that in the first quarter is an excellent result, proving our core profitability, especially in a quarter that is a typically slower quarter for us.
Our adjusted return on tangible common equity was 18.82% in the first quarter of 2019 compared to 17.09% for the same period last year. Our current tangible book value per share was $19.73 at the end of the quarter, an increase of $0.90 per share during the quarter and an increase of $2.83 when compared to this time last year. That represents a 16.7% increase year-over-year in tangible book value, including the effects, or absorbing the effects of two acquisitions.
We had an impressive positive move in our net interest margin during the quarter, increasing 4 basis points from the fourth quarter of last year. GAAP margin came in at 3.95% compared to 3.91% last quarter, and margin excluding accretion increased even more, coming in at 3.83% compared with 3.75% last quarter. And accretion income continues to be a smaller percentage of total revenue.
For the first quarter, our yield on earning assets increased by 14 basis points, while our total funding costs increased 11 basis points. Excluding accretion, our yield on total loans increased 19 basis points from the fourth quarter of last year to the first quarter of this year. Our core bank production yields were 5.78% for the quarter against 5.19% in the same quarter a year ago and 5.74% last quarter.
On the deposit side, we were successful in growing noninterest-bearing deposits and improving our mix, such that noninterest-bearing deposits are now over 28% of our total deposits. The target production (ph) for the quarter was $478 million and noninterest-bearing production was over 38% of that total. We recognize the deposit betas are not always linear and since the Fed has appeared to have paused, we looked back on our deposit betas from inception of the Fed rate raising in December of '15 (ph), and since that time frame forward, our deposit betas have had a remarkable 31% for total deposits. This has really allowed us to have a stable healthy margin throughout the cycle, and we believe that we can continue to see a stable margin going forward and the Fidelity deal only helps strengthen that.
Moving on to noninterest income, it was consistent with the fourth quarter of 2018 and our lines of business continue to provide significant financial results. Mortgage revenue, which is cyclical and usually slow in the first quarter, actually beat the third and fourth quarter of 2018 results. Mortgage production was flat relative to the first quarter of last year, but the net profitability quarter -- first quarter last year to first quarter this year increased by over 47%.
Production in the warehouse lending division increased over 25% during the first quarter of '19 when compared to first quarter last year. And net income there increased over 38% during the quarter, compared to last year. We believe the mortgage division, combined with the Fidelity mortgage group will continue to grow -- to provide strong financial results for us.
As Dennis mentioned, our adjusted efficiency ratio was 55.12% for the first quarter of 2019, compared to 59.95% in the first quarter of last year. However, compared to last quarter, the efficiency ratio increased by about 102 basis points. The seasonal payroll taxes that we incurred in the first quarter affected this ratio by approximately 92 of those 102 basis points. And we believe the efficiency ratio will decline throughout the rest of the year.
When looking at operating expenses, consensus was approximately $7 million -- $70 million of expense for the first quarter and our adjusted expenses came in higher at about $72.3 million. We have a little over $3 million of expenses in the first quarter that are not recurring in future quarters, such as operating expenses on the closed branches, which were opened part of the first quarter and some data processing charges left on the old contracts and termination fees on closed branches.
In addition, when you look at data processing, comparing first quarter of 2018, which was before the Atlantic Coast and Hamilton acquisitions, for this quarter, our data processing recurring run rate has increased only about 10% year-over-year. However, our number of accounts and volume and transactions have increased over 40%.
On the balance sheet side, organic loan growth was slower than we had planned, and Dennis already explained quite a bit of that. Production was strong in the first quarter, coming in at over $613 million for the quarter, but net loan growth was negatively impacted by early payoffs and delayed funding of that production. However, as Dennis mentioned, we do already see the momentum picking up in the second quarter so far.
There are several things that give us real confidence that our asset quality would remain strong. Our annualized net charge-off ratio was 17 basis points of total loans and 27 basis points of non-purchase loans. Our non-performing assets as a percent of total assets decreased to 54 basis points compared to 61 basis points at the same time last year. From the slides in our investor presentation, you can see our diversification across loan type and geography, and you can see how the Fidelity acquisition continues to help with diversification.
One of our biggest successes in the first quarter has been deposit growth. As Denis mentioned, our deposit growth was stronger than our loan growth. Moving our loan-to-deposit ratio from 96% in March of 2018 to 86% at March of '19, really is an accomplishment and assists us to be a stronger competitor going forward, especially with the disruption we expect in Atlanta with the recent acquisition activity there.
As I already mentioned, deposit production for the quarter was $478 million and noninterest-bearing production was over 38% of that. (inaudible) part of our ability to grow core deposits at a faster pace than loans and to fund our future growth through organic relationships rather than wholesale funding. We believe this safely grows our balance sheet and continues to increase shareholder value.
I'd like to again emphasize how excited we are about the rest of 2019, and what it means for our Company. We are proud of our first quarter results and we really look forward to the remainder of the year. We remain confident in our outlook and our ability to execute our plan to deliver top quartile results for our shareholders.
Dennis, with that, I'll turn it back over to you, or do you want to jump right to the --
Dennis J. Zember -- President and Chief Executive Officer
(Inaudible) right to the Q&A.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
All right. Gavi, we're ready to go live for the Q&A.
Questions and Answers:
Operator --
Okay. We will now begin the question-and-answer session (Operator Instruction).
The first question comes from Tyler Stafford with Stephens Inc. Please go ahead.
Tyler Stafford -- Stephens Inc -- Analyst
Hey, good morning, guys.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Good morning, Tyler.
Tyler Stafford -- Stephens Inc -- Analyst
Hey, Nicole, I want to just start on one of your last comments, just about that $3 million of expenses of the -- the $72.3 million in the first quarter that you said is not repeatable. Is it the $3 million of $72.3 million or $3 million annualized that's not repeatable going forward?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
No, it's $3 million of the $72 million.
Tyler Stafford -- Stephens Inc -- Analyst
Okay.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
That's not repeatable.
Tyler Stafford -- Stephens Inc -- Analyst
Perfect. Okay. Thanks for clarifying that. And then just sticking with expenses. Obviously, there's a lot of moving pieces with Fidelity coming on board, and the associated cost savings there. But there is an, call it, $80 million delta or so between the high and the low 2020 expenses from the Street. So I was hoping you could just connect the dots for us on the pro forma expense base on the combined companies with the cost savings for 2020.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Yeah, the 2020 cost savings are projected to be around -- between $440 million and $450 million of expense for the year.
Tyler Stafford -- Stephens Inc -- Analyst
Okay. Got it. And then -- thanks for clarifying that. And then just lastly, maybe for Dennis, Slide 25 mentions the efforts working on the 20 commercial bankers, getting those to the finish line. I don't think you've mentioned that in the deck, hiring kind of expectations in the past, like that. So can you just talk about, geographically where those bankers are based, and is it fair to say those are a result of recent larger MOEs within the market, any more context you can give us there?
Dennis J. Zember -- President and Chief Executive Officer
I would -- some of it relates to us being a little more aggressive, knowing that we've got almost $2 billion of indirect auto and some mortgage pay-offs on the Fidelity balance sheet that we're going to have to reinvest. So some of it is feeling -- we feel like we need better loan production capacity. Some of it is from that and just us being more aggressive. I would say that some of the larger banks that are doing restructures and obviously SunTrust and BB&T with their pending merger, has definitely shaken loose some opportunities that we would not have been able to look at. All of the 20 that I mentioned are from banks larger than us. Thus I'll leave it at that.
Tyler Stafford -- Stephens Inc -- Analyst
Got it.
Dennis J. Zember -- President and Chief Executive Officer
And they are mostly commercial oriented, mostly C&I oriented. Not -- there are -- I mean, some of them have maybe more of a generalist, where they could potentially do some CRE as well, but we're focusing more on C&I. 15 of those 20 are in Atlanta.
Tyler Stafford -- Stephens Inc -- Analyst
Great. Thanks for that detail. And maybe just one more if I can sneak it in. Slide 24, around the Fidelity Southern expected EPS accretion mentions high single digits. And then Slide 28 mentions mid-single digits. Can you guys just clarify the current expectations for the combined EPS accretion from that (inaudible)?
Dennis J. Zember -- President and Chief Executive Officer
I think we came -- 6% to 7%.
Tyler Stafford -- Stephens Inc -- Analyst
Okay.
Dennis J. Zember -- President and Chief Executive Officer
So, 7% -- I mean, we said --
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
So, that would be high-mid (multiple speakers)
Dennis J. Zember -- President and Chief Executive Officer
Maybe, going forward, we're just going to say a percentage and not be coy.
Tyler Stafford -- Stephens Inc -- Analyst
Okay. Thanks guys.
Operator --
The next question comes from Brady Gailey with KBW. Please go ahead.
Brady Gailey -- Keefe, Bruyette, & Woods, Inc. -- Analyst
Hey, good morning, guys.
Dennis J. Zember -- President and Chief Executive Officer
Good morning, Brady.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Good morning.
Brady Gailey -- Keefe, Bruyette, & Woods, Inc. -- Analyst
So, we've seen -- we didn't see much loan growth this quarter. And your loan balances were kind of flat last quarter. It sounds like quarter-to-date it's picking up. But I think I have -- I think I remember you guys saying roughly $1 billion a year of annual loan growth. Is that -- do you think that is still achievable or do you think we're looking at something a little less than that for 2019?
Dennis J. Zember -- President and Chief Executive Officer
It's probably something a little less than that. I mean, we did dial back on -- we had been doing some mortgage portfolio. We've dialed that back a little. A lot of that has mortgage rates or for the balance sheet, aren't as attractive as they were this time last year. And that was -- so that was probably a $100 million to $150 million of that. So, I mean, when I say a little less, I don't mean $1 billion is going to $0.5 billion. We're probably more $800 million to $900 million, just given that mortgage portfolio -- portfolio banking from the mortgage side is not as attractive as it was. I think we're probably a little -- growth-wise, I'd say that premium finance, we feel a little better about that. I'd say, given where we finished the quarter on unfunded commitments with CRE, I think we feel a little better about that. We will land these -- some of these bankers, so C&I growth is going to be a little better. But like I said, unless we're willing to give on -- unless we are willing to give on the recourse side, I just don't think we're going to get a lot of growth in CRE, I think, outside of what we've already closed. And -- I mean our production does look good, but to really put on the growth that we would love to have, we're going to have to do something different on recourse and I don't know that we're going to go there wholly.
Brady Gailey -- Keefe, Bruyette, & Woods, Inc. -- Analyst
All right, that makes sense. And then, I know last quarter you all had thought about the core NIM kind of being stable from here, but it was actually up -- what? About 8 basis points linked quarter, so it came a little better than you all had thought. Do you think at 3.83% the core NIM is stable from here or could it slip back to that kind of mid- 3.70% range that we saw kind in the back half of last year?
Dennis J. Zember -- President and Chief Executive Officer
I would tell you that -- linking to your last question -- yeah -- if we think we're going to maybe be 10% lower on the kind of loan growth we were expecting, 10% on growth. So maybe instead of $1 billion, $900 million, we're going to be getting a little less in loan growth, we are going to be pushing a little harder on the profitability side. I would tell you that we -- at 86% loan-to-deposit ratios, loans are somewhere like around 81% or so of earning asset. I've built -- that number is going to tick up a little. We had great growth in deposits this quarter, but for the year I still think loans will probably outpace deposit growth and you'll see a little more concentration of earning assets in loans, which are going to give us a little better NIM. I don't think the NIM is under pressure from here. I mean, especially given that we're sitting here with 86% loan-to-deposit ratio, when we've normally been a touch above 90%, I think that alone will sort of hold us where we are, or better.
Brady Gailey -- Keefe, Bruyette, & Woods, Inc. -- Analyst
Okay. And then lastly for me, Dennis. If you look at where the Company is now, I mean, you're -- with LION in there you're going to be $16 billion, $17 billion. I meant that's multiples ahead of where you all were, say, a decade ago. So you have the scale, clearly you have the profitability with what we see in this quarter. I know, near term, you're going to be focused on LION and getting that thing closed and integrated. But I mean longer term, do you think that M&A will still be as big of a piece of the Ameris strategy? Or do you feel like you've kind of hit the level where you have scale, you have profitability, and M&A really won't be as big of a strategy as it has been over the last decade?
Dennis J. Zember -- President and Chief Executive Officer
I mean, I love M&A. And so, it's hard to say that it is not going to be as big a part. I mean, it will be different, for sure. Atlanta, it's the first time in Ameris' history that we got enough concentration in enough really top-tier markets that we can put up the earnings-per-share growth double-digit per -- earnings-per-share growth without having to do M&A, and the past decade has just been sort of messy.
M&A is kind of messy, especially -- culturally and financially. But we've been able to grow the Company and grow earnings and grow operating ratios through M&A. Right now, I will tell you, we are so squarely focused on integrating Fidelity culturally and financially, and hitting those targets on that page that -- I mean, we still have phone calls -- incoming phone calls and we still have all the conversations we've had in the past, but to move us off -- to move us off a -- started to say something my mom wouldn't appreciate, a near perfect execution on the Fidelity deal is going to be pretty hard.
Once we see our pathway clear on those six items, once I know for sure we're going to have the image in Atlanta it takes to move a lot of business off the other bank's balance sheet onto ours, same thing with their bankers. Once I see that the cash flows from the indirect auto are going into higher yielding commercial assets, got all the cost savings. Once I see our pathway clear to that, I think we would be willing to look at M&A. I would -- I'm not going to be coy, I think M&A is still going to be part of our strategy. It's just not going to be part of our strategy until I know that we have executed near-perfectly on Fidelity.
Brady Gailey -- Keefe, Bruyette, & Woods, Inc. -- Analyst
Great. Thanks for the color guys.
Operator --
The next question comes from Jennifer Demba with SunTrust. Please go ahead.
Jennifer Demba -- SunTrust Robinson Humphrey, Inc. -- Analyst
Thank you. Good morning.
Dennis J. Zember -- President and Chief Executive Officer
Good morning.
Jennifer Demba -- SunTrust Robinson Humphrey, Inc. -- Analyst
Dennis, you mentioned that things are a bit more competitive in the larger markets like Atlanta, Orlando, Tampa. How do you think your credit policies are going to have to evolve over the next couple of years as you are getting more meaningful in these markets, particularly Atlanta with the LION deal, and the hiring you're aiming to do here?
Dennis J. Zember -- President and Chief Executive Officer
Probably we're going to have to -- getting to this point, we've not had to rely too heavily on C&I lending or middle-market type stuff. So we're going to fine-tune what we're doing there. I don't know if that's policy as much as that's just staffing up and getting a little more expertise in credit administration.
Recourse, until we sort of found our way into Atlanta, in Atlanta we're trying to bank $10 million, $20 million, $30 million commercial real estate deals, a lot of times they have tenants that may not be credit tenants -- credit rated and all that, but they do have -- they do have balance sheets and operating histories that are maybe a little better than what we've seen in some of our more legacy markets. And so that's kind of what we're wrestling with internally. Do we treat those CRE deals that won't have a little more non-recourse, do we treat them a little more like C&I loans with covenants in the search. And we just -- right now we're just not there, we don't really feel like -- I don't feel like we've got to do much of that to be too creative to be -- like I said, step on the gas any harder, just sort of hit our EPS numbers and our profitability targets. I mean, we are going to be progressive and we're going to be creative where we need to be, but we're not going to alter. This is not the time, I don't think to do something to alter our risk profile. And I don't feel like we have to do that to redeploy the cash flows from Fidelity's auto book, or to get the growth that we're looking for.
Jennifer Demba -- SunTrust Robinson Humphrey, Inc. -- Analyst
Great. Thank you. Also, you said you're working on 20 new hires. What is budgeted for '19 and '20 in terms of hiring for Ameris?
Dennis J. Zember -- President and Chief Executive Officer
We -- before the Fidelity deal, probably 10 bankers. With the Fidelity deal, and knowing that we've got to redeploy all of those proceeds, we're probably closer to 30 or 35 bankers. So, I mean, had we not done Fidelity, I think we would have -- we had about -- we have about 110, 115 bankers, commercial bankers in the Company now. I think we probably would have hired another 10 or so, mostly in Orlando and Atlanta. I think now with the Fidelity deal and all the new proceeds, I think we're probably 20 or 25 better than that.
Jennifer Demba -- SunTrust Robinson Humphrey, Inc. -- Analyst
And that's per year or over the next couple of years?
Dennis J. Zember -- President and Chief Executive Officer
That's per -- over -- that's between now and middle of next year.
Jennifer Demba -- SunTrust Robinson Humphrey, Inc. -- Analyst
Okay. Thank you very much.
Operator --
(Operator Instructions) The next question comes from Brett Rabatin with Piper Jaffray. Please go ahead.
Brett Rabatin -- Piper Jaffray -- Analyst
Hey, good morning.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Good morning, Brett.
Brett Rabatin -- Piper Jaffray -- Analyst
Wanted to go back -- I joined a little bit late, but just want to make sure I -- I had a clear on the expenses and just you had the $3.1 million that you kind of take out. But I want to make sure I understood. So the $72.3 million, you're saying that -- and there's another $3 million that's kind of not ongoing, that was in 1Q?
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
That's right. There's about $3 million there. So you're exactly right. There is about $3 million excluded from GAAP expenses to operating expenses. And then included in that operating, there is about another $3 million. I think that were true operating expenses this quarter, but things that are not recurring, such as operating expenses for the one month that the branches were opened. Those payroll taxes that always hit the first quarter and then some other small lagging things and the cost saves that we didn't get a full quarter of and we put them all together, it's about $3 million.
Brett Rabatin -- Piper Jaffray -- Analyst
Okay. Great. And then just wanted to ask on -- just thinking about growth and maybe more of the challenges today, is what you're seeing -- I'm just curious, does it change anything on your plan for LION? And just maybe I know some of that book was going to be run down. Do you change your plan on any of that related to auto or can you maybe just give us some color on -- updated thoughts on their loan book?
Dennis J. Zember -- President and Chief Executive Officer
It doesn't change our opinion on the auto book. And I mean, I have a high opinion of the auto book from a credit perspective. I mean that auto book outperformed our balance sheet by -- credit losses by 20% or 30%. I mean it was -- it did really well in the recession. The problem is, right now, yields to us with Fidelity are barely 3%. It may not even be 3%. It's just -- it's hard to originate and sell that paper. I mean, if rates dropped so precipitously over the next three months or six months, such that there was a lot of gains and lot of excess spread there, I mean maybe we would look at it. But the fact is it's -- that's not going to happen. We don't want to -- the auto book is sort of not core. We still like -- from our franchise value perspective, we have more franchise value, we have more yield, we have probably similar credit economics, if we went into, sort of, higher quality commercial assets. And I think really that's the goal here. We don't want to move to Atlanta in such a meaningful way and be doing indirect auto. And I'm not saying that -- I'm not saying that really critically of the indirect auto book, I'm just saying that we believe the way to maximize our franchise value is to move that into that amazing book of deposits they have into local commercial assets in the City of Atlanta, and that is our goal.
Brett Rabatin -- Piper Jaffray -- Analyst
Okay. Appreciate the color. Thanks.
Dennis J. Zember -- President and Chief Executive Officer
All right.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Thanks, Brett. I was going to add real quick on something that I said earlier that maybe I can clarify, is when we look at 2020 run rate -- run rate of the expenses, including Fidelity, there is a lot of moving parts. And I think when I clarified kind of the run rate for 2020, maybe I wasn't clear that it's -- between four -- what we estimate to be our total run rate for 2020 operating expenses is closer to the $420 million, $430 million. I think I've got tangled on my answer there to Tyler, possibly on cost saves versus spending. And so, we really anticipate the 2020 expense rate to be closer to the $420-ish million, $430 million (ph) and that includes -- I think we originally estimated $410 million to $420 million. But as we start putting in some of the growth opportunities for these commercial lenders that we can plan on hiring, so we've increased that just slightly.
Brett Rabatin -- Piper Jaffray -- Analyst
Okay. That's good color as well. Thank you.
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Thank you.
Operator --
This concludes the question-and-answer session. I would like to turn the conference back over to Dennis Zember for any closing remarks.
Dennis J. Zember -- President and Chief Executive Officer
All right. Thank you, Gavi. Appreciate your attendance on the call today. Nicole and I are available all day, really all week, I guess, really any time for questions or answers. Text or email, whatever you want to, we will be willing to get on the call with you. Thank you again, and we'll see you soon.
Operator --
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Duration: 42 minutes
Call participants:
Operator --
Nicole S. Stokes -- Executive Vice President and Chief Financial Officer
Dennis J. Zember -- President and Chief Executive Officer
Tyler Stafford -- Stephens Inc -- Analyst
Brady Gailey -- Keefe, Bruyette, & Woods, Inc. -- Analyst
Jennifer Demba -- SunTrust Robinson Humphrey, Inc. -- Analyst
Brett Rabatin -- Piper Jaffray -- Analyst
More ABCB analysis
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp (NASDAQ: ABCB) Q1 2019 Earnings Call April 23, 2019, 10:00 a.m. Duration: 42 minutes Call participants: Operator -- Nicole S. Stokes -- Executive Vice President and Chief Financial Officer Dennis J. Zember -- President and Chief Executive Officer Tyler Stafford -- Stephens Inc -- Analyst Brady Gailey -- Keefe, Bruyette, & Woods, Inc. -- Analyst Jennifer Demba -- SunTrust Robinson Humphrey, Inc. -- Analyst Brett Rabatin -- Piper Jaffray -- Analyst More ABCB analysis Transcript powered by AlphaStreet This article is a transcript of this conference call produced for The Motley Fool. I get lots of questions about when we will know that it's the right time to pull back or to slow down on our efforts, and so this quarter I kept a running tally of the 50 largest deals that we had a leading shot at doing, but for whatever reason we didn't (inaudible). | Duration: 42 minutes Call participants: Operator -- Nicole S. Stokes -- Executive Vice President and Chief Financial Officer Dennis J. Zember -- President and Chief Executive Officer Tyler Stafford -- Stephens Inc -- Analyst Brady Gailey -- Keefe, Bruyette, & Woods, Inc. -- Analyst Jennifer Demba -- SunTrust Robinson Humphrey, Inc. -- Analyst Brett Rabatin -- Piper Jaffray -- Analyst More ABCB analysis Transcript powered by AlphaStreet This article is a transcript of this conference call produced for The Motley Fool. Ameris Bancorp (NASDAQ: ABCB) Q1 2019 Earnings Call April 23, 2019, 10:00 a.m. ET Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks: Operator -- Good morning, and welcome to the Ameris Bank First Quarter 2019 Financial Results Conference Call. | Duration: 42 minutes Call participants: Operator -- Nicole S. Stokes -- Executive Vice President and Chief Financial Officer Dennis J. Zember -- President and Chief Executive Officer Tyler Stafford -- Stephens Inc -- Analyst Brady Gailey -- Keefe, Bruyette, & Woods, Inc. -- Analyst Jennifer Demba -- SunTrust Robinson Humphrey, Inc. -- Analyst Brett Rabatin -- Piper Jaffray -- Analyst More ABCB analysis Transcript powered by AlphaStreet This article is a transcript of this conference call produced for The Motley Fool. Ameris Bancorp (NASDAQ: ABCB) Q1 2019 Earnings Call April 23, 2019, 10:00 a.m. Mortgage production was flat relative to the first quarter of last year, but the net profitability quarter -- first quarter last year to first quarter this year increased by over 47%. | Duration: 42 minutes Call participants: Operator -- Nicole S. Stokes -- Executive Vice President and Chief Financial Officer Dennis J. Zember -- President and Chief Executive Officer Tyler Stafford -- Stephens Inc -- Analyst Brady Gailey -- Keefe, Bruyette, & Woods, Inc. -- Analyst Jennifer Demba -- SunTrust Robinson Humphrey, Inc. -- Analyst Brett Rabatin -- Piper Jaffray -- Analyst More ABCB analysis Transcript powered by AlphaStreet This article is a transcript of this conference call produced for The Motley Fool. Ameris Bancorp (NASDAQ: ABCB) Q1 2019 Earnings Call April 23, 2019, 10:00 a.m. Dennis J. Zember -- President and Chief Executive Officer I would -- some of it relates to us being a little more aggressive, knowing that we've got almost $2 billion of indirect auto and some mortgage pay-offs on the Fidelity balance sheet that we're going to have to reinvest. |
27870.0 | 2019-03-19 00:00:00 UTC | 3 Small-Cap Stocks With Big-Cap Potential | ABCB | https://www.nasdaq.com/articles/3-small-cap-stocks-big-cap-potential-2019-03-19 | nan | nan | When you tune in to stock market coverage, you're likely to see headlines driven by massive global companies. But there are many small-cap stocks with growth stories that could be making the headlines of tomorrow. Three Motley Fool contributors think Freshpet (NASDAQ: FRPT) , Qualys (NASDAQ: QLYS) , and Ameris Bancorp (NASDAQ: ABCB) warrant a closer look.
An under-the-radar pet-food stock
Jeremy Bowman (Freshpet): One category that Americans consistently demonstrate a willingness to spend more money on is pets. The pet-food industry is stable, recession proof, and growing steadily as more pet owners see their animals as members of the family.
You probably wouldn't know it, but one big winner in the sector has been Freshpet, whose stock has jumped more than 400% over the last three years and has quietly been one of the best on the market.
Freshpet sees itself as disrupting the $30 billion pet-food industry, arguing that traditional dog- and cat-food formulations have essentially been unchanged for decades. Instead of conventional dry food or even canned wet food, Freshpet offers fresh, refrigerated food for dogs and cats and sells its products in Freshpet Fridges in pet stores and other big-box chains. It currently has installed 19,500 Freshpet Fridges and sees room in the market for at least 30,000 fridges across North America.
Growth has been impressive, with revenue up 26.8% in 2018 to $193.2 million. It increased even faster in the fourth quarter , growing by 29.7%. Considering the size of the pet-food market, Freshpet has yet to capture even 1% of the total market, so it should have a long path of growth ahead of it, especially as brand awareness and availability build. Profits are also expected to build, as the company sees 38% adjusted EBITDA growth this year along with 24% revenue growth.
Freshpet expects the pet-food market to grow annually by 6% over the next five years. Considering the company's position as a disruptor, Freshpet looks poised to continue grabbing share of the growing market and delivering returns for investors.
A small-cap to secure portfolio gains
Daniel Miller (Qualys): With so much of our information stored online, data breaches have become increasingly common and impactful. In fact, according to Juniper Research, the annual cost of data breaches worldwide will soar to $2.1 trillion by 2020. Skyrocketing data breach costs have business leaders everywhere looking for solutions, which is great news for Qualys. If you haven't heard of Qualys, the company is a leading provider of cloud-based security and compliance solutions with more than 12,200 global customers, including 70% of the Forbes Global 50. It boasts active users in more than 130 countries.
QLYS data by YCharts .
The stock cooled a little during 2018 but is still up more than 222% over the past three years, and investor optimism has pushed the small-cap stock to a price-to-earnings ratio of over 62 times and a forward consensus price-to-earnings of 45 times. The company grew revenues by 21% last year compared to the prior year, generated record margins, and saw new solutions contribute 20% of bookings.
There's no question Qualys is a small-cap stock -- or slightly larger, with a market cap of about $3.3 billion -- with big-cap potential, since the danger of data breaches remains a huge and costly issue for companies worldwide.
A small bank with big ambitions
Jordan Wathen (Ameris Bancorp): Operating out of the southeast United States, Ameris Bancorp is a small bank with offices in Georgia, Florida, and South Carolina. A colleague, Jason Moser, put this bank on my radar .
Ameris is arguably in the "sweet spot" for commercial banks, being large enough to comfortably tackle the financing needs of small businesses that can get left behind in the bureaucracy of larger superregional lenders. It recently announced its intention to acquire Fidelity Southern Corporation (NASDAQ: LION) , a deal that will give Ameris lower-cost deposits and more scale in key geographies like Atlanta. The total balance sheet should grow to just over $16 billion, up from $11.4 billion at the end of 2018.
It's convenient that this transaction will close ahead of the tie-up of BB&T and SunTrust . When those two superregionals merge, banking talent and valuable customers are likely to look for new homes, perhaps on Ameris' growing balance sheet. Note that SunTrust is currently headquartered in Atlanta, Georgia, though upon combining, BB&T and SunTrust's corporate offices will be located in Charlotte, North Carolina.
Since it is acquisitive by nature, investors should expect the deals to keep coming for Ameris, which has built its franchise by rolling up smaller banks in six transactions since 2013. Over the next 10 years, if not longer, the banking industry will continue to consolidate, generating excess returns for smart sellers and smart buyers alike. Ameris, it seems, is one of the latter.
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*Stock Advisor returns as of March 1, 2019
Daniel Miller has no position in any of the stocks mentioned. Jeremy Bowman has no position in any of the stocks mentioned. Jordan Wathen has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Three Motley Fool contributors think Freshpet (NASDAQ: FRPT) , Qualys (NASDAQ: QLYS) , and Ameris Bancorp (NASDAQ: ABCB) warrant a closer look. There's no question Qualys is a small-cap stock -- or slightly larger, with a market cap of about $3.3 billion -- with big-cap potential, since the danger of data breaches remains a huge and costly issue for companies worldwide. Ameris is arguably in the "sweet spot" for commercial banks, being large enough to comfortably tackle the financing needs of small businesses that can get left behind in the bureaucracy of larger superregional lenders. | Three Motley Fool contributors think Freshpet (NASDAQ: FRPT) , Qualys (NASDAQ: QLYS) , and Ameris Bancorp (NASDAQ: ABCB) warrant a closer look. An under-the-radar pet-food stock Jeremy Bowman (Freshpet): One category that Americans consistently demonstrate a willingness to spend more money on is pets. A small bank with big ambitions Jordan Wathen (Ameris Bancorp): Operating out of the southeast United States, Ameris Bancorp is a small bank with offices in Georgia, Florida, and South Carolina. | Three Motley Fool contributors think Freshpet (NASDAQ: FRPT) , Qualys (NASDAQ: QLYS) , and Ameris Bancorp (NASDAQ: ABCB) warrant a closer look. There's no question Qualys is a small-cap stock -- or slightly larger, with a market cap of about $3.3 billion -- with big-cap potential, since the danger of data breaches remains a huge and costly issue for companies worldwide. A small bank with big ambitions Jordan Wathen (Ameris Bancorp): Operating out of the southeast United States, Ameris Bancorp is a small bank with offices in Georgia, Florida, and South Carolina. | Three Motley Fool contributors think Freshpet (NASDAQ: FRPT) , Qualys (NASDAQ: QLYS) , and Ameris Bancorp (NASDAQ: ABCB) warrant a closer look. Freshpet expects the pet-food market to grow annually by 6% over the next five years. Ameris, it seems, is one of the latter. |
27871.0 | 2019-02-12 00:00:00 UTC | The Biggest Bank M&A Deal Since the Financial Crisis | ABCB | https://www.nasdaq.com/articles/biggest-bank-ma-deal-financial-crisis-2019-02-12 | nan | nan | In this week's episode of Industry Focus: Financials , we start with Part 2 of host Jason Moser's interview with Ameris Bancorp (NASDAQ: ABCB) CEO Dennis Zember. Then, Jason and Fool.com contributor Matt Frankel, CFP, dive into the merger of BB&T (NYSE: BBT) and SunTrust (NYSE: STI) , which will create the sixth largest U.S. bank when it is finalized later this year. Plus, you'll hear listeners' emails and Twitter questions and two stocks that are on our radar right now.
A full transcript follows the video.
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The author(s) may have a position in any stocks mentioned.
This video was recorded on Feb. 11, 2019.
Jason Moser: Welcome to Industry Focus , the podcast that dives into a different sector of the stock market each day. It's Monday, Feb. 11, and that means we're talking Financials . I'm your host, Jason Moser, and on today's show we're going to dig into the latest big bank merger. We'll answer a couple of listener emails. As always, we'll have One to Watch.
We begin today with part two of our Between Two Fools interview with Ameris Bancorp CEO Dennis Zember. Our conversation picks up where we left off on last week's show. This week, Dennis talks more about the opportunities with Ameris' big merger with Fidelity, where he sees the company in the next five years, and even offers up a book recommendation for us as well.
You all are in a tough market, obviously, with some very big and very well-endowed competitors. Banking is a challenging space. Smaller banks have their fair share of challenges. But you also have your fair share of opportunities. I wondered if you could speak a little bit more to the opportunities and the challenges that you see as a smaller but clearly growing regional bank in today's economy.
Dennis Zember: Probably the biggest challenge at Ameris Bank, and I'd say it's probably been a challenge since I started Valentine's Day 2005, 14 years -- not that I brought the challenge with me -- the challenge of being a small bank but growing, being a small bank with a bigger vision, is you're always punching ahead of your class. If you're a $1 billion bank that's grown quickly to be a $5 billion bank, a lot of times, you still have $1 billion processes and $1 billion solutions. We'll tell you for 14 years, we have been almost with breakneck speed re-engineering pretty much everything we do, especially on the administrative side of the business to accommodate more assets, more revenues, more growth, more markets. Yesterday, we had credit administration that looked like this, but today, that's not going to be good enough. Really, two years ago, Jason, we were $7 billion. Today, we're staring at $16 billion. So we have to be serious. It's a challenge to constantly re-engineer solutions so that we're competitive and efficient. You can't just grow with the same processes. You have to grow with processes that are more scalable and leverageable so that the growth is incrementally more profitable.
You take that to the customer. When I first got here, our average loan size was $60,000. I was looking at credit committee today, and we've got some $50 million customers in there. The credit administration, the attention, the expertise that it requires... a customer that's borrowing $50 million requires a lender with a lot more expertise than one with $100,000. I'm not trying to be master of the obvious there. We have to constantly be tweaking what we're doing. We have to train our folks extremely hard to be ready for the next customer that they get in front of.
I will say that, for a bank that's small -- I guess now, small is relative -- but for a bank that's small but growing or wanting to grow that's got a big vision, you've got to have a passion and a zeal to be able to re-engineer things. The opportunity I think that all that creates is -- again, I'm not in other businesses and other banks. I don't want to sound like the parent who's talking about how great their children is with no real perspective here. But I'm convinced that our company, as fast as we've grown and as many times as we changed things, I think we've got more apt people in this company that are not afraid of change, that don't panic when change comes about. I think that helps us stay nimble and light on our feet. It helps us not want to get into too much of a routine. It helps us stay creative, not just for what we're doing in our company, our processes, but honestly stay creative for the customer.
Moser: Well, there's no question that's important. We say, yes, you're a small but growing bank, you guys are getting ready to get a little bit bigger here. The Fidelity deal which you announced about a month ago, you're going to be acquiring Fidelity Bank and rolling that into your operations. It gives you more exposure to bigger markets -- Atlanta, Orlando, Jacksonville, you mentioned Charleston. Can you speak a little bit more to the deal and why you think investors should be excited about this?
Zember: To say I'm excited about this is an understatement. This opportunity for Ameris Bank, really Ameris Bank and Fidelity, the two of us, this is an opportunity to create the kind of franchise that most community banks don't get to look at. The opportunity to be this material, to be this noticeable, to be this accessible in a market as large as Atlanta, generally requires so much investment that community banks just avoid that. They don't try to build a franchise that would take in an entire market like Atlanta.
With what we already had in Atlanta and what Fidelity has, when we combine, we're going to be a real alternative to super-regionals in Atlanta. We're going to drive an image that puts us out there as the alternative for businesses and consumers. Again, being from Atlanta, it's been 20 years or more since there was a community bank with that much reach all across the city, in all of the markets and all of the counties, that would be willing to customize a solution for customers in a way that the market notices. When you combine our footprint and our attitude and our willingness to fight for the business that we want, I'm just convinced that we're going to surprise and impress some folks in Atlanta.
I'll repeat what I said earlier. Just being big in Atlanta or really any market like Atlanta, that's not what drives franchise value. That isn't what impresses investors, and I don't think that's what holds investors in the stock. Doing that is important, but doing that while being a bank that's got passion for top-quartile results, return on assets, return on tangible capital, being focused on efficiency, having strong capital, strong credit results, all of that's just as important a part of the formula.
Moser: OK, piggybacking a little bit on that. That's a great answer. I tell you, after going through y'all's call and the release and all this stuff, you convinced me. I think this is a good deal. Really, you did a good job of making the case in being able to just look two years down the road and say, "Listen, this may seem like a big deal right now. It could present its fair share of challenges. But in two years, this thing is going to not only be accretive, but it's going to take you guys to a new level." So it got me thinking. I mentioned, we invest a little bit differently here at The Motley Fool than your typical Wall Street firm. We take a much longer timeline. Think Warren Buffett-style investing. We love to find those businesses that we can invest in for three to five years, or in some cases, even indefinitely. That's one of the things, frankly, that attracted me to Ameris, was the size and the opportunity to be a part of something that had a very long runway of growth.
For you, thinking three to five years and even beyond, let's just use five years. Where do you see Ameris Bancorp five years from now?
Zember: Let me answer that question without saying anything about how big we'll be, $20 billion or $30 billion. I have no idea what's ahead of us there. I will tell you, we will have impressed people on the investor side. The reason I believe that is because of the passion around here, how serious we are about investor returns. We will keep looking at opportunities. We are going to grow organically and we are going to continue doing M&A. We've done 35 or 40 deals, we've lost count. We have a real passion. We are experts at M&A. We've figured out organic growth as well. I know all of those things are going to continue if the market's right.
I think we'll combine all that with our level of creativity for the customer and the investor. We'll continue to do all that in a way that produces a shareholder return. If you ask me where we'd be three to five years from now, I think you and I may be on the call here again, recapping what I said. In three to five years from now, we want to have impressed investors, impressed customers, and maybe repeat what we've done in the last three to five years, which I don't think is happenstance. I don't think that we just were successful with the last three to five years from growth and profitability. I know we were more purposeful about producing those results. We'll just keep doing what we've become accustomed to doing, and I think we'll be happy where we end up in five years.
I will tell you that each member of our executive team has virtually all of their net worth invested in Ameris.
Moser: Interesting!
Zember: Again, we're not doing it for our personal benefit. But when you're in that situation, and you think like an owner, you tend to make different decisions.
Moser: I think you hit the nail on the head there: think like an owner. That's something we espouse here at The Motley Fool so often. It really does create unique incentives, and it does help guide good decision-making. I'm glad that you didn't shy away from that word, "expert," when it came to M&A. When the Fidelity deal was announced, I'm sure you noticed, Wall Street took a tone of caution immediately. The stock sold off around 10% that day. That's pretty common. Normally, you see the acquirer's stock sells down, the stock of the company being acquired is usually up based on the value of the offer. The market's saying, "Hey, we get that you want to do this, but the burden of proof is on you." I was telling our investors, "You need to have your eyes on this one here because they have a long track record of M&A. They've done a lot of this stuff. They're good at it. I have no reason to believe they're not going to be able to pull this one off as well." We feel like that really opened a window for investors there. Clearly, the market is starting to come around since that initial sell-off.
Zember: I agree.
Moser: I'm excited about it. I know our investors are, too. One more question for you. I want to wrap this up and let you get back to work. Our listeners, our members, me, we're all big-time readers here. We love reading, anything and everything. I'd be remiss if I did not ask you if you had any book recommendations for our listeners, anything you've read recently, anything, any topic, it can be something that you just enjoyed. Anything out there that you think our listeners should check out?
Zember: I recently put down what I was reading. I was at a mortgage conference, actually a Fidelity mortgage conference, just meeting their people, part of our integration efforts. They were handing out a book called Real Leadership by John Addison. John was a co-president at Primerica back in the day. I was just flipping through it, and just a couple of pages in, I noticed that John Addison's mother was from Moultrie, Georgia, so it had me hooked.
Moser: [laughs] Understandable!
Zember: So, I've just been reading the whole thing. I'll tell you, it's just good, practical stuff that leaders should read and remember. I really related to one of these comments and it kept me in the book, when he says a good leadership principle is to try to make your parents proud.
Moser: I like that!
Zember: Be making leadership decisions or just general decisions that would make your parents proud. That's something that I think of quite a bit.
Moser: That's very relatable, as a parent, as a son. That's very relatable, indeed. Thanks so much! Dennis Zember, I appreciate you taking the time out of your busy schedule to talk with us today, to tell our listeners more about Ameris Bancorp and where you all are headed. This is an exciting story and it's a stock that I'll continue to cover. I look forward to the opportunity to get to speak with you again sometime in the near future.
Zember: Jason, thank you!
Moser: Joining me now in the studio via Skype is Certified Financial Planner Mr. Matt Frankel. Matt, how's it going?
Matt Frankel: Great! How are you guys?
Moser: Doing very well! You have a good weekend down there in hopefully sunny South Carolina?
Frankel: It was nice and warm over the weekend. It's cold now, but at least we had a couple of nice days.
Moser: Did you guys have a school delay today?
Frankel: No, it's not that cold.
Moser: [laughs] We had a school delay today. It was chilly. We had some snow last night, some ice. I guess they just, rather be safe than sorry up here in Fairfax County. It's a huge county, so it's a lot of kids to account for.
Frankel: It's in the 40s here, which we think it's cold. [laughs]
Moser: [laughs] Having grown up in South Carolina, I can vouch for that. I co-sign.
Let's get this started this week. We want to talk about the big news that came out last week in the world of banking, there's a big merger that's going to be taking place here. BB&T is going to be acquiring SunTrust. They're going to be buying SunTrust for $28.2 billion. It's going to create the country's sixth largest bank after all is said and done. Matt, you've had a chance to go through the mechanics of this deal, the implications. Tell us a little bit about your thoughts on this announcement.
Frankel: For the most part, I think it's definitely a good move. Now, take this with a grain of salt because I'm always suspicious when companies justify mergers with the term "synergies." As in, "This is going to create over $1 billion in annual cost savings after this merger is completed." And that's exactly what we're hearing here. But, in this case, I think it might actually be true. The main reason, BB&T and SunTrust are both generally southeast-based bank companies. There's a lot of overlap between their branch networks. Let's say if one town has a BB&T and a SunTrust branch right next to each other, they could consolidate that into one and actually save a good bit of money. There is substantial cost-saving that should be realized here.
The other thing, they're moving their headquarters to Charlotte. Right now, one's in Winston-Salem and one's in Atlanta. I can't remember which is which off the top of my head. They're moving to Charlotte, which is a big banking hub. Bank of America is based there. Wells Fargo 's East Coast operations are pretty much based there. So there's a huge talent pool of great banking talent there. I love the move to Charlotte. Not only are they going to be the sixth largest bank in America, but this should make them a dominant force in the southeast. I'd say about half of my friends down here bank with either BB&T or SunTrust, so this will combine their forces and give them a really good market share in their core area.
On the other hand, there are some downsides. You mentioned this is going to be the sixth largest bank. Combined, they're going to have about $440 billion in assets.
That puts them over the key $250 billion mark to become a systemically important financial institution, or SIFI. The bigger you are in banking, the tighter you're regulated. Not as big of a concern right now, given the current administration. But after 2020, if the other party gets some power, they might crack down on banking regulations, and they're not going after the small ones. That's my biggest concern about the deal, is that this could increase regulatory pressure on them. I think it'll be more than offset by the cost-saving that I just mentioned, and just the market share advantage. Definitely a good move. It's nice to see some mergers happening in the banking world again. We've had a ton in other sectors, but not much in banking lately.
Moser: For sure. And speaking of mergers, as the interview with Ameris' CEO there, Dennis Zember, noted, and we talked about on the show here briefly a time ago, is this acquisition with Ameris Bancorp and Fidelity. Let's be clear -- that's a tiny deal. That's bringing together essentially a $1.5 billion market cap bank with a $750 million market cap bank. They're going to have total assets somewhere in the neighborhood of $17 billion. That's apples and oranges. But I want to go back to something that Dennis was talking about in our interview. I feel like this was perfect timing, having his interview lining up with the news on this merger. We get an understanding of the challenges and opportunities for both organizations there. Dennis said in that interview that the deal with Fidelity gives them the opportunity to drive an identity as a real alternative in the super regionals sector in big markets like Atlanta, Orlando, Jacksonville, Charleston, I'm sure North Carolina will come into play there as well.
We talk about scale, and how this BB&T and SunTrust deal is going to create the sixth largest bank. Dennis made the point there that just being big these days in the banking industry isn't enough. It comes down to not only footprint, but he feels like their advantage at Ameris, that attitude and willingness to fight for the business they want, he feels like they're going to be able to surprise some people because of the culture they have with the company, and perhaps the advantage there in being a bit smaller, and being a bit nimbler, and maybe not necessarily on regulators' radar like these bigger banks are going to be.
Frankel: Yeah, definitely. It's not always great to be big, especially in a heavily regulated industry. Banking being probably the most heavily regulated industry in the world.
Moser: Understandably.
Frankel: Sure. But, especially the ones at the top, you see how much Wells Fargo is in the news. There have been small banks that have acted just as badly as Wells Fargo, but you don't hear about them because they're not as scrutinized and as in-the-spotlight. This is definitely going to put them in the spotlight. I'm curious as to what the new name is going to be. Any thoughts on that?
Moser: You just jumped in it! We were just talking about that before taping. Chris and Abi were leaving the studio from taping today's MarketFoolery . We started kicking around some ideas. You have to figure, the nature of this deal, they probably just brand everything to BB&T, right? Combining those two names is going to probably be pretty difficult. My observation, SunTrust sounds too much like a soda, right? If you try to combine the two, maybe the best-case scenario, you get something like SunnyB? I don't know.
All I'm saying is, it's probably easiest to go with one or the other as opposed to making some new-fangled name that no one has any real understanding of from a brand perspective, right?
Frankel: That could actually be one of the potential risks of the deal, that no one knows what this brand is that they're going to create. They've already said they're not going to keep either of the names, they're going to go with something new. "Hey, everybody! Cut back with SunnyB! We've got a great offer there for interest rates, and we'll make you smile with our name. Put you in a good mood." I don't know, man!
Frankel: Which one do you think has better national recognition, BB&T or SunTrust?
Moser: I tend to lean toward BB&T. Being from the Southeast, I feel like I've had exposure to both of them. I'm sure there are people out there that would say they're more familiar with SunTrust as well. That's going to be a big challenge for them, coming up with a new name that resonates with consumers.
Frankel: Yeah. It's been done before and surprised me in the past. We'll have to see what they come up with.
Moser: Yep, we shall see! Matt, let's jump in really quick to tweets and emails and whatnot. I'm going to start off here with a tweet from a loyal listener. This is actually in regard to a show we did last week, not a show that you and I did. I taped the Tuesday episode of Industry Focus with Asit Sharma. We talked about the Consumer Goods sector and Beyond Meat, an IPO that's coming down the pike here soon. Warren has just chimed in, he said, " Industry Focus is officially my favorite podcast series. They have the best hosts taking some deep dives into business trends, keeping listeners a step ahead of Wall Street." Warren, thank you so much for those kind words! We really enjoy what we do. Glad it's helpful, always happy to help! You know where we are.
Matt, first question here. This was a question we got from last week's YouTube Live show that we did, Chris and Andy and I sat in and did this show. There was a question that was posed from a viewer. This sounded like it was right up your alley. "What do you think about Realty Income (NYSE: O) , ticker O, for a new investor? Is it a good idea?"
Frankel: Well, it's my single largest stock position.
Moser: So you're saying it's a good idea?
Frankel: So I'm saying it's a good idea. Here's why. If you haven't heard of this stock -- like you said, ticker symbol O, Realty Income -- it's a real estate investment trust that specializes in freestanding retail properties. A lot of investors are hesitant to get involved with anything involving physical retail, but you shouldn't be in this case. Here's two main reasons why. One: Realty Income focuses on businesses that are not threatened by e-commerce or recessions. Think of discount-oriented retailers like warehouse clubs like Costco , Sam's Club, things like that. Also non-discretionary businesses, things that people need like pharmacies, gas stations. And, businesses that have a service component, like a movie theater or a restaurant, things that people have to physically go to that don't have an e-commerce equivalent. That's No. 1.
No. 2 is their lease structure. They're on what are called triple net leases, which is a long-term lease structure. Realty Income's typical tenant signs a 15-year lease or more. Minimal turnover. The triple net lease means that they're responsible for paying property taxes, building insurance, maintenance expenses. It pretty much shifts all of the variable costs of property ownership to the tenant. Rent naturally goes up every year, it's called an escalator.
It's a perfect business model for consistent, steady income. Realty Income pays a great dividend, right around 4% right now. They've increased it over 90 times since it's been listed in 1994 on the NYSE. They pay monthly dividends. They're coming up on their 500th dividend payment, consecutive. It's just like clockwork. Very low-risk business. Valuation's a little high, but you get what you pay for. I don't see their streak of dividend increases ending anytime soon. It's my dividend stock that I plan on holding until I retire.
Moser: We're very transparent about our holdings and we try to make sure people understand that the companies we talk about that we like, a lot of times, we own those businesses because we feel that they are good investments. We're not trying to push anybody in any direction where they shouldn't feel comfortable. Matt, you have a lot of experience in that real estate industry. Obviously, you're going to be helping with our new real estate service here coming up, too. Take that with a grain of salt there, too. I'm putting that ticker at the top of my watch list. I don't know that I have any exposure to REITs, but now that I know this is your biggest holding, I'm going to have to at least keep it on my radar.
We have one more email here from Carl. Carl asks, "Can you please talk about the bulge bracket investment banks and why they're so important, what their influence is on the market, and as a small-time investor, what do I need to watch for in?" Matt, I think this is more of a terminology thing than anything else. It's this bulge bracket investment bank terminology that perhaps he wants a little bit more clarification on. Can you shed any light?
Frankel: I wasn't actually familiar with that term until you sent me the article.
Moser: Nor was I.
Frankel: Generally, it just means the big investment banks. Goldman Sachs and Morgan Stanley qualify based on the definition in the article I was reading. Goldman, as you know, is one of my favorite bank stocks. Morgan Stanley is also one of my favorites, but for different reasons. As a rule, I don't invest in banks that are not based in America just because I don't fully understand all the regulations. Like I said, it's a very complex industry. It would take way too much to understand the banking regulations in every single foreign market. And I understand the American banking regulations really well, that's why, for my money, I tend to stick with the American investment banks. Our of those, Goldman is my favorite right now. But, yeah, I learned a new term.
Moser: [laughs] Yeah, me too. Hopefully our listeners did as well.
Before we get into One to Watch for the coming week, I do want to remind listeners that we have another save-the-date for you. If you remember, last week we talked about a YouTube Live show we were giving a try. We're going to give it a try again this coming week on this Wednesday, February 13th. We're going to be doing another YouTube Live market show where Chris Hill, Ron Gross and I are going to be talking stocks and we're going to be taking your questions. How do you find the show? It's pretty easy, actually. Just go to The Motley Fool's YouTube channel. You can go to youtube.com/themotleyfool . Hit subscribe and we can see you on Wednesday, Feb. 13. Still ironing out the time. It's going to be in the 03:00 to 03:30 PM range. Again, just go to that Motley Fool YouTube channel, click subscribe, and then you'll be able to get in touch with us on Wednesday. Hopefully we'll be able to answer a few more questions for listeners about what's going on in the markets today. Earnings season in full gear here. It's a great time to be doing what we do for a living, Matt.
All right, jumping into One to Watch for the coming week. What's the stock that you've got on your radar, Matt? What's your one you're watching?
Frankel: Mine is Tanger Factory Outlets (NYSE: SKT) , ticker SKT. Since we already talked about Realty Income and the good kind of retail, I wanted to push that a little bit further. This is another one that I own, not quite to the magnitude that I own Realty Income. Tanger is a great dividend stock, pays about 6.3% right now. It's also a kind of retail that's not terribly vulnerable to e-commerce. The nature of outlet retail is very experiential. I don't know about you, but the reason that my wife and I go to the outlets from time to time is to find stuff that we can't find anywhere else. It's got the experiential component, it's got a discount component, which keeps people physically going to those properties instead of browsing online equivalents.
They release their earnings today. By the time you're hearing this, their year-end will probably be out. Pay attention to their occupancy rate. Pay attention to any concessions they're making to tenants to keep them around. More importantly, pay attention to their future plans of how they're planning to adjust to the new retail environment. They've been gradually adding more dining options and other experiential components to their properties to further insulate them from e-commerce headwinds. Like I said, great dividend payer, 6.3%. Good coverage ratio. That's not in danger anytime soon. If that one dips, I may just add to my position in that.
Moser: Well, there you go. I like outlet shopping. You know what I find really helpful, an example of one brand that's done a good job of incorporating the outlet shopping into their app is Under Armour . A lot of times, I'll just open that app and go straight to the outlets section. You find all of this stuff that they have on sale or closeout or whatever. They're not the only ones doing it, but yeah, outlet shopping, you can always find some good stuff at some good prices.
I'm going to go with a company a lot of folks recognize here, Ellie Mae (NYSE: ELLI) , ticker ELLI. Earnings are out on Thursday. This one is interesting to me. Ellie Mae has had a great year thus far. It's up something like 30%, and this is on the tail of a tough 2018. It got to the point here where the housing market was becoming a little bit tricky, tighter housing inventory, rising interest rates, was all fueling low home affordability, so they were getting dinged on the purchase side and the refinance side. As rates go up, people tend to refinance less. That's all really what Ellie Mae does with their lending platform. So, the language on last quarter's call wasn't all that exciting. They were kind of dull, a little down in the dumps maybe. I'll be interested to see how they feel about things going into this call and the rest of the year, especially because we've heard talk about even potentially rates coming back down a little bit. A lot of people out there projecting that the Fed's not going to do anything else to rates for the rest of the year. Who knows! It's going to be interesting to me to see how their attitude is on the call. Either way, still one I like. Still own shares myself.
Speaking of One to Watch and shares we own ourselves, Matt, you bought into my One to Watch from last week, didn't you?
Frankel: [laughs] I did. I bought Markel shortly after earnings, when it dipped. Just over $1,000, I got a couple of more shares. I was very excited! I was glad Jason put that on my radar last week.
Moser: [laughs] Well, I think you and I feel the same way about that company. I'm glad you were able to add a few more shares to your portfolio.
Matt, listen, it's been great talking to you! I appreciate you joining in this week!
Frankel: Always good to be here!
Moser: Folks, as always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Today's show is produced by Dan the man Boyd. We're out there wishing or guy Austin Morgan, hoping he's feeling better there. He had surgery last week on his shoulder. Austin, hoping you're resting and recovering. For Matt Frankel, for Dennis Zember of Ameris Bancorp, I'm Jason Moser. Thanks for listening, and we'll see you next week!
Jason Moser owns shares of Ellie Mae, Markel, Under Armour (A Shares), and Under Armour (C Shares). Matthew Frankel, CFP owns shares of Bank of America, Markel, Realty Income, and Tanger Factory Outlet Centers. The Motley Fool owns shares of and recommends Ellie Mae, Markel, Under Armour (A Shares), and Under Armour (C Shares). The Motley Fool recommends Costco Wholesale and Tanger Factory Outlet Centers. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In this week's episode of Industry Focus: Financials , we start with Part 2 of host Jason Moser's interview with Ameris Bancorp (NASDAQ: ABCB) CEO Dennis Zember. This week, Dennis talks more about the opportunities with Ameris' big merger with Fidelity, where he sees the company in the next five years, and even offers up a book recommendation for us as well. Dennis said in that interview that the deal with Fidelity gives them the opportunity to drive an identity as a real alternative in the super regionals sector in big markets like Atlanta, Orlando, Jacksonville, Charleston, I'm sure North Carolina will come into play there as well. | In this week's episode of Industry Focus: Financials , we start with Part 2 of host Jason Moser's interview with Ameris Bancorp (NASDAQ: ABCB) CEO Dennis Zember. Doing that is important, but doing that while being a bank that's got passion for top-quartile results, return on assets, return on tangible capital, being focused on efficiency, having strong capital, strong credit results, all of that's just as important a part of the formula. Matthew Frankel, CFP owns shares of Bank of America, Markel, Realty Income, and Tanger Factory Outlet Centers. | In this week's episode of Industry Focus: Financials , we start with Part 2 of host Jason Moser's interview with Ameris Bancorp (NASDAQ: ABCB) CEO Dennis Zember. Dennis Zember: Probably the biggest challenge at Ameris Bank, and I'd say it's probably been a challenge since I started Valentine's Day 2005, 14 years -- not that I brought the challenge with me -- the challenge of being a small bank but growing, being a small bank with a bigger vision, is you're always punching ahead of your class. If you're a $1 billion bank that's grown quickly to be a $5 billion bank, a lot of times, you still have $1 billion processes and $1 billion solutions. | In this week's episode of Industry Focus: Financials , we start with Part 2 of host Jason Moser's interview with Ameris Bancorp (NASDAQ: ABCB) CEO Dennis Zember. This opportunity for Ameris Bank, really Ameris Bank and Fidelity, the two of us, this is an opportunity to create the kind of franchise that most community banks don't get to look at. Moser: We're very transparent about our holdings and we try to make sure people understand that the companies we talk about that we like, a lot of times, we own those businesses because we feel that they are good investments. |
27872.0 | 2019-02-05 00:00:00 UTC | War on Cash Rages On | ABCB | https://www.nasdaq.com/articles/war-cash-rages-2019-02-05 | nan | nan | In this episode of the Industry Focus: Financials podcast, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss some of the latest efforts to encourage a cashless society, answer a few questions from our Twitter followers, and discuss the stocks they're keeping their eyes on this week. It's all on this week's info-packed episode.
A full transcript follows the video.
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This video was recorded on Feb. 4, 2019.
Jason Moser: Joining me in the studio now via Skype is certified financial planner Matt Frankel. Matt, how's everything going?
Matt Frankel: Great! It's always good to be with you guys!
Moser: Another week. We're definitely getting into earnings season here. Always a lot to talk about. We'll certainly be talking more earnings as the weeks go on. I wanted to talk a little bit -- we just had the Super Bowl yesterday, and we've seen some other articles here recently that are talking more and more about how sports franchises, stadiums, arenas, they're all leading this push for cashless concessions. We were reading an article that specifically was talking about Super Bowl 53, also talking about the Tampa Bay Rays actually leading that push. This is something we talk about a lot on the show, of course, because it's a real market opportunity. It's something we've had a lot of success with, with the war on cash basket. It was an interesting article to read. From my perspective, anytime I go to one of those events, it seems to me like cash is a hindrance, it's a problem. You go and you're like, "Oh, man, I have to stop by the cash machine and get cash. It'd be much easier if I could pay with my phone or if they had contactless payments." It sounds like that's what these sporting events are trying to do.
Frankel: Yeah. Visa is a big sponsor of the Super Bowl, which probably has something to do with it. It's not just on the consumer point of view. For the business, it's a benefit, as well. Not having cash greatly reduces your chances of getting robbed or employee theft. You don't have to go to the bank anymore. You don't have to make certain capital investments like having cash registers or a big safe in the back or things like that, for example. There's benefits on both sides to not using cash. As technology evolves, it's getting easier and easier to use contactless payments and things like that. It's getting easier for the consumer to use, which has been, in my opinion, the big hindrance up to this point. I don't foresee that trend reversing anytime soon.
Moser: No, I don't either. I put out a poll on Twitter a few days ago. I was reading another article that had done a survey in regard to mobile wallet vs. contactless payments. It got me thinking, I wonder if there was a strong preference out there for one over the other, so I asked on Twitter if you had your choice, invisible world where you have to make a payment, like at a grocery store or gas station or whatever, would you prefer to use your mobile wallet -- Apple Pay or Google Pay -- or, would you prefer to use a contactless payment form like waving a card, kind of like how we get into the Metro here in D.C. I wasn't sure myself, initially, if I had a preference.
It turned out that about 60% of the people prefer using a mobile wallet, a digital wallet, vs. contactless. The more I thought about it, if I had my druthers, I would probably go with the contactless payment. A little card is so easy to pull out and wave. The less I have to worry about dealing with my phone, probably better. But, it's either way. They're both convenient and I like both options. Where do you stand on the contactless vs. the mobile wallet?
Frankel: I like the contactless. I'm actually probably the least tech-savvy person that covers fintech. [laughs] I just got a Venmo account about two weeks ago.
Moser: Nice!
Frankel: I've used Zelle and I've used cash. I can go either way. Right now, I'm still one of the people who uses cash for small transactions. I'm in the majority of that, to be clear. Cash still dominates small transactions. For example, I could never see a convenience store going completely cashless. They would lose too many customers because that's what they use. But the latest statistic is, about 48% of all transactions are now either credit or debit card based. That includes things like mobile wallet and contactless payments. I'm one of the later adopters, but I definitely go contactless, especially with how easy it is, especially through some of the newer mobile phones. I just got the Galaxy Note 9, and the Samsung Pay is really easy to use where you can. It's becoming so much more user friendly than it was a just few years ago.
Moser: Yeah. I imagine that'll probably continue to be the case. We've talked about the legalities here with places not accepting cash. I think you're right, most places would be smart to always accept cash. Ultimately, you want to give your consumers choice. The place that gives their consumers the most choices is going to probably generate more business over the course of time. You did some research into the legality questions here. If an entity decides to go completely cash free, and how that could play out on the legal side of things. What'd you come up with?
Frankel: Yeah, especially in bigger cities, it's becoming a real trend. Restaurants, things like that are going completely cashless. Starbucks is even testing out some cashless locations in certain areas. I know they have one in Seattle that's completely cashless right now. This begs the question, is that legal? If you look at the money in your wallet, it says right there, this is legal tender for all debts, public and private.
I did a little bit of digging into that. Long story short, the Treasury and the Federal Reserve both say that it's completely optional for a business to accept cash. There's two main reasons why. First, the wording on the bill itself says that in order for cash to be mandatory to be accepted, it has to be a debt. If it's not the purpose of repaying a debt, then the businesses don't need to accept it. They gave a good example involving gas stations. A lot of gas stations won't accept $50 or $100 bills at night. If you go to a clerk with a $50 bill and say, "I want to fill up my tank," they have the right to say no. If they let you pump and then go to pay, then it becomes a debt and they legally do have to take the money. That's an interesting gray area. So, if they let you get the merchandise first, then it becomes, you're indebted to them, and they do have to take it.
Reason No. 2 is that although everything that's written on our money is implicitly backed by our law, there's no actual federal law in the book that says cash is legal tender. You would think there is, but there's no law. This comes straight from the U.S. Treasury. There is no law on the federal level that says that businesses have to accept cash. It's completely optional. Now, there are some local laws. Massachusetts, for example, has a lesser-known state law that says that businesses have to accept cash. So, you're not going to see a cashless Starbucks in Massachusetts anytime soon. There's a big push on some local levels, in New York, for example, there's some politicians who say that cashless businesses unfairly discriminate against lower-income individuals. Makes sense. A lot of people in the lower income brackets don't have bank accounts, don't have debit cards, things like that. The argument is that you want a fully inclusive marketplace. That's definitely a problem that would have to be worked out before cashless businesses become really widespread.
But, yeah, it's completely legal for businesses to refuse cash, which I was surprised to find out. It makes sense when you think about those two reasons.
Moser: Yeah, those are good examples. Matt, I think you may need to go in there and update your LinkedIn profile there to reflect your legal expertise. Good research there, man! I appreciate that. I'm sure our listeners do, too.
OK, let's pivot over to Twitter for the week. We had some fun stuff happening on Twitter. We always like to shine a light there to some of the good stuff that's going on. @JGLabonte said, "Hey, TMFJMo, I found that online checkout using PayPal is so frictionless that I buy stuff before I can talk myself out of it. I bet lots of other folks have this problem, too. Next time, I'll try to buy more PayPal instead." Jay, probably not a bad idea. PayPal will pay dividends for some time to come. But I feel your pain, I know the problem.
@Every90Midwest said, "Hey, you mentioned you could put four more in your war on cash basket. Care to share what those would be? Are Discovery and American Express (NYSE: AXP) two of them?" Matt, I'm going to give you first up here. If you could add any stock or stocks to the war on cash basket, what would you throw in there that's not currently in there?
Frankel: I like American Express because they do a really good job of spanning the entire spectrum, especially the lower-end consumers. I've referred to Green Dot , it's one of my favorites that I'm about to talk about. They've done a great job of the prepaid debit card market, being really inclusive to the underbanked, which is what they call people without bank accounts and things like that. American Express has been a pioneer of solutions for that segment of the market. I would definitely put Amex in there.
Green Dot is one I talk about all the time. They're not only focusing on their own products, but on helping other companies offer cashless products to customers. To name a couple more, I'd actually put Apple in the war on cash basket. Apple Pay is getting bigger and bigger. Amazon 's another one, they're the ultimate cashless business.
Moser: That's a good point.
Frankel: I would argue that you can put more than four in the war on cash basket.
Moser: We could probably have our own fund. We could build an ETF with all these ideas. I like all those names you said. I would lean toward American Express over Discovery. Discovery is not a bad business, I just don't know that it has the same brand power that American Express has and the optionality to build out new offerings and whatnot. I also was thinking about this, Berkshire Hathaway . You could throw that in there as a lower-risk play, but they recently made some big investments in to the cashless movement. That's a way you could participate.
Perhaps for a little global exposure, Latin America in particular, MercadoLibre might be one worth looking at. They have their own payments solution there, Mercado Pago. Could be a little bit of a higher risk profile, maybe, but definitely gives you exposure to that.
A lot of different options out there for investing in that cashless movement. Nice problem to have, I suppose.
One more question we got, from @CNGChicago. He asks, "Gents, any good forums for real estate investors you would recommend? Appreciate your work." Matt, this seems like it's right up your alley. I'm going to yield the floor to you and see if you can't offer this guy some good resources.
Frankel: First, I need to start off by saying The Motley Fool is going to be your go-to source for real estate before too long.
Moser: Hey, now!
Frankel: [laughs] We're launching our real estate sister website a little bit later this year. Stay tuned for that! Listen to the interview with Matty A. that you did a few months ago for a little more details on that.
Talking about some existing places to go, my favorite is biggerpockets.com. Probably the best real estate social network and full of resources. If you're a beginner or a seasoned investor looking for more advanced strategies, that's a good place to go. connectedinvestors.com is another good real estate social network. They're more oriented in my mind toward the fix-and-flip market than they are the buy-and-hold real estate market. Two great resources there. There's a bunch of them, but those are two of the really big ones.
Moser: All good stuff. Thanks, man! Yeah, that was a good interview with Matty Argersinger from a few months back. He gave a lot of good insight as to what you guys are doing. I know you're excited to get that thing going. Stay tuned, that's right around the corner.
Let's jump into what's coming up here for the week. We got our One to Watch, taking a look at stocks on our radar here for earnings season. What's one that you're watching this week, Matt?
Frankel: I'm watching Berkshire, ticker BRK-A or BRK-B, depending on how much money you want to spend on each share. There are two big events coming up within the next couple of weeks that I'm paying attention to. On the 15th of February, all hedge funds and companies with big stock portfolios like that have to disclose what they did in the fourth quarter. I have a feeling we're going to see that Berkshire was very active in the stock market in the fourth quarter. They were sitting on over $100 billion in cash in an environment that is Warren Buffett's dream environment for investing. I wouldn't be surprised if he bought himself some Christmas presents on the Christmas Eve lows there, especially things like Apple and a lot of his favorite companies that really took a dive the in the second half of the fourth quarter.
Beyond that, there's also Buffett's closely watched annual letter. That comes out about a week after that, along with Berkshire's year-end results, where we'll find out how much of their own stock they bought back, which has been a hot topic lately. And, Buffett's feelings on the market and where Berkshire might be going. Hopefully, he whittled down his cash holdings a little bit. Investors would be happy to see that. I think that's exactly what you're going to find out.
Moser: We're looking forward to that. I'm going to go, on that same wavelength there, our little baby Berkshire that we always call it, Markel (NYSE: MKL) , ticker MKL, earnings are coming out on Tuesday. Not a lot that goes on with this business on a quarter-to-quarter basis. It's pretty consistent. You've got the insurance business, you've got the Markel Venture side of things. They've got their investment portfolio, much like Berkshire Hathaway has. Listeners will recall that there was a little bit of an issue here. They announced there was an investigation into the reinsurance side of the business, specifically it was in regard to reserves. Looking for any clarity on that, and how it could play out on the business here for the coming year. It's a reserve issue, it doesn't sound like it's anything very pivotal to the overall company. But, hey, maybe it plays out on the book value of the company in the short run, and maybe that offers investors an opportunity if there's a little dip in the stock. This has been one that we've owned for long periods of time here in a number of our services here at The Fool, and I suspect that will remain the case regardless of what they say with the earnings release. But hey, if the stock takes a dive, investors may want to take a look at it because it's still a very good business.
I think that's going to wrap it up for us this week. Matt, appreciate you, as always, joining!
Frankel: Always good to be here! Looking forward to next week!
Moser: Yes, sir! Speaking of next week, a reminder for our listeners. Next week, we will have part two of our Between Two Fools interview with Dennis Zember, Ameris Bancorp CEO. Stay tuned for that! Really excited to be able to bring you that. Thanks again for listening, folks!
As always, people on the program may have interest in the stocks they talk about and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Today's show is produced by Dan the Man Boyd. Enjoy that new motorcycle, Dan! Be careful! For Matt Frankel, I am Jason Moser. Thank you again for listening! And we will see you next week!
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jason Moser owns shares of Alphabet (C shares), Amazon, Apple, Markel, PayPal Holdings, Starbucks, Twitter, and Visa. Matthew Frankel, CFP owns shares of American Express, Apple, Berkshire Hathaway (B shares), and Markel. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Discovery (C shares), Markel, MercadoLibre, PayPal Holdings, Starbucks, and Twitter. The Motley Fool owns shares of Visa and has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | There's a big push on some local levels, in New York, for example, there's some politicians who say that cashless businesses unfairly discriminate against lower-income individuals. They've done a great job of the prepaid debit card market, being really inclusive to the underbanked, which is what they call people without bank accounts and things like that. That comes out about a week after that, along with Berkshire's year-end results, where we'll find out how much of their own stock they bought back, which has been a hot topic lately. | Jason Moser owns shares of Alphabet (C shares), Amazon, Apple, Markel, PayPal Holdings, Starbucks, Twitter, and Visa. Matthew Frankel, CFP owns shares of American Express, Apple, Berkshire Hathaway (B shares), and Markel. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Discovery (C shares), Markel, MercadoLibre, PayPal Holdings, Starbucks, and Twitter. | In this episode of the Industry Focus: Financials podcast, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss some of the latest efforts to encourage a cashless society, answer a few questions from our Twitter followers, and discuss the stocks they're keeping their eyes on this week. It got me thinking, I wonder if there was a strong preference out there for one over the other, so I asked on Twitter if you had your choice, invisible world where you have to make a payment, like at a grocery store or gas station or whatever, would you prefer to use your mobile wallet -- Apple Pay or Google Pay -- or, would you prefer to use a contactless payment form like waving a card, kind of like how we get into the Metro here in D.C. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Discovery (C shares), Markel, MercadoLibre, PayPal Holdings, Starbucks, and Twitter. | We'll certainly be talking more earnings as the weeks go on. We've talked about the legalities here with places not accepting cash. Long story short, the Treasury and the Federal Reserve both say that it's completely optional for a business to accept cash. |
27873.0 | 2019-02-01 00:00:00 UTC | The 3 Stocks on the MFM Team's Radar This Week | ABCB | https://www.nasdaq.com/articles/3-stocks-mfm-teams-radar-week-2019-02-01 | nan | nan | At The Motley Fool, we're buy-and-hold investors, but before we can hold a stock, we have to pick the stock. So our analysts are always on the hunt for excellent investment ideas. And every week, some businesses stand out from the crowd, which is why every Motley Fool Money episode ends with host Chris Hill asking his guests -- this time, senior analysts Aaron Bush, Ron Gross, and Jason Moser -- which companies they have their eyes on and why.
Their picks for this episode: Hawaiian Holdings (NASDAQ: HA) , operator of Hawaiian Airlines; small Georgia-based bank Ameris Bancorp (NASDAQ: ABCB) ; and behind-the-app-scenes search company Elastic (NYSE: ESTC) .
A full transcript follows the video.
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Chris Hill: Let's get to the stocks on our radar. Our man behind the glass, Steve Broido, is going to hit you with a question. Ron Gross, you're up first. What are you looking at this week?
Ron Gross: I've got Hawaiian Holdings, HA, operates Hawaiian Airlines, 15th largest airline in North America by passengers carried. Most extensive routes to the Hawaiian Islands, fuel and labor costs remained fairly stable, which has allowed them to increase the bottom line nicely. The stock is at a historically low valuation, however, because of worries about increasing competition. But I think the company's in a pretty good place to combat that. 1.4% yield for those looking for a dividend.
Hill: Steve, question about Hawaiian Holdings?
Steve Broido: This one might be a little bit tricky. When we were in Hawaii, there seemed to be a lot of people going between island to island that lived there. What percentage do you think of that makes up this business vs. me flying here from Virginia?
Gross: It's a smaller percent than people popping in from the mainland and from overseas, but it's an important part. There are some airlines that actually specialize in that island hopping.
Hill: Jason Moser, what are you looking at?
Jason Moser: Ameris Bancorp, ABCB. Ameris' earnings came out on Friday. No surprises, really. It reinforced what they already told us about a month ago when they announced the Fidelity Bank acquisition. Efficiency ratio down to 54% from 60% a year ago. That's important because it's a ratio that tells you they're earning more than they're spending. Big exposure with this acquisition that's going to give them additional presence in Atlanta and Orlando. The stock actually fell 10% on that news a month or so ago, it actually touched under $30. But to me, it was a no-brainer. This is going to make this a bigger, more powerful bank. A good business in an attractive space, one you can plan on owning for a long time to come. As a side note, I'm going to have the very good fortune of interviewing CEO Dennis Zember very soon. We'll have that available for Industry Focus , and perhaps other podcasts, too, Chris.
Hill: Steve, question about Ameris Bancorp?
Broido: Convince me that banks aren't just commodities.
Moser: Steve, banks aren't just commodities. You can trust me.
Broido: Thank you!
Hill: Aaron Bush, what are you looking at?
Aaron Bush: I'm looking at Elastic, ESTC. Elastic is a search company, but it's nothing like Alphabet . They're an enterprise search company. I'll explain that with a couple of examples. Ron, when you're swiping left and right on Tinder it's actually Elastic that powers the search looking for your matches. When, after your Tinder date, you're looking to take an Uber back home, it's Elastic that powers the search to find matches between drivers and riders. They help big companies work to find things in servers, network outages. It's a really big opportunity. The company is growing like wildfire. The stock is expensive, but it's a really cool opportunity, I think.
Hill: Steve, question about Elastic?
Broido: Is the goal for this company to get acquired by somebody like Google?
Bush: I don't think Google would acquire them. This could be a stand-alone business, but still be a pretty massive business on its own one day.
Hill: Three stocks, Steve. Do you have one you want to add your watch list?
Broido: I'm feeling Elastic.
Bush: Sweet!
Gross: Honey, Aaron was kidding!
Aaron Bush has no position in any of the stocks mentioned. Chris Hill has no position in any of the stocks mentioned. Jason Moser has no position in any of the stocks mentioned. Ron Gross has no position in any of the stocks mentioned. Steve Broido has no position in any of the stocks mentioned. The Motley Fool recommends Hawaiian Holdings. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Their picks for this episode: Hawaiian Holdings (NASDAQ: HA) , operator of Hawaiian Airlines; small Georgia-based bank Ameris Bancorp (NASDAQ: ABCB) ; and behind-the-app-scenes search company Elastic (NYSE: ESTC) . Jason Moser: Ameris Bancorp, ABCB. And every week, some businesses stand out from the crowd, which is why every Motley Fool Money episode ends with host Chris Hill asking his guests -- this time, senior analysts Aaron Bush, Ron Gross, and Jason Moser -- which companies they have their eyes on and why. | Their picks for this episode: Hawaiian Holdings (NASDAQ: HA) , operator of Hawaiian Airlines; small Georgia-based bank Ameris Bancorp (NASDAQ: ABCB) ; and behind-the-app-scenes search company Elastic (NYSE: ESTC) . Jason Moser: Ameris Bancorp, ABCB. And every week, some businesses stand out from the crowd, which is why every Motley Fool Money episode ends with host Chris Hill asking his guests -- this time, senior analysts Aaron Bush, Ron Gross, and Jason Moser -- which companies they have their eyes on and why. | Their picks for this episode: Hawaiian Holdings (NASDAQ: HA) , operator of Hawaiian Airlines; small Georgia-based bank Ameris Bancorp (NASDAQ: ABCB) ; and behind-the-app-scenes search company Elastic (NYSE: ESTC) . Jason Moser: Ameris Bancorp, ABCB. At The Motley Fool, we're buy-and-hold investors, but before we can hold a stock, we have to pick the stock. | Their picks for this episode: Hawaiian Holdings (NASDAQ: HA) , operator of Hawaiian Airlines; small Georgia-based bank Ameris Bancorp (NASDAQ: ABCB) ; and behind-the-app-scenes search company Elastic (NYSE: ESTC) . Jason Moser: Ameris Bancorp, ABCB. At The Motley Fool, we're buy-and-hold investors, but before we can hold a stock, we have to pick the stock. |
27874.0 | 2019-01-25 00:00:00 UTC | Ameris Bancorp (ABCB) Q4 Earnings Surpass Estimates | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-q4-earnings-surpass-estimates-2019-01-25 | nan | nan | Ameris Bancorp (ABCB) came out with quarterly earnings of $0.96 per share, beating the Zacks Consensus Estimate of $0.93 per share. This compares to earnings of $0.63 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 3.23%. A quarter ago, it was expected that this bank would pos t earnings of $0.90 per share when it actually produced earnings of $0.91, delivering a surprise of 1.11%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times.
Ameris Bancorp, which belongs to the Zacks Banks - Southeast industry, posted revenues of $130.02 million for the quarter ended December 2018, missing the Zacks Consensus Estimate by 1.62%. This compares to year-ago revenues of $93.09 million. The company has not been able to beat consensus revenue estimates over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call .
Ameris Bancorp shares have added about 11.4% since the beginning of the year versus the S&P 500's gain of 5.4%.
What's Next for Ameris Bancorp?
While Ameris Bancorp has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power o f earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Ameris Bancorp was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.95 on $132.67 million in revenues for the coming quarter and $4.15 on $772.70 million in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Southeast is currently in the bottom 43% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp (ABCB) came out with quarterly earnings of $0.96 per share, beating the Zacks Consensus Estimate of $0.93 per share. Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report To read this article on Zacks.com click here. There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. | Ameris Bancorp (ABCB) came out with quarterly earnings of $0.96 per share, beating the Zacks Consensus Estimate of $0.93 per share. Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report To read this article on Zacks.com click here. The current consensus EPS estimate is $0.95 on $132.67 million in revenues for the coming quarter and $4.15 on $772.70 million in revenues for the current fiscal year. | Ameris Bancorp (ABCB) came out with quarterly earnings of $0.96 per share, beating the Zacks Consensus Estimate of $0.93 per share. Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report To read this article on Zacks.com click here. Ameris Bancorp, which belongs to the Zacks Banks - Southeast industry, posted revenues of $130.02 million for the quarter ended December 2018, missing the Zacks Consensus Estimate by 1.62%. | Ameris Bancorp (ABCB) came out with quarterly earnings of $0.96 per share, beating the Zacks Consensus Estimate of $0.93 per share. Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report To read this article on Zacks.com click here. While Ameris Bancorp has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? |
27875.0 | 2019-01-25 00:00:00 UTC | Ameris Bancorp (ABCB) Q4 2018 Earnings Conference Call Transcript | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-q4-2018-earnings-conference-call-transcript-2019-01-25 | nan | nan | Ameris Bancorp (NASDAQ: ABCB)
Q4 2018 Earnings Conference Call
Jan. 25, 2019 10:00 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Good morning, and welcome to the Ameris Bancorp fourth-quarter 2018 financial results conference call. [Operator instructions] Please note, today's event is being recorded. I would now like to turn the conference over to Nicole Stokes, chief financial officer. Please go ahead, ma'am.
Nicole Stokes -- Chief Financial Officer
Great. Thank you, Rackam. 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 Dennis Zember, president and CEO of Ameris Bancorp; and Jon Edwards, our chief credit officer. Dennis will begin with some opening general comments, and I will discuss the details of our financial results before we open up for Q&A. Before we begin, I'll remind you that our comments may include forward-looking statements. These statements are subject to risks and uncertainties.
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The actual results could vary materially. We list some of these 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 our appendix to our presentation. And with that, I'll turn it over to Dennis for opening comments. Dennis?
Dennis Zember -- President and Chief Executive Officer
Thank you, Nicole, and thank you to everyone who's taken the time to join us this morning on our fourth-quarter and year-to-date 2018 earnings conference call . Like I said in my press release quote, we are delighted with our results in 2018. And we believe we've got a lot of momentum carrying us into this new year. For the current quarter, we're reporting adjusted earnings per share of $0.96, which is an increase of 54% over the same quarter in 2017 when we reported $0.63 per share.
Our adjusted earnings excludes mostly merger-related costs, as well as some costs associated with a couple of executive retirements. Including these costs, our actual earnings came in at $0.91 per share compared to $0.24 in the fourth quarter of 2017. 2017 earnings were affected, if you remember, by the adjustment in deferred tax asset associated with the Tax Act. For the year-to-date period, we're reporting adjusted earnings of $3.38 per share compared to $2.48 in the same -- in -- excuse me, in 2017.
I remember being in investor conferences back a few years ago talking about our pathway to $1 per share for a year -- for a whole year. And so to see $3.38 for a whole year, and honestly quarterly earnings approaching $1 per share, we feel pretty accomplished here in Jacksonville. I'm going to go through some of the highlights in 2018, but I'm going to focus on the ones that are impactful as we consider our 2019 opportunity. The first item to highlight is where our operating ratios finish the year.
The fourth quarter of the year is normally one of our slower quarters. But during the quarter, we posted an impressive return on assets of over 1.60% and a return on tangible common equity of almost 21%. Granted some of this move higher compared to last year was due to the Tax Reform Act, but even when that is normalized and you're looking at comparable tax rates, we improved our core profitability by over 15%. We focused on two areas of the business to accomplish this.
Going into the year, we knew there was going to be an industry brawl for deposits, and we were prepared with good plans to deal with margin pressures. We redoubled our efforts to reinvest only the incremental revenues from the rate hikes into our deposit costs and we succeeded. The result is that we're reporting exactly the same margin in 2018 that we reported in 2017. Notable like the press release said, given a 46% increase in the balance sheet and that today we are very competitive with our deposit rates.
In other words, we didn't get this result by holding our deposit cost to such a low level that both the costs and the balances are unsustainable. Boiling this down to just two sentences on the call makes it sound so easy, but it has been such a granular effort at the customer level. It's not just happenstance that we managed to zero sensitivity in both years. And I want to commend our bankers and the leaders in our treasury group for seeing us through this rate cycle.
We also made the move in operating efficiency that we've been promising for some time. The announcement of Hamilton and Atlantic Coast, along with the growth we experienced over the past two years, gave us the opportunity to finally make this improvement. Jim and Nicole found an aggressive level of cost savings in our due diligence on these banks and didn't we get that number. We looked at what we were doing administratively, and we managed to bring these new banks on with little to no incremental staff or overhead.
The result is that we moved our efficiency ratio down to 54% in the fourth quarter compared to 60% in the same quarter a year ago. That alone is impressive enough to be the end of the story, but we kept working and found some additional savings opportunities that should push us closer to 50% level very soon. I mentioned briefly about the deals we announced that closed and integrated. All of the deals together amounted to about $3 billion of total assets, about 40 offices or -- and about 400 employees.
Our staff did a great job not only on the systems and customer conversions, but more importantly with the new employees that started wearing our jersey very quickly. I don't know how you can have a successful acquisition if you don't win over the new staff with an inspiring message about the company they're joining and without systems that let them serve their customers efficiently and quickly. Our staff has mastered this element of M&A, and I attribute a lot of our success in this area to their hard work. Credit quality has been a theme for the last half of this year.
And so we've added some slides to our presentation that looks at the portfolio at -- with various segments. We don't really intend to go over those today but are available to questions by phone or in upcoming conferences to discuss. We're looking at several things that give us real confidence about loan quality. First is our diversification in cross-loan-type and geography that inflates us to a real degree against a recession or a slowdown in one area or in one industry.
Secondly are the results. We have very low charge-offs, nonperformers and past dues, especially on the legacy side where we originated the loan. Even on the acquired side, we've performed better than our initial model. For the year, we're reporting 18 basis points of net charge-offs.
And 55% of that relates to the insurance agency fraud that we dealt with in the middle of the year. Just looking at our legacy portfolio to gauge the strength of our credit policies and our credit administration, we experienced only 4 basis points of net charge-offs in 2018 compared to 17 basis points in 2017. And we only have about 20 basis points of legacy NPA. Lastly, our organic growth.
For the year, we came in a little slower than we wanted, mostly due to maybe being too selective on some lower-yielding CRE opportunities. As our commercial construction book A then moved to permanent, we were are also seeing some investor CRE payoffs that surprised us, that neutralized really impressive production numbers out of the bank. The fourth quarter is seasonal for us, more so than in the past, given payoffs in premium finance, some municipal credits and ag production. So being flat this quarter doesn't shake my confidence in our growth goals for 2019.
On Page 11 of the investor presentation, and Nicole shows that loan production in the bank was $605 million, yielding $574 million. That production level is 30% higher than the same quarter last year. And the yield pickup reflects almost 85% of the move in rates this year. I'm looking at our pipeline in Atlanta and Orlando and they're growing.
The pipelines in the rest of our markets in our existing markets are very strong. And I'm confident we'll continue to have a growth story that's as impressive as our operating ratios. We reported double-digit deposit growth this year, which is outstanding given the kind of competition we've all seen. We have 42% growth in checking accounts.
And we reduced our dependency on non-deposit borrowings at the bank down to only 1.5% of assets. Our momentum on the deposit side is an additional strength we have going into 2019. And our loan-to-deposit ratio below 90% finally at the end of the year takes a little bit of pressure off of moving deposit cost higher. On fidelity, we are busy with Palmer and with his teams working on integration plan and on the future.
We're both recruiting bankers in Atlanta that can help us redeploy the cash flows we expect from the indirect portfolio, and we're looking forward to a merger date that we hope will be in the second quarter of this year. With that, I will turn it over to Nicole for some more details on the numbers.
Nicole Stokes -- Chief Financial Officer
Thank you, Dennis. As you mentioned today, we're reporting an adjusted earnings of $45.9 million or $0.96 per share for the fourth quarter. These adjusted results primarily exclude $997,000 of merger charges, $2 million of executive early retirement benefit, $754,000 of expenses related to restructuring in the branch consolidation, $882,000 of the financial impact from Hurricane Michael and $250,000 loss on the sale of the branch building. In addition, we had a prior-year tax benefit of $1.7 million that we excluded that benefit from adjusted earnings.
Including all of these items, we are reporting GAAP earnings of $43.5 million or $0.91 per share. For the full year, we're reporting earnings of $2.80 per share and adjusted earnings of $3.38 per share, which excludes those same-type items. We're reporting GAAP earnings of $121 million compared to $73.5 million for last year, and adjusted net income of $146.2 million compared to $92.3 million for last year. One of the key metrics we focused on in 2018 is the operating efficiency ratio.
Our adjusted efficiency ratio for the fourth quarter of 2018 was 54.1%. And the ratio for the full year was 56.19%. This is a significant improvement and something we're really proud of, especially when you compare it to our fourth-quarter ratio at 60.88% last year and at full year last year at 60.27%. We continue to press for consistent efficiency at low 50% levels due to our announced cost-savings initiatives, which go into effect in the first quarter of 2019, and the fact that we have fully integrated Hamilton and realized the cost savings we were expecting.
I just can't emphasize enough the gratitude I have to our team. Reducing inefficiency ratio down to 54% from over 60% while growing assets over 45% in the same time frame is quite an accomplishment. And it takes every single Ameris team member to make something like that happen. It truly speaks volume of our dedication and focus on financial results and strategy.
Our adjusted return on assets in the fourth quarter, which is normally a slower quarter for us, was 1.61%, and an increase from the 1.53% reported the last quarter and the 1.20% we reported in the fourth quarter of last year. And again, the Tax Reform Act had an impact on that 1.20%. But even on an apples-to-apples basis, our ROA would have been this higher by 15% over our adjusted results of 17%. We continue to believe in ROA north of 150% as an impressive representation of our core profitability in our business model.
We stay focused on key operating results for both acquisitions and organic growth. Our return on tangible common equity was 20.95% in the fourth quarter compared to 13.91% for the same quarter last year. Our tangible book value per share was $18.83 at the end of the year, an increase of $1.05 per share during the fourth quarter. Moving on to the net interest margin.
The yield curve has certainly not been our friend. The pressure on our margins in the yield curve have made margin expansion difficult, if not possible. We were able to maintain a stable margin during 2018 despite aggressive deposit pricing pressure as competitive betas on deposits have significantly risen from the Fed rate action along with economic factors that have limited upward movement for the long end of the curve that typically affects our long-term loan pricing. Our margin excluding accretion was 3.79% for both 2017 and '18 year to date.
On a quarter-over-quarter basis, our margin declined 2 basis points during the fourth quarter from 3.77% last quarter to 3.75% this quarter. Our normal influx of municipal liquidity in the last couple of months of the year always boost our short-term liquidity. And this year it costs us about 3 basis points in the margin in the fourth quarter. For the fourth quarter, our yield on earning assets increased by 3 basis points while our total funding cost increased 4 basis points.
Excluding accretion, our yield on total loans increased 5 basis points from the third quarter to the fourth quarter. Our core bank production yields was 5.74% for the quarter against 4.89% last year and 5.51% last quarter. On the deposit side, we were aggressive on the deposit pricing in the fourth quarter to protect our core deposit against competitive pricing pressure. Even with our aggressive deposit strategy, our year-to-date deposit beta was 40 basis points.
Because of our ability to maintain and grow deposits, we were able to reduce our average balance and home loan bank advances by 80%, which carries a much higher cost of funds of over 200 basis points compared to our average cost of deposits of 79 basis points. Noninterest income totaled $30.5 million in the fourth quarter compared to $30.2 million last quarter. Mortgage revenue, which is cyclical and tends to slow in the fourth quarter increased 10% compared to the fourth quarter last year. The gain on sale premium continues to improve, but still below the premiums that we saw fourth quarter of last year.
Our recruitment of strong producers with steady sources of referrals have helped us to maintain those levels of production. And in addition, we continue to see new home building and home sales in our market, although we're focused on watching credit and economic metric for any sign of weakness, which we have not yet seen. Since I'm discussing mortgage, I thought I'd hit some highlights from our other lines of business. Overall, growth in our lines of business have been strong.
I already mentioned the quarter rate production in the retail mortgage group. But the year-to-date production increased by over 17%.Production in the warehouse lending division increased almost $1.1 billion or 31% during the year compared to last year. Loan production in our SBA division remained strong as total production was over 19% higher this year than last year. And we believe we can continue to sustain long -- strong growth rate in these divisions for the next few years.
It seems like almost every quarter this year I've had to discuss our corporate tax rate, mostly because of clarification from the changes in tax law last year. This quarter, when we filed our 2017 income tax returns in the fourth quarter, we had a large provision to return benefit related to our state tax expense. We excluded that $1.7 million benefit from adjusted earnings. As a result of that same calculation, we also made an adjustment to our 2018 state tax liability in the fourth quarter, which lowered the fourth-quarter tax rate but brings our year-to-date tax rate in line at 21.5%.
This is slightly below the expected rate we had of 22.5%, but we believe is consistent going forward, so our tax rate could be between 21.5% and 23%. On the balance sheet side, I'll touch on that a little bit. Dennis has already touched on some of that. Our total assets increased over $3.5 billion or 45.7% for the year.
Excluding the acquisitions, total assets grew $522 million or 6.7% organically. Organic loan growth was slower this year coming in at $483 million or 8.5%. And as Dennis stated, production was strong but net growth was negatively impacted by early payoffs. On the deposit side, deposit growth has been a challenge and continues to be a focus as we enter 2019.
Exclusive of the effect of the acquisition, the year-over-year deposit growth was just over $549 million or 8.6%. I think that this is a really good time to point out that in this competitive environment we were able to grow core deposits at a faster pace than loans while we kept a steady margin. To repeat, exclusive of acquisitions, we grew loans $522 million. We grew core deposit $549 million.
And I think that's really something to be proud of as it not only grows the balance sheet but it grows the balance sheet in a sustainable way that increases the value of our company for our shareholders. We believe the fidelity announcement only strengthens of our ability to grow core deposits and funds our future growth as we reposition their balance sheet and their operating model into ours. In conclusion, we're proud of our 2018 financial results, but we are already moving forward into 2019 to make it more successful. We're confident in our ability to execute our integration plans while continuing to deliver top quartile results for our shareholders.
And with that, I will turn the call back over to Dennis for closing comments.
Dennis Zember -- President and Chief Executive Officer
I don't have any comments. We will just go into question.
Nicole Stokes -- Chief Financial Officer
OK. Rackam, we are ready for questions.
Questions and Answers:
Operator
[Operator instructions] Today's first question comes from Tyler Stafford of Stephens Inc. Please go ahead.
Tyler Stafford -- Stephens, Inc. -- Analyst
Hey, good morning, everyone.
Nicole Stokes -- Chief Financial Officer
Good morning.
Tyler Stafford -- Stephens, Inc. -- Analyst
Hey, Nicole, I just -- I missed it in your prepared remarks, what was the tax rate guidance for this year?
Nicole Stokes -- Chief Financial Officer
21.5% to 23%. From 21.5% to 22.5%.
Tyler Stafford -- Stephens, Inc. -- Analyst
OK, got it. Thanks. So the press release talked about in the first quarter realizing -- starting to realize the branch and the $20 million kind of efficiency initiative, just where are you in that process? Have you realized any so far? And what's the expectation for realizing those this year? And how much do you think might be reinvested to that?
Nicole Stokes -- Chief Financial Officer
Great. Thank you, Tyler. We -- all of those, we still expect, anticipate all of those. There's nothing that's been derailed from that plan.
The branch closing have already occurred. They occurred January 11. So those have already occurred, and the remaining cost savings are full. We current -- we have no plans to change any of those announcements.
Tyler Stafford -- Stephens, Inc. -- Analyst
Got it. OK. Just looking at this quarter expenses, both the intangible amortization and the expense line items were up. Do you have -- with fidelity in the fold, do you have what a reasonable intangible expense that would be for this year? And then was there anything more onetime in the other expense line item in this quarter?
Nicole Stokes -- Chief Financial Officer
Sure. So I'll touch on the intangible really quick. So the fourth quarter, there was a catch up as intangible amortization that was on our core deposit intangible. We finalized the evaluation of that.
And so we had to -- it came in a little bit higher than we had originally booked in June. So we had to catch up six months of amortization in that. So that run rate for the fourth quarter has about $0.5 million of extra that we're not -- it is a one-time catch up this quarter. With the fidelity numbers, I don't think that we've disclosed those quite yet.
Tyler Stafford -- Stephens, Inc. -- Analyst
OK. And then the other expense line, was there anything unusual there? Other than what you called out in the -- as onetime in the press release?
Nicole Stokes -- Chief Financial Officer
No, there's really not. I mean, everything that was kind of a one-time item, which include the executive retirement, the hurricane. The hurricane expenses came in a little bit lighter than we had originally thought, which is good. I mean, we're thankful that that was less than what we had originally anticipated.
Tyler Stafford -- Stephens, Inc. -- Analyst
OK, got it. Switching over to -- just to the margin and the deposit growth you saw this quarter, obviously, very strong NIB growth. And you touched on a little bit in the commentary, but can you just give us a little bit more sense of your expectation for continued noninterest-bearing growth this year, just given the strength you saw in the fourth quarter?
Dennis Zember -- President and Chief Executive Officer
I would -- excuse me -- I would tell you the -- going into this year, we have much more momentum in sales efforts -- successful our sales effort and strategies on the deposit side. I think this year it doesn't feel like there's as much rate pressure on the deposit side. Our name recognition in Atlanta, even though we've not closed the fidelity deal, our name recognition in Atlanta has already spurn some deposit opportunities that we probably wouldn't have expected to have this time last year. So outside of the fidelity transaction, just what we would do organically, I feel good.
And we would do better this year than last. And I'm not saying that -- we probably get 10% or 11% on the deposit growth this year. I'm not thinking it's going to go to 13% or 14% or 15%. But holding the line right there, double-digits on the larger balance sheet, I feel pretty confident here.
Tyler Stafford -- Stephens, Inc. -- Analyst
OK, got it. And then last one for me on USPF. Maybe a little bit more nuanced, but did those loans reprice each year at renewal? And then at renewal, are you able to pick up any higher spreads on those, just given the velocity of those loans?
Nicole Stokes -- Chief Financial Officer
Yes. Those loans typically have an average maturity of about 10 months. And so they reprice every 10 months.
Tyler Stafford -- Stephens, Inc. -- Analyst
And are you...
Nicole Stokes -- Chief Financial Officer
[Inaudible] pickup.
Tyler Stafford -- Stephens, Inc. -- Analyst
Hello?
Nicole Stokes -- Chief Financial Officer
Tyler?
Tyler Stafford -- Stephens, Inc. -- Analyst
Oh, sorry. I thought you were looking at something. What was...
Nicole Stokes -- Chief Financial Officer
No, I was just thinking.
Tyler Stafford -- Stephens, Inc. -- Analyst
What's the -- do you have any idea just what the typical pickup in spreads are on that?
Dennis Zember -- President and Chief Executive Officer
It's maybe about 60 basis points...
Nicole Stokes -- Chief Financial Officer
About 60 points over this year.
Tyler Stafford -- Stephens, Inc. -- Analyst
OK. Got it. All right, that's it for me. Nice quarter.
Thanks, guys.
Nicole Stokes -- Chief Financial Officer
Thank you, Tyler.
Operator
And our next question today comes from Brady Gailey of KBW.
Brady Gailey -- KBW -- Analyst
Hey, good morning, guys.
Dennis Zember -- President and Chief Executive Officer
Good morning.
Nicole Stokes -- Chief Financial Officer
Good morning, Brady.
Brady Gailey -- KBW -- Analyst
So maybe just start on the net interest margin. I mean, you talked about the pressure that the curve has put out there. You've all done a decent job holding that flat. Do you think that you can continue to hold the core margin flat from here? Or do you think there's some downside in '19?
Nicole Stokes -- Chief Financial Officer
No. It's interesting, because when I said last year internally, talked about our growth, our growth was cold and leaving our margins stable. I really had some shock spaces from our team and some pushback. And so the fact that we've been able to do that is remarkable.
So I think it would be hard for me to say that we expect any decline. And I really don't see an expansion. Knowing that our efforts -- kind of going back to Tyler's question, knowing that our effort -- this past year, we really focused on deposit growth. And looking into '19, we're already tweaking some of those initiatives that we have for deposit growth and focusing more on the noninterest-bearing that we all recognize that that's where we really are going to be able to sustain the margin, if not growing those noninterest-bearing deposits.
So that's our focus. So I'd like to say that a stable margin is absolutely our expectation.
Dennis Zember -- President and Chief Executive Officer
And Brady, I would add that if you look at loan production in the quarter going back to my comment that loan production dollars were up, but the yield is as well to 5.74%. If we're coming in at 5.74%, we've got the loan deposit ratio -- loan-to-deposit ratio below 90%. So we probably got a little -- a couple basis points of pickup when the loan-to-deposit ratio moves a little bit higher. But if loan yields are coming in at 5.74%, I just -- I see plenty of opportunity to maintain the margin where we were this quarter.
Brady Gailey -- KBW -- Analyst
All right. And then the back half of the year with LION is the mix, I know their margin is a little lower than yours. What's the impact to the core NIM on having LION in that? It's around, what, 5 or 10 basis points of a negative impact?
Dennis Zember -- President and Chief Executive Officer
I don't -- you may have it in front of you. I don't have that in front of me. When we model out fidelity, say, sort of 12 to 18 months out after we reinvested the order book into sort of more traditional commercial credit, we're not seeing -- their deposit cost are lower than ours. Their deposit mix is about as good as ours, maybe a little better.
So really it's just -- it all hinges on how fast we can reinvest the order book. And it kind of goes back to our desire to recruit as heavy and as hard as we can in Atlanta.
Nicole Stokes -- Chief Financial Officer
That's right. What we modeled -- to add to that Brady, what we modeled was about a 5% growth in fidelity's earning assets at a 3.50% margin. And if you take $400 million of reinvestment with a 250-basis pickup -- basis-point pickup on that indirect auto gets us back. And so we'll -- we feel like we can get their margins back in line with ours, as well as because of the noninterest-bearing deposit on the funding side.
Brady Gailey -- KBW -- Analyst
OK. All right. And then I understand the dynamics of the seasonality in 4Q. You mentioned all the loan categories that go down in the fourth quarter.
I think in the past we've talked about at that 12% to 14% loan growth -- organic loan growth piece. Is that still appropriate for '19 or do you think that growth will come a little -- at a slightly lower pace?
Dennis Zember -- President and Chief Executive Officer
I would say -- I know I really don't want to step out on that. You know, I know if I break it down into segments kind of how we look at it over here, what would the core bank would do, what mortgage would do, what premium finance, municipal, equipment, I -- we see a busy pathway, or a pathway to $1 billion, or maybe a little bit more, in loan growth. So we're at double -- we are, for sure, at double digits. I think it's -- the third and fourth quarter were softer really across the industry on loan growth.
And there's been so many questions about credit quality and when you're going to pull back or if you're going to pull back. The stuff coming through the pipeline is quality as what we've seen for not having to move around in the policy -- credit policy is to get things on the balance sheet. So we still feel pretty good about what we are looking. It's just been a little softer.
It's been a little softer. So I think we're good on $1 billion, I think is what we're seeing. $1 billion of growth. And probably 50% to 60% of that is coming out of the core bank.
Brady Gailey -- KBW -- Analyst
All right. And then last for me is just on the buyback. I know with LION, tending that may disallow you from doing it. And I know your stock still trades at a higher price to tangible, so -- and I know, Dennis, you're sensitive to any sort of dilution there? But at the same time, stock's trading at, like, eight times earnings.
So how do you think about -- I know you all have the $100 million buyback out there. How do you think about actually buying back your stock here?
Dennis Zember -- President and Chief Executive Officer
I have -- I have -- I mean, I'm having a little bit of a back and forth with my -- with our corporate attorney about whether or not we can buy back and with safe harbor rules and all that. And so we've not -- previously we've not got a kind of final statement. When we came out with that, we said, look, we like anything below two times tangible book. And really we are trading cheap on next year's earnings.
We -- so -- we were really always traded at a discount to earnings. We've tied it pretty well to tangible book. But even now we're trading right at or right below two times of book where we finish the quarter or the year. So we would definitely be inclined to buy the stock back, if we could get around safe harbor rules.
And I'd love to do that just to illustrate the company's confidence in 2019. So if we can get around that and get some attorney buy in, we would probably start participating, Brady.
Operator
And our next question today comes from Jennifer Demba of SunTrust. Please go ahead.
Jennifer Demba -- SunTrust Robinson Humphrey -- Analyst
Thanks a lot. Appreciate it. Just want to ask a question on credit quality, Dennis. We've seen some issues with leverage loans with another bank this quarter.
Curious if you guys have any leverage loans in your loan portfolio? And if so, what the outstandings are?
Dennis Zember -- President and Chief Executive Officer
Yes. Like shared national credit?
Jennifer Demba -- SunTrust Robinson Humphrey -- Analyst
Or just C&I leverage loans? Not necessarily shared national credits, but could be both.
Dennis Zember -- President and Chief Executive Officer
Yes. We -- well, one, we don't have any shared national credits. Jon?
Jon Edwards -- Chief Credit Officer -- Analyst
No, Jennifer. We haven't really participated in C&I to the extent that we've been looking at any kind of leveraged deals.
Jennifer Demba -- SunTrust Robinson Humphrey -- Analyst
OK. All right. So as you look at your expectations fundamentally in '19, what do you think is the biggest risk right now in your budget?
Dennis Zember -- President and Chief Executive Officer
The biggest risk in the budget, that's probably growth. And I'd say the biggest risk. And I don't want anybody on the call to think that it's a mammoth risk. Again, when I look at the pipeline and the production levels and the referral sources and the way we're sourcing business all across on the one side.
Again, I have confidence. But I think that is probably -- the industry is experiencing softer growth than kind of where we were a year ago. That's probably the key place I think on the margin. I'm not worried about the margin given where loan production yields are and given that we have a lower loan-to-deposit ratio really than we've had in two years.
So we could squeeze out more margin and profitability by just moving higher own back. Deposits, we are competitive on deposit rates. I've looked at what our peers, where our peers are in all the way up to the super regionals. And we're not sitting here with 25 basis points behind that we've got to make up.
So I don't see deposit costs or deposit flows being an issue. Credit quality, I mean, we have 4 basis points of charge-offs on the legacy portfolio. Nonperformers keep going down. I don't really see a lot of risk.
I probably should've started off like that. If there was a risk, it would probably be on the growth side.
Nicole Stokes -- Chief Financial Officer
I think I would add to that one comment that on the growth side that one thing that we're not willing to do is give up quality for quantity. And that's been a question that we've had in several of our investor meetings, of when do you know that it's the right time to kind of take your foot off the accelerator on growth, and we do that know. And we've answered that when loans that come through committing no longer fit into our policy or the structure. And so far we have not seen that.
And that's not -- I mean, our production is still high. But I think that's one thing that's in all of our minds is that that -- going back to your question of the biggest risk and Dennis answer -- Dennis' answer about that -- the loan growth is that we're not willing to jeopardize quality for quantity.
Dennis Zember -- President and Chief Executive Officer
I mean, I...
Jennifer Demba -- SunTrust Robinson Humphrey -- Analyst
Dennis, are you surprised your quality has been so good that's allowed you to grow at that pace?
Dennis Zember -- President and Chief Executive Officer
I don't -- I'm not surprised with that given how strong the economy is. Given -- I mean, the tax rate change definitely made commercial customer stronger. There's no question about it. No, I'm not surprised.
Nicole Stokes -- Chief Financial Officer
It was just the diversification of our portfolio, our lines of business, and the market -- the expansion of our markets through some of these acquisitions that we entered. That has helped our growth rate.
Dennis Zember -- President and Chief Executive Officer
Yes. And I'd like to say, and I'm not trying to be too visionary here. But I mean, in the third and fourth quarter, when growth was slowing down, we didn't just sit on our hands. I mean, it's important to us to hit some numbers in 2019 so we came up with some of the strategies and even if rate -- even if growth does slow, between the things we're working on on the expense side, on the noninterest income side, margin, things we can do here or there.
Even if rates -- even if growth slows, we're going to be able to post an impressive growth in earnings per share that -- and so I don't have to chase a commercial real estate loan at LIBOR 200 when -- if we don't want to do. We can still hit the numbers without having to do that.
Jennifer Demba -- SunTrust Robinson Humphrey -- Analyst
OK. Last question is on, you said you wanted to hire some people in Atlanta. Do you have a specific goal in mind there?
Dennis Zember -- President and Chief Executive Officer
Well, we've got -- I mean, we want to have a $1 billion of growth. We -- along with fidelity, we'll have $1.5 billion or $1.6 billion of indirect auto that's going to cash flow probably in 24 to 36 months. So number-wise, I don't have a number. I have a number in my mind.
I don't want to say right now because it seems too big. But we are going to capitalize on the opportunity to be the No. 1 alternative to super regionals in Atlanta. And that means we've got a good bit of recruiting to do.
Jennifer Demba -- SunTrust Robinson Humphrey -- Analyst
OK. Thank you.
Nicole Stokes -- Chief Financial Officer
Thank you, Jennifer.
Operator
And our next question today comes from Casey Whitman of Sandler O'Neill. Please go ahead. Casey your line is open, please.
Casey Whitman -- Sandler O'Neill -- Analyst
Good morning.
Dennis Zember -- President and Chief Executive Officer
Good morning.
Nicole Stokes -- Chief Financial Officer
Good morning, Casey.
Casey Whitman -- Sandler O'Neill -- Analyst
Just circling back to Tyler's question on expenses. Congrats on getting that efficiency ratio down to 54%. So you referenced 50% efficiency ratio in your prepared remarks. And just wondering to get there, can we assume it takes the full cost saves from LION, so maybe get there in 2020? Or do you think it's possible we can get there even sooner with the efficiency initiatives you guys already announced?
Dennis Zember -- President and Chief Executive Officer
Casey, I'm going to answer before Nicole can say anything. At -- the 50% is -- I mean, just the $20 million cost-saving initiative alone will put us maybe at 50.3% or 50.4%. And I think Tyler did ask if there's going to some reinvestment. I mean, we are -- again, we're looking to hire people.
We're looking in there, especially on the production side. So net-net, we do expect that to be an impact to the bottom line. The growth that we expect this year and the way we expect to grow kind of flat on the administrative side and really with -- we can grow really with just the existing production of resources. That and the $20 million cost-saving initiative is what should carry us to 50%.
Long-term, we're not looking to be a bank with a 40% efficiency ratio. I don't -- we don't -- I don't have to be there. I don't -- we can deliver that kind of customer service. We need to be around 50% to deliver the kind of customer service that we want to have the kind of staffing and systems.
So I don't -- I'm not thinking that we're a bank that's going to cruise into the mid-40s. But we see a pathway with growth and this initiative to get to 50%.
Casey Whitman -- Sandler O'Neill -- Analyst
OK, great. And then maybe just thinking about expenses in the very near term with the efficiency program in place and as you make the hires, I'm guessing throughout the year, should we at least -- can we at least assume some expense reduction in the first quarter? Or do you think it sort of holds flat?
Nicole Stokes -- Chief Financial Officer
No. I think from an adjusted core operating expense run rate, we will have some of those cost saves in the first quarter. And so it will be flat to diminishing in the first quarter.
Casey Whitman -- Sandler O'Neill -- Analyst
OK. And then last question, just the provision this quarter, can you walk us through some of the dynamics, just how much was related to the hurricane? How much is related to premium finance? And then maybe give us a sense to where your outlook is for provisioning levels in 2019, you know, pre-LION?
Dennis Zember -- President and Chief Executive Officer
OK. Sure. The -- for the provision on the hurricane, we really have talked about it for 90 days as to how much of an impact that is and ended up with an additional factor -- key factor that would put in there that added a couple of hundred thousand dollars to the reserves. The impact of the changes that were in the earnings release on the loss factors for service finance and USPF have -- consumer profile and USPF amounted to collectively about $1.1 million, $1.2 million.
So of the increase that we had for the quarter, $1.2 million of it was related to the changes in the loss factors and the additional for agriculture on the hurricane.
Casey Whitman -- Sandler O'Neill -- Analyst
OK. And so how are you thinking about, I guess, provisioning levels in the first two quarters, the year before LION comes on board?
Dennis Zember -- President and Chief Executive Officer
Well, from a budget perspective, I think we're budgeting a provision expense that will accommodate the growth at the current provision that we have plus 15 -- 12 to 15 basis points of loss. So it's certainly down from the -- it's about what the run rate is.
Casey Whitman -- Sandler O'Neill -- Analyst
All right. Thank you.
Nicole Stokes -- Chief Financial Officer
Thank you, Casey.
Operator
And ladies and gentlemen, this concludes our question-and-answer session. I would turn the conference back over to the management team for any final remarks.
Dennis Zember -- President and Chief Executive Officer
All right. Thank you, again, for your time this morning. If you have any questions or comments, feel free to call me or Nicole, and we'll get back to you as fast as we can. Thanks, and have a great weekend.
Operator
[Operator signoff]
Duration: 43 minutes
Call Participants:
Nicole Stokes -- Chief Financial Officer
Dennis Zember -- President and Chief Executive Officer
Tyler Stafford -- Stephens, Inc. -- Analyst
Brady Gailey -- KBW -- Analyst
Jennifer Demba -- SunTrust Robinson Humphrey -- Analyst
Jon Edwards -- Chief Credit Officer -- Analyst
Casey Whitman -- Sandler O'Neill -- Analyst
More ABCB analysis
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp (NASDAQ: ABCB) Q4 2018 Earnings Conference Call Jan. 25, 2019 10:00 a.m. Operator [Operator signoff] Duration: 43 minutes Call Participants: Nicole Stokes -- Chief Financial Officer Dennis Zember -- President and Chief Executive Officer Tyler Stafford -- Stephens, Inc. -- Analyst Brady Gailey -- KBW -- Analyst Jennifer Demba -- SunTrust Robinson Humphrey -- Analyst Jon Edwards -- Chief Credit Officer -- Analyst Casey Whitman -- Sandler O'Neill -- Analyst More ABCB analysis This article is a transcript of this conference call produced for The Motley Fool. We're both recruiting bankers in Atlanta that can help us redeploy the cash flows we expect from the indirect portfolio, and we're looking forward to a merger date that we hope will be in the second quarter of this year. | Operator [Operator signoff] Duration: 43 minutes Call Participants: Nicole Stokes -- Chief Financial Officer Dennis Zember -- President and Chief Executive Officer Tyler Stafford -- Stephens, Inc. -- Analyst Brady Gailey -- KBW -- Analyst Jennifer Demba -- SunTrust Robinson Humphrey -- Analyst Jon Edwards -- Chief Credit Officer -- Analyst Casey Whitman -- Sandler O'Neill -- Analyst More ABCB analysis This article is a transcript of this conference call produced for The Motley Fool. Ameris Bancorp (NASDAQ: ABCB) Q4 2018 Earnings Conference Call Jan. 25, 2019 10:00 a.m. ET Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks: Operator Good morning, and welcome to the Ameris Bancorp fourth-quarter 2018 financial results conference call. | Operator [Operator signoff] Duration: 43 minutes Call Participants: Nicole Stokes -- Chief Financial Officer Dennis Zember -- President and Chief Executive Officer Tyler Stafford -- Stephens, Inc. -- Analyst Brady Gailey -- KBW -- Analyst Jennifer Demba -- SunTrust Robinson Humphrey -- Analyst Jon Edwards -- Chief Credit Officer -- Analyst Casey Whitman -- Sandler O'Neill -- Analyst More ABCB analysis This article is a transcript of this conference call produced for The Motley Fool. Ameris Bancorp (NASDAQ: ABCB) Q4 2018 Earnings Conference Call Jan. 25, 2019 10:00 a.m. Our adjusted return on assets in the fourth quarter, which is normally a slower quarter for us, was 1.61%, and an increase from the 1.53% reported the last quarter and the 1.20% we reported in the fourth quarter of last year. | Operator [Operator signoff] Duration: 43 minutes Call Participants: Nicole Stokes -- Chief Financial Officer Dennis Zember -- President and Chief Executive Officer Tyler Stafford -- Stephens, Inc. -- Analyst Brady Gailey -- KBW -- Analyst Jennifer Demba -- SunTrust Robinson Humphrey -- Analyst Jon Edwards -- Chief Credit Officer -- Analyst Casey Whitman -- Sandler O'Neill -- Analyst More ABCB analysis This article is a transcript of this conference call produced for The Motley Fool. Ameris Bancorp (NASDAQ: ABCB) Q4 2018 Earnings Conference Call Jan. 25, 2019 10:00 a.m. And we would do better this year than last. |
27876.0 | 2019-01-24 00:00:00 UTC | Pre-Market Earnings Report for January 25, 2019 : ABBV, NEE, CL, APD, ERIC, DHI, LEA, HRC, IBKC, NEP, ABCB, ESXB | ABCB | https://www.nasdaq.com/articles/pre-market-earnings-report-january-25-2019-abbv-nee-cl-apd-eric-dhi-lea-hrc-ibkc-nep-abcb | nan | nan | The following companies are expected to repor t earnings prior to market open on 01/25/2019. Visit our Earnings Calendar for a full list of expected earnings releases.
AbbVie Inc. ( ABBV ) is reporting for the quarter ending December 31, 2018. The large cap pharmaceutical company's consensus earnings per share forecast from the 7 analysts that follow the stock is $1.92. This value represents a 29.73% increase compared to the same quarter last year. In the past year ABBV has beat the expectations every quarter. The highest one was in the 3rd calendar quarter where they beat the consensus by 6.47%. Zacks Investment Research reports that the 2018 Price to Earnings ratio for ABBV is 11.15 vs. an industry ratio of 15.30.
NextEra Energy, Inc. ( NEE ) is reporting for the quarter ending December 31, 2018. The electric power utilities company's consensus earnings per share forecast from the 6 analysts that follow the stock is $1.51. This value represents a 20.80% increase compared to the same quarter last year. NEE missed the consensus earnings per share in the 4th calendar quarter of 2017 by -4.58%. Zacks Investment Research reports that the 2018 Price to Earnings ratio for NEE is 23.15 vs. an industry ratio of 12.30, implying that they will have a higher earnings growth than their competitors in the same industry.
Colgate-Palmolive Company ( CL ) is reporting for the quarter ending December 31, 2018. The cleaning company's consensus earnings per share forecast from the 8 analysts that follow the stock is $0.73. This value represents a 2.67% decrease compared to the same quarter last year. In the past year CL has met analyst expectations three times and beat the expectations the other quarter. Zacks Investment Research reports that the 2018 Price to Earnings ratio for CL is 21.06 vs. an industry ratio of 21.20.
Air Products and Chemicals, Inc. ( APD ) is reporting for the quarter ending December 31, 2018. The chemical company's consensus earnings per share forecast from the 6 analysts that follow the stock is $1.87. This value represents a 4.47% increase compared to the same quarter last year. In the past year APD has met analyst expectations once and beat the expectations the other three quarters. Zacks Investment Research reports that the 2019 Price to Earnings ratio for APD is 19.11 vs. an industry ratio of 11.50, implying that they will have a higher earnings growth than their competitors in the same industry.
Ericsson ( ERIC ) is reporting for the quarter ending December 31, 2018. The wireless equipment company's consensus earnings per share forecast from the 3 analysts that follow the stock is $0.13. This value represents a 192.86% increase compared to the same quarter last year. Zacks Investment Research reports that the 2018 Price to Earnings ratio for ERIC is 33.84 vs. an industry ratio of 18.00, implying that they will have a higher earnings growth than their competitors in the same industry.
D.R. Horton, Inc. ( DHI ) is reporting for the quarter ending December 31, 2018. The building (residential/commercial) company's consensus earnings per share forecast from the 18 analysts that follow the stock is $0.78. This value represents a 1.30% increase compared to the same quarter last year. DHI missed the consensus earnings per share in the 3rd calendar quarter of 2018 by -0.81%. Zacks Investment Research reports that the 2019 Price to Earnings ratio for DHI is 8.97 vs. an industry ratio of 0.70, implying that they will have a higher earnings growth than their competitors in the same industry.
Lear Corporation ( LEA ) is reporting for the quarter ending December 31, 2018. The auto (truck) company's consensus earnings per share forecast from the 7 analysts that follow the stock is $3.96. This value represents a 9.59% decrease compared to the same quarter last year. In the past year LEA has beat the expectations every quarter. The highest one was in the 3rd calendar quarter where they beat the consensus by 4.34%. Zacks Investment Research reports that the 2018 Price to Earnings ratio for LEA is 8.04 vs. an industry ratio of 6.70, implying that they will have a higher earnings growth than their competitors in the same industry.
Hill-Rom Holdings Inc ( HRC ) is reporting for the quarter ending December 31, 2018. The medical products company's consensus earnings per share forecast from the 5 analysts that follow the stock is $0.98. This value represents a 6.52% increase compared to the same quarter last year. In the past year HRC has beat the expectations every quarter. The highest one was in the 3rd calendar quarter where they beat the consensus by 7.95%. Zacks Investment Research reports that the 2019 Price to Earnings ratio for HRC is 18.74 vs. an industry ratio of -24.20, implying that they will have a higher earnings growth than their competitors in the same industry.
IBERIABANK Corporation ( IBKC ) is reporting for the quarter ending December 31, 2018. The banks (southeast) company's consensus earnings per share forecast from the 6 analysts that follow the stock is $1.78. This value represents a 33.83% increase compared to the same quarter last year. IBKC missed the consensus earnings per share in the 1st calendar quarter of 2018 by -3.52%. Zacks Investment Research reports that the 2018 Price to Earnings ratio for IBKC is 11.09 vs. an industry ratio of 14.60.
NextEra Energy Partners, LP ( NEP ) is reporting for the quarter ending December 31, 2018. The alternative energy company's consensus earnings per share forecast from the 5 analysts that follow the stock is $0.52. This value represents a 173.68% increase compared to the same quarter last year. NEP missed the consensus earnings per share in the 4th calendar quarter of 2017 by -26.92%. Zacks Investment Research reports that the 2018 Price to Earnings ratio for NEP is 10.70 vs. an industry ratio of -51.40, implying that they will have a higher earnings growth than their competitors in the same industry.
Ameris Bancorp ( ABCB ) is reporting for the quarter ending December 31, 2018. The banks (southeast) company's consensus earnings per share forecast from the 3 analysts that follow the stock is $0.93. This value represents a 47.62% increase compared to the same quarter last year. Zacks Investment Research reports that the 2018 Price to Earnings ratio for ABCB is 10.74 vs. an industry ratio of 14.60.
Community Bankers Trust Corporation. ( ESXB ) is reporting for the quarter ending December 31, 2018. The banks (southeast) company's consensus earnings per share forecast from the 1 analyst that follows the stock is $0.16. This value represents a 23.08% increase compared to the same quarter last year. ESXB missed the consensus earnings per share in the 1st calendar quarter of 2018 by -7.69%. Zacks Investment Research reports that the 2018 Price to Earnings ratio for ESXB is 12.00 vs. an industry ratio of 14.60.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp ( ABCB ) is reporting for the quarter ending December 31, 2018. Zacks Investment Research reports that the 2018 Price to Earnings ratio for ABCB is 10.74 vs. an industry ratio of 14.60. The large cap pharmaceutical company's consensus earnings per share forecast from the 7 analysts that follow the stock is $1.92. | Ameris Bancorp ( ABCB ) is reporting for the quarter ending December 31, 2018. Zacks Investment Research reports that the 2018 Price to Earnings ratio for ABCB is 10.74 vs. an industry ratio of 14.60. Zacks Investment Research reports that the 2018 Price to Earnings ratio for NEE is 23.15 vs. an industry ratio of 12.30, implying that they will have a higher earnings growth than their competitors in the same industry. | Ameris Bancorp ( ABCB ) is reporting for the quarter ending December 31, 2018. Zacks Investment Research reports that the 2018 Price to Earnings ratio for ABCB is 10.74 vs. an industry ratio of 14.60. Zacks Investment Research reports that the 2019 Price to Earnings ratio for DHI is 8.97 vs. an industry ratio of 0.70, implying that they will have a higher earnings growth than their competitors in the same industry. | Ameris Bancorp ( ABCB ) is reporting for the quarter ending December 31, 2018. Zacks Investment Research reports that the 2018 Price to Earnings ratio for ABCB is 10.74 vs. an industry ratio of 14.60. In the past year ABBV has beat the expectations every quarter. |
27877.0 | 2019-01-08 00:00:00 UTC | First Week of February 15th Options Trading For Ameris Bancorp (ABCB) | ABCB | https://www.nasdaq.com/articles/first-week-february-15th-options-trading-ameris-bancorp-abcb-2019-01-08 | nan | nan | Investors in Ameris Bancorp (Symbol: ABCB) saw new options begin trading this week, for the February 15th expiration. At Stock Options Channel , our YieldBoost formula has looked up and down the ABCB options chain for the new February 15th contracts and identified one put and one call contract of particular interest.
The put contract at the $30.00 strike price has a current bid of 25 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $30.00, but will also collect the premium, putting the cost basis of the shares at $29.75 (before broker commissions). To an investor already interested in purchasing shares of ABCB, that could represent an attractive alternative to paying $33.94/share today.
Because the $30.00 strike represents an approximate 12% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 92%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract . Should the contract expire worthless, the premium would represent a 0.83% return on the cash commitment, or 8.00% annualized - at Stock Options Channel we call this the YieldBoost .
Below is a chart showing the trailing twelve month trading history for Ameris Bancorp, and highlighting in green where the $30.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $35.00 strike price has a current bid of 95 cents. If an investor was to purchase shares of ABCB stock at the current price level of $33.94/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $35.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 5.92% if the stock gets called away at the February 15th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if ABCB shares really soar, which is why looking at the trailing twelve month trading history for Ameris Bancorp, as well as studying the business fundamentals becomes important. Below is a chart showing ABCB's trailing twelve month trading history, with the $35.00 strike highlighted in red:
Considering the fact that the $35.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 60%. On our website under the contract detail page for this contract , Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 2.80% boost of extra return to the investor, or 26.89% annualized, which we refer to as the YieldBoost .
The implied volatility in the put contract example is 42%, while the implied volatility in the call contract example is 37%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 251 trading day closing values as well as today's price of $33.94) to be 29%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Of course, a lot of upside could potentially be left on the table if ABCB shares really soar, which is why looking at the trailing twelve month trading history for Ameris Bancorp, as well as studying the business fundamentals becomes important. Below is a chart showing ABCB's trailing twelve month trading history, with the $35.00 strike highlighted in red: Considering the fact that the $35.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Ameris Bancorp (Symbol: ABCB) saw new options begin trading this week, for the February 15th expiration. | Below is a chart showing ABCB's trailing twelve month trading history, with the $35.00 strike highlighted in red: Considering the fact that the $35.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Ameris Bancorp (Symbol: ABCB) saw new options begin trading this week, for the February 15th expiration. At Stock Options Channel , our YieldBoost formula has looked up and down the ABCB options chain for the new February 15th contracts and identified one put and one call contract of particular interest. | Below is a chart showing ABCB's trailing twelve month trading history, with the $35.00 strike highlighted in red: Considering the fact that the $35.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Ameris Bancorp (Symbol: ABCB) saw new options begin trading this week, for the February 15th expiration. At Stock Options Channel , our YieldBoost formula has looked up and down the ABCB options chain for the new February 15th contracts and identified one put and one call contract of particular interest. | At Stock Options Channel , our YieldBoost formula has looked up and down the ABCB options chain for the new February 15th contracts and identified one put and one call contract of particular interest. Below is a chart showing ABCB's trailing twelve month trading history, with the $35.00 strike highlighted in red: Considering the fact that the $35.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Ameris Bancorp (Symbol: ABCB) saw new options begin trading this week, for the February 15th expiration. |
27878.0 | 2019-01-06 00:00:00 UTC | Validea's Top Five Financial Stocks Based On Joel Greenblatt - 1/6/2019 | ABCB | https://www.nasdaq.com/articles/valideas-top-five-financial-stocks-based-joel-greenblatt-162019-2019-01-06 | nan | nan | The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt . This value model looks for companies with high return on capital and earnings yields.
ARCH CAPITAL GROUP LTD. ( ACGL ) is a large-cap value stock in the Insurance (Prop. & Casualty) industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm's underlying fundamentals and the stock's valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Arch Capital Group Ltd. provides insurance, reinsurance and mortgage insurance. The Company provides a range of property, casualty and mortgage insurance and reinsurance lines. The Company operates in five segments: insurance, reinsurance, mortgage, other and corporate. The insurance segment's product lines include construction and national accounts; excess and surplus casualty; lenders products; professional lines; programs; property, energy, marine and aviation; travel, accident and health, and other. The reinsurance segment's product lines include casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe, and other. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. The other segment includes the results of Watford Holdings Ltd.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ATLANTIC CAPITAL BANCSHARES INC ( ACBI ) is a small-cap growth stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm's underlying fundamentals and the stock's valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Atlantic Capital Bancshares, Inc. is the bank holding company for Atlantic Capital Bank (the Bank). The Bank operates as a commercial bank. The Bank provides an array of credit, treasury management and deposit products and services to growth businesses, middle market corporations, commercial real estate developers and investors, and private clients. Its wealth management division offers financial planning, trust administration, investment management, brokerage and estate planning services. It also provides selected capital markets, mortgage banking, and electronic banking services to its corporate, business and individual clients. Its private banking credit products include loans to individuals for personal and investment purposes, such as secured installment and term loans, and home equity lines of credit. Its specialty corporate financial services include payments industry banking, financial institutions banking, capital markets services and specialty commercial lending.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ALLEGIANCE BANCSHARES INC ( ABTX ) is a small-cap growth stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm's underlying fundamentals and the stock's valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Allegiance Bancshares, Inc. is a bank holding company. Through its subsidiary, Allegiance Bank (the Bank), the Company provides a range of commercial banking services primarily to Houston metropolitan area-based small to medium-sized businesses, professionals and individual customers. In addition to banking during normal business hours, the Company offers extended drive-in hours, automated teller machines (ATMs) and banking by telephone, mail and Internet. The Company also provides debit card services, cash management services and wire transfer services, and offers night depository, direct deposits, cashier's checks, letters of credit and mobile deposits. It also offers safe deposit boxes, automated teller machines, drive-in services and round the clock depository facilities. The Company maintains an Internet banking Website that allows customers to obtain account balances and transfer funds among accounts.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
AMERIS BANCORP ( ABCB ) is a small-cap value stock in the Regional Banks industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm's underlying fundamentals and the stock's valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ameris Bancorp is a financial holding company. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. The Company operates through four segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division and the SBA Division. The Banking Division is engaged in the delivery of financial services, which include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division is engaged in the origination, sales and servicing of one- to four-family residential mortgage loans. The Warehouse Lending Division is engaged in the origination and servicing of warehouse lines to other businesses that are secured by underlying one- to four-family residential mortgage loans. The SBA Division is engaged in the origination, sales and servicing of small business administration (SBA) loans.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
ALLIANCEBERNSTEIN HOLDING LP ( AB ) is a mid-cap value stock in the Investment Services industry. The rating according to our strategy based on Joel Greenblatt is 0% based on the firm's underlying fundamentals and the stock's valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: AllianceBernstein Holding L.P. is engaged in providing research, investment management and related services to a range of clients through its three buy-side distribution channels: Institutions, Retail and Private Wealth Management, and its sell-side business, Bernstein Research Services. The Company offers a range of investment services, including equity strategies, with global and regional portfolios across capitalization ranges and investment strategies, including value, growth and equities; traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies; passive management, including index and enhanced index strategies; alternative investments, including hedge funds, fund of funds and private equity, and multi-asset solutions and services, including dynamic asset allocation, customized target-date funds and target-risk funds. The Company's services span various investment disciplines, including market capitalization, term and geographic locations.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
For a full detailed analysis using NASDAQ's Guru Analysis tool, click here
Since its inception, Validea's strategy based on Joel Greenblatt has returned 94.72% vs. 100.14% for the S&P 500. For more details on this strategy, click here
About Joel Greenblatt : In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way to beat the market using two -- and only two -- fundamental variables. The "Magic Formula," as he called it, produced back-tested returns of 30.8 percent per year from 1988 through 2004, more than doubling the S&P 500's 12.4 percent return during that time. Greenblatt also produced exceptional returns as managing partner at Gotham Capital, a New York City-based hedge fund he founded. The firm averaged a remarkable 40 percent annualized return over more than two decades.
About Validea : Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP ( ABCB ) is a small-cap value stock in the Regional Banks industry. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt . The Bank provides an array of credit, treasury management and deposit products and services to growth businesses, middle market corporations, commercial real estate developers and investors, and private clients. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP ( ABCB ) is a small-cap value stock in the Regional Banks industry. The reinsurance segment's product lines include casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe, and other. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP ( ABCB ) is a small-cap value stock in the Regional Banks industry. The mortgage segment includes the results of Arch Mortgage Insurance Company and Arch Mortgage Insurance Designated Activity Company, which are providers of mortgage insurance products and services to the United States and European markets. The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. | For a full detailed analysis using NASDAQ's Guru Analysis tool, click here AMERIS BANCORP ( ABCB ) is a small-cap value stock in the Regional Banks industry. The following are the top rated Financial stocks according to Validea's Earnings Yield Investor model based on the published strategy of Joel Greenblatt . The Company's business is conducted through its banking subsidiary, Ameris Bank (the Bank), which provides a range of banking services to its retail and commercial customers. |
27879.0 | 2018-12-29 00:00:00 UTC | It Could Always Go Lower! | ABCB | https://www.nasdaq.com/articles/it-could-always-go-lower-2018-12-29 | nan | nan | The market sure gave Market Foolery a warm post-Christmas welcome back this week. In today's episode, analysts Chris Hill and Jason Moser go through some of the lovely happenings that just keep on happening, like a tweet, apropos of seemingly nothing, from the Treasury Secretary that there's no liquidity crisis. Among other things. Long-term investors don't need to sweat the day-to-day stuff too hard, but the guys share some advice on investing in a market as volatile as this without getting swept away.
Then, a close look at two new acquisitions -- Visa 's (NYSE: V) buy of an itty-bitty European payments company, and a new bank that joined the Ameris Bancorp (NASDAQ: ABCB) family.
A full transcript follows the video.
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This video was recorded on Dec. 27, 2018.
Chris Hill: It's Thursday, Dec. 27. Welcome to Market Foolery . I'm Chris Hill. Joining me in studio, we both survived Christmas, Jason Moser. I should say all three of us survived Christmas, because Dan Boyd, our man behind the glass, also survived. Good to see you.
Jason Moser: Good to see you alive and kicking.
Hill: It's been bananas, hasn't it?
Moser: [laughs] Yeah.
Hill: There is actually some business news out there. There's an acquisition we're going to talk about. Actually, two acquisitions we're going to talk about.
But we should start with what's been happening with the market Christmas Eve and then on the 26th. It's just been crazy. Even for us, I think. I don't know about you, but I got this sense when we were chatting before we started taping that, we're in the studio, we've been watching the market. This is our job. But even for you and me, we were looking at what was happening on Christmas Eve and going, "Holy cow!"
Moser: Yeah. It's really weird. I've said this before. I walked out of the financial crisis stretch of time there, 2008, 2009, the Hank Paulson years, where really, all it took was one 30-minute-long speech from him live on the news to send the markets one way or the other five, six, seven hundred points. And we became very used to those types of moves. These are definitely a lot easier to stomach, but you still step back and you're wondering, what in the world is going on? I think the headlines would have you believe that a lot of this is based on interest rate policy. It was something to the extent that Fed Chair Jerome Powell said that they're probably going to raise rates twice in 2019. But maybe his attitude, the way he said it didn't instill confidence in people. You have to start looking at some of the stuff and saying, you're reading a bit too much into this.
Now, with that said, the reality is that these are the types of things that are going to move these markets on a day-to-day basis. We can sit there and say it's absurd, but it's not going to change the fact that these markets are going haywire. You have a few things to keep in mind. No. 1: We're at a point here toward the end of the year where there's going to be some cleaning house and setting up shops for the beginning of 2019 and making those holdings look better from an institutional perspective.
I would also say, all of this headline stuff aside, it doesn't change the fundamentals of a lot of these really good businesses out there. They're the same good businesses they were at the beginning of the year as they are at the end of this year. They have long track records of success. My point is, I think these are the times, the volatility is really when opportunities present themselves. Make sure that you have your ducks in a row and you're ready to pull that trigger.
The other thing I would encourage people to do is to take it slow. You don't need to put all your cash to work at once. The one thing the financial crisis taught me back then was, take it slow. If you think it can't go lower, trust me, it can definitely go lower. The fact of the matter is, we're going to have this administration for at least the next two years. A lot of this is tied to the unpredictable nature of what they're going to say next. Love it or hate it, that's going to be the reality of the situation.
Hill: A couple things. First of all, for those who are new to investing in the stock market or new to paying attention to the Federal Reserve, what Jerome Powell did, that guidance, that's not unusual. Past Fed chairs have done that, future Fed chairs will do that. That, in and of itself, is not unusual.
As you said, when you have one of the dominant storylines of the past week, in terms of Wall Street and the Fed, being people figuring out if the president is allowed to fire the chairman of the Federal Reserve. Like, people looking into that, and, "Our next guest is a lawyer who's going to interpret," that's new. I don't think we've seen that before.
But to your point, and you were touching on emotion and not getting caught up, it's worth reminding ourselves that part of keeping your emotions in check is recognizing that other people are not going to keep their emotions in check. And when there was this question, when the president was tweeting about Jerome Powell, and sending signals of "Powell needs to go," and, by the way, having the Treasury Secretary call the CEOs of the banks out of the blue, and then tweet about that ... that's not helping.
Moser: Not at all. The picture that runs through my mind, immediately when I saw that tweet -- we always about the difference between Main Street and Wall Street, and what's going on at Wall Street isn't necessarily what Main Street is feeling. I see that tweet go out, and I'm thinking, man, the normal, everyday Main Street guy or gal, they see that tweet, and they're thinking, "Liquidity? What the hell is he talking about?" Like, what does that mean? How does that matter to me?
Hill: For those that missed it, Treasury Secretary Mnuchin was tweeting about and then issuing a statement about how he was in Mexico on vacation right before Christmas, and, probably at the urging of the president, called the CEOs of the six largest banks in America, and then decided to share with the world, "Hey, everybody, I talked to the banks and I assured them that we're good we're in terms of liquidity." And then, on Twitter, you immediately had all these other people tweeting analogies to that. It's like you're on a plane and the pilot comes on, "Just want to let everybody know, we have a full tank of jet fuel and all of the engines are working great. We're fine. If you thought everything was problematic, no, everything's fine. Feel free to walk about the cabin."
Moser: [laughs] I mean, did you have liquidity concerns, Chris?
Hill: Not until that!
Moser: Not until that, I didn't either! I really do believe that even after that call, I look at that and I think, I still don't have concerns in regard to liquidity. Just, that's a tremendous disconnect. You're not speaking to the general public when you say stuff like that. You're speaking to people us, who are going to sit here and talk about it on this show and try to explain to the general public that frankly, you shouldn't be worried about that. There was obviously a liquidity crisis during the Great Recession. The ways that they addressed that dealt with it, we're paying a little bit of the price today and trying to unwind all that mess. But to get out there and just say it based on some of the market tumult, I think, was amateurish, to be quite honest with you. I don't think it was very professional. I don't think he quite thought it through.
Again, I go back to, we've got at least two more years of this administration, whether you love him or hate him. It's not getting political here. I'm just saying, this is the type of stuff you have to expect. It's going to be a little bit unpredictable. But you know what? That's OK. Actually, I'm going to embrace that unpredictability. I'm going to make sure that I keep some cash on the sidelines ready to invest, because I think we're going to continue to see these types of opportunities going into 2019, going into 2020. These times, that volatility, as we've said before, is what helps you separate yourself and really outperform over longer periods of time. It just takes some courage. It's a lot easier said than done.
Hill: Let's get to the acquisitions. You had pointed out this first one. Clearly, I was caught up in the headlines whether or not it's OK to fire the chairman of the Federal Reserve and tweets about liquidity.
Ameris Bancorp made an acquisition. What's the deal here?
Moser: Longtime listeners will know Ameris. I've talked about it before. It is one that flies under the radar for a lot of folks because it's a small-cap Southeast regional bank. It's one I started digging into back during the financial crisis, when everything was going to hell in a handbasket. Ameris has always been a very well-run bank. It was much smaller back then, but the FDIC saw fit to use Ameris as a partner in rolling up a lot of those failed institutions. Ameris has been able to grow over the years and deliver for shareholders. It became, ultimately, about a $2 billion market-capitalization bank. Recently, the stock has pulled back a little bit.
This is your quintessential deal where the market is placing the burden of proof on the acquirer. That's the right perspective, I think. They announced this deal -- they're going to buy Fidelity Bank, an Atlanta bank. They're going to roll this bank into their family. It's about a $750 million acquisition, so it's a big one for Ameris in the context of their company.
But I think that there are a lot of reasons to be optimistic about it. I like banks a lot. I compare them to insurers in that they're basically in the business of investing. Well-run insurers are able to take that float that they get from the premiums and they're able to invest that money and help grow the business and diversify and get bigger. Banks are very much the same way; they're just investing that deposit base.
This deal is going to give Ameris a much bigger deposit base. Actually, the deposit base they're bringing in from Fidelity, it's a lower-cost deposit base, about 25% lower cost of deposits, which is good. That gives them the opportunity to make more money on that deposit base. It also gives them terrific exposure to the Atlanta market, which is booming. Having been down there since 2000, I've seen the development, and I continue to go back -- it's amazing how big that place is getting, and the sprawl.
This is going to give Ameris total assets of $16 billion-plus, total deposits of $13 billion-plus. They have a consistent history of being able to bring 1% or better return on assets. While acquisitions are always very risky -- and that's a big risk here too. I'm not discounting it. But, No. 1, they have a good track record based on what they've done over the past several years with the FDIC and bringing all of these institutions in. They made a few other acquisitions last year. But also, these are two cultures that are very similar. They've known each other for a long time. Executive teams have worked together before. I think there are a lot of similarities, and it seems that both teams are very excited to become part of each other's family.
Hill: You look at the stock, which has almost been cut in half in the last six months. I'm wondering if you look at the stock and say, for someone who doesn't own shares, this is a buying opportunity? Or, because of this acquisition, because of the size of this acquisition, do you wait and see how it plays out maybe three months from now?
Moser: If this happened four years ago, five years ago, with a little bit less experience at the helm, and a little bit less of a track record to go on, you probably are a little bit more hesitant. I think today, the risk-reward is such that this is absolutely a buying opportunity. This is a proven management team in a business that isn't going away. They've done a very good job of managing this business in a conservative fashion, and all of the metrics continue to confirm that. They remain well capitalized and they don't do anything stupid. They have a very nice, diverse lending book. Frankly, I own shares personally. I have a lot of optimism as to where this bank is going to go over the coming decade. And I think that's how investors need to look at this. Today, it looks a little bit sketchy, a little bit risky, maybe. But if you look at this as a two-year, five-year, 10-year holding, they're going to digest this acquisition and become a much bigger and healthier bank that's going to be able to deliver more for shareholders over time.
Hill: As you said, Ameris Bancorp, concentrated in the southeast part of the United States. Would you say it's the Bojangles of banking?
Moser: [laughs] I'm sure they don't make biscuits that come quite close to what the Jangler is able to deliver. Where Bojangles has had a little bit of trouble extending their book beyond the southeastern quarter of the United States, I think that Ameris is a bit stronger in that regard. I suspect we'll continue to see them slowly but surely spread beyond just the Southeast. I would not go so far as to call them the Jangler of the banking industry.
Hill: The stock of the day is Earthport , a British payments company. Shares of Earthport are up 280% today. That is because this small payments company has just been acquired by Visa. Good for Earthport. [laughs] Good for any shareholders who are listening. They're having a heck of a day.
This seems yet another smart deployment of capital on the part of Visa and the war on cash.
Moser: If you've never heard of Earthport, join the club, because I can't say I knew a whole heck of a lot about it either until this deal was announced today. Although, I will say, it's interesting. This initial offer was made back in November. While the deal was announced today, there was another competitor in this space that made an offer as well, a counter-offer, so Visa had to up their ante a little bit in order to get it.
You look at the numbers -- $250 million, whatever. This is a drop-in-the-bucket deal for Visa. There's far more upside than downside for them when you think about it from a global perspective. That's what this is -- it's a play on cross-border transactions, spreading that footprint and getting a bigger global presence. When you look at this space, this is exemplary of what the biggest advantages in the space are. The scale that Visa possesses, and the network effects that come from being a part of that big network.
It's interesting to me, from the European perspective, companies like Earthport are going to have a very difficult time succeeding. The EU is a fairly highly regulated environment when it comes to interchange. It sounds when it comes to cross-border transactions, the European Commission is actually testing additional regulations or caps on that interchange for cross-border transactions. It's not really much that would affect Visa any which way. They're passing along the cost in regard to the business that Earthport's focusing on. But it makes for a much more difficult environment for companies like Earthport to succeed. There's not much they can do. They can't raise prices, they can't really do anything to exercise any kind of pricing power. So growing and competing in this space is really difficult.
Then, the light at the end of the tunnel is, you get acquired by a much bigger network like Visa that immediately increases your network by many factors. It's probably the best-case scenario for Earthport. For Visa, like I said, it's not really a big deal either way. It's another incremental step in building out that network, becoming a bigger global network, and flexing the scale that they've achieved to date. It's not going to be one on its own that makes a big difference to their performance, but it's another piece of the puzzle.
Hill: I have to believe there are investors who are looking at this move and immediately searching around for, "What are other small...? Who are Earthport's direct competitors? Because hopefully, I can pick up a few shares, they get bought up, because that that really does seem to be the move."
Moser: That's probably a fair assumption. Look at the European space. I spoke with Rory Carron the other week with Rubicoin out there in Ireland. We were talking a little bit about some of these smaller payments companies over there in their part of the world. I get people on Twitter all the time who ping me about some of these smaller companies, too. I think there's a good chance we're going to see a lot more consolidation in the future with these European companies. Again, it's going to be a little bit more of a difficult environment for them to grow and succeed. The light at the end of the tunnel is, "Maybe we can become a part of something bigger." Visa and Mastercard are the most obvious suspects, but don't discount companies like PayPal . They recently bought iZettle. That was a European play. You're seeing Square certainly try to grow their presence there and beyond. American Express , Discover , there are so many companies out there that do such a good job, and I think they're looking at this global opportunity and really thinking long and hard about the opportunities that exist.
Hill: In the same way that we talk about start-up beverage companies, and for them, the business plan is, "At some point, hopefully we get acquired by Coke or Pepsi ." In the spirits case, maybe Diageo buys us, or Constellation Brands , that sort of thing. The difference there is, if you're a small craft brew based in Richmond, Virginia, or Raleigh, North Carolina, whatever, you can just go about your business. You're not worried about being quashed by Budweiser. Whereas with Earthport, to your point, at some point, someone in the room had to say, "Look, if we don't take this offer and we don't get another one, this may be a binary outcome situation for us. Take this offer, or, in two years, we're out of business."
Moser: That's a very good comparison there. There's a lot more loyalty to a good craft brew than there is to that little European payment processor that you can't remember the name of. [laughs]
Hill: [laughs] Right. This weekend on Motley Fool Money , we've got our 2018 year in review, then we're back at it Monday with Market Foolery and Industry Focus , which Jason hosts. Obviously, the market is closed on Tuesday. Then, back to business on Wednesday.
Moser: Back to business. Looking forward to it.
Hill: Thanks for being here!
Moser: Thank you!
Hill: As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. That's going to do it for this edition of Market Foolery . The show is mixed by Dan Boyd. I'm Chris Hill. Thanks for listening. We'll see you on Monday!
Chris Hill owns shares of PayPal Holdings. Jason Moser owns shares of Mastercard, PayPal Holdings, Square, and Visa. The Motley Fool owns shares of and recommends Mastercard, PayPal Holdings, and Square. The Motley Fool owns shares of Visa and has the following options: short January 2019 $82 calls on PayPal Holdings and short January 2019 $80 calls on Square. The Motley Fool recommends Anheuser-Busch InBev NV, Constellation Brands, and Diageo. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Then, a close look at two new acquisitions -- Visa 's (NYSE: V) buy of an itty-bitty European payments company, and a new bank that joined the Ameris Bancorp (NASDAQ: ABCB) family. I walked out of the financial crisis stretch of time there, 2008, 2009, the Hank Paulson years, where really, all it took was one 30-minute-long speech from him live on the news to send the markets one way or the other five, six, seven hundred points. As you said, when you have one of the dominant storylines of the past week, in terms of Wall Street and the Fed, being people figuring out if the president is allowed to fire the chairman of the Federal Reserve. | Then, a close look at two new acquisitions -- Visa 's (NYSE: V) buy of an itty-bitty European payments company, and a new bank that joined the Ameris Bancorp (NASDAQ: ABCB) family. Jason Moser owns shares of Mastercard, PayPal Holdings, Square, and Visa. The Motley Fool owns shares of and recommends Mastercard, PayPal Holdings, and Square. | Then, a close look at two new acquisitions -- Visa 's (NYSE: V) buy of an itty-bitty European payments company, and a new bank that joined the Ameris Bancorp (NASDAQ: ABCB) family. Hill: For those that missed it, Treasury Secretary Mnuchin was tweeting about and then issuing a statement about how he was in Mexico on vacation right before Christmas, and, probably at the urging of the president, called the CEOs of the six largest banks in America, and then decided to share with the world, "Hey, everybody, I talked to the banks and I assured them that we're good we're in terms of liquidity." Moser: If this happened four years ago, five years ago, with a little bit less experience at the helm, and a little bit less of a track record to go on, you probably are a little bit more hesitant. | Then, a close look at two new acquisitions -- Visa 's (NYSE: V) buy of an itty-bitty European payments company, and a new bank that joined the Ameris Bancorp (NASDAQ: ABCB) family. Moser: Not until that, I didn't either! It's interesting to me, from the European perspective, companies like Earthport are going to have a very difficult time succeeding. |
27880.0 | 2018-12-27 00:00:00 UTC | Ameris Bancorp (ABCB) Ex-Dividend Date Scheduled for December 28, 2018 | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-ex-dividend-date-scheduled-december-28-2018-2018-12-27 | nan | nan | Ameris Bancorp ( ABCB ) will begin trading ex-dividend on December 28, 2018. A cash dividend payment of $0.1 per share is scheduled to be paid on January 10, 2019. Shareholders who purchased ABCB prior to the ex-dividend date are eligible for the cash dividend payment. This marks the 10th quarter that ABCB has paid the same dividend. At the current stock price of $31.69, the dividend yield is 1.26%.
The previous trading day's last sale of ABCB was $31.69, representing a -46.33% decrease from the 52 week high of $59.05 and a 5.67% increase over the 52 week low of $29.99.
ABCB is a part of the Finance sector, which includes companies such as J P Morgan Chase & Co ( JPM ) and Bank of America Corporation ( BAC ). ABCB's current earnings per share, an indicator of a company's profitability, is $2.05. Zacks Investment Research reports ABCB's forecasted earnings growth in 2018 as 33.33%, compared to an industry average of 32.4%.
For more information on the declaration, record and payment dates, visit the ABCB Dividend History page. Our Dividend Calendar has the full list of stocks that have an ex-dividend today.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | ABCB is a part of the Finance sector, which includes companies such as J P Morgan Chase & Co ( JPM ) and Bank of America Corporation ( BAC ). Zacks Investment Research reports ABCB's forecasted earnings growth in 2018 as 33.33%, compared to an industry average of 32.4%. For more information on the declaration, record and payment dates, visit the ABCB Dividend History page. | ABCB's current earnings per share, an indicator of a company's profitability, is $2.05. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Ameris Bancorp ( ABCB ) will begin trading ex-dividend on December 28, 2018. | Shareholders who purchased ABCB prior to the ex-dividend date are eligible for the cash dividend payment. This marks the 10th quarter that ABCB has paid the same dividend. For more information on the declaration, record and payment dates, visit the ABCB Dividend History page. | Shareholders who purchased ABCB prior to the ex-dividend date are eligible for the cash dividend payment. Ameris Bancorp ( ABCB ) will begin trading ex-dividend on December 28, 2018. This marks the 10th quarter that ABCB has paid the same dividend. |
27881.0 | 2018-12-19 00:00:00 UTC | Ameris Bancorp (ABCB) to Buy Fidelity Southern for $750.7M | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-to-buy-fidelity-southern-for-%24750.7m-2018-12-19 | nan | nan | In an effort to expand its market presence, Ameris Bancorp ABCB recently announced a deal to buy Fidelity Southern Corporation LION for $750.7million. The deal, expected to close in the second quarter of 2019, is subject to approval of regulatory authorities and shareholders of both companies.
Following the deal's announcement on Dec 18, shares of Ameris Bancorp have declined nearly 5.7%. While the transaction will likely be beneficial for the company, bearish broader markets hurt investor's overall sentiments. This supposedly led to the fall in the company's share prices.
Details and Benefits
Per the agreement, shareholders of Fidelity Southern will receive 0.80 share of Ameris Bancorp for each share of Fidelity Southern. Notably, based on Ameris Bancorp's closing price of $34.02 on Dec 14, 2018, the deal is valued at $27.22 per share.
Following the deal's closure, Ameris Bancorp will be roughly $16.2 billion in assets (based on Sep 30, 2018 data), excluding the accounting adjustments for the purchase.
Palmer Proctor Jr., president of Fidelity Southern said,"The combination of Ameris and Fidelity joins two franchises that are very similar in culture, complementary in terms of our lines of business and well positioned competitively, resulting in a $16 billion asset bank second to none in terms of management strength and financial resources."
The acquisition will be accretive to Ameris Bancorp's earnings in the mid-single digit range, after the company realizes cost saving of 40% of Fidelity Southern's projected non-interest expense. Further, the company will benefit from revenue synergies. Also, the bank will benefit from Fidelity Southern's low-cost deposits (25% less expensive than Ameris Bank')
Conclusion
Ameris Bancorp has been expanding inorganically over the past several years. Earlier this year the company acquired Hamilton State Bancshares, Inc and Atlantic Coast Financial Corporation
Shares of Ameris Bancorp have lost 44.2% in the last six months compared with the 26% decline registered by the industry .
Currently Ameris Bancorp carries a Zacks Rank #3 (Hold).
Stocks to Consider
A couple of better-ranked stocks from the finance space are Chemung Financial Corp CHMG and City Holding Company CHCO
Chemung Financial's shares have gained 17.5 % in the past two years. Further its earnings estimate for 2018 moved up 5% in the past 60 days. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here
City Holding Company carries Zacks Rank #2 (Buy) at present. The stock has gained 4.8% in two years' time. Its earnings estimates for the current year moved 3.27% north over the past 60 days.
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Ameris Bancorp (ABCB): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In an effort to expand its market presence, Ameris Bancorp ABCB recently announced a deal to buy Fidelity Southern Corporation LION for $750.7million. Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report Fidelity Southern Corporation (LION): Free Stock Analysis Report City Holding Company (CHCO): Free Stock Analysis Report Chemung Financial Corp (CHMG): Free Stock Analysis Report To read this article on Zacks.com click here. The acquisition will be accretive to Ameris Bancorp's earnings in the mid-single digit range, after the company realizes cost saving of 40% of Fidelity Southern's projected non-interest expense. | Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report Fidelity Southern Corporation (LION): Free Stock Analysis Report City Holding Company (CHCO): Free Stock Analysis Report Chemung Financial Corp (CHMG): Free Stock Analysis Report To read this article on Zacks.com click here. In an effort to expand its market presence, Ameris Bancorp ABCB recently announced a deal to buy Fidelity Southern Corporation LION for $750.7million. Stocks to Consider A couple of better-ranked stocks from the finance space are Chemung Financial Corp CHMG and City Holding Company CHCO Chemung Financial's shares have gained 17.5 % in the past two years. | Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report Fidelity Southern Corporation (LION): Free Stock Analysis Report City Holding Company (CHCO): Free Stock Analysis Report Chemung Financial Corp (CHMG): Free Stock Analysis Report To read this article on Zacks.com click here. In an effort to expand its market presence, Ameris Bancorp ABCB recently announced a deal to buy Fidelity Southern Corporation LION for $750.7million. Details and Benefits Per the agreement, shareholders of Fidelity Southern will receive 0.80 share of Ameris Bancorp for each share of Fidelity Southern. | In an effort to expand its market presence, Ameris Bancorp ABCB recently announced a deal to buy Fidelity Southern Corporation LION for $750.7million. Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report Fidelity Southern Corporation (LION): Free Stock Analysis Report City Holding Company (CHCO): Free Stock Analysis Report Chemung Financial Corp (CHMG): Free Stock Analysis Report To read this article on Zacks.com click here. Details and Benefits Per the agreement, shareholders of Fidelity Southern will receive 0.80 share of Ameris Bancorp for each share of Fidelity Southern. |
27882.0 | 2018-12-17 00:00:00 UTC | Mid-Day Market Update: Crude Oil Down Over 1%; Diffusion Pharmaceuticals Shares Spike Higher | ABCB | https://www.nasdaq.com/articles/mid-day-market-update-crude-oil-down-over-1-diffusion-pharmaceuticals-shares-spike-higher | nan | nan | Midway through trading Monday, the Dow traded down 0.22 percent to 24,047.50 while the NASDAQ climbed 0.12 percent to 6,918.63. The S&P also fell, dropping 0.06 percent to 2,598.40.
Leading and Lagging Sectors
On Monday, the financial shares rose by 0.7 percent. Meanwhile, top gainers in the sector included Fidelity Southern Corporation (NASDAQ: LION ) up 21 percent, and KCAP Financial Inc (NASDAQ: KCAP ) up 8 percent.
In trading on Monday, utilities shares fell 1.3 percent.
Top Headline
Hitachi agreed to acquire the power grid division of ABB Ltd (NYSE: ABB ). Hitachi will acquire 80.1 percent of the power-grid unit with an enterprise value of $11 billion.
Equities Trading UP
Synergy Pharmaceuticals Inc. (NASDAQ: SGYP ) shares got a boost, shooting up 43 percent to $0.1144 after Health Canada accepted Cipher Pharmaceuticals' new drug submission for PLECANATIDE.
Shares of Fidelity Southern Corporation (NASDAQ: LION ) shot up 21 percent to $26.00 after the company and Ameris Bancorp (NASDAQ: ABCB ) agreed to merge.
Diffusion Pharmaceuticals Inc. (NASDAQ: DFFN ) shares were also up, gaining 37 percent to $3.9200 after the US Patent Office awarded the company exclusive rights for the use of its TSC drug in conjunction with tPA for stroke treatment.
Equities Trading DOWN
Sophiris Bio, Inc. (NASDAQ: SPHS ) shares dropped 42 percent to $1.1999 after announcing the company's phase 2b prostate cancer trial showed no additional benefit to patients.
Shares of Dova Pharmaceuticals, Inc. (NASDAQ: DOVA ) were down 27 percent to $10.80. Dova Pharmaceuticals appointed David Zaccardelli as President and CEO. The company expects Q4 net poduct sales of $2.4 million to $2.7 million for DOPTELET.
Cancer Genetics, Inc. (NASDAQ: CGIX ) was down, falling around 34 percent to $0.3663 after the company terminated its proposed merger with NovellusDx.
Commodities
In commodity news, oil traded down 1.15 percent to $50.61 while gold traded up 0.39 percent to $1,246.30.
Silver traded up 0.46 percent Monday to $14.705, while copper fell 0.71 percent to $2.743.
Eurozone
European shares were lower today. The eurozone's STOXX 600 fell 1.09 percent, the Spanish Ibex Index declined 0.53 percent, while Italy's FTSE MIB Index fell 0.93 percent. Meanwhile the German DAX dropped 0.95 percent, and the French CAC 40 fell 1.1 percent while U.K. shares fell 0.83 percent.
Economics
The Empire State manufacturing index dropped 12.4 points to 10.9 for December. However, economists were projecting a reading of 20.1.
The housing market index declined 4 points to a reading of 56 in December.
The Treasury International Capital report for October is schedule for release at 4:00 p.m. ET.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shares of Fidelity Southern Corporation (NASDAQ: LION ) shot up 21 percent to $26.00 after the company and Ameris Bancorp (NASDAQ: ABCB ) agreed to merge. Diffusion Pharmaceuticals Inc. (NASDAQ: DFFN ) shares were also up, gaining 37 percent to $3.9200 after the US Patent Office awarded the company exclusive rights for the use of its TSC drug in conjunction with tPA for stroke treatment. Equities Trading DOWN Sophiris Bio, Inc. (NASDAQ: SPHS ) shares dropped 42 percent to $1.1999 after announcing the company's phase 2b prostate cancer trial showed no additional benefit to patients. | Shares of Fidelity Southern Corporation (NASDAQ: LION ) shot up 21 percent to $26.00 after the company and Ameris Bancorp (NASDAQ: ABCB ) agreed to merge. Meanwhile, top gainers in the sector included Fidelity Southern Corporation (NASDAQ: LION ) up 21 percent, and KCAP Financial Inc (NASDAQ: KCAP ) up 8 percent. Meanwhile the German DAX dropped 0.95 percent, and the French CAC 40 fell 1.1 percent while U.K. shares fell 0.83 percent. | Shares of Fidelity Southern Corporation (NASDAQ: LION ) shot up 21 percent to $26.00 after the company and Ameris Bancorp (NASDAQ: ABCB ) agreed to merge. Midway through trading Monday, the Dow traded down 0.22 percent to 24,047.50 while the NASDAQ climbed 0.12 percent to 6,918.63. The eurozone's STOXX 600 fell 1.09 percent, the Spanish Ibex Index declined 0.53 percent, while Italy's FTSE MIB Index fell 0.93 percent. | Shares of Fidelity Southern Corporation (NASDAQ: LION ) shot up 21 percent to $26.00 after the company and Ameris Bancorp (NASDAQ: ABCB ) agreed to merge. In trading on Monday, utilities shares fell 1.3 percent. Diffusion Pharmaceuticals Inc. (NASDAQ: DFFN ) shares were also up, gaining 37 percent to $3.9200 after the US Patent Office awarded the company exclusive rights for the use of its TSC drug in conjunction with tPA for stroke treatment. |
27883.0 | 2018-12-17 00:00:00 UTC | Mid-Morning Market Update: Markets Open Lower; Hitachi To Acquire ABB's Power-Grid Unit | ABCB | https://www.nasdaq.com/articles/mid-morning-market-update-markets-open-lower-hitachi-acquire-abbs-power-grid-unit-2018-12 | nan | nan | Following the market opening Monday, the Dow traded down 0.66 percent to 23,942.72 while the NASDAQ declined 0.37 percent to 6,885.19. The S&P also fell, dropping 0.53 percent to 2,586.31.
Leading and Lagging Sectors
Monday morning, the financial shares rose by 0.02 percent. Meanwhile, top gainers in the sector included Fidelity Southern Corporation (NASDAQ: LION ) up 22 percent, and KCAP Financial Inc (NASDAQ: KCAP ) up 8 percent.
In trading on Monday, consumer discretionary shares fell 1.3 percent.
Top Headline
Hitachi agreed to acquire the power grid division of ABB Ltd (NYSE: ABB ). Hitachi will acquire 80.1 percent of the power-grid unit with an enterprise value of $11 billion.
Equities Trading UP
Evofem Biosciences, Inc. (NASDAQ: EVFM ) shares got a boost, shooting up 23 percent to $4.30 after the company disclosed that its Phase 3 study evaluating amphora for hormone-free birth control met primary endpoint.
Shares of Fidelity Southern Corporation (NASDAQ: LION ) shot up 20 percent to $25.81 after the company and Ameris Bancorp (NASDAQ: ABCB ) agreed to merge.
Proteostasis Therapeutics, Inc. (NASDAQ: PTI ) shares were also up, gaining 11 percent to $5.36 after reporting a global license agreement with Genentech.
Equities Trading DOWN
Sophiris Bio, Inc. (NASDAQ: SPHS ) shares dropped 38 percent to $ 1.2801 after announcing the company's phase 2b prostate cancer trial showed no additional benefit to patients.
Shares of Dova Pharmaceuticals, Inc. (NASDAQ: DOVA ) were down 24 percent to $11.29. Dova Pharmaceuticals appointed David Zaccardelli as President and CEO. The company expects Q4 net poduct sales of $2.4 million to $2.7 million for DOPTELET.
Innovate Biopharmaceuticals, Inc. (NASDAQ: INNT ) was down, falling around 10 percent to $2.54. Innovate Biopharmaceuticals announced plans to commence its Phase 3 registration trial in celiac disease in 1H 2019 and announce top-line NASH data with drug combinations by EASL 2019.
Commodities
In commodity news, oil traded up 0.35 percent to $51.38 while gold traded up 0.22 percent to $1,244.10.
Silver traded up 0.29 percent Monday to $14.68, while copper fell 0.89 percent to $2.738.
Eurozone
European shares were lower today. The eurozone's STOXX 600 fell 0.74 percent, the Spanish Ibex Index declined 0.18 percent, while Italy's FTSE MIB Index fell 0.47 percent. Meanwhile the German DAX dropped 0.68 percent, and the French CAC 40 fell 0.73 percent while U.K. shares fell 0.67 percent.
Economics
The Empire State manufacturing index dropped 12.4 points to 10.9 for December. However, economists were projecting a reading of 20.1.
The housing market index declined 4 points to a reading of 56 in December.
The Treasury is set to auction 3-and 6-month bills at 11:30 a.m. ET.
The Treasury International Capital report for October is schedule for release at 4:00 p.m. ET.
© 2018 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shares of Fidelity Southern Corporation (NASDAQ: LION ) shot up 20 percent to $25.81 after the company and Ameris Bancorp (NASDAQ: ABCB ) agreed to merge. Equities Trading UP Evofem Biosciences, Inc. (NASDAQ: EVFM ) shares got a boost, shooting up 23 percent to $4.30 after the company disclosed that its Phase 3 study evaluating amphora for hormone-free birth control met primary endpoint. Proteostasis Therapeutics, Inc. (NASDAQ: PTI ) shares were also up, gaining 11 percent to $5.36 after reporting a global license agreement with Genentech. | Shares of Fidelity Southern Corporation (NASDAQ: LION ) shot up 20 percent to $25.81 after the company and Ameris Bancorp (NASDAQ: ABCB ) agreed to merge. Meanwhile, top gainers in the sector included Fidelity Southern Corporation (NASDAQ: LION ) up 22 percent, and KCAP Financial Inc (NASDAQ: KCAP ) up 8 percent. Equities Trading DOWN Sophiris Bio, Inc. (NASDAQ: SPHS ) shares dropped 38 percent to $ 1.2801 after announcing the company's phase 2b prostate cancer trial showed no additional benefit to patients. | Shares of Fidelity Southern Corporation (NASDAQ: LION ) shot up 20 percent to $25.81 after the company and Ameris Bancorp (NASDAQ: ABCB ) agreed to merge. Meanwhile, top gainers in the sector included Fidelity Southern Corporation (NASDAQ: LION ) up 22 percent, and KCAP Financial Inc (NASDAQ: KCAP ) up 8 percent. The eurozone's STOXX 600 fell 0.74 percent, the Spanish Ibex Index declined 0.18 percent, while Italy's FTSE MIB Index fell 0.47 percent. | Shares of Fidelity Southern Corporation (NASDAQ: LION ) shot up 20 percent to $25.81 after the company and Ameris Bancorp (NASDAQ: ABCB ) agreed to merge. The S&P also fell, dropping 0.53 percent to 2,586.31. The eurozone's STOXX 600 fell 0.74 percent, the Spanish Ibex Index declined 0.18 percent, while Italy's FTSE MIB Index fell 0.47 percent. |
27884.0 | 2018-12-17 00:00:00 UTC | Mid-Afternoon Market Update: Dow Down Over 350 Points; Sophiris Bio Shares Plummet | ABCB | https://www.nasdaq.com/articles/mid-afternoon-market-update-dow-down-over-350-points-sophiris-bio-shares-plummet-2018-12 | nan | nan | Toward the end of trading Monday, the Dow traded down 1.54 percent to 23,730.40 while the NASDAQ climbed 1.76 percent to 6,788.71. The S&P also fell, dropping 1.56 percent to 2,559.50.
Leading and Lagging Sectors
Monday afternoon, the financial shares slipped by just 0.5 percent. Meanwhile, top gainers in the sector included Fidelity Southern Corporation (NASDAQ: LION ) up 18 percent, and KCAP Financial Inc (NASDAQ: KCAP ) up 8 percent.
In trading on Monday, real estate shares fell 2.9 percent.
Top Headline
Hitachi agreed to acquire the power grid division of ABB Ltd (NYSE: ABB ). Hitachi will acquire 80.1 percent of the power-grid unit with an enterprise value of $11 billion.
Equities Trading UP
Synergy Pharmaceuticals Inc. (NASDAQ: SGYP ) shares got a boost, shooting up 54 percent to $0.1230 after Health Canada accepted Cipher Pharmaceuticals' new drug submission for PLECANATIDE.
Shares of Fidelity Southern Corporation (NASDAQ: LION ) shot up 18 percent to $25.23 after the company and Ameris Bancorp (NASDAQ: ABCB ) agreed to merge.
Diffusion Pharmaceuticals Inc. (NASDAQ: DFFN ) shares were also up, gaining 19 percent to $3.4068 after the US Patent Office awarded the company exclusive rights for the use of its TSC drug in conjunction with tPA for stroke treatment.
Equities Trading DOWN
Sophiris Bio, Inc. (NASDAQ: SPHS ) shares dropped 45 percent to $1.1250 after announcing the company's phase 2b prostate cancer trial showed no additional benefit to patients.
Shares of Dova Pharmaceuticals, Inc. (NASDAQ: DOVA ) were down 36 percent to $9.44. Dova Pharmaceuticals appointed David Zaccardelli as President and CEO. The company expects Q4 net poduct sales of $2.4 million to $2.7 million for DOPTELET.
Cancer Genetics, Inc. (NASDAQ: CGIX ) was down, falling around 33 percent to $0.3698 after the company terminated its proposed merger with NovellusDx.
Commodities
In commodity news, oil traded down 2.27 percent to $50.04 while gold traded up 0.67 percent to $1,249.70.
Silver traded up 0.70 percent Monday to $14.74, while copper fell 0.58 percent to $2.7465.
Eurozone
European shares closed lower today. The eurozone's STOXX 600 fell 1.14 percent, the Spanish Ibex Index declined 0.83 percent, while Italy's FTSE MIB Index fell 1.15 percent. Meanwhile the German DAX dropped 0.86 percent, and the French CAC 40 fell 1.11 percent while U.K. shares fell 1.05 percent.
Economics
The Empire State manufacturing index dropped 12.4 points to 10.9 for December. However, economists were projecting a reading of 20.1.
The housing market index declined 4 points to a reading of 56 in December.
The Treasury International Capital report for October is schedule for release at 4:00 p.m. ET.
© 2018 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shares of Fidelity Southern Corporation (NASDAQ: LION ) shot up 18 percent to $25.23 after the company and Ameris Bancorp (NASDAQ: ABCB ) agreed to merge. Diffusion Pharmaceuticals Inc. (NASDAQ: DFFN ) shares were also up, gaining 19 percent to $3.4068 after the US Patent Office awarded the company exclusive rights for the use of its TSC drug in conjunction with tPA for stroke treatment. Equities Trading DOWN Sophiris Bio, Inc. (NASDAQ: SPHS ) shares dropped 45 percent to $1.1250 after announcing the company's phase 2b prostate cancer trial showed no additional benefit to patients. | Shares of Fidelity Southern Corporation (NASDAQ: LION ) shot up 18 percent to $25.23 after the company and Ameris Bancorp (NASDAQ: ABCB ) agreed to merge. Meanwhile, top gainers in the sector included Fidelity Southern Corporation (NASDAQ: LION ) up 18 percent, and KCAP Financial Inc (NASDAQ: KCAP ) up 8 percent. Click here to start your 14 Day Trial of Benzinga Professional The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shares of Fidelity Southern Corporation (NASDAQ: LION ) shot up 18 percent to $25.23 after the company and Ameris Bancorp (NASDAQ: ABCB ) agreed to merge. Toward the end of trading Monday, the Dow traded down 1.54 percent to 23,730.40 while the NASDAQ climbed 1.76 percent to 6,788.71. The eurozone's STOXX 600 fell 1.14 percent, the Spanish Ibex Index declined 0.83 percent, while Italy's FTSE MIB Index fell 1.15 percent. | Shares of Fidelity Southern Corporation (NASDAQ: LION ) shot up 18 percent to $25.23 after the company and Ameris Bancorp (NASDAQ: ABCB ) agreed to merge. In trading on Monday, real estate shares fell 2.9 percent. Silver traded up 0.70 percent Monday to $14.74, while copper fell 0.58 percent to $2.7465. |
27885.0 | 2018-12-05 00:00:00 UTC | Two Bank Stocks on Our Radar Right Now | ABCB | https://www.nasdaq.com/articles/two-bank-stocks-our-radar-right-now-2018-12-05 | nan | nan | Each week on the Industry Focus: Financials podcast, host Jason Moser and Fool.com contributor Matt Frankel, CFP, each discuss one stock that's on their watch list.
This week, Frankel discusses why investment banking giant Goldman Sachs (NYSE: GS) is looking like a bargain right now, while Moser recently purchased shares of Ameris Bancorp (NASDAQ: ABCB) and thinks the stock looks rather interesting.
A full transcript follows the video.
10 stocks we like better than Walmart
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, the Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of November 14, 2018
The author(s) may have a position in any stocks mentioned.
This video was recorded on Dec. 3, 2018.
Jason Moser: Let's wrap up the week, as always, with One to Watch. Matt, what is your one to watch for the coming week?
Matt Frankel: Last week, I suggested a financials index fund. This week, I'm going to narrow it down. I'm going to say Goldman Sachs, ticker GS, which is one of my favorites. Listeners know that. I've mentioned before that Goldman has a lot of room to run with their consumer banking business. They're still arguably the No. 1 brand name on Wall Street. When you hear Wall Street, it's pretty much synonymous with Goldman Sachs for a lot of people. And now, they're in this legal problem with Malaysia. Malaysia is trying to get back $600 million in fees that it paid in a bond fund that went bad. Now that they're wrapped up in this, the stock's taken another hit down, and it's actually trading for less than its book value for the first time in over two years. I think Goldman looks really, really interesting at this point.
Moser: And what is the ticker for Goldman?
Frankel: GS.
Moser: GS. OK. Folks who follow me on Twitter may know that on November 20th, I bought Ameris Bancorp, along with another stock, Etsy , but I'm going to go ahead and shine the light on Ameris Bancorp this week, because I did add shares of Ameris to my portfolio. Most folks, you've probably heard it on this show before. Ameris is a small-cap bank down there in southwest Georgia. About a $2 billion market cap, but it really has grown by leaps and bounds over the last several years. The FDIC found it to be a very good partner in rolling up some of those failed institutions from the financial crisis. Ameris has always been able to maintain healthy capital ratios, which is really encouraging. I think the stock is a little bit on sale around this time of year here, around 20 times earnings today. In their most recent quarter, they announced they grew total assets to close to $11.5 billion versus approximately $7.5 billion at the end of 2017. With a bank like this, growing that asset base, growing that deposit base, really helps them generate the return on assets that we value a lot of these banks by.
And then, they have a nice diverse lending book, which is a testament to smart leadership. They're good stewards with the capital and look after shareholders. I think this is an attractive long-term idea, one that I look forward to holding for many years to come, and I think listeners would benefit from probably looking into it there.
So, we got a big, megabank, and we got a little, tiny bank. Those are a couple of good ideas for listeners out there.
Jason Moser owns shares of Etsy and Twitter. Matthew Frankel, CFP has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Etsy and Twitter. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | This week, Frankel discusses why investment banking giant Goldman Sachs (NYSE: GS) is looking like a bargain right now, while Moser recently purchased shares of Ameris Bancorp (NASDAQ: ABCB) and thinks the stock looks rather interesting. Each week on the Industry Focus: Financials podcast, host Jason Moser and Fool.com contributor Matt Frankel, CFP, each discuss one stock that's on their watch list. * David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! | This week, Frankel discusses why investment banking giant Goldman Sachs (NYSE: GS) is looking like a bargain right now, while Moser recently purchased shares of Ameris Bancorp (NASDAQ: ABCB) and thinks the stock looks rather interesting. Each week on the Industry Focus: Financials podcast, host Jason Moser and Fool.com contributor Matt Frankel, CFP, each discuss one stock that's on their watch list. Jason Moser owns shares of Etsy and Twitter. | This week, Frankel discusses why investment banking giant Goldman Sachs (NYSE: GS) is looking like a bargain right now, while Moser recently purchased shares of Ameris Bancorp (NASDAQ: ABCB) and thinks the stock looks rather interesting. Each week on the Industry Focus: Financials podcast, host Jason Moser and Fool.com contributor Matt Frankel, CFP, each discuss one stock that's on their watch list. OK. Folks who follow me on Twitter may know that on November 20th, I bought Ameris Bancorp, along with another stock, Etsy , but I'm going to go ahead and shine the light on Ameris Bancorp this week, because I did add shares of Ameris to my portfolio. | This week, Frankel discusses why investment banking giant Goldman Sachs (NYSE: GS) is looking like a bargain right now, while Moser recently purchased shares of Ameris Bancorp (NASDAQ: ABCB) and thinks the stock looks rather interesting. OK. Folks who follow me on Twitter may know that on November 20th, I bought Ameris Bancorp, along with another stock, Etsy , but I'm going to go ahead and shine the light on Ameris Bancorp this week, because I did add shares of Ameris to my portfolio. Those are a couple of good ideas for listeners out there. |
27886.0 | 2018-11-28 00:00:00 UTC | 4 Small-Cap Bank Stocks That Should Be on Your Radar | ABCB | https://www.nasdaq.com/articles/4-small-cap-bank-stocks-should-be-your-radar-2018-11-28 | nan | nan | On Industry Focus: Financials , host Jason Moser and Fool.com contributor Matt Frankel, CFP, spend lots of time discussing the big U.S. banks. However, there are some interesting small-cap banks that are worth a look, as well.
In this segment, they explain why Synovus (NYSE: SNV) , Ameris Bancorp (NASDAQ: ABCB) , Bank of Hawaii (NYSE: BOH) , and Universal Insurance Holdings (NYSE: UVE) should be on investors' radar.
A full transcript follows the video.
10 stocks we like better than Walmart
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, the Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of November 14, 2018
The author(s) may have a position in any stocks mentioned.
This video was recorded on Nov. 26, 2018.
Jason Moser: Let's take a look here, new topic for discussion. We got a tweet a few days back from @ChrisM_Jones. Chris said, "Would love for the two of you to cover some small-cap financials. For example, AX , UVE. Full disclosure, UVE was my first stock, and now is my largest position." The bottom line is, Chris was hoping we could take a look into some more small-cap financial stocks. Matt, you and I love talking stocks. When you get to find compelling small-cap financials, we could probably talk about that for the next four hours. Unfortunately, we're not going to be given that much time. We thought we would take an opportunity here to target two companies each in the small-cap space that we like and see if we could give Chris a couple of ideas, companies that we like, some things to keep an eye on with them.
We're going to start the discussion here with a company that Matt, you know, Synovus, ticker SNV. Give us your elevator pitch for Synovus.
Matt Frankel: This is a bank that I drive by a lot because it's a southern regional bank. The reason I like Synovus is, one, they're profitable; two, they're growing very fast. On the side of profitability, return on assets of a little over 1.3X, return on equity of 40%. Both are great numbers. The loan portfolio is growing at a pretty impressive rate, about 4.5% a year. They're making acquisitions on a pretty aggressive basis and they're actually getting really good deals. I reported over the summer that Synovus decided to acquire a bank called FCB Financial, Florida Community Bank. They actually wound up getting a discount to the share price. Generally, when you acquire a company, you're paying a premium. That's why the shares jump up right after the acquisition's announced. This will make them one of the biggest regional banks around. They got a great price. They expect it to be immediately accretive to earnings. I really like Synovus. Very profitable, well-run bank with big ambitions.
Moser: Ameris Bancorp is the first one I'm going to talk about here. Listeners have probably heard me talk about it before. The ticker is ABCB. This is a not-so-little regional bank in the southeast. Home base is Moultrie, Georgia. Full disclosure, my mom and dad actually live in Moultrie, Georgia. I've played golf with a couple of these guys at Ameris Bancorp before. That wasn't through design, it's just small town living there. Everybody knows everybody. And I do own shares of Ameris Bancorp, as well. This is a company I found back in 2011, at the depths of the financial crisis, when a lot of these small-cap banks, these tiny banks, particularly in Georgia, for whatever reason, were going belly up. They had bad loan books and really overextended themselves. Ameris Bancorp has always been a very well-run, fairly conservative operation, not trying to write checks that the bank can't cash.
What that resulted in, over the course of the few years in that recovery from the financial crisis, the FDIC recognized Ameris Bancorp's excellence in operating and started using Ameris as a partner in rolling up some of these failed financial institutions to give them at least a little bit of an exit strategy so that everything didn't go completely to hell in a handbasket. What this ultimately did for Ameris, it gave them a very risk-free way to build up their asset base and their deposit base. The FDIC basically said, "Any losses are going to be on us. We just want you to help us get these things rolled up, and there's going to be nothing ultimately but upside there for you."
Fast-forward to today, that really has worked out for the company. They now have total assets near close to $11.5 billion. Tangible book value per share is close to $18. All in all, what you have here in Ameris is a still small-cap bank, around $2 billion market cap, that has grown its presence beyond that Georgia footprint. They have plenty of opportunities to continue to make some smart acquisitions going forward. And they certainly have done that. They recently purchased Atlantic Coast Financial, as well as Hamilton State Bank. It's all helping them grow this business out. Longtime CEO Edwin Hortman stepped down recently. The new CEO, Dennis Zember, who has been with the company for a number of years, held positions of COO and CFO. That's all to say, I expect that conservative, smart, long-term-focused mentality to continue here with Ameris Bancorp. Certainly had developed a long track record of success. I suspect we will see that going forward, as well. That's one of those little small-cap financials I really like.
Speaking of banks, Matt, you wanted to take a trip out west and talk a little bit about Bank of Hawaii, right?
Frankel: Yeah! Since we're talking about some of your disclosures, disclosure: I've never been to Hawaii, so I've never been to a Bank of Hawaii branch.
Moser: I've been to Hawaii! I was looking to see if we could get a Fool branch in Hawaii. That'd be pretty sweet, actually.
Frankel: If there was an office there, I might sign up for it.
Moser: I was pitching that and or/ the Bahamas. I would gladly take either post.
Frankel: [laughs] So, I've never actually been to a Bank of Hawaii, but I know a lot about them as a bank. They're one of my favorite small-cap banks. I've been watching them for a little while. Not only are they an extremely profitable bank, but along with one other bank, they have a pretty dominant market share in Hawaii. If you're in Hawaii, you generally don't go to a Bank of America or Wells Fargo . You're either at Bank of Hawaii or First Hawaiian Bank , the other major bank out there. They have a very big market share. Great reputation on the island. Don't expect too much growth as in geographic growth. You're not going to have a Bank of Hawaii branch in Kansas or anything like that.
Hawaii's economy is doing great. It's growing at a faster rate than the rest of the U.S. It's one of the fastest-growing economies. Great reputation. The loan portfolio, for example, grew about 7% over the past year, most banks were in the 3-4% range, if you look back at our episode where we covered the big banks. That's a testament to how strong the Hawaiian economy is right now. Consistently profitable throughout any economy. A little fun fact: after Citigroup almost collapsed during the financial crisis, they brought in Bank of Hawaii's former CEO to be the new chairman of the board. The big guys on Wall Street know how profitable Bank of Hawaii is and how well-run it is.
It's not a cheap bank stock. I put it in the valuation category of a US Bancorp . But just like Synovus, about a 1.3% return on assets, and 18% return on equity, which is unheard of for a brick and mortar bank. Highly profitable. Very, very low default rate. It was like a 0.2% non-performing assets rate, which is extremely low. Great economy, great quality bank, great history of being a well-run institution. That's why it's one of my favorites. Hopefully I get to visit one someday.
Moser: I feel like this is the opportunity to bring this thing under official coverage here at The Fool. The annual meeting is out there in Hawaii, right? That has to be where they have the annual meetings. Then you have to go out there, right? It's the biggest no-brainer. We'll look into that later this week, Matt.
Let's wrap it up here. Chris had made specific mention here of a company, Universal Insurance Holdings. This is the company he said has grown into his biggest position. Let me tell you, Chris, I think that's not actually such a bad move here. From what I have seen with Universal Insurance Holdings, this is a pretty compelling company. This is the largest private personal residential homeowner's insurance company in Florida. When I say Florida, let's be very clear, most of their business is in Florida. Only 26% of their total insured business is outside of Florida. This is a Florida play. They are in 16 states, but right now, this is a Florida play. They are seeking to expand that footprint and diversify, geographically speaking.
But generally speaking, we love the insurance business from the investor's perspective because insurance is one of those things that's always going to be needed, particularly if you're a homeowner. Chances are, you've got a mortgage, you have to pay that mortgage, your mortgage company is going to require it. Even if you've got your mortgage paid off, nobody owns a home and isn't going to have some type of insurance on it.
Universal Insurance Holdings has been focusing on its primary market of Florida for a number of years. It's a small company, $1.5 billion market cap. But I tell you, if you bought this thing five years ago, you're feeling really good about it. The stock's up close to 300% since then. A big measure for us when we look at insurance companies is book value. We can see through Universal's book value they are growing. In 2013, that book value was at $5.20 per share, vs. today, which is $15.20 per share. Obviously, that indicates the company is growing, and growing at a healthy rate. Another metric that we look to with insurance companies to understand if they're writing good books of business is the combined ratio. We like to see that combined ratio under 100%, that tells us that they are writing good business, profitable business. The combined ratio for Universal in 2017 chalked up at 84.4%. That actually was a little bit up historically from what we've seen in years past.
This is a well-run business. CEO Sean Downes has been there for a while, has plenty of experience in the industry. The risks with a business like this, particularly in a state like this, is the natural disasters. Florida is known for its storms. But the flip side of that is, every insurance company in Florida is planning for that stuff. It's not a matter of if, it's a matter of when. So, I like to believe that management is certainly keeping that on their radar. And the way that insurance companies tend to hedge that risk is by reinsurance.
So, all in all, it does look like Universal Insurance Holdings is doing a lot of good things with the business. Based on the metrics, the business looks very healthy. Strong balance sheet, appears to be very capable management there. Chris, I think you can feel pretty good about owning that one. Congratulations on your gains, and here's to many, many more dollars in the future!
Jason Moser has no position in any of the stocks mentioned. Matthew Frankel, CFP owns shares of AX and BAC. The Motley Fool owns shares of and recommends AX. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In this segment, they explain why Synovus (NYSE: SNV) , Ameris Bancorp (NASDAQ: ABCB) , Bank of Hawaii (NYSE: BOH) , and Universal Insurance Holdings (NYSE: UVE) should be on investors' radar. The ticker is ABCB. On Industry Focus: Financials , host Jason Moser and Fool.com contributor Matt Frankel, CFP, spend lots of time discussing the big U.S. banks. | In this segment, they explain why Synovus (NYSE: SNV) , Ameris Bancorp (NASDAQ: ABCB) , Bank of Hawaii (NYSE: BOH) , and Universal Insurance Holdings (NYSE: UVE) should be on investors' radar. The ticker is ABCB. On Industry Focus: Financials , host Jason Moser and Fool.com contributor Matt Frankel, CFP, spend lots of time discussing the big U.S. banks. | In this segment, they explain why Synovus (NYSE: SNV) , Ameris Bancorp (NASDAQ: ABCB) , Bank of Hawaii (NYSE: BOH) , and Universal Insurance Holdings (NYSE: UVE) should be on investors' radar. The ticker is ABCB. Not only are they an extremely profitable bank, but along with one other bank, they have a pretty dominant market share in Hawaii. | In this segment, they explain why Synovus (NYSE: SNV) , Ameris Bancorp (NASDAQ: ABCB) , Bank of Hawaii (NYSE: BOH) , and Universal Insurance Holdings (NYSE: UVE) should be on investors' radar. The ticker is ABCB. On Industry Focus: Financials , host Jason Moser and Fool.com contributor Matt Frankel, CFP, spend lots of time discussing the big U.S. banks. |
27887.0 | 2018-11-27 00:00:00 UTC | Small-Cap Banks, Amazon Pay, and More | ABCB | https://www.nasdaq.com/articles/small-cap-banks-amazon-pay-and-more-2018-11-27 | nan | nan | We spend a lot of time covering the big banks, so here's a closer look at four small-cap bank stocks that probably aren't on your radar -- yet. Plus, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss Amazon.com 's (NASDAQ: AMZN) Amazon Pay and what it could mean to some of our War on Cash favorites. Plus, the team answers listener emails on REITs, bank interest margins, dividends and buybacks, and more. It's all on this week's episode of Industry Focus: Financials .
A full transcript follows the video.
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This video was recorded on Nov. 26, 2018.
Jason Moser: Welcome to Industry Focus , the podcast that dives into a different sector of the stock market each day. It's Monday, Nov. 26. I'm your host, Jason Moser. On today's show, we're going to talk small-cap financial stocks. We'll tackle some listener emails. We'll tap into Twitter , of course, and give you One to Watch for the coming week.
But we begin this week talking about the king of e-commerce as Amazon continues to pursue the massive market opportunity not only in e-commerce but out there in payments. We talk a lot about payments here, as you know. Joining me in the studio this week, as usual, is Certified Financial Planner Matt Frankel. Matt, how's everything going?
Matt Frankel: Pretty good. We took the kids up to my family in Maryland and just got back from that. I actually had a chance to use Amazon Pay for some Black Friday shopping last. I'm really looking forward to talking about that.
Moser: I have a feeling we're going to be digging into that a little bit. You guys had a nice Thanksgiving weekend, it sounds like.
Frankel: We did. The trip was surprisingly smooth for a 10-hour car ride with two small children.
Moser: Holy cow, 10 hours! How many times did you have to stop for that trip?
Frankel: We've got little kids, one of whom is potty training, so...
Moser: Well, we're glad to have you back here and joining us. You mentioned Amazon Pay, so let's kick right off here talking about Amazon. There are a few different points to this discussion we want to get to. We're talking primarily about Amazon's effort to gain more share in the payments space. That's through Amazon Pay. We can couple this discussion also with the fact that according to Adobe Analytics, Black Friday pulled in a record $6.22 billion in online sales, which was up almost 24% from a year ago. It was the first day in history to see more than $2 billion in sales stemming from smartphones. That's where I really want to pick this conversation up here. Not only are we living in an e-commerce world; we're certainly living in a mobile world as well.
For a lot of us, Amazon Pay probably isn't top of mind, yet we're reading now that they're really making efforts to gain share, it seems like initially with companies that are not necessarily direct competitors, like gas stations or restaurants or what have you. It does seem like they're trying to take a little bit more of that role in the transaction, much like we've seen Apple (NASDAQ: AAPL) do to date with Apple Pay. But it's also not just Apple. There are all these payments companies out there, trying to get a little piece of that transaction.
Talk a little bit about your experience with Amazon Pay. Give us a little bit of your perspective here as to what the endgame is with Amazon.
Frankel: I was on a certain retailer's website. I can't tell you what I bought, or who I bought it from, because it was an anniversary gift for my wife, who listens to the show.
Moser: Oh, so you really can't. I was going to say, "You can't, or you won't?" But it's both.
Frankel: I really can't. It was a small business, something you would see featured on Shark Tank . It struck me as somewhere that gets most of their sales from Amazon to begin with. This was directly on their website. I went to check out; they were having a great Black Friday sale. I went to their website, selected my products, and went to the checkout. And there were two buttons. There was a PayPal (NASDAQ: PYPL) button and an Amazon Pay button. I was curious, because I had never seen that on a merchant's website. Amazon really hasn't pushed it until recently. So I clicked Amazon Pay, and it took me right to my Amazon checkout, where I have my Amazon credit card already set up. It was just like checking out for a normal Amazon purchase. It took me about two clicks. It was very easy. I was actually going to use PayPal, and I like this alternative because it lets me keep all my purchases in one place. I'd say about 50% of what my wife and I order is already through Amazon. It lets me organize my purchases into one payment portal. I actually think PayPal might have something to worry about here.
Moser: That's a good perspective there. I want to ask you, the initial thing that comes to mind here where I think they may have a little bit of a challenge, we know that to date, the U.S. consumer isn't necessarily all that digital-wallet-focused yet. That's still something that we're in the very nascent stages of, and I think it's going to take a while for that behavior to really change. You look at something like Apple Pay, for example, as clever as that is, consumers still aren't embracing that wholeheartedly. Whether it's Apple Pay or Google Pay or Amazon Pay, the digital wallet, there's a big opportunity there. That explains why Amazon is pursuing this.
The one hang-up here I have with Amazon and the process that you just described, it sounds like there's a little bit more friction in there, versus if I go somewhere, whatever website it may be, and I have the option to pay with Apple Pay. When it says, "Do you want to use Apple Pay?" And you can just use your thumbprint to verify the transaction, as opposed to having to go to another website and verify that purchase. What I'm getting at here is ultimately, it feels like Apple, and to a degree Google, have a hardware advantage that Amazon doesn't have to date. Does that make sense?
Frankel: Yes, but here's my perspective on that. I don't necessarily think this will steal any market share from people who are already on Apple Pay or PayPal. Both of those are, like you said, very easy portals. They both have hardware advantages over Amazon. But there are a lot of people who are not using digital wallets yet who are already comfortable with Amazon's checkout process. I don't necessarily think they're going to steal market share or steal existing customers from any of the other ones, but I do think it gives them an advantage recruiting new adopters to digital wallets.
Moser: Probably, you're right. We talk about this all the time, this is not a zero-sum game. It's not as if one wins and everybody else loses. This is a massive opportunity out there. At the end of the day, money is going everywhere. That's what dictates everything, basically, is money getting from Point A to Point B. Pursuing even just a small piece of that pie makes a lot of sense, particularly in Amazon's case, because really, you have to figure for them, this is a very easy bet to make. The business certainly isn't hinging on it. At the most, they get a tiny scrape of that transaction. When Apple Pay is used, Apple gets a very, very tiny scrape of that transaction. It's not terribly meaningful. It becomes meaningful if you have a billion people using it on a consistent basis. And obviously, we're not to that point yet. But even beyond the financial implications, I would imagine that a company like Amazon, as smart as they are about using data and doing things with that data, just gleaning the data from transactions like these would be seen as a reasonable pay-off.
Frankel: Right, and that seems to really be what they're after here. I've actually read that Amazon is subsidizing the swipe fees for merchants -- not swipe fees, but whatever the swipe-fee-equivalent of digital wallet fees are. They're actually subsidizing the fees to get retailers to put the Amazon Pay button on their website at a lower cost to them. It's fair to say Amazon's not making money on this, but it's expanding their reach. Anything that expands Amazon's reach, data-wise, customer-wise, merchant-wise, is good for the long-term business.
Moser: Makes sense to me. I don't think Amazon's going to ever going to have a hardware advantage, at least on the smartphone side. They tried with the Fire Phone. They were late to the game, tried to do something a little bit different, but there was nothing terribly compelling to get someone to switch, particularly if you're already used to a certain operating system. I'm also skeptical when it comes to incorporating things like voice assistant technology into actually paying for things.
With all that said, things change very quickly. Technology is evolving seemingly on a daily basis. I'm going to be interested to see where Amazon takes this. Amazon Pay has been around for a while, they just haven't done much with it. Perhaps we're entering this stage now where consumers are going to be a bit more open to adopting digital payments and digital wallets and whatnot. If that's the case, clearly we can see there's a lot of market share there to pick up. For Amazon to try to be a part of that makes perfect sense.
Frankel: To be perfectly clear, PayPal, Amazon Pay, and Apple Pay all have tremendous growth runways. PayPal's growth rate could go from 20% to 19%. I'm not saying they're going to really suffer. To be clear, I still love PayPal on a long-term basis.
Moser: Gotcha! We want to make sure we respond to the inevitable email we're going to get. We're not saying, "Short PayPal, long Amazon." You're probably saying go long on both, right? It's reasonable to just diversify your portfolio, own shares in both companies.
Frankel: Right. Both companies are going to be winners. I could just see the tweetstorm going off in my head when I was saying that.
Moser: Well, we'll get out in front of it if that does happen. Let's take a look here, new topic for discussion. We got a tweet a few days back from @ChrisM_Jones. Chris said, "Would love for the two of you to cover some small-cap financials. For example, AX , UVE . Full disclosure: UVE was my first stock, and now is my largest position." The bottom line is, Chris was hoping we could take a look into some more small-cap financial stocks.
Matt, you and I love talking stocks. When you get to find compelling small-cap financials, we could probably talk about that for the next four hours. Unfortunately, we're not going to be given that much time. We thought we would take an opportunity here to target two companies each in the small-cap space that we like and see if we could give Chris a couple of ideas, companies that we like, some things to keep an eye on with them.
We're going to start the discussion here with a company that Matt, you know, Synovus (NYSE: SNV) , ticker SNV. Give us your elevator pitch for Synovus.
Frankel: This is a bank that I drive by a lot, because it's a Southern regional bank. The reason I like Synovus is, one, they're profitable; two, they're growing very fast. On the side of profitability, return on assets of a little over 1.3, return on equity of 40%. Both are great numbers. The loan portfolio is growing at a pretty impressive rate, about 4.5% a year. They're making acquisitions on a pretty aggressive basis, and they're actually getting really good deals.
I reported over the summer that Synovus decided to acquire a bank called FCB Financial, Florida Community Bank. They actually wound up getting a discount to the share price. Generally, when you acquire a company, you're paying a premium. That's why the shares jump up right after the acquisition's announced. This will make them one of the biggest regional banks around. They got a great price. They expect it to be immediately accretive to earnings. I really like Synovus. Very profitable, well-run bank with big ambitions.
Moser:Ameris Bancorp (NASDAQ: ABCB) is the first one I'm going to talk about here. Listeners have probably heard me talk about it before. The ticker is ABCB. This is a not-so-little regional bank in the Southeast. Home base is Moultrie, Georgia. Full disclosure: My mom and dad actually live in Moultrie, Georgia. I've played golf with a couple of these guys at Ameris Bancorp before. That wasn't through design; it's just small-town living there. Everybody knows everybody. And I do own shares of Ameris Bancorp as well. This is a company I found back in 2011, at the depths of the financial crisis, when a lot of these small-cap banks, these tiny banks, particularly in Georgia, for whatever reason, were going belly-up. They had bad loan books and really overextended themselves. Ameris Bancorp has always been a very well-run, fairly conservative operation, not trying to write checks that the bank can't cash.
What that resulted in, over the course of the few years in that recovery from the financial crisis, the FDIC recognized Ameris Bancorp's excellence in operating and started using Ameris as a partner in rolling up some of these failed financial institutions to give them at least a little bit of an exit strategy so that everything didn't go completely to hell in a handbasket. What this ultimately did for Ameris, it gave them a very risk-free way to build up their asset base and their deposit base. The FDIC basically said, "Any losses are going to be on us. We just want you to help us get these things rolled up, and there's going to be nothing ultimately but upside there for you."
Fast-forward to today, that really has worked out for the company. They now have total assets near close to $11.5 billion. Tangible book value per share is close to $18. All in all, what you have here in Ameris is a still small-cap bank, around $2 billion market cap, that has grown its presence beyond that Georgia footprint. They have plenty of opportunities to continue to make some smart acquisitions going forward. And they certainly have done that. They recently purchased Atlantic Coast Financial, as well as Hamilton State Bank. It's all helping them grow this business out. Longtime CEO Edwin Hortman stepped down recently. The new CEO, Dennis Zember, who has been with the company for a number of years, held positions of COO and CFO.
That's all to say, I expect that conservative, smart, long-term-focused mentality to continue here with Ameris Bancorp. Certainly had developed a long track record of success. I suspect we will see that going forward as well. That's one of those little small-cap financials I really like.
Speaking of banks, Matt, you wanted to take a trip out west and talk a little bit about Bank of Hawaii (NYSE: BOH) , right?
Frankel: Yeah! Since we're talking about some of your disclosures, disclosure: I've never been to Hawaii, so I've never been to a Bank of Hawaii branch.
Moser: I've been to Hawaii! I was looking to see if we could get a Fool branch in Hawaii. That'd be pretty sweet, actually.
Frankel: If there was an office there, I might sign up for it.
Moser: I was pitching that and/or the Bahamas. I would gladly take either post.
Frankel: [laughs] So I've never actually been to a Bank of Hawaii, but I know a lot about them as a bank. They're one of my favorite small-cap banks. I've been watching them for a little while. Not only are they an extremely profitable bank, but along with one other bank, they have a pretty dominant market share in Hawaii. If you're in Hawaii, you generally don't go to a Bank of America or Wells Fargo . You're either at Bank of Hawaii or First Hawaiian Bank , the other major bank out there. They have a very big market share. Great reputation on the island. Don't expect too much growth as in geographic growth. You're not going to have a Bank of Hawaii branch in Kansas or anything like that.
Hawaii's economy is doing great. It's growing at a faster rate than the rest of the U.S. It's one of the fastest-growing economies. Great reputation. The loan portfolio, for example, grew about 7% over the past year, most banks were in the 3%-4% range, if you look back at our episode where we covered the big banks. That's a testament to how strong the Hawaiian economy is right now. Consistently profitable throughout any economy.
A little fun fact: After Citigroup almost collapsed during the financial crisis, they brought in Bank of Hawaii's former CEO to be the new chairman of the board. The big guys on Wall Street know how profitable Bank of Hawaii is and how well run it is.
It's not a cheap bank stock. I put it in the valuation category of a US Bancorp . But just like Synovus, about a 1.3% return on assets, and 18% return on equity, which is unheard of for a brick-and-mortar bank. Highly profitable. Very, very low default rate. It was like a 0.2% non-performing assets rate, which is extremely low. Great economy, great quality bank, great history of being a well-run institution. That's why it's one of my favorites. Hopefully I get to visit one someday.
Moser: I feel like this is the opportunity to bring this thing under official coverage here at the Fool. The annual meeting is out there in Hawaii, right? That has to be where they have the annual meetings. Then you have to go out there, right? It's the biggest no-brainer. We'll look into that later this week, Matt.
Let's wrap it up here. Chris had made specific mention here of a company, Universal Insurance Holdings. This is the company he said has grown into his biggest position. Let me tell you, Chris, I think that's not actually such a bad move here. From what I have seen with Universal Insurance Holdings, this is a pretty compelling company. This is the largest private personal residential homeowner's insurance company in Florida. When I say Florida, let's be very clear, most of their business is in Florida. Only 26% of their total insured business is outside of Florida. This is a Florida play. They are in 16 states, but right now, this is a Florida play. They are seeking to expand that footprint and diversify, geographically speaking.
But generally speaking, we love the insurance business from the investor's perspective, because insurance is one of those things that's always going to be needed, particularly if you're a homeowner. Chances are, you've got a mortgage, you have to pay that mortgage, your mortgage company is going to require it. Even if you've got your mortgage paid off, nobody owns a home and isn't going to have some type of insurance on it.
Universal Insurance Holdings has been focusing on its primary market of Florida for a number of years. It's a small company, $1.5 billion market cap. But I tell you, if you bought this thing five years ago, you're feeling really good about it. The stock's up close to 300% since then. A big measure for us when we look at insurance companies is book value. We can see through Universal's book value they are growing. In 2013, that book value was at $5.20 per share, vs. today, which is $15.20 per share. Obviously, that indicates the company is growing, and growing at a healthy rate. Another metric that we look to with insurance companies to understand if they're writing good books of business is the combined ratio. We like to see that combined ratio under 100%, that tells us that they are writing good business, profitable business. The combined ratio for Universal in 2017 chalked up at 84.4%. That actually was a little bit up historically from what we've seen in years past.
This is a well-run business. CEO Sean Downes has been there for a while, has plenty of experience in the industry. The risks with a business like this, particularly in a state like this, is the natural disasters. Florida is known for its storms. But the flip side of that is, every insurance company in Florida is planning for that stuff. It's not a matter of if; it's a matter of when. So I like to believe that management is certainly keeping that on their radar. And the way that insurance companies tend to hedge that risk is by reinsurance.
So all in all, it does look like Universal Insurance Holdings is doing a lot of good things with the business. Based on the metrics, the business looks very healthy. Strong balance sheet, appears to be very capable management there. Chris, I think you can feel pretty good about owning that one. Congratulations on your gains, and here's to many, many more dollars in the future!
Chris, thank you for the question! We always love taking a look at new stocks, and this gave us a chance to dig into a few new names, and hopefully give our listeners a few additional ideas for their watchlist.
OK, Matt, let's take a look at some email questions we've pulled in over the past couple of weeks. We had a question from Jay Otto in Oshkosh, Wisconsin. He says, "I love your podcast. I enjoy listening to you on the other podcasts as well." Thanks, Jay! I like being on those podcasts. I think he's talking about me, Matt, but I'm not sure. He had a question on REITs. I'm going to give you this question, Matt, because you're our REIT guy. "Is there any difference in investing in REIT stocks versus other equities? I think I've heard in the past that there are different tax implications with these stocks. Is that true?"
Frankel: Yes, that is absolutely true. Provided that you hold them in a taxable account, most dividend stocks have what are called qualified dividend status, which gets favorable tax treatment. Think long-term capital gains rates, the same rates that apply to qualified dividends. Generally, most people pay a 15% dividend tax rate if you're in any of the middle tax brackets. If you have a REIT, though, it's considered pass-through business income for the most part, so you're generally taxed at your ordinary income tax rate for a REIT.
There are a couple of caveats to mention. One: Your REIT dividend is actually a combination of a qualified dividend and a non-qualified dividend. Depending on the quarter and the particular REIT, most of it is usually ordinary income with a little bit that you'll get a favorable tax treatment on. The second thing is that thanks to the tax reform bill, REITs qualify for that pass-through deduction as small business income. Whatever income you do get from REITs, you can take a 20% deduction for that before your ordinary income tax rates are applied.
There's a lot of moving parts here. The situation is definitely a little more complicated with REITs than it is for other stocks. But I love them. I always recommend REITs in retirement accounts so you don't have to worry about this. But yes, if you hold them in a regular brokerage account, there's a big tax differences. Long story short, REITs are a little more complicated.
Moser: Good information to know. Jay has a follow-up as well. "Another topic you hit on last week was Buffett's large investments in the big banks in the last quarter. You guys talked about how it should be a good environment for the big banks with rising interest rates. Can I assume the same opportunity is there for smaller banks such as Axos or," a bank we just talked about a minute ago, "Ameris Bancorp?"
Frankel: The opportunity is definitely there. You have to remember that certain banking products are tied to short-term interest rates and some are tied to long-term interest rates. For example, if a bank is a big credit card business, credit card rates go up immediately when the Fed raises rates. Those businesses are already seeing a big benefit, as the Fed has hiked rates about eight times so far in this cycle. On the other hand, if you don't have a big credit card operation and you rely on long-term rates, such as mortgages and auto loans, those really haven't kept pace with the shorter end of the spectrum. It depends which end of the yield curve is moving as to which banks benefit the most. It's not really small cap versus large cap; it's how is their loan portfolio made up? Short-term loans like credit cards or long-term loans like mortgages and auto loans that are not at variable rates that move with longer-term Treasury yields, not the federal funds rate.
The short answer to your question is yes, but look into how the bank makes its money. That'll tell you what rates need to rise.
Moser: That's a great point! We have one more question, from Landon Boring. Landon, come on, man, you're not boring. [laughs] Just kidding! Landon says, "I really enjoy the Industry Focus podcasts." Thanks, Landon. We enjoy doing them! "I have a question about the War on Cash podcast from Nov. 19, 2018. Jason and Matt mentioned that they like the buybacks of Visa but are OK with small dividends to fund future growth. I'm confused. Don't both buybacks and dividends decrease the amount of cash to fund future growth?" He goes on to say he would personally prefer dividends over buybacks. That's cash in the pocket. But on the other hand, increasing dividends generally represents a much stronger commitment by management in the faith of the business, because companies generally do not like to cut the dividend, and dividends provide a more direct reward to shareholders.
Landon, you make a very good point here. Regardless of whether it's a dividend or a buyback, the company has to fund that one way or another. When you have a business like Visa, or Mastercard for that matter, that is as big as they are, and have very high-margin business models, as they both do, the nice thing about that type of investment opportunity for investors is that while the growth is going to be there, the growth will generally be organic, and it'll be tied to general consumer spending. These are business models that generate a lot of surplus cash. They have to do something with it. There's only so much they can reinvest in the business before they start getting a little bit outside of their circle of competence, and you start seeing some deteriorating returns on those investments. So you reward your shareholders either through a dividend or share repurchases.
I tend to prefer dividends, just because, like you said, Landon, they are cash in the pocket. But by the same token, these companies do know that material buybacks over the course of time can play out on the share price. The fact of the matter is, when you reduce that number of shares outstanding, that's going to give you a little bit of a different look on the value of those shares. It should, in theory, make them a little bit more expensive over time.
All in all, we like to see a healthy mix there, and feel like, with Visa and Mastercard, perhaps the opportunity there is to grow that dividend a little bit more substantially over time. That's what we'll be hoping that they do. Landon, thank you very much for the question! Jay, you as well!
We'll tap into Twitter here really quick for a couple of comments. One from @Cricket99238. Neeraj says he was delighted to learn about the XLF Holdings SPDR ETF for financials. "Thanks for introducing it. And with Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) and [ JPMorgan Chase ] as its largest holding, it seems a no-brainer investment. The market is certainly giving a wonderful opportunity to buy this stock basket." Matt, that fund is what you were talking about a couple of weeks ago, right?
Frankel: That's correct. It's basically if you don't want to put all your money in one bank stock -- it's not practical for most people listening to own 10 bank stocks like Warren Buffett does. If you're not comfortable owning an individual bank, you're not really sure which ones are healthy, which ones are not healthy, which ones are growing in the right way, which ones are growing in the wrong way, things like that, an index fund like the XLF, especially one like that that has very low fees, can be a great way to get exposure to the whole sector, if it does as well as Warren Buffett thinks it's going to.
Moser: Good deal. We also have a tweet from @BuckyCat. BuckyCat wonders if buying Eventbrite (NYSE: EB) stock gives you a discount on buying tickets from them, because they buy a lot of event tickets from them between Eventbrite and Ticketfly. Listeners may remember that Eventbrite was my One to Watch last week. A little bit of a direction away from direct payments companies, but the relationship with payments companies in the space. Generally speaking, the company itself, I think, has a lot of opportunities for investors. BuckyCat, I don't know if you get discounts there. That would be pretty sweet. But it's good to know that you're buying a lot of tickets from them. I own Eventbrite shares, and that, in all honesty, should mean their share price should be going up in the future, if you keep on buying all those tickets.
Frankel: A lot of people would own a lot more stocks if they would offer discounts. A lot more people would buy things like Fitbit stock. Berkshire Hathaway is the only one I know of that gives discounts to shareholders through all of its subsidiaries.
Moser: That would be pretty sweet, if that was a more consistent behavior. Offer the shareholders a discount. I would utilize that all the time.
Frankel: If you're a Berkshire shareholder, you can get a discount on Geico auto insurance. I don't know if you knew that.
Moser: That's a good point there. If you go to the Berkshire meeting, there's all sorts of opportunities to buy the stuff that from the companies that they own, particularly See's Candies. That line always seems to be stretching out the door.
Well, as always, we love it when you reach out to us via email. Please email us here at industryfocus@fool.com . Of course, you can get us on Twitter @MFIndustryFocus. Keep doing it! Clearly, if you do it, we're going to answer your questions here on the show. We just did.
Matt, it's about that time this week. We're going to wrap things up with our one to watch. What is the stock that you'll be watching this week?
Frankel: It's not really a financial-sector stock. I'm looking at Amazon. We talked about them quite a bit. They're down roughly 25% from the highs. I think their new payments system is going to have some traction. Like I said, I personally think that PayPal and the others are going to lose a little bit of their growth trajectory because Amazon has a big existing customer base for this to really play well with. And not just because of that. I think Amazon is a good value. I thought Amazon was a pretty decent value at about $2,000 a share. I really think it's a good value now. There's talk of them offering some kind of co-branded checking account product. Maybe they'll be a financial sector stock after all. I love Amazon this week!
Moser: Time will tell. I put nothing past them. That's a good one! I'm going to go with Tiffany (NYSE: TIF) , ticker TIF, this week. I know this may seem a little bit of an odd pick, because it's not directly a financial. But I've covered Tiffany for a number of years now. What I have found is that Tiffany is a very good indicator of how the economy is doing and how the market thinks the economy is going to be doing in the coming quarters. You know what we're in right now? It's what I like to call the Larry David economy. Everything is pretty, pretty, pretty good. And I hope that will continue. But I think on Wednesday, when Tiffany's earnings come out, we'll get a better idea.
Management recently had raised guidance last quarter, which was impressive. They're going to be investing a lot in their New York flagship store in the coming year. That really does matter for a company like Tiffany that depends on that physical presence. What they do that I think is so phenomenal, they really protect that brand so well. It's a luxury brand. They don't resort to fire sales. You're not going to find big Cyber Monday, half off deals with Tiffany. They protect that brand and do a very good job. When times are good, like they are right now, the stock feels it, and it looks like it's feeling it right now. When times get a little tough, certainly, the stock feels it again. Honestly, that's where investors need to consider potentially investing in a business like this, when times get a little bit tougher.
I'm sure on Wednesday, we'll get a better idea of what management sees coming around for the next full year, certainly the holiday quarter guidance. A lot of things you can glean from this luxury retailer in Tiffany's. We'll keep an eye on it.
Matt, thanks for joining us this week! I always appreciate your Skyping in. Glad you guys had a good Thanksgiving!
Frankel: Hope you had the same!
Moser: Yep, it was nice and quiet, and I'm still full. [laughs] As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. This show is produced by Austin Morgan. For Matt Frankel, I'm Jason Moser. Thanks for listening. And we'll see you next week!
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jason Moser owns shares of Amazon, Apple, Eventbrite, Inc., Mastercard, PayPal Holdings, Twitter, and Visa. Matthew Frankel, CFP owns shares of Apple, Axos Financial, Inc., Bank of America, Berkshire Hathaway (B shares), and Fitbit. The Motley Fool owns shares of and recommends Adobe Systems, Amazon, Apple, Axos Financial, Inc., Berkshire Hathaway (B shares), Fitbit, Mastercard, PayPal Holdings, and Twitter. The Motley Fool owns shares of Visa and has the following options: long January 2020 $150 calls on Apple, short January 2020 $155 calls on Apple, and short January 2019 $82 calls on PayPal Holdings. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Moser:Ameris Bancorp (NASDAQ: ABCB) is the first one I'm going to talk about here. The ticker is ABCB. Plus, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss Amazon.com 's (NASDAQ: AMZN) Amazon Pay and what it could mean to some of our War on Cash favorites. | Moser:Ameris Bancorp (NASDAQ: ABCB) is the first one I'm going to talk about here. The ticker is ABCB. Jason Moser owns shares of Amazon, Apple, Eventbrite, Inc., Mastercard, PayPal Holdings, Twitter, and Visa. | Moser:Ameris Bancorp (NASDAQ: ABCB) is the first one I'm going to talk about here. The ticker is ABCB. We spend a lot of time covering the big banks, so here's a closer look at four small-cap bank stocks that probably aren't on your radar -- yet. | Moser:Ameris Bancorp (NASDAQ: ABCB) is the first one I'm going to talk about here. The ticker is ABCB. Amazon Pay has been around for a while, they just haven't done much with it. |
27888.0 | 2018-10-24 00:00:00 UTC | 2 Under-the-Radar Financial Stocks to Watch | ABCB | https://www.nasdaq.com/articles/2-under-radar-financial-stocks-watch-2018-10-24 | nan | nan | Travelers Companies (NYSE: TRV) and Ameris Bancorp (NASDAQ: ABCB) aren't stocks that you'll typically find in the headlines, but that doesn't mean you should ignore them. Both companies just reported impressive results, and there could be more good news in the quarters and years to come.
In this segment from Industry Focus: Financials , host Jason Moser gives investors a rundown of how these two companies are doing, and why they might belong on your watch list.
A full transcript follows the video.
10 stocks we like better than Walmart
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, the Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of August 6, 2018
The author(s) may have a position in any stocks mentioned.
This video was recorded on Oct. 22, 2018.
Jason Moser: Let's take a look here really quick at Travelers. Everybody knows the red umbrella. Travelers Insurance's earnings came out. I made the joke last week -- for listeners who don't know, I actually moved up here and took the job at The Fool in 2010. The job that I left was with Travelers Insurance. I worked with Travelers for a year. It was a good job, it offered me a lot of opportunity to move up in the company. I made the joke that when I left, the stock was somewhere around $50. Now it's around $125, it peaked around $150. The bottom line was, I felt like I left the company in really good shape. Of course, that was a joke, because I didn't have anything to do with anything.
I do think this is a very good business. I'm surprised it's always flown under the radar of our services here. The fact of the matter is, if you invested in Travelers a decade ago, and you held onto those shares, you would be extremely happy. I think that is because the company is very focused on making sure they do right by their customers. When I was there, their core philosophy was, "Pay what we owe, and let's move on." They tried to reduce and eliminate as many of those frictional costs as possible when it comes to insurance. One of the big ones is subrogation, when you have claims that are disputed, and they go further down the line to lawyers and insurance companies battling each other. To me, that's a one-two punch there that makes it pretty compelling from the investor's perspective.
Net premiums grew 6%. The combined ratio is still performing very well. This year the underlying combined ratio was 93%. We always like to see that low number, under 100. That means they're writing good business. To me, there were a lot of good reasons to be optimistic about Travelers. I think investors in Travelers today could feel comfortable holding those shares knowing this is a well-run business that should continue to perform well for some time to come.
Also, I'll give one more look here to a company I follow, Ameris Bancorp. Ameris is a small little bank in Moultrie, Georgia. It's actually a part of that small business big investments basket that I put out recently. It's just a $2 billion market cap. I found it back in 2011, right at the peak of the financial crisis. You were a small-cap bank in Georgia, that was basically ground zero. I don't think a lot of people gave them a chance to survive. But the FDIC found that this was a very well-run bank and decided to use them as a partner in helping them roll up some of those failed institutions. Really, it's been a total assets story. It's been a story about assets and about deposits. Ameris has continued to grow that asset base and that deposit base. And that deposit base is really top of mind for them in the coming years. The efficiency ratio continues to improve, 60% last year down to 54% this year. Another ratio we like to see on the lower side. They are still assessing the potential for some loan losses from Hurricane Michael, which did roll right through that part of the country. But all in all, still performing very well. I'm very encouraged with what Ameris is doing and what the future holds for them.
Jason Moser has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Travelers Companies (NYSE: TRV) and Ameris Bancorp (NASDAQ: ABCB) aren't stocks that you'll typically find in the headlines, but that doesn't mean you should ignore them. In this segment from Industry Focus: Financials , host Jason Moser gives investors a rundown of how these two companies are doing, and why they might belong on your watch list. I think investors in Travelers today could feel comfortable holding those shares knowing this is a well-run business that should continue to perform well for some time to come. | Travelers Companies (NYSE: TRV) and Ameris Bancorp (NASDAQ: ABCB) aren't stocks that you'll typically find in the headlines, but that doesn't mean you should ignore them. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Travelers Companies (NYSE: TRV) and Ameris Bancorp (NASDAQ: ABCB) aren't stocks that you'll typically find in the headlines, but that doesn't mean you should ignore them. 10 stocks we like better than Walmart When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. I think investors in Travelers today could feel comfortable holding those shares knowing this is a well-run business that should continue to perform well for some time to come. | Travelers Companies (NYSE: TRV) and Ameris Bancorp (NASDAQ: ABCB) aren't stocks that you'll typically find in the headlines, but that doesn't mean you should ignore them. After all, the newsletter they have run for over a decade, the Motley Fool Stock Advisor, has tripled the market. I made the joke last week -- for listeners who don't know, I actually moved up here and took the job at The Fool in 2010. |
27889.0 | 2018-10-23 00:00:00 UTC | This Week's Bank Earnings: What Investors Need to Know | ABCB | https://www.nasdaq.com/articles/weeks-bank-earnings-what-investors-need-know-2018-10-23 | nan | nan | We're now well into earnings season, and while we heard from the big banks earlier on, there have been several other interesting earnings reports over the past week.
In this episode of Industry Focus: Financials , host Jason Moser and Fool.com contributor Matt Frankel give listeners a rundown of earnings from PayPal (NASDAQ: PYPL) , American Express (NYSE: AXP) , Travelers (NYSE: TRV) , Ameris Bancorp (NASDAQ: ABCB) , and Synchrony Financial (NYSE: SYF) . Plus, there's a new FICO scoring model coming soon, and several other key bank earnings in the week ahead. You'll hear all of this and more in this week's episode.
A full transcript follows the video.
10 stocks we like better than Walmart
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, the Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of August 6, 2018
The author(s) may have a position in any stocks mentioned.
This video was recorded on Oct. 22, 2018.
Jason Moser: Welcome to Industry Focus , the podcast that dives into a different sector of the stock market every day. It's Monday, October 22nd. I'm your host, Jason Moser. Joining me in the studio via Las Vegas is certified financial planner, Matt Frankel. Matt, you are out there in Las Vegas. How's everything going so far?
Matt Frankel: Good! We're just getting warmed up. It's only 09:30 in the morning here. Everybody's just getting their coffee behind me. We're just getting going.
Moser: Alright, good deal! On today's show, we are going to talk about UltraFICO. Matt, you're going to tell us a little bit about what's going on out there with Money20/20 and what you have coming up. Of course, we'll tap into Twitter , we'll have One to Watch.
We're going to start the show with Earningspalooza. Earnings are in full effect, full throttle now. We're getting lots of them all week long. We've got a few companies here on the docket to talk about today. I wanted to go ahead and open up the conversation with PayPal, a company that all of our listeners are familiar with. I think it's a stock that you and I both own. At least, I own it. Do you own shares of PayPal, Matt?
Frankel: I did. I actually sold it. I had eBay , so I acquired PayPal shares through eBay.
Moser: Very good!
Frankel: I got rid of it a couple of years ago to buy Square , which turned out to be a pretty good move.
Moser: Not a bad move at all!
Frankel: Yeah, it's tough to argue with that one.
Moser: I thankfully own both. I think that when you look at the quarter PayPal turned in, you have to feel really good about what they're doing. This is really all about the dollars that are flowing through that network. Total payment volume for the company was up 24% to $143 billion. Engagement, which is essentially the number of transactions on the trailing 12-month basis, was up. Mobile payment volume was $57 billion. My takeaway from the quarter was that they're doing a lot of really good things. There's a reason why the stock spiked on this release. I think, generally speaking, you have to be pretty optimistic. What's your take, Matt?
Frankel: This quarter in my mind was all about Venmo. You mentioned payment volume was up 24%. Venmo's payment volume was up 78%. That's really what's driving PayPal higher. Not only that, but we mentioned in an episode a week or two ago that they're trying to start to monetize Venmo. They announced that one in four members can be monetized right now. That's up from 17% last quarter, and much less than that last year. Not only is Venmo growing, but they finally think they can turn it into a significant revenue stream, which is a lot sooner than anyone really thought that was going to happen. That's my takeaway on this quarter.
Moser: I was looking for any and all language regarding Venmo that I could find. I think you're right, that's the forward-looking picture with this company. I think it's worth noting, we talk a lot about Venmo. You and I spoke last week about the fee change on the instant access side of the business. We have to keep an eye on how consumers are going to feel about that ultimately. For me, it was worth noting that while the results for Venmo were good, $17 billion of that $143 billion was through the Venmo network, which was significant. They said that 24% of users are now participating in a monetizable action. That's all great news, but I think what could get lost in the conversation is the fact that PayPal on its own, sans Venmo, is still doing a really good job. To me as an investor, that's an even better outlook, really. You're looking at not only the power of the PayPal platform, but also the Venmo platform, other platforms like Xoom, for example. These guys have a lot of different ways to make it work. From an investor's perspective, that's a really attractive part of this business.
Frankel: Yeah, definitely. PayPal is growing really well on its own, which is impressive, considering how big PayPal is. PayPal has become just part of our language, like, "PayPal me." Everybody uses PayPal, it seems, but they're somehow still growing very, very rapidly.
Moser: I think I'm going to hang onto my shares, Matt. I'm going to keep my Square shares, too. Like we say every week, if we could shut up for long enough, I'm sure we'd both add to our positions. Maybe after earnings season dies down, we'll have a chance.
Let's jump into American Express real quick. You took a look at the quarter there. What stood out to you?
Frankel: A lot. American Express, as frequent listeners know, is the one that I'm always trying to get Jason to include in his war on cash basket. American Express is looking really good. They're taking advantage of this booming economy and consumer spending preferences. 16% year over year loan growth was what really stood out to me. They grew their revenue by 10% year over year. They grew revenue by 10%, they grew expenses by only 8%. Anytime you grow your revenue faster than you're growing expenses in banking is a really good thing.
They raised their full-year forecast, which surprised a lot of people because they're still, in a lot of minds, recovering from losing their Costco partnership, which they've now made up for and then some. Global consumer revenue was up 15% year over year. Speaking of PayPal and Venmo, along with their earnings announcement, they announced that they were entering into a partnership with PayPal and Venmo where people can pay their AmEx bills directly through the Venmo platform and send payments via AmEx through their PayPal/Venmo platforms. This should be another exciting revenue driver coming soon.
Not only this, Amex's delinquency rate and charge-off rates, which were already very low, in terms of the credit card industry, to begin with, are looking even better. So, not only are they growing loans at a double-digit rate year over year, they're doing so in what looks to be a very responsible risk management scenario.
Moser: One thing I did notice, too, was that it looks like they've updated their rewards program to become a little bit more enticing, compete a little bit more. That's what these card companies ultimately have to do, whether it's Visa or MasterCard or American Express. They need to give customers incentives to use the cards. One of the biggest incentives you can throw out there is a rewards program. I think that when you look across the spectrum there, American Express has always had a very compelling rewards program. I speak to this as a cardholder of 10 years. I don't own the stock, but I am a card holder, and I'm not going to get rid of that card, I don't think, ever. It's been a great one to have. Again, I think it always deserves an honorable mention for the war on cash basket. It was just on the outside looking in. But hey, who's to say we can't change that basket and add a little bit to it? Maybe we'll do that in 2019, Matt.
Frankel: If AmEx keeps growing like this, it'd be tough not to.
Moser: Let's take a look here really quick at Travelers. Everybody knows the red umbrella. Travelers Insurance's earnings came out. I made the joke last week -- for listeners who don't know, I actually moved up here and took the job at The Fool in 2010. The job that I left was with Travelers Insurance. I worked with Travelers for a year. It was a good job, it offered me a lot of opportunity to move up in the company. I made the joke that when I left, the stock was somewhere around $50. Now it's around $125, it peaked around $150. The bottom line was, I felt like I left the company in really good shape. Of course, that was a joke, because I didn't have anything to do with anything.
I do think this is a very good business. I'm surprised it's always flown under the radar of our services here. The fact of the matter is, if you invested in Travelers a decade ago, and you held onto those shares, you would be extremely happy. I think that is because the company is very focused on making sure they do right by their customers. When I was there, their core philosophy was, "Pay what we owe, and let's move on." They tried to reduce and eliminate as many of those frictional costs as possible when it comes to insurance. One of the big ones is subrogation, when you have claims that are disputed, and they go further down the line to lawyers and insurance companies battling each other. To me, that's a one-two punch there that makes it pretty compelling from the investor's perspective.
Net premiums grew 6%. The combined ratio is still performing very well. This year the underlying combined ratio was 93%. We always like to see that low number, under 100. That means they're writing good business. To me, there were a lot of good reasons to be optimistic about Travelers. I think investors in Travelers today could feel comfortable holding those shares knowing this is a well-run business that should continue to perform well for some time to come.
Also, I'll give one more look here to a company I follow, Ameris Bancorp. Ameris is a small little bank in Moultrie, Georgia. It's actually a part of that small business big investments basket that I put out recently. It's just a $2 billion market cap. I found it back in 2011, right at the peak of the financial crisis. You were a small-cap bank in Georgia, that was basically ground zero. I don't think a lot of people gave them a chance to survive. But the FDIC found that this was a very well-run bank and decided to use them as a partner in helping them roll up some of those failed institutions. Really, it's been a total assets story. It's been a story about assets and about deposits. Ameris has continued to grow that asset base and that deposit base. And that deposit base is really top of mind for them in the coming years. The efficiency ratio continues to improve, 60% last year down to 54% this year. Another ratio we like to see on the lower side. They are still assessing the potential for some loan losses from Hurricane Michael, which did roll right through that part of the country. But all in all, still performing very well. I'm very encouraged with what Ameris is doing and what the future holds for them.
One more here, Matt, Synchrony. Perhaps a name that not everybody is familiar with. Synchrony has a history with PayPal, too. Tell me what you saw in their most recent quarter.
Frankel: In my mind, we're saving the best for last here. I'm a big fan of Synchrony. I often refer to them as the biggest credit card company people have never heard of. Their core business is store credit cards. If you have a store credit card through, say, Amazon , it's a Synchrony card. My furniture, I bought at Rooms to Go was on a Synchrony card that was offering 0% financing. They have a pretty broad reach. Dozens and dozens of retailers issue their credit cards through Synchrony.
Synchrony is really firing on all cylinders right now. Store credit cards are a very lucrative business if they're done correctly. They charge higher interest rates than typical credit cards. Store credit cards tend to be in the 25-30% interest rate range, whereas regular credit cards average about 17% right now. While they have higher delinquency and charge-off rates, it's more than made up for by the additional interest income. To give you a number from their recent quarter, Synchrony's net interest margin is about 16.5%. That's what the average credit card charges altogether before expenses and charge-offs and things like that. Synchrony is doing a very good job of risk management, which is producing some pretty impressive margins.
They're also quietly growing their banking platform. They're becoming one of the biggest online savings banks because they offer higher interest rates. They don't have a branch network, so they can pass on some of the savings to consumers in the form of high-interest savings and CD accounts. Not only are they growing their business very quickly, they're funding it with low-cost deposits as opposed to borrowed money. Their business is looking good. They have a bunch of positive tailwinds.
I actually just met with Synchrony's leadership team here this morning. That was my first Money20/20 meeting at 07:15 in the morning. We got started off with a bang. They brought up a bunch of really good points that are going to be long-term tailwinds for the company. The CareCredit product, which is issued at a lot of physicians' and veterinarians' offices, things like that, it's supposed to be a healthcare credit card, is a Synchrony product. I'm sure a lot of listeners have noticed that over the past couple of years, more and more healthcare costs are being shifted onto the consumer. Whether we like that or not, it's a big tailwind for the CareCredit product, which offers people a very low-cost way to finance their healthcare expenses. CareCredit is becoming a bigger and bigger part of Synchrony's bottom line every quarter and should continue to do so.
They're also investing very heavily in technology, improving the customer experience, figuring out how different products work together. They're just recently rolling out their HOME card. They're pairing all of their home-oriented retailers that issue Synchrony cards into one. Same with Auto card, they're issuing a new credit card you could buy, say, gas, go to an auto parts retailer, anything you need for your car combining onto one store credit card product.
They have a lot going for them. Their quarter was very impressive. 14% year over year loan growth. 14% deposit growth. They're buying back shares at a breathtaking pace. They bought back almost a billion dollars of shares just during the third quarter. That's about 4% of their total. In one quarter.
They're taking advantage of this -- they lost a key partnership recently. Unfortunately, they lost their Walmart partnership. But if they're growing at a 14% rate, they're going to more than make up for that lost revenue in no time. They're taking great advantage of their depressed valuation. They're running a very efficient business. 31% efficiency ratio is unheard of in banking. Even for low-cost internet banks, that's very impressive. They're just making some really smart moves. Great margins, great profitability. I'm excited to see where they go from here.
Moser: OK. Investors, if you haven't heard of Synchrony, or if you've never looked into it, it sounds like, based on what Matt's told us here, get it on your radar. Synchrony. Thanks, Matt!
Frankel: Yeah, I know that was long, but I like Synchrony.
Moser: That's OK, you said a lot of good stuff. Listeners should only benefit from that.
Let's take a look at UltraFICO, which we mentioned at the beginning of the show. Over the weekend, speaking of American Express, one of the things I get with American Express is, every quarter, they send me my free credit report. I get this, and I can look through and dispute any problems or anything. It gives me my FICO score. And it always makes me feel good, because I take good care of my credit score. My FICO score is still good. So, I'm going to sleep at night, I'm feeling nice and safe and comfy in my home, knowing that the bank is going to keep lending me that money because I've got a good FICO score. Then, I wake up and read about this UltraFICO score. And now, I'm getting a little bit concerned.
This sort of piggybacks on the conversation we had last week in regard to the return of zero-down subprime mortgages. Essentially, Fair Isaac , the company that created and uses the FICO credit score, is going to roll out this new scoring system in early 2019 that essentially factors in how consumers manage the cash in their checking, savings, and money market accounts. It's basically another way for them to measure an individual's particular credit risk.
The whole idea behind this, it's not to make sure that they are lending to the best possible borrowers. What they're trying to do is expand the pool of borrowers and give more credit to more people, to grow that opportunity to lend to more people. I can't help but feel like maybe, between last week's story on the subprime mortgages and this week's UltraFICO score, I'm a little bit skeptical at first glance that this is a good idea.
You said that you're going to be speaking with these good people out there this week. Tell me a little bit about what you think about this UltraFICO score.
Frankel: It makes sense to a certain degree. When you go to open a checking account, they run a credit check on you. It's a product that you need good credit to get. You need to use your checking account responsibly to keep it open. So, it is somewhat a predictor of responsible financial behavior. But, at the same time, this is being used as a backup FICO score. Here's the idea -- if you go to apply for, let's say, a mortgage, they run your FICO score and say, "Oh, your score is too low. You don't qualify for a mortgage." You can say to this lender, if they give you the option, "Now check my UltraFICO score," which would take into account if you've had a checking account open for a long time with no overdrafts, no defaults. It would take that into account and potentially raise your score and allow you to qualify for a lending product that you otherwise wouldn't. So, it makes sense to a degree. But like you said, I'm skeptical. There's a reason that people with low FICO scores don't qualify for loans, it's because they generally don't have a very strong history of financial responsibility for one reason or another.
I'm approaching this with caution. I'm meeting with FICO's CEO, as you said, tomorrow morning. I definitely have a list of questions written down for him. I'm curious to hear what they say about it in more detail and the rationale behind it, which I will definitely be glad to share with our listeners next week, whatever I take out of that meeting. For the time being, I'm approaching this with caution. I like the FICO score system the way it is, simply put. I think it does a very good job of predicting consumer financial behavior. This seems more like a way to boost banks' lending pools a little bit more.
Moser: Yep. Bottom line is, I'm not going to change what I'm doing. I think I'll dance with what I've got, because it seems to be working so far. As we said at the top of the show, Matt, you are on location this week in Las Vegas at the Money 20/20 show. I know you get a chance to go to this show every year and look forward to interviewing CEOs and finding out what's going on in the world of finance and tech. Tell us a little bit about what you have coming up here this week, and what our listeners can look forward to next Monday.
Frankel: I mentioned I have the FICO CEO on my agenda for tomorrow. I'm meeting with some people from AmEx later today. I have Green Dot , one of my favorite fintech plays, which I'd love to talk about more next week.
Moser: Hey, now!
Frankel: [laughs] Just to plug a next episode. I have a bunch of good stuff going on tomorrow. We're going to walk the floor, see what's new in the world of fintech. There's over 1,000 companies presenting here, so I have my hands full. I can't wait to see what the conference has that I'll have to share with you guys next week.
Moser: That's great! We'll look forward to connecting on Monday and letting our listeners benefit from everything you've been able to do this week.
Let's tap into Twitter really quick. First up, we've got @MP_Fitzgerald. He says, "If it weren't for The Motley Fool, I'd never have prioritized having some cash on the side for times like these. Thank you, guys." Mark, thank you! We appreciate you listening. He was talking about all that volatility we've seen here the past couple of weeks. It sounded like he had a little dry powder. Glad we could help, Mark! Thanks for the kind words!
@JennysWave25. "In regard to Visa's recent dividend raise," you know, Matt, I was a little bit hard on Visa last week on Market Foolery regarding the dividend raise, simply because I feel like they could do a little more. Clearly, more of their money is going toward share repurchases. But, Jenny said, "I reacted the same way after reading about Visa's dividend hike. First thought, sweet! Looked at my holdings. Second thought, what the? $0.25? I'm trying not to be disappointed about more money." You know, Jenny, I guess that's the way we have to look at it. It's money in the pocket, right?
Final tweet for the week, from @DevonGSmith16. He asked a good question here. It's not necessarily so finance-related, though we've talked about Facebook (NASDAQ: FB) on the show before. He asks, "Is John Oliver's recent episode on Last Week Tonight enough to sell Facebook? I know it's entertainment, hilarious, but it sure didn't make me proud to be an owner of Facebook shares ." Matt, he's talking about that commercial that John Oliver recently made for his HBO show. I'm assuming you got the chance to watch that?
Frankel: I did.
Moser: You did, OK. This is basically the one where it ends up, the ad slogan is, "Facebook: we're a toilet." He's very concerned about the fact that Facebook doesn't have much control over its platform, and a lot of fake news is spreading, and the impact from such fake news and lack of control.
I don't know that I look at something like that as a reason necessarily to sell. Now, to be frank, I don't own Facebook shares and I never will own Facebook shares. I'm just not a big fan of the company, not a big fan of the platform. I don't use their stuff. What's your take on that? If you see something like, would that be enough reason for you to sell?
Frankel: At the end of the day, like you said, John Oliver's a comedian. But there's a difference between being a socially responsible company and being a good business. That's what this boils down to. I don't own Facebook shares. Just like you, I would never. I'm just not a big fan of their business. Is the fake news on Facebook a social responsibility issue? Absolutely. Does that in itself make it a bad business and give you a reason to sell the stock? Probably not. Dig a little deeper into the fundamentals than just the fake news issue before you sell your shares. That's my feeling on it. John Oliver's a comedian -- a very good one, but at the end of the day, don't buy or sell any stock based on what any comedian tells you.
Moser: Yeah. His spot was really funny. We'll tweet that out on the Industry Focus Twitter feed later today so you guys can catch it.
Matt, as we do every week, we're going to wrap up here with One to Watch. Again, earnings season is in full throttle now. What is your one to watch for the coming week?
Frankel: I'm watching New York Community Bancorp (NYSE: NYCB) , ticker NYCB. They're a regional lender based in New York. Their primary business is loaning out on rent-controlled New York apartment buildings. The reason that I'm really interested in what they have to say is, they're a business that does not react well to higher interest rates, in contrast to many banks. They have a higher cost of capital. Most of their deposits are interest-paying. Their loan portfolio is mostly these loans on rent-controlled buildings, and there's not much demand for those when interest rates start to rise. So, they're stuck with this portfolio of loans that were made when interest rates were really low. Their cost of capital starts rising. So, their stock has just been pummeled lately. Now it pays almost a 7% dividend. It should be a big beneficiary of the bank reform bill, because they're right in that $50 billion asset range that got deregulated. I was a shareholder. I got rid of it a little while ago, but I might jump back in, depending on when things look like they're going to start to turn around.
Moser: Great! I'm going to take a look at Markel Insurance (NYSE: MKL) , ticker MKL. They're slated to release earnings on Wednesday the 24th. I'm sure most listeners are familiar with the name Markel. It's what we commonly refer to as our baby Berkshire , an insurance company built very much in that same mold. I own shares, very happy to own more if I ever get the opportunity to buy at a compelling valuation. And it, too, is a member of that small business big investment basket that I put out a little while back. I'll be interested to see what Tom Gayner and company have to say on Wednesday.
Frankel: I'll be watching that one. I own shares, too.
Moser: Excellent! Remember, always, you can reach out to us via email at industryfocus@fool.com . Or, you can follow us on Twitter @MFIndustryFocus. And hey, while you're at it, let me tell you something here. Why not subscribe to The Motley Fool's newly renovated YouTube channel? You'll find clips from all of our podcasts, the entire family -- Rule Breaker Investing , Industry Focus , Motley Fool Money , Market Foolery , Answers , the whole kit and caboodle. I tell you, Dylan and his team have really done a good job building this thing out. It's really slick. Just go to youtube.com/themotleyfool . I think they put it best on Twitter -- "It's like podcasts, except for your eyes."
Matt, thanks for joining this week! Safe travels! Enjoy Vegas! Don't roll out of there flat broke, man! Draw a line somewhere, OK?
Frankel: [laughs] I'll try! I'm with a colleague who likes to gamble like I do, so neither one of us is the voice of reason. That's always an issue.
Moser: [laughs] That could get ugly. We'll talk to you next week. As always, people on the program may have interest in the stocks they talk about, and they Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. This week, the show is produced by our man behind the glass, Mr. Steve Broido. Thanks, Steve! For Matt Frankel, I'm Jason Moser. Thanks for listening and we'll see you next week!
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jason Moser owns shares of Markel, MA, PayPal Holdings, SQ, TWTR , and V. Matthew Frankel, CFP owns shares of American Express, BRK-B, Markel, and SQ and has the following options: short December 2018 $90 calls on SQ. The Motley Fool owns shares of and recommends AMZN, Facebook, Fair Isaac, Markel, MA, PayPal Holdings, SQ, and TWTR. The Motley Fool owns shares of V and has the following options: short January 2019 $82 calls on PayPal Holdings and short January 2019 $80 calls on SQ. The Motley Fool recommends BRK-B, COST, and EBAY. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In this episode of Industry Focus: Financials , host Jason Moser and Fool.com contributor Matt Frankel give listeners a rundown of earnings from PayPal (NASDAQ: PYPL) , American Express (NYSE: AXP) , Travelers (NYSE: TRV) , Ameris Bancorp (NASDAQ: ABCB) , and Synchrony Financial (NYSE: SYF) . So, I'm going to sleep at night, I'm feeling nice and safe and comfy in my home, knowing that the bank is going to keep lending me that money because I've got a good FICO score. You'll find clips from all of our podcasts, the entire family -- Rule Breaker Investing , Industry Focus , Motley Fool Money , Market Foolery , Answers , the whole kit and caboodle. | In this episode of Industry Focus: Financials , host Jason Moser and Fool.com contributor Matt Frankel give listeners a rundown of earnings from PayPal (NASDAQ: PYPL) , American Express (NYSE: AXP) , Travelers (NYSE: TRV) , Ameris Bancorp (NASDAQ: ABCB) , and Synchrony Financial (NYSE: SYF) . Jason Moser owns shares of Markel, MA, PayPal Holdings, SQ, TWTR , and V. Matthew Frankel, CFP owns shares of American Express, BRK-B, Markel, and SQ and has the following options: short December 2018 $90 calls on SQ. The Motley Fool owns shares of and recommends AMZN, Facebook, Fair Isaac, Markel, MA, PayPal Holdings, SQ, and TWTR. | In this episode of Industry Focus: Financials , host Jason Moser and Fool.com contributor Matt Frankel give listeners a rundown of earnings from PayPal (NASDAQ: PYPL) , American Express (NYSE: AXP) , Travelers (NYSE: TRV) , Ameris Bancorp (NASDAQ: ABCB) , and Synchrony Financial (NYSE: SYF) . I can't help but feel like maybe, between last week's story on the subprime mortgages and this week's UltraFICO score, I'm a little bit skeptical at first glance that this is a good idea. Jason Moser owns shares of Markel, MA, PayPal Holdings, SQ, TWTR , and V. Matthew Frankel, CFP owns shares of American Express, BRK-B, Markel, and SQ and has the following options: short December 2018 $90 calls on SQ. | In this episode of Industry Focus: Financials , host Jason Moser and Fool.com contributor Matt Frankel give listeners a rundown of earnings from PayPal (NASDAQ: PYPL) , American Express (NYSE: AXP) , Travelers (NYSE: TRV) , Ameris Bancorp (NASDAQ: ABCB) , and Synchrony Financial (NYSE: SYF) . I think investors in Travelers today could feel comfortable holding those shares knowing this is a well-run business that should continue to perform well for some time to come. Moser: OK. Investors, if you haven't heard of Synchrony, or if you've never looked into it, it sounds like, based on what Matt's told us here, get it on your radar. |
27890.0 | 2018-10-19 00:00:00 UTC | Ameris Bancorp (ABCB) Beats Q3 Earnings Estimates | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-beats-q3-earnings-estimates-2018-10-19 | nan | nan | Ameris Bancorp (ABCB) came out with quarterly earnings of $0.91 per share, beating the Zacks Consensus Estimate of $0.90 per share. This compares to earnings of $0.63 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 1.11%. A quarter ago, it was expected that this bank would post earnings of $0.84 per share when it actually produced earnings of $0.74, delivering a surprise of -11.90%.
Over the last four quarters, the company has surpassed consensus EPS estimates just once.
Ameris Bancorp, which belongs to the Zacks Banks - Southeast industry, posted revenues of $129.21 million for the quarter ended September 2018, missing the Zacks Consensus Estimate by 4.60%. This compares to year-ago revenues of $93.85 million. The company has not been able to beat consensus revenue estimates over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Ameris Bancorp shares have lost about 10.6% since the beginning of the year versus the S&P 500's gain of 3.6%.
What's Next for Ameris Bancorp?
While Ameris Bancorp has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Ameris Bancorp was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.95 on $137.33 million in revenues for the coming quarter and $3.32 on $475.40 million in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Southeast is currently in the top 38% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp (ABCB) came out with quarterly earnings of $0.91 per share, beating the Zacks Consensus Estimate of $0.90 per share. Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report To read this article on Zacks.com click here. There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. | Ameris Bancorp (ABCB) came out with quarterly earnings of $0.91 per share, beating the Zacks Consensus Estimate of $0.90 per share. Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report To read this article on Zacks.com click here. The current consensus EPS estimate is $0.95 on $137.33 million in revenues for the coming quarter and $3.32 on $475.40 million in revenues for the current fiscal year. | Ameris Bancorp (ABCB) came out with quarterly earnings of $0.91 per share, beating the Zacks Consensus Estimate of $0.90 per share. Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report To read this article on Zacks.com click here. Ameris Bancorp, which belongs to the Zacks Banks - Southeast industry, posted revenues of $129.21 million for the quarter ended September 2018, missing the Zacks Consensus Estimate by 4.60%. | Ameris Bancorp (ABCB) came out with quarterly earnings of $0.91 per share, beating the Zacks Consensus Estimate of $0.90 per share. Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report To read this article on Zacks.com click here. While Ameris Bancorp has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? |
27891.0 | 2018-10-19 00:00:00 UTC | Ameris Bancorp (ABCB) Q3 2018 Earnings Conference Call Transcript | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-q3-2018-earnings-conference-call-transcript-2018-10-19 | nan | nan | Ameris Bancorp (NASDAQ: ABCB)
Q3 2018 Earnings Conference Call
Oct. 19, 2018 , 10:00 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Good morning and welcome to the Ameris Bancorp Third Quarter 2018 Financial Results Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to Nicole Stokes, Chief Financial Officer. Please go ahead.
Nicole Stokes -- Chief Financial Officer
Thank you, Chad. 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 Dennis Zember, President and CEO of Ameris Bancorp and Jon Edwards, our Chief Credit Officer. Dennis will begin with some opening general comments, I will discuss the details of our financial results, and Jon will make a few comments about credit quality to include the expected impact of Hurricane Michael on our portfolio before Dennis provides closing remarks.
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 development 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 in our press release.
And with that, I'll turn it over to Dennis Zember for opening comments.
Dennis Zember -- President, Chief Executive Officer
Thank you, Nicole, and good morning, everyone. I appreciate you taking the time this morning to join us on our third quarter 2018 earnings call. We're really excited about our results this quarter and the momentum we have with earnings and in our operating ratios.
For the third quarter, we are reporting operating earnings of $0.91 a share or $43.3 million, which excludes about a $1.5 million of executive, retirement, merger and acquisition costs and some branch consolidation costs. Including those charges, we are reporting $41.4 million in net income and $0.87 per share. Besides the move in earnings this quarter, our operating ratios came in very strong, particularly given the momentum I know that we still have in the Q.
Our operating return on assets came in at 1.53% in the current quarter compared to 1.26% in the same quarter in 2017. Talking about the return on assets, I remember earlier in the year at a conference or in some meetings, the question was, how was the industry going to invest the Tax Cut. The fear I guess, was that margins would come down or the spending would go up and in the -- and really the industry would just punch out the same results with a little less going to Washington. That didn't happen here.
To test this, I grossed up our third quarter results from last year using this quarter's tax rate and when I do that, I see that our core apples-to-apples profitability ratios are higher now by 11.3%. In other words, we've managed the current rate environment with a stable margin, we've grown our balance sheet by almost 50% through organic and acquisition strategy and we've improved our overall operating performance by double digits. We didn't just rest on the fact that the tax law would make us more profitable.
Sitting here today, I know we still have a material amount of cost savings to realize on the Hamilton transaction and none of the cost savings we announced a few weeks ago are in our current numbers. Hopefully, you can hear how proud I'm of the earnings machine we have built with dedicated bankers that love our strategy and are excited about staying top of class.
Most of the improvement in our operating ratios comes from gains in the efficiency ratio, which moved this quarter to about 54% compared to just above 60% in the same quarter in 2017. Nicole was wagging her finger at me to not forecast a ratio for next quarter. So I won't, but with what we have yet to realize in cost savings, I do feel very confident that 2019s efficiency ratio will keep moving in the direction we have it right now.
If I could be master of the obvious for a second, this move in the efficiency ratio is important for earnings per share, but I see it is critical philosophically to our long-term success and being hyper competitive on the best customers without having to recalibrate our expectations for a return on assets.
I believe we can be top of class of quality with the best customers and still be hyper profitable. I don't think that these are mutually exclusive, especially for company that's willing to focus on efficiency and resources. Our margin in the third quarter, excluding accretion came in at 3.77% against a linked-quarter margin of 3.81%. The entire move in margin this quarter came only from higher levels of short-term assets as a percentage of earning assets, which negatively impacted the margin by about 4 basis points. Our yields and our costs on both sides of the balance sheet were managed exactly how we've been managing for the past couple of years, but we wanted extra cash and liquidity as we closed and integrated Hamilton.
Subsequent to the end of the third quarter, we've used that extra cash and pay off certain Federal Home Loan Bank bonds, so I expect that the negative influence we saw this quarter will be fully erased in the fourth quarter. This is a messy quarter when it comes to evaluating costs on the deposit side of the business. I know there's a lot of sensitivity to deposit betas and deposit costs, but I move this quarter related mostly to a full quarter with Atlantic Coast and Hamilton, which pushed our interest bearing costs higher. The fact is, both of these smaller banks were a little ahead of us on interest bearing costs, but will moderate those levels over the next couple of right moves, one of which we got this past quarter.
On loan growth, we had a slower quarter on loan growth this quarter than what we've experienced in the past. We had the same investor CRE payoffs that the industry is discussing mostly in commercial construction. We also have what I call the first quarter effect on the two acquisitions where we target and move out certain marginal customers that don't meet our credit standards. But don't have the pipelines in production to counter that negative move. These two acquisitions especially together were large enough that this was a noticeable effect, but going forward, I don't think we'll see -- I do expect that we'll see solid growth with these things in these really attractive markets.
Core deposit growth outside of M&A came in at about 17.5% annualized against balances in the second quarter of this year. We had a great quarter on core deposit growth. Across our Company right now, nothing is more important or top of mind than deposit growth. This attention has paid off, this has been going on for more than just this year and this attention has paid off, and I feel confident in saying that we'll beat last year's quarter deposit growth rate of 11%, as we closed out 2018.
This is no small feat, but the competition for deposits, especially the profitable account it's fierce as I can remember. So to be growing core deposits at a double-digit clip is one thing, but to do it in a manner that doesn't push your margin lower is an entirely different kind of result.
As I look forward, I don't see anything changing with respect to our growth rate. We still are looking for loan growth in double digits and for deposit growth rate to continue inching higher toward our expecting growth --expected growth in loans. We finished this quarter with a loan to deposit ratio of about 93% compared to 101% this time last year. So we have a lot more cushion to manage growth rate than we have had in the past.
I'll stop there on the results and let Nicole and Jon leg-in with some more facts. But first let me say something about M&A if I can. This quarter, especially, we've had a lot of questions about M&A with stock prices moving like they have and whether or not we'd still be in the game. A lot of these questions have come in kind of a pretty worry some time, particularly given how the markets reacted to some deals. We all have a lot to worry about. Having for me, I'm worried about raising two teenage son and I worry about our folks that were affected by the hurricane. But nobody on this call now or that listens to it later needs to be worried that Ameris will be doing a deal that does not reward our shareholders, period.
Our recipe for crafting a deal that the market rewards is not any different than it has ever been. That formula is something that's neutral, tangible book value, it has meaningful EPS accretion, there are strategies that we use to deliver the economics are simple, and reliable and something we've done in the past. And it needs to be in a market that would boost our long-term growth rate. Our stock price falling obviously impacts how aggressively we can go after a deal, but our story is good enough that it resonates with Boards and management teams and I'm not concerned that we can't find a good deal even with today's stock price.
Jon is going to give you some more color about the hurricane in his credit comment, but let me say that we were blessed with how well we came through the storm. We do have customers and employees that suffered tremendously and our Company and our employees are aggressively showing up to help and rebuild where we can. We had quite a few branches that we closed ahead of the storm, but today all but four are open for business and we are being creative in our efforts to deliver services where we have a branch that's closed. Please keep these markets and the affected people in your thoughts and prayers for a few months as they rebuild.
So with that Nicole, I'll turn it back to you for some more details.
Nicole Stokes -- Chief Financial Officer
Great, thank you, Dennis. As you mentioned, today we're reporting operating earnings of $43.3 million or $0.91 per share for the third quarter, which is approximately an 83% improvement over the same quarter in 2017. These operating results primarily exclude merger charges, executive early retirement benefits, and expenses related to the branch consolidation plan announced in September. Including all of these charges, we are reporting total earnings of $41.4 million or $0.87 per share.
You will notice that our effective tax rate increased over 24% in the third quarter. This was a result of the 162(m) calculation on the executive retirement expense from last quarter that will be not deductible this quarter. We correctly presented this impact in the adjusted net income table non-a, as an add-back. With this adjustment, our effective tax rate is 23% and inline with our expectations of an effective tax rate of 22.5% and 23.5%, going forward.
Our operating return on assets in the third quarter was 1.53%, which was an increase from the 1.26%, we reported in the third quarter of 2017, and the 1.38% reported last quarter. We're proud of this ROA and we believe an ROA north of 1.50% is an impressive representation of our core profitability. We've been able to grow the balance sheet, both through acquisitions inorganically, while keeping focused on key operating results such as margin and efficiency.
The yield curve continues to make the margin a challenge. Our margin excluding accretion, as Dennis mentioned, declined 4 basis points during the quarter from 3.81 basis points last quarter to 3.77 basis points this quarter. As Dennis mentioned, we had excess liquidity on our balance sheet during the third quarter, such that our short-term assets to earning assets ratio increased to over 4%. Excluding this approximate $200 million of excess liquidity, our margin would have been 3.84% and reflects the increase we were expecting from the Hamilton acquisition.
Subsequent to quarter end, we paid off certain FHLB advances as they mature, and we expect the margin to return north of 3.80% in the fourth quarter. For the third quarter, our yield on earning assets increased by 12 basis points, while our total funding cost increased 15 basis points. On the asset side, we saw increases in both loans and volume. Our core bank production yields were 5.51% for the quarter, against 4.74% in the same quarter a year ago.
On the deposit side, as Dennis mentioned, there were many moving parts with the acquisitions and conversion to our systems and products and pricing, as well as strong organic deposit growth. Our year-to-date deposit beta of 38 basis points is in line with our expectations, but something we continue to monitor.
Our incremental funding rate for the third quarter in the core bank was within our expectations, considering the growth in non-interest bearing deposits mixed with CD and money market growth, and repricing. With the cyclical deposit influx and organic deposit growth we forecast in the fourth quarter, offset by the yield curve pressure and despite the intense level of competition, we believe our funding costs will be stable in the fourth quarter, again allowing margin to return above 3.80% going forward.
Non-interest income totaled $30.2 million in the third quarter. Service charge income was up 20%, due to the full quarter of Atlantic and Hamilton acquisition. Mortgage revenue declined slightly when compared to the second quarter, but the pipeline remains strong. In fact, the mortgage pipeline is stronger now than it was the same time last year and production increased over 19%, when comparing the third quarter of this year to the third quarter of last year.
The gain on sale premium rebounded somewhat this quarter, but still remains below the premiums we saw this time last year. We continue to recruit producers that have steady sources of referrals or construction connection. Our markets are still strong with respect to new home building and the pace of home sales, and we believe continuing to focus on builders and realtors of our primary customer, we'll continue to drive above average growth and profitability in our mortgage group.
One of the things I'm most proud of this quarter is our operating efficiency ratio. For the quarter, it improved to 54.4% in the third quarter from 57.5% reported last quarter, and 61.1% reported in the third quarter of '17. We expect additional improvement in the efficiency ratio in the fourth quarter after Hamilton is fully integrated. This leverage combined with the cost-saving initiatives announced in September of this year, gives us confidence that our efficiency ratio will be in the very low 50s by the end of the year and throughout 2019.
Our ability to execute our strategy of improving the operating efficiency ratio as we have, while growing the balance sheet over 49% in the past year, is a mark of our dedication to execution of our strategies.
On the balance sheet side, total assets increased over $238 million or 8.5% annualized, materially all of which was in earning assets. Organic loan growth was slower this quarter and came in at 3.4%, which lowered our year-to-date organic loan growth rate to 11.5%. Production was strong, but net growth was negatively impacted by early pay-off including delivered pay-offs from the acquisition. In the third quarter, which was the first quarter after acquisition, we had closed to a $100 million of pay-offs in those markets, which reduced the net loan growth figure by over 4%.
Loan production in the core bank was actually 14% higher this quarter than the same time here last year, and more than 6% higher than the second quarter of this year. The strong loan production was offset by those early pay-off, and an increased level of unfunded commitment production, which we expect to fund in the next few quarters. Pipelines were strong at the end of the third quarter and we believe our forecast of double-digit loan growth 12% to 14% for the year is still attainable.
On the deposit side, our total deposit growth really picked up this quarter. Exclusive of the effects via acquisition, year-over-year deposit growth is over $524 million or almost 9%. Core non-interest bearing deposits grew faster than total deposits, with the year-over-year increase of just over 11%. Because of that growth, our mix of deposit excluding the acquisition has improved set the DDA account on 30% of total core deposits at the end of the third quarter, up from 29% this time last year.
We anticipate the usual cyclical deposits in the fourth quarter that will allow us to pay down some of the higher FHLB advances, keeping our funding cost relatively flat in the fourth quarter. We still see opportunity for continued strong deposit growth in newer markets, such as Atlanta, Orlando, and Tampa.
We continue to see really encouraging growth in our lines of business and believe this is important when considering the opportunity we have in the fourth quarter and throughout 2019. Production in our Retail Mortgage division increased by over 19%, when compared to the same quarter last year. Production in the Warehouse Lending division increased over 27%, when compared to the third quarter of '17, and loan production in the SBA division remains strong, and total production was over 180% higher this quarter than the third quarter last year.
We continue to believe that we can sustain double-digit annualized growth rates in these divisions for the next years.
In conclusion, we are really proud of our third quarter results, and we look forward to the fourth quarter and 2019. The two recent acquisitions and our successful integration, combined with the cost saving initiatives announced last month, continue to give us confidence in the 2019 outlook for top quartile financial results.
And with that, I will turn it over to Jon Edwards, our Chief Credit Officer for a few comments on credit quality and the potential impact on Hurricane Michael. Jon?
Jon Edwards -- Executive Vice President, Chief Credit Officer
Thank you, Nicole. Good morning, everyone. First, let me speak to our third quarter asset quality. Overall, most of our asset quality metrics improved in the third quarter versus second quarter. Nonperforming assets decreased 9% over second quarter and totaled 60 basis points of total assets. That improvement was primarily the result of payments and other collection activities, but also certain loans placed back on accrual, after having demonstrated sustained satisfactory performance.
Similarly, classified assets decreased during third quarter and totaled less than 15% of total bank capital. Past due loans remain nominal and concentrations in credit remain manageable and within the regulatory guidance. Our charge-offs were the one thing that was a little higher during the quarter and that was due primarily to certain premium finance loans that were really subject to the second quarter reserve bill and were charged off in the third quarter.
Overall, our primary markets remain robust and we are not seeing any segment of our portfolio, which currently experiencing any material deterioration. It was a good quarter overall.
Now let me say a few words about the impact of Hurricane Michael. First, as everyone knows that storm has had a devastating effect on many individuals and businesses. And Ameris Bank will do whatever is necessary to aid in their recovery. In reality, it's too early to know with full certainty what the real impact will be to those communities, or our customers, or our bank. But in response to Hurricanes Matthew in 2016 and Irma in 2017, we develop strategies to help our customers and will likely follow that template for this storm also.
Of note, when I speak about the primary impacted areas, I am primarily referencing those coastal communities between Pensacola to the West and St. George Island on the East side. Clearly other noncoastal communities in Florida and Georgia were impacted, but most not as severely as those along the Florida coast. Our overall exposure is really broken down into three parts, agriculture, real estate secured loans, and consumer installment loans really the latter of which is not material and I'm not going to really speak about. The bank's agriculture loan portfolio totals $239 million. including both production related loans as well as those that are primarily secured by farmland. Of that total about 75% or $180 million were located in markets that incurred some amount of impact from the storm. The primary crops affected were corn and peanuts -- sorry, cotton and corn as most of the peanuts had been harvested by the time the storm hit. Depending on where your farm was located within those affected areas, the impact may have been as low as 10% loss of yield up to a total loss.
Remedies available to our farmers include the crop insurance proceeds, which I think all of our farmers carry, low interest disaster loans through several government programs and potentially direct government payments. Clearly there will be the need for some type of restructure our many ag loans, most likely ranging from full bearing term loan payments to restructured operating loans. I believe, most of our farmers in ag related businesses have the capacity to restructure if needed and actual loan losses should not be material. Additionally, Ameris Bank is a preferred lender for FSA and we will utilize the guarantee program as needed. Now as it relates to real estate secured loans, our exposure to those primary impacted areas totaled approximately $127 million, including residential, commercial and construction loans.
Our customers and our lending staff are still on the process of inspecting properties and assessing damages, so the final impact is still a bit unclear. But to give you a small example specific to residential construction loans, we have approximately $35 million worth of commitments, $20 million outstanding in our Panama City and Tallahassee markets, subsequent to discussions with our builders and our visual inspections, we've determined less than 5% of the homes sustained any material damage or less than $1 million outstanding. I expect most of that damage will be covered by insurance for that entire segment of loans.
In summary, let me say, it's still a little early to measure the complete impact, but as our information becomes clear, we will make necessary adjustments to our watch list and the allowance for loan losses.
With that, I will turn the call back over to Dennis for closing comment.
Dennis Zember -- President, Chief Executive Officer
Well, I have no --. Okay, I'd like to thank everyone again for listening to our third quarter earnings results and want to turn it back to Chad, I guess to see if there are any questions.
Questions and Answers:
Operator
Thank you, sir. We will now begin the question-and-answer session. (Operator Instructions) The first question will come from Brady Gailey with KBW. Please go ahead.
KBW -- -- Analyst
Hey, guys, it's actually Woody (ph) on for Brady.
Dennis Zember -- President, Chief Executive Officer
Hi, Woody.
KBW -- -- Analyst
So first, I know you said, the rise in deposit costs was largely related to the two acquisitions, but I was wondering if you could give some color on how the legacy bank deposit costs performed over the quarter?
Nicole Stokes -- Chief Financial Officer
Sure, we were shuffling papers so quick. So there is quite a bit of noise for share because of everything coming on, but the core bank we did see increase and 11% of that increase was in non-interest bearing, which helped the overall cost. But we did see our money markets, which part of that was we feel like we were maybe a little bit behind the curve. And if you think back just second quarter, our deposit beta in the second quarter was pretty low. So we knew that we were going to have to kind of catch that up a little bit in the third quarter. So we did raise our money market accounts rate and then as well as CD rates. So we did have some increase in the core bank, but the majority of it did come from those acquisitions. And we believe that the fourth quarter is going to be consistent. If we didn't have a huge increase at the end of the quarter that's going to have a larger impact next quarter. We feel like that increase was throughout the entire third quarter.
Dennis Zember -- President, Chief Executive Officer
And I'll say it too just sort of adding on top of that. Like I said, the deposit costs that we inherited with the Atlantic Coast and Hamilton transactions, I think in the past when deposits were not as -- deposit competition was not as fierce, we would have taken those deposits and immediately had some rightsizing where we have sort of moved them to our levels. But given how fierce deposit competition is in Atlanta, and Orlando, and Tampa, we didn't want to do that. So we've kind of left those sort of where they are. So I think going forward, what you'd see on those deposits especially is almost the deposit beta of zero probably for -- probably for the next couple of moves as -- and ours we just keep continue, keep inching up as asset revenues coming in. I mean our strategy for 2 years has been to take whatever incremental revenues we get from a right move -- a higher rate move and kind of apply those back in a smart way into the deposit costs. So that we can remain competitive continue to grow core deposits, but do it in a manner that doesn't affect the margin. I mean, I know, the deposit costs and deposit betas are top of everybody's mind. But we are not managing just the deposit beta, we're managing deposit costs, so that in conjunction with our asset yields in our production levels, so that we keep the margin right there at 3.80%.
KBW -- -- Analyst
Okay, that's really helpful. And then looking at those asset yields, they also saw a pretty big jump this quarter, was that also driven from the two acquisitions?
Nicole Stokes -- Chief Financial Officer
Yes, it was some from the acquisition and that it was also just from the rising rates in our loan production. Our loan production yields increased and they have increased over the last year or so, but yes its both.
KBW -- -- Analyst
Got it, thanks. Those were both my questions. Thank you.
Nicole Stokes -- Chief Financial Officer
Great. Thank you.
Operator
The next question comes from Tyler Stafford with Stephens Inc. Please go ahead.
Tyler Stafford -- Stephens Inc. -- Analyst
Hi, good morning, guys.
Dennis Zember -- President, Chief Executive Officer
Good morning.
Nicole Stokes -- Chief Financial Officer
Good morning.
Tyler Stafford -- Stephens Inc. -- Analyst
Maybe just to start on credit. So last quarter obviously you had the US PF issues. So it was nice to see no issues this quarter. You've got a pure bank out this morning reporting some pretty sizable CRE issues. Just bigger picture across Ameris' balance sheet, how do you feel about the credit environment, anything in particular seeing that is worrisome? And then anything within the US PF specifically just as it relates to last quarter as well?
Dennis Zember -- President, Chief Executive Officer
I'll take the first part first, I mentioned that our primary markets, and you know we've get about seven or eight markets, it probably carry 80% or more of our production are still pretty vibrant. There's new investment going on. Property values are holding pretty good. We haven't seen any real deterioration across any of those markets. And so I'm still feeling really good about commercial real estate, right now. So I mean we're looking out for new construction projects and thinking about lease up terms in the next 18 months to 2 years and so on and so forth. But right now, there's not been any real change, we feel pretty good about it. On US PF side, now we are watching that segment really little more closely and feel pretty good about the down payments that they're getting the terms that we've got -- there's going to be some small things that will fall out, I'm sure toward the end of the year, but I feel pretty good about the fact that we really sort of encapsulated the issues very quickly in the third -- in the second quarter, primarily.
Tyler Stafford -- Stephens Inc. -- Analyst
Okay, very helpful. Thanks. Just on the remaining cost savings with Hamilton. How much is remaining in total and how much would you expect to realize in the fourth quarter?
Nicole Stokes -- Chief Financial Officer
So, we anticipate the fourth quarter earnings pre-tax -- sorry, after tax is about $2 million that will be incurred in the third quarter. We did our Hamilton acquisition last weekend actually and so that system integration is complete. So those will -- we have a few more expenses for a few weeks, but its about $2 million. And then the cost savings that we announced last September or that we announced in September, those will be fully implemented in the first quarter of next year.
Tyler Stafford -- Stephens Inc. -- Analyst
Okay, got it. On the loan repositioning that you talked about, can you just size up, how much of an impact that was to the third quarter loan growth?
Nicole Stokes -- Chief Financial Officer
Yes. I've got that right here. So our total pay-offs were right about
Dennis Zember -- President, Chief Executive Officer
It was about $100 million.
Nicole Stokes -- Chief Financial Officer
From the Atlantic and Hamilton acquisitions, it was about $100 million. Half of that was in construction and then the remaining we have multi-family, commercial real estate, and C&I that made up that $100 million.
Dennis Zember -- President, Chief Executive Officer
Impacted the -- Nicole and I are calculating that alone impacted the growth rate -- the annualized growth rate by about 4%, little more than 4%, just the -- just that repositioning.
Tyler Stafford -- Stephens Inc. -- Analyst
Okay, got it. And then just one more from me on the margins, just making sure I'm thinking about this correctly. So fourth quarter total deposit costs will move up modestly I guess or just pricing continues to be there. But overall cost to fund should be relatively flattish as you offset those deposit costs with lower overall FHLB balances and cost there, and then you get a lift on the asset side, is that basically what you're saying. And then so we're at 3.80% margin?
Dennis Zember -- President, Chief Executive Officer
Yes, yes exactly.
Tyler Stafford -- Stephens Inc. -- Analyst
Okay.
Dennis Zember -- President, Chief Executive Officer
We think the asset yields are going to continue move up with the last right move we just got. And deposit costs are going to keep inching like they have. We keep benefiting, I mean, we still have the mortgage portfolio, the purchase mortgage pools, those keep paying off. And yes, so there is -- every quarter there is probably a 300 basis point pickup on all of those renewals. Yes, I think, I didn't make a big deal about it, but we have a 93% loan to deposit ratio right now. And we pretty much have the exact same margin we had a year ago, when the loan to deposit ratio was about 100%. So even where we've sort of repositioned loans as a percentage of total earning assets, we still held the margin. So I think and -- I'm not sitting here worried that the margins go and fall apart on us, really at all. I hope I've sounded pretty confident there.
Tyler Stafford -- Stephens Inc. -- Analyst
Yes, I think that's coming across. Thanks, Dennis.
Dennis Zember -- President, Chief Executive Officer
All right.
Operator
The next question will be from Casey Whitman of Sandler O'Neill.
Casey Whitman -- Sandler O'Neill -- Analyst
Good morning.
Nicole Stokes -- Chief Financial Officer
Good morning.
Casey Whitman -- Sandler O'Neill -- Analyst
Appreciate the color on the core margin. Just so we can get a sense of where the reported marginal shake out. I mean how much can we assume you're going to get an accretion income next year? Just the best guess will be helpful.
Nicole Stokes -- Chief Financial Officer
So we're estimating, about $3 million a quarter. So about $12 million for the year.
Casey Whitman -- Sandler O'Neill -- Analyst
Okay, great. And then can you remind us how much of your loan portfolio is variable today and then how much of that is tied to LIBOR versus prime? If you have it.
Nicole Stokes -- Chief Financial Officer
Yes, sorry.
Dennis Zember -- President, Chief Executive Officer
We are going through. No, its found.
Nicole Stokes -- Chief Financial Officer
I'm sorry, it's right here. Fixed rate is about 65% and variable rate is 35%. And...
Dennis Zember -- President, Chief Executive Officer
The fixed rate includes one year, includes the $500 million, $600 million from premium finance, which are really one year credit. So I mean really it's probably -- really we're probably going to have half 50s on fixed rate. Probably the half 50s on fixed rate and then the rest variable. Yes, as far as that goes, the mix is probably, it's moved up quite a bit, it's probably 80% based of LIBOR and still, but 20% based of prime.
Casey Whitman -- Sandler O'Neill -- Analyst
Okay, great. And I apologize if you already kind of walked through this. But maybe just give us a little more help in terms of what's going on between -- the strategy between using broker deposits and FHLB borrowings this quarter, and then sort of what we might see next quarter?
Nicole Stokes -- Chief Financial Officer
Sure. So, at the very -- during the second quarter, we entered into broker deposits that have a shorter term maturity. They are less then a year or less. And so we entered into the broker deposit and then we also have the FHLB advances, but those are on a very, very short-term and knowing that we have cyclical deposits. And part of that was in the second quarter in preparing for Atlantic Coast and Hamilton. Unlike Dennis mentioned it, sometimes when we do those acquisitions, we'd like to have some excess liquidity just in case, and we haven't experienced that this time. And so we are paying off -- we already paid off a significant portion of that FHLB advances in October.
Dennis Zember -- President, Chief Executive Officer
We -- in case, we don't -- for broker deposits and home loan bank advances, we don't do long term -- long dated term deal. I mean, you may be on the call thinking that it would, it would have been smart a couple of years ago to have done some two-year CDs and maybe it would have been. But we're just -- again, we're not trying to play margin gains, we're not even trying to necessarily grow the margin. I think for a bank our size 3.80% is -- and for the kind of customers, we're hunting 3.80% is a solid margin. So all we're trying to do is use this as short-term funding that -- it helps us maintain that margin.
Casey Whitman -- Sandler O'Neill -- Analyst
Got it. Okay. So this in fourth quarter we should see a normal seasonal inflow of your core deposits and broker deposits will sort of start to come off, as those matures?
Nicole Stokes -- Chief Financial Officer
The broker deposits will stay for the fourth quarter, but the FHLB advances will paid down.
Casey Whitman -- Sandler O'Neill -- Analyst
Okay, got it, got it. All right, helpful. Just we are on the same page here, just can you remind us how you get to your calculation for organic loans, I mean just what categories of loans you include in there?
Nicole Stokes -- Chief Financial Officer
Sure. And It's difficult and for -- to calculate because we also -- what we do is we take the legacy -- what we call legacy loans and then we do have run the shift from either the cover category into PNC, the Purchase Non-Covered or the purchased loans into legacy, once they are refinanced under our credit standards, and so we exclude all of that. So then we are excluding the movement between buckets, so that we are really just saying what is our true new loan growth in the bank.
Dennis Zember -- President, Chief Executive Officer
So, if you're looking at the balance sheet in Nicole's financial tables, really we're including loans and purchased loans. So if you include, I guess for this quarter we're including a total $5.543 billion (ph) and $2.711 billion (ph), and really the only thing we're excluding is movement in the purchase mortgage pools, which this quarter was $22 million is all.
Casey Whitman -- Sandler O'Neill -- Analyst
Got it. Thanks so much.
Dennis Zember -- President, Chief Executive Officer
All right.
Operator
Our next question comes from Jennifer Demba with SunTrust Robinson and Humphrey.
Jennifer Demba -- SunTrust Robinson and Humphrey -- Analyst
Thank you. Good morning.
Dennis Zember -- President, Chief Executive Officer
Good morning.
Jennifer Demba -- SunTrust Robinson and Humphrey -- Analyst
Question on your loan growth outlook. You continue to believe double-digit makes sense and is achievable. Dennis, can you just talk about the competitive environment. Are you getting the quality credits you want in this environment and at this point in the economic cycle? And can you -- are you able to still produced double-digit loan growth with the kind of quality you're going to require?
Dennis Zember -- President, Chief Executive Officer
Right now, I think -- right now the answer is yes. The answer is yes. If we were having to -- had we not made, -- if we were 2 years ago still sitting here with a 70% efficiency ratio, I would tell you no. Because we couldn't compete and we could not compete for those best customers with the kind of yields they're demanding. But the fact that we've moved efficiency ratio down from kind of low 70s to mid 50s and going lower, and the fact that we've still been able to grow core deposits, which are probably 30%, 40%, 50% cheaper than home loan bank or broker. I think we're in a position to compete, I mean, I know we're in a position to compete on them. What we were doing 2 years ago was 20% loan growth. I mean, we can't do 20% anymore, because we're sitting here with close to $8.5 billion or approaching $8.5 billion of loans, and that just not prove it. But being able to do the same nominal amount of loan growth still gives us loan growth in the low double-digit, say 12%, 13%, where we used to be talking about 20%. We're not really talking about a different nominal amount of loan growth, it just shakes our percentage wise to something less. We don't, we are sitting here with really attractive concentration ratios. Jhn briefly touched on the fact that we're not concentrated in just one asset class. I'm not loaded up on commercial construction. I don't have investors CRE pushing me over 300%. So I've got room to do CRE, if we want to do that, we've got more room on premium finance, our mortgage warehouse, if that stays an option and an opportunity, municipal lending is still -- there still opportunities there. So even outside of our core bank, I'd tell you the core bank looks good, especially with Atlanta, and Tampa, and Orlando being new opportunities for us. Where really they weren't -- or weren't as big an opportunity a year ago. I still feel good that we can do some loan growth by there.
Jennifer Demba -- SunTrust Robinson and Humphrey -- Analyst
Thanks, Dennis. I appreciate it.
Operator
(Operator Instructions) The next question will be from Christopher Marinac with FIG Partners. Please go ahead.
Christopher Marinac -- FIG Partners -- Analyst
Thanks. Good morning. Dennis, I want to stay on the loan growth issue. As we get further along in the cycle. I mean what's the appropriate balance between growing strong, but not growing too much, I know that changes as we go along. I just kind of want to continue on that thought?
Dennis Zember -- President, Chief Executive Officer
I think if -- I think we'll know when I think back to Jennifer's question, I think I'm sitting here thinking more and more about that. I think we'll know when we start seeing deals come across -- when we start filling like our bankers and I love the way our bankers work. If our bankers starts sending -- trying the same deals through and we've got to get creative on loan structure, maybe do some things that we didn't -- that we wouldn't have wanted to do in the past. If on big commercial construction loans, we cannot talk a customer into getting it bonded anymore. Or they just refused to give us any kind of guarantee or things like that, Chris, I think we'll know that we're going to have start tailing back on what kind of loan growth we're looking for. I would tell you if that happens and I know the industry believes, the industry definitely believes that we're peaking on credit quality and you really -- you might think that if you look at what Jon's talking about where credit is and where net charge-offs are, if that's the case, I would tell you right now, I think we're ahead of the pack when it comes to evaluating cost structure, and resources, and managing costs, and efficiency. So that we hold -- so we can hold our growth rates -- our earnings growth rates. Our EPS growth rates are away at the same level. We will not -- maybe it's a little early to say, but we will not continue to push loan growth as high as we possibly can for the sake of quality. I mean, I was -- I'm only 49 years old, so I probably have to live through a couple economic cycles and in the next economic cycle, I want to be known for quality. And when we can get the loan growth and hold the quality, we will when we can't get the quality or we've got to sacrifice, we'll just start tailing back what we want on loan growth and we'll start looking for earnings growth in other places, where there is fee income, cost structure, does that make sense?
Christopher Marinac -- FIG Partners -- Analyst
No, it does and I appreciate the background. Just a quick follow-up, can you remind us on how deep into Florida, along the Central I-4 corridor that you're getting in terms of calling on customer, not as much of a branch question as it is a sort of the customer penetration as you get deeper into Florida?
Dennis Zember -- President, Chief Executive Officer
Yes, I know that I-4 was the end of the world, when Ed was here -- when Ed was here I-4 was really the end of the world. We just really did not go south of I-4. I mean, Sarasota, for instance, south of I-4, but kind of really still considered maybe part of Tampa, MSA or Tampa market at large really even that we didn't go there. So I would tell you, our concentration is very small. I mean there might not be anything, I guarantee there's -- I say guarantee, I am pretty confident there's no construction south of I-4. We may have a assisted living deal within eyesight of I-4, but construction wise there would be nothing.
Christopher Marinac -- FIG Partners -- Analyst
Okay, great. Thank you for the time this morning. I appreciate it.
Dennis Zember -- President, Chief Executive Officer
All right.
Operator
Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Dennis Zember for any closing remarks.
Dennis Zember -- President, Chief Executive Officer
Okay, thank you, again, for your participation and your willingness. I think the call has might have been a little longer than has been in the past. Nicole and I are available if you have any questions, Jon, as well. So if we didn't answer a question or you want more detail, feel free to reach out to us, email or phone call. All right, thank you and have a good weekend.
Operator
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Duration: 48 minutes
Call participants:
Nicole Stokes -- Chief Financial Officer
Dennis Zember -- President, Chief Executive Officer
Jon Edwards -- Executive Vice President, Chief Credit Officer
KBW -- -- Analyst
Tyler Stafford -- Stephens Inc. -- Analyst
Casey Whitman -- Sandler O'Neill -- Analyst
Jennifer Demba -- SunTrust Robinson and Humphrey -- Analyst
Christopher Marinac -- FIG Partners -- Analyst
More ABCB analysis
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp (NASDAQ: ABCB) Q3 2018 Earnings Conference Call Oct. 19, 2018 , 10:00 a.m. Duration: 48 minutes Call participants: Nicole Stokes -- Chief Financial Officer Dennis Zember -- President, Chief Executive Officer Jon Edwards -- Executive Vice President, Chief Credit Officer KBW -- -- Analyst Tyler Stafford -- Stephens Inc. -- Analyst Casey Whitman -- Sandler O'Neill -- Analyst Jennifer Demba -- SunTrust Robinson and Humphrey -- Analyst Christopher Marinac -- FIG Partners -- Analyst More ABCB analysis Transcript powered by AlphaStreet This article is a transcript of this conference call produced for The Motley Fool. In other words, we've managed the current rate environment with a stable margin, we've grown our balance sheet by almost 50% through organic and acquisition strategy and we've improved our overall operating performance by double digits. | Duration: 48 minutes Call participants: Nicole Stokes -- Chief Financial Officer Dennis Zember -- President, Chief Executive Officer Jon Edwards -- Executive Vice President, Chief Credit Officer KBW -- -- Analyst Tyler Stafford -- Stephens Inc. -- Analyst Casey Whitman -- Sandler O'Neill -- Analyst Jennifer Demba -- SunTrust Robinson and Humphrey -- Analyst Christopher Marinac -- FIG Partners -- Analyst More ABCB analysis Transcript powered by AlphaStreet This article is a transcript of this conference call produced for The Motley Fool. Ameris Bancorp (NASDAQ: ABCB) Q3 2018 Earnings Conference Call Oct. 19, 2018 , 10:00 a.m. Now as it relates to real estate secured loans, our exposure to those primary impacted areas totaled approximately $127 million, including residential, commercial and construction loans. | Duration: 48 minutes Call participants: Nicole Stokes -- Chief Financial Officer Dennis Zember -- President, Chief Executive Officer Jon Edwards -- Executive Vice President, Chief Credit Officer KBW -- -- Analyst Tyler Stafford -- Stephens Inc. -- Analyst Casey Whitman -- Sandler O'Neill -- Analyst Jennifer Demba -- SunTrust Robinson and Humphrey -- Analyst Christopher Marinac -- FIG Partners -- Analyst More ABCB analysis Transcript powered by AlphaStreet This article is a transcript of this conference call produced for The Motley Fool. Ameris Bancorp (NASDAQ: ABCB) Q3 2018 Earnings Conference Call Oct. 19, 2018 , 10:00 a.m. For the quarter, it improved to 54.4% in the third quarter from 57.5% reported last quarter, and 61.1% reported in the third quarter of '17. | Duration: 48 minutes Call participants: Nicole Stokes -- Chief Financial Officer Dennis Zember -- President, Chief Executive Officer Jon Edwards -- Executive Vice President, Chief Credit Officer KBW -- -- Analyst Tyler Stafford -- Stephens Inc. -- Analyst Casey Whitman -- Sandler O'Neill -- Analyst Jennifer Demba -- SunTrust Robinson and Humphrey -- Analyst Christopher Marinac -- FIG Partners -- Analyst More ABCB analysis Transcript powered by AlphaStreet This article is a transcript of this conference call produced for The Motley Fool. Ameris Bancorp (NASDAQ: ABCB) Q3 2018 Earnings Conference Call Oct. 19, 2018 , 10:00 a.m. Dennis Zember -- President, Chief Executive Officer Impacted the -- Nicole and I are calculating that alone impacted the growth rate -- the annualized growth rate by about 4%, little more than 4%, just the -- just that repositioning. |
27892.0 | 2018-10-17 00:00:00 UTC | 2 Financial Stocks on Our Radar This Week | ABCB | https://www.nasdaq.com/articles/2-financial-stocks-our-radar-week-2018-10-17 | nan | nan | The big banks have reported earnings already, but there are a few smaller institutions we're keeping a close eye on.
In this week's "One to Watch" segment from Industry Focus: Financials , host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss why Synchrony Financial (NYSE: SYF) and Ameris Bancorp (NASDAQ: ABCB) are on their radar, and what they're looking for when both companies report earnings.
A full transcript follows the video.
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This video was recorded on Oct. 15, 2018.
Jason Moser: Matt, we're going to wrap it up here real quick here with One to Watch earning season in full tilt, so there will be plenty to choose from. What is your One to Watch for this coming week?
Matt Frankel: I keep my eye on Synchrony Financial. They are one of the big issuers of stored credit cards and they are an online bank. They report earnings on Friday and there are some couple of things I'm watching for. No. 1, they announced recently that they lost their partnership with Walmart , which is a big deal. This is like when American Express lost its Costco partnership. This is the big thing in this business. So, I'm interested to see how are they planning to rebound from that. They said at the time of the announcement that they we'll be able to replace all that lost revenue within a couple of years. So, I want to know how. They're a credit card business, so they're going to be a big beneficiary of rising interest rates. Because the big banks surprised us with, their default rates dropped, their credit quality is improving. I want to see if Synchrony is trending the same way. It could be a big profitability boost for the company.
Moser: And the ticker?
Frankel: SYF.
Moser: OK, good deal! I'm going to be watching Ameris Bancorp, ticker ABCB. They are a little community bank based out of Moultrie, Georgia. Folks who have followed me for any period of time know I've been following this bank for quite some time. They have earnings coming out on Friday. It's always been a story of growing their assets under management. Growth from the financial crisis was a neat part of the story early on with a lot of those failed institutions from the Great Recession. They essentially had these FDIC-aided acquisitions, which pretty much protected them from any downside while helping them grow out the actual customer base and asset base there. This is a very well-run bank that has seen a little bit of a pullback recently with the market volatility. Still, I think, a lot of things to like about what they're doing. Still just a small cap, you know, and we talk about big banks. So, it's just a $2 million market cap bank here.
But, earnings out on Friday. I'll be interested to see what they have to tell us. Also, just to note, we have PayPal earnings coming out this week, as well, on Thursday. We'll certainly cover that on next week's show.
Jason Moser owns shares of PYPL. Matthew Frankel, CFP owns shares of AXP. The Motley Fool owns shares of and recommends PYPL. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In this week's "One to Watch" segment from Industry Focus: Financials , host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss why Synchrony Financial (NYSE: SYF) and Ameris Bancorp (NASDAQ: ABCB) are on their radar, and what they're looking for when both companies report earnings. I'm going to be watching Ameris Bancorp, ticker ABCB. Jason Moser: Matt, we're going to wrap it up here real quick here with One to Watch earning season in full tilt, so there will be plenty to choose from. | In this week's "One to Watch" segment from Industry Focus: Financials , host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss why Synchrony Financial (NYSE: SYF) and Ameris Bancorp (NASDAQ: ABCB) are on their radar, and what they're looking for when both companies report earnings. I'm going to be watching Ameris Bancorp, ticker ABCB. Jason Moser owns shares of PYPL. | In this week's "One to Watch" segment from Industry Focus: Financials , host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss why Synchrony Financial (NYSE: SYF) and Ameris Bancorp (NASDAQ: ABCB) are on their radar, and what they're looking for when both companies report earnings. I'm going to be watching Ameris Bancorp, ticker ABCB. The big banks have reported earnings already, but there are a few smaller institutions we're keeping a close eye on. | In this week's "One to Watch" segment from Industry Focus: Financials , host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss why Synchrony Financial (NYSE: SYF) and Ameris Bancorp (NASDAQ: ABCB) are on their radar, and what they're looking for when both companies report earnings. I'm going to be watching Ameris Bancorp, ticker ABCB. After all, the newsletter they have run for over a decade, the Motley Fool Stock Advisor, has tripled the market. |
27893.0 | 2018-10-17 00:00:00 UTC | Blackstone (BX) to Post Q3 Earnings: What's in the Offing? | ABCB | https://www.nasdaq.com/articles/blackstone-bx-to-post-q3-earnings%3A-whats-in-the-offing-2018-10-17 | nan | nan | BlackstoneBX is scheduled to report third-quarter 2018 results on Oct 18, before the opening bell. Its revenues and earnings are projected to grow on a year-over-year basis.
In the last reported quarter, the company's economic net income surpassed the Zacks Consensus Estimate. Growth in assets under management (AUM) and rise in revenues were partially offset by higher expenses.
Moreover, Blackstone boasts an impressive earnings surprise history. Its earnings have surpassed estimates in each of the trailing four quarters with an average positive surprise of 22.9%.
However, activities of the company in the third quarter failed to win analysts' confidence. As a result, its Zacks Consensus Estimate for earnings of 73 cents has moved 2.7% lower over the past 30 days. Nonetheless, the figure reflects a year-over-year improvement of 5.8%.
In fact, the consensus estimate for sales of $1.82 billion reflects rise of 4.5% from the year-ago quarter.
Factors to Influence Q3 Results
Driven by net inflows, the company's fee-earning AUM and total AUM have been witnessing consistent growth since the past few years. Notably, with an improvement in the overall economic scenario, Blackstone's fund-raising ability is likely to continue aiding the uptrend in its fee-earning AUM and total AUM in the to-be-reported quarter.
The Zacks Consensus Estimate for fee-earning AUM for the third quarter is $337 billion, which reflects an improvement of 17.8% year over year. Also, the consensus estimate for total AUM of $452 billion depicts 16.8% growth from the prior-year quarter end.
Given the growth in assets, the company's performance fee is expected to be positively impacted. Estimates for performance fees (segment revenues) of $933 million indicate an increase of 4.2% on a year-over-year basis.
Additionally, net management and advisory fees (segment revenues) are projected to be $735 million, up 6.2% from the year-ago quarter.
However, because of rise in compensation and benefit costs, the company's overall expenses remained elevated in the past few years. Moreover, as its well-performing funds require more headcount, expenses are likely to increase further during the quarter.
Here is what our quantitative model predicts:
We cannot conclusively predict whether Blackstone will beat the Zacks Consensus Estimate this time. This is because it doesn't have the right combination of the two key ingredients - a positive Earnings ESP and Zacks Rank #3 (Hold) or higher - for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Earnings ESP: The Earnings ESP for Blackstone is -1.07%.
Zacks Rank: Blackstone currently has a Zacks Rank of 2 (Buy), which increases the predictive powerof ESP. But we need to have a positive Earnings ESP to be sure of the positive surprise.
The Blackstone Group L.P. Price and EPS Surprise
The Blackstone Group L.P. Price and EPS Surprise | The Blackstone Group L.P. Quote
Stocks That Warrant a Look
Here are some stocks that you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.
M&T Bank Corporation MTB is slated to release results on Oct 18. The company has an Earnings ESP of +0.35% and carries a Zacks Rank of 3. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
People's United Financial, Inc. PBCT has an Earnings ESP of +0.30% and holds a Zacks Rank of 2. It is slated to report quarterly numbers on Oct 18.
Ameris Bancorp ABCB has an Earnings ESP of +1.11% and has a Zacks Rank #3. It is scheduled to report results on Oct 19.
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Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
M&T Bank Corporation (MTB): Free Stock Analysis Report
Ameris Bancorp (ABCB): Free Stock Analysis Report
The Blackstone Group L.P. (BX): Free Stock Analysis Report
People's United Financial, Inc. (PBCT): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp ABCB has an Earnings ESP of +1.11% and has a Zacks Rank #3. Click to get this free report M&T Bank Corporation (MTB): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report The Blackstone Group L.P. (BX): Free Stock Analysis Report People's United Financial, Inc. (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. In the last reported quarter, the company's economic net income surpassed the Zacks Consensus Estimate. | Click to get this free report M&T Bank Corporation (MTB): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report The Blackstone Group L.P. (BX): Free Stock Analysis Report People's United Financial, Inc. (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. Ameris Bancorp ABCB has an Earnings ESP of +1.11% and has a Zacks Rank #3. In the last reported quarter, the company's economic net income surpassed the Zacks Consensus Estimate. | Click to get this free report M&T Bank Corporation (MTB): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report The Blackstone Group L.P. (BX): Free Stock Analysis Report People's United Financial, Inc. (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. Ameris Bancorp ABCB has an Earnings ESP of +1.11% and has a Zacks Rank #3. This is because it doesn't have the right combination of the two key ingredients - a positive Earnings ESP and Zacks Rank #3 (Hold) or higher - for increasing the odds of an earnings beat. | Ameris Bancorp ABCB has an Earnings ESP of +1.11% and has a Zacks Rank #3. Click to get this free report M&T Bank Corporation (MTB): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report The Blackstone Group L.P. (BX): Free Stock Analysis Report People's United Financial, Inc. (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. In the last reported quarter, the company's economic net income surpassed the Zacks Consensus Estimate. |
27894.0 | 2018-10-17 00:00:00 UTC | Loan Growth & Fee Income to Aid SunTrust's (STI) Q3 Earnings | ABCB | https://www.nasdaq.com/articles/loan-growth-fee-income-to-aid-suntrusts-sti-q3-earnings-2018-10-17 | nan | nan | SunTrust BanksSTI is scheduled to report third-quarter 2018 results on Oct 19, before the opening bell. Its revenues and earnings are projected to grow year over year.
In the last reported quarter, the company's earnings surpassed the Zacks Consensus Estimate. Results benefited from rise in revenues and lower provisions. However, in increase in non-interest expenses was the undermining factor.
SunTrust has an impressive earnings surprise history. Over the trailing four quarters,its earnings surpassed the Zacks Consensus Estimate in three and matched in one, the average beat being 8.7%.
However, the company's activities in the third quarter were not able to impressive the analysts. As a result, the Zacks Consensus Estimate for earnings of $1.38 moved 1.4% lower over the past 30 days. Nonetheless, the figure represents year-over-year growth of 30.2%.
Moreover, the consensus estimate for revenues of $2.34 billion reflects a rise of 2.7% from the prior-year quarter.
Now, let's check out the factors are expected to impact SunTrust's third-quarter results.
Factors at Play
Net interest income to improve: The quarter witnessed a modest rise in lending activity, mainly in the areas of commercial and industrial, to which SunTrust has significant exposure. Further, increase in loans is expected to have led to a rise in earning assets. The Zacks Consensus Estimate for average earning assets of $186 billion for the to-be-reported quarter reflects nearly 1% rise on a sequential basis.
Thus, given the loan growth and higher interest rates, SunTrust is likely to record a rise in net interest income in the third quarter. Further, management expects net interest margin to remain stable or increase 2 basis points sequentially.
Relatively stable non-interest income: While overall mortgage servicing fees remained decent in the third quarter, production volumes slowed down. Thus, mortgage production income will likely be subdued. Also, rising interest rates have hampered activity and thus this segment is not going to be much of a help either. So, SunTrust's overall mortgage revenues are not expected to witness much improvement.
Coming to investment banking activities, equity issuances globally might get a boost from IPOs and follow-on offerings, thereby having a positive impact on the related fees. However, the trend of pocketing solid advisory and underwriting fees for debt issuance may reverse to some extent in the to-be-reported quarter. Thus, investment banking income is expected to remain relatively stable.
Also, given the low volatility experienced in the third quarter, trading activities seem to be muted following the impressive first-half performance. This is expected to have an adverse impact on SunTrust's trading income.
Decline in operating expenses to lend some support: Driven by branch consolidation efforts, SunTrust's expenses have been declining for the past few quarters. This is expected to continue in the to-be-reported quarter as well.
Asset quality to offer some support: SunTrustexpects loan loss provision to match net charge-offs in addition to providing for loan growth. Further, the consensus estimate for non-performing assets of $796 million for the to-be-reported quarter shows a 2.2% decline on a sequential basis.Likewise, estimates for non-performing loans of $734 million reflect a decrease of 2.8% from the prior quarter.
Now, let's check what our quantitative model predicts.
Chances of SunTrust beating the Zacks Consensus Estimate in the to-be-reported quarter are low. This is because it doesn't have the right combination of the two key ingredients - a positive Earnings ESP and Zacks Rank #3 (Hold) or higher - for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Earnings ESP: The Earnings ESP for SunTrust is -0.09%.
Zacks Rank: SunTrust currently carries a Zacks Rank #3. This increases the predictive power of Earnings ESP. But we need to have a positive Earnings ESP to be sure of the positive surprise.
SunTrust Banks, Inc. Price and EPS Surprise
SunTrust Banks, Inc. Price and EPS Surprise | SunTrust Banks, Inc. Quote
Stocks That Warrant a Look
Here are some bank stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around.
M&T Bank Corporation MTB is slated to release results on Oct 18. The company has an Earnings ESP of +0.35% and carries a Zacks Rank of 3. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
People's United Financial, Inc. PBCT has an Earnings ESP of +0.30% and holds a Zacks Rank of 2. It is slated to report quarterly numbers on Oct 18.
Ameris Bancorp ABCB has an Earnings ESP of +1.11% and has a Zacks Rank #3. It is scheduled to report results on Oct 19.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
SunTrust Banks, Inc. (STI): Free Stock Analysis Report
M&T Bank Corporation (MTB): Free Stock Analysis Report
Ameris Bancorp (ABCB): Free Stock Analysis Report
People's United Financial, Inc. (PBCT): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp ABCB has an Earnings ESP of +1.11% and has a Zacks Rank #3. Click to get this free report SunTrust Banks, Inc. (STI): Free Stock Analysis Report M&T Bank Corporation (MTB): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report People's United Financial, Inc. (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. Factors at Play Net interest income to improve: The quarter witnessed a modest rise in lending activity, mainly in the areas of commercial and industrial, to which SunTrust has significant exposure. | Click to get this free report SunTrust Banks, Inc. (STI): Free Stock Analysis Report M&T Bank Corporation (MTB): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report People's United Financial, Inc. (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. Ameris Bancorp ABCB has an Earnings ESP of +1.11% and has a Zacks Rank #3. Further, the consensus estimate for non-performing assets of $796 million for the to-be-reported quarter shows a 2.2% decline on a sequential basis.Likewise, estimates for non-performing loans of $734 million reflect a decrease of 2.8% from the prior quarter. | Click to get this free report SunTrust Banks, Inc. (STI): Free Stock Analysis Report M&T Bank Corporation (MTB): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report People's United Financial, Inc. (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. Ameris Bancorp ABCB has an Earnings ESP of +1.11% and has a Zacks Rank #3. The Zacks Consensus Estimate for average earning assets of $186 billion for the to-be-reported quarter reflects nearly 1% rise on a sequential basis. | Ameris Bancorp ABCB has an Earnings ESP of +1.11% and has a Zacks Rank #3. Click to get this free report SunTrust Banks, Inc. (STI): Free Stock Analysis Report M&T Bank Corporation (MTB): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report People's United Financial, Inc. (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. In the last reported quarter, the company's earnings surpassed the Zacks Consensus Estimate. |
27895.0 | 2018-10-16 00:00:00 UTC | Why Ameris Bancorp (ABCB) Might Surprise This Earnings Season | ABCB | https://www.nasdaq.com/articles/why-ameris-bancorp-abcb-might-surprise-this-earnings-season-2018-10-16 | nan | nan | Investors are always looking for stocks that are poised to beat at earnings season and Ameris BancorpABCB may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.
That is because Ameris Bancorp is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings - with the most up-to-date information possible - is a pretty good indicator of some favorable trends underneath the surface for ABCB in this report.
In fact, the Most Accurate Estimate for the current quarter is currently at 91 cents per share for ABCB, compared to a broader Zacks Consensus Estimate of 90 cents per share. This suggests that analysts have very recently bumped up their estimates for ABCB, giving the stock a Zacks Earnings ESP of +1.11% heading into earnings season.
Ameris Bancorp Price and EPS Surprise
Ameris Bancorp Price and EPS Surprise | Ameris Bancorp Quote
Why is this Important?
A positive reading for the Zacks Earnings ESP has proven to be very powerful in producing both positive surprises, and outperforming the market. Our recent 10-year backtest shows that stocks that have a positive Earnings ESP and a Zacks Rank #3 (Hold) or better show a positive surprise nearly 70% of the time, and have returned over 28% on average in annual returns (see more Top Earnings ESP stocks here ).
Given that ABCB has a Zacks Rank #3 and an ESP in positive territory, investors might want to consider this stock ahead of earnings. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Clearly, recent earnings estimate revisions suggest that good things are ahead for Ameris Bancorp, and that a beat might be in the cards for the upcoming report.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Ameris Bancorp (ABCB): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | After all, analysts raising estimates right before earnings - with the most up-to-date information possible - is a pretty good indicator of some favorable trends underneath the surface for ABCB in this report. Given that ABCB has a Zacks Rank #3 and an ESP in positive territory, investors might want to consider this stock ahead of earnings. Investors are always looking for stocks that are poised to beat at earnings season and Ameris BancorpABCB may be one such company. | Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report To read this article on Zacks.com click here. Investors are always looking for stocks that are poised to beat at earnings season and Ameris BancorpABCB may be one such company. After all, analysts raising estimates right before earnings - with the most up-to-date information possible - is a pretty good indicator of some favorable trends underneath the surface for ABCB in this report. | This suggests that analysts have very recently bumped up their estimates for ABCB, giving the stock a Zacks Earnings ESP of +1.11% heading into earnings season. Given that ABCB has a Zacks Rank #3 and an ESP in positive territory, investors might want to consider this stock ahead of earnings. Investors are always looking for stocks that are poised to beat at earnings season and Ameris BancorpABCB may be one such company. | Given that ABCB has a Zacks Rank #3 and an ESP in positive territory, investors might want to consider this stock ahead of earnings. Investors are always looking for stocks that are poised to beat at earnings season and Ameris BancorpABCB may be one such company. After all, analysts raising estimates right before earnings - with the most up-to-date information possible - is a pretty good indicator of some favorable trends underneath the surface for ABCB in this report. |
27896.0 | 2018-10-16 00:00:00 UTC | Loan Growth, Higher Rates to Aid KeyCorp's (KEY) Q3 Earnings | ABCB | https://www.nasdaq.com/articles/loan-growth-higher-rates-to-aid-keycorps-key-q3-earnings-2018-10-16 | nan | nan | KeyCorpKEY is slated to announce third-quarter 2018 results on Oct 18, before the opening bell. The company is expected to show some improvement in net interest income (NII), driven by higher interest rates and decent loan growth, while the flattening of the yield curve and higher deposit betas will likely to hamper growth to some extent.
While the overall loan growth in the third quarter was not impressive, commercial and industrial loans witnessed modest rise. Notably, the Zacks Consensus Estimate for average total loans of $89.8 billion for the quarter indicates growth of 1.4% sequentially.
Driven by loan growth, earning assets are also likely to rise. The consensus estimate for average interest earning assets of $124.7 billion for the to-be-reported quarter indicates an increase of 1.1% from the prior-quarter end.
Thus, KeyCorp's NII, one of the main revenue sources, is expected to support earnings growth. The Zacks Consensus Estimate for NII (tax equivalent basis) of $1 billion for the to-be-reported quarter reflects 1.9% increase on a sequential basis.
Let's check out the other factors that are expected to influence KeyCorp's third-quarter performance:
Muted non-interest income growth: KeyCorp's third-quarter non-interest income will likely benefit from a rise in service charge on deposits as deposit balances are expected to improve.
Seasonal slowdown and lower debt placement activities are expected to hamper BB&T's investment banking performance to some extent. Also, decline in global M&A deal volume in the quarter will likely hamper the company's advisory fees to some extent. Nonetheless, strong M&A deal pipeline over the prior quarters will likely provide respite.
Further, mortgage banking fees are not expected to improve much mainly due to a slowdown in refinancing activities due to higher rates and lower mortgage originations.
Thus, because of the above-mentioned factors, BB&T's non-interest income growth is expected to remain subdued in the third quarter.
Expenses might not provide much support: While KeyCorp's efforts to diversify products, reorganize operations and exit unprofitable/non-core businesses are likely to save costs, its continued investments in its franchise and inorganic growth strategies are expected to keep overall expenses elevated.
Asset quality to aid results: The consensus estimate for non-performing asset of $547 million indicates a decline of 4.2% sequentially. Likewise, estimates for non-performing loans of $519 million reflect a decrease of 4.8% from the prior quarter.
As KeyCorp is likely to witness rise in loans, a corresponding increase in provision for loan losses is expected. Overall, this is expected to be manageable.
Here is what our quantitative model predicts:
Chances of KeyCorp beating the Zacks Consensus Estimate in the third quarter are low. This is because it doesn't have the right combination of the two key ingredients - a positive Earnings ESP and Zacks Rank #3 (Hold) or higher - for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Earnings ESP: The Earnings ESP for KeyCorp is -0.90%.
Zacks Rank: KeyCorp currently carries a Zacks Rank #3. But we need to have a positive Earnings ESP to be sure of the earnings beat.
Notably, the Zacks Consensus Estimate for earnings for the to-be-reported quarter is 44 cents, which reflects a year-over-year improvement of 25.7%. Also, the consensus estimate for sales of $1.63 billion indicates 5.9% growth from the prior-year quarter.
Nonetheless, shares of KeyCorp have gained 2.6% for the three months ended Sep 30, 2018, underperforming the industry 's rally of 2.9%.
Stocks That Warrant a Look
Here are a few stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.
M&T Bank Corporation MTB is slated to release results on Oct 18. The company has an Earnings ESP of +0.35% and carries a Zacks Rank of 3. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
People's United Financial, Inc. PBCT has an Earnings ESP of +0.30% and holds a Zacks Rank of 2 (Buy). It is slated to report quarterly numbers on Oct 18.
Ameris Bancorp ABCB has an Earnings ESP of +1.11% and holds a Zacks Rank #3. It is scheduled to report results on Oct 19.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
KeyCorp (KEY): Free Stock Analysis Report
M&T Bank Corporation (MTB): Free Stock Analysis Report
Ameris Bancorp (ABCB): Free Stock Analysis Report
People's United Financial, Inc. (PBCT): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp ABCB has an Earnings ESP of +1.11% and holds a Zacks Rank #3. Click to get this free report KeyCorp (KEY): Free Stock Analysis Report M&T Bank Corporation (MTB): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report People's United Financial, Inc. (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. The consensus estimate for average interest earning assets of $124.7 billion for the to-be-reported quarter indicates an increase of 1.1% from the prior-quarter end. | Click to get this free report KeyCorp (KEY): Free Stock Analysis Report M&T Bank Corporation (MTB): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report People's United Financial, Inc. (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. Ameris Bancorp ABCB has an Earnings ESP of +1.11% and holds a Zacks Rank #3. The company is expected to show some improvement in net interest income (NII), driven by higher interest rates and decent loan growth, while the flattening of the yield curve and higher deposit betas will likely to hamper growth to some extent. | Click to get this free report KeyCorp (KEY): Free Stock Analysis Report M&T Bank Corporation (MTB): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report People's United Financial, Inc. (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. Ameris Bancorp ABCB has an Earnings ESP of +1.11% and holds a Zacks Rank #3. Notably, the Zacks Consensus Estimate for average total loans of $89.8 billion for the quarter indicates growth of 1.4% sequentially. | Ameris Bancorp ABCB has an Earnings ESP of +1.11% and holds a Zacks Rank #3. Click to get this free report KeyCorp (KEY): Free Stock Analysis Report M&T Bank Corporation (MTB): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report People's United Financial, Inc. (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. The company is expected to show some improvement in net interest income (NII), driven by higher interest rates and decent loan growth, while the flattening of the yield curve and higher deposit betas will likely to hamper growth to some extent. |
27897.0 | 2018-10-16 00:00:00 UTC | BB&T (BBT) Q3 Earnings to Rise on Higher Loans & Fee Income | ABCB | https://www.nasdaq.com/articles/bbt-bbt-q3-earnings-to-rise-on-higher-loans-fee-income-2018-10-16 | nan | nan | BB&T CorporationBBT is slated to announce third-quarter 2018 results on Oct 18, before the market opens. Per the Fed's latest data , commercial and industrial loans recorded decent growth, with the quarter witnessing an overall modest improvement in lending activities.
Notably, BB&T anticipates total loans, on an annualized basis, to grow 2-4% sequentially in the to-be-reported quarter. Driven by loan growth, earning assets are likely to rise too. The Zacks Consensus Estimate for average interest earning assets of $1.96 trillion indicates a slight rise sequentially.
Also, management expects GAAP and core net interest margin to be improve on a sequential basis, supported by rise in interest rates. Thus, BB&T's net interest income (NII), one of the primary sources of revenues, will aid earnings growth. The Zacks Consensus Estimate for NII of $1.69 billion for the to-be-reported quarter reflects 2.1% growth from the prior quarter.
Now, let's check out some of the other factors that are likely to influence BB&T's performance:
Fee income to provide support: Given the rise in deposit balances, BB&T islikely to register a rise in service charge on deposits. The consensus estimate for service charge on deposits is $182 million, up 1.7% from the prior quarter.
Additionally, while rise in interest rates must have resulted in a fall in refinancing activity, overall mortgage originations seem to be decent in the third quarter. Thus, the Zacks Consensus Estimate for mortgage banking income of $94 million is stable sequentially.
Moreover, bankcard fees and merchant discounts are estimated to be $74 million, indicating a rise of 2.8% from the prior year.
Also, investment banking and brokerage fees and commissions are likely to support fee income growth to some extent. The consensus estimate for the same is $111 million, reflecting a rise of 1.8% sequentially.
However, BB&T is expected to witness a decline in insurance income for the to-be-reported quarter. The Zacks Consensus Estimate for insurance commission of $451 million shows 6.2% fall on a sequential basis.
Overall, total non-interest income is projected to remain relatively stablefrom the prior quarter as the consensus estimate for the to-be-reported quarter is pegged at $1.22 billion.
Expenses to rise: Excluding merger-related and restructuring charges, and other one-time items, BB&T expects expenses to increase 1-3% year over year.
Asset quality is not of much support: BB&T expects loan loss provision to match net charge-offs (NCOs) in addition to providing for loan growth. Further, management expects NCO rates to increase sequentially and be in the range of 35-45 basis points on the assumption of no deterioration in the economy.
The Zacks Consensus Estimate for non-performing assets of $620 million for the to-be-reported quarter shows a marginal decline on a sequential basis.
Here is what our quantitative model predicts:
The chances of BB&T beating the Zacks Consensus Estimate in the third quarter are low. This is because it doesn't have the right combination of the two key ingredients - a positive Earnings ESP and Zacks Rank #3 (Hold) or higher - for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Earnings ESP: The Earnings ESP for BB&T is -0.36%.
Zacks Rank: BB&T carries a Zacks Rank #3. But we need to have a positive Earnings ESP to be sure of the earnings beat.
BB&T Corporation Price and EPS Surprise
BB&T Corporation Price and EPS Surprise | BB&T Corporation Quote
Notably, the Zacks Consensus Estimate for earnings for the quarter is $1.00, which reflects year-over-year improvement of 28.2%. Further, the consensus estimate for sales of $2.91 billion indicates 3.6% growth from the prior-year quarter.
Stocks That Warrant a Look
Here are a few bank stocks that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat in their upcoming releases.
M&T Bank Corp. MTB is slated to release results on Oct 18. The company has an Earnings ESP of +0.35% and carries a Zacks Rank of 3. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
People's United Financial, Inc. PBCT has an Earnings ESP of +0.30% and holds a Zacks Rank of 2 (Buy). It is slated to report quarterly numbers on Oct 18.
Ameris Bancorp ABCB has an Earnings ESP of +1.11% and has a Zacks Rank #3. It is scheduled to report results on Oct 19.
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BB&T Corporation (BBT): Free Stock Analysis Report
M&T Bank Corporation (MTB): Free Stock Analysis Report
Ameris Bancorp (ABCB): Free Stock Analysis Report
People's United Financial, Inc. (PBCT): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Ameris Bancorp ABCB has an Earnings ESP of +1.11% and has a Zacks Rank #3. Click to get this free report BB&T Corporation (BBT): Free Stock Analysis Report M&T Bank Corporation (MTB): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report People's United Financial, Inc. (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. Per the Fed's latest data , commercial and industrial loans recorded decent growth, with the quarter witnessing an overall modest improvement in lending activities. | Click to get this free report BB&T Corporation (BBT): Free Stock Analysis Report M&T Bank Corporation (MTB): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report People's United Financial, Inc. (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. Ameris Bancorp ABCB has an Earnings ESP of +1.11% and has a Zacks Rank #3. The Zacks Consensus Estimate for non-performing assets of $620 million for the to-be-reported quarter shows a marginal decline on a sequential basis. | Click to get this free report BB&T Corporation (BBT): Free Stock Analysis Report M&T Bank Corporation (MTB): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report People's United Financial, Inc. (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. Ameris Bancorp ABCB has an Earnings ESP of +1.11% and has a Zacks Rank #3. The Zacks Consensus Estimate for NII of $1.69 billion for the to-be-reported quarter reflects 2.1% growth from the prior quarter. | Ameris Bancorp ABCB has an Earnings ESP of +1.11% and has a Zacks Rank #3. Click to get this free report BB&T Corporation (BBT): Free Stock Analysis Report M&T Bank Corporation (MTB): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report People's United Financial, Inc. (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. The Zacks Consensus Estimate for NII of $1.69 billion for the to-be-reported quarter reflects 2.1% growth from the prior quarter. |
27898.0 | 2018-10-12 00:00:00 UTC | Oversold Conditions For Ameris Bancorp (ABCB) | ABCB | https://www.nasdaq.com/articles/oversold-conditions-ameris-bancorp-abcb-2018-10-12 | nan | nan | Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.
In trading on Friday, shares of Ameris Bancorp (Symbol: ABCB) entered into oversold territory, hitting an RSI reading of 29.3, after changing hands as low as $43.14 per share. By comparison, the current RSI reading of the S&P 500 ETF ( SPY ) is 28.7. A bullish investor could look at ABCB's 29.3 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABCB shares:
Looking at the chart above, ABCB's low point in its 52 week range is $43.14 per share, with $59.05 as the 52 week high point - that compares with a last trade of $43.28.
Find out what 9 other oversold stocks you need to know about »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Friday, shares of Ameris Bancorp (Symbol: ABCB) entered into oversold territory, hitting an RSI reading of 29.3, after changing hands as low as $43.14 per share. A bullish investor could look at ABCB's 29.3 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABCB shares: Looking at the chart above, ABCB's low point in its 52 week range is $43.14 per share, with $59.05 as the 52 week high point - that compares with a last trade of $43.28. | The chart below shows the one year performance of ABCB shares: Looking at the chart above, ABCB's low point in its 52 week range is $43.14 per share, with $59.05 as the 52 week high point - that compares with a last trade of $43.28. In trading on Friday, shares of Ameris Bancorp (Symbol: ABCB) entered into oversold territory, hitting an RSI reading of 29.3, after changing hands as low as $43.14 per share. A bullish investor could look at ABCB's 29.3 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. | In trading on Friday, shares of Ameris Bancorp (Symbol: ABCB) entered into oversold territory, hitting an RSI reading of 29.3, after changing hands as low as $43.14 per share. The chart below shows the one year performance of ABCB shares: Looking at the chart above, ABCB's low point in its 52 week range is $43.14 per share, with $59.05 as the 52 week high point - that compares with a last trade of $43.28. A bullish investor could look at ABCB's 29.3 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. | In trading on Friday, shares of Ameris Bancorp (Symbol: ABCB) entered into oversold territory, hitting an RSI reading of 29.3, after changing hands as low as $43.14 per share. A bullish investor could look at ABCB's 29.3 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of ABCB shares: Looking at the chart above, ABCB's low point in its 52 week range is $43.14 per share, with $59.05 as the 52 week high point - that compares with a last trade of $43.28. |
27899.0 | 2018-10-12 00:00:00 UTC | Ameris Bancorp (ABCB) Q3 Earnings Preview: What to Watch Ahead of the Release | ABCB | https://www.nasdaq.com/articles/ameris-bancorp-abcb-q3-earnings-preview%3A-what-to-watch-ahead-of-the-release-2018-10-12 | nan | nan | Wall Street expects a year-over-year increase in earnings on higher revenues when Ameris Bancorp (ABCB) reports results for the quarter ended September 2018. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.
The earnings report, which is expected to be released on October 19, 2018, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on theearnings call it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus Estimate
This bank is expected to post quarterly earnings of $0.90 per share in its upcoming report, which represents a year-over-year change of +42.9%.
Revenues are expected to be $135.44 million, up 44.3% from the year-ago quarter.
Estimate Revisions Trend
The consensus EPS estimate for the quarter has been revised 0.69% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
Price, Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is subject to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time , and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Ameris Bancorp?
For Ameris Bancorp, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +1.11%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination indicates that Ameris Bancorp will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?
While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Ameris Bancorp would post earnings of $0.84 per share when it actually produced earnings of $0.74, delivering a surprise of -11.90%.
The company has not been able to beat consensus EPS estimates in any of the last four quarters.
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Ameris Bancorp appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Ameris Bancorp (ABCB): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Wall Street expects a year-over-year increase in earnings on higher revenues when Ameris Bancorp (ABCB) reports results for the quarter ended September 2018. Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report To read this article on Zacks.com click here. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. | Wall Street expects a year-over-year increase in earnings on higher revenues when Ameris Bancorp (ABCB) reports results for the quarter ended September 2018. Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report To read this article on Zacks.com click here. Price, Consensus and EPS Surprise Earnings Whisper Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. | Wall Street expects a year-over-year increase in earnings on higher revenues when Ameris Bancorp (ABCB) reports results for the quarter ended September 2018. Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report To read this article on Zacks.com click here. Price, Consensus and EPS Surprise Earnings Whisper Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. | Wall Street expects a year-over-year increase in earnings on higher revenues when Ameris Bancorp (ABCB) reports results for the quarter ended September 2018. Click to get this free report Ameris Bancorp (ABCB): Free Stock Analysis Report To read this article on Zacks.com click here. Price, Consensus and EPS Surprise Earnings Whisper Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. |
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