Amerant Bancorp Inc.

Greetings, and welcome to the Amerit Bank Corp's first quarter 2025 results. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Laura Rossi. Head of Investor Relations at Amarant Bancorp. You may begin.

Thank you, Brock. Good morning, everyone, and thank you for joining us to review Amarant Bancorp's first quarter 2021-2025 results. On today's call are Jerry Plush, our Chairman and CEO, and Charimar Calderon, our Senior Executive Vice President and CFO. As we begin, please note that discussions on today's call contain forward-looking statements within the meaning of the Securities Exchange Act. In addition, references will also be made to non-GAAP financial measures. Please refer to the company's earnings release for a statement regarding forward-looking statements, as well as for information on reconciliation of non-GAAP financial measures to GAAP measures. I will now turn it over to our Chairman and CEO, Jerry Blush.

Thank you, Laura. Good morning, everyone. results. We're implementing a change in our approach this quarter. This change is a result of our seeking investor and analyst feedback on the last several quarter's reports. So while the deck continues to include all the slides we've consistently supplied, we'll be commenting on significantly fewer slides than in the past. We're going to focus on results, on asset quality, and certain strategic updates as well, including changes to our mortgage business and on some significant personnel additions. But before we dive into the details, I want to take a moment to acknowledge both the challenges and significant achievements we delivered this quarter. Despite the uncertainty of this environment, we outperformed expectations in several key areas. Our net interest income and net interest margin were stronger than projected, driving a robust PPNR. We also saw excellent deposit growth, underscoring the continued trust clients placed in us. But more importantly, we made the prudent decision to reserve for five specific loans and also to adjust our generic reserves, reflecting our commitment to transparency and risk management. Taking decisive action was essential as we remained focused on the longer term, and we believe this has taken us to our best positions for the future. So let's turn now to slide three, and here you'll see that our core business demonstrated solid deposit growth. Our total assets reached $10.2 billion as of the close of the first quarter, an increase from $9.9 billion in the fourth quarter. We expect to now stay above the $10 billion level and grow from there in 2025. We've been building out our infrastructure to support being a regional bank, and so we intend to keep moving in that direction. Total investments were $1.76 billion, up compared to $1.5 billion in the fourth quarter, as we opted to purchase securities to protect the net interest margin. in a potential downward rate scenario. Our total gross loans were down by $52 million to $7.2 billion, down from $7.3 billion in the fourth quarter, primarily driven by increased repayments, which offset loan production in the quarter, as well as some loan closings sliding into the second. Our total deposits were up by $300 million to $8.2 billion, compared to $7.9 billion in the fourth quarter, driven by growth in core deposits, In this period, it's important to note that we manage the balance sheet to not only achieve strong P&R results and protect our men, but also to hedge the risk of a downward rate scenario. Looking at the income statement on slide four, you'll see we had strong pre-provision net revenue driven by higher than previously projected net interest income and net interest margin. Our diluted income per share for the first quarter was 28 cents compared to 40 cents in diluted income per share in the fourth quarter. comparison to last. We're going to cover those details in just a few slides. Our net interest margin was flat at 3.75% compared to 4.2%, but significantly better than projected. The end of the first quarter reflects these positive impacts due to the full quarter back of the Houston franchise sale. Lower promo rates and new deposits and the timing difference between maturities and broken CDs and the bills that flow direct. And it was also a full period of higher yielding securities in the investment program, we're calling it, after the repositioning that we did in the portfolio in late pre-Q and early pre-Q 2020. Net interest margin increases were somewhat upset by the downward repricing of floating rate loans and the impact of securities that we purchased this quarter, and the average yield on securities is clearly lower than before. comparison to our loan production. Our net interest income was $85.9 million, down $1.7 million from the $87.6 million for Q, primarily driven by lower average balances and yields on loans and higher average balances on profits. Again, as I noted previously, we're reaching a higher yield on new production than the loans mature. Provision for credit losses was $18.4 million, up $8.5 million from the $9.9 million in the fourth quarter. This increase was primarily driven by specific reserves, and also for macroeconomic updates. Sherry's going to cover this more shortly. Non-interest income was $19.5 million, which included an equity of $2.8 million, primarily from a low milk sale that was previously charged off. While non-interest expense was $71.5 million, when you exclude the REO valuation we reported of $500,000, would have been $71 million even. Pre-provision debt revenue, otherwise known as PKR, was higher at $33.9 million in 1-2 compared to $27.9 million in 4-2, and in comparison with consensus, 1-2-25, $31.32 million. Let's turn to slide 5. I'm going to cover a couple of other key items here. We paid our quarterly cash to the United States for a common share of $7.28. $29.3 billion, primarily driven by net new assets, although this was partially upset by market volatility, which resulted in lower market valuation. We continue to see this as an area of opportunity for us to work in it from going forward. And as we previously announced on April 1 of 2025, the company redeemed $60 million in aggregate principal amount of its 5.75% senior notes due this year. So we'll move down to slide six, and here I want to provide an update on our residential mortgage business. We're implementing a strategic change in our operating model, and here is what we're going to do. While the mortgage business was built to create a new source of income in 2021 through the sale of conforming mortgage originations, it could then be sold into the secondary market. This has required continued investment in hiring business development personnel and technology and procurement expansion. Given our strategic decision made last year to double down on our goal in South Florida, and given the required capital that would be needed to scale a national and British business that could otherwise be employed in forward bank strategic growth initiatives, we've elected to transition from being a national reserve to a Florida global stock. So we're moving forward with a change to the operating model, where Enron will continue to offer mortgage products, one of the primary tokens of the rich nations for income for our customers. It's important to note, while we'll still follow input from customers outside of 200 issues to buy additional properties, but you can see, as part of this downsizing, we expect our variable costs to be lowered, and it will result in a reduction in operating costs in the third and the fourth purpose this year. We expect both non-interest income and uninterest once all the restructuring is completed. We'll transition this over the next 120 days, which will result in a reduced level of FTE for the mortgage business. This will allow for the early completion of the current pipeline. So at this point, I'll turn it over to Sherry to our scholar metrics and get into the current blogging record details.