Earnings call transcript Q2 2023

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Operator

Good day and thank you for standing by. Welcome to Amerant Bancorp Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I'd now like to hand over conference over to your speaker today, Laura Rossi, Head of Investor Relations and Sustainability at Amerant Bancorp. Please go ahead.

Laura Rossi

Gigi. you, Thank and Amerant everyone for us joining Good second thank quarter review Bancorp's XXXX to morning, you results. and our On today's Executive Vice Calderon, Chief Chairman our Officer. President Executive call are Officer; Jerry and Plush, Chief Financial and Sharymar

discussions As today's forward-looking of Securities call meaning on Exchange we the note Act. within contain please the begin, that statements

as information addition, will also a measures. reconciliation the to refer release financial references GAAP be for financial measures for In measures. company's regarding statement well of non-GAAP statements forward-looking Please and made to as earnings to non-GAAP

Chairman I will now and turn CEO, Plush. over to our Jerry

Jerry Plush

Thank Financial quarter and Lafigliola XXXX everyone, is our earnings first Officer you, as us first thank second I'd as CFO. call. joining who like on to and Carlos her Amerant's good thank Laura, with to earnings also and call for welcome Chief you today tenure new morning, his Shary for our

became of recently part our both having new Carlos Officer executive I stronger believe Operating Chief team organization. a makes them As much announced, us in as our of June.

results. expense upfront in Next, outstanding clearly while the important the driven of provision originated it's by CECL to that I details substantial in The commercial are this negative calculation. by Shary last in her in provide City factors from recorded quarter a additional loan address results was the economic In many legacy real quarter. XXXX used this estate quarter New was York increased and XQ ways, think the from increase provision will the overshadowed an reflected section,

our on and sets believe for review able we rely organic deposit in from XQ clearly in growth goal and ourselves outstanding The that year-to-date this apart competition. to will the being reflects the of us growth we presentation deposit

showing sources in shortly. types granular essential We've in to of on is the today's earnings and our and relationship-based first bank I how a and will it information talking performance. detail provided it been be more into deposits presentation in and about is XQ We've it year-to-date deposits go

quarter the primarily net addition, average overall of for strong the reporting from as are coupled company, public reflects a on pre-provision in any core history higher net achievement quarter margin. of In balance a revenue driven this the with we the interest a company highest

So and core core as we in right XX% efficiency. result a of higher lower NII expenses, at were

So further we slides and slides we order additional today, that will have some we've be the go through transparency. you believe see that we the changed added add and will as helpful presentation

highlights items detail. liquidity for going XQ So other our actions going and to cover balance then with in and key and along taken deposits, the quarter performance is cover I'm and sheet capital to Shary in

of to highlights. attributable turn of the million decrease 'XX. provide was income was This primarily Slide $X.X to compared and a company X second Net we'll by now summary here So quarter the million higher our we quarter levels. $XX.X interest in to the we provision XQ driven in losses XX compared our The quarter, reduction for but period. X.X% point X.XX% in from the to basis margin with guidance a previous net margin reported XQ line credit was the last for

of $XX $X.XX loans compared last $XXX gross billion and XQ deposits billion Total to million $X.XX Our assets $XXX $X.XX up an $X.XX compared compared billion, increased last million were quarter, the quarter. 'XX. billion total increase to were million to

of requirements to excess considered continue capital well levels be June XX, to XXXX. and capitalized at strong minimum company's be in well The regulatory

of at June strong Our X.XX% as equity ratio XX, remained XXXX. common tangible

would the also upcoming the deducted held portfolio slide, adjustment TCE. is related which market vast the an TCE the you result we of market of classify As available TCE the value from X.XX%. In portfolio, if our investment in mark show to we'll to portfolio sale, majority as for to deducted maturity on

quarter, dividend XX. quarterly on of Lastly, $X.XX May per also out during share cash the paid announced previously the we

X million and mostly $XX.X in the to offset the includes income We of can recorded in on by to previous turn quarter. see gains expense, million of $XX.X the reported million we'll now here a non-interest total of non-interest early non-routine bank So core loan $XX.X which you non-routine extinguishment home Slide total $XX.X federal million PPNR in $XX.X million, was advances. compared

were non-interest previously we in of these in net conjunction was listed negative our $X overall here with the and Form-XK non-routine of all in XQ recorded are items filed million. furnished mid-June non-deal The Non-routine items expense in detail substantially a of impact in virtual roadshow. these

We'll turn now taken to quarter. second the during Slide actions X and cover key

million loans again, $XXX we million or and XQ. in or X.X% $XXX reported So growth X.X% of year-to-date

had Regarding million deposits, of $XXX $XXX year-to-date or million X.X% growth in X% XQ. we've or and

loan the XQ XX.X% 'XX. for deposit for is Our ratio to XX.X% of compared now to and XQ XX.X%

improving for on As on working noted deposit needs. generate growth funding asset more deposits. earlier, except core we're to reducing also focused organic other More We're reliance shortly. even sources, on and mix the liability that on deposit

regarding listed Next, continues. here our rationalization center additions. banking details We've

opened June over deposits. in and Our Florida planned location million key as $XX in to have we already

Tampa year locations downtown open Miami, Fort to and are Lauderdale still by end and Our in XQ new process in 'XX.

of from location been the OCC. the Approval stages. received banking private and is a the for LOI final Texas River agreement section in Houston, under in already has We're Oaks

side, location On Miami, close Champions opening. in Downtown closed with to coincide the Edgewater Miami our intend Houston, the FM-XXXX our in into Texas and merged and to Florida Center location our we we consolidation Banking it

Turning now repurchase the to stock program.

average June, or at value. in program in million, have $XX.XX Class and share so May at book $XX per share million We price X.X price for a stock XX,XXX A of an $X.X to common and shares we repurchased repurchase place

remaining balancing prudently million price quarter this are and We levels capital cash on as between was program of $XX end. hand, levels. under Availability

the to and our focused I'm us on to people finalized we executive our totally changes having the welcome changes new results. the delighted people, are impact board moves these team say further business to optimized and We're happy org regarding expected have now and significant Next all these structure. already on to behind a be on

onboarded new go merged retail our two market one and during banking banking president one business We were commercial of forward into unit leader lines Houston the in resulting between savings. quarter. head significant of new synergies and business under the gain to Our

We ratio we support analysis intend also close ratio also did facing go the the personnel in to which to in changes efficiency period will organization result XX/XX to ahead. and These rationalize support and other customer improve as improve this to be areas, of to positions the further future we expense savings. several

three three week. development I mentioned in as banking we hiring serve the Houston key here business personnel to and including we've starts next officers whom South who finally, of continue markets And we key selectively August add in development new commercial the private the business Florida, start in new added all early in leader of

overview Slide So X earlier. This provide an regarding of slides I'll one I is and deposits we'll June referenced turn of now to XX. as the new

at of So were prior again, from $XXX quarter million up billion, total second deposits $X.X the end the the quarter.

commercial, the as You here international. can well in see was as and private banking retail increase primarily

committed to our $XXX of exceed intent we of a We maintaining million quarter even and for was XX% and deposits million growth by institutional referenced the Organic than current remain reduced we to target and ratio not loan XXX%. to the $XXX the as million, deposit $XX broker just higher respectively. with

$XXX X The see, increased you and continue now well-diversified domestic we'll customers. primarily and to here totaling total now So turn mix can by deposits. transaction quarter. deposit to for deposits Domestic quarter the deposits or million this a to composed Slide of was we end the of have international of that's compared account and growth up the driven $X.X and XX% X.X% as of time billion previous quarter

deposits pricing, $X.X deposit $XX take for infrastructure as to million We continue emphasize source this it do billion and deposits of advantage of X% XX% and to our which And favorable gathering funds additional or to funding up that We the totaled provides to of to intend international is our prior total international diversification believe base. as to given capabilities. account essential and compared quarter. was a

an XX,XXX international include of of accounts size include $XXX,XXX, size Domestic deposits XX,XXX approximately average an over average $XX,XXX. with accounts with deposits while

the time or of compared second Our quarter. of million X.X% excluding billion increase $X.X core the $XXX deposits quarter, all previous an defined the as as total to were of end deposits

million $X.X core non-interest previous deposits in XX.X% and savings billion X.X% versus $XXX deposits, $X.X in quarter, and demand million X% bearing or billion million The quarter. million down the or in the previous $X.X included $X.X which up down $XX versus billion was interest prior quarter, bearing versus or market $XX deposits, in money

million deposits by the provide to in requirements table here the additional which state carry move insured again of now second and we've our are public quarter, of and subject as Slide coverage. data this of XX% in We'll additionally, we collateral deposits to included $XXX are Florida state to regarding the deposit Florida. FDIC qualified insurance X of

Reciprocal the over which insured grew are of billion the accounts deposits IntraFi XXX% at network QX XXX 'XX. through $X end FDIC the to of by as

protect ongoing marketing we existing customers our to an and customers to on and basis. as as to this proactively proactively as are customers this well our branded We to it's promote AmerantProtect intend potential continue to

Additionally, of our total fund of $XX are the as end providers quarter. million those large second of above defined with the balances XX% as funding approximately

actions management. only some We're on practices, to and now provide liquidity on move additional strengthen position. We'll our not we've taken to regarding risk but Slide funding our capital X going details to

liquidity the large gathering So testing or government as well reserve the on U.S. deposit pipelines, portfolio ratios, the as of such credit, lines our daily analysis account fund of here our of indirect direct have of practice regular $X.XX liquidity management providers, and and federal lending our standard XX% monitoring in things billion active management includes shown limits as of guarantees. collateral investment as daily

So were credit from availability, the of advances as in FHLB XX, 'XX. $XXX of total terms June million

$X.XX emergency needed from billion availability $X.X no Federal remaining current credit Bank. additional this open capacitor billion. of an funding our or the borrowing have the facilities with collateral is discount been the on note that We Based funds availability, source. from window Reserve FHLB have Please from from

liquidity taken our a at position increase we Reserve position, million cash Regarding Bank. have Federal to of additional $XXX the strong actions

we're our deposits are ensure we XXX% clients insured. their promote to all mentioned, just with continuing As of to AmerantProtect large to work FDIC deposit

we minimum continue in XXX covenants and include We this product and requirements to deposit to increased financing new with relationship. volumes by coverage for balance $XXX under any added XQ million accounts

$XX.X hand. cash in liquidity use in debt dividend declared our of approximately our covers $X.X times by XQ liquidity we the at will board service million of company, which this of hand, The and X on annual OpEx So just million terms only 'XX. holding on carry as

to now XX. turn Slide We'll

Here, we and shares provide an outstanding. repurchases update on share

during again given on began to quarter. does the having share opportunity program to pause reflect price elected we presents in We prudently million believe So use so true repurchases market this after $XX to stock, our repurchase. not valuation March the current industry our the repurchase an events, of

referenced prudent and In today you than better can before, XX,XXX a I we and way, believe said buying when this the XQ, repurchased again shows what before I've say and own are doing of nothing you common of it create. stock you and business. back shares in It will right I'll done there's as measured your in part value

turn now show we'll to our relative to and So regulatory XX capital Slide we'll minimums. position

and end XQ of our capital total XX.XX% ratio at So at CETX XX.XX%. 'XX, was ended the our

includes $XX equity on AOCI after was in from Our AFS resulting portfolio investment of which valuation the ratio common the change X.XX%. tax tangible million

of this ratio, per here and ratio to of $XX.XX held that of our this the from would quarter to an adjusted equity maturity TCE is not we small investment if show what in common end. results tangible $XX.X book X.XX%. portfolio impact have share that impact included and stood million maturity show also for losses Remember our TCE, relatively tangible the at this in the the on valuation have which we our to unrealized value here adjusted emphasize would required, but held as our Regarding

Shary? go now. S, quarter items balance key with detail. metrics, in all the that sheet results She'll other to for Shary the and over turn over things said, I'll more

Sharymar Calderon

Jerry, you, everyone. morning, good and Thank

to more and our Happy share position performance. to color be here financial on

I'll Slide key our turning by XX. begin changes to compared to metrics last So performance and discussing quarter. their

compared and is for bearing interest deposits continue to to Non-interest rates XQ given deposits deposits XX.X% as reduced on higher no the surprise XX.X% comes previous quarter. interest total market This decreased in to customers competition. DDAs in seek their as to

through continue the focused We mentioned. be keenly ratio to this Jerry increasing on initiatives different

and XX.X% Our discussed. ratio last and non-routine efficiency of to ROE compared this quarter we respectively, charges was as higher were provision quarter ROA and XX.X% the at lower a and result X.XX%, X.XX%

the show easily for one-time can excluding more underlying and so see we quarter. the core consistency items, of efficiency For transparency, three and performance operating metrics ROA, you ROE non-routine

which charges. XX.X% core the As includes XX.X%, is efficiency versus an example, non-routine

coverage a compared to to provision the losses consumer the in loan with X.XX% of X.X% credit result as outlook. and to for Lastly, to charge-off updates City of increased York loans the the New total allowance increased economic associated legacy the XQ as well as loan

Continuing to XX, I'll discuss portfolio. Slide investment our

at second quarter, compared quarter. to slower prepayments. the recent X.X When Our which the the $X.X investment the higher billion, the to due years and quarter longer balance securities previous duration rates prior as was unchanged extended duration investment portfolio therefore has mortgage to compared to model anticipates of remains

sale. available impact I would interest did discuss we take on valuation minute debt for the securities to the rate quarter, of increases to As last like a of

to this portfolio quarter. $XX.X increase $X.X of million compared million As of in of tax June, decreased of the after the value market first an the end

was by rates second quarter-over-quarter rising during the driven change The quarter.

available for total XX% sale the securities XX% portfolio, represents Federal remaining is while and portfolio investment Our the FHLB maturity stocks. and and of Reserve represent balance health

Slide compared the to the quarter, second XX, total about growth talk billion at up of to end X.X% At portfolio. on $X.X were $X.XX the the billion, the let's slightly of loan loans end first quarter. Continuing

growth in by prepayments Partially residential offsetting family commercial loans was to primarily compared loans. primarily origination in increased XQ. consumer Specialty single million specialty loan were and million $XXX finance finance This increase mortgage. of this $XXX million, efforts, $XXX to approximately in and driven

with was customers portfolio of and in $X.XX includes increase amount $XXX residential 'XX. billion million million an and mortgage single primarily originated during the other in $XX billion, done This family relationships. loans strategic private to our $X.XX compare The around XQ banking purchased quarter,

had Consumer X.X% $XXX of million, a approximately loans as a quarter-over-quarter. us or This to yielding $XX for higher of which tactical includes indirect in XQ.XX yields. move represented million were decrease million $XXX loans, increase

$XX quarter. $XXX are are prepayment buying end speed, current we quarter, the New QX is of as held as which we of million Also, the strategy York sale last 'XX over compared focusing portfolio. will on production and balance our any CRE mentioned Loans of in Mortgage City organic The for that the estimate growth are next remaining years. since We with the XXXX. consisting Amerant we As of new continue totaled no connection these the longer of run-off off pay properties. all million two XX to million $XX previous at

our progress for of of In continue our line include with full business will show X% focus of to Tampa to which this for a percentage represents end us significant of the growth quarter. the portfolio, the in Tampa, almost a source banking as as we total relationships. market was opportunity

our language of defined reference to loan this contracts converted to with total transition SOFR note clearly have robust approximately completed $X.X balance alternative approximately we Of rate. quarter, XXX fallback from loans a successfully includes ensure a We billion. LIBOR a existing that

Slide a at closer XX, take to credit quality. look let's Turning

remains is reserve $XX.X The million, strong. was of XX.X% losses end at coverage quarter. sound the previous the from $XXX credit at quarter allowance of credit the and for close million the second increase an Our quality of

that $XX for It of the reflects credit million economic in implementation and and We loan recorded for to in the factors. now impact quarter quarterly quality additional the credit the which periods. $XX.X for losses for for credit is reserve to losses to provision of specific million desegregated updated growth provision includes million requirements account $X.X those important reflect CECL a mention million $XX.X charge-offs, second in quarter, XXXX

and consumer loans. charges commercial there million related in quarter of were During the $X.X was by second $X.X loans related million XXXX, $X.X multiple million indirect offset in to net $X.X million to This which of recoveries.

for points Our are $X.X a theory loans mention to primarily and $XX.X million. points for loan downgrade City basis a non-performing last up due to compared basis is the York to quarter. total a million of XX loans further New to commercial This XX loan from special

includes a last in increase sale increase Non-performing at transportation to the the of million and decrease end to repossessed disclosed other related second and totaled $XX.X million repossessed quarter. of NPLs the 'XX. quarter, in XQ of This assets assets compared the million $X.X $XX.X an equipment

close to quarter and the times The the the reserves up basis basis from times, assets X.X XX closed non-performing of was loss XXXX. the the end of times the assets loans quarter XXXX, points, second XX at quarter ratio coverage non-performing X.X In at last the X.X of last first of total points down to from quarter second at of of loan from of year. ratio

CRE Slide portfolio XX, our further on we in discuss Now detail.

weighted a sponsorship tiered debt experience and service XX% times well on based value have as of to as for coverage conservative We worth years of AUM, sponsor. and average each of X.X profile loan net strong

CRE the end we XQ tier XX% of had As borrowers. of portfolio 'XX, our of top in

loan significant total. no CRE the concentration have represent We our tenant portfolio in the tenants of top XX% XX as retail

tenants recognized and Major clothing regional grocery food and others. among national stores, include

analysis a environments. rate turn factors their underwriting note Our includes which swaps, caps protects Please hedged that interest of tenant and debt service retention. via like methodology by the portfolio them CRE or for over of key rates borrowers in CRE coverage has ratio, for over been sensitivity vacancy against our risk rate interest impact rising variety XX% and

or Next, quarter. interest second interest Net on the X.X% up net to previous I'll compared discuss million, for net $XX.X was million and interest income income quarter the XX. margin Slide $X.X

increased balances. also offset sensitive borrowing, and recorded during well via of rates to via lower rates as as due of XQ the position cost we repricing higher enabled deposits balances market to asset cost which us despite Our incremental the

assets, XQ, theory the banks primarily line loan advances, and earning in XX single Fed's on higher family in increase driven commercial loans primarily the The deposits rate savings primarily basis money in and extent and decreased increase total residential with rates on point and balances interest was lesser and owner interest earning a increased and by FHLB benchmark balances, deposits. loans occupied to with market

via higher increase of repriced continued had market increases rates. rates quarter, experienced to repricing market not money betas the as deposits As current that time as deposits we of during the well rate at effect combined and

XX up see interest a basis you a the on observed of since quarter-over-quarter. in but approximately points cycle, graph, over points XX we beginning rate As beta cumulative basis can the of the basis

last have market rates time portion reprice large reduced a expense to current As and deposits is impact repriced we in the quarter, of quarters. indicated our coming at limiting our interest a balance left in

on the to Moving net margin. interest

As Jerry quarter-over-quarter. mentioned, X.XX%, was NIM X the for by points down quarter basis second

our funding contain NIM a a said, to of and I asset ability As sensitive costs decrease offset reflection our in further is position.

NIM However, for forecast market in domestic the pressured continue to higher substantial demand be deposits final margin expect remarks. some provide and to my I'll given competition color for on additional rates. we

on Moving XX. rate to interest Slide on sensitivity

of asset see our balance and a loans repricing within You XX% with can year. the sensitivity sheet having of structures floating our rate XX%

As by change portfolio our cycle a said we to rate incorporating of in We portfolio loans. currently adjustable rate we our originating loan previous for with have continue rates. calls, floor over have XX% in position floors adjustable when

portfolio this SOFR see can rates our the rate. you to of transition here Additionally, XX% to net index with

reductions the and withstand portfolio maturities profile remains valuation previous changes. to by sensitivity to of organic in sensitivity to portfolio investment ability during $XX AOCI NIM million our available include remark would to of stable like additional for expected negative of to sale quarter. improvement our I expectations We the rate XXXX. compared Our the due the showcase the

continue our best manage XXXX. of sheet our for to the remainder balance will actively to position We bank

second in by from Slide quarter XXXX. income million $XX.X XX.X% non-interest first was or to Continuing up $X.X million the million, of $XX.X the quarter XX, in

earlier, by driven non-routine to As $XX.X quarter. securities million on sale increase lower referenced previous non-interest sale were losses items. the the available income The for of was primarily of compared

$XX management derivatives valuation. lower $XX from or quarter. income lower million second under execute as mortgage increased the million totaled as the by end quarter, partially net from billion income and on non-interest $X.X from by increase strategy first customer fee our by of continued banking Amerant was up we in increase This well the as million This approximately as market in income. was assets new assets of X.X% relationship-focused driven approximately to $XX offset

Turning to now XX. Slide

were quarter. the Second first quarter million, up or $XX.X from non-interest expenses million $X.X XX%

Jerry non-routine quarter expenses as we $XX.X our earlier, As expense of million covered considered this items.

core non-interest expenses these the second of XXXX. quarter million were items, Excluding $XX.X in

and from Edgewater loss on reprocessed versus data branch connection in was telecommunication with with with million close with in teams at fintech vendor charges $X increase the additional million an investment expenses function, impairment engagement investment in write-off ratio primarily of the decision the equipment software an expenses carried round, and activities, our which the of expenses expenses both in in support specific $X given assets our the as advertising in related partnership quarter-over-quarter closure additional with with million cost advanced professional to sports higher of The severance Florida. investment of related in in $X.X teams additional resulting location Miami, result for round, to our due $X.X of driven and of in rationalization $X.X connection financing processing contracts third-party by mentioned an a by organizational charges expenses a upcoming sale with championship Jerry, termination in million connection customer current additional in-development connection run million million provided million improved FIS, $X.X connection in the phasing to our given with $X.X

with from non-interest in salaries of fees. lower new clients index, replacement primarily to level lower and by the expenses loan a additional cap the XQ rate derivative LIBOR swap professional to interest related due in and transition increase The to offset of expenses partially absence contracts expenses lower was

bank XXX team XQ. slightly ended and In quarter FTEs, Amerant of we had XX Mortgage. lower the XXX by we in XXX the terms from of our with by XXX employed the Out members, team, are

was Mortgage. On Mortgage a of Amerant to with PPNR turn million Amerant a on XQ On consistent results. negative XX, had 'XX, XQ standalone which focuses 'XX in Slide that which $X basis, of note, let's

Amerant excluding ratio activities to Mortgage from from XX.X%. XX.X% efficiency improved Our the

loans During with shows the $XXX purchased July $XX XXXX million $XXX The customers. to million in X, second noted related to slide approximately process as Mortgage $XXX or it's in rates in Amerant and quarter, the current million on pipeline company the lost. of in originated applications and bank

before I some I back to you Now next with turn for on it like would Jerry, to our expectations color provide quarter.

in growth, stronger in annualized used XX% excess we over growth expect Regarding further with current cost pipeline will the loan growth be quarter line reduce loan given to third any continues be the note the growth that to communicated earlier. Deposit but institutional growth strong, deposits. high

Given costs we competitive rising environment, due to margin to reflect pricing. rate deposit expect

in reduction a is of XX basis points. quarters to XX next expectation Our in NIM the

For $XX non-interest $XX quarter. million of to a million income, range expect we next

million expense Regarding next and core around to losses and in quarter. $XX million to be in or remain expenses, operating we provision normalize the non-interest for estimate range $XX we expect credit

for his it Jerry over pass remarks. to closing I'll

Jerry Plush

Thanks, Shary.

cover me items in Let a closing. few

FIS is delayed just conversion three has from to push at to FIS want We no ensure we timing back the this readiness everything our quarter agreed everything to right First, the testing do right, folks been of workarounds. have after early rounds and to as November.

customers to our and So thing now, to the systemically being on absolutely people. certainly it everything converted do works to should as while planning we for it sure our right were ensure is great a make experience by

enhancement further growth margin evaluating light we're expenses, strategies inevitable strategies, from referenced, in the everything, Shary so just margin that of among compression Next, others.

at to the to to do funding higher pressure in on and expect to and think earnings organically. everything I And and we'll look so. continue is of do this we continue coming we grow intend that finally, have absolutely must costs, we light already begun from

We the are to serve full in relationships banking and existing with ample us. customers willing we have are grow opportunities and to new business. open There welcome for markets we

look I answer So any that, stop. I'll with Shary to will have. questions you and

Gigi, please open So you for if the would, Q&A. line

Operator

James. Rose from question from Michael line of [Operator Our Instructions] Raymond first the comes

Michael Rose

start NIB on could like just the that deposits everybody we dropped else. Maybe understanding mix

You initiatives guys I you know are a at have place. of lot XX%. in

a this sticky and and very in environment. type think foreign of clearly I deposit thing which unique very element, a is have cost You positive lower very

down Here of bottom quarter's on compression. a kind are efforts the margin some trying at this obviously kind going we after cost of get for after just just some get guide quarter? we of stuff, a to expected nearing given that any this the sense to or just we undertake? And Are of Thanks. a higher are near nearing you're bottom to deposit for trying paying sense NIM the growth a for

Jerry Plush

so expressed actively terms maturities seeing And which in look, is there, one want market of managing in different core, going in that as see growth real well. Michael, be strong and/or pressures, happening really you're Well, we whether there's coming. drop. happen equal their you're seeing great question. And you're let's not feel -- what's to bigger preference and deposit. money in clearly answer the clarify, customers have a getting certainly is Competitive to be growth The just money if we again, time are the clearly that to on money raising out returns CDs, right?

So greater again actually because to it's bearing, percentage, overshadowed we other our been but point, your grew growth case, in it's non-interest categories. as declined in by a the the

Our think to believe going is early too but that consistent our have forward. compression a margin to certainly of goal little that not view I we it's tell, probably is quarters

increase yields we'd can increases, again, an portfolio the of obviously on got We'd loan like we've given that to think of see this. in rate And out variable higher that there. depending percentage the manage proactively the we fix to

XX now in right that come solid we where think we is I believe So that do going are to XX it's to lower.

is us got for I pipelines core grow. important we obviously, see to bearing, clearly very both going getting international the the mean, the because keep on ramp can sides cost in to up and relationship deposit. on key to to and that a But attract continue more down is operating accounts. lower of growth recognize to are the balance the it's sheet. sticky a -- non-interest to great is there the costs is side the focus And we it our growth we've We view so advantage really also

Michael Rose

you Very leads into of helpful. a pipelines And kind mentioned kind question, solid. of follow-up that being

and I stronger is efforts maybe this in it I wanted of much Florida a markets to markets strong of annualized Is in X%, to into some how for like from. just loan of about better maybe from the that some quarter just the the is growth third you the really really sense it out is competitors? some where just versus that gain newer hiring or there? of that was get a of new Houston like the just kind Thanks. quarter. growth in sense think Trying lot Tampa markets in share demand growth a there's this and talked and market being coming these -- are some growth more it South get of

Jerry Plush

markets. we Yes, potential all three growth actually see in

consider all in greater got as if really to you three. up, across personnel over definitely of three the in Jason's building. little I that count as a at Tampa been counties that mortgage seeing some they've don't Florida and pipeline. of South area work a it's has team in So We're the versus the now team when been overweight in addition their Bay beginning it you one think office Houston, solid it's show out plus a of the XX to three counties, year. momentum in the demand the there break other. are Tampa, in in well right, the we to in that

Caroline joined in quarter. us the past obviously

and she's and hands meeting new doing proactively out a job there of around customers. with very her I think getting nice meeting and things customers

The for that thing renew, any open that customer with we wishes we're fuller all to expand we our relationships said, any a are customer new I business. as and requiring certainly relationship So customers. is with want

And this that's where deposit a from. bit fair growth is of coming

to eventually We got that we there there if to addition other our reasons very, to own speak so meet deposit put as we there's good there. with are requiring covenants opportunities customer And customer a in be said place. get are standard in that certain to isn't base mining very to

Michael, review real roundtable that the hold weekly deposit credit important, week, the not about just quick. pipelines the on on side. it's loan So committee only classic we're we what We excited. And hold I pipeline. Every talk I'll think call a

go leader organization, business is and And represented so we over every opportunities. every the in organization region in deposit the

shown I efforts fully intend in continue to sides. to our just numbers and we think press again that's So our both in

Sharymar Calderon

that to -- in into they each Jerry, international strategy of the important looking And we're or our come complement focus to to growth that through. I thinking lower our it's our our also about think we our markets, overall cost deposits with mention are when

it's strategy So I Tampa here South and think within our Houston, for Florida. built

Michael Rose

the maybe And for given challenges color. finally the just everything's on just you the that appreciate the expense side I of revenue me, Jerry out table on mentioned kind there. are

here, of in the it's more You guys lot difficult. since -- IPO probably little that wood gets a it chopped regard. have like From seems bit a

and gone the size where home runs be opportunities for singles to of are expense of Thanks. to just reduction to types the looking and trying efforts. be edges could around assuming more the Just doubles up you're going kind that cut

Jerry Plush

simple with we in total even have eventually good number already, the and something a a a potential of Yes. folks of the organization to as of organization. certainly Michael, hybrid the you more in footage give that square reassessing work We're we're in we situation, as sort scenario. hoteling lot looking I'll of told example, means could I've folks a whether a go

that sort everything is single that's in in at reassessing down and level So there. level table, on I'll item the of every summary our we're when consolidated it breaking every feeds those you P&L call and basically line our I say everything GL that looking expense the see single the

we because have think So things. up come few excited a with I I'm

the you, bring important our August here think are thing I of with to and the in investors of on all coming number of third that up lots quarter and updates share in just Shary on really I the conferences in September. have given progress so all that, to opportunities

got we've with three as and is things filings to give uncover fully at look XK move we documents updates you I way the forward. So things

Obviously, lots view but of do opportunities. share. are we done to and that, today process my think that have nothing work So would there we is in

Operator

PSC. the question of next Graham from Dick Our in line comes

Graham Dick

wanted buyback. guys the I to little saw use you I just on this start bit So quarter. of a

your I are common better there's bank sense the on said forward. the your attractive investment well to with appetite XX%. Tier own in seems and wanted here equity capitalized no for going over get Just shares that know stock. your you And pretty X

relative just a in have what that left the you there's on lot to be. guys you authorization might like get might trying active far. so seems So used a and sense what do for how to you It front guys

Jerry Plush

been good with question. slow We've steady Graham, it. and Yes,

going any I at we're and That a think out not been very slug. doing we've day consistent. big given represents

and our and way I Directors evaluating are we've very We continue. Shary Board openly What that I about consistently with -- that's chatted of we'll this. I and opportunities think obviously the

You balance when capital got you sheet. a to act. continue to grow want look to incredibly We've grow right, our it's have We because pay to prudent this, dividends. to be our at balancing

moving think all and at make different of sure people incredibly looking we're important know. pieces it's So we the -- to but

We continue pursue that we're place feel program. opportunities. us that up between active are have of take be and of an have that comfortable there And have going intend don't opportunistic. new We price put we we in or quarter rest a whether where to to to of that next we to, lot a necessarily we expectations now where

We but look It's levels, at a there of up company actively manage program the out also We And the balance. have have so I the in important obviously tool would sum that towards have it holdco. just clear to using we cash we we kind look and way -- place. the at a at terms a that of we eye needs it. to something it our is be this really capital in

Graham Dick

sense flip the I Okay. I wanted more the But to in multifamily little Understood. book office to like and on just guess small the then portfolio $XX just office to I book, And book just but bit York rent wanted borrowers for Are million, you our on New down the generate credit of couple in drill particular. I service any the being how how over and growth or the seeing saw out debt get able I plays or your on years? of performing and times is that might is whatever. front trends think coverage ratio you your book otherwise? that and X.X to kind guess next quickly terms it a of know it's relatively

Jerry Plush

I really that issues Banking, been two our I we very, with active been of Commercial new full will within being Look, very done tell has customers. this Yes. don't Esterripa It's to Juan time, team at we've the of don't have other New I the And circled that really at quarter problematic that one all the reviews, based see be the with to visited the members unfortunately that organization. properties like those really there's material horizon. certainly office. York. anything on you Head loans. any think in this on singular one. They're KYC, on the meeting seems He's from out else immediate He's this anything point

Sharymar Calderon

debt York, And average loan little value have to New service and X.X. of we to of on the an color a add bit just at in Right. space office XX% a

Graham Dick

to your Fed points, guys I update the the down sort lastly, I Okay. quickly. guide if shake guess, we of any XX do hit might where end to guys just beta have That's wanted of helpful. year pause? maybe deposit on of basis XX -- And the you out think get you the NIM what then total on NIM by

Sharymar Calderon

even the somehow to When beta forward. quarters. QX I somewhere and stable between it rate think the a behaved to right? for we Fed, be expect for a the going say has to shift QX, QX, results from that at we fair in -- beta may look that both in We how considering least So it's into decrease

that think be a two say we've in QX historical our it results to of these quarters, but I results. and already QX would estimate past captured some I good think between

Jerry Plush

do to compression. I the NIM Yes. also comment want on

think liability highlight of wanted have institutional big accomplishments the to it's one highest to on not first One pay down tends and -- really reasons to that funding the the the out of costing that the things the was to side. this and one that we and other of of break than I we be quarter

an area of And us. so for that's focus

that's to back believe international, So and deposit continue we obviously, we itself. to beta. when to drive can intent to very down, costs favorable we where our we If were, exceed NIM can our is generate maintain to loan be the a deposit growth able ratio so more

platform on ramp really have we moved complete this lot we tell a we to is already the to will the believe and we -- bearing the conversion our We once can as all I capabilities up one of non-interest earlier customers was questions remote deposit continue because will over that We've opportunity of like capture. everyone a have.

just the obviously to cost, out. be think that them going We give very a introducing to beta get for will really us competitive platform organization. lower deposits in will us opportunity a comprehensive And we that's more better advantage

the I the clearly it in what been as seeing that relates on. just directly we're to linked what higher beta So worth, into putting up is recognize costing drive for it's deposits we've

Sharymar Calderon

have already capture most repricing that for repricing. expecting we of about of when -- our portfolio we do up see do But of the deposits think we the we when there that's upcoming, that rate, gap part And we're rate. the Right. increased at our that look

some do but already coming So that the up in we higher capturing have repricing, is rate.

offsetting -- getting there. a it's us slightly to So or decrease that's how the

Operator

next question KBW. Gailey Our Brady of the comes from line from

Brady Gailey

$XX just color non-performers more on little the you just So color what this a into in on loan happened York happening one wanted moved is Could us give a I more I this little think million with New there? quarter. multifamily that what was

Jerry Plush

in property XXXX. It a it's credit. mean, Sure. legacy emphasized, originated was that's It's I multifamily as a conversion. a I've

as that's we're proactively up substandard we that the I a believed off, put needed given and pay we we not further Our this Brady, it very, ongoing the the since clearly and during with than did belief quarter borrower that much did. managed. proactively very classify reserve working the loan just that -- negotiations but is the can matured and to being think go clearly, don't one I that, loan

Sharymar Calderon

speaks it I being think complement item, that us being within pervasive think Jerry the not that the in a to this portfolio. I space, also something multifamily specific And to

Brady Gailey

Is property? it a rent controlled

Jerry Plush

Yes.

Brady Gailey

Right. And Okay. then...

Jerry Plush

detail, thank Brady, further No you.

Brady Gailey

more that consumer from you color on Can offs. of million net noise -- Do indirect think And then you what little was like any purchase forward drove $X.X those I the that? a loans the expect were? of give charge sort

Jerry Plush

shrinking Yes. portfolio. This a is

bought loss. Our vintage 'XX We've hotspot. these view for running the in we is levels. particular end this credit two talked the is now And appears parties the the one the of about the We It quarters programs we've last consecutive terminated at at hottest the year. from. had that's

As two speeds gone in we is portfolio payment be that this Shary years. believe under current will the a at referenced,

view that the is and she and believe is loss guidance view the loss that. we've got Our a content side captured on loss gave forward on projected we've

not So you the there that into it's the be last won't two the a there, see that portfolio. been mean, could the or million at but I in the level replacements couple here there replenishment quarters. have

Sharymar Calderon

the mentioning, term, was think the believer life we Right. that losses And about allowance. are peak XXXX the when loss covered Jerry expected our or of in that through the already vintage any the we're and

Brady Gailey

these improvement student Are loans? or home two parties, just loans the are remind can like who you And Okay. us?

Jerry Plush

debt generated. the is had input. I'll is it over We loans XX this call No, contiguous. This no the consolidation nationally

that that intended the So you to was sort be of geographic protection have. would

I of first the was the say the it's states, XX% are concentrations in of SoFi, state, to so one one think highest of California. I When in biggest safe think around the any part portfolio. was inclusive right, terms

Brady Gailey

Okay.

the And New well York so $XX think multifamily. have Then you loan in million as million New $XX there, estate NPAs, commercial based real right? another in York I you have

Sharymar Calderon

do. we Yes,

property It's have in Oreo that. NPAs York. New additional the within an relationship in We one actually

Brady Gailey

little on what property there? that color and give you a And us happened can more

Sharymar Calderon

in property New commercial York the the Oreo? For of

Brady Gailey

yes. million $XX the property, other Yes,

Jerry Plush

actually that We We've leases improving. got Frankly, signed. new we're there good Yes. on one, in It's Brady. feel a additional see concern at position all. don't I

the -- it's way a its I the belief location, high good demand that process in be will describe best populated, to area. very way It's think very on it is our to marketable. densely in in is

But continue that make that working then a have excellent the going good And fully we is and job think we be be up think we're we'll really to done to again, an helping us. We the need leased sure with. positive. I to one like But folks partner it get in shape. in we

issues is equipment. outlook the all nothing one on just on think the reported that at repossessed obviously like we the I So

Brady Gailey

And but it, that? that's sorry I missed that CRE in if of Oreo, one is what type

Sharymar Calderon

It's retail.

Brady Gailey

All last mean, I the okay. a you a year. And higher picture just core did question. right. one ROA It's maybe I bigger pressure with just basis, almost retail, provision. -- know under But here come the ROA on has you did a

how So up to level? think ROA one you that do hitting about -- getting back

Jerry Plush

it's more I compression. And last clearly Look, NIM some to think expense. obviously, challenging with considering going Yes. you're quarters NIM booked have provision the healthy some the two we've

improve not Brady, generate been range, to we'd We've results. spot. a building make think the coupled -- is go our This on the we've followed expense $XX really believe the that's our long-term. changes provision balance -- organization think we're and sheet, put sort our a sides I ability with both trying everyone back few then If you be that under and I story in billion to just to I of of to get good a is for the

the things up that with go us, very think the But to right challenges office trying team, on We're customer legacy consistent side forward be the past we here. think systems based we'll as use ease come this we as on on a Obviously, Once I on to have get basis. that of up conversion something the customer, highly popped can the had I have. some infrastructure. be some we we've the have well efficient right back

it's growth I think we to can a that our And grow. markets in good belief been is strategy. continue we're

doing three sense making the of all that is three country we best in They are are stress in be in not all having I'm country three very are the levels. markets from that the the to in some our are and of in rest the that spots the of business the visits And vibrant.

continue We were but know billion. growing us. are just $XX -- So sit through we avoid feel going about shy that going going and $XX talked there We $XX openly. to and it's you through this and at can't billion, to -- the about billion It's we've for to implications not around in

cost now exercise here. organization. Otherwise, cutting then and that's do. to real muscle on to to want put going be what grow we've we infrastructure not some the got it's We've a the And

opportunity want customers open what the our I a bank made a We to be we're had. our customer comments we business. relationships. service belief us. there's that a think -- business use full there's closing for as why to us We're in want real good that want So just in we is and That's that for that's

Brady Gailey

Great. Thanks. Okay.

Jerry Plush

we I get okay. growth, can believe so there on

Operator

Feddie Strickland next Montgomery Our from Research comes line Janney Division. Scott of question in the

Feddie Strickland

of on that two clarification basis guide. to the quarter points or is Was quarters? that third course XX in that the points XX the Just NIM basis next over

Jerry Plush

That's in the third quarter.

Feddie Strickland

the we in of if that In But we see Jerry, and little on XXXX, funding margin asset the back touched of earning And some think reasoning third quarter, up earlier. the okay. as repricing potentially the costs? XXXX some then you along Fed come in see I same to could this a starts overtake stop bit line hiking

Jerry Plush

because see Yes, think on -- you're that's going I to pressure happening.

it in headquartered we're money the country, environment -- some the the here. in competitive back, campaigns. the marketplace And and locally seeing First from of super CD Feddie, stepping all, not from it's the competition just banks largest that's for in of market

with need international, core is as corporate our and with customers And more really that's other private to we lines well essential with on banking the business why -- us. that our push why in that's the so of mind for as

can to that's out asked you're your a go I profitable normalize PPNR basis. drive and adding that's to mean, what's the growth, think it going earlier, on if question just yes, we that was So forward where

Feddie Strickland

they're on Understood. you curious, cost. those? international those. And mean, the feel then continue grow is sounds like lower deposits, usually rate to can I what like it sense. us That remind makes Just average the just Can you I know on you

Sharymar Calderon

the portfolio. basis points XX in for average around It's

Jerry Plush

seeing to -- the a think, not at the more focused is on over back This our from. Latin America more the more that on to the and growth quarters this history. as color, growth where some start I there'll in come talk countries. and And broader next give that to be Yes. opportunities Feddie, several we're all about that is is look coming couple we're of And we'll

Feddie Strickland

it. me. Got last just for one And one

higher? mentioned on seems quarter. third a to what's $XX pretty million million You guide talk income driving of income It through $XX like non-interest that for drivers solid the the jump. quarter non-interest you there, linked some Can

Sharymar Calderon

Sure.

as -- can in see, you increase we have we AUMs. an So

We that's that also it. will of into part fee get believe income of we valuation Also, we increase and us mortgage the We have activity are those. an some looking of to range. in believe

Feddie Strickland

Thanks sense. for questions. makes That my taking

Jerry Plush

one. good a Have Feddie. Thanks,

Operator

in of comes next Matt Our question the Stephens. from line Olney

Matt Olney

Thanks. Good morning.

a $XX the Just expense, few clarifications looking on provision for of front the credit million. that

took the this quality. you $XX downgrade on I says slide the that comes what $XX on requirements kind million is? million Was mark non-accrual color the more of additional reserve or think credit from from any

Jerry Plush

Yes. the credit into that's we also I'll a that to the dissect there replenishment obviously related all on right? But you were Look, CECL think to if I charge-offs. we as what specific the of provision, the pieces other the put I there's in New York, the was think model. And the piece to referenced related largest biggest macroeconomic sort factors them was call refer of two

took, in appropriate said either and felt it highly or we a evaluated again business that's reflect evaluated models. based that I into -- we won't the basically your And we're from conservative, I that look and that get those party, on you have, the and an call that we right? aggressive spread the think I to think you and put it's third of so reputable, going

look I you So reserve, expect our And we're that don't X.X% nearly in a overall future level continue allowance. view when at is at to we quarters. the think

adequately is particularly secured covering And that think what got we portfolio we've this that risk that's there. so the positions at and we of stage -- that, the kind think more the given

the recognized. in earlier quarters could believe we've I take or I there, we charge-off A consumer. as indirect future that replenishment. I here part we that $X got lost million an $X big be of or And million point, replenishment the Matt, or number, think think those we've in that there's but mean, give from was referenced that was the -- content. got

Matt Olney

that. point, And following appreciate your I that up piece. indirect consumer on last Okay. Jerry, on

start vintage losses the you think need guess, the terms hottest I to charge-offs. historical they kind of out that how is I do the before disclosed those long off and XXXX of decline? based peak in data,

Jerry Plush

Yes.

we're now, in decline Matt. that think I on

that's -- think off rate the why on rate I I the when given portfolio of at on. prepay look months sort of million when a you run the it's to $XXX million I did that as and update, speeds, think we run six remember $XX pay being every probably to around able that's this

have number. horizon, you a in right, write-offs, gets two of we'll that's year I'll us payoffs So us. call this And behind believe completely it we and the we combination that said why behind

Matt Olney

growth lending guess the categories one at least a I That's you in XQ then was the Okay. And loan switching I little over the think helpful, of driving said growth front, specialty Jerry. loan bit to portfolio.

with this Just again of any of funding it relationships? and what kind remind come deposit does is or kind me

Jerry Plush

Yes.

call we'll in That's about that middle we'll sort example. classic almost if bank division. an your ago typical that. equipment a equipment commercial, call in call part lending of that year our think under fits put call -- as our So guess We'll where else, falls is when The category. what we that we way launched corporate the I I'll like into a non-traditional finance in was have what of it of what typical. in we asset-based big have years is specialty. bigger But market really group specialty Anything a finance X.X you a it we so activity

Matt Olney

at the much me that of with itself. growing Presumably help of some the kind -- the portfolio come this portfolio appreciate I strategically guess, headwinds. point in of way doesn't given by just that funding funding

Jerry Plush

that to Actually, Yes. have same. that's I one the of is we're putting things you the tell unique

but us, we with we're bank, to necessarily certainly doing all want meaning bank you pushing Not it. that getting got the in you We're our in those cases us. core are with not share. we interested to for the deposit primary are deposit, If

corporate respects that's commercial be in not real to good They because a I us tends agree way right? example, think way, like estate. finance some tend Even users, with I it about So think as to to typically activities, fund be an other providers. a you not traditional obviously equipment fund

In Matt, our we're case, we're going some banking also relationships to the principles the of And on side. that level because after emphasizing private relationship look with more come it, in we needs deposits. every broadly at these

me that to coming do just to laser So anyone Amerant that go ensuring anyone they visit, on and a We're question, know automatically for that do I not see, activity. they we're you're more you I very, anything tell can if that to they there's comes very transparent. I can deposits. financing ask us that when immediately focused respond

for to bank. your you we're Amerant us to coming You're as looking and of think

shape. into our they've so take And EF. team's proud not this I've we're pushing have and similarly I'm gathering, do deposit real seen I the put estate that's my been in it. and because way the really effort in But really team that career our able organizations other that commercial to to beginning calls, of said hold in And energy for prior on

Matt Olney

incremental some just of on color that residential on Any today think and loan yields yields on kind more you're those of loan color growth? products? family single Any are then the the tickets it's I especially seeing on the loans. what the finance

Jerry Plush

an production is for clearly that us put forward booking, an right, to of swap and income in we're do opportunity that XQ, that a to index pegged seeing wanting more majority this swap I in, there's on the got fixed. to these books floating production you're we're are going I because the days, which XQ, occasional are coming A in that course customers our an we've the on think for Xs the being obviously I real of plus think but think the opportunity and Yes, vast in there's are

Matt Olney

Okay. And then -

Jerry Plush

to or Yes. going to I The are there, to is which overhang move still the mean, is by Fed way. not. there's in that I rates, I go, lot but the continue think the had Matt, better mean, speculation people of we still I do right know there's want a certainty number, a -- things all going because lots uncertainty way inflation now.

going it on of on the sides. the you think on So success both I'm we're why reasons of I certainty rate deposits, comment people want having. why want it's certainly one you that's and the see of to inflow not right? happening clearly they that's term that time see others

Operator

turn closing would to Plush I for to like you. the Thank Mr. now remarks. conference back

Jerry Plush

your want in of earnings call. and to joining I thank great for day. thank continued your genuinely a quarter company our second all appreciate everyone We interest for you support. our Have Okay. everyone

Operator

concludes call. conference Thank today's This participating. for you

You may now disconnect

Amerant Bancorp (AMTB) 21 Jul 232023 Q2 Earnings call transcript