Board of Directors Declares Quarterly Cash
Dividend of $0.09 per Common Share
Amerant Bancorp Inc. (NYSE: AMTB) (the “Company” or “Amerant”)
today reported net income attributable to the Company of $5.0
million in the second quarter of 2024, or $0.15 per diluted share,
compared to $10.6 million, or $0.31 per diluted share, in the first
quarter of 2024.
“The Company had strong loan growth in the second quarter, as
well as significantly higher pre-provision net revenue, excluding
the impact of previously disclosed deal charges from the sale of
our Houston franchise” stated Jerry Plush, Chairman and CEO.
“However, the provision for credit losses was higher than the first
quarter, primarily related to a legacy commercial credit that,
while paying as agreed, was downgraded based on the receipt of
updated financial information. We are actively working toward
reaching a positive resolution on this credit, as we remain focused
on executing on our strategic plan.”
- Total assets were $9.7 billion, a decrease of $70.0 million, or
0.7%, compared to $9.8 billion in 1Q24.
- Cash and cash equivalents were $310.3 million, down $349.4
million, or 53.0%, compared to $659.7 million in 1Q24.
- Total gross loans were $7.32 billion, an increase of $316.5
million, or 4.5%, compared to $7.01 billion in 1Q24, driven by
organic production during the quarter.
- Average yield on loans increased to 7.08%, compared to 7.05% in
1Q24.
- Total deposits were $7.82 billion, down $62.2 million, or 0.8%,
compared to $7.88 billion in 1Q24, as continued organic growth was
offset by a reduction in higher-cost municipal and commercial
deposits.
- Core deposits were $5.51 billion, down $127.8 million, or 2.3%,
compared to $5.63 billion in 1Q24, driven by the previously
referenced reduction in higher-cost municipal and commercial
deposits.
- Average cost of total deposits slightly decreased to 2.98%,
compared to 3.00% in 1Q24.
- Loan to deposit ratio was 93.69%, compared to 88.93% in
1Q24.
- Total advances from Federal Home Loan Bank (“FHLB”) were $765.0
million, up $50.0 million, or 7.0%, compared to $715.0 million in
1Q24. The Bank had $2.1 billion in availability remaining from the
FHLB as of June 30, 2024.
- Total non-performing assets were $121.1 million, up $70.6
million, or 139.9%, compared to $50.5 million as of 1Q24. The
increase was primarily driven by three credits previously
classified as special mention and two newly downgraded loans to
substandard based on receipt of updated financial information from
borrowers in the second quarter.
- The allowance for credit losses ("ACL") was $94.4 million, a
decrease of $1.7 million, or 1.7%, compared to $96.1 million as of
1Q24.
- Assets Under Management and custody (“AUM”) totaled $2.45
billion, up $94.2 million, or 4.0%, from $2.36 billion in
1Q24.
- Pre-provision net revenue (“PPNR”)(1) was $25.5 million,
compared to $25.9 million in 1Q24. PPNR, excluding non-routine
items in connection with the sale of the Company’s Houston
franchise which were disclosed on a Form 8-K on July 1, 2024 (the
“Houston Transaction”), was $31.0 million, compared to PPNR of
$26.1 million in 1Q24, excluding non-routine items of non-interest
income and expense(2).
- Net Interest Margin (“NIM”), was 3.56%, up compared to 3.51% in
1Q24
- Net Interest Income (“NII”) was $79.4 million, up $1.4 million,
or 1.8%, from $78.0 million in 1Q24.
- Provision for credit losses was $19.2 million, up $6.8 million,
or 54.4%, compared to $12.4 million in 1Q24.
- Non-interest income was $19.4 million, up $4.9 million, or
34.0%, from $14.5 million in 1Q24.
- Non-interest expense was $73.3 million, up $6.7 million, or
10.1%, from $66.6 million in 1Q24. Non-interest expense, excluding
non-routine items in connection with the Houston Transaction(2)
were $67.7 million.
- The efficiency ratio was 74.2%, compared to 72.0% in 1Q24. The
efficiency ratio excluding non-routine items in connection with the
Houston Transaction was 68.6%(2).
- Return on average assets (“ROA”) was 0.21%, compared to 0.44%
in 1Q24. ROA excluding non-routine items in connection with the
Houston Transaction was 0.38%(2).
- Return on average equity (“ROE”) was 2.68%, compared to 5.69%
in 1Q24. ROE excluding non-routine items in connection with the
Houston Transaction was 5.03%(2).
- The Company’s Board of Directors declared a cash dividend of
$0.09 per share of common stock on July 24, 2024. The dividend is
payable on August 30, 2024, to shareholders of record on August 15,
2024.
Additional details on second quarter 2024 results can be found
in the Exhibits and Glossary of Terms and Definitions to this
earnings release, and the earnings presentation available under the
Investor Relations section of the Company’s website at
https://investor.amerantbank.com. See Glossary of Terms and
Definitions for definitions of financial terms.
1 Non-GAAP measure, see “Non-GAAP
Financial Measures” for more information and Exhibit 2 for a
reconciliation to GAAP measures.
2 Represents core PPNR, core noninterest
expense, core efficiency ratio, core ROA or Core ROE, as
applicable, which are Non-GAAP measures. See “Non-GAAP Financial
Measures” for more information and Exhibit 2 for a reconciliation
to GAAP measures.
Second Quarter 2024 Earnings Conference Call
The Company will hold an earnings conference call on Thursday,
July 25, 2024 at 9:00 a.m. (Eastern Time) to discuss its second
quarter 2024 results. The conference call and presentation
materials can be accessed via webcast by logging on from the
Investor Relations section of the Company’s website at
https://investor.amerantbank.com. The online replay will remain
available for approximately one month following the call through
the above link.
About Amerant Bancorp Inc. (NYSE: AMTB)
Amerant Bancorp Inc. is a bank holding company headquartered in
Coral Gables, Florida since 1979. The Company operates through its
main subsidiary, Amerant Bank, N.A. (the “Bank”), as well as its
other subsidiaries: Amerant Investments, Inc., Elant Bank and Trust
Ltd., and Amerant Mortgage, LLC. The Company provides individuals
and businesses in the U.S. with deposit, credit and wealth
management services. The Bank, which has operated for over 40
years, is the largest community bank headquartered in Florida. The
Bank operates 25 banking centers – 18 in South Florida, 1 in Tampa,
FL and 6 in the Houston, Texas area. For more information, visit
investor.amerantbank.com.
Cautionary Notice Regarding Forward-Looking
Statements
This press release contains “forward-looking statements”
including statements with respect to the Company’s objectives,
expectations and intentions and other statements that are not
historical facts. Examples of forward-looking statements include
but are not limited to: our future operating or financial
performance, including revenues, expenses, expense savings, income
or loss and earnings or loss per share, and other financial items;
statements regarding expectations, plans or objectives for future
operations, products or services, and our expectations on loan
recoveries or reaching positive resolutions on problem loans. All
statements other than statements of historical fact are statements
that could be forward-looking statements. You can identify these
forward-looking statements through our use of words such as “may,”
“will,” “anticipate,” “assume,” “should,” “indicate,” “would,”
“believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,”
“point to,” “project,” “could,” “intend,” “target,” “goals,”
“outlooks,” “modeled,” “dedicated,” “create,” and other similar
words and expressions of the future.
Forward-looking statements, including those relating to our
beliefs, plans, objectives, goals, expectations, anticipations,
estimates and intentions, involve known and unknown risks,
uncertainties and other factors, which may be beyond our control,
and which may cause the Company’s actual results, performance,
achievements, or financial condition to be materially different
from future results, performance, achievements, or financial
condition expressed or implied by such forward-looking statements.
You should not rely on any forward-looking statements as
predictions of future events. You should not expect us to update
any forward-looking statements, except as required by law. All
written or oral forward-looking statements attributable to us are
expressly qualified in their entirety by this cautionary notice,
together with those risks and uncertainties described in “Risk
factors” in our annual report on Form 10-K for the fiscal year
ended December 31, 2023 filed on March 7, 2024, in our quarterly
report on Form 10-Q for the fiscal quarter ended March 31, 2024
filed on May 3, 2024 and in our other filings with the U.S.
Securities and Exchange Commission (the “SEC”), which are available
at the SEC’s website www.sec.gov.
Interim Financial Information
Unaudited financial information as of and for interim periods,
including the three and six month periods ended June 30, 2024 and
2023, and the three months ended March 31, 2024 and December 31,
2023, may not reflect our results of operations for our fiscal year
ending, or financial condition, as of December 31, 2024, or any
other period of time or date.
Non-GAAP Financial Measures
The Company supplements its financial results that are
determined in accordance with accounting principles generally
accepted in the United States of America (“GAAP”) with non-GAAP
financial measures, such as “pre-provision net revenue (PPNR)”,
“core pre-provision net revenue (Core PPNR)”, “core noninterest
income”, “core noninterest expense”, “core net income”, “core
earnings per share (basic and diluted)”, “core return on assets
(Core ROA)”, “core return on equity (Core ROE)”, “core efficiency
ratio”, “tangible stockholders’ equity (book value) per common
share”, “tangible common equity ratio, adjusted for unrealized
losses on debt securities held to maturity”, and “tangible
stockholders' equity (book value) per common share, adjusted for
unrealized losses on debt securities held to maturity”. This
supplemental information is not required by, or is not presented in
accordance with GAAP. The Company refers to these financial
measures and ratios as “non-GAAP financial measures” and they
should not be considered in isolation or as a substitute for the
GAAP measures presented herein.
We use certain non-GAAP financial measures, including those
mentioned above, both to explain our results to shareholders and
the investment community and in the internal evaluation and
management of our businesses. Our management believes that these
non-GAAP financial measures and the information they provide are
useful to investors since these measures permit investors to view
our performance using the same tools that our management uses to
evaluate our past performance and prospects for future performance,
especially in light of the additional costs we have incurred in
connection with the Company’s restructuring activities that began
in 2018 and continued in 2024, including the effect of non-core
banking activities such as the sale of loans and securities and
other repossessed assets, the Houston Transaction, the valuation of
securities, derivatives, loans held for sale and other real estate
owned and repossessed assets, the early repayment of FHLB advances,
impairment of investments, Bank owned life insurance restructure
and other non-routine actions intended to improve customer service
and operating performance. While we believe that these non-GAAP
financial measures are useful in evaluating our performance, this
information should be considered as supplemental and not as a
substitute for or superior to the related financial information
prepared in accordance with GAAP. Additionally, these non-GAAP
financial measures may differ from similar measures presented by
other companies.
Exhibit 2 reconciles these non-GAAP financial measures to GAAP
reported results.
Exhibit 1- Selected Financial
Information
The following table sets forth selected financial information
derived from our interim unaudited and annual audited consolidated
financial statements.
(in thousands)
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
Consolidated Balance Sheets
(audited)
Total assets
$
9,747,738
$
9,817,772
$
9,716,327
$
9,345,700
$
9,519,526
Total investments
1,547,864
1,578,568
1,496,975
1,314,367
1,315,303
Total gross loans (1)(2)
7,322,911
7,006,383
7,264,912
7,142,596
7,216,958
Allowance for credit losses
94,400
96,050
95,504
98,773
105,956
Total deposits
7,816,011
7,878,243
7,894,863
7,546,912
7,579,571
Core deposits (1)
5,505,349
5,633,165
5,597,766
5,244,034
5,498,017
Advances from the Federal Home Loan
Bank
765,000
715,000
645,000
595,000
770,000
Senior notes
59,685
59,605
59,526
59,447
59,368
Subordinated notes
29,539
29,497
29,454
29,412
29,369
Junior subordinated debentures
64,178
64,178
64,178
64,178
64,178
Stockholders' equity (3)(4)
734,342
738,085
736,068
719,787
720,956
Assets under management and custody
(1)
2,451,854
2,357,621
2,289,135
2,092,200
2,147,465
Three Months Ended
(in thousands, except percentages, share
data and per share amounts)
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
Consolidated Results of
Operations
Net interest income
$
79,355
$
77,968
$
81,677
$
78,577
$
83,877
Provision for credit losses (5)
19,150
12,400
12,500
8,000
29,077
Noninterest income
19,420
14,488
19,613
21,921
26,619
Noninterest expense
73,302
66,594
109,702
64,420
72,500
Net income (loss) attributable to Amerant
Bancorp Inc. (6)
4,963
10,568
(17,123
)
22,119
7,308
Effective income tax rate
21.51
%
21.50
%
14.21
%
22.57
%
21.00
%
Common Share Data
Stockholders' book value per common
share
$
21.88
$
21.90
$
21.90
$
21.43
$
21.37
Tangible stockholders' equity (book value)
per common share (7)
$
21.15
$
21.16
$
21.16
$
20.63
$
20.66
Tangible stockholders' equity (book value)
per common share, adjusted for unrealized losses on debt securities
held to maturity (7)
$
20.54
$
20.60
$
20.68
$
19.86
$
20.11
Basic earnings (loss) per common share
$
0.15
$
0.32
$
(0.51
)
$
0.66
$
0.22
Diluted earnings (loss) per common share
(8)
$
0.15
$
0.31
$
(0.51
)
$
0.66
$
0.22
Basic weighted average shares
outstanding
33,581,604
33,538,069
33,432,871
33,489,560
33,564,770
Diluted weighted average shares
outstanding (8)
33,780,666
33,821,562
33,432,871
33,696,620
33,717,702
Cash dividend declared per common share
(3)
$
0.09
$
0.09
$
0.09
$
0.09
$
0.09
Three Months Ended
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
Other Financial and Operating Data
(9)
Profitability Indicators (%)
Net interest income / Average total
interest earning assets (NIM) (1)
3.56
%
3.51
%
3.72
%
3.57
%
3.83
%
Net income (loss)/ Average total assets
(ROA)(1)
0.21
%
0.44
%
(0.71
)%
0.92
%
0.31
%
Net income (loss) / Average stockholders'
equity (ROE) (1)
2.68
%
5.69
%
(9.22
)%
11.93
%
3.92
%
Noninterest income / Total revenue (1)
19.66
%
15.67
%
19.36
%
21.81
%
24.09
%
Capital Indicators (%)
Total capital ratio (1)
12.00
%
12.49
%
12.12
%
12.70
%
12.39
%
Tier 1 capital ratio (1)
10.44
%
10.87
%
10.54
%
11.08
%
10.77
%
Tier 1 leverage ratio (1)
8.74
%
8.73
%
8.84
%
9.05
%
8.91
%
Common equity tier 1 capital ratio (CET1)
(1)
9.70
%
10.10
%
9.79
%
10.30
%
10.00
%
Tangible common equity ratio (1)
7.30
%
7.28
%
7.34
%
7.44
%
7.34
%
Tangible common equity ratio, adjusted for
unrealized losses on debt securities held to maturity (1)
7.11
%
7.10
%
7.18
%
7.18
%
7.16
%
Liquidity Ratios (%)
Loans to Deposits (1)
93.69
%
88.93
%
92.02
%
94.64
%
95.22
%
Asset Quality Indicators (%)
Non-performing assets / Total assets
(1)
1.24
%
0.51
%
0.56
%
0.57
%
0.71
%
Non-performing loans / Total gross loans
(1)
1.38
%
0.43
%
0.47
%
0.46
%
0.65
%
Allowance for credit losses / Total
non-performing loans
93.51
%
317.01
%
277.63
%
297.55
%
224.51
%
Allowance for credit losses / Total loans
held for investment
1.41
%
1.38
%
1.39
%
1.40
%
1.48
%
Net charge-offs / Average total loans held
for investment (1)(10)
1.13
%
0.69
%
0.85
%
0.82
%
0.42
%
Efficiency Indicators (% except
FTE)
Noninterest expense / Average total
assets
3.03
%
2.75
%
4.57
%
2.69
%
3.06
%
Salaries and employee benefits / Average
total assets
1.40
%
1.36
%
1.38
%
1.31
%
1.45
%
Other operating expenses/ Average total
assets (1)
1.63
%
1.39
%
3.20
%
1.38
%
1.62
%
Efficiency ratio (1)
74.21
%
72.03
%
108.30
%
64.10
%
65.61
%
Full-Time-Equivalent Employees (FTEs)
(11)
720
696
682
700
710
Three Months Ended
(in thousands, except percentages and per
share amounts)
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
Core Selected Consolidated Results of
Operations and Other Data (7)
Pre-provision net revenue (loss)
(PPNR)
$
25,473
$
25,862
$
(7,595
)
$
36,456
$
38,258
Core pre-provision net revenue (Core
PPNR)
$
31,007
$
26,068
$
29,811
$
35,880
$
39,196
Core net income
$
9,307
$
10,730
$
15,272
$
21,664
$
8,048
Core basic earnings per common share
0.28
0.32
0.46
0.65
0.24
Core earnings per diluted common share
(8)
0.28
0.32
0.46
0.64
0.24
Core net income / Average total assets
(Core ROA) (1)
0.38
%
0.44
%
0.64
%
0.91
%
0.34
%
Core net income / Average stockholders'
equity (Core ROE) (1)
5.03
%
5.78
%
8.23
%
11.69
%
4.32
%
Core efficiency ratio (12)
68.60
%
71.87
%
69.67
%
62.08
%
60.29
%
__________________
(1)
See Glossary of Terms and Definitions for
definitions of financial terms.
(2)
As of June 30, 2024, March 31, 2024,
December 31, 2023, September 30, 2023 and June 30, 2023, mortgage
loans held for sale carried at fair value totaled $60.1 million,
$48.9 million, $26.2 million, $26.0 million and $49.9 million,
respectively. In addition, June 30, 2024, December 31, 2023 and
September 30, 2023, includes $551.8 million $365.2 million and
$43.3 million, respectively, in loans held for sale carried at the
lower of estimated cost or fair value.
(3)
In the fourth quarter of 2022, the Company
announced that the Board of Directors authorized a new repurchase
program pursuant to which the Company may purchase, from time to
time, up to an aggregate amount of $25 million of its shares of
Class A common stock (the “2023 Class A Common Stock Repurchase
Program”). In the second quarter of 2024 the Company repurchased an
aggregate of 200,652 shares of Class A common stock at a weighted
average price of $22.17 per share under the 2023 Class A Common
Stock Repurchase Program. The aggregate purchase price for this
transactions was approximately $4.4 million which includes
transaction costs. For all other periods, see March 31, 2024 Form
10-Q and 2023 Form 10-K.
(4)
For the second and first quarters of 2024
as well as each of the fourth, third and second quarters of 2023,
the Company’s Board of Directors declared cash dividends of $0.09
per share of the Company’s common stock and paid an aggregate
amount of $3.0 million per quarter in connection with these
dividends. The dividend declared in the second quarter of 2024 was
paid on May 30, 2024 to shareholders of record at the close of
business on May 15, 2024. See March 31, 2024 Form 10-Q and 2023
Form 10-K for more information on dividend payments during the
previous quarters.
(5)
In the second and first quarter of 2024
and in the fourth and third quarter of 2023, includes, $17.7
million, $12.4 million, $12.0 million and $7.4 million of provision
for credit losses on loans. Provision for unfunded commitments
(contingencies) in the second quarter of 2024 and in the fourth and
third quarter of 2023, were $1.5 million, $0.5 million and $0.6
million, respectively, while there was none in the first quarter of
2024. For all other periods shown, includes provision for credit
losses on loans. There was no provision for credit losses on
unfunded commitments in the second quarter of 2023.
(6)
In the three months ended December 31,
2023, September 30, 2023 and June 30, 2023, net income excludes
losses of $0.8 million, $0.4 million and $0.3 million,
respectively, attributable to a minority interest in Amerant
Mortgage LLC. In the fourth quarter of 2023, the Company increased
its ownership interest in Amerant Mortgage to 100% from 80% at
September 30, 2023. This transaction had no material impact to the
Company’s results of operations in the three months ended December
31, 2023. In connection with the change in ownership interest,
which brought the minority interest share to zero, the Company
derecognized the equity attributable to noncontrolling interest of
$3.8 million at December 31, 2023, with a corresponding reduction
to additional paid-in capital.
(7)
This presentation contains adjusted
financial information determined by methods other than GAAP. This
adjusted financial information is reconciled to GAAP in Exhibit 2 -
Non-GAAP Financial Measures Reconciliation.
(8)
See 2023 Form 10-K for more information on
potential dilutive instruments and its impact on diluted earnings
per share computation.
(9)
Operating data for the periods presented
have been annualized.
(10)
See 2023 Form 10-K for more details on
charge-offs for all previous periods.
(11)
As of June 30, 2024, March 31, 2034,
December 31, 2023, September 30, 2023 and June 30, 2023, includes
83, 65, 67, 98, and 93 FTEs for Amerant Mortgage LLC,
respectively.
(12)
Core efficiency ratio is the efficiency
ratio less the effect of restructuring costs and other non-routine
items, described in Exhibit 2 - Non-GAAP Financial Measures
Reconciliation.
Exhibit 2- Non-GAAP Financial Measures
Reconciliation
The following table sets forth selected financial information
derived from the Company’s interim unaudited and annual audited
consolidated financial statements, adjusted for certain costs
incurred by the Company in the periods presented related to tax
deductible restructuring costs, provision for (reversal of) credit
losses, provision for income tax expense (benefit), the effect of
non-core banking activities such as the sale of loans and
securities and other repossessed assets, the Houston Transaction,
the valuation of securities, derivatives, loans held for sale and
other real estate owned and repossessed assets, the early repayment
of FHLB advances, impairment of investments, Bank owned life
insurance restructure and other non-routine actions intended to
improve customer service and operating performance. The Company
believes these adjusted numbers are useful to understand the
Company’s performance absent these transactions and events.
Three Months Ended,
(in thousands)
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
Net income (loss) attributable to Amerant
Bancorp Inc.
$
4,963
$
10,568
$
(17,123
)
$
22,119
$
7,308
Plus: provision for credit losses (1)
19,150
12,400
12,500
8,000
29,077
Plus: provision for income tax (benefit)
expense
1,360
2,894
(2,972
)
6,337
1,873
Pre-provision net revenue (loss)
(PPNR)
25,473
25,862
(7,595
)
36,456
38,258
Plus: non-routine noninterest expense
items
5,562
—
43,094
6,303
13,383
Less: non-routine noninterest income
items
(28
)
206
(5,688
)
(6,879
)
(12,445
)
Core pre-provision net revenue (Core
PPNR)
$
31,007
$
26,068
$
29,811
$
35,880
$
39,196
Total noninterest income
$
19,420
$
14,488
$
19,613
$
21,921
$
26,619
Less: Non-routine noninterest income
items:
Derivatives (losses) gains, net
(44
)
(152
)
(151
)
(77
)
242
Securities (losses) gains, net
(117
)
(54
)
33
(54
)
(1,237
)
Bank owned life insurance charge (2)
—
—
(655
)
—
—
Gains on early extinguishment of FHLB
advances, net
189
—
6,461
7,010
13,440
Total non-routine noninterest income
items
$
28
$
(206
)
$
5,688
$
6,879
$
12,445
Core noninterest income
$
19,392
$
14,694
$
13,925
$
15,042
$
14,174
Total noninterest expense
$
73,302
$
66,594
$
109,702
$
64,420
$
72,500
Less: non-routine noninterest expense
items
Restructuring costs (3):
Staff reduction costs (4)
—
—
1,120
489
2,184
Contract termination costs (5)
—
—
—
—
1,550
Consulting and other professional fees and
software expenses(6)
—
—
1,629
—
2,060
Disposition of fixed assets (7)
—
—
—
—
1,419
Branch closure expenses and related
charges (8)
—
—
—
252
1,558
Total restructuring costs
$
—
$
—
$
2,749
$
741
$
8,771
Other non-routine noninterest expense
items:
Losses on loans held for sale carried at
the lower cost or fair value (9)(11)
1,258
—
37,495
5,562
—
Loss on sale of repossessed assets and
other real estate owned valuation expense (10)
—
—
—
—
2,649
Goodwill and intangible assets impairment
(11)
300
—
1,713
—
—
Fixed assets impairment (11)(12)
3,443
—
—
—
—
Legal and broker fees (11)
561
—
—
—
—
Bank owned life insurance enhancement
costs (2)
—
—
1,137
—
—
Impairment charge on investment carried at
cost
—
—
—
—
1,963
Total non-routine noninterest expense
items
$
5,562
$
—
$
43,094
$
6,303
$
13,383
Core noninterest expense
$
67,740
$
66,594
$
66,608
$
58,117
$
59,117
(in thousands, except percentages and per
share amounts)
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
Net income (loss) attributable to Amerant
Bancorp Inc.
$
4,963
$
10,568
$
(17,123
)
$
22,119
$
7,308
Plus after-tax non-routine items in
noninterest expense:
Non-routine items in noninterest expense
before income tax effect
5,562
—
43,094
6,303
13,383
Income tax effect (13)
(1,196
)
—
(8,887
)
(1,486
)
(2,811
)
Total after-tax non-routine items in
noninterest expense
4,366
—
34,207
4,817
10,572
Less after-tax non-routine items in
noninterest income:
Non-routine items in noninterest income
before income tax effect
(28
)
206
(5,688
)
(6,879
)
(12,445
)
Income tax effect (13)
6
(44
)
1,032
1,607
2,613
Total after-tax non-routine items in
noninterest income
(22
)
162
(4,656
)
(5,272
)
(9,832
)
BOLI enhancement tax impact (2)
—
—
2,844
—
—
Core net income
$
9,307
$
10,730
$
15,272
$
21,664
$
8,048
Basic earnings (loss) per share
$
0.15
$
0.32
$
(0.51
)
$
0.66
$
0.22
Plus: after tax impact of non-routine
items in noninterest expense and BOLI tax impact (14)
0.13
—
1.11
0.14
0.31
(Less): after tax impact of non-routine
items in noninterest income
—
—
(0.14
)
(0.15
)
(0.29
)
Total core basic earnings per common
share
$
0.28
$
0.32
$
0.46
$
0.65
$
0.24
Diluted earnings (loss) per share (15)
$
0.15
$
0.31
$
(0.51
)
$
0.66
$
0.22
Plus: after tax impact of non-routine
items in noninterest expense and BOLI tax impact (14)
0.13
—
1.11
0.14
0.31
(Less): after tax impact of non-routine
items in noninterest income
—
0.01
(0.14
)
(0.16
)
(0.29
)
Total core diluted earnings per common
share
$
0.28
$
0.32
$
0.46
$
0.64
$
0.24
Net income (loss) / Average total assets
(ROA)
0.21
%
0.44
%
(0.71
)%
0.92
%
0.31
%
Plus: after tax impact of non-routine
items in noninterest expense and BOLI tax impact (14)
0.17
%
—
%
1.55
%
0.20
%
0.45
%
Plus (less): after tax impact of
non-routine items in noninterest income
—
%
—
%
(0.20
)%
(0.21
)%
(0.42
)%
Core net income / Average total assets
(Core ROA)
0.38
%
0.44
%
0.64
%
0.91
%
0.34
%
Net income (loss) / Average stockholders'
equity (ROE)
2.68
%
5.69
%
(9.22
)%
11.93
%
3.92
%
Plus: after tax impact of non-routine
items in noninterest expense and BOLI tax impact (14)
2.36
%
—
%
19.96
%
2.60
%
5.68
%
Plus (less): after tax impact of
non-routine items in noninterest income
(0.01
)%
0.09
%
(2.51
)%
(2.84
)%
(5.28
)%
Core net income / Average stockholders'
equity (Core ROE)
5.03
%
5.78
%
8.23
%
11.69
%
4.32
%
Efficiency ratio
74.21
%
72.03
%
108.30
%
64.10
%
65.61
%
(Less): impact of non-routine items in
noninterest expense
(5.63
)%
—
%
(42.54
)%
(6.27
)%
(12.11
)%
(Less) plus: impact of non-routine items
in noninterest income
0.02
%
(0.16
)%
3.91
%
4.25
%
6.79
%
Core efficiency ratio
68.60
%
71.87
%
69.67
%
62.08
%
60.29
%
Three Months Ended,
(in thousands, except percentages, share
data and per share amounts)
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
Stockholders' equity
$
734,342
$
738,085
$
736,068
$
719,787
$
720,956
Less: goodwill and other intangibles
(16)
(24,581
)
(24,935
)
(25,029
)
(26,818
)
(24,124
)
Tangible common stockholders' equity
$
709,761
$
713,150
$
711,039
$
692,969
$
696,832
Total assets
9,747,738
9,817,772
9,716,327
9,345,700
9,519,526
Less: goodwill and other intangibles
(16)
(24,581
)
(24,935
)
(25,029
)
(26,818
)
(24,124
)
Tangible assets
$
9,723,157
$
9,792,837
$
9,691,298
$
9,318,882
$
9,495,402
Common shares outstanding
33,562,756
33,709,395
33,603,242
33,583,621
33,736,159
Tangible common equity ratio
7.30
%
7.28
%
7.34
%
7.44
%
7.34
%
Stockholders' book value per common
share
$
21.88
$
21.90
$
21.90
$
21.43
$
21.37
Tangible stockholders' equity book
value per common share
$
21.15
$
21.16
$
21.16
$
20.63
$
20.66
Tangible common stockholders' equity
$
709,761
$
713,150
$
711,039
$
692,969
$
696,832
Less: Net unrealized accumulated losses on
debt securities held to maturity, net of tax (17)
(20,304
)
(18,729
)
(16,197
)
(26,138
)
(18,503
)
Tangible common stockholders' equity,
adjusted for net unrealized accumulated losses on debt securities
held to maturity
$
689,457
$
694,421
$
694,842
$
666,831
$
678,329
Tangible assets
$
9,723,157
$
9,792,837
$
9,691,298
$
9,318,882
$
9,495,402
Less: Net unrealized accumulated losses on
debt securities held to maturity, net of tax (17)
(20,304
)
(18,729
)
(16,197
)
(26,138
)
(18,503
)
Tangible assets, adjusted for net
unrealized accumulated losses on debt securities held to
maturity
$
9,702,853
$
9,774,108
$
9,675,101
$
9,292,744
$
9,476,899
Common shares outstanding
33,562,756
33,709,395
33,603,242
33,583,621
33,736,159
Tangible common equity ratio, adjusted
for net unrealized accumulated losses on debt securities held to
maturity
7.11
%
7.10
%
7.18
%
7.18
%
7.16
%
Tangible stockholders' book value per
common share, adjusted for net unrealized accumulated losses on
debt securities held to maturity
$
20.54
$
20.60
$
20.68
$
19.86
$
20.11
____________
(1)
In the second and first quarter of 2024
and in the fourth and third quarter of 2023, includes $17.7
million, $12.4 million, $12.0 million and $7.4 million of provision
for credit losses on loans, respectively. Provision for unfunded
commitments (contingencies) in the second quarter of 2024, and in
the fourth and third quarter of 2023, were $1.5 million, $0.5
million and $0.6 million, respectively, while there was none in the
first quarter of 2024. For all other periods shown, includes
provision for credit losses on loans. There was no provision for
credit losses on unfunded commitments in the second quarter of
2023.
(2)
In the fourth quarter of 2023, the Company
completed a restructuring of its bank-owned life insurance (“BOLI”)
program. This was executed through a combination of a 1035 exchange
and a surrender and reinvestment into higher-yielding general
account with a new investment grade insurance carrier. This
transaction allowed for higher team member participation through an
enhanced split-dollar plan. Estimated improved yields resulting
from the enhancement have an earn-back period of approximately 2
years. In the fourth quarter of 2023, we recorded total additional
expenses and charges of $4.6 million in connection with this
transaction, including: (i) a reduction of $0.7 million to the cash
surrender value of BOLI; (ii) transaction costs of $1.1 million,
and (iii) income tax expense of $2.8 million.
(3)
Expenses incurred for actions designed to
implement the Company’s business strategy. These actions include,
but are not limited to reductions in workforce, streamlining
operational processes, rolling out the Amerant brand,
implementation of new technology system applications,
decommissioning of legacy technologies, enhanced sales tools and
training, expanded product offerings and improved customer
analytics to identify opportunities.
(4)
Staff reduction costs consist of severance
expenses related to organizational rationalization.
(5)
Contract termination and related costs
associated with third party vendors resulting from the Company’s
engagement of FIS.
(6)
In the three months ended December 31,
2023, includes an aggregate of $1.6 million of nonrecurrent
expenses in connection with the engagement of FIS and, to a lesser
extent, software expenses related to legacy applications running in
parallel to new core banking applications. There were no
significant nonrecurrent expenses in connection with engagement of
FIS in the three months ended June 30, 2024, March 31, 2024 and
September 30, 2023. In the three months ended June 30, 2023,
includes expenses of $2.0 million in connection with the engagement
of FIS.
(7)
Includes expenses in connection with the
disposition of fixed assets due to the write off of in-development
software in the three months ended June 30, 2023.
(8)
In the three months ended September 30,
2023, consists of expenses in connection with the closure of a
branch in Houston, Texas in 2023. In addition, in the three months
ended June 30, 2023 includes $0.9 million of accelerated
amortization of leasehold improvements and $0.6 million of
right-of-use, or ROU asset impairment, associated with the closure
of a branch in Miami, FL in 2023.
(9)
In the three months ended December 31,
2023, includes (i) fair value adjustment of $35.5 million related
to an aggregate of $401 million in Houston-based CRE loans held for
sale which are carried at the lower of cost or fair value, and (ii)
a loss on sale of $2.0 million related to a New York-based CRE loan
previously carried at the lower of cost or fair value. In the three
months ended September 30, 2023, includes a fair value adjustment
of $5.6 million related to a New York-based CRE loan held for sale
carried at the lower of cost or fair value.
(10)
In the three months ended June 30, 2023,
amount represents the loss on sale of repossessed assets in
connection with our equipment-financing activities.
(11)
In the three months ended June 30, 2024,
amounts shown are in connection with the Houston Transaction.
(12)
Related to Houston branches and included
as part of occupancy and equipment expenses. See Exhibit 5 for
additional information.
(13)
In the three months ended March 31, 2024,
amounts were calculated based upon the effective tax rate for the
period of 21.51%. For all of the other periods shown, amounts
represent the difference between the prior and current period
year-to-date tax effect.
(14)
In the three months ended December 31,
2023, per share amounts and percentages were calculated using the
after-tax impact of non-routine items in noninterest expense of
$34.2 million and BOLI tax impact of $2.8 million in the same
period. In all other periods shown, per share amounts and
percentages were calculated using the after tax impact of
non-routine items in noninterest expense.
(15)
See 2023 Form 10-K for more information on
potential dilutive instruments and its impact on diluted earnings
per share computation.
(16)
At June 30, 2024, March 31, 2024, December
31, 2023 and September 30, 2023, other intangible assets primarily
consist of naming rights of $2.3 million, $2.4 million, $2.5
million and $2.7 million, respectively, and mortgage servicing
rights (“MSRs”) of $1.5 million, $1.4 million, $1.4 million and
$1.3 million, respectively. At June 30, 2023 and March 31, 2023,
other intangible assets primarily consist of MSRs of $1.3 million
and $1.4 million, respectively. Other intangible assets are
included in other assets in the Company’s consolidated balance
sheets.
(17)
As of June 30, 2024, March 31, 2024,
December 31, 2023, September 30, 2023, June 30, 2023 and March 31,
2023, amounts were calculated based upon the fair value on debt
securities held to maturity, and assuming a tax rate of 25.38%,
25.40%, 25.36%, 25.51%, 25.46% and 25.53%, respectively.
Exhibit 3 - Average Balance Sheet, Interest
and Yield/Rate Analysis
The following tables present average balance sheet information,
interest income, interest expense and the corresponding average
yields earned and rates paid for the periods presented. The average
balances for loans include both performing and nonperforming
balances. Interest income on loans includes the effects of discount
accretion and the amortization of non-refundable loan origination
fees, net of direct loan origination costs, accounted for as yield
adjustments. Average balances represent the daily average balances
for the periods presented.
Three Months Ended
June 30, 2024
March 31, 2024
June 30, 2023
(in thousands, except percentages)
Average
Balances
Income/
Expense
Yield/
Rates
Average Balances
Income/ Expense
Yield/ Rates
Average
Balances
Income/
Expense
Yield/
Rates
Interest-earning assets:
Loan portfolio, net (1)(2)
$
7,049,109
$
124,117
7.08
%
$
6,995,974
$
122,705
7.05
%
$
7,068,034
$
119,570
6.79
%
Debt securities available for sale (3)
(4)
1,267,828
14,104
4.47
%
1,239,762
13,186
4.28
%
1,041,039
10,397
4.01
%
Debt securities held to maturity (5)
221,106
1,878
3.42
%
224,877
1,967
3.52
%
236,297
1,976
3.35
%
Debt securities held for trading
—
—
—
%
—
—
—
%
262
3
4.59
%
Equity securities with readily
determinable fair value not held for trading
2,466
13
2.12
%
2,477
55
8.93
%
27
—
—
%
Federal Reserve Bank and FHLB stock
54,664
955
7.03
%
50,180
883
7.08
%
52,917
857
6.50
%
Deposits with banks
364,466
5,260
5.80
%
422,841
5,751
5.47
%
379,123
5,694
6.02
%
Other short-term investments
6,399
82
5.15
%
5,932
78
5.29
%
—
—
—
%
Total interest-earning assets
8,966,038
146,409
6.57
%
8,942,043
144,625
6.50
%
8,777,699
138,497
6.33
%
Total non-interest-earning assets
(6)
763,628
812,523
710,404
Total assets
$
9,729,666
$
9,754,566
$
9,488,103
Three Months Ended
June 30, 2024
March 31, 2024
June 30, 2023
(in thousands, except percentages)
Average
Balances
Income/
Expense
Yield/
Rates
Average
Balances
Income/
Expense
Yield/
Rates
Average
Balances
Income/
Expense
Yield/
Rates
Interest-bearing liabilities:
Checking and saving accounts
Interest bearing DDA
$
2,408,979
$
16,779
2.80
%
$
2,445,362
$
17,736
2.92
%
$
2,641,746
$
16,678
2.53
%
Money market
1,411,287
14,973
4.27
%
1,431,949
14,833
4.17
%
1,169,047
9,401
3.23
%
Savings
253,625
26
0.04
%
262,528
28
0.04
%
287,493
36
0.05
%
Total checking and saving accounts
4,073,891
31,778
3.14
%
4,139,839
32,597
3.17
%
4,098,286
26,115
2.56
%
Time deposits
2,258,973
25,971
4.62
%
2,290,587
26,124
4.59
%
2,045,747
18,528
3.63
%
Total deposits
6,332,864
57,749
3.67
%
6,430,426
58,721
3.67
%
6,144,033
44,643
2.91
%
Securities sold under agreements to
repurchase
124
2
6.49
%
—
—
—
%
60
1
6.68
%
Advances from the FHLB (7)
737,658
6,946
3.79
%
644,753
5,578
3.48
%
828,301
7,621
3.69
%
Senior notes
59,646
941
6.35
%
59,567
943
6.37
%
59,330
941
6.36
%
Subordinated notes
29,519
361
4.92
%
29,476
361
4.93
%
29,348
362
4.95
%
Junior subordinated debentures
64,178
1,055
6.61
%
64,178
1,054
6.61
%
64,178
1,052
6.57
%
Total interest-bearing
liabilities
7,223,989
67,054
3.73
%
7,228,400
66,657
3.71
%
7,125,250
54,620
3.07
%
Non-interest-bearing liabilities:
Non-interest bearing demand deposits
1,452,921
1,435,226
1,332,189
Accounts payable, accrued liabilities and
other liabilities
309,298
344,197
283,653
Total non-interest-bearing liabilities
1,762,219
1,779,423
1,615,842
Total liabilities
8,986,208
9,007,823
8,741,092
Stockholders’ equity
743,458
746,743
747,011
Total liabilities and stockholders'
equity
$
9,729,666
$
9,754,566
$
9,488,103
Excess of average interest-earning assets
over average interest-bearing liabilities
$
1,742,049
$
1,713,643
$
1,652,449
Net interest income
$
79,355
$
77,968
$
83,877
Net interest rate spread
2.84
%
2.79
%
3.26
%
Net interest margin (7)
3.56
%
3.51
%
3.83
%
Cost of total deposits (7)
2.98
%
3.00
%
2.40
%
Ratio of average interest-earning assets
to average interest-bearing liabilities
124.11
%
123.71
%
123.19
%
Average non-performing loans/ Average
total loans
0.60
%
0.46
%
0.54
%
Six Months Ended
June 30, 2024
June 30, 2023
(in thousands, except percentages)
Average
Balances
Income/
Expense
Yield/
Rates
Average
Balances
Income/
Expense
Yield/
Rates
Interest-earning assets:
Loan portfolio, net (1)(2)
$
7,018,015
$
246,822
7.07
%
$
6,985,153
$
228,071
6.58
%
Debt securities available for sale (3)
(4)
1,253,795
27,290
4.38
%
1,049,886
20,568
3.95
%
Debt securities held to maturity (5)
222,992
3,845
3.47
%
238,450
4,088
3.46
%
Debt securities held for trading
—
—
—
%
141
4
5.72
%
Equity securities with readily
determinable fair value not held for trading
2,472
68
5.53
%
2,443
—
—
%
Federal Reserve Bank and FHLB stock
52,422
1,838
7.05
%
55,346
1,872
6.82
%
Deposits with banks
393,654
11,011
5.63
%
341,168
9,024
5.33
%
Other short-term investments
6,165
160
5.22
%
—
—
—
%
Total interest-earning assets
8,949,515
291,034
6.54
%
8,672,587
263,627
6.13
%
Total non-interest-earning assets (6)
792,602
725,675
Total assets
$
9,742,117
$
9,398,262
Interest-bearing liabilities:
Checking and saving accounts
Interest bearing DDA
$
2,427,170
$
34,515
2.86
%
$
2,493,009
$
29,533
2.39
%
Money market
1,421,618
29,807
4.22
%
1,250,801
17,281
2.79
%
Savings
258,077
53
0.04
%
293,464
83
0.06
%
Total checking and saving accounts
4,106,865
64,375
3.15
%
4,037,274
46,897
2.34
%
Time deposits
2,274,780
52,095
4.61
%
1,907,443
31,362
3.32
%
Total deposits
6,381,645
116,470
3.67
%
5,944,717
78,259
2.65
%
Securities sold under agreements to
repurchase
62
2
6.49
%
30
1
6.72
%
Advances from the FHLB (7)
691,206
12,524
3.64
%
893,484
14,384
3.25
%
Senior notes
59,606
1,883
6.35
%
59,290
1,883
6.40
%
Subordinated notes
29,497
723
4.93
%
29,327
723
4.97
%
Junior subordinated debentures
64,178
2,109
6.61
%
64,178
2,167
6.81
%
Total interest-bearing
liabilities
7,226,194
133,711
3.72
%
6,991,026
97,417
2.81
%
Non-interest-bearing liabilities:
Non-interest bearing demand deposits
1,444,073
1,354,951
Accounts payable, accrued liabilities and
other liabilities
326,809
310,716
Total non-interest-bearing liabilities
1,770,882
1,665,667
Total liabilities
8,997,076
8,656,693
Stockholders’ equity
745,041
741,569
Total liabilities and stockholders'
equity
$
9,742,117
$
9,398,262
Excess of average interest-earning assets
over average interest-bearing liabilities
$
1,723,321
$
1,681,561
Net interest income
$
157,323
$
166,210
Net interest rate spread
2.82
%
3.32
%
Net interest margin (7)
3.54
%
3.86
%
Cost of total deposits (7)
2.99
%
2.16
%
Ratio of average interest-earning assets
to average interest-bearing liabilities
123.85
%
124.05
%
Average non-performing loans/ Average
total loans
0.61
%
0.50
%
___________
(1)
Includes loans held for investment net of
the allowance for credit losses, and loans held for sale. The
average balance of the allowance for credit losses was $95.6
million, $92.3 million, and $84.6 million in the three months ended
June 30, 2024, March 31, 2024 and June 30, 2023, respectively, and
$94.0 million and $83.0 million, in the six months ended June 30,
2024 and June 30, 2023, respectively. The average balance of total
loans held for sale was $191.7 million, $180.5 million and $85.1
million in the three months ended June 30, 2024, March 31, 2024 and
June 30, 2023, respectively, and $90.0 million, and $75.8 million
in the six months period ended June 30, 2024 and June 30, 2023,
respectively.
(2)
Includes average non-performing loans of
$52.7 million, $32.6 million and $38.5 million for the three months
ended June 30, 2024, March 31, 2024 and June 30, 2023,
respectively, and $42.7 million and $35.2 million in the six months
ended June 30, 2024 and June 30, 2023, respectively.
(3)
Includes the average balance of net
unrealized gains and losses in the fair value of debt securities
available for sale. The average balance includes average net
unrealized losses of $115.8 million, $101.5 million and $106.7
million in the three months ended June 30, 2024, March 31, 2024 and
June 30, 2023, respectively, and average net unrealized net losses
of $108.6 million and $105.8 million in the six months ended June
30, 2024 and June 30, 2023, respectively.
(4)
Includes nontaxable securities with
average balances of $18.8 million, $18.3 million and $19.5 million
for the three months ended June 30, 2024, March 31, 2024 and June
30, 2023, respectively, and $18.8 million and $19.4 million, in the
six months ended June 30, 2024 and June 30, 2023, respectively. The
tax equivalent yield for these nontaxable securities was 4.47%,
4.68%, 4.53% for the three months ended June 30, 2024, March 31,
2024 and June 30, 2023, respectively, and 4.51% and 4.59% in the
six months ended June 30, 2024 and June 30, 2023, respectively. In
2024 and 2023, the tax equivalent yields were calculated assuming a
21% tax rate and dividing the actual yield by 0.79.
(5)
Includes nontaxable securities with
average balances of $47.8 million, $48.5 million and $50.1 million
for the three months ended June 30, 2024, March 31, 2024 and June
30, 2023, respectively, and $48.1 million and $50.4 million in the
six months ended June 30, 2024 and June 30, 2023, respectively. The
tax equivalent yield for these nontaxable securities was 4.23%,
4.25% and 4.16% for the three months ended June 30, 2024, March 31,
2024 and June 30, 2023, respectively, and 4.24% and 4.18% in the
six months ended June 30, 2024 and June 30, 2023, respectively. In
2024 and 2023, the tax equivalent yields were calculated assuming a
21% tax rate and dividing the actual yield by 0.79.
(6)
Excludes the allowance for credit
losses.
(7)
See Glossary of Terms and Definitions for
definitions of financial terms.
Exhibit 4 - Noninterest Income
This table shows the amounts of each of the categories of
noninterest income for the periods presented.
Three Months Ended
Six Months Ended June
30,
June 30, 2024
March 31, 2024
June 30, 2023
2024
2023
(in thousands, except percentages)
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Deposits and service fees
$
5,281
27.2
%
$
4,325
29.9
%
$
4,944
18.6
%
$
9,606
28.3
%
$
9,899
21.5
%
Brokerage, advisory and fiduciary
activities
4,538
23.4
%
4,327
29.9
%
4,256
16.0
%
8,865
26.1
%
8,438
18.4
%
Change in cash surrender value of bank
owned life insurance (“BOLI”)(1)
2,242
11.5
%
2,342
16.2
%
1,429
5.4
%
4,584
13.5
%
2,841
6.2
%
Cards and trade finance servicing fees
1,331
6.9
%
1,223
8.4
%
562
2.1
%
2,554
7.5
%
1,095
2.4
%
Gain on early extinguishment of FHLB
advances, net
189
1.0
%
—
—
%
13,440
50.5
%
189
0.6
%
26,613
57.9
%
Securities (losses) gains, net (2)
(117
)
(0.6
)%
(54
)
(0.4
)%
(1,237
)
(4.7
)%
(171
)
(0.5
)%
(10,968
)
(23.9
)%
Loan-level derivative income (3)
2,357
12.1
%
466
3.2
%
476
1.8
%
2,823
8.3
%
2,547
5.5
%
Derivative (losses) gains, net (4)
(44
)
(0.2
)%
(152
)
(1.1
)%
242
0.9
%
(196
)
(0.6
)%
256
0.6
%
Other noninterest income (5)
3,643
18.7
%
2,011
13.9
%
2,507
9.4
%
5,654
16.8
%
5,241
11.4
%
Total noninterest income
$
19,420
100.0
%
$
14,488
100.0
%
$
26,619
100.0
%
$
33,908
100.0
%
$
45,962
100.0
%
__________________
(1)
Changes in cash surrender value of BOLI
are not taxable.
(2)
Includes net loss of $0.1 million in each
of the three and six month periods ended June 30, 2024, and $1.2
million and $10.8 million in the three and six month periods ended
June 30, 2023 ,respectively, in connection with the sale of debt
securities available for sale. There were no sales of debt
securities available for sale in the three months ended March 31,
2024. In addition, includes unrealized losses of $0.1 million in
the three months ended March 31, 2024 and in the six months ended
June 30, 2024, related to the change in fair value of equity
securities with readily available fair value not held for trading
which are recorded in results of the period. There were no
significant unrealized losses related to equity securities with
readily available fair value not held for trading in the three
months ended June 30, 2024 and in the three and six month periods
ended June 30, 2023.
(3)
Income from interest rate swaps and other
derivative transactions with customers. The Company incurs expenses
related to derivative transactions with customers which are
included as part of noninterest expenses under loan-level
derivative expense. See Exhibit 5 for more details.
(4)
Net unrealized gains and losses related to
uncovered interest rate caps with clients.
(5)
Includes mortgage banking income of $1.9
million, $1.1 million and $1.6 million in the three months ended
June 30, 2024, March 31, 2024 and June 30, 2023, respectively, and
$3.0 million and $3.4 million in the six months ended June 30, 2024
and June 30, 2023, respectively, primarily consisting of net gains
on sale, valuation and derivative transactions associated with
mortgage loans held for sale activity, and other smaller sources of
income related to the operations of Amerant Mortgage. In addition,
includes $0.5 million BOLI death benefits received in the three and
six months ended June 30, 2024. Other sources of income in the
periods shown include foreign currency exchange transactions with
customers and valuation income on the investment balances held in
the non-qualified deferred compensation plan.
Exhibit 5 - Noninterest Expense
This table shows the amounts of each of the categories of
noninterest expense for the periods presented.
Three Months Ended
Six Months Ended June
30,
June 30, 2024
March 31, 2024
June 30, 2023
2024
2023
(in thousands, except percentages)
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Salaries and employee benefits (1)
$
33,857
46.2
%
$
32,958
49.5
%
$
34,247
47.2
%
$
66,815
47.8
%
$
69,123
50.4
%
Occupancy and equipment (2)
9,041
12.3
%
6,476
9.7
%
6,737
9.3
%
15,517
11.1
%
13,535
9.9
%
Professional and other services fees
(3)
12,110
16.5
%
10,963
16.5
%
7,415
10.2
%
23,073
16.5
%
15,043
11.0
%
Loan-level derivative expense (4)
580
0.8
%
4
—
%
110
0.2
%
584
0.4
%
1,710
1.3
%
Telecommunications and data processing
(5)
2,732
3.7
%
3,533
5.3
%
5,027
6.9
%
6,265
4.5
%
8,091
5.9
%
Depreciation and amortization (6)
1,652
2.3
%
1,477
2.2
%
2,275
3.1
%
3,129
2.2
%
3,567
2.6
%
FDIC assessments and insurance
2,772
3.8
%
3,008
4.5
%
2,739
3.8
%
5,780
4.1
%
5,476
4.0
%
Losses on loans held for sale carried at
the lower cost or fair value (7)
1,258
1.7
%
—
—
%
—
—
%
1,258
0.9
%
—
—
%
Advertising expenses
4,243
5.8
%
3,078
4.6
%
4,332
6.0
%
7,321
5.2
%
6,918
5.0
%
Other real estate owned and repossessed
assets (income) expense, net (8)(9)
(148
)
(0.2
)%
(354
)
(0.5
)%
2,431
3.4
%
(502
)
(0.4
)%
2,431
1.8
%
Contract termination costs (9)(10)
—
—
%
—
—
%
1,550
2.1
%
—
—
%
1,550
1.1
%
Other operating expenses (11)
5,205
7.1
%
5,451
8.2
%
5,637
7.8
%
10,656
7.7
%
9,789
7.0
%
Total noninterest expense (12)
$
73,302
100.0
%
$
66,594
100.0
%
$
72,500
100.0
%
$
139,896
100.0
%
$
137,233
100.0
%
___
(1)
Includes staff reduction costs of $2.2
million and $2.4 million in the three and six months ended June 30,
2023, respectively, which consist of severance expenses primarily
related to organizational rationalization.
(2)
In each of the three and six month periods
ended June 30, 2024, includes fixed assets impairment charge of
$3.4 million in connection with the Houston Transaction. In each of
the three and six month periods ended June 30, 2023, includes $0.6
million related to ROU asset impairment in connection with the
closure of branch in Miami, Florida in 2023.
(3)
Includes $0.3 million in legal expenses in
connection with the Houston Transaction in the three and six month
periods ended June 30, 2024. Additionally, includes additional
non-routine expenses of $2.0 million and $4.6 million in the three
months and six months ended June 30, 2023, respectively, related to
the engagement of FIS. Lastly, includes recurring service fees in
connection with the engagement of FIS in the three months ended
March 31, 2024 and June 30, 2024 and in the six months ended June
30, 2024.
(4)
Includes services fees in connection with
our loan-level derivative income generation activities.
(5)
Includes a charge of $1.4 million in each
of the three and six month periods ended June 30, 2023 related to
the disposition of fixed assets due to the write off of
in-development software.
(6)
Includes a charge of $0.9 million in each
of the three and six month periods ended June 30, 2023 for the
accelerated depreciation of leasehold improvements in connection
with the closure of a branch in Miami, Florida in 2023.
(7)
In each of the three and six month periods
ended, amounts shown are in connection with the Houston
Transaction
(8)
Includes OREO rental income of $0.4
million in the three months ended March 31, 2024, as well as in the
three and six month periods ended June 30, 2023. In addition, in
each of the three and six month periods ended June 30, 2023,
includes a loss on sale of repossessed assets in connection with
our equipment-financing activities of $2.6 million.
(9)
Beginning in the three months ended June
30, 2023, OREO and repossessed assets expense is presented
separately in the Company’s consolidated statement of operations
and comprehensive (loss) income.
(10)
Contract termination and related costs
associated with third party vendors resulting from the Company’s
transition to our new technology provider.
(11)
In each of the three and six month periods
ended June 30, 2024, includes broker fees of $0.3 million in
connection with the Houston Transaction. Additionally, in each of
the three and six month periods ended June 30, 2023, includes an
impairment charge of $2.0 million related to an investment carried
at cost and included in other assets. In all of the periods shown,
includes mortgage loan origination and servicing expenses,
charitable contributions, community engagement, postage and courier
expenses, and debits which mirror the valuation income on the
investment balances held in the non-qualified deferred compensation
plan in order to adjust the liability to participants of the
deferred compensation plan and other small expenses.
(12)
Includes $3.8 million, $3.1 million and
$4.0 million in the three months ended June 30, 2024, March 31,
2024 and June 30, 2023, respectively, and $6.9 million and $7.9
million in the six months ended June 30, 2024 and June 30, 2023,
related to Amerant Mortgage, primarily consisting of salaries and
employee benefits, mortgage lending costs and professional and
other services fees.
Exhibit 6 - Consolidated Balance
Sheets
(in thousands, except share data)
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
Assets
(audited)
Cash and due from banks
$
32,762
$
41,231
$
47,234
$
48,145
$
45,184
Interest earning deposits with banks
238,346
577,843
242,709
202,946
365,673
Restricted cash
32,430
33,897
25,849
51,837
34,204
Other short-term investments
6,781
6,700
6,080
6,024
—
Cash and cash equivalents
310,319
659,671
321,872
308,952
445,061
Securities
Debt securities available for sale, at
fair value
1,269,356
1,298,073
1,217,502
1,033,797
1,027,676
Debt securities held to maturity, at
amortized cost (1)
219,613
224,014
226,645
230,254
234,369
Trading securities
—
—
—
—
298
Equity securities with readily
determinable fair value not held for trading
2,483
2,480
2,534
2,438
2,500
Federal Reserve Bank and Federal Home Loan
Bank stock
56,412
54,001
50,294
47,878
50,460
Securities
1,547,864
1,578,568
1,496,975
1,314,367
1,315,303
Loans held for sale, at the lower of cost
or fair value (2)
551,828
—
365,219
43,257
—
Mortgage loans held for sale, at fair
value
60,122
48,908
26,200
25,952
49,942
Loans held for investment, gross
6,710,961
6,957,475
6,873,493
7,073,387
7,167,016
Less: Allowance for credit losses
94,400
96,050
95,504
98,773
105,956
Loans held for investment, net
6,616,561
6,861,425
6,777,989
6,974,614
7,061,060
Bank owned life insurance
238,851
237,314
234,972
232,736
231,253
Premises and equipment, net
33,382
44,877
43,603
43,004
43,714
Deferred tax assets, net
48,779
48,302
55,635
63,501
56,779
Operating lease right-of-use assets
100,580
117,171
118,484
116,763
116,161
Goodwill
19,193
19,193
19,193
20,525
20,525
Accrued interest receivable and other
assets (3)(4)
220,259
202,343
256,185
202,029
179,728
Total assets
$
9,747,738
$
9,817,772
$
9,716,327
$
9,345,700
$
9,519,526
Liabilities and Stockholders'
Equity
Deposits
Demand
Noninterest bearing
$
1,465,140
$
1,397,331
$
1,426,919
$
1,370,157
$
1,293,522
Interest bearing
2,316,976
2,619,115
2,560,629
2,416,797
2,773,120
Savings and money market
1,723,233
1,616,719
1,610,218
1,457,080
1,431,375
Time
2,310,662
2,245,078
2,297,097
2,302,878
2,081,554
Total deposits
7,816,011
7,878,243
7,894,863
7,546,912
7,579,571
Advances from the Federal Home Loan
Bank
765,000
715,000
645,000
595,000
770,000
Senior notes
59,685
59,605
59,526
59,447
59,368
Subordinated notes
29,539
29,497
29,454
29,412
29,369
Junior subordinated debentures held by
trust subsidiaries
64,178
64,178
64,178
64,178
64,178
Operating lease liabilities (5)
105,861
122,267
123,167
120,665
119,921
Accounts payable, accrued liabilities and
other liabilities (6)
173,122
210,897
164,071
210,299
176,163
Total liabilities
9,013,396
9,079,687
8,980,259
8,625,913
8,798,570
Stockholders’ equity
Class A common stock
3,357
3,373
3,361
3,359
3,374
Additional paid in capital
189,601
192,237
192,701
194,103
195,275
Retained earnings
620,299
618,359
610,802
630,933
611,829
Accumulated other comprehensive loss
(78,915
)
(75,884
)
(70,796
)
(105,634
)
(86,926
)
Total stockholders' equity before
noncontrolling interest
734,342
738,085
736,068
722,761
723,552
Noncontrolling interest
—
—
—
(2,974
)
(2,596
)
Total stockholders' equity
734,342
738,085
736,068
719,787
720,956
Total liabilities and stockholders'
equity
$
9,747,738
$
9,817,772
$
9,716,327
$
9,345,700
$
9,519,526
__________
(1)
Estimated fair value of $192,403,
$198,909, $204,945, $195,165 and $209,546 at June 30, 2024, March
31, 2024, December 31, 2023, September 30, 2023 and June 30, 2023,
respectively.
(2)
As of June 30, 2024, includes loans held
for sale and a valuation allowance of $1.3 million, in connection
with the Houston Transaction. As of December 31, 2023 and September
30, 2023, includes a valuation allowance of $35.5 million and $5.6
million as a result of fair value adjustment.
(3)
As of June 30, 2024, March 31, 2024,
December 31, 2023, September 30, 2023 and June 30, 2023, includes
derivative assets with a total fair value of $64.0 million, $64.7
million, $59.9 million, $87.1 million and $75.8 million,
respectively. As of December 31, 2023, includes a receivable from
insurance carrier for $62.5 million in connection with the
restructuring of the Company’s BOLI in the fourth quarter of 2023,
which were collected in the first quarter of 2024.
(4)
Includes other assets for sale of $22.8
million in connection with the Houston Transaction.
(5)
Consists of total long-term lease
liabilities. Total short-term lease liabilities are included in
other liabilities.
(6)
As of June 30, 2024, March 31, 2024,
December 31, 2023, September 30, 2023 and June 30, 2023, includes
derivatives liabilities with a total fair value of $62.9 million,
$63.8 million, $59.4 million, $85.6 million and $74.5 million,
respectively.
Exhibit 7 - Loans
Loans by Type - Held For Investment
The loan portfolio held for investment consists of the following
loan classes:
(in thousands)
June 30, 2024
March 31, 2024
December 31,
2023
September 30,
2023
June 30, 2023
Real estate loans
(audited)
Commercial real estate
Non-owner occupied
$
1,714,088
$
1,672,470
$
1,616,200
$
1,593,571
$
1,645,224
Multi-family residential
359,257
349,917
407,214
771,654
764,712
Land development and construction
loans
343,472
333,198
300,378
301,938
314,010
2,416,817
2,355,585
2,323,792
2,667,163
2,723,946
Single-family residential
1,446,569
1,490,711
1,466,608
1,371,194
1,285,857
Owner occupied
981,405
1,193,909
1,175,331
1,129,921
1,063,240
4,844,791
5,040,205
4,965,731
5,168,278
5,073,043
Commercial loans
1,521,533
1,550,140
1,503,187
1,452,759
1,577,209
Loans to financial institutions and
acceptances
48,287
29,490
13,375
13,353
13,332
Consumer loans and overdrafts (1)
296,350
337,640
391,200
438,997
503,432
Total loans
$
6,710,961
$
6,957,475
$
6,873,493
$
7,073,387
$
7,167,016
__________________
(1)
As of June 30, 2024, March 31, 2024,
December 31, 2023, September 30, 2023 and June 30, 2023 includes
$131.9 million, $163.3 million, $210.9 million, $254.7 million and
$312.3 million, respectively, in consumer loans purchased under
indirect lending programs.
Loans by Type - Held For Sale
The loan portfolio held for sale consists of the following loan
classes:
(in thousands)
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
Loans held for
sale at the lower of cost or fair value
(audited)
Real estate loans
Commercial real estate
Non-owner occupied
$
112,002
$
—
$
—
$
43,256
$
—
Multi-family residential
918
—
309,612
—
—
Land development and construction
loans
29,923
—
55,607
—
—
142,843
—
365,219
43,256
—
Single-family residential
88,507
—
—
—
—
Owner occupied
220,718
—
—
—
—
452,068
—
365,219
43,256
—
Commercial loans
90,353
—
—
—
—
Consumer loans
9,407
—
—
—
—
Total loans held for sale at the lower of
cost or fair value (1)
551,828
—
365,219
43,256
—
Mortgage loans
held for sale at fair value
Land development and construction loans
(2)
7,776
26,058
12,778
6,931
3,726
Single-family residential (3)
52,346
22,850
13,422
19,022
46,216
Total mortgage loans held for sale at fair
value (4)
60,122
48,908
26,200
25,953
49,942
Total loans held for sale (5)
$
611,950
$
48,908
$
391,419
$
69,209
$
49,942
__________________
(1)
In the second quarter of 2024, the Company
transferred an aggregate of $551.8 million in connection with the
Houston Transaction. The Company recorded a valuation allowance of
$1.3 million as a result of the transfer in the same period. In the
fourth quarter of 2023, the Company transferred an aggregate of
$401 million in Houston-based CRE loans held for investment to the
loans held for sale category, and recognized a valuation allowance
of $35.5 million as a result of the fair value adjustment of these
loans. The Company subsequently sold these loans in the first
quarter of 2024 and there was no material impact to the Company’s
results of operations as a result of this transaction. In the third
quarter of 2023, the Company transferred a New York-based CRE loan
held for investment to the loans held for sale category, and
recognized a valuation allowance of $5.6 million as a result of the
fair value adjustment of this loan. In the fourth quarter of 2023,
the Company sold this loan and there was no material impact to the
Company’s results of operations as a result of this
transaction.
(2)
In the second quarter of 2023, the Company
transferred approximately $13 million in land development and
construction loans held for sale to the loans held for investment
category.
(3)
In the fourth, third and second quarters
of 2023, the Company transferred approximately $17 million, $17
million and $28 million, respectively, in single-family residential
loans held for sale to the loans held for investment category. In
the first quarter of 2024, there were no significant transfers of
single-family residential loans from the loans held for sale to the
loans held for investment category.
(4)
Loans held for sale in connection with
Amerant Mortgage’s ongoing business.
(5)
Remained current and in accrual status at
each of the periods shown.
Non-Performing Assets
This table shows a summary of our non-performing assets by loan
class, which includes non-performing loans, other real estate
owned, or OREO, and other repossessed assets at the dates
presented. Non-performing loans consist of (i) nonaccrual loans,
and (ii) accruing loans 90 days or more contractually past due as
to interest or principal.
(in thousands)
June 30, 2024
March 31, 2024
December 31,
2023
September 30,
2023
June 30, 2023
Non-Accrual Loans
(audited)
Real Estate Loans
Commercial real estate (CRE)
Non-owner occupied
$
—
$
—
$
—
$
—
$
1,696
Multi-family residential
6
—
8
23,344
24,306
6
—
8
23,344
26,002
Single-family residential
3,726
4,400
2,459
2,533
1,681
Owner occupied
26,309
1,958
3,822
2,100
6,890
30,041
6,358
6,289
27,977
34,573
Commercial loans
67,005
21,833
21,949
4,713
12,241
Consumer loans and overdrafts
4
45
38
1
1
Total Non-Accrual Loans (1)
$
97,050
$
28,236
$
28,276
$
32,691
$
46,815
Past Due Accruing Loans(2)
Real Estate Loans
Owner occupied
769
—
—
—
—
Single-family residential
2,656
1,149
5,218
—
302
Commercial
—
918
857
504
—
—
Consumer loans and overdrafts
477
—
49
—
78
Total Past Due Accruing Loans
$
3,902
$
2,067
$
6,124
$
504
$
380
Total Non-Performing Loans
100,952
30,303
34,400
33,195
47,195
Other Real Estate Owned
20,181
20,181
20,181
20,181
20,181
Total Non-Performing Assets
$
121,133
$
50,484
$
54,581
$
53,376
$
67,376
__________________
(1)
See March 31, 2024 Form 10-Q and 2023 Form
10-K for more information about the activity of non-accrual loans
in the first quarter of 2024 and all periods in 2023.
(2)
Loans past due 90 days or more but still
accruing.
Loans by Credit Quality Indicators
This table shows the Company’s loans by credit quality
indicators. The Company has not purchased credit-impaired
loans.
June 30, 2024
March 31, 2024
June 30, 2023
(in thousands)
Special Mention
Substandard
Doubtful
Total (1)
Special Mention
Substandard
Doubtful
Total (1)
Special Mention
Substandard
Doubtful
Total (1)
Real Estate Loans
Commercial Real
Estate (CRE)
Non-owner
occupied
$
33,979
$
—
$
—
$
33,979
$
—
$
—
$
—
$
—
$
8,301
$
1,753
$
—
$
10,054
Multi-family residential
—
6
—
6
—
6
—
6
—
24,306
—
24,306
Land development
and
construction
loans
—
—
—
—
—
—
—
—
6,497
—
—
6,497
33,979
6
—
33,985
—
6
—
6
14,798
26,059
—
40,857
Single-family residential
—
3,684
—
3,684
—
3,715
—
3,715
—
2,154
—
2,154
Owner occupied
35,642
26,381
—
62,023
40,666
2,023
—
42,689
2,236
6,972
—
9,208
69,621
30,071
—
99,692
40,666
5,744
—
46,410
17,034
35,185
—
52,219
Commercial loans
25,671
67,836
—
93,507
63,172
22,800
—
85,972
13,029
13,312
3
26,344
Consumer loans and
overdrafts
—
—
—
—
—
36
—
36
—
70
—
70
Totals
$
95,292
$
97,907
$
—
$
193,199
$
103,838
$
28,580
$
—
$
132,418
$
30,063
$
48,567
$
3
$
78,633
__________
(1)
There were no loans categorized as “loss”
as of the dates presented.
Exhibit 8 - Deposits by Country of
Domicile
This table shows the Company’s deposits by country of domicile
of the depositor as of the dates presented.
(in thousands)
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
June 30, 2023
(audited)
Domestic
$
5,281,946
$
5,288,702
$
5,430,059
$
5,067,937
$
5,113,604
Foreign:
Venezuela
1,918,134
1,988,470
1,870,979
1,892,453
1,912,994
Others
615,931
601,071
593,825
586,522
552,973
Total foreign
2,534,065
2,589,541
2,464,804
2,478,975
2,465,967
Total deposits
$
7,816,011
$
7,878,243
$
7,894,863
$
7,546,912
$
7,579,571
Glossary of Terms and Definitions
- Total gross loans: include loans held for investment net of
unamortized deferred loan origination fees and costs, as well as
loans held for sale.
- Core deposits: consist of total deposits excluding all time
deposits.
- Assets under management and custody: consists of assets held
for clients in an agency or fiduciary capacity which are not assets
of the Company and therefore are not included in the consolidated
financial statements.
- Net interest margin, or NIM: defined as net interest income, or
NII, divided by average interest-earning assets, which are loans,
securities, deposits with banks and other financial assets which
yield interest or similar income.
- ROA and Core ROA are calculated based upon the average daily
balance of total assets.
- ROE and Core ROE are calculated based upon the average daily
balance of stockholders’ equity.
- Total revenue is the result of net interest income before
provision for credit losses plus noninterest income.
- Total capital ratio: total stockholders’ equity divided by
total risk-weighted assets, calculated according to the
standardized regulatory capital ratio calculations.
- Tier 1 capital ratio: Tier 1 capital divided by total
risk-weighted assets. Tier 1 capital is composed of Common Equity
Tier 1 (CET1) capital plus outstanding qualifying trust preferred
securities of $62.3 million at each of all the dates
presented.
- Tier 1 leverage ratio: Tier 1 capital divided by quarter to
date average assets.
- Common equity tier 1 capital ratio, CET1: Tier 1 capital
divided by total risk-weighted assets.
- Tangible common equity ratio: calculated as the ratio of common
equity less goodwill and other intangibles divided by total assets
less goodwill and other intangible assets. Other intangible assets
primarily consist of naming rights and mortgage servicing rights
and are included in other assets in the Company’s consolidated
balance sheets.
- Tangible common equity ratio, adjusted for unrealized losses on
debt securities held to maturity: calculated in the same manner
described in tangible common equity but also includes unrealized
losses on debt securities held to maturity in the balance of common
equity and total assets.
- Loans to Deposits ratio: calculated as the ratio of total loans
gross divided by total deposits.
- Non-performing assets include all accruing loans past due by 90
days or more, all nonaccrual loans and other real estate owned
(“OREO”) properties acquired through or in lieu of foreclosure, and
other repossessed assets.
- Non-performing loans include all accruing loans past due by 90
days or more and all nonaccrual loans
- Ratio for net charge-offs/average total loans held for
investments: calculated based upon the average daily balance of
outstanding loan principal balance net of unamortized deferred loan
origination fees and costs, excluding the allowance for credit
losses.
- Other operating expenses: total noninterest expense less salary
and employee benefits.
- Efficiency ratio: total noninterest expense divided by the sum
of noninterest income and NII.
- The terms of the FHLB advance agreements require the Bank to
maintain certain investment securities or loans as collateral for
these advances.
- Cost of total deposits: calculated based upon the average
balance of total noninterest bearing and interest bearing deposits,
which includes time deposits.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240724464045/en/
Investors Laura Rossi InvestorRelations@amerantbank.com (305)
460-8728
Media Alexis Dominguez MediaRelations@amerantbank.com (305)
441-8412
Amerant Bancorp (NYSE:AMTB)
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