Amerant Bancorp Inc. · NYSE:AMTB
Amerant Bancorp — Investor Presentation (July 2019)
33 slides from Amerant Bancorp's investor presentation, Jul 29, 2019
Slide 1: Investor Presentation As of June 30, 2019
Investor Presentation As of June 30, 2019
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 Geographic Mix Who We Are June 30, 2019 Loans Deposits • Founded in 1979 • Acquired in 1987 by MSF(1) • 80.1% spin-off in Aug. 2018 3.7% History 48.2% • Adopted Amerant brand in Oct. 2018 96.3% 51.8% • Completed IPO in Dec. 2018 • MSF no longer has any stake in the Company(2) § Domestic § Internat
Slide 4: Investment Opportunity Highlights
4 Investment Opportunity Highlights Established Strong and Well-Positioned Significant Fee Pathway to Franchise in Diverse Deposit Loan Income Strong Attractive Portfolio Markets Base Platform Profitability • Long history with • Combination of • Loan book well- • Wealth • Recent strong reputation do
Slide 5: Experienced Management Team
5 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. 77 years old • Former Chairman, President
Slide 6: Deep Culture of Enterprise Risk Management
6 Deep Culture of Enterprise Risk Management ü Enterprise-Wide ü ü ü Risk Governance Risk Culture Risk Appetite 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 • Direc
Slide 7: Our New Brand Meant for You: A Different Kind of Bank
7 Our New Brand Meant for You: A Different Kind of Bank Our new purpose We are evolving, just like you All that we do, our attitude and behaviors, aim We are renewing our commitment to you by at our ultimate goal: offering the closest, most aiming to keep growing and making possible a personal and e
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
9 Growing and Diverse Markets Branch Footprint Deposit Market Share Market Demographics June 30, 2018 2010 – 2019 Est. Population Change Deposits % of Market Market Branches ($mm) AMTB Share % 19.80% 15 banking centers $5,762mm Deposits 12.92% Miami-Dade, FL 9 $5,287 82.6 4.1 6.64% Broward, FL 5 351
Slide 10: Ongoing Business Transformation
10 Ongoing Business Transformation From... To... Part of a diverse international financial group, Focused on traditional community banking with a sophisticated international customer business in the U.S. and an international base business to service valued relationships A number of non-core products
Slide 11: Summary of Our Strategic Plan
11 Summary of Our Strategic Plan Building on our strengths to shape our future Domestic focus Expanding Growth in Core, Increased with an Strong Credit Business and Domestic Profitability International Culture Geographic Deposits and Returns Heritage Presence ▪ Protect and serve ▪ Exit higher-risk ▪
Slide 12: Build on Improving Financial Performance
12 Build on Improving Financial Performance Increased Attractive Risk- Higher Net Improving Enhanced Domestic Adjusted Loan Interest Expense Profitability Deposits Profile Margin Culture Nonaccrual Domestic Net Interest Loans / Total Efficiency (2) Deposits(1) Margin(2) (2) ROATCE Loans(1) Ratio ($
Slide 13: Investment Portfolio
13 Investment Portfolio Investment Securities Balances and Yields Highlights ($ in millions) • Decreased portfolio size in order to fund lending and $1,750 $88.4 decrease non-core funding $83.9 $1,500 $81.2 • Proportion of fixed rate investments has been $1,250 increased to protect the yield in decl
Slide 14: Strategic Shift in Loan Mix Yielding Benefits
14 Strategic Shift in Loan Mix Yielding Benefits Loan Portfolio(1) Loan Mix by Geography June 30, 2019 December 31, 2015 June 30, 2019 Financial Institutions & Acceptances 0.4% Consumer 1.8% 24.2% 1-4 Family 3.7% 9.2% 96.3% C&I 20.3% 75.8% § Domestic § International Owner Occupied CRE 53.9% CRE 14.4
Slide 15: Balanced CRE Loan Portfolio
15 Balanced CRE Loan Portfolio CRE Portfolio(1) CRE Loan Mix by Primary Market Area(2) June 30, 2019 June 30, 2019 New York City area 24.1% Other FL, Greater TX, and NY/ Houston NJ 4.7% Hospitality 16.4% 5.3% Retail 36.0% Miami-Dade, Broward, and Palm Multifamily Beach 54.8% 30.9% Highlights Industr
Slide 16: Disciplined Credit Culture
16 Disciplined Credit Culture Robust Underwriting Standards Non-Performing Assets(2) / Total Assets (3) • Strong credit metrics and reserve coverage 1.50% • The increase in charge-off was due to: ◦ Several international commercial credits (2016) 1.00% ◦ One isolated CRE loan (1) (2018) • For the fir
Slide 17: Highly Attractive Deposit Franchise
17 Highly Attractive Deposit Franchise Highlights Deposit Mix (1) June 30, 2019 NIB • Focus on developing domestic relationships as Jumbo Demand, Time, opposed to rate sensitive, non-relationship time 13.5% 12.0% deposits • Experienced 12% CAGR in domestic deposits IB Demand, • Core domestic deposit
Slide 18: Wholesale Funding
18 Wholesale Funding FHLB and Other Borrowings by Advances from the Federal Home Loan Bank and Other Maturity Borrowings June 30, 2019 ($ in millions) Year of Maturity Interest Rate 2Q19 1Q19 2Q18 2018 0.90% to 2.38% — — 417.0 2019 31.1% 2019 1.00% to 3.86% 350 385 225 2020 28.9% 2020 1.50% to 2.74%
Slide 19: Interest Income and Margin Trends
19 Interest Income and Margin Trends Highlights Impact on NII from Interest Rate Change 3.6% $250 • Increase in NIM through 2018 driven by rising interest 1.8% rates (until 2018) and changes in loan portfolio composition focus on higher yielding domestic loans $240 0.0% • Management taking proactive
Slide 20: Robust Wealth Management Franchise Anchors Non-Interest Income
20 Robust Wealth Management Franchise Anchors Non-Interest Income Wealth Management Platform 2019 YTD Non-Interest Income Breakdown Total: $27.3 million § Amerant Trust Amerant Investments Deposits and service fees § Brokerage, advisory, and 23.0% fiduciary activities 30.9% • Estate Planning • Wealt
Slide 21: Increasing Operating Efficiency
21 Increasing Operating Efficiency Cost Initiatives Efficiency Ratio(1) • Simplification of business model 84.7% and product offerings as part of 78.8% Rationalization 78.0% 76.8% of Business Lines spin-off 73.8% • Deemphasized international business resulting in less complexity and reduced costs •
Slide 22: ROA Expansion
22 ROA Expansion Enhanced Profitability Drivers for Improvement 1 Technology and Expense Saving Initiatives Target ROA Continue to rationalize expenses and improve scalable platform 34 bps increase 2 Changing Business Mix Exit from lower yielding loans and securities and redeploy into higher yieldin
Slide 23: Investment Highlights
23 Investment Highlights Recent shift from preservation of capital to 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.
Slide 24: Appendices
Appendices
Slide 25: Appendix Summary Financial Statements
25 Appendix 1 Summary Financial Statements December 31, June 30, (in millions) 2015 2016 2017 2018 2019 Assets Total Cash & Bals Due Dep Inst $138.3 $135.0 $153.4 $85.7 $90.3 Total Securities (1) 2,055.6 2,123.2 1,777.0 1,671.2 1,582.5 Loans & Leases Held for Sale (HFS) 9.7 — 5.6 — — Total Loans & L
Slide 26: Appendix Summary Financial Statements (cont'd)
26 Appendix 1 Summary Financial Statements (cont’d) Years ended December 31, Six months ended (in thousands) 2015 2016 2017 2018 June 30, 2019 Total Interest Income $208,199 $238,827 $273,320 $309,358 $159,533 Total Interest Expense 35,914 46,894 63,610 90,319 50,307 Net Interest Income $172,285 $19
Slide 27: Non-GAAP Financial Measures Reconciliations
27 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, efficiency ratios, ROA and ROE. Thes
Slide 28: Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 2 28 Non-GAAP Financial Measures Reconciliations (cont’d) (in thousands) 2Q19 YTD 2018 2017 Total noninterest income $ 27,303 $ 53,875 $ 71,485 Less: net gain on sale of New York building — — (10,469) Adjusted noninterest income $ 27,303 $ 53,875 $ 61,016 Total noninterest expenses $ 104,85
Slide 29: Non-GAAP Financial Measures Reconciliations (cont'd)
29 Appendix 2 Non-GAAP Financial Measures Reconciliations (cont’d) (in thousands) 2Q19 YTD 2018 2017 Net income $ 25,928 $ 45,833 $ 43,057 Plus after-tax restructuring costs: Restructuring costs before income tax effect 3,669 6,395 — Income tax effect (789) (1,303) — Total after-tax restructuring co
Slide 30: Non-GAAP Financial Measures Reconciliations (cont'd)
30 Appendix 2 Non-GAAP Financial Measures Reconciliations (cont’d) 2Q19 YTD 2018 2017 Basic earnings per share $ 0.61 $ 1.08 $ 1.01 Plus: after tax impact of restructuring costs 0.07 0.12 — Plus: after tax impact of total spin-off costs — 0.16 0.07 Plus: effect of lower rate under the 2017 Tax Act —
Slide 31: Non-GAAP Financial Measures Reconciliations (cont'd)
31 Appendix 2 Non-GAAP Financial Measures Reconciliations (cont’d) (in thousands, except per share data and percentages) 2Q19 YTD 2018 2017 Efficiency ratio 76.80% 78.77% 73.84% Less: impact of restructuring costs -2.69% -2.34% —% Less: impact of total spin-off costs —% -2.44% -1.86% Plus: after-tax
Slide 32: Non-GAAP Financial Measures Reconciliations (cont'd)
32 Appendix 2 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
Slide 33: Thank you
AMERANT Thank you