Amerant Bancorp Inc.

Ladies and gentlemen, thank you for standing by. And welcome to the Amaranth Bancorp fourth quarter 2020 earnings call. At this time, all participant lines are on a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. And if you require any further assistance, please press star 0. I would now like to hand the conference to your speaker today. Laura Rossi, Investor Relations Officer. Please go ahead, ma'am.

Thank you, operator. Good morning to everyone on the call, and thank you for joining us to review Ameran Bancorp's fourth quarter and full year 2020 results. With me this morning are Miller Wilson, Chief Executive Officer, Carlos Yafiliola, Chief Financial Officer, Miguel Palacios, Chief Business Officer, and T.L. Fisher, Credit Risk Manager. Before we begin, Note that the company's press release, comments made on today's call, and responses to your questions contain forward-looking statements. The company's business and operations are subject to a variety of risks and uncertainties, many of which are beyond its control, and consequently, actual results may differ materially from those expressed or implied. Please refer to the cautionary notices regarding forward-looking statements in the company's press release. For a more complete description of these and other possible risks, please refer to the company's annual report on Form 10-K for the year ended December 31, 2019, quarterly report on Form 10-Q for the quarter ended June 30, 2020, as well as to subsequent filings with the SEC. You can access these filings on the SEC's website. Please note that Amerint has no obligation and makes no commitment to update or publicly release any revisions to forward-looking statements in order to reflect new information or subsequent events, circumstances, or changes in expectations, except as required by law. You should also note that the company's press release, earnings presentation, and today's call include references to certain adjusted financial measures, also known as non-GAAP financial measures. please refer to Appendix 1 of the company's earnings presentation for a reconciliation of each non-GAAP financial measure to its most comparable GAAP financial measure. I will now turn the call over to Mr. Wilson.

Good morning, and thank you for joining Ameren's fourth quarter 2020 earnings call. As I have done in the past few quarters, I'll begin by discussing how Ameren continues to navigate the current environment as well as our fourth quarter and full year highlights. Carlos will then review our financial performance in further detail. After our prepared remarks, Carlos, Miguel, Piel, and I will address questions. Before I move into the results, I would like to acknowledge that while this past year was unlike any other, I am extraordinarily proud of how well we persisted through it together. I am grateful for all those who worked to make this happen, particularly the Amaranth team as well as our customers and communities. It is because of all of you that Amaranth was able to achieve several significant accomplishments that are even more impressive given the difficult operating environment. First, we focused on expanding our fee income opportunities and carefully managing expenses. We delivered on our cost efficiency initiatives by diligently streamlining and right-sizing our operations. Second, we had no provision for loan losses recorded in the fourth quarter. This is a testament to the sound credit quality of our loan portfolio, diligent portfolio monitoring, and excellent risk mitigation throughout the year. Finally, even in this unprecedented year, We successfully completed the sale of $60 million of senior notes in the second quarter and an oversubscribed modified Dutch auction tender offer for the company's Class B common stock, totaling $53.3 million in December. This transaction boosted tangible book value per share by 75 cents. However, the achievement I am most proud of was Amaranth's ability to step up to the plate when our community needed us most, providing critical banking services during a time of need. And we are honored and humbled that our community placed this trust in us. I would also like to recap the actions Amaranth took throughout the year for our customers and communities in light of the pandemic. First, Ameren continued to offer payment deferrals and or forbearance options. As we ended the quarter, the company has received a limited number of requests for additional payment extensions, which are being carefully evaluated. Second, participating in the SBA's Paycheck Protection Program. From the program's start through its closing in August, Ameren provided over 2,600 PPP loans, totaling $223 million, to small businesses. We held $199 million in outstanding PPP loans at the end of the fourth quarter, with approximately $95 million in associated deposits. This quarter, we focused on processing PPP loan forgiveness requests. and continue to do so through the beginning of 2021. We have also started to receive applications under the third round of PPP, which went into effect during the month of January, and we continue to work to leverage these new relationships into future cross-selling opportunities. we originated loans to small and mid-sized businesses under the government's Main Street Lending Program in the fourth quarter. Amaran originated $56 million of these loans, of which 95% of the balances were subsequently sold to the Federal Reserve, generating approximately half a million in related fee income. Additionally, we continue to closely monitor credit and liquidity risk as well as credit underwriting practices to prudently manage our loan portfolio. This includes assessing forbearance status and general credit conditions for all portions of the portfolio on a daily basis, with an emphasis on loans in industries most vulnerable to the financial impact of the COVID pandemic. Finally, and most importantly, as we carried out these actions throughout this year, Ameren's top priority continued to be providing high-quality and uninterrupted services to customers while prioritizing the health and safety of employees, customers, and local community. Before I report on our performance and hand over to Carlos, I would like to acknowledge the news that was announced last week. I will be retiring from Ameren at the end of March, but it will continue to serve on Ameren's board where I look forward to assisting the new CEO in a smooth transition. It has been an honor to serve this organization for over 43 years. I am humbled by the trust placed in me to lead Ameren as its CEO over the past 12 years. Thank you to all my incredible teammates who have worked hard to drive this company forward. and will continue to do so under our incoming CEO, Jerry Plush. The future of Amarant is bright, and I look forward to watching Jerry lead the company to the next level. Turning now to our performance highlights in slide four. Of note, net income increased significantly quarter over quarter to 8.5 million, up from 1.7 in the third quarter. This increase was largely driven by the absence of provisions for loan losses this period. Further supporting the increase was the higher net interest income, which was up 7.3% from the third quarter due to the lower overall deposit costs and higher interest income on our loan portfolio. Our NIM for the fourth quarter was 2.61%. an outstanding pickup of 22 basis points from 2.39% in the previous quarter. Our fourth quarter non-interest income decreased 43.3% quarter over quarter. This decrease was mainly driven by lower net gains on the sale of securities and a one-time loss on the sale of the Beacon Operations Center, partially offset by derivative and other incomes. At the same time, we saw our expenses increase 13.5% quarter over quarter, largely due to the one-time severance expenses we recorded this quarter as we implemented voluntary and involuntary plans, which we will touch on later. Finally, on the loan side, Ameren continued to purchase high-yield consumer loans in the fourth quarter, And we are pleased that our consumer and residential loan portfolios increased both quarter over quarter and compared to December 31, 2019. On the deposit side, our deposits at the end of 2020 were down slightly compared to the previous quarter and were essentially flat compared to the end of 2019. Moving to slide five. As I just mentioned, our net income for the quarter was nearly four times the income of the third quarter, but down year over year. Our return on assets was 0.42% in the fourth quarter, or 0.56% on an adjusted basis, and our diluted earnings per share was $0.20 per share, or $0.27 on an adjusted basis, in line with market expectations. In addition, our credit quality remains strong and our commitment to monitoring credit risk even stronger. As I just mentioned, we recorded no provision for loan losses in the fourth quarter as we saw lower than initially estimated losses and improving economic conditions despite the ongoing pandemic. And now I will turn the call over to Carlos who will review our performance in more detail.