Amerant Bancorp Inc. · NYSE:AMTB
Amerant Bancorp — Q2 2023 Earnings Presentation
40 slides from Amerant Bancorp's earnings presentation, Aug 8, 2023
Slide 1: Investor Update
amerantbank.com Investor Update August 8, 2023
Slide 2: Important Notices and Disclaimers
Important Notices and Disclaimers 2 Forward-Looking Statements This presentation contains “forward-looking statements” including statements with respect to the Company’s objectives, expectations and intentions and other statements that are not historical facts. All statements other than statements o
Slide 3: Investment Opportunity Highlights
Investment Opportunity Highlights 3 – Established franchise with high scarcity value; presence in attractive, high-growth markets of Miami, Tampa and Houston – Strong and diverse deposit base; deposits first focus – Strong reserve coverage and disciplined credit culture – Net interest income continu
Slide 4: Key Updates 2023
Key Updates 2023 4 Loans: • Growth YTD of $297 million, or 4.30%, and QoQ of $102 million or 1.43% for the quarter ended June 30, 2023 • Increase primarily in commercial loans, partially offset by continued reduction in indirect consumer loans outstanding given termination of purchases under program
Slide 5: Executive Team Updates
Executive Team Updates 5 Sharymar Calderon Caroline Verot Moore EVP, Chief Financial Officer EVP, Houston Market President – Appointed Executive Vice President, Chief Financial – Appointed Executive Vice President, Houston Officer (CFO) in June 2023 Market President in April 2023 – Served as Senior
Slide 6: Strategic Objectives
Strategic Objectives 6 1. Deposits first focus 2. Superior customer experience 3. Rationalize existing and evaluate new lines of business (LoBs) / geographies 4. Significantly improve operational efficiency 5. Improve brand awareness 6. Attract, retain, develop, recognize and reward the best team me
Slide 7: About Us
About Us 7 Financial Highlights • Founded in 1979 Six Months Ended 2022 2021 2020 History • Completed IPO in Dec. 2018 (in millions, except per share data and percentages) June 30, 2023 Balance Sheet • Rebranded as Amerant in June 2019 Assets $ 9,520 $ 9,128 $ 7,638 $ 7,771 Loans $ 7,217 $ 6,920 $ 5
Slide 8: Growing and Attractive Markets
Growing and Attractive Markets 8 (1) Banking Center Footprint Market Demographics June 30, 2023 17 banking centers 2013 – 2023 Population Change Florida 18.4% 7.0% 6.2% Miami Houston U.S. 6 banking centers 2023 – 2028 Est. Population Change Texas 4.8% 2.0% 2.1% Miami Houston U.S. (2) Amerant is the
Slide 9: Performance Highlights 2Q23
Performance Highlights 2Q23 9 • Net income attributable to the Company was $7.3 million in 2Q23 compared to $20.2 million in 1Q23 (1) • Core pre-provision net revenue (Core PPNR) was $39.2 million in 2Q23 compared to $37.1 million in 1Q23 Earnings • Diluted earnings per share (EPS) was $0.22 in 2Q23
Slide 10: Financial Update (Core PPNR)
(1) Financial Update (Core PPNR ) 10 2Q23 1Q23 (in thousands) Net income attributable to Amerant Bancorp Inc. $ 7,308 $ 20,186 Plus: provision for credit losses 29,077 11,700 Plus: provision for income tax expense 1,873 5,301 (1) Pre-provision net revenue (PPNR) $ 38,258 $ 37,187 Plus: non-routine n
Slide 11: Key Performance Metrics
Key Performance Metrics 11 ACL / Total NIB Deposits/ Net Interest Efficiency (1) (2) Tier 1 Capital ROA ROE Loans held for Total Deposits Margin Ratio Ratio (3) investment 0.88% 1.48% 3.90% 3.83% 10.88% 10.77% 1.20% 18.7% 63.67% 65.61% 11.15% 17.1% 0.31% 3.92% 1Q23 2Q23 1Q23 2Q23 1Q23 2Q23 1Q23 2Q23
Slide 12: Deposit Details (by line of business)
Deposit Details (by line of business) 12 ($ in millions, except %) Change QoQ Change YTD 4Q22 1Q23 2Q23 $ % $ % Commercial Real Estate 211 263 255 (8) (3) 44 21 Commercial & Industrial 819 918 1,028 110 12 209 26 Specialty Finance 123 123 176 53 43 53 43 Florida Government and Municipalities 283 279
Slide 13: Well Diversified and Stable Deposit Mix
Well Diversified and Stable Deposit Mix 13 Deposit Composition Mix by Country of Domicile ($ in millions, except for percentages) International Deposits 8,000 $7,580 33% of Total Deposits ($ in millions) $7,287 57,665 Accounts $7,044 $1,294 7,000 $6,588 $1,361 $1,368 $6,203 $1,319 6,000 $1,299 $686
Slide 14: Deposits: Insured vs. Uninsured
Deposits: Insured vs. Uninsured 14 As of June 30, 2023 ($ in millions, except for number of customers and percentages) (1) Number of Total Insured & Dollars $ Insured ($) % Uninsured ($) % Customers Uninsured ($) (in thousands) (2) <=250 $ 4,243 56 % $ — — % 98,752 $ 4,243 250-1,000 $ 959 13 % $ 662
Slide 15: Liquidity Risk Management
Liquidity Risk Management 15 Our standard liquidity management practices include: • Regular testing of lines of credit; satisfactory results have been obtained as of June 30, 2023 • Daily monitoring of Federal Reserve Bank account balances as well as large fund providers • Daily analysis of lending
Slide 16: Shares Outstanding
Shares Outstanding 16 Changes in shares outstanding: Class A balance at March 31, 2023 33,814,260 (1) Class A repurchase program (95,262) (2) Net Issuances 17,161 Balance at June 30, 2023 33,736,159 (1) Shares were bought back under the "2023 Class A Common Stock Repurchase Program" approved on Dece
Slide 17: Well Capitalized Position
Well Capitalized Position 17 As of June 30, 2023 Total Capital Ratio 12.39% Regulatory Minimum: 10.00% Common Equity Tier 1 Capital (CET1) Ratio 10.00% Regulatory Minimum: 6.50% (1)(3) TCE Ratio 7.34% (2)(3) TCE adj. for HTM Valuation 7.16% (3) TBV/Share adj. for HTM Valuation $20.11 (1) Includes $8
Slide 18: Investment Portfolio
Investment Portfolio 18 (1) Balances and Yields Highlights ($ in millions) • Effective duration increased to 5.1 years as the model anticipates 1,500 $10.8 longer duration due to recent higher mortgage rates and therefore $2.5 slower prepayments $238.6 $239.3 $234.4 • Valuation of AFS debt securitie
Slide 19: Loan Portfolio Highlights
Loan Portfolio Highlights 19 (1)(2) (1) Loan Composition Geographic Mix (Domestic) 9.6% 8.9% 8.7% 7.7% 7.0% 18.5% 2.5% 13.3% 17.4% 3.8% 4.0% 3.8% 3.9% 15.8% 16.7% 2.9% 2.5% 2.3% 2.1% 2.1% 6.1% 5.3% 4.8% 4.4% 4.1% 16.3% 15.3% 15.1% 15.0% 14.7% 19.3% 20.6% 20.8% 20.0% 19.6% 6.79% 6.38% 5.85% 19.4% 18.
Slide 20: Commercial Real Estate (CRE) Held For Investment-Detail
Commercial Real Estate (CRE) Held For 20 Investment-Detail Outstanding as of June 30, 2023 ($ in millions, except %) % Total % Total Income (1) Land and CRE Type FL TX NY Other Total CRE Loans Producing Construction Retail $ 461 $ 163 $ 83 $ 2 $ 709 26.0 % 9.9 % $ 701 $ 8 Multifamily 341 490 107 — $
Slide 21: Commercial Real Estate (NYC) - Detail
Commercial Real Estate (NYC) - Detail 21 Outstanding as of June 30, 2023 ($ in millions, except %) Income Land and CRE Type Total % Property Type Producing Construction Retail 83 0 83 12% Multifamily 107 0 107 11% Office 38 0 38 11% Hotels 49 0 49 15% Industrial 15 0 15 11% Specialty 0 0 0 —% Land 0
Slide 22: Credit Quality
Credit Quality 22 (2) (1) (1) Allowance for Credit Losses NPLs and NPAs / Total Assets ($ in millions) $106.0 $83.5 $84.4 $76.5 0.50% $70.5 0.41% 0.31% 0.51% 0.71% 1.48% 0.21% 0.23% 0.39% 0.41% 1.23% 1.19% 1.22% 1.20% 0.29% 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 NPLs / Total Assets NPAs /
Slide 23: Net Interest Income and NIM
Net Interest Income and NIM 23 Net Interest Income (NII) and NIM (%) Commentary ($ in millions, except for percentages) $83.9 NII was up in 2Q23 driven by: $82.2 $82.3 80 $69.9 • higher rates on total interest earnings assets, mainly loans 70 and interest earning deposits with banks. These results $
Slide 24: Interest Rate Sensitivity
Interest Rate Sensitivity 24 (1) (1) Impact on NII from Interest Rate Change Impact on AFS from Interest Rate Change As of June 30, 2023 Expected AOCI Accretion 9.8% 400 6.4% 9.6% (100) 4.2% 4.6% ($ in Millions) 0% 2.3% ($ in Millions) -1.6% 0% 350 -3.5% -7.3% 1,119 1,073 1,050 371 382 1,026 1,003 9
Slide 25: Noninterest Income Mix
Noninterest Income Mix 25 Noninterest Income Mix Commentary ($ in millions) 30 $24.4 $19.3 $26.6 • Noninterest income was up by $7.3 million in 2Q23, $62.4 primarily due to lower losses on the sale of AFS securities $11.4 $13.2 $13.4 20 (3) $12.9 $16.0 • Core noninterest income , which excludes $12.
Slide 26: Noninterest Expense
Noninterest Expense 26 Noninterest Expense Mix Commentary ($ in millions, except for FTEs) • Noninterest expense increased in 2Q23 primarily due to: – $2.6 million loss on sale of repossessed assets in connection with our $72.5 equipment-financing activities $62.2 $62.2 $64.7 – $2.0 million impairme
Slide 27: New Banking Centers
New Banking Centers 27 Opened 6/26/2023 Expected opening 4Q23 Key Biscayne, FL Downtown Miami, FL River Oaks, Houston Ft. Lauderdale, FL Tampa, FL amerantbank.com
Slide 28: Partnerships
Partnerships 28 amerantbank.com
Slide 29: Partnerships Cont'd
Partnerships Cont'd 29 amerantbank.com
Slide 30: In Summary
In Summary 30 • Deposits First – remain focused on progressive organic growth and continued reduction in uninsured deposits via ICS program. Focused also on further improving type of deposits and expanding international growth • Executive team is now in place. Staffing optimization that occurred in
Slide 31: Appendices
Appendices amerantbank.com
Slide 32: Appendix 1 Summary Financial Statements
Appendix 1 32 Summary Financial Statements As of June 30, As of December 31, (in millions) 2023 2022 2021 2020 Assets Cash and cash equivalents $445.1 $290.6 $274.2 $214.4 (1) Total Securities 1,264.8 1,311.1 1,293.7 1,307.6 (2) Mortgage Loans Held for Sale, at fair value 49.9 62.4 14.9 — (3) Loans
Slide 33: Summary Financial Statements (cont'd)
Appendix 1 33 Summary Financial Statements (cont’d) Six Months Ended June 30, Years Ended December 31, (in thousands) 2023 2022 2021 2020 Total Interest Income $263,627 $338,776 $247,844 $260,554 Total Interest Expense 97,417 72,111 42,703 71,002 Net Interest Income $166,210 $266,665 $205,141 $189,5
Slide 34: Non-GAAP Financial Measures Reconciliations
Appendix 2 34 Non-GAAP Financial Measures Reconciliations Explanation of Certain Non-GAAP Financial Measures This presentation contains certain adjusted financial information or non-GAAP financial measures, including “pre-provision net revenue (PPNR)”, “core pre- provision net revenue (Core PPNR)”,
Slide 35: Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 2 35 Non-GAAP Financial Measures Reconciliations (cont’d)* (in thousands) Three Months Ended Six Months Ended June 30, Years Ended December 31, June 30, 2023 March 31, 2023 2023 2022 2021 2020 (1) Net income (loss) attributable to Amerant Bancorp Inc. $ 7,308 $ 20,186 $ 27,494 $ 63,310 $ 11
Slide 36: Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 2 36 Non-GAAP Financial Measures Reconciliations (cont’d)* Three Months Ended Six Months Ended June 30, Years Ended December 31, (in thousands) June 30, 2023 March 31, 2023 2023 2022 2021 2020 Net income (loss) attributable to Amerant Bancorp Inc. $ 7,308 $ 20,186 $ 27,494 $ 63,310 $ 112,92
Slide 37: Non-GAAP Financial Measures Reconciliations (cont'd)
37 Appendix 2 Non-GAAP Financial Measures Reconciliations (cont’d)* Three Months Ended Six Months Ended June 30, Years Ended December 31, June 30, 2023 March 31, 2023 2023 2022 2021 2020 Net income (loss) / Average total assets (ROA) 0.31 % 0.88 % 0.59 % 0.77 % 1.50 % (0.02)% Plus: after tax impact
Slide 38: Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 2 38 Non-GAAP Financial Measures Reconciliations (cont’d)* Three Months Ended Six Months Ended June 30, Years Ended December 31, (in thousands, except per share data and percentages) June 30, 2023 March 31, 2023 2023 2022 2021 2020 Tangible common equity ratio: Stockholders' equity $ 720,95
Slide 39: Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 2 39 Non-GAAP Financial Measures Reconciliations (cont’d) (1) The Company sold its Coral Gables headquarters for $135 million, with an approximate carrying value of $69.9 million at the time of sale and transaction costs of $2.6 million. The Company leased-back the property for an 18-year t
Slide 40: Thank you
40 Thank you Investor Relations InvestorRelations@amerantbank.com amerantbank.com