Amerant Bancorp Inc. · NYSE:AMTB
Amerant Bancorp — Investor Presentation (March 2020)
39 slides from Amerant Bancorp's investor presentation, Mar 31, 2020
Slide 1: Investor Presentation
Investor Presentation As of March 31, 2020
Slide 2: Important Notices and Disclaimers
2 Important Notices and Disclaimers Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, including, without limitation, future financial and operating results; costs and revenues;
Slide 3: Who We Are
3 Who We Are Vision Mission To be recognized as a trusted financial To provide our customers with the advisor dedicated to building stronger financial products and services they and deeper customer relationships in need to achieve their success and life the markets we serve, leading to the goals, wi
Slide 4: About Us
About Us 4 Financial Highlights • Founded in 1979 • Acquired in 1987 by MSF (1) (in millions, except per share data 2015 2016 2017 2018 2019 1Q2020 and percentages) • 80.1% spin-off in Aug. 2018 Balance Sheet History • Rebranded as Amerant in June 2019 Assets $ 8,163 $ 8,434 $ 8,437 $ 8,124 $ 7,985
Slide 5: Investment Opportunity Highlights
5 Investment Opportunity Highlights Established Strong and Significant Fee Pathway to Well-Positioned Franchise in Diverse Deposit Loan Income Strong Attractive Base Portfolio (1) Platform Profitability Markets • Long history with • Combination of • Loan book well- • Wealth • Dynamic initiatives str
Slide 6: Experienced Management Team
6 Experienced Management Team Frederick • Chairman since January 2019 Copeland • Director of Company and Bank from 2007 to 2018 • Former President and CEO of Far East National Bank Chairman of the Board • Former President and CEO of Aetna International, Inc. • Former Chairman, President, and CEO of
Slide 7: Value Proposition and Brand Attributes
7 Value Proposition and Brand Attributes High Touch Service • Dynamic • Adaptable Meant for You • Attentive • Diligent • Responsive • Innovative By leveraging our experience and knowledge, we Trustworthy proactively anticipate your financial needs based on • Dependable where you are and where you pl
Slide 8: Market Strategy
8 Market Strategy Our strategy is to operate and expand in high-growth, diverse economies where we can build from our heritage serving the Hispanic community Miami-Dade MSA Target markets have: • Major industry sectors are trade, tourism, services, manufacturing, education, and real estate • Substan
Slide 9: Growing and Diverse Markets
Growing and Diverse Markets 9 Branch Footprint (1) Deposit Market Share (2) Market Demographics March 31, 2020 June 30, 2019 2010 – 2020 Est. Population Change 19 banking centers Deposits % of Market Market Branches ($mm) AMTB Share % 21.1% 13.7% Miami-Dade, FL 9 $4,793 81.6 3.6 7.0% Florida Broward
Slide 10: Ongoing Business Transformation
10 Ongoing Business Transformation From... To... Part of a diverse international financial group, Focused on traditional community banking with a sophisticated international customer business in the U.S. and an international base business to service valued relationships A number of non-core products
Slide 11: Summary of Our Strategic Plan
11 Summary of Our Strategic Plan Building on our strengths to shape our future Domestic focus Expanding Growth in Core, Increased with an Strong Credit Business and Domestic Profitability International Culture(1) Geographic Deposits and Returns Heritage Presence ▪ Protect and serve ▪ Exit higher-ris
Slide 12: Build on Improving Financial Performance
12 Build on Improving Financial Performance Increased Attractive Risk- Higher Net Rationalizing Domestic Adjusted Loan Interest Cost Structure Deposits Profile (1) Margin Non-performing Domestic Net Interest Efficiency Loans (2) Deposits Margin (3) Ratio (3) / Total Loans ($ in millions) 11.7% CAGR
Slide 13: Deep Culture of Enterprise Risk Management
13 Deep Culture of Enterprise Risk Management ü Enterprise-Wide Risk Governance ü Risk Culture ü Risk Appetite ü Strategic Planning Board of Directors Senior Management Three Lines of Defense 1 Front Line Units 2 Risk Management 3 Internal Audit • Own and manage their • Independent from front • Dire
Slide 14: Investment Portfolio
Investment Portfolio 14 Investment Securities Balances and Yields (1) Highlights ($ in millions) • Leveraging opportunities for higher-yield, longer 1,750 duration investments $24.2 $23.8 $70.3 $23.5 $73.9 $83.9 • Effective duration of 3.0 years as expected 1,500 prepayment speeds accelerated in the
Slide 15: Strategic Shift in Loan Mix Yielding Benefits
15 Strategic Shift in Loan Mix Yielding Benefits Loan Portfolio Loan Mix by Geography March 31, 2020 December 31, 2015 March 31, 2020 Financial Institutions & Acceptances 0.3% Consumer 2.5% 24.2% 1-4 Family 3.0% 10.0% 97.0% C&I 19.1% 75.8% § Domestic § International Owner CRE 51.8% Highlights Occupi
Slide 16: Balanced CRE Loan Portfolio
16 Balanced CRE Loan Portfolio CRE Portfolio CRE Loan Mix by Primary Market Area(1) March 31, 2020 March 31, 2020 Greater Houston 14.8% Hospitality New York 6.7% City area 23.6% Retail 39.0% Miami-Dade, Broward, and Other FL, Palm Beach TX, and NY/ Multifamily NJ 7.4% 28.4% counties 54.2% Industrial
Slide 17: Disciplined Credit Culture
17 Disciplined Credit Culture Robust Underwriting Standards Non-performing Assets(3) / Total Assets • Credit quality and reserve coverage remains strong 1.50% • Provision for loan losses of $22.0 million to account for estimated portfolio deterioration due to COVID-19; will continue to reassess prov
Slide 18: Highly Attractive Deposit Franchise
18 Highly Attractive Deposit Franchise Highlights Deposit Mix (1) Jumbo NIB March 31, 2020 Time, Demand, • Focus on developing domestic relationships as opposed to rate 13.6% 13.3% sensitive, non-relationship time deposits IB • Experienced 12% CAGR in domestic deposits as a result of Demand, increas
Slide 19: Wholesale Funding
19 Wholesale Funding FHLB and Other Borrowings (1) by Maturity Advances from the Federal Home Loan Bank and Other March 31, 2020 Borrowings (1) ($ in millions) Year of Interest Rate 1Q19 4Q19 1Q20 Maturity 2021 16.6% 2019 1.80% to 3.86% $ 385 $ — $ — 2022 2020 2020 0.44% to 2.63% 265 285 215 13.4% 1
Slide 20: Interest Income and Margin Trends
20 Interest Income and Margin Trends Highlights Impact on NII from Interest Rate Change (2) ($ in Millions and percentages) • In 1Q20 proactive steps to protect NIM: (As of March 31, 2020) – Redemption of $26.8 million in TruPs 3.6% 2.1% – Strategic deposit rate cuts 190 0.0% – Leveraged opportuniti
Slide 21: Wealth Management Franchise Expansion - Key Component of Noninterest Income
21 Wealth Management Franchise Expansion - Key Component of Noninterest Income Wealth Management Platform (1) 2020 YTD Noninterest Income Mix Total: $21.9 million Amerant Trust Amerant Investments § Deposits and service fees 19.6% § Brokerage, advisory, and fiduciary • Estate Planning • Brokerage Se
Slide 22: Increasing Operating Efficiency
22 Increasing Operating Efficiency Cost Initiatives Efficiency Ratio (1) 84.7% • Simplification of business model Rationalization and product offerings following 78.0% 78.8% 77.5% of Business Lines spin-off 73.8% • Deemphasized international business resulting in less 63.1% complexity and reduced co
Slide 23: Drivers for Improvement
23 Drivers for Improvement 1 Technology and Expense Saving Initiatives Continue to rationalize expenses and improve scalable platform, while investing in digital transformation to drive future profitability 2 Changing Business Mix Redeploy lower yielding loans into higher yielding domestic C&I, CRE,
Slide 24: Investment Highlights
24 Investment Highlights Focus on driving profitable growth and shareholder value Substantial and continuing insider ownership, approximately 30% Strong asset quality and domestic loan growth Focus on expanding domestic deposit base throughout our high growth U.S. markets Low cost deposits from inte
Slide 25: Supplemental Information: COVID-19 Update
Supplemental Information COVID-19 Update
Slide 26: Business Continuity Plan Status
26 Business Continuity Plan Status • Ensuring all operational processes are being executed on a daily basis with minimal impact to customers • Surveying critical vendor/suppliers readiness Operations, • Ensuring systems stability and bandwidth capacity to accommodate significant levels of connectivi
Slide 27: Relief Programs to Support Our Clients and Communities
Relief Programs to Support Our Clients 27 and Communities * The following credit programs and initiatives started in March and continue into April: • Convert P&I loans to IO for a 90 day period w/o escrow deferral Deferral • Convert P&I loans to IO for a 90 day period with escrow deferral Programs •
Slide 28: Loan portfolio by industry
Loan portfolio by industry 28 (As of 03/31/2020) Non- % Unfunded Real Real Total Commitme Highlights ($ in millions) Estate Estate Total Loans nts (8) Financial Sector (1) $ 5 $ 69 $ 74 1.6 % $ 17 • Diversified portfolio - highest sector Construction and Real Estate & Leasing: concentration, other t
Slide 29: Industries with escalated monitoring: CRE Hotels
29 Industries with escalated monitoring CRE Hotels (As of 03/31/2020) Hotels - LTV Hotels 60% 47% Boutique 50% 29% 40% 30% Full Service 37% 20% 18% 17% 12% 10% Limited Service 5% 34% 0% 50% or 50-60% 60-70% 70-80% 80% or less more Highlights • CRE Hotel portfolio is limited to 27 properties majority
Slide 30: Industries with escalated monitoring: CRE Retail
30 Industries with escalated monitoring CRE Retail (As of 03/31/2020) CRE Retail(1) CRE Retail - Single Retail - LTV Tenant(1)(2) 60% Theme/Festival Center Groceries Education 12% 3% Vacant 9% 48% Restaurant 3% 50% Community 4% Center 14% 40% Neighbor hood Banking Center 8% 30% 19% Food and Health 2
Slide 31: Appendices
Appendices
Slide 32: Summary Financial Statements
32 Appendix 1 Summary Financial Statements December 31, March 31, (in millions) 2015 2016 2017 2018 2019 2020 Assets Cash and cash equivalents $138.3 $135.0 $153.4 $85.7 $121.3 $271.1 (1) Total Securities 2,055.6 2,123.2 1,777.0 1,671.2 1,666.5 1,695.9 Loans Held for Sale (HFS) 9.7 — 5.6 — — — Loans
Slide 33: Summary Financial Statements (cont'd)
33 Appendix 1 Summary Financial Statements (cont’d) Years ended December 31, Three months ended (in thousands) 2015 2016 2017 2018 2019 March 31, 2020 Total Interest Income $208,199 $238,827 $273,320 $309,358 $312,974 $71,315 Total Interest Expense 35,914 46,894 63,610 90,319 99,886 22,086 Net Inter
Slide 34: Non-GAAP Financial Measures Reconciliations
34 Appendix 2 Non-GAAP Financial Measures Reconciliations Explanation of Certain Non-GAAP Financial Measures This Presentation contains certain adjusted financial information, and their effects on noninterest income, noninterest expense, income taxes, net income, operating income, efficiency ratios,
Slide 35: Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 2 35 Non-GAAP Financial Measures Reconciliations (cont’d) (in thousands) 1Q20 2019 2018 2017 Total noninterest income $ 21,910 $ 57,110 $ 53,875 $ 71,485 Less: gain on sale of vacant Beacon land — (2,795) — — Less: gain on sale of New York building — — — (10,469) Adjusted noninterest income
Slide 36: Non-GAAP Financial Measures Reconciliations (cont'd)
36 Appendix 2 Non-GAAP Financial Measures Reconciliations (cont’d) (in thousands) 1Q20 2019 2018 2017 Net income $ 3,382 $ 51,334 $ 45,833 $ 43,057 Plus after-tax restructuring costs: Restructuring costs before income tax effect 354 5,046 6,395 — Income tax effect (74) (1,001) (1,303) — Total after-
Slide 37: Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 2 37 Non-GAAP Financial Measures Reconciliations (cont’d) 1Q20 2019 2018 2017 Basic earnings per share $ 0.08 $ 1.21 $ 1.08 $ 1.01 Plus: after tax impact of restructuring costs 0.01 0.09 0.12 — Plus: after tax impact of total spin-off costs — — 0.16 0.07 Plus: effect of lower rate under the
Slide 38: Non-GAAP Financial Measures Reconciliations (cont'd)
38 Appendix 2 Non-GAAP Financial Measures Reconciliations (cont’d) (in thousands, except per share data and percentages) 1Q20 2019 2018 2017 Efficiency ratio 63.07 % 77.47 % 78.77 % 73.84 % Less: impact of restructuring costs (0.50)% (1.89)% (2.34)% — % Less: impact of total spin-off costs — % — % (
Slide 39: Thank you
AMERANT Thank you