AMTB

Core Strategic Priorities & Progress

• Transforming Credit (highest priority): Revised Q2 credit policies, approval authorities and product programs, completed a revamp of the loan origination process. Continued optimizing the portfolio by exiting out-of-footprint, criticized and low-quality exposures, resulting in meaningful declines in special mention and classified loans this quarter.
• Operational Efficiency: Standardizing, streamlining and digitizing end-to-end processes to cut structural costs, increase capacity and improve client service. Identified multiple near-term AI use cases to boost productivity, and uncovered additional cost savings initiatives expected to launch in Q4 2026, supporting progress toward long-term efficiency targets.
• Relationship First Growth Model: Deepens existing client relationships via an integrated sales model combining private/commercial banking, advisory and treasury management to increase cross-selling and fee income. Q2 progress included strengthening CRM tracking and referral discipline, improving cross-team coordination, and focusing on revenue-generating growth opportunities.
• *Grow the Bank (Disciplined, Sustainable Growth): Prioritizes balance sheet and revenue growth within core U.S. markets aligned with risk appetite. Q2 growth focused on Florida CNI lending and select residential mortgage growth. Total deposits grew over $400 million, primarily driven by low-cost international deposit growth, particularly from Venezuela (up close to $500 million quarter-over-quarter). All credit risk remains within the U.S., with international funding used to support domestic loan growth.

Operational Context

• Management acknowledged the devastating impact of recent earthquakes in Venezuela and extended condolences to affected communities.
• Credit optimization progress: All high-risk loan categories (non-performing, classified, special mention) declined in Q2, driven by active portfolio management, timely downgrades, and resolution via payoffs and loan sales.

• Balance Sheet Growth: Expects total loans to reach ~$7.3 billion and total deposits to reach ~$9.1 billion by Q4 2026, driven by CNI/residential mortgage loan growth and continued momentum in low-cost international deposit growth.
• Net Interest Margin: Expects NIM to hold steady at ~3.50% for the remainder of 2026, supported by disciplined balance sheet management and growth in lower-cost deposits (current cost of international deposits is under 1%). Guidance assumes no Fed rate changes through the end of 2026.
• Expenses: Expects Q3 2026 non-interest expenses to be in line with Q2 2026, falling to a $66-67 million range in Q4 2026, on track for a long-term target efficiency ratio of ~60%. All costs associated with crossing the $10 billion asset threshold are already embedded in 2026 guidance, with only minor technology investments expected in 2027 that will be offset by existing cost savings.
• Profitability: Targets 1% ROA by the end of 2026, driven primarily by net interest income growth from loan and low-cost deposit expansion, with smaller contributions from operating expense efficiency and non-interest income growth.
• Capital Management: Continues to view share repurchases as an attractive use of capital, and plans to maintain ongoing capital return to shareholders via both repurchases and steady dividends ($0.09 per share quarterly dividend approved for Q3 payment).

This call does not break out financial performance for distinct product segments. Aggregate corporate performance is as follows: Total assets as of Q2 2026 were $10.3 billion, up from $9.9 billion in Q1 2026. Total gross loans were $6.9 billion (up $112 million quarter-over-quarter, +1.7%), driven by Commercial and Industrial (CNI) and residential mortgage growth, partially offset by commercial prepayments, strategic loan sales, and credit optimization exits. Total deposits were $8.4 billion (up $416 million quarter-over-quarter, +5.2%), with core deposits rising $553 million (+9.4%) driven by low-cost international deposit growth, while broker deposits declined $50 million. Assets under management were $3.4 billion, down $53 million from Q1 due to the departure of a large non-fee-impactful trust relationship. Diluted Q2 2026 earnings per share was 53 cents, up from 44 cents in Q1. Net interest income was $82.6 million, up $2.3 million from Q1, with a net interest margin of 3.52% (down 3 basis points from Q1). Provision for credit losses was $4.8 million, down from $7.8 million in Q1. Non-interest income was $18.2 million, up $800,000 from Q1. Non-interest expense was $68.9 million, up $2 million from Q1. Return on assets (ROA) was 0.84% and return on equity (ROE) was 9.23%, up from 0.73% and 7.63% respectively in Q1. CET-1 capital ratio was 11.94%, up from 11.84% in Q1. Non-performing loans declined $5 million (-2.8%) to $171 million, or 1.7% of total assets, with further declines to $162 million after quarter end.

• Competitive lending markets pressure loan yields, limiting potential upside to net interest margin despite low-cost deposit growth.
• Concentration risk from rapid Venezuelan deposit growth is actively managed via compliance, due diligence, concentration limits and pricing discipline.
• The company still holds a portfolio of classified and special mention loans, primarily in commercial real estate (CRE), that require ongoing active management and strategic exits.
• Macroeconomic uncertainty requires ongoing adjustments to credit loss reserves, creating potential volatility in provision expenses.

Q: Analyst asks how incremental low-cost deposit growth will be deployed, and whether the company will remain above the $10 billion asset threshold by year-end 2026. / A: Management confirms that most new low-cost deposits will be used to replace higher-cost legacy deposits to rebalance the deposit base, with a large portion redeployed into high-quality domestic loans (aligned with new stricter credit standards) and used to pay off maturing wholesale funds. Even excess liquidity placed in short-term yielding accounts contributes positively to net interest margin. Management confirms the company will remain above the $10 billion asset threshold through year-end 2026.

Q: Analyst asks for details on recent changes to the credit box, including target loan sizes, exited asset classes, and current origination spreads. / A: Management confirms the majority of 2026 growth will come from granular CNI and residential mortgage lending, with very selective growth in CRE while the existing CRE portfolio is rebalanced via exits of low-quality classified assets. The sweet spot for new loans is under $30 million, with only rare exceptions for transactions up to $30-$35 million for top-tier clients, to increase portfolio granularity. Spreads remain compressed due to highly competitive markets for high-quality assets.

Q: Analyst asks whether costs for crossing the $10 billion asset threshold are included in 2026 guidance, and what expense growth to expect in 2027. / A: Management notes all required compliance and risk management investments for crossing the $10 billion threshold were completed in prior periods, and all associated costs are already embedded in 2026 guidance. For 2027, only slight incremental technology investments are expected, which will be offset by existing cost savings to keep overall expense run rate stable at Q4 2026 levels.

Q: Analyst asks how the company balances loan growth and capital return via share repurchases amid accelerating deposit growth. / A: Management notes the CET-1 ratio is a strong 12% at quarter-end, and stress testing confirms capital remains very strong even under adverse scenarios. The company will therefore continue to allocate capital to both support loan growth and ongoing share repurchases and dividends.