Slide 1: Investor Presentation
Investor Presentation As of June 30, 2020
Slide 2: Important Notices and Disclaimers
2 Important Notices and Disclaimers Forward-Looking Statements This presentation contains “forward-look ing statements” within the meaning of the Se curities Act of 1933 and the Se curities Ex change Act of 1934, including, without limitation, future financial and ope rating results; costs and re ve
Slide 3: Who We Are
3 Who We Are Mission Vision To provide our customers with the To be recognized as a trusted financial financial products and services they need advisor dedicated to building stronger to achieve their success and life goals, and deeper customer relationships in the with an inspired talented team, and
Slide 4: About Us
About Us 4 • Founded in 1979 Financial Highlights • Acquired in 1987 by MSF (1) (in millions, except per share data 2015 2016 2017 2018 2019 2Q20 YTD and percentages) • 80.1% spin-off in Aug. 2018 Balance Sheet History • C ompleted IPO in Dec. 2018 $ 8 ,163 $ 8 ,434 $ 8 ,437 $ 8 ,124 $ 7 ,985 $ 8 ,1
Slide 5: Investment Opportunity Highlights
Investment Opportunity Highlights 5 Established Strong and Well-Positioned Pathway to Franchise in Significant Fee Diverse Deposit Loan Strong Attractive Income Platform Base Portfolio Profitability Markets • Long history with • Combination of • Loan book well- • Wealth • Dynamic initiatives strong
Slide 6: Experienced Management Team
6 Experienced Management Team Frederick • C hairman since January 2019 Copeland • Dire ctor of C ompany and Bank from 2007 to 2018 • Form e r President and C EO of Far East National Bank Chairman of the Board • Form e r President and C EO of Ae tna International, Inc. • Form e r C hairman, President
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 proactively Trustworthy anticipate your financial needs based on where you are and • Dependable 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 Target markets have: Miami-Dade MSA • Major industry sectors are trade, tourism, services, • Substantial domestic deposit manufacturing, educa
Slide 9: Growing and Diverse Markets
Growing and Diverse Markets 9 Branch Footprint (1) Deposit Market Share (2) Market Demographics June 30, 2020 June 30, 2019 2010 – 2020 Est. Population Change 19 banking centers Deposits % of Market Market Branches ($mm) A MTB Share % Miami-Dade, FL 9 $4,793 81.6 3.6 Florida Broward, FL 5 330 5.6 0.
Slide 10: Ongoing Business Transformation
10 Ongoing Business Transformation From... To... Part of a diverse international financial group, with a Focused on traditional community banking sophisticated international customer base business in the U.S. and an international business to service valued relationships A number of non-core products
Slide 11: Summary of Our Strategic Plan
Summary of Our Strategic Plan 11 Building on our strengths to shape our future Domestic focus Expanding Growth in Core, Increased with an Strong Credit Business and Domestic Profitability International Culture(1) Geographic Deposits and Returns Heritage Presence ▪ C ontinue strong ▪ Grow U.S. ▪ Exit
Slide 12: Build on Improving Financial Performance
Build on Improving Financial Performance 12 Increased Attractive Risk- Higher Net Rationalizing Domestic Adjusted Loan Interest Cost Structure Deposits Profile (1) Margin Non-performing Net Interest Efficiency Domestic Deposits Loans (2) Margin (3) Ratio (3) / Total Loans ($ in millions) 12.4% C AGR
Slide 13: Deep Culture of Enterprise Risk Management
13 Deep Culture of Enterprise Risk Management ✓ Enterprise-Wide 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 • Dire
Slide 14: Investment Portfolio
Investment Portfolio 14 Investment Securities Balances and Yields (1) Highlights ($ in millions) • Effective duration of 2.6 years as expected prepayment speeds stabilized in the mortgage securities portfolio • Floating portion of the portfolio at 16.9% of the total portfolio • Continued purchasing
Slide 15: Strategic Shift in Loan Mix Yielding Benefits
Strategic Shift in Loan Mix Yielding Benefits 15 Loan Portfolio Loan Mix by Geography June 30, 2020 December 31, 2015 June 30, 2020 ▪ Domestic ▪ International Highlights • Continued focus on domestic lending activities. Domestic loan CAGR of 6.7% since 2015 • Average loan yields have increased from
Slide 16: Balanced CRE Loan Portfolio
Balanced CRE Loan Portfolio 16 CRE Portfolio CRE Loan Mix by Primary Market Area(1) June 30, 2020 June 30, 2020 Highlights (2) • Well diversified among geographies and property types, with construction representing less than 10% • Conservative weighted average LTV 61% and DSC 1.7x • Strong sponsorsh
Slide 17: Disciplined Credit Culture
Disciplined Credit Culture 17 Robust Underwriting Standards Non-performing Assets(3) / Total Assets • C redit quality remains sound and reserve coverage is strong • As of June 30, 2020, provision for loan losses of $48.6 million to account for estimated portfolio deterioration due to COVID-19, and s
Slide 18: Highly Attractive Deposit Franchise
Highly Attractive Deposit Franchise 18 Highlights Deposit Mix (1) June 30, 2020 • Focus on developing domestic relationships as opposed to rate sensitive, non-relationship time deposits Total Deposits: • Experienced 12% CAGR in domestic deposits as a result $6.0 billion of increased cross-selling ef
Slide 19: Wholesale Funding
Wholesale Funding 19 FHLB advances, Senior Notes and Other Advances from the Federal Home Loan Bank, Senior Borrowings (1) by Maturity Notes and Other Borrowings (1) June 30, 2020 ($ in millions) Year of Maturity Interest Rate 2Q19 1Q20 2Q20 2019 1.80% to 3.86% $ 350 $ — $ — 2020 0.44% to 2.63% 325
Slide 20: Interest Income and Margin Trends
Interest Income and Margin Trends 20 Highlights Impact on NII from Interest Rate Change (2) • In 2Q 20 proactive steps to protect NIM: ($ in M illions and percentages) (A s of June 30, 2020) – Highe r loan volumes resulting from PPP program 4.1% – Strate gic deposit rate cuts 2.5% – C ontinued re te
Slide 21: Wealth Management Franchise Expansion - Key Component of Noninterest Income
21 Wealth Management Franchise Expansion - Key Component of Noninterest Income Wealth Management Platform 2020 YTD Noninterest Income Mix Total: $41.7 million Amerant Trust Amerant Investments • Estate Planning • Brokerage Services • Asset Protection • Investment Advisory • Escrow Services Services
Slide 22: Increasing Operating Efficiency
Increasing Operating Efficiency 22 Cost Initiatives Efficiency Ratio (1) • Simplification of business model and product offerings following Rationalization spin-off of Business Lines • Deemphasized international business resulting in less complexity and reduced costs • Investments in technology are
Slide 23: Drivers for Improvement
Drivers for Improvement 23 1 Technology, Operating Model and Expense Saving Initiatives Continue to rationalize expenses and improve scalable platform, while investing in digital transformation to drive great customer experience and increase future profitability 2 Changing Business Mix Redeploy lowe
Slide 24: Investment Highlights
24 Investment Highlights Focus on driving profitable growth and shareholder value Substantial and continuing insider ownership, approximately 30% Strong asset quality and domestic loan growth Focus on expanding domestic deposit base throughout our high growth U.S. markets Low cost deposits from inte
Slide 25: Supplemental Information
Supplemental Information COVID-19 Update
Slide 26: Business Update Related to COVID-19
Business Update Related to COVID-19 26 • Amerant’s Business C ontinuity Plan (“BC P”), activated on March 16, 2020, successfully supports approximately 86% of employees with remote work capabilities Business • Phased opening approach started June 3rd to re-introduce employees back to the workplace o
Slide 27: Loan portfolio by industry
27 Loan portfolio by industry Non- (As of 06/30//2020) Real Real % Total Unfunded Highlights ($ in m illions) Estate Estate Total Loans Com mitments(8) Financial Sector (1) $ 5 $ 74 $ 79 1.3% $ 17 • Diversified portfolio - highest Construction and Real Estate & Leasing: sector concentration, other C
Slide 28: Industries with escalated monitoring
28 Industries with escalated monitoring CRE Hotels (As of 06/30/2020) Hotels Hotels - LTV 50% 40% 30% 20% 10% 0% Total: $263 million 50% or 50-60% 60-70% 70-80% 80% or Loan Portfolio Percentage: 4.5% less more Highlights • CRE Hotel portfolio is limited to 27 properties majority in popular travel de
Slide 29: Industries with escalated monitoring
Industries with escalated monitoring 29 CRE Retail (As of 06/30/2020) CRE Retail(1) CRE Retail - Single Retail - LTV Tenant(1) 60% 50% 40% 30% 20% 10% 0% 50% 50-60% 60-70% 70-80% 80% or or less more Total: $1.1 billion Total: $202 million Loan Portfolio Percentage: 19.2% Loan Portfolio Percentage: 3
Slide 30: Appendices
Appendices
Slide 31: Summary Financial Statements
31 Appendix 1 Summary Financial Statements December 31, June 30, (in millions) 2015 2016 2017 2018 2019 2020 A ssets C ash and cash equivalents $ 1 38.3 $ 1 35.0 $ 1 53.4 $ 8 5.7 $ 1 21.3 $ 2 17.3 T otal Securities (1) 2 ,0 55.6 2 ,1 23.2 1 ,7 77.0 1 ,6 71.2 1 ,6 66.5 1 ,6 09.8 L oans Held for Sale
Slide 32: Summary Financial Statements (cont'd)
32 Appendix 1 Summary Financial Statements (cont’d) Six months Years ended December 31, ended (in thousands) 2015 2016 2017 2018 2019 June 30, 2020 Total Interest Income $208,199 $238,827 $273,320 $309,358 $312,974 $135,482 Total Interest Expense 35,914 46,894 63,610 90,319 99,886 39,930 Net Interes
Slide 33: Non-GAAP Financial Measures Reconciliations
33 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 34: Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 2 34 Non-GAAP Financial Measures Reconciliations (cont’d) (in thousands) 2Q20 YTD 2019 2018 2017 T otal noninterest income $ 4 1 ,663 $ 5 7 ,110 $ 5 3 ,875 $ 7 1 ,485 L ess: gain on sale of vacant Beacon land — (2 ,7 95) — — L ess: gain on sale of N ew Y ork building — — — (1 0 ,469) A djus
Slide 35: Non-GAAP Financial Measures Reconciliations (cont'd)
35 Appendix 2 Non-GAAP Financial Measures Reconciliations (cont’d) (in thousands) 2Q20 YTD 2019 2018 2017 N et (loss) income $ (1 1 ,897) $ 5 1 ,334 $ 4 5 ,833 $ 4 3 ,057 P lus after-tax restructuring c osts: Res tructuring c osts before income tax effect 1 ,6 72 5 ,0 46 6 ,3 95 — I nc ome tax effec
Slide 36: Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 2 36 Non-GAAP Financial Measures Reconciliations (cont’d) 2Q20 YTD 2019 2018 2017 Bas ic (loss) earnings per share $ (0 .2 8) $ 1 .2 1 $ 1 .0 8 $ 1 .0 1 P lus: after tax impact of restructuring costs 0 .0 3 0 .0 9 0 .1 2 — P lus: after tax impact of total spin-off c osts — — 0 .1 6 0 .0 7 P
Slide 37: Non-GAAP Financial Measures Reconciliations (cont'd)
37 Appendix 2 Non-GAAP Financial Measures Reconciliations (cont’d) (in thousands, except per share data and percentages) 2Q20 YTD 2019 2018 2017 E ffic iency ratio 5 9 .47% 7 7 .47% 7 8 .77% 7 3 .84% L ess: impact of restructuring c osts (1 .2 1)% (1 .8 9)% (2 .3 4)% —% L ess: impact of total s pin-
Slide 38: Thank you
AMERANT Thank you