Amerant Bancorp Inc. · NYSE:AMTB
Amerant Bancorp — Q4 2023 Earnings Presentation
37 slides from Amerant Bancorp's earnings presentation, Jan 25, 2024
Slide 1: Fourth Quarter Earnings
amerantbank.com Fourth Quarter Earnings January 25, 2024
Slide 2: Important Notices and Disclaimers
Important Notices and Disclaimers 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 of
Slide 3: 4Q23 In Review
4Q23 In Review • Total deposits increased $326 million, while total loans grew by $132 million • Reclassified $401 million of our Houston-based multifamily loans as held-for-sale; recorded non-cash charge of $30.0 million before taxes in 4Q23; sale expected to be completed on January 25, 2024 • Comp
Slide 4: 4Q23 Highlights
4Q23 Highlights Income Statement Balance Sheet Capital • Diluted loss per share (1) - $(0.51) • Total Assets - $9.7B • Total Capital Ratio - 12.19% • NIM - 3.72% • Total Deposits - $7.9B • CET 1 - 9.84% • Provision for credit losses - $12.5M • Loans Held for Investment , gross - $6.9B • Tier 1 Capit
Slide 5: Deposit Details
Deposit Details ($ in millions, except %) Change QTD Change YTD 4Q22 3Q23 4Q23 $ % $ % Relationship Deposits 5,658 6,474 6,839 365 6% 1,181 21 % Institutional Deposits 757 337 297 (40) (12)% (460) (61)% Brokered Deposits 629 736 737 1 —% 108 17 % Total Deposits 7,044 7,547 7,873 326 4% 829 12 % Tota
Slide 6: Well Diversified and Stable Deposit Mix
Well Diversified and Stable Deposit Mix Deposit Composition Mix by Country of Domicile ($ in millions) $7,873 Domestic Deposits 69% of Total Deposits 8,000 $7,580 $7,547 ($ in millions) Avg. account balance: $110,000 $7,287 $1,405 $7,044 $1,294 $1,370 7,000 $1,361 5,000 $1,368 6,000 $686 $737 $736 $
Slide 7: Key Performance Metrics
Key Performance Metrics NIB Deposits/ Total Higher Operating Rationalizing Cost ACL / Total Loans ROA ROE Tier 1 Capital Ratio Deposits Profitability Structure Held for Investment 1.40% 1.39% 0.92% 11.93% 11.08% 10.60% 3.72% 108.30% 18.2% 17.8% 3.57% 64.10% (0.71)% (9.22)% 3Q23 4Q23 3Q23 4Q23 3Q23 4
Slide 8: Investment Portfolio
Investment Portfolio Expected Prepayments & Maturities Balances and Yields (1) ($ in millions) 60.0 ($ in millions) $2.5 1,500 $11.4 $2.4 38.3 39.4 39.1 $226.6 36.5 40.0 $242.1 $230.3 1,000 4.17% 3.98% 3.59% 4.34% 4.56% 4.65% 4.75% 20.0 500 $1,057.6 $1,033.8 $1,217.5 0 0.0 4Q22 3Q23 4Q23 1Q24 2Q24 3
Slide 9: Loan Portfolio Highlights
Loan Portfolio Highlights Loan Composition (1) Geographic GeographicMix (1) Mix(Domestic) 8.7% 7.7% 7.0% 6.1% 5.5% 4.0% 3.8% 3.9% 4.0% 4.5% 16.7% 17.4% 18.5% 19.5% 20.3% 2.3% 2.1% 2.1% 2.0% 1.8% 4.8% 4.4% 4.1% 3.4% 3.0% 15.1% 15.0% 14.7% 15.8% 16.2% 20.0% 19.6% 18.5% 17.3% 20.8% 20.2% 21.3% 22.0% 20
Slide 10: Commercial Real Estate (CRE) Held For Investment - Detail
Commercial Real Estate (CRE) Held For Investment - Detail Outstanding as of December 31, 2023 ($ in millions) Land and CRE Type FL TX NY Other Total % Total CRE % Total Loans (1) Income Producing (2) Construction Retail $ 513 $ 134 $ 81 $ — $ 728 31.3 % 10.5 % $ 728 $ — Multifamily 345 87 90 35 $ 55
Slide 11: Credit Quality
Credit Quality Allowance for Credit Losses NPLs/ Total Loans and NPAs / Total Assets ($ in millions) 0.65% $106.0 0.54% 0.71% $98.8 $95.5 0.46% 0.47% $83.5 $84.4 1.48% 0.31%0.51% 1.40% 1.39% 0.41% 0.57% 0.56% 1.22% 1.20% 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 Allowance for Credit Losses A
Slide 12: Allowance for Credit Losses
Allowance for Credit Losses ($ in millions) $98.8 $95.5 $12.1 $2.6 $5.3 $1.8 $(4.5) $(20.6) 3Q23 Requirement for Gross Charge-offs Loan Growth Requirements for Recoveries Houston Held-for- 4Q23 Charge-offs Credit Quality, Sale Loans Factor Updates & Macroeconomic Changes 12
Slide 13: Net Charge-Offs Composition
Net Charge-Offs Composition ($ in millions) $20.6 $6.8 $(5.3) $(8.5) Gross Charge-offs Specific Reserves Allocated in Total Recoveries Net Incremental Charge-Offs Previous Quarters Gross Charge-offs Net of Gross Charge-offs Previously Allocated Reserves Gross Charge-offs / Avg Total Loans HFI 1.16%
Slide 14: Criticized Loans
Criticized Loans Non Performing Loans ($ in millions) $18.4 $33.2 $6.1 $34.4 $(23.3) 3Q23 Downgrades to Loans over 90 Days CRE NY Loan Exited 4Q23 Non-Accrual Special Mention Loans ($ in millions) $34.8 $46.0 $29.2 $(1.0) $(17.0) 3Q23 Downgrades to Downgrades to Net Paydowns 4Q23 Special Mention Non
Slide 15: Net Interest Income and NIM
Net Interest Income and NIM 15 NII and NIM (%) ($ in millions) $82.2 $82.3 $83.9 $81.7 $78.6 80 70 60 50 3.96% 3.90% 3.83% 40 3.72% 3.57% 30 20 10 0 4Q22 1Q23 2Q23 3Q23 4Q23 Net Interest Income NIM Total Deposits Beta Evolution Cost of Funds 1.96 2.00 1.00 4Q22 1Q23 2Q23 3Q23 4Q23 Cost of Deposits (
Slide 16: Net Interest Margin
Net Interest Margin Margin Bridge 3.57% 3.72% 0.15% 0.16% 0.03% (0.01)% (0.02)% (0.16)% 3Q23 Loans Loan Recovery Securities Other Earning Funding Mix Cost of Funds 4Q23 Asset Mix 16
Slide 17: Interest Rate Sensitivity
Interest Rate Sensitivity 17 Impact on NII from Interest Rate Change (1) Impact on AFS from Interest Rate Change (1) As of December 31, 2023 Expected AOCL Improvement 6.1% 4.6% 1,328 1,271 1,250 3.8% 1,216 1,189 9.3% 1,161 1,104 0% ($ in Millions) -1.2% 4.6% 0% ($ in Millions) -3.1% -6.3% 2.9% (50)
Slide 18: Non-Interest Income Mix
Non-Interest Income Mix Non-Interest Income Mix (1) Assets Under Management and Custody ($ in millions) $19.3 30 $24.4 $26.6 4Q22 4Q23 $21.9 $11.4 $13.2 $19.5 $13.4 20 $7.0 $1.0 $6.5 18% 17% $2.1 $0.2 $3.4 $0.5 $1.2 $0.8 $4.5 $4.5 $4.4 10 $3.1 $3.8 $2.0B $2.3B $4.1 $4.2 $4.3 $4.4 $4.2 $4.8 $5.0 $4.9
Slide 19: Non-Interest Expense
Non-Interest Expense Non-Interest Expense Mix Non-routine Noninterest Expenses ($ in millions, except for FTEs) ($ in millions) 50 120 $109.7 $43.1 40 90 $72.5 30 $64.7 $64.4 $76.7 $62.2 60 $35.5 $38.3 $29.4 $29.8 $33.1 20 $13.4 30 $34.9 $34.2 $32.8 $31.3 $33.0 10 $6.3 722 $2.0 710 $3.4 692 700 $2.4
Slide 20: EPS Trend
EPS Trend Change in Diluted Earnings (Loss) Per Common Share 1 0.5 $0.28 $0.66 0 $(0.18) $(0.13) $(0.51) -0.5 -1 $(1.14) -1.5 3Q23 Core PPNR Net Non-Routine Provision for Credit Income Tax Benefit 4Q23 Items Losses Diluted Earnings Loss in 4Q23 reflects the impact of $37.4 million of net non-routine
Slide 21: 2024 Outlook
2024 Outlook • Projected loan growth of approximately 15% (annualized) • Projected deposit growth expected to match loan growth; focus on improving ratio of noninterest bearing to total deposits • Loan to deposit target will remain at 95% • Net interest margin expected to be stable in the first half
Slide 22: 2024 Overview
2024 Overview • 2024 is a significant year as the Company and Bank transition from a multi-year transformation to focusing on execution • With the FIS conversion and much of the physical infrastructure changes nearly complete, along with the executive leadership team now in place, our primary focus
Slide 23: Supplemental Loan Portfolio Information
Supplemental Loan Portfolio Information
Slide 24: Loans Held for Investment Portfolio by Industry
Loans Held for Investment Portfolio by Industry (December 31, 2023) Non-Real Highlights ($ in millions) Real Estate Estate Total % Total Loans Financial Sector (1) $ 6 $ 249 $ 255 3.7 % • Diversified portfolio - highest Construction and Real Estate & Leasing: sector concentration, other than Commerc
Slide 25: CRE Retail - Detail
CRE Retail - Detail As of 12/31/2023 CRE Retail (1) CRE Retail - Single Tenant (1) Retail - LTV 60% Theme/Festival Center; 12% Neighborhood Center; 39% 50% 40% 36% Tobacco & CBD; 36.0% Food and Health Retail; 25.0% 29% 30% 19% Community Center; 16% 20% 16% Single Tenant; 7% 10% —% Clothing; 39.0% 0%
Slide 26: CRE Office - Detail
CRE Office - Detail As of 12/31/2023 CRE Office (1) Office - LTV Texas; 11% 60% New York; 8% Others less than 50% $5M; 13.0% 42% 40% 33% 30% 20% 16% South Florida; 68% 10% 10% —% 0% 50% or 51-60% 61-70% 71-80% 81% or Total: $353 million less more Loan Portfolio Percentage: 5.1% (1) CRE office loans
Slide 27: Appendices
Appendices
Slide 28: Non-GAAP Financial Measures Reconciliations
Appendix 1 Non-GAAP Financial Measures Reconciliations The following table sets forth selected financial information derived from the Company’s interim unaudited and annual audited consolidated financial statements, adjusted for certain costs incurred by the Company in the periods presented related
Slide 29: Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 1 Non-GAAP Financial Measures Reconciliations (cont'd) Three Months Ended Years Ended December 31, December 31, September 30, June 30, March 31, December 31, 2023 2022 ($ in thousands) 2023 2023 2023 2023 2023 (audited) Total noninterest expenses $ 109,702 $ 64,420 $ 72,500 $ 64,733 $ 62,24
Slide 30: Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 1 Non-GAAP Financial Measures Reconciliations (cont'd) Three Months Ended, Years Ended December 31, December 31, September 30, June 30, March 31, December 31, 2023 2022 ($ in thousands, except percentages and per share data) 2023 2023 2023 2023 2022 (audited) Net (loss) income attributable
Slide 31: Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 1 Non-GAAP Financial Measures Reconciliations (cont'd) Three Months Ended, Years Ended December 31, December 31, September 30, March 31, December 31, 2023 2022 ($ in thousands, except percentages and per share data) June 30, 2023 (audited) 2023 2023 2023 2023 Net (loss) income / Average sto
Slide 32: Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 1 Non-GAAP Financial Measures Reconciliations (cont'd) Three Months Ended, Years Ended December 31, December 31, September 30, 2023 2022 ($ in thousands, except percentages and per share data) 2023 2023 June 30, 2023 March 31, 2023 December 31, 2022 (audited) Tangible common stockholders' e
Slide 33: Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 1 Non-GAAP Financial Measures Reconciliations (cont'd) (1) As previously disclosed, the Company adopted CECL in the fourth quarter of 2022, effective as of January 1, 2022. See Form 10-K for more details of the CECL adoption and related effects to quarterly results for each quarter in the y
Slide 34: Income Statement Highlights - 4Q23 vs 3Q23
Income Statement Highlights - 4Q23 vs 3Q23 ($ in thousands) 4Q23 3Q23 Change Total Interest Income Loans $ 127,090 $ 120,244 $ 6,846 Investment securities 14,460 13,868 592 Interest earning deposits with banks and other interest income 4,019 5,271 (1,252) Total Interest Expense Interest bearing dema
Slide 35: Glossary
Glossary 35 • ACL - Allowance for Credit Losses • MV - Market Value • AFS - Available for Sale • NPL - Non-Performing Loans • AOCI - Accumulated Other Comprehensive Income • NPA - Non-Performing Assets • CET 1 - Common Equity Tier 1 capital ratio • NIB - Noninterest Bearing • CRE - Commercial Real E
Slide 36: Glossary (cont'd)
Glossary (cont'd) 36 • TCE Ratio - 4Q23 includes $70.8 million accumulated unrealized losses net of taxes primarily related to the decline in the fair value of debt securities available for sale, which are carried at fair value, as a result of increases in market rates. • Total Gross Loans - include
Slide 37: AMERANT Mission, Vision and Precepts
AMERANT™ Mission To provide our customers with the products, services and advice they need to achieve financial success, through our diverse, inclusive and motivated team that is personally involved with the communities we serve, all of which result in increased shareholder value. Vision To be the B