Amerant Bancorp Inc. · NYSE:AMTB
Amerant Bancorp — Q3 2020 Earnings Presentation
29 slides from Amerant Bancorp's earnings presentation, Oct 29, 2020
Slide 1: Third Quarter 2020 Financial Review Earnings Call
Third Quarter 2020 Financial Review Earnings Call October 29, 2020
Slide 2: Important Notices and Disclaimers
Important Notices and Disclaimers 2 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: Business Update Related to COVID-19
1 Business Update Related to COVID-19 3 • Amerant’s Business Continuity Plan (“BCP”) continues to successfully support employees with remote work Business capabilities Continuity • Company moved into a new phase of reintroducing a higher number of employees back into the workplace Plan following saf
Slide 4: Performance Highlights 3Q20
Performance Highlights 3Q20 4 • Net income of $1.7 million in 3Q20, compared to a net loss of $15.3 million in 2Q20 and net income of $11.9 million in 3Q19; Operating income(1) was $11.5 million in 3Q20, down 46.6% from $21.6 million in 2Q20, and down 9.8% from $12.8 million in 3Q19. • Noninterest i
Slide 5: Third Quarter 2020 Results
Third Quarter 2020 Results 5 (5) (1)(5) ($ in millions, except per share items and Return on Equity (ROE) Adjusted ROE percentages) 3Q19 2Q20 3Q20 Net Interest Income $52.6 $46.3 $45.3 5.81% 6.30% Net Interest Margin (NIM) 2.80% 2.44% 2.39% (Reversal of) Provision for Loan Losses (1.5) 48.6 18.0 (7.
Slide 6: Investment Portfolio Balances and Yields
Investment Portfolio 6 Balances and Yields (1) Highlights ($ in millions) $24.4 • Effective duration of 2.4 years as mortgage securities' $24.0 prepayment speeds ramped up in the third quarter 1,500 $77.6 $65.6 $24.4 $61.7 • Floating portion of the portfolio at 13.3% of the total portfolio 1,000 $1,
Slide 7: Loan Portfolio Highlights
7 Loan Portfolio Highlights Loan Composition Geographic Mix (Domestic) (Domestic) (1) 0.4% 0.3% 0.3% 0.3% 0.3% 6,000 $756 $749 1.8% 1.5% 2.5% 2.2% 3.2% $808 $772 9.2% 9.4% 10.0% 10.1% 10.1% 5,000 $752 14.4% 15.6% 16.3% 16.0% 15.8% $1,046 $1,060 $1,040 $965 $1,029 FFI 4,000 19.6% 21.5% 19.1% 21.2% 20
Slide 8: Credit Quality
Credit Quality 8 Allowance for Loan Losses ($ in millions) Non-Performing Assets (1) / Total Assets $119.7 $116.8 1.08% 0.95% 2.04% $72.9 1.97% $53.6 $52.2 0.42% 0.41% 0.41% 1.29% 0.93% 0.91% 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 (4) Allowance for Loan Losses ALL as a % of Total Loans (2
Slide 9: Interest-Earning Assets
9 Interest-Earning Assets (1) ($ in millions, except for percentages ) 9,000 8,000 7,000 $1,633 $1,739 $1,770 $1,675 $1,469 6,000 $5,754 $5,744 $5,872 $5,925 5,000 $5,668 4,000 4.64% 4.47% 4.31% 3,000 3.77% 3.64% 2,000 2.73% 2.66% 2.59% 2.50% 1,000 2.32% 0 3Q19 4Q19 1Q20 2Q20 3Q20 Loans Investments
Slide 10: Deposit Highlights
Deposit Highlights 10 Deposit Composition Mix by Country of Domicile ($ in millions, except for percentages) International Deposits 7,000 ($ in millions) ~ $5,842 $6,024 $5,878 11% Compound Annual Decline Rate 6,000 $5,693 $5,757 $588 $508 $566 $682 $647 5,000 $1,846 $1,767 $1,714 $1,758 $1,894 CDs
Slide 11: Wholesale Funding & Debt by Maturity
Wholesale Funding (1) & Debt (2) by Maturity 11 September 30, 2020 ($ in millions) Year of Maturity Interest Rate 3Q19 2Q20 3Q20 2023 and after 2019 1.80% to 2.28% $ 195 $ — $ — 72.9% 2020 1.50% to 2.56% 325 — — 2021 1.93% to 3.08% 240 — — 2022 0.65% to 2.80% 320 50 50 2023 and (4) (5) after 0.62% t
Slide 12: Net Interest Income and NIM
12 Net Interest Income and NIM Net Interest Income (NII) and NIM (%) Commentary ($ in millions, except for percentages) • NII down in 3Q20 primarily on: 60 – Lower rates on variable-rate loans due to repricing at $52.6 lower market rates $51.3 $49.2 50 – Lower average balances and yields on investme
Slide 13: Noninterest Income Mix
13 Noninterest Income Mix Noninterest Income Mix Commentary ($ in millions) $21.9 • $8.6 million net gain on debt securities sold buffered the 22 impact of low market rates on NIM $19.8 $20.3 20 $3.9 • Deposits and service fees increased in 3Q20 due to higher $3.5 wire transfer fees attributed to el
Slide 14: Noninterest Expense
Noninterest Expense 14 Noninterest Expense Mix Commentary ($ in millions, except for FTEs) • $8.8 million increase in noninterest expense in 3Q20 mostly reflects the absence of $8.5 million in expense deferral related to the origination of loans under the PPP program and 60 includes $0.6 million of
Slide 15: Interest Rate Sensitivity
Interest Rate Sensitivity 15 Commentary Loan Portfolio & Repricing Detail • The Company continues to be asset sensitive as over half of (As of September 30, 2020) loans have floating rate structures or mature within a year By Rate Type By Interest Type • Actively implementing floor rates in the loan
Slide 16: FY20-21 Goals
16 FY20-21 Goals • Continue focus on domestic Net Interest • Protect loan portfolio yield while commercial deposit growth via cross proactively reducing funding sale and by targeting new verticals/ Income costs to improve NIM Deposits niches for deposits • Increase domestic deposits and • Continue s
Slide 17: Supplemental Loan Portfolio Information
Supplemental Loan Portfolio Information
Slide 18: Loan portfolio by industry
Loan portfolio by industry 18 (September 30, 2020) Real Non-Real % Total Unfunded Highlights ($ in millions) Estate Estate Total Loans Commitments(8) (1) Financial Sector $ 5 $ 70 $ 75 1.3 % $ 18 • Diversified portfolio - highest Construction and Real Estate & Leasing: sector concentration, other Co
Slide 19: Industries with escalated monitoring: Oil and Gas, Travel, Entertainment and Dining
Industries with escalated monitoring 19 Oil and Gas, Travel, Entertainment and Dining (September 30, 2020) Real Non-Real % Total Unfunded Highlights ($ in millions) Estate Estate Total Loans Commitments(1) Extraction/Support $ 1 $ 21 $ 22 0.4 % $ 7 Very limited exposure: Petrochemical 6 2 8 0.1 % 2
Slide 20: Industries with escalated monitoring: Commercial Real Estate (CRE)
Industries with escalated monitoring 20 Commercial Real Estate (CRE) (September 30, 2020) ($ in millions, except %) % Total % Total Income Land and CRE Type FL TX NY Other Total CRE Loans Producing (1) Construction Retail $ 616 $ 200 $ 301 $ — $ 1,117 37.4 % 18.9 % $ 1,109 $ 8 Multifamily 438 311 32
Slide 21: Industries with escalated monitoring: CRE Hotels
Industries with escalated monitoring 21 CRE Hotels (As of 09/30/2020) Hotels Hotels - LTV 50% 40% 38% Boutique 29% 31% 30% Full Service 20% 38% 14% 12% Limited Service 10% 33% 5% 0% 50% 50-60% 60-70% 70-80% 80% or Total: $271 million or less more Loan Portfolio Percentage: 4.6% Highlights • CRE Hote
Slide 22: Industries with escalated monitoring: CRE Retail
Industries with escalated monitoring 22 CRE Retail (As of 09/30/2020) CRE Retail (1) CRE Retail - Single Retail - LTV (1) Tenant 60% Education Groceries 9% 4% 50% 44% Neighborhood Center Restaurant 20% Theme/Festival Center 3% 40% 11% Banking 30% 9% 23% 20% Single Tenant 20% Community Center15% 25%
Slide 23: Appendices
Appendices
Slide 24: Appendix Non-GAAP Financial Measures Reconciliations
Appendix 1 24 Non-GAAP Financial Measures Reconciliations The following table sets forth selected financial information derived from the Company’s interim unaudited consolidated financial statements, adjusted for certain costs incurred by the Company in the periods presented related primarily to tax
Slide 25: Appendix Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 1 25 Non-GAAP Financial Measures Reconciliations (cont’d) Three Months Ended, Nine Months Ended September 30, ($ in thousands, except per share amounts) September 30, 2020 June 30, 2020 September 30, 2019 2020 2019 Net income (loss) $ 1,702 $ (15,279) $ 11,931 $ (10,195) $ 37,859 Plus after
Slide 26: Appendix Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 1 26 Non-GAAP Financial Measures Reconciliations (cont’d) Three Months Ended, Nine Months Ended September 30, September 30, 2020 June 30, 2020 September 30, 2019 2020 2019 Diluted earnings (loss) per share (2) $ 0.04 $ (0.37) $ 0.28 $ (0.24) $ 0.88 Plus: after tax impact of restructuring co
Slide 27: Appendix Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 1 27 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, 2020 June 30, 2020 September 30, 2019 2020 2019 Salaries and employee benefits / Average total assets 1.39 %
Slide 28: Appendix Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 1 28 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 A
Slide 29: Thank you
Thank you Investor Relations InvestorRelations@amerantbank.com