Ameris Bancorp (ABCB) CEO Dennis Zember on Merger Agreement with Fidelity Southern Corporation Conference Call (Transcript)

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About: Ameris Bancorp (ABCB)
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Ameris Bancorp (NASDAQ:ABCB) Ameris Bancorp and Fidelity Southern Corporation Merger Agreement Conference Call December 17, 2018 11:00 AM ET

Executives

Nicole Stokes - EVP & CFO

Dennis Zember - President & CEO

Jim Lahaise - Chief Strategy Officer of Ameris

Palmer Proctor - President of Fidelity Southern Corporation and CEO of Fidelity Bank

Charlie Christi - CFO of Fidelity Southern Corporation and Fidelity Bank

Analysts

Woody Lay - KBW

Tyler Stafford - Stephens Inc

Brett Rabatin - Piper Jaffray

Christopher Marinac - FIG Partners

Operator

Good day and welcome to the Ameris Bancorp and Fidelity Southern Corporation Merger Agreement 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.

At this time, I would now like to turn the conference over to Nicole Stokes, Executive Vice President and Chief Financial Officer. Please go ahead.

Nicole Stokes

Thank you, Denise, and thank you to all who have joined our call today. During the call, we will be referencing the press release and the presentation that are available on the Investor Relations section of our website at amerisbank.com, as well as on the SEC's website.

I am joined on the call today with Dennis Zember, President and CEO of Ameris Bancorp; Jim Lahaise, our Chief Strategy Officer of Ameris; as well as Palmer Proctor, President of Fidelity Southern Corporation and CEO of Fidelity Bank; and Charlie Christi the CFO of Fidelity Southern Corporation and Fidelity Bank.

Dennis and Palmer will begin with some opening comments about our announcement this morning and then I will discuss the details of the deal including our assumptions and expected economics. We will be available for questions at the end of the call.

Before we begin, I have to 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 these factors that might cause results to differ in our press release and in our SEC filings, which are available on those websites. 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.

And with that, I’ll turn it over to Dennis Zember for opening comments.

Dennis Zember

Thank you, Nicole, and good morning everyone. I appreciate you've taken the time this morning to join us on this conference call concerning the merger of Fidelity Southern Corporation into Ameris Bancorp. This morning, I'm in Atlanta in the offices of Fidelity Bank with Palmer to share with you the good news about this opportunity.

As far as I know, this is the first time Fidelity Southern has considered this type of transaction. On behalf of our company, our Board of Directors and our staff, we are honored that it was Ameris Bank that got the call. I think it's a testament to the kind of organization we've built our reputation in the market and our image with bankers and customers. It's our company realizing our vision that was crafted over 45 years ago in Moultrie, Georgia. This is a rare opportunity for such a transformative deal. It creates an absolute powerhouse of a banking franchise, and I want to thank Jim Miller and Palmer and their Board for being so collaborative in building this deal that I think truly is a win-win for both organizations.

It was just the year ago that we announced the Hamilton Bank acquisition, and we've begun to discuss our vision for Atlanta. That vision called for us to be $5 billion or more with market presence and a reputation that would position us as a community bank of choice for top bankers and customers. It's been a long time since this entire market has been served by an Atlanta headquartered Community Bank with the intensity and ambition to really disrupt the business of the super-regionals that dominate this market. Combining with Fidelity and Atlanta, Ameris Bank will have about 80 offices, over 2,000 employees wearing our jersey. We'll be the largest community bank in the city with the broadest reach in the individual community bank into individual communities, and we'll be managing about $7 billion in total assets.

The pace at which we realized the first part of our vision should tell you something about how serious we are about our franchise and about this market. Palmer and I and our families have known each other for almost two decades. We've respected each other's competitors and have served exactly the same role for our respective organizations. We've talked in the past about putting these companies together but the time was not right until earlier in this year. A lot of thought and planning have gone into what we are announcing this morning, and I'm very confident in the integration. Palmer joining our executive team immediately brings more depth to one of the hardest working teams out there, and his Atlanta community presence and leadership will distinguish us.

There are a lot of ways to look at this opportunity for Ameris Bank. In the short term, this acquisition greatly alleviates the number one pressure on earnings that our industry is facing with deposit costs and challenges for deposit growth. Fidelity's deposit costs are 25% lower than Ameris Bank's, and their deposit betas reflect the premium franchise that sells more on accessibility and on relationship than just on price. They have admirably leveraged their market presence just as you would have expected.

In the short term, we will restructure the Fidelity balance sheet, increasingly away from the indirect auto business, they've already started this process. We want to focus more on the commercial opportunity that our image in Atlanta will drive. We aren't expecting to do this with breakneck pace, because there’s absolutely no quality issue with the current balance sheet. There is a yield pickup that's important to unlock, and there’s cash flows we will need to fund the commercial activity, but our deal pricing is favorable enough that it allows us to be conservative. That's critical to understand when you're evaluating this deal that we don't have to reach or be overly aggressive to hit the meaningful economics that Nicole is going to discuss.

Long term, this deal moves our earnings per share growth rate higher by 150 to 200 basis points, but more importantly it increases the quality of our earnings. Core funding is the basic building block of every high quality franchise in any environment. Our day one balance sheet will be anchored with core deposits and our standing in this market will drive additional growth for decades.

I know that every investor on the call is thinking one thing, that's the read my lips moment, I'm having about book value dilution that we're taking on the deal. This deal in the short term beats the metrics on stock buyback, and in the long term is a strategic no-brainer. Our deal metrics that Nicole will cover are win-win for both companies. It is a premium to Lion’s last trade, but the price to adjusted tangible book and the premium on core deposits is right for Ameris Bank.

The pullback in our stock price over the past few weeks and the franchise value that we're creating together warranted another look at that commitment and at this deal against everything else we had in front of us. I'm very confident in our calculation on earn-back, and Nicole is going to discuss that a little more here shortly.

So with that, I will turn it over to Palmer for any comments he might want to share.

Palmer Proctor

Thank you, Dennis. I’ll be brief, but I’d like to start by reiterating what you've said about this being in the right time for us to combine and become the Community Bank of choice for top bankers and customers. This truly is a strategic combination, I’ve admired the success that Dennis, Nicole, and the entire Ameris team have earned over the years and having the opportunity to partner with top leadership and the top performing franchise was paramount in our decision to merge.

We have very common cultures and a willingness to recognize talent on both organizations, within both organizations. As you know, we’ve been around for about 45 years, and during that time we’ve developed deep ties and deep commitments to our communities. And it’s both refreshing and encouraging to be partnering with a company that shares the same values. Furthermore, it strengthens our ability to continue to capture market share and increase shareholder value. We are the largest independent community bank headquartered in the Atlanta MSA.

Now, this partnership allows us to expand our customer service to communities throughout Florida, Alabama, and South Carolina. The synergy and efficiencies we intend to realize will increase shareholder value for both Fidelity and Ameris shareholders as we immediately become the premier Southeastern bank holding company. With similar cultures and complementary business lines and geographies, we believe we can be stronger together rather than as competitors, and I’m truly excited about the opportunities that lie ahead for us. I said in the announcement this morning and I’ll reiterate it now, I believe this merger is a win-win for both companies, shareholders, customers, employees and communities we serve, and this will be an outstanding combination.

I’ll stop there now and turn it back over Nicole to fill in some of the details of the transaction.

Nicole Stokes

Thank you, Palmer. I’m going to be referencing the investor presentation that we filed this morning as an 8-K and that can be found again on the SEC’s website and on our website amerisbank.com. As Dennis and Palmer both mentioned, this transaction maintenance from a strategic perspective, but the deal is financially accretive on several fronts that I’d like to discuss. The merger of Fidelity into Ameris amplifies and ramps up our expectations of what we had previously started in Atlanta and it allows for continued footprint expansion in Florida.

The consideration is a 100% stock with a fixed exchange ratio of 0.8. As of last Friday night that worked out to about $27.22 per share for Fidelity, which is a 27% market premium and 176% of the most recent reported tangible book value. Included in our purchase accounting adjustments is approximately 31 million of write-up of the premises that are on Fidelity’s balance sheet and taking that into consideration the purchase price represents, it drops down to about a 164% of adjusted tangible book value. This purchase price also equates to about an 8.8% deposit premium.

We expect to close the transaction in the second quarter of 2019, and we believe our balance sheet restructure and cost saving initiatives will be completed during 2020. The combined diluted ownership structure is expected to be about 68% Ameris and about 31.5% Fidelity. The combined company will be approximately 16.2 billion in assets with 12.7 billion in loans and 13.2 billion in deposits, representing about a 96% loan-to-deposit ratio with over 375,000 deposit account relationships, we now have the scale in our delivery platform and branch network along with brand recognition in our market that we can leverage for additional growth while stabilizing deposit costs.

We expect mid single digit accretion once the cost savings are fully phased in. Pro forma capital ratios remained well capitalized and this transaction further de-risks our balance sheet with core funding and a loan portfolio that outperformed in the past down cycle. Talking about tangible book value dilution, the deal is less than 3% of dilutive to tangible book with an earn-back period of approximately 2.5 years. We believe this level of dilution in earn back is acceptable due to the long-term transformation and impact this acquisition has on our company.

In addition, the valuable low cost core deposit base with historical low deposit betas strengthens our ability to protect our margin and will not be a risk on earnings. We’re not assuming any revenue synergies and a remodeling loan growth at about 8%, which we believe is realistic in the Atlanta MSA. The deal is positive to TCE, which we project to be just a touch below 8.5% at closing.

We project more rapid capital generation post-closing due to core earnings going forward which will assist us in accreting capital at a faster pace. Our CRE and C&D concentrations both improved with this transaction, remaining less than two thirds of the regulatory guidance. This gives us plenty of room to grow in the Atlanta market as we've repositioned the indirect audit portfolio into more commercial assets.

From a risk perspective, our due diligence team completed a comprehensive review of Fidelity's loan portfolio with a specific focus on commercial loans over $1 million and also higher risk categories such as construction, SBA, and the watch list loans. We intend to achieve the desired economics in this transaction through normal cost savings and from restructuring certain parts of the asset side of the balance sheet as we discussed.

We're modeling 40% cost sales with 50% of that realized in '19. Our path to these efficiencies are identified, they're well defined through our due diligence process and our teams are already working on integration and efficiency initiative. We have experience and success in implementing these types of integrations and we're confident in our ability in this transaction as well.

After the transaction closes, we'll be the strongest community bank in our home markets of Atlanta and Jacksonville. With our current growth rates, we believe we are just months away from being the fifth largest bank in both of these markets. This joining a forces of Ameris and Fidelity with our customer service focus, our branch network, our name recognition that all strengthens our ability to continue to track exceptional quality customers.

This transaction, in my opinion is truly transformational for Ameris. Combined, we will have the most recognizable community banking franchise in the Southeast. The size and scale in Atlanta and Jacksonville, two of the strongest markets in the Southeast really anchors us for strong growth and good economic time. However, the merged less risky balance sheet also protects us in a potential downturn scenario. Combined, we feel we're stronger and more prepared for the future than we were as competitors.

With that Dennis, I'll turn it over you for closing comments before the Q&A.

Dennis Zember

Before going off script, I will just reiterate a little of what Nicole just said and that is that together this, the way this deal positions this for good economic times and not so good economic times is one of the things that makes it once in a lifetime opportunity. Still sitting here today, we don't see negative trends economically. We don't see problems with customers or credit or anything like that. If that were to come upon us this balance sheet we think, we think we have fortified the balance sheet with core funding, a faster pace of earnings accretion and capital growth and the market presence. I think we've done something really unique and good for both companies.

With that, Denise, I'll turn it back to you for any questions that are in queue.

Question-and-Answer Session

Operator

Thank you, Mr. Zember. [Operator Instructions] And the first question will be from Brady Gailey of KBW. Please go ahead.

Woody Lay

Hey guys, this is actually Woody on for Brady. So, pro forma indirect auto will be about 12% of your total loan portfolio. Obviously, that's coming down, but I was just hoping to get your general thoughts on this space. Will you leave indirect all together or are you planning on keeping the operations open in Georgia and Florida?

Palmer Proctor

This is Palmer, Woody. Indirect has always been a core competency of ours. And right now, we've got about $100 million of run off per quarter. We could accelerate that a little bit more if we wanted to depending on the growth we've seen in the other areas. But right now, we pulled that business back as you know, exited several states with the exception of Georgia and Florida. And a lot of that's going to be predicated on the type of yields that we can generate on paper. I mean, our desire to fold it back was driven strictly by the metrics of that. So if we start seeing stronger yields coming out of that paper, that would certainly be an asset class that we would have, but it would never be at the level that we've had historically with Fidelity Bank and obviously the combined balance sheets reflect that.

Dennis Zember

Woody, going forward, once we get through the repositioning of that book into commercial assets, that line of business will probably be as small or smaller than the other lines of business we have; municipal, mortgage, warehouse, premium finance. Again, like Palmer saying driven by the credit quality we see and by yields.

Woody Lay

And then -- so with the theory, the total capital percentage going down the 226%, do you think you'll be more aggressive on the CRE front especially in Atlanta?

Dennis Zember

We will be more active. I don’t want to say more aggressive, but we will be more active, yes.

Woody Lay

And then last, I was just hoping if you all could disclose the total merger costs associated with the deal?

Dennis Zember

Nicole.

Nicole Stokes

Yes, it's $47.5 million pre-tax, about $38.4 million after tax.

Operator

And the next question will be from Tyler Stafford of Stephens Inc. Please go ahead.

Tyler Stafford

Congratulations on the deal, maybe just to start where Woody left off. Nicole, can you just confirm if those merger charges are included or not included in the TBV accretion and earn back?

Nicole Stokes

They are included.

Tyler Stafford

And then just on the indirect run off. Can you give us some color on what's assumed or what you guys modeled in terms of the pace of that runoff in the earnings, in accretion -- earnings accretion and tangible book value earn back math that you've laid out in the slide deck? What's the underlying assumption there?

Nicole Stokes

Sure. So, we have that running off at 100 million a quarter, but what we also have is the yield adjustment built into those purchase accounting adjustments bringing that portfolio from about a 3% yield up to a 5.5% yield.

Tyler Stafford

And then, maybe Nicole or Dennis one, can you just talk a little bit more specifically about how Fidelity Southern impacts your incremental funding pressure going forward once the deal is closed?

Dennis Zember

Thank you. If you look at where Fidelity Southern's – well one, the roll-off in the indirect auto book, the cash flows from that alone are probably about half of what we are -- just the roll off, the annual roll off we are forecasting of that is about half of the deposit growth that Ameris is going to get this year. So that alone -- that pressure alone is pretty serious.

Secondly, if you look at where Fidelity Southern's deposit costs are, they're able to maintain their existing balances where they have even growing at levels that are cheaper to ours. Again, that has something to do with their market presence there, who they are in this community. If I had to guess, we didn't quantify it, but I think if we had this deposit mix this year, this has been --what would you think, deposit costs, we'd probably be 5 to 10 basis points cheaper.

Tyler Stafford

And then Dennis, you've mentioned in your prepared remarks just the dilution math between what the buyback was and the deal. Just what -- can you share any color on what the exact kind of earn back math would be versus the buyback versus what you announced today?

Dennis Zember

Yes, at $35, the $100 million buyback that we had announced at $35 would be about 6% dilutive to book value. It would be about 6% accretive to earnings. The earn back is about 3.5 to 3.75 years. This deal is 2.5% dilutive to book value, 2.5 year earn back, and EPS accretion right in line with the book value -- excuse me, with the stock buyback. Against a stock buyback, this was this is a strategic no-brainer.

Tyler Stafford

And then just last one for me. I know this call isn't necessarily about the quarter, it's much more about the acquisition, but just considering the stock is now trading at roughly 7.5 times consensus '19 estimates, is there any color you can provide from just a high level perspective on how the fourth quarter is shaping up to give a little bit of confidence as we're heading into earnings?

Dennis Zember

Yes. I've got a few things, I'd say. Margin was -- before margin, I'll start with credit quality. No credit quality hiccups, no credit issues that are driving results positive or negative. All of our asset quality metrics at the end of November were better than where we finished the third quarter. And like I said, it's really starting off the call or after the end of the prepared remarks, we still don't see anything from -- at a customer level or a credit quality level that that scares us. We see nothing. Nothing's different credit wise in the third quarter, it is just except the metrics are better.

Deposit growth in the quarter has been what it normally is for us in the fourth quarter. I think Nicole's saying earlier about $500 million of deposit growth, a lot of that is seasonal. So, you've got to kind of cut through what just a fourth quarter event, but when you do that, the fourth quarter growth rate in deposits are going to be about what they were, maybe a touch better than what they were in the third quarter.

The core margin -- the core margin we've got is stable in the third quarter -- excuse me in the fourth quarter against where we were in the third quarter. Loan growth is, core loans will probably be a say, I guess, the core loans probably be up about 5% in the quarter. That takes into consideration the seasonality that we normally get with on the mortgage side and with ag, so and honestly a little better, that's probably a little better than where we thought it would be given knowing that seasonality was going to be there and where numbers came in, in the third quarter. Does that help?

Tyler Stafford

Yes, that's very helpful.

Dennis Zember

I will tell you one thing too. We've met with investors several times over the fourth quarter. We've done some traveling. We've done the some other meetings. And people are just nervous about 2019 earnings. We don't have -- we're not nervous sitting around the table here about our 2019 earnings. The strategies that we've got in place, where our operating ratios, our credit quality. We don't, there's nothing that's making us nervous about what we've said we're going to do in 2019.

Tyler Stafford

And just to be clear, you are talking about 2019 consensus earnings right?

Dennis Zember

Yes, correct.

Operator

The next question will be from Brett Rabatin of Piper Jaffray. Please go ahead.

Brett Rabatin

Wanted to first ask, you mentioned that you had identified revenue synergies but hadn't included. Can you maybe give us some color around what you might have from opportunity perspective on that?

Jim Lahaise

Sure. This is Jim, hey. Some areas that we see opportunities, there's going to be just in Atlanta about 140,000 checking accounts in this market and with our current deposit account per person, we'd see a lot of upside in the cross-sell opportunities in that, along with the size of our mortgage shop and our premium finance on the small business side and the C&I lending piece. We see a lot of opportunities that will be able to grow with the critical mass that we'll have in this market.

Dennis Zember

Ameris has all of our, Brett, all of our lines of business, mortgage, SBA, premium finance, all of our lines of business are headquartered up here. But we've never really been able to cross-sell well off of them because we've not had the market presence. We've that, that's going to change with this deal.

Brett Rabatin

Okay. And then maybe you give a little color on the right way to think about the loan portfolio from here, in terms of just you're obviously going to be focused more on commercial does the Fidelity Southern loan portfolio can be -- is it going to be flat from here? Maybe give us some color on what you're expecting or modeling for the growth or lack thereof of their portfolios? You obviously are picking up some good deposits to use.

Dennis Zember

We are -- I would say it's not going to be flat. I think we would see some growth in their portfolio although, not -- it's not going to -- we're not going to wow you with growth in their portfolio until the auto book is repositioned. As far as mix goes, we do want to be, I think with the market presence we have and the image we're going to drive, we're going to be better C&I lenders up here than Ameris Bank has been in the past or Fidelity, neither of us have really, have the wherewithal to focus on that. We didn’t have the presence or the image to be able to pick-up the best customers on the C&I side. The question earlier about CRE, we’ve got really for the opportunity, it’s up here.

We’ve got low, we've a lot of room on the CRE side, I know a lot of our bankers are excited to see that. So we’ll be, we’re not going to be aggressive, but we’re going to be able to play in that space. I think what Ameris has done, when you look at the mix on our balance sheet between residential. We’ve got a decent C&I portfolio now, but it’s not the traditional C&I business, it’s mortgage warehouse, it’s premium finance, it’s municipal lending. But I think you’ll see, with this deal and a few years out. I think you see us a better, we’d be a stronger C&I player still have those lines of business, probably have the CRE concentration a little low as a percentage of our total balance sheet than it is right now.

Palmer Proctor

And to further echo that, this is Palmer you know we probably started our migration of our balance sheet and transition. The beauty of this deal too is will help accelerate that. Because you could see just looking quarter-to-quarter, the significant pullback, we’ve had in indirect and further and more importantly the growth we're experience in the commercial and residential construction lending and mortgage lending as well.

So, all the metrics there from our side that will be continued growth. If you looked at us independently, we were telling the market too that when you factor in the run-off with indirect on top of our internal growth rate, we were going to be in the lower single digit growth net-net with that indirect run-off. But now given the Ameris opportunity, that’s going to help accelerate that and so we feel very bullish about next year’s loan growth.

Brett Rabatin

And then maybe one last one, if I can just around credit. The market is obviously pricing in or starting to expect some sort of recession or credit issues at some point in ’19 or ’20, you’ve got a $40 million total mark on credit. Can you maybe give us some color on, what you did from a review perspective on credit and then just you’re obviously expecting seems like the economy to stay strong, maybe just talk about, if you’re, from just a credit perspective doing anything differently?

Dennis Zember

Yes, I would say something Nicole can pile on, if she wants. Fidelity got a really granular portfolio. So, the due-diligence was -- we were pretty comp, it was comprehensive. If you take the auto book or first, let me say, in the last recession Fidelity’s balance sheet, their credit outperformed Ameris’ credit by about 40%. So when Nicole was talking earlier about how we fortified our balance sheet. Nicole -- excuse me, Nicole’s balance sheet, Fidelity’s balance sheet, definitely outperforms in a down market. If we’re sitting around thinking that that’s upon us and we’ve really done something remarkable here.

The review we looked at about 76% of construction lines. We looked at about half of all the SBA loans. We looked at about two-thirds of all the watch list loans that we’re not subject to a government guarantee, the SBA side. We looked at, which was almost all the loans over $200,000. So really, when you get down, when I’m saying two-thirds really we look at almost every loan over $200,000. We did a really deep review of anything that was OREO or substandard or non-performing, it was, I would say as comprehensive is we’ve done anywhere.

Jim Lahaise

And the other thing to keep in mind, one thing that made this due diligence for Ameris a little bit easier is given that half our book is the indirect paper and knowing the asset quality and the metrics of that, there aren’t any surprises in that book. It’s a lot easier to look through that portfolio than it is individual commercial loans often times. So half the balance sheet based on the historical metrics we’ve had in terms of charge-offs and delinquencies are absolutely de minimis. So that certainly provides additional comfort as we move forward into whatever credit cycle we’re going into.

Operator

[Operator Instructions] And your next question will come from Christopher Marinac of FIG Partners. Please go ahead.

Christopher Marinac

Dennis and Palmer, I want to talk about the back office and the systems and the type of investments that you need to make and also maybe just more color on the core operating system, so kind of a combination systems question.

Dennis Zember

Okay. We see this as a real opportunity to get, to strengthen what we've got on the operating side. Fidelity's got really strong operations, a really strong operations group here in Atlanta, a lot of access to the technical talent that we need. And we see that that we think that's a big advantage for us, we're going to take advantage of that. On the operating system, we've not decided yet, let me say that way. We've both operating systems are strong enough to handle what we've got but we will make a decision quick and move forward with that. I don't know if I, I don't think I answered your whole question.

Christopher Marinac

So if we think about the pro forma expenses, with the 40% cost saves, I think it'd be running maybe 2.5% of assets and I think well below 50 on efficiency. So I guess I want to know, sort of what type of new investments you have to make on the back end, and does that factor into the cost save like kind of happen after the fact and you'll realize these costs saves in '19 to '20, and then really kind of reinvest on the back end of that?

Nicole Stokes

No, Chris, our nets, our 40% was really a net calculation. So we realized there are things that we will have to reinvest in. And it's really some of the same areas that we've been looking at and talking about for the last couple quarters, just being a $16 billion organization as opposed to an $11 billion organization. And really those costs saves we've looked at and I think we can kind of break them down into maybe four categories. One of them being the balance sheet restructure, which gives us more on the revenue side versus the cost saves.

And then we have, we do have some administrative efficiencies that we can gather kind of between the operations groups and the not just operations, but all of the support functions, the enterprise services that. And some of those will be reallocated into those, reallocation of resources into the areas that we need to expand. And then we also have in the mortgage area. There is a lot of things that Fidelity's mortgage group does and under the leadership with John, I mean, and then there's also a side of that with the Ameris side.

So, we really feel like combining that with Robert and John together, the mortgage group can be more efficient and can be stronger together. And then the fourth group that I would say is kind of that branch network and there is some branch overlap. We have not publicly put those numbers and identified those branches in the public document, but some of those costs saves were identified from the branch overlap.

Christopher Marinac

Okay, that's great Nicole. That's really helpful I guess just the final question for you Dennis or Palmer too is. Your loan growth is obviously a key piece of Ameris earnings estimates in 2019. And Dennis it seems like you're still very comfortable with what's going on both this quarter as well as for next year. So that looks like it's almost a billion dollars growth. Is there any reason to slow down growth next year or does this merger kind of give you almost the green light to continue to push ahead just as a combined entity you can do more?

Dennis Zember

Chris one of the, all year I've relied on the fact if y'all look at what we did for the last year, and really through the first half of this year, billion dollars of growth was, we weren't being, we weren't pushing the accelerator too hard to get that. When we closed Hamilton and Atlantic Coast deal and we found ourselves in Tampa, Orlando and Atlanta in a bigger way, the opportunity to sell in those markets and sort of open those up to us with the new production teams and everything sort of gave me even more confidence that we could do a billion dollars. I think when you look at a growth, when you look at the, what we're going to have in Atlanta with this deal, yes, I still feel comfortable with a billion dollars.

And again it's not a billion dollars of growth straight off of core, of the core bank where it's where people would think it would be centered hard on CRE, I mean we're, we'll get growth in lines of business in municipal and premium finance, on warehouse, on some of the other stuff the SBA side. The core bank to do a billion dollars, the core bank would probably only have to do 7% or 8%. And when you look at off of their balances, and when you look at the market presence we'll have in Atlanta, Orlando, Tampa and all the other places that we're operating and being successful, I still have confidence in the billion dollars.

Operator

And ladies and gentlemen, this will conclude our question-and-answer session. I would like to hand the conference back over to Dennis Zember for his closing comments.

Dennis Zember

All right, thank you Denise, and thank you to everyone who's joining the call this morning for your time. Hope you hear that we're enthusiastic about this and about what this does for the future of Ameris. We'll be available for questions or comments, email or telephone, if you have anything you'd like to share. Thank you. Have a good day.

Operator

Thank you, sir. Ladies and gentlemen, the conference has concluded. Thank you for attending today's presentation. At this time, you may disconnect your lines.