Amerant Bancorp Inc. Q4 FY2025 earnings call

• The Board approved a 3-year strategic plan focused on stabilizing, optimizing, and growing the organization. - Key areas include credit transformation to improve loan portfolio quality, balance sheet optimization to rightsize the balance sheet, and operational efficiency to enhance productivity and client experience. - Launched an AI project for process optimization. - Approved a share repurchase program. - Identified opportunities in Venezuela with significant deposits, AUM, and customers, expecting growth in commercial activity due to oil extraction license plans.

Total assets were $9.8 billion as of the end of the fourth quarter, a decrease from $10.4 billion in the third quarter. Cash and cash equivalents decreased $160.7 million to $470.2 million. Total investments were $2.1 billion, down from $2.3 billion in the third quarter. Total gross loans decreased by $244.6 million to $6.7 billion. Total deposits decreased by $514 million to $7.8 billion. Net interest income was $90.2 million, down $4 million from $94.2 million in the third quarter. The net interest margin decreased to 3.78% from 3.92% in the third quarter. Provision for credit losses was $3.5 million, down $11.1 million from $14.6 million in the third quarter. Noninterest income was $22 million, up from $17.3 million in the third quarter. Noninterest expense was $106.8 million, up $28.9 million from the third quarter. ROA was 0.10% and ROE was 1.12% compared to 0.57% and 6.21% in the third quarter. Non-GAAP metrics: Pre-provision net revenue was $5.4 million compared to $33.6 million in the third quarter, and core PPNR was $29.3 million compared to $35.8 million in the third quarter. Capital ratios: CET1 was 11.8% compared to 11.54% in the previous quarter.

• Projected loan balances to be similar to the fourth quarter 2025 in the first quarter of 2026, with full-year growth estimated at 7%-9%. - Projected deposit growth to match loan growth. - Net interest margin expected to be in the 3.65%-3.70% range. - Expenses projected at approximately $70 million to $71 million in the first half of 2026, reducing to $67 million to $68 million by year-end. - Intend to continue prudent capital management, including dividends and share repurchases.

• Asset quality risks related to loan portfolio performance, such as nonperforming assets and criticized loans. - Risks associated with the execution of strategic initiatives, including challenges in credit resolution and expense management.

Q: Michael Rose from Raymond James asked about metrics to measure the progress of the 3-year program.

A: Carlos Iafigliola and Sharymar Yepez responded, stating focus on credit quality, criticized buckets, operational efficiencies, and aiming for ROA near 1% and efficiency ratio near 60% by year-end 2026.

Q: Russell Gunther from Stephens inquired about expense drivers and asset quality progression.

A: Sharymar Yepez and Carlos Iafigliola discussed expense drivers like reducing higher cost deposits and marketing optimization, and asset quality progression through proactive credit risk management.

Q: Wood Lay from KBW asked about deposits, brokered deposits, and restructuring charges.

A: Carlos Iafigliola responded on rationalizing deposits to be under $10 billion, using brokered deposits as an ALM tool, and intention to have a clean 2026 without elevated restructuring charges.