Amerant Bancorp Inc. · NYSE:AMTB
Amerant Bancorp — Q3 2021 Earnings Presentation
31 slides from Amerant Bancorp's earnings presentation, Oct 20, 2021
Slide 1: Third Quarter 2021 Financial Review
Earnings Call October 21, 2021 Third Quarter 2021 Financial Review
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, including statements regarding the proposed clean-up merger (the "Merger"), the Class A Repurchase Program and the Company’s
Slide 3: Performance Highlights 3Q21
3 • All capital ratios are above "well capitalized" levels • Announced Company's intention to effect a clean-up merger in order to have just one class of common stock going forward; called special meeting of shareholders to take place on Nov. 15, 2021 • Board of Directors approved new Class A repurc
Slide 4: Core PPNR - 3Q21
4Core PPNR(1) - 3Q21 CORE PPNR (1) increased 8.0% compared to 2Q21 (1) Non-GAAP Financial Measure (2) In the second quarter of 2021, includes expenses in connection with the departure of certain Sr. officers and the elimination of various other support function positions, including the NYC LPO (( 3Q
Slide 5: Key Actions - 3Q21
5Key Actions - 3Q21 Several key actions of note, among others: – Non performing loans decreased 31.7%, compared to 2Q21; approximately $16.4 million from charge-offs (previously fully reserved), $13 million from upgrades and $9.4 million transferred to OREO – Continued downward repricing of customer
Slide 6: Focused on Key Performance Metrics
6 77.8% 74.2% 2Q21 3Q21 18.8% 21.5% 2Q21 3Q21 12.9% 13.3% 2Q21 3Q21 2.81% 2.94% 2Q21 3Q21 Focused on Key Performance Metrics Robust Deposit Base Robust Capital Position Higher Operating Profitability Rationalizing Cost Structure (1) Calculated based upon the average daily balance of total assets. (2
Slide 7: Amerant Mortgage ("AMTM")
7Amerant Mortgage ("AMTM") • Venture launched on Dec. 8, 2020 • Started taking applications on May 24, 2021 • Amerant Bank owns 51% and has 3 of 5 board seats; provides a line of credit of $10 million and a warehouse line for mortgage origination Data as of September 30, 2021 In Thousands Highlights
Slide 8: Investment Portfolio Balances and Yields
8 88.9% 11.1% U.S. Gov't sponsored enterprises 41.0% U.S. Gov't agency 29.1% Municipals 0.2% Corporate debt 29.5% US treasury 0.2% $1,317.7 $1,194.1 $1,220.4 $61.7 $93.3 $130.5 $24.4 $24.0 $23.9 2.26% 2.14% 2.25% 3Q20 2Q21 3Q21 0 500 1,000 1,500 86.7% 13.3% • Effective duration extended vs. 2Q21 due
Slide 9: Loan Portfolio Highlights
9 50.4% 48.6% 48.5% 48.5% 48.1% 20.5% 20.1% 19.5% 18.1% 16.9% 15.8% 16.2% 16.3% 16.8% 17.1% 10.1% 10.9% 10.9% 11.0% 11.4% 3.2% 4.2% 4.8% 5.5% 6.5% 3.64% 3.76% 3.77% 3.89% 3.92% 3Q20 4Q20 1Q21 2Q21 3Q21 66.5% 66.2% 66.1% 65.5% 68.2% 17.9% 17.8% 18.0% 18.4% 17.2% 12.6% 12.9% 12.9% 13.1% 11.4% 3.0% 3.1
Slide 10: New York LPO Update
10New York LPO Update • As announced in our 2Q21 call, AMTB officially closed the NYC loan production office • Reduced staff from 6 to 1 FTEs • Sub-lease of former office at 52nd and Madison expected to commence in 4Q21 • Elected to market and sell portion of portfolio in 3Q21 to shorten duration an
Slide 11: Credit Quality
11 $116.8 $110.9 $110.9 $104.2 $83.41.97% 1.90% 1.93% 1.86% 1.59% 3Q20 4Q20 1Q21 2Q21 3Q21 1.41% 0.40% —% 0.12% 1.16% 3Q20 4Q20 1Q21 2Q21 3Q21 • Credit quality remains sound and reserve coverage is strong; released $5.0 million from the ALL in 3Q21 and 2Q21, respectively • Over 80% of Non-Performing
Slide 12: Deposit Highlights
12 $5,878 $5,732 $5,678 $5,674 $5,626 $2,686 $2,679 $2,759 $2,835 $2,875 $1,767 $1,547 $1,388 $1,243 $1,107 $508 $634 $553 $531 $433 $917 $872 $978 $1,066 $1,211 0.82% 0.69% 0.60% 0.52% 0.44% 3Q20 4Q20 1Q21 2Q21 3Q21 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 $3,031 $2,635 $2,529 $2,535 2018 2019 2
Slide 13: Net Interest Income and NIM
13 $45.4 $48.7 $47.6 $50.0 $51.8 2.39% 2.61% 2.66% 2.81% 2.94% Net Interest Income NIM 3Q20 4Q20 1Q21 2Q21 3Q21 0 10 20 30 40 50 60 NII increased in 3Q21 primarily due to: • Lower overall cost of deposits: – Declines in average CD balances – Downward repricing of CDs – Increase in average NIB deposi
Slide 14: Noninterest Income
14 $20.3 $11.5 $14.2 $15.7 $13.4 $3.9 $4.2 $4.1 $4.3 $4.3 $4.3 $4.2 $4.6 $4.4 $4.6 $8.6 $1.0 $2.6 $1.3 $3.5 $2.1 $2.9 $5.7 $4.5 3Q20 4Q20 1Q21 2Q21 3Q21 0 2 4 6 8 10 12 14 16 18 20 22 7% 93% 11% 89% Noninterest Income Mix Noninterest Income Mix Commentary Noninterest income decreased in 3Q21 primari
Slide 15: Noninterest Expense
15 • Noninterest expense decreased in 3Q21 primarily due to: – Lower salaries and employee benefits expenses resulting from the nonrecurring of the $3.3 million in severance expenses recorded in 2Q21 – Lower occupancy and equipment expenses resulting from the nonrecurring of $0.8 million lease impai
Slide 16: Interest Rate Sensitivity
16 $209 $211 $214 $217 $219 -50 bps -25 bps BASE +25 bps +50 bps 160 180 200 (As of September 30, 2021) Fixed 53% Adjustable 47% Interest Rate Sensitivity By Interest TypeBy Rate Type By Repricing Term (1) NII and percentage change represents the base scenario of net interest income. The base scenar
Slide 17: Initiatives Update
17Initiatives Update • Increased percentage of noninterest-bearing deposits to total deposits and reduced brokered deposits to total deposits towards our targets of 25% and 5%, respectively; loan to deposit ratio in mid 90% range • Added talent and capabilities to our treasury management sales force
Slide 18: Initiatives Update: Clean-up Merger
18Initiatives Update Focused on increasing profitability and shareholder value • As announced on Sep. 13th, the Company intends to effect a clean-up merger, subject to shareholder approval, providing for: – Each outstanding share of Class B common stock to be automatically converted to 0.95 of a sha
Slide 19: Supplemental Loan Portfolio Information
Supplemental Loan Portfolio Information
Slide 20: Deferrals & Forbearance due to COVID-19
20Deferrals & Forbearance due to COVID-19 • 2 customers remaining totaling $37MM or 0.7% of total loans vs. 21.4% at 6/5/20 peak • All in CRE NY: 1 CRE retail $29MM, 1 CRE office with ground floor retail $8MM • Decrease compared to 2Q21 due to 1 CRE multifamily NY $5.2MM, forbearance expired, and pa
Slide 21: Loan portfolio by industry
21Loan portfolio by industry • Diversified portfolio - highest sector concentration, other than real estate, at 9.9% of total loans • 77% of total loans secured by real estate • Main concentrations: • CRE or Commercial Real Estate • Wholesale - Food • Retail - Gas stations • Services – Healthcare, R
Slide 22: Industries with escalated monitoring: Travel, Entertainment and Dining
22Industries with escalated monitoring Travel, Entertainment and Dining Very limited exposure: • Arts, Entertainment and Recreation $12 MM (0.2% of total loans) - $7 MM Bowling • Restaurants $40 MM (0.7% of total loans) - 47% Limited- service, 20% Full-service, 33% Other • Aviation $36 MM (0.7% of t
Slide 23: Industries with escalated monitoring: Commercial Real Estate
23Industries with escalated monitoring Commercial Real Estate (CRE) CRE Type FL TX NY Other Total % Total CRE % Total Loans Income Producing (1) Land and Construction Retail $ 650 $ 207 $ 260 $ — $ 1,117 42.4 % 20.4 % $ 1,091 $ 25 Multifamily 292 189 221 — 702 26.7 % 12.8 % 563 139 Office 307 16 57
Slide 24: Industries with escalated monitoring: CRE Hotels
24Industries with escalated monitoring CRE Hotels (As of 09/30/2021) • CRE Hotel portfolio is limited to 26 properties, majority of which are in popular travel destinations such as Miami Beach (#9 / $106 MM) and New York (#2 / $80 MM) • Three hotel construction loans to borrowers who are experienced
Slide 25: Industries with escalated monitoring: CRE Retail
25 9% 27% 39% 17% 8% 50% or less 50- 60% 60- 70% 70- 80% 80% or more 0% 10% 20% 30% 40% 50% 60% Industries with escalated monitoring CRE Retail (As of 09/30/2021) • Florida and Texas are focused on neighborhood shopping centers or service centers with basic needs related anchor stores, as well as th
Slide 26: Appendices
Appendices
Slide 27: Non-GAAP Financial Measures Reconciliations
27Appendix 1 Non-GAAP Financial Measures Reconciliations The following table sets forth selected financial information derived from the Company’s interim unaudited and annual audited consolidated financial statements, adjusted for certain costs incurred by the Company in the periods presented relate
Slide 28: Non-GAAP Financial Measures Reconciliations (cont'd)
28Appendix 1 Non-GAAP Financial Measures Reconciliations (cont’d) Three Months Ended, Nine Months Ended September 30, ($ in thousands) September 30, 2021 June 30, 2021 September 30, 2020 2021 2020 Net income (loss) attributable to Amerant Bancorp Inc. $ 17,031 $ 15,962 $ 1,702 $ 47,452 $ (10,195) Pl
Slide 29: Non-GAAP Financial Measures Reconciliations (cont'd)
29Appendix 1 Non-GAAP Financial Measures Reconciliations (cont’d) Three Months Ended, Nine Months Ended September 30, ($ in thousands, except per share amounts and percentages) September 30, 2021 June 30, 2021 September 30, 2020 2021 2020 Net income (loss) / Average stockholders' equity (ROE) 8.38 %
Slide 30: Non-GAAP Financial Measures Reconciliations (cont'd)
30Appendix 1 Non-GAAP Financial Measures Reconciliations (cont’d) (1) Expenses incurred for actions designed to implement the Company’s strategy as a new independent company. These actions include, but are not limited to reductions in workforce, streamlining operational processes, rolling out the Am
Slide 31: Thank you
Thank you Investor Relations InvestorRelations@amerantbank.com