Amerant Bancorp (AMTB)2023-07-21 18:29Financial Data and Key Metrics Changes - Net income attributable to the company was 20.2 million in Q1 2023, primarily due to higher provision for credit losses [7][8] - Net interest margin (NIM) decreased to 3.83% from 3.9% in the previous quarter [7][8] - Total assets increased by 7.22 billion, and total deposits grew to 293 million from the last quarter [8][10] Business Line Data and Key Metrics Changes - Core pre-provision net revenue (PPNR) was 37.1 million in the previous quarter [9] - Loans grew year-to-date by 102 million (1.4%) in Q2 [10] - Deposits increased year-to-date by 293 million (4%) in Q2 [10] Market Data and Key Metrics Changes - Domestic deposits accounted for 67% of total deposits, totaling 222 million (4.5%) from the previous quarter [16] - International deposits, which make up 33% of total deposits, totaled 71 million (3%) compared to the prior quarter [16] Company Strategy and Development Direction - The company aims to focus on organic deposit growth and reduce reliance on other funding sources, with a target loan-to-deposit ratio of 95% [10][16] - The banking center rationalization continues, with new locations opening and consolidations planned to improve efficiency [11][13] - The company is actively promoting its AmerantProtect product to ensure customer deposits are fully insured [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the pressure on margins due to competitive deposit pricing and indicated a potential NIM reduction of 18 to 20 basis points in the upcoming quarters [35][43] - The company expects stronger loan growth in Q3, driven by a solid pipeline and ongoing efforts in all served markets [42][56] - Management emphasized the importance of maintaining a focus on non-interest-bearing deposits to manage costs effectively [49][70] Other Important Information - The company repurchased 95,262 shares for 25 million share repurchase program [12][21] - The allowance for credit losses increased to 29.1 million in Q2 [15][30] - The transition from LIBOR to SOFR for approximately 390 loans totaling about $1.1 billion was successfully completed [29] Q&A Session Summary Question: Insights on deposit mix and NIM expectations - Management noted that while non-interest-bearing deposits decreased as a percentage, they still grew in absolute terms, and they aim to manage margin compression proactively [49][50] Question: Sources of loan growth - Growth is expected across all markets, with significant demand in South Florida, Tampa, and Houston, driven by relationship-building efforts [52][54] Question: Future expense management strategies - The company is reassessing all expense line items and exploring opportunities for cost reductions, including potential changes in office space utilization [57][58] Question: Share repurchase program outlook - Management intends to continue the share repurchase program prudently, balancing capital growth and dividend payments [61][62] Question: Performance of the New York office loan portfolio - The office loan portfolio is currently stable, with no immediate issues, although one loan has been flagged for concern [64][66]