Amerant Bancorp Inc. Q1 FY2025 earnings call

• Implemented a change in approach focusing on asset quality, strategic updates (e.g., mortgage business shift to Florida focus), and personnel additions. - Achieved solid deposit growth, with total deposits up $300 million. Managed balance sheet to protect net interest margin and hedge rate risk. - Mortgage business transitioned to Florida-focused model, expecting lower variable costs and reduced operating costs by ~$2.5 million per quarter. - Added key personnel in risk management (e.g., Chief Credit Officer, Head of Credit Review, Head of Enterprise Risk Management) and business development (e.g., Chief Consumer Banking Officer, Head of Treasury Management). - Expanded Florida market presence with new regional headquarters and banking centers in West Palm Beach, with planned openings in Miami Beach and Tampa.

Total assets reached $10.2 billion as of the close of the first quarter, an increase from $9.9 billion in the fourth quarter. Total investments were $1.76 billion, up compared to $1.5 billion in the fourth quarter. Total gross loans were down by $52 million to $7.2 billion, down from $7.3 billion in the fourth quarter. Total deposits were up by $300 million to $8.2 billion compared to $7.9 billion in the fourth quarter. Net interest income was $85.9 million, down $1.7 million from the $87.6 million in 4Q. Provision for credit losses was $18.4 million, up $8.5 million from the $9.9 million in 4Q. Non-interest income was $19.5 million, while non-interest expense was $71.5 million. Net interest margin was flat at 3.75% compared to 4.2%, but significantly better than projected.

• Expect to maintain above the $10 billion level in asset growth in 2025. - Net interest margin projected to be in the mid-3.60% range for the second quarter. - Expenses projected to be comparable to the first quarter in the second quarter. - ROA expected to reach 1% in the second half of 2025. - Loan growth expected in the 10-15% range by year-end, with potential temporary asset mix changes to purchase securities due to macroeconomic uncertainty.

• Macro and geopolitical uncertainties impacting asset quality. - Volatility in interest rates affecting net interest margin. - Migration of problem assets and potential realized losses. - Impact of tariff negotiations on the economy and bank performance.

Q: On loan growth outlook, impact of pullback and confidence in hitting double digits this year?

A: Jerry Plush and Sharymar Calderon noted prudent approach, selective lending, but belief in deposit growth and continued asset growth.

Q: On asset quality and profitability, visibility on migration of problem assets and realized losses?

A: Sharymar Calderon said charge-offs expected to go slightly up in Q2 then normalize, with 1% ROA expected in back half due to expense reductions from mortgage business shift.

Q: On mortgage expense outlook and macro uncertainty impact on initiatives?

A: Jerry Plush said expense savings should drop to bottom line, and initiatives like branch expansions are well underway despite macro uncertainty.

Q: On buyback, margin outlook, and credit metrics?

A: Jerry Plush and Sharymar Calderon discussed buyback purpose, margin expectations with new loan yields and deposit costs, and ongoing proactive credit risk management.

Q: On risk rating changes, financial statement updates, and mortgage strategy?

A: Jerry Plush and Sharymar Calderon addressed timing of financial statement updates, proactive risk management, and mortgage business shift to focus on Florida and relationship approach.