Amerant Bancorp Inc.
10/23/2024 | Press release | Distributed by Public on 10/23/2024 14:33
AMERANT REPORTS THIRD QUARTER 2024 RESULTS Form 8 K
AMERANT REPORTS THIRD QUARTER 2024 RESULTS
Board of Directors Declares Quarterly Cash Dividend of $0.09 per Common Share
CORAL GABLES, FLORIDA, October 23, 2024. Amerant Bancorp Inc. (NYSE: AMTB) (the "Company" or "Amerant") today reported a net loss attributable to the Company of $48.2 million in the third quarter of 2024, or $1.43 loss per diluted share, compared to net income of $5.0 million, or $0.15 income per diluted share, in the second quarter of 2024.
On September 27, 2024, the Company completed a public offering of 8,684,210 shares of its Class A voting common stock, at a price to the public of $19.00 per share, which included 784,210 shares issued upon the exercise in full by the underwriters of their option to purchase additional shares of common stock. The total gross proceeds from the offer were approximately $165 million, with net proceeds of approximately $155.8 million, which the Company intends to use for general corporate purposes to support its continued organic growth, which may include, among other things, investments in its banking subsidiary and potential balance sheet optimization strategies.
Following the capital raise, the Company executed on the previously announced investment portfolio repositioning, which consisted in the sale of $551 million in securities with an average yield of 3.2%, including a portion of the $220 million in securities previously designated as held to maturity, all securities with yields below 2.75% and all corporate debt securities (including bank sub debt). This repositioning resulted in a pre-tax loss on the sale of securities of $68.5 million ($53.1 million after-tax) as of September 30, 2024. In addition, the Company also incurred a valuation expense of $5.7 million in connection with Other Real Estate Owned ("OREO").
"As previously noted, the capital raise and follow-on investment portfolio repositioning this quarter completes the multi-year transformation we have undertaken here at Amerant," stated Jerry Plush, Chairman and CEO. "We continued to see strong organic loan and deposit growth this quarter, which we believe evidences our intent and ability to achieve our strategic goal of becoming the bank of choice in the markets we serve."
1
•Total assets were $10.4 billion, an increase of $634.2 million, compared to $9.7 billion in 2Q24.
•Cash and cash equivalents were $671.8 million, up $361.5 million, compared to $310.3 million in 2Q24.
•Total gross loans were $7.56 billion, an increase of $239.1 million, compared to $7.32 billion in 2Q24.
•Average yield on loans remained at 7.08%, unchanged from 2Q24.
•Total deposits were $8.11 billion, up $294.9 million, compared to $7.82 billion in 2Q24, driven by continued organic growth.
•Core deposits were $5.71 billion, up $202.0 million, compared to $5.51 billion in 2Q24.
•Average cost of total deposits increased slightly to 2.99%, compared to 2.98% in 2Q24.
•Loan to deposit ratio was 93.23%, compared to 93.69% in 2Q24.
•Total advances from Federal Home Loan Bank ("FHLB") were $915.0 million, up $150.0 million, compared to $765.0 million in 2Q24. The Bank had $1.9 billion in availability remaining from the FHLB as of September 30, 2024.
•Total non-performing loans ("NPL") were $114.9 million, up $14.0 million, compared to $101.0 million as of 2Q24, while special mention loans declined to $76.4 million at September 30, 2024 compared to $95.3 million at June 30, 2024.
•OREO was $14.5 million, a decrease of $5.7 million from 2Q24, primarily driven by the valuation expense recorded in the third quarter of 2024.
•The allowance for credit losses ("ACL") was $79.9 million, a decrease of $14.5 million, compared to $94.4 million as of 2Q24. The Company charged off $17.3 million against previously established specific reserves as of quarter end September 30, 2024.
•Assets Under Management and custody ("AUM") totaled $2.55 billion, up $98.7 million, from $2.45 billion in 2Q24.
•Pre-provision net revenue ("PPNR")(1) was negative $42.9 million, compared to PPNR of $25.5 million in 2Q24. Excluding non-routine items in non-interest income and expense, PPNR(2) was $31.3 million, compared to $31.0 million in 2Q24.
•Net Interest Margin ("NIM") was 3.49%, down from 3.56% in 2Q24. The decrease in NIM was primarily driven by higher average balances in NPLs as well as higher average balances in interest bearing liabilities and cost of funds.
•Net Interest Income ("NII") was $81.0 million, up $1.6 million, from $79.4 million in 2Q24.
•Provision for credit losses was $19.0 million, down $0.2 million, compared to $19.2 million in 2Q24.
2
•Non-interest income was negative $47.7 million due to the net loss recorded on the investment portfolio repositioning initiated during the quarter. Excluding non-routine items, non-interest income(2) was $20.8 million, compared to non-interest income of $19.4 million in 2Q24. Non-interest income in 3Q24 includes $1.6 million resulting from the unwinding of a swap related to the sale of a non-performing loan, which was offset by $1.6 million in non-interest expense (no impact to P&L).
•Non-interest expense was $76.2 million, up $2.9 million, from $73.3 million in 2Q24. Excluding non-routine items, non-interest expense(2) was $70.5 million. Non-interest expense in 3Q24 includes $1.6 million resulting from the unwinding of a swap related to the sale of a non-performing loan, which was offset by of $1.6 million in non-interest income (no impact to P&L).
•The efficiency ratio was 228.7%, compared to 74.2% in 2Q24. Excluding non-routine items in non-interest income and expense, the efficiency ratio(2) was 69.3%, compared to 68.6% in 2Q24.
•Return on average assets ("ROA") was negative 1.92%, compared to 0.21% in 2Q24. Excluding non-routine items in non-interest income and expense, ROA(2) was 0.37% compared to 0.38% in 2Q24.
•Return on average equity ("ROE") was negative 24.98%, compared to 2.68% in 2Q24. Excluding non-routine items in non-interest income and expense, ROE(2) was 4.80% compared to 5.03% in 2Q24.
•The Company's Board of Directors declared a cash dividend of $0.09 per share of common stock on October 23, 2024. The dividend is payable on November 29, 2024, to shareholders of record on November 14, 2024.
Additional details on third 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 income, 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.
Third Quarter 2024 Earnings Conference Call
The Company will hold an earnings conference call on Thursday, October 24, 2024 at 9:00 a.m. (Eastern Time) to discuss its third 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
3
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 26 banking centers - 19 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 our investment portfolio repositioning and 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 month periods ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, and the nine month periods ended September 30, 2024 and 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.
4
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", "tangible common equity ratio, adjusted for net unrealized accumulated losses on debt securities held to maturity", and "tangible stockholders' equity (book value) per common share, adjusted for net unrealized accumulated 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 (including the investment portfolio repositioning initiated at the end of the third quarter of 2024) 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.
5
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)
|
September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||
| Consolidated Balance Sheets | (audited) | |||||||||
| Total assets | $ | 10,381,961 | $ | 9,747,738 | $ | 9,817,772 | $ | 9,716,327 | $ | 9,345,700 |
| Total investments | 1,542,544 | 1,547,864 | 1,578,568 | 1,496,975 | 1,314,367 | |||||
|
Total gross loans (1)(2)
|
7,561,963 | 7,322,911 | 7,006,383 | 7,264,912 | 7,142,596 | |||||
| Allowance for credit losses | 79,890 | 94,400 | 96,050 | 95,504 | 98,773 | |||||
| Total deposits | 8,110,944 | 7,816,011 | 7,878,243 | 7,894,863 | 7,546,912 | |||||
|
Core deposits (1)
|
5,707,366 | 5,505,349 | 5,633,165 | 5,597,766 | 5,244,034 | |||||
| Advances from the Federal Home Loan Bank | 915,000 | 765,000 | 715,000 | 645,000 | 595,000 | |||||
| Senior notes | 59,764 | 59,685 | 59,605 | 59,526 | 59,447 | |||||
| Subordinated notes | 29,582 | 29,539 | 29,497 | 29,454 | 29,412 | |||||
| Junior subordinated debentures | 64,178 | 64,178 | 64,178 | 64,178 | 64,178 | |||||
|
Stockholders' equity (3)(4)(5)
|
902,888 | 734,342 | 738,085 | 736,068 | 719,787 | |||||
|
Assets under management and custody (1)
|
2,550,541 | 2,451,854 | 2,357,621 | 2,289,135 | 2,092,200 |
| Three Months Ended | ||||||||||
|
(in thousands, except percentages, share data and per share amounts)
|
September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||
|
Consolidated Results of Operations
|
||||||||||
| Net interest income | $ | 80,999 | $ | 79,355 | $ | 77,968 | $ | 81,677 | $ | 78,577 |
|
Provision for credit losses (6)
|
19,000 | 19,150 | 12,400 | 12,500 | 8,000 | |||||
| Noninterest (loss) income | (47,683) | 19,420 | 14,488 | 19,613 | 21,921 | |||||
| Noninterest expense | 76,208 | 73,302 | 66,594 | 109,702 | 64,420 | |||||
|
Net (loss) income attributable to Amerant Bancorp Inc. (7)
|
(48,164) | 4,963 | 10,568 | (17,123) | 22,119 | |||||
| Effective income tax rate | 22.18% | 21.51% | 21.50% | 14.21% | 22.57% | |||||
|
Common Share Data
|
||||||||||
| Stockholders' book value per common share | $ | 21.44 | $ | 21.88 | $ | 21.90 | $ | 21.90 | $ | 21.43 |
|
Tangible stockholders' equity (book value) per common share (8)
|
$ | 20.87 | $ | 21.15 | $ | 21.16 | $ | 21.16 | $ | 20.63 |
|
Tangible stockholders' equity (book value) per common share, adjusted for unrealized losses on debt securities held to maturity (8)
|
$ | 20.87 | $ | 20.54 | $ | 20.60 | $ | 20.68 | $ | 19.86 |
| Basic (loss) earnings per common share | $ | (1.43) | $ | 0.15 | $ | 0.32 | $ | (0.51) | $ | 0.66 |
|
Diluted (loss) earnings per common share (9)
|
$ | (1.43) | $ | 0.15 | $ | 0.31 | $ | (0.51) | $ | 0.66 |
| Basic weighted average shares outstanding | 33,784,999 | 33,581,604 | 33,538,069 | 33,432,871 | 33,489,560 | |||||
|
Diluted weighted average shares outstanding (9)
|
33,784,999 | 33,780,666 | 33,821,562 | 33,432,871 | 33,696,620 | |||||
|
Cash dividend declared per common share (4)
|
$ | 0.09 | $ | 0.09 | $ | 0.09 | $ | 0.09 | $ | 0.09 |
6
| Three Months Ended | |||||||||
| September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||
|
Other Financial and Operating Data (10)
|
|||||||||
| Profitability Indicators (%) | |||||||||
|
Net interest income / Average total interest earning assets (NIM) (1)
|
3.49% | 3.56% | 3.51 | % | 3.72 | % | 3.57 | % | |
|
Net (loss) income/ Average total assets (ROA)(1)
|
(1.92)% | 0.21 | % | 0.44 | % | (0.71) | % | 0.92 | % |
|
Net (loss) income/ Average stockholders' equity (ROE) (1)
|
(24.98)% | 2.68 | % | 5.69 | % | (9.22) | % | 11.93 | % |
|
Noninterest (loss) income / Total revenue (1)
|
(143.12)% | 19.66% | 15.67% | 19.36% | 21.81% | ||||
| Capital Indicators (%) | |||||||||
|
Total capital ratio (1)
|
12.66% | 11.88% | 12.49 | % | 12.12 | % | 12.70 | % | |
|
Tier 1 capital ratio (1)
|
11.31% | 10.34% | 10.87 | % | 10.54 | % | 11.08 | % | |
|
Tier 1 leverage ratio (1)
|
9.56% | 8.74% | 8.73 | % | 8.84 | % | 9.05 | % | |
|
Common equity tier 1 capital ratio (CET1) (1)
|
10.60% | 9.60% | 10.10 | % | 9.79 | % | 10.30 | % | |
|
Tangible common equity ratio (1)
|
8.48% | 7.30% | 7.28 | % | 7.34 | % | 7.44 | % | |
|
Tangible common equity ratio, adjusted for unrealized losses on debt securities held to maturity (1)
|
8.48% | 7.11% | 7.10% | 7.18% | 7.18% | ||||
| Liquidity Ratios (%) | |||||||||
|
Loans to Deposits (1)
|
93.23% | 93.69% | 88.93 | % | 92.02 | % | 94.64 | % | |
| Asset Quality Indicators (%) | |||||||||
|
Non-performing assets / Total assets (1)
|
1.25% | 1.24% | 0.51 | % | 0.56 | % | 0.57 | % | |
|
Non-performing loans / Total gross loans (1)
|
1.52% | 1.38% | 0.43 | % | 0.47 | % | 0.46 | % | |
|
Allowance for credit losses / Total non-performing loans
|
69.51% | 93.51% | 317.01 | % | 277.63 | % | 297.55 | % | |
| Allowance for credit losses / Total loans held for investment | 1.15% | 1.41% | 1.38 | % | 1.39 | % | 1.40 | % | |
|
Net charge-offs / Average total loans held for investment (1)(11)
|
1.90% | 1.13% | 0.69 | % | 0.85 | % | 0.82 | % | |
| Efficiency Indicators (% except FTE) | |||||||||
| Noninterest expense / Average total assets | 3.04% | 3.03% | 2.75 | % | 4.57 | % | 2.69 | % | |
| Salaries and employee benefits / Average total assets | 1.39% | 1.40% | 1.36 | % | 1.38 | % | 1.31 | % | |
|
Other operating expenses/ Average total assets (1)
|
1.64% | 1.63% | 1.39 | % | 3.20 | % | 1.38 | % | |
|
Efficiency ratio (1)
|
228.74% | 74.21% | 72.03 | % | 108.30 | % | 64.10 | % | |
|
Full-Time-Equivalent Employees (FTEs) (12)
|
735 | 720 | 696 | 682 | 700 | ||||
7
| Three Months Ended | ||||||||||
|
(in thousands, except percentages and per share amounts)
|
September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||
|
Core Selected Consolidated Results of Operations and Other Data (8)
|
||||||||||
|
Pre-provision net revenue (loss) (PPNR)
|
$ | (42,892) | $ | 25,473 | $ | 25,862 | $ | (7,595) | $ | 36,456 |
| Core pre-provision net revenue (Core PPNR) | $ | 31,264 | $ | 31,007 | $ | 26,068 | $ | 29,811 | $ | 35,880 |
|
Core net income
|
$ | 9,249 | $ | 9,307 | $ | 10,730 | $ | 15,272 | $ | 21,664 |
|
Core basic earnings per common share
|
0.27 | 0.28 | 0.32 | 0.46 | 0.65 | |||||
|
Core earnings per diluted common share (9)
|
0.27 | 0.28 | 0.32 | 0.46 | 0.64 | |||||
|
Core net income / Average total assets (Core ROA) (1)
|
0.37% | 0.38% | 0.44 | % | 0.64 | % | 0.91 | % | ||
|
Core net income / Average stockholders' equity (Core ROE) (1)
|
4.80% | 5.03% | 5.78 | % | 8.23 | % | 11.69 | % | ||
|
Core efficiency ratio (13)
|
69.29% | 68.60% | 71.87 | % | 69.67 | % | 62.08 | % |
__________________
(1) See Glossary of Terms and Definitions for definitions of financial terms.
(2) As of September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, mortgage loans held for sale carried at fair value totaled $43.9 million, $60.1 million, $48.9 million, $26.2 million and $26.0 million, respectively. In addition, September 30, 2024, June 30, 2024, December 31, 2023 and September 30, 2023, includes $553.9 million, $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 third quarter of 2024 the Company repurchased an aggregate of 143,674 shares of Class A common stock at a weighted average price of $21.59 per share under the 2023 Class A Common Stock Repurchase Program. The aggregate purchase price for these transactions was approximately $3.1 million which includes transaction costs. For all other periods, see June 30, 2024 Form 10-Q, March 31, 2024 Form 10-Q and 2023 Form 10-K.
(4) For all periods shown, 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 third quarter of 2024 was paid on August 30, 2024 to shareholders of record at the close of business on August 15, 2024. See June 30, 2024 Form 10-Q, and 2023 Form 10-K for more information on dividend payments during the previous quarters.
(5) On September 27, 2024, the Company completed a public offering of 8,684,210 shares of its Class A voting common stock, at a price to the public of $19.00 per share.
(6) In the third, second and first quarter of 2024 and in the fourth and third quarter of 2023, includes $17.9 million, $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 third and second quarter of 2024 and in the fourth and third quarter of 2023, were $1.1 million, $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.
(7) In the three months ended December 31, 2023 and September 30, 2023, net income excludes losses of $0.8 million and $0.4 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.
(8) 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.
(9) See 2023 Form 10-K for more information on potential dilutive instruments and its impact on diluted earnings per share computation.
(10) Operating data for the periods presented have been annualized.
(11) See 2023 Form 10-K for more details on charge-offs for all previous periods.
(12) As of September 30, 2024, June 30, 2024, March 31, 2034, December 31, 2023 and September 30, 2023, includes 81, 83, 65, 67 and 98 FTEs for Amerant Mortgage, respectively.
(13) 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.
8
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)
|
September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||
| Net (loss) income attributable to Amerant Bancorp Inc. | $ | (48,164) | $ | 4,963 | $ | 10,568 | $ | (17,123) | $ | 22,119 |
|
Plus: provision for credit losses (1)
|
19,000 | 19,150 | 12,400 | 12,500 | 8,000 | |||||
| Plus: provision for income tax (benefit) expense | (13,728) | 1,360 | 2,894 | (2,972) | 6,337 | |||||
|
Pre-provision net revenue (loss) (PPNR)
|
(42,892) | 25,473 | 25,862 | (7,595) | 36,456 | |||||
| Plus: non-routine noninterest expense items | 5,672 | 5,562 | - | 43,094 | 6,303 | |||||
|
Plus (less): non-routine noninterest income items
|
68,484 | (28) | 206 | (5,688) | (6,879) | |||||
| Core pre-provision net revenue (Core PPNR) | $ | 31,264 | $ | 31,007 | $ | 26,068 | $ | 29,811 | $ | 35,880 |
|
Total noninterest (loss) income
|
$ | (47,683) | $ | 19,420 | $ | 14,488 | $ | 19,613 | $ | 21,921 |
|
Less: Non-routine noninterest (loss) income items:
|
||||||||||
|
Derivatives (losses) gains, net
|
- | (44) | (152) | (151) | (77) | |||||
|
Securities (losses) gains, net (2)
|
(68,484) | (117) | (54) | 33 | (54) | |||||
|
Bank owned life insurance charge (3)
|
- | - | - | (655) | - | |||||
| Gains on early extinguishment of FHLB advances, net | - | 189 | - | 6,461 | 7,010 | |||||
| Total non-routine noninterest (loss) income items | $ | (68,484) | $ | 28 | $ | (206) | $ | 5,688 | $ | 6,879 |
| Core noninterest income | $ | 20,801 | $ | 19,392 | $ | 14,694 | $ | 13,925 | $ | 15,042 |
|
Total noninterest expense
|
$ | 76,208 | $ | 73,302 | $ | 66,594 | $ | 109,702 | $ | 64,420 |
| Less: non-routine noninterest expense items | ||||||||||
|
Restructuring costs (4):
|
||||||||||
|
Staff reduction costs (5)
|
- | - | - | 1,120 | 489 | |||||
|
Contract termination costs (6)
|
- | - | - | - | - | |||||
|
Consulting and other professional fees and software expenses(7)
|
- | - | - | 1,629 | - | |||||
|
Branch closure expenses and related charges (8)
|
- | - | - | - | 252 | |||||
| Total restructuring costs | $ | - | $ | - | $ | - | $ | 2,749 | $ | 741 |
| Other non-routine noninterest expense items: | ||||||||||
|
Losses on loans held for sale carried at the lower cost or fair value (9)(10)
|
- | 1,258 | - | 37,495 | 5,562 | |||||
|
Other real estate owned valuation expense
|
5,672 | - | - | - | - | |||||
|
Goodwill and intangible assets impairment (10)
|
- | 300 | - | 1,713 | - | |||||
|
Fixed assets impairment (10)(11)
|
- | 3,443 | - | - | - | |||||
|
Legal and broker fees (10)
|
- | 561 | - | - | - | |||||
|
Bank owned life insurance enhancement costs (3)
|
- | - | - | 1,137 | - | |||||
| Impairment charge on investment carried at cost | - | - | - | - | - | |||||
| Total non-routine noninterest expense items | $ | 5,672 | $ | 5,562 | $ | - | $ | 43,094 | $ | 6,303 |
|
Core noninterest expense
|
$ | 70,536 | $ | 67,740 | $ | 66,594 | $ | 66,608 | $ | 58,117 |
9
|
|
Three Months Ended, | |||||||||
|
(in thousands, except percentages and per share amounts)
|
September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||
| Net (loss) income attributable to Amerant Bancorp Inc. | $ | (48,164) | $ | 4,963 | $ | 10,568 | $ | (17,123) | $ | 22,119 |
| Plus after-tax non-routine items in noninterest expense: | ||||||||||
| Non-routine items in noninterest expense before income tax effect | 5,672 | 5,562 | - | 43,094 | 6,303 | |||||
|
Income tax effect (12)
|
(1,332) | (1,196) | - | (8,887) | (1,486) | |||||
| Total after-tax non-routine items in noninterest expense | 4,340 | 4,366 | - | 34,207 | 4,817 | |||||
|
Plus (less) after-tax non-routine items in noninterest income:
|
||||||||||
| Non-routine items in noninterest income before income tax effect | 68,484 | (28) | 206 | (5,688) | (6,879) | |||||
|
Income tax effect (12)
|
(15,411) | 6 | (44) | 1,032 | 1,607 | |||||
| Total after-tax non-routine items in noninterest income | 53,073 | (22) | 162 | (4,656) | (5,272) | |||||
|
BOLI enhancement tax impact (2)
|
- | - | - | 2,844 | - | |||||
|
Core net income
|
$ | 9,249 | $ | 9,307 | $ | 10,730 | $ | 15,272 | $ | 21,664 |
|
Basic (loss) earnings per share
|
$ | (1.43) | $ | 0.15 | $ | 0.32 | $ | (0.51) | $ | 0.66 |
|
Plus: after tax impact of non-routine items in noninterest expense and BOLI tax impact (13)
|
0.13 | 0.13 | - | 1.11 | 0.14 | |||||
|
Plus (less): after tax impact of non-routine items in noninterest income
|
1.57 | - | - | (0.14) | (0.15) | |||||
|
Total core basic earnings per common share
|
$ | 0.27 | $ | 0.28 | $ | 0.32 | $ | 0.46 | $ | 0.65 |
|
Diluted (loss) earnings per share (14)
|
$ | (1.43) | $ | 0.15 | $ | 0.31 | $ | (0.51) | $ | 0.66 |
|
Plus: after tax impact of non-routine items in noninterest expense and BOLI tax impact (13)
|
0.13 | 0.13 | - | 1.11 | 0.14 | |||||
|
Plus (less): after tax impact of non-routine items in noninterest income
|
1.57 | - | 0.01 | (0.14) | (0.16) | |||||
|
Total core diluted earnings per common share
|
$ | 0.27 | $ | 0.28 | $ | 0.32 | $ | 0.46 | $ | 0.64 |
| Net (loss) income / Average total assets (ROA) | (1.92) | % | 0.21 | % | 0.44 | % | (0.71) | % | 0.92 | % |
|
Plus: after tax impact of non-routine items in noninterest expense and BOLI tax impact (13)
|
0.18 | % | 0.17 | % | - | % | 1.55 | % | 0.20 | % |
|
Plus (less): after tax impact of non-routine items in noninterest income
|
2.11 | % | - | % | - | % | (0.20) | % | (0.21) | % |
|
Core net income / Average total assets (Core ROA)
|
0.37 | % | 0.38 | % | 0.44 | % | 0.64 | % | 0.91 | % |
| Net (loss) income/ Average stockholders' equity (ROE) | (24.98) | % | 2.68 | % | 5.69 | % | (9.22) | % | 11.93 | % |
|
Plus: after tax impact of non-routine items in noninterest expense and BOLI tax impact (13)
|
2.25 | % | 2.36 | % | - | % | 19.96 | % | 2.60 | % |
|
Plus (less): after tax impact of non-routine items in noninterest income
|
27.53 | % | (0.01) | % | 0.09 | % | (2.51) | % | (2.84) | % |
|
Core net income / Average stockholders' equity (Core ROE)
|
4.80 | % | 5.03 | % | 5.78 | % | 8.23 | % | 11.69 | % |
| Efficiency ratio | 228.74 | % | 74.21 | % | 72.03 | % | 108.30 | % | 64.10 | % |
|
Less: impact of non-routine items in noninterest expense and and noninterest income
|
(159.45) | % | (5.61) | % | (0.16) | % | (38.63) | % | (2.02) | % |
| Core efficiency ratio | 69.29 | % | 68.60 | % | 71.87 | % | 69.67 | % | 62.08 | % |
10
|
|
||||||||||
|
(in thousands, except percentages, share data and per share amounts)
|
September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||
| Stockholders' equity | $ | 902,888 | $ | 734,342 | $ | 738,085 | $ | 736,068 | $ | 719,787 |
|
Less: goodwill and other intangibles (15)
|
(24,366) | (24,581) | (24,935) | (25,029) | (26,818) | |||||
| Tangible common stockholders' equity | $ | 878,522 | $ | 709,761 | $ | 713,150 | $ | 711,039 | $ | 692,969 |
| Total assets | 10,381,961 | 9,747,738 | 9,817,772 | 9,716,327 | 9,345,700 | |||||
|
Less: goodwill and other intangibles (15)
|
(24,366) | (24,581) | (24,935) | (25,029) | (26,818) | |||||
| Tangible assets | $ | 10,357,595 | $ | 9,723,157 | $ | 9,792,837 | $ | 9,691,298 | $ | 9,318,882 |
| Common shares outstanding | 42,103,623 | 33,562,756 | 33,709,395 | 33,603,242 | 33,583,621 | |||||
| Tangible common equity ratio | 8.48 | % | 7.30 | % | 7.28 | % | 7.34 | % | 7.44 | % |
| Stockholders' book value per common share | $ | 21.44 | $ | 21.88 | $ | 21.90 | $ | 21.90 | $ | 21.43 |
| Tangible stockholders' equity book value per common share | $ | 20.87 | $ | 21.15 | $ | 21.16 | $ | 21.16 | $ | 20.63 |
| Tangible common stockholders' equity | $ | 878,522 | $ | 709,761 | $ | 713,150 | $ | 711,039 | $ | 692,969 |
|
Less: Net unrealized accumulated losses on debt securities held to maturity, net of tax (16)
|
- | (20,304) | (18,729) | (16,197) | (26,138) | |||||
| Tangible common stockholders' equity, adjusted for net unrealized accumulated losses on debt securities held to maturity | $ | 878,522 | $ | 689,457 | $ | 694,421 | $ | 694,842 | $ | 666,831 |
| Tangible assets | $ | 10,357,595 | $ | 9,723,157 | $ | 9,792,837 | $ | 9,691,298 | $ | 9,318,882 |
|
Less: Net unrealized accumulated losses on debt securities held to maturity, net of tax (16)
|
- | (20,304) | (18,729) | (16,197) | (26,138) | |||||
| Tangible assets, adjusted for net unrealized accumulated losses on debt securities held to maturity | $ | 10,357,595 | $ | 9,702,853 | $ | 9,774,108 | $ | 9,675,101 | $ | 9,292,744 |
| Common shares outstanding | 42,103,623 | 33,562,756 | 33,709,395 | 33,603,242 | 33,583,621 | |||||
| Tangible common equity ratio, adjusted for net unrealized accumulated losses on debt securities held to maturity | 8.48 | % | 7.11 | % | 7.10 | % | 7.18 | % | 7.18 | % |
| Tangible stockholders' book value per common share, adjusted for net unrealized accumulated losses on debt securities held to maturity | $ | 20.87 | $ | 20.54 | $ | 20.60 | $ | 20.68 | $ | 19.86 |
____________
(1) In the third, second and first quarter of 2024 and in the fourth and third quarter of 2023, includes $17.9 million, $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 third and second quarter of 2024, and in the fourth and third quarter of 2023, were $1.1 million, $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.
(2) In the third quarter of 2024, the Company executed an investment portfolio repositioning which resulted in a total pre-tax net loss of $68.5 million during the same period.
(3) 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.
(4) 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.
(5) Staff reduction costs consist of severance expenses related to organizational rationalization.
(6) Contract termination and related costs associated with third party vendors resulting from the Company's engagement of FIS.
(7) 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 September 30, 2024, June 30, 2024, March 31, 2024 and September 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.
11
(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, 2024, amounts shown are in connection with the Houston Transaction.
(11) Related to Houston branches and included as part of occupancy and equipment expenses. See Exhibit 5 for additional information.
(12) In the three months ended March 31, 2024, amounts were calculated based upon the effective tax rate for the period of 21.50%. For all of the other periods shown, amounts represent the difference between the prior and current period year-to-date tax effect.
(13) 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.
(14) See 2023 Form 10-K for more information on potential dilutive instruments and its impact on diluted earnings per share computation.
(15) At September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, other intangible assets primarily consist of naming rights of $2.1 million, $2.3 million, $2.4 million, $2.5 million and $2.7 million, respectively, and mortgage servicing rights ("MSRs") of $1.4 million, $1.5 million, $1.4 million, $1.4 million and $1.3 million, respectively. Other intangible assets are included in other assets in the Company's consolidated balance sheets.
(16) There were no debt securities held to maturity at September 30, 2024. As of June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 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% and 25.51%, respectively.
12
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 | ||||||||||||||||||
| September 30, 2024 | June 30, 2024 | September 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) | $ | 7,291,632 | $ | 129,752 | 7.08 | % | $ | 7,049,109 | $ | 124,117 | 7.08 | % | $ | 7,048,891 | $ | 120,244 | 6.77 | % |
| Debt securities available for sale (3) (4) | 1,313,366 | 14,273 | 4.32 | % | 1,267,828 | 14,104 | 4.47 | % | 1,052,147 | 10,924 | 4.12 | % | ||||||
| Debt securities held to maturity (5) | 205,958 | 1,752 | 3.38 | % | 221,106 | 1,878 | 3.42 | % | 232,146 | 1,958 | 3.35 | % | ||||||
| Debt securities held for trading | - | - | - | % | - | - | - | % | 2,048 | 4 | 0.77 | % | ||||||
| Equity securities with readily determinable fair value not held for trading | 2,525 | 19 | 2.99 | % | 2,466 | 13 | 2.12 | % | 2,479 | 21 | 3.36 | % | ||||||
| Federal Reserve Bank and FHLB stock | 61,147 | 1,083 | 7.05 | % | 54,664 | 955 | 7.03 | % | 54,056 | 961 | 7.05 | % | ||||||
| Deposits with banks | 344,469 | 4,670 | 5.39 | % | 364,466 | 5,260 | 5.80 | % | 344,015 | 5,248 | 6.05 | % | ||||||
| Other short-term investments | 6,677 | 88 | 5.24 | % | 6,399 | 82 | 5.15 | % | 1,964 | 23 | 4.65 | % | ||||||
| Total interest-earning assets | 9,225,774 | 151,637 | 6.54 | % | 8,966,038 | 146,409 | 6.57 | % | 8,737,746 | 139.383 | 6.33 | % | ||||||
| Total non-interest-earning assets (6) | 760,198 | 763,628 | 756,141 | |||||||||||||||
| Total assets | $ | 9,985,972 | $ | 9,729,666 | $ | 9,493,887 | ||||||||||||
13
| Three Months Ended | ||||||||||||||||||
| September 30, 2024 | June 30, 2024 | September 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 | $ | 2,294,323 | $ | 15,345 | 2.66 | % | $ | 2,408,979 | $ | 16,779 | 2.80 | % | $ | 2,523,092 | $ | 16,668 | 2.62 | % |
| Money market | 1,541,987 | 16,804 | 4.34 | % | 1,411,287 | 14,973 | 4.27 | % | 1,144,580 | 11,013 | 3.82 | % | ||||||
| Savings | 247,903 | 26 | 0.04 | % | 253,625 | 26 | 0.04 | % | 280,096 | 32 | 0.05 | % | ||||||
| Total checking and saving accounts | 4,084,213 | 32,175 | 3.13 | % | 4,073,891 | 31,778 | 3.14 | % | 3,947,768 | 27,713 | 2.79 | % | ||||||
| Time deposits | 2,324,694 | 27,260 | 4.67 | % | 2,258,973 | 25,971 | 4.62 | % | 2,201,138 | 22,482 | 4.05 | % | ||||||
| Total deposits | 6,408,907 | 59,435 | 3.69 | % | 6,332,864 | 57,749 | 3.67 | % | 6,148,906 | 50,195 | 3.24 | % | ||||||
| Securities sold under agreements to repurchase | - | - | - | % | 124 | 2 | 6.49 | % | 326 | 4 | 4.87 | % | ||||||
| Advances from the FHLB (7) | 863,913 | 8,833 | 4.07 | % | 737,658 | 6,946 | 3.79 | % | 800,978 | 8,207 | 4.07 | % | ||||||
| Senior notes | 59,725 | 942 | 6.27 | % | 59,646 | 941 | 6.35 | % | 59,409 | 942 | 6.29 | % | ||||||
| Subordinated notes | 29,561 | 361 | 4.86 | % | 29,519 | 361 | 4.92 | % | 29,391 | 361 | 4.87 | % | ||||||
| Junior subordinated debentures | 64,178 | 1,067 | 6.61 | % | 64,178 | 1,055 | 6.61 | % | 64,178 | 1,097 | 6.78 | % | ||||||
| Total interest-bearing liabilities | 7,426,284 | 70,638 | 3.78 | % | 7,223,989 | 67,054 | 3.73 | % | 7,103,188 | 60,806 | 3.40 | % | ||||||
| Non-interest-bearing liabilities: | ||||||||||||||||||
| Non-interest bearing demand deposits | 1,491,406 | 1,452,921 | 1,335,041 | |||||||||||||||
| Accounts payable, accrued liabilities and other liabilities | 301,373 | 309,298 | 320,369 | |||||||||||||||
| Total non-interest-bearing liabilities | 1,792,779 | 1,762,219 | 1,655,410 | |||||||||||||||
| Total liabilities | 9,219,063 | 8,986,208 | 8,758,598 | |||||||||||||||
| Stockholders' equity | 766,909 | 743,458 | 735,289 | |||||||||||||||
| Total liabilities and stockholders' equity | $ | 9,985,972 | $ | 9,729,666 | $ | 9,493,887 | ||||||||||||
| Excess of average interest-earning assets over average interest-bearing liabilities | $ | 1,799,490 | $ | 1,742,049 | $ | 1,634,558 | ||||||||||||
| Net interest income | $ | 80,999 | $ | 79,355 | $ | 78,577 | ||||||||||||
| Net interest rate spread | 2.76 | % | 2.84 | % | 2.93 | % | ||||||||||||
|
Net interest margin (7)
|
3.49 | % | 3.56 | % | 3.57 | % | ||||||||||||
|
Cost of total deposits (7)
|
2.99 | % | 2.98 | % | 2.66 | % | ||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 124.23 | % | 124.11 | % | 123.01 | % | ||||||||||||
| Average non-performing loans/ Average total loans | 1.54 | % | 0.60 | % | - | % |
14
| Nine Months Ended | ||||||||||||
| September 30, 2024 | September 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) | $ | 7,102,716 | $ | 376,574 | 7.08 | % | $ | 7,006,633 | $ | 348,315 | 6.65 | % |
| Debt securities available for sale (3) (4) | 1,273,797 | 41,562 | 4.36 | % | 1,050,648 | 31,494 | 4.01 | % | ||||
| Debt securities held to maturity (5) | 217,272 | 5,597 | 3.44 | % | 236,325 | 6,046 | 3.42 | % | ||||
| Debt securities held for trading | - | - | - | % | 783 | 6 | 1.02 | % | ||||
| Equity securities with readily determinable fair value not held for trading | 2,490 | 87 | 4.67 | % | 2,455 | 21 | 1.14 | % | ||||
| Federal Reserve Bank and FHLB stock | 55,352 | 2,922 | 7.05 | % | 54,911 | 2,833 | 6.90 | % | ||||
| Deposits with banks | 377,139 | 15,681 | 5.55 | % | 342,127 | 14,272 | 5.58 | % | ||||
| Other short-term investments | 6,337 | 248 | 5.22 | % | 662 | 23 | 4.65 | % | ||||
| Total interest-earning assets | 9,035,103 | 442,671 | 6.54 | % | 8,694,544 | 403,010 | 6.20 | % | ||||
| Total non-interest-earning assets (6) | 788,240 | 735,943 | ||||||||||
| Total assets | $ | 9,823,343 | $ | 9,430,487 | ||||||||
| Interest-bearing liabilities: | ||||||||||||
| Checking and saving accounts | ||||||||||||
| Interest bearing DDA | $ | 2,382,548 | $ | 49,860 | 2.80 | % | $ | 2,503,147 | $ | 46,201 | 2.47 | % |
| Money market | 1,462,034 | 46,611 | 4.26 | % | 1,215,005 | 28,295 | 3.11 | % | ||||
| Savings | 254,661 | 79 | 0.04 | % | 288,959 | 114 | 0.05 | % | ||||
| Total checking and saving accounts | 4,099,243 | 96,550 | 3.15 | % | 4,007,111 | 74,610 | 2.49 | % | ||||
| Time deposits | 2,291,539 | 79,355 | 4.63 | % | 2,006,417 | 53,844 | 3.59 | % | ||||
| Total deposits | 6,390,782 | 175,905 | 3.68 | % | 6,013,528 | 128,454 | 2.86 | % | ||||
| Securities sold under agreements to repurchase | 41 | 2 | 6.52 | % | 130 | 5 | 5.14 | % | ||||
|
Advances from the FHLB (7)
|
749,195 | 21,357 | 3.81 | % | 862,310 | 22,591 | 3.50 | % | ||||
| Senior notes | 59,646 | 2,826 | 6.33 | % | 59,330 | 2,825 | 6.37 | % | ||||
| Subordinated notes | 29,519 | 1,083 | 4.90 | % | 29,349 | 1,084 | 4.94 | % | ||||
| Junior subordinated debentures | 64,178 | 3,176 | 6.61 | % | 64,178 | 3,264 | 6.80 | % | ||||
| Total interest-bearing liabilities | 7,293,361 | 204,349 | 3.74 | % | 7,028,825 | 158,223 | 3.01 | % | ||||
| Non-interest-bearing liabilities: | ||||||||||||
| Non-interest bearing demand deposits | 1,459,325 | 1,348,242 | ||||||||||
| Accounts payable, accrued liabilities and other liabilities | 318,273 | 313,967 | ||||||||||
| Total non-interest-bearing liabilities | 1,777,598 | 1,662,209 | ||||||||||
| Total liabilities | 9,070,959 | 8,691,034 | ||||||||||
| Stockholders' equity | 752,384 | 739,453 | ||||||||||
| Total liabilities and stockholders' equity | $ | 9,823,343 | $ | 9,430,487 | ||||||||
| Excess of average interest-earning assets over average interest-bearing liabilities | $ | 1,741,742 | $ | 1,665,719 | ||||||||
| Net interest income | $ | 238,322 | $ | 244,787 | ||||||||
| Net interest rate spread | 2.80 | % | 3.19 | % | ||||||||
|
Net interest margin (7)
|
3.52 | % | 3.76 | % | ||||||||
|
Cost of total deposits (7)
|
2.99 | % | 2.33 | % | ||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 123.88% | 123.70% | ||||||||||
| Average non-performing loans/ Average total loans | 0.93% | 0.48% |
___________
(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 $92.1 million, $95.6 million, and $101.2 million in the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively, and $93.2 million and $89.1 million, in the nine months ended September 30, 2024 and September 30, 2023, respectively. The average balance of total loans held for sale was $612.9 million, $191.7 million and $58.8 million in the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively, and $352.8 million, and $70.1 million in the nine months period ended September 30, 2024 and September 30, 2023, respectively.
(2) Includes average non-performing loans of $113.5 million, $52.7 million and $39.8 million for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively, and $66.3 million and $34.1 million in the nine months ended September 30, 2024 and September 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 $89.4 million, $115.8 million and $119.8 million in the three months ended
15
September 30, 2024, June 30, 2024 and September 30, 2023, respectively, and average net unrealized net losses of $102.2 million and $110.5 million in the nine months ended September 30, 2024 and September 30, 2023, respectively.
(4) Includes nontaxable securities with average balances of $19.9 million, $18.8 million and $18.6 million for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively, and $19.9 million and $18.6 million, in the nine months ended September 30, 2024 and September 30, 2023, respectively. The tax equivalent yield for these nontaxable securities was 4.33%, 4.47%, 4.34% for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively, and 4.28% and 4.64% in the nine months ended September 30, 2024 and September 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 $44.5 million, $47.8 million and $49.6 million for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively, and $47.8 million and $50.1 million in the nine months ended September 30, 2024 and September 30, 2023, respectively. The tax equivalent yield for these nontaxable securities was 4.43%, 4.23% and 4.26% for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively, and 4.23% and 4.21% in the nine months ended September 30, 2024 an September 30, 2023, respectively. As of September 30, 2024, the Company had no debt securities classified as held to maturity. 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.
16
Exhibit 4 - Noninterest Income
This table shows the amounts of each of the categories of noninterest income for the periods presented.
| Three Months Ended | Nine Months Ended September 30, | |||||||||||||||||||
| September 30, 2024 | June 30, 2024 | September 30, 2023 | 2024 | 2023 | ||||||||||||||||
| (in thousands, except percentages) | Amount | % | Amount | % | Amount | % | Amount | % | Amount | % | ||||||||||
| Deposits and service fees | $ | 5,046 | 10.6 | % | $ | 5,281 | 27.2 | % | $ | 5,053 | 23.1 | % | $ | 14,652 | 106.4 | % | $ | 14,952 | 22.0 | % |
| Brokerage, advisory and fiduciary activities | 4,466 | 9.4 | % | 4,538 | 23.4 | % | 4,370 | 19.9 | % | 13,331 | 96.8 | % | 12,808 | 18.9 | % | |||||
|
Change in cash surrender value of bank owned life insurance ("BOLI")(1)
|
2,332 | 4.9 | % | 2,242 | 11.5 | % | 1,483 | 6.8 | % | 6,916 | 50.2 | % | 4,324 | 6.4 | % | |||||
| Cards and trade finance servicing fees | 1,430 | 3.0 | % | 1,331 | 6.9 | % | 734 | 3.4 | % | 3,984 | 28.9 | % | 1,829 | 2.7 | % | |||||
| Gain on early extinguishment of FHLB advances, net | - | - | % | 189 | 1.0 | % | 7,010 | 32.0 | % | 189 | 1.4 | % | 33,623 | 49.5 | % | |||||
|
Securities (losses) gains, net (2)
|
(68,484) | (143.6) | % | (117) | (0.6) | % | (54) | (0.3) | % | (68,655) | (498.4) | % | (11,022) | (16.2) | % | |||||
|
Loan-level derivative income (3)
|
3,515 | 7.4 | % | 2,357 | 12.1 | % | 1,196 | 5.5 | % | 6,338 | 46.0 | % | 3,743 | 5.5 | % | |||||
|
Derivative (losses) gains, net (4)
|
- | - | % | (44) | (0.2) | % | (77) | (0.4) | % | (196) | (1.4) | % | 179 | 0.3 | % | |||||
|
Other noninterest income (5)
|
4,012 | 8.3 | % | 3,643 | 18.7 | % | 2,206 | 10.0 | % | 9,666 | 70.1 | % | 7,447 | 10.9 | % | |||||
| Total noninterest (loss) income | $ | (47,683) | (100.0) | % | $ | 19,420 | 100.0 | % | $ | 21,921 | 100.0 | % | $ | (13,775) | (100.0) | % | $ | 67,883 | 100.0 | % |
__________________
(1) Changes in cash surrender value of BOLI are not taxable.
(2) Includes a total net loss of $68.5 million as a result of the investment portfolio repositioning initiated during the third quarter of 2024.
(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 $2.8 million, $1.9 million and $0.5 million in the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively, and $5.8 million and $3.9 million in the nine months ended September 30, 2024 and September 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 nine months ended September 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.
17
Exhibit 5 - Noninterest Expense
This table shows the amounts of each of the categories of noninterest expense for the periods presented.
| Three Months Ended |
Nine Months Ended September 30,
|
|||||||||||||||||||
| September 30, 2024 | June 30, 2024 | September 30, 2023 | 2024 | 2023 | ||||||||||||||||
| (in thousands, except percentages) | Amount | % | Amount | % | Amount | % | Amount | % | Amount | % | ||||||||||
|
Salaries and employee benefits (1)
|
$ | 34,979 | 45.9 | % | $ | 33,857 | 46.2 | % | $ | 31,334 | 48.6 | % | $ | 101,794 | 47.1 | % | $ | 100,457 | 49.8 | % |
|
Occupancy and equipment (2)
|
5,891 | 7.7 | % | 9,041 | 12.3 | % | 7,293 | 11.3 | % | 21,408 | 9.9 | % | 20,828 | 10.3 | % | |||||
|
Professional and other services fees (3)
|
13,711 | 18.0 | % | 12,110 | 16.5 | % | 5,325 | 8.3 | % | 36,784 | 17.0 | % | 20,368 | 10.1 | % | |||||
|
Loan-level derivative expense (4)
|
1,802 | 2.4 | % | 580 | 0.8 | % | 18 | - | % | 2,386 | 1.1 | % | 1,728 | 0.9 | % | |||||
|
Telecommunications and data processing (5)
|
2,991 | 3.9 | % | 2,732 | 3.7 | % | 3,556 | 5.5 | % | 9,256 | 4.3 | % | 11,647 | 5.8 | % | |||||
|
Depreciation and amortization (6)
|
1,737 | 2.3 | % | 1,652 | 2.3 | % | 1,795 | 2.8 | % | 4,866 | 2.3 | % | 5,362 | 2.7 | % | |||||
| FDIC assessments and insurance | 2,863 | 3.8 | % | 2,772 | 3.8 | % | 2,590 | 4.0 | % | 8,643 | 4.0 | % | 8,066 | 4.0 | % | |||||
|
Losses on loans held for sale carried at the lower cost or fair value (7)
|
- | - | % | 1,258 | 1.7 | % | 5,562 | 8.6 | % | 1,258 | 0.6 | % | 5,562 | 2.8 | % | |||||
| Advertising expenses | 3,468 | 4.6 | % | 4,243 | 5.8 | % | 2,724 | 4.2 | % | 10,789 | 5.0 | % | 9,642 | 4.8 | % | |||||
|
Other real estate owned and repossessed assets (income) expense, net (8)
|
5,535 | 7.3 | % | (148) | (0.2) | % | (134) | (0.2) | % | 5,033 | 2.3 | % | 2,297 | 1.1 | % | |||||
|
Contract termination costs (9)
|
- | - | % | - | - | % | - | - | % | - | - | % | 1,550 | 0.8 | % | |||||
|
Other operating expenses (10)
|
3,231 | 4.1 | % | 5,205 | 7.1 | % | 4,357 | 6.9 | % | 13,887 | 6.4 | % | 14,146 | 6.9 | % | |||||
|
Total noninterest expense (11)
|
$ | 76,208 | 100.0 | % | $ | 73,302 | 100.0 | % | $ | 64,420 | 100.0 | % | $ | 216,104 | 100.0 | % | $ | 201,653 | 100.0 | % |
___
(1) Includes staff reduction costs of $0.5 million and $2.9 million in the three and nine months ended September 30, 2023, respectively, which consist of severance expenses primarily related to organizational rationalization.
(2) In the three month period ended June 30, 2024 and nine month period ended September 30, 2024, includes fixed assets impairment charge of $3.4 million in connection with the Houston Transaction. In each of the three and nine months ended September 30, 2023, includes a rent termination fee of $0.3 million in connection with the closure of a branch in Houston, Texas. In addition, in the nine months ended September 30, 2023, includes $0.6 million related to ROU asset impairment in connection with the closure of a branch in Miami, Florida in 2023 as well as $0.5 million related to ROU asset impairment in connection with the closure of a branch in Houston, Texas in 2023.
(3) Includes $0.3 million in legal expenses in connection with the Houston Transaction in the three months ended June 30, 2024 and nine months ended September 30, 2024. Additionally, includes additional non-routine expenses of $4.6 million in the nine months ended September 30, 2023, related to the engagement of FIS. Lastly, includes recurring service fees in connection with the engagement of FIS in the three months ended September 30, 2024 and June 30, 2024, and in the nine months ended September 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 the nine month periods ended September 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 the nine month periods ended September 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 months ended June 30, 2024, amounts shown are in connection with the Houston Transaction. In the three and nine month periods ended September 30, 2023, includes valuation allowance as a result of changes in the fair value of loans held for sale carried at the lower of cost or fair value.
(8) Includes OREO rental income of $0.5 million in the three months ended September 30, 2024 and $0.4 million in each of the three months ended June 30, 2024 and September 30, 2023, and $1.4 million and $0.9 million in the nine months ended September 30, 2024 and September 2023, respectively. In addition, in the nine months ended September 30, 2023, includes a loss on sale of repossessed assets in connection with our equipment-financing activities of $2.6 million. Additionally, includes $5.7 million of OREO valuation expense in the three months ended September 30, 2024.
(9) Contract termination and related costs associated with third party vendors resulting from the Company's transition to our new technology provider.
18
(10) In each of the three months ended June 30, 2024 and nine months ended September 30, 2024, includes broker fees of $0.3 million in connection with the Houston Transaction. Additionally, in the nine months ended September 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.
(11) Includes $3.9 million, $3.8 million, $3.0 million in the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively, and $10.5 million and $10.9 million in the nine months ended September 30, 2024 and September 30, 2023, related to Amerant Mortgage, primarily consisting of salaries and employee benefits, mortgage lending costs and professional and other services fees.
19
Exhibit 6 - Consolidated Balance Sheets
| (in thousands, except share data) | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||
| Assets | (audited) | |||||||||
| Cash and due from banks | $ | 40,538 | $ | 32,762 | $ | 41,231 | $ | 47,234 | $ | 48,145 |
| Interest earning deposits with banks | 614,345 | 238,346 | 577,843 | 242,709 | 202,946 | |||||
| Restricted cash | 10,087 | 32,430 | 33,897 | 25,849 | 51,837 | |||||
| Other short-term investments | 6,871 | 6,781 | 6,700 | 6,080 | 6,024 | |||||
| Cash and cash equivalents | 671,841 | 310,319 | 659,671 | 321,872 | 308,952 | |||||
| Securities | ||||||||||
| Debt securities available for sale, at fair value | 1,476,378 | 1,269,356 | 1,298,073 | 1,217,502 | 1,033,797 | |||||
| Debt securities held to maturity, at amortized cost (1) | - | 219,613 | 224,014 | 226,645 | 230,254 | |||||
| Equity securities with readily determinable fair value not held for trading | 2,562 | 2,483 | 2,480 | 2,534 | 2,438 | |||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 63,604 | 56,412 | 54,001 | 50,294 | 47,878 | |||||
| Securities | 1,542,544 | 1,547,864 | 1,578,568 | 1,496,975 | 1,314,367 | |||||
| Loans held for sale, at the lower of cost or fair value (2) | 553,941 | 551,828 | - | 365,219 | 43,257 | |||||
| Mortgage loans held for sale, at fair value | 43,851 | 60,122 | 48,908 | 26,200 | 25,952 | |||||
| Loans held for investment, gross | 6,964,171 | 6,710,961 | 6,957,475 | 6,873,493 | 7,073,387 | |||||
| Less: Allowance for credit losses | 79,890 | 94,400 | 96,050 | 95,504 | 98,773 | |||||
| Loans held for investment, net | 6,884,281 | 6,616,561 | 6,861,425 | 6,777,989 | 6,974,614 | |||||
| Bank owned life insurance | 241,183 | 238,851 | 237,314 | 234,972 | 232,736 | |||||
| Premises and equipment, net | 32,866 | 33,382 | 44,877 | 43,603 | 43,004 | |||||
| Deferred tax assets, net | 41,138 | 48,779 | 48,302 | 55,635 | 63,501 | |||||
| Operating lease right-of-use assets | 100,158 | 100,580 | 117,171 | 118,484 | 116,763 | |||||
| Goodwill | 19,193 | 19,193 | 19,193 | 19,193 | 20,525 | |||||
| Accrued interest receivable and other assets (3)(4) | 250,965 | 220,259 | 202,343 | 256,185 | 202,029 | |||||
| Total assets | $ | 10,381,961 | $ | 9,747,738 | $ | 9,817,772 | $ | 9,716,327 | $ | 9,345,700 |
| Liabilities and Stockholders' Equity | ||||||||||
| Deposits | ||||||||||
| Demand | ||||||||||
| Noninterest bearing | $ | 1,482,061 | $ | 1,465,140 | $ | 1,397,331 | $ | 1,426,919 | $ | 1,370,157 |
| Interest bearing | 2,389,605 | 2,316,976 | 2,619,115 | 2,560,629 | 2,416,797 | |||||
| Savings and money market | 1,835,700 | 1,723,233 | 1,616,719 | 1,610,218 | 1,457,080 | |||||
| Time | 2,403,578 | 2,310,662 | 2,245,078 | 2,297,097 | 2,302,878 | |||||
| Total deposits | 8,110,944 | 7,816,011 | 7,878,243 | 7,894,863 | 7,546,912 | |||||
| Advances from the Federal Home Loan Bank | 915,000 | 765,000 | 715,000 | 645,000 | 595,000 | |||||
| Senior notes | 59,764 | 59,685 | 59,605 | 59,526 | 59,447 | |||||
| Subordinated notes | 29,582 | 29,539 | 29,497 | 29,454 | 29,412 | |||||
| Junior subordinated debentures held by trust subsidiaries | 64,178 | 64,178 | 64,178 | 64,178 | 64,178 | |||||
| Operating lease liabilities (5) | 105,875 | 105,861 | 122,267 | 123,167 | 120,665 | |||||
| Accounts payable, accrued liabilities and other liabilities (6) | 193,730 | 173,122 | 210,897 | 164,071 | 210,299 | |||||
| Total liabilities | 9,479,073 | 9,013,396 | 9,079,687 | 8,980,259 | 8,625,913 | |||||
| Stockholders' equity | ||||||||||
| Class A common stock | 4,210 | 3,357 | 3,373 | 3,361 | 3,359 | |||||
| Additional paid in capital | 342,508 | 189,601 | 192,237 | 192,701 | 194,103 | |||||
| Retained earnings | 569,131 | 620,299 | 618,359 | 610,802 | 630,933 | |||||
| Accumulated other comprehensive loss | (12,961) | (78,915) | (75,884) | (70,796) | (105,634) | |||||
| Total stockholders' equity before noncontrolling interest | 902,888 | 734,342 | 738,085 | 736,068 | 722,761 | |||||
| Noncontrolling interest | - | - | - | - | (2,974) | |||||
| Total stockholders' equity | 902,888 | 734,342 | 738,085 | 736,068 | 719,787 | |||||
| Total liabilities and stockholders' equity | $ | 10,381,961 | $ | 9,747,738 | $ | 9,817,772 | $ | 9,716,327 | $ | 9,345,700 |
20
__________
(1) Estimated fair value of $192,403, $198,909, $204,945 and $195,165 at June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, respectively. During the third quarter of 2024, the Company executed an investment portfolio repositioning and transferred approximately $220 million in debt securities from held to maturity to the available for sale category.
(2) As of September 30, 2024 and 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 September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023, includes derivative assets with a total fair value of $52.3 million, $64.0 million, $64.7 million, $59.9 million and $87.1 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) As of September 30, 2024 and June 30, 2024, includes other assets for sale of approximately $21.4 million and $23.6 million, respectively, 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 September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, includes derivatives liabilities with a total fair value of $51.3 million, $62.9 million, $63.8 million, $59.4 million and $85.6 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) |
September 30, 2024 |
June 30, 2024 |
March 31, 2024 |
December 31, 2023 |
September 30, 2023 |
|||||
| Real estate loans | (audited) | |||||||||
| Commercial real estate | ||||||||||
| Non-owner occupied | $ | 1,709,911 | $ | 1,714,088 | $ | 1,672,470 | $ | 1,616,200 | $ | 1,593,571 |
| Multi-family residential | 343,012 | 359,257 | 349,917 | 407,214 | 771,654 | |||||
| Land development and construction loans | 411,051 | 343,472 | 333,198 | 300,378 | 301,938 | |||||
| 2,463,974 | 2,416,817 | 2,355,585 | 2,323,792 | 2,667,163 | ||||||
| Single-family residential | 1,485,326 | 1,446,569 | 1,490,711 | 1,466,608 | 1,371,194 | |||||
| Owner occupied | 1,013,682 | 981,405 | 1,193,909 | 1,175,331 | 1,129,921 | |||||
| 4,962,982 | 4,844,791 | 5,040,205 | 4,965,731 | 5,168,278 | ||||||
| Commercial loans | 1,630,309 | 1,521,533 | 1,550,140 | 1,503,187 | 1,452,759 | |||||
| Loans to financial institutions and acceptances | 92,489 | 48,287 | 29,490 | 13,375 | 13,353 | |||||
| Consumer loans and overdrafts (1) | 278,391 | 296,350 | 337,640 | 391,200 | 438,997 | |||||
| Total loans | $ | 6,964,171 | $ | 6,710,961 | $ | 6,957,475 | $ | 6,873,493 | $ | 7,073,387 |
__________________
(1) As of September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023 and includes $103.9 million, $131.9 million, $163.3 million, $210.9 million and $254.7 million, respectively, in consumer loans purchased under indirect lending programs.
21
Loans by Type - Held For Sale
The loan portfolio held for sale consists of the following loan classes:
| (in thousands) | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||
| Loans held for sale at the lower of cost or fair value | (audited) | |||||||||
| Real estate loans | ||||||||||
| Commercial real estate | ||||||||||
| Non-owner occupied | $ | 111,591 | $ | 112,002 | $ | - | $ | - | $ | 43,256 |
| Multi-family residential | 915 | 918 | - | 309,612 | - | |||||
| Land development and construction loans | 35,020 | 29,923 | - | 55,607 | - | |||||
| 147,526 | 142,843 | - | 365,219 | 43,256 | ||||||
| Single-family residential | 86,905 | 88,507 | - | - | - | |||||
| Owner occupied | 221,774 | 220,718 | - | - | - | |||||
| 456,205 | 452,068 | - | 365,219 | 43,256 | ||||||
| Commercial loans | 87,866 | 90,353 | - | - | - | |||||
| Consumer loans | 9,870 | 9,407 | - | - | - | |||||
| Total loans held for sale at the lower of cost or fair value (1) | 553,941 | 551,828 | - | 365,219 | 43,256 | |||||
| Mortgage loans held for sale at fair value | ||||||||||
| Land development and construction loans (2) | 10,608 | 7,776 | 26,058 | 12,778 | 6,931 | |||||
| Single-family residential (3) | 33,243 | 52,346 | 22,850 | 13,422 | 19,022 | |||||
| Total mortgage loans held for sale at fair value (4) | 43,851 | 60,122 | 48,908 | 26,200 | 25,953 | |||||
| Total loans held for sale (5) | $ | 597,792 | $ | 611,950 | $ | 48,908 | $ | 391,419 | $ | 69,209 |
__________________
(1) As of September 30, 2024, includes $553.9 million in connection with the Houston Transaction. In the second quarter of 2024, the Company transferred an aggregate of $551.8 million in connection with the Houston Transaction, in which 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 each of the fourth and third quarters of 2023, the Company transferred approximately $17 million, 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) As of September 30, 2024, there were $0.6 million in loans between 60 and 90 days past due; all loans remain in accrual status at each of the periods shown.
22
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) |
September 30, 2024 |
June 30, 2024 |
March 31, 2024 |
December 31, 2023 |
September 30, 2023 |
|||||
| Non-Accrual Loans | (audited) | |||||||||
| Real Estate Loans | ||||||||||
| Commercial real estate (CRE) | ||||||||||
| Non-owner occupied | $ | 1,916 | $ | - | $ | - | $ | - | $ | - |
| Multi-family residential | - | 6 | - | 8 | 23,344 | |||||
| 1,916 | 6 | - | 8 | 23,344 | ||||||
| Single-family residential | 13,452 | 3,726 | 4,400 | 2,459 | 2,533 | |||||
| Owner occupied | 29,240 | 26,309 | 1,958 | 3,822 | 2,100 | |||||
| 44,608 | 30,041 | 6,358 | 6,289 | 27,977 | ||||||
| Commercial loans | 68,654 | 67,005 | 21,833 | 21,949 | 4,713 | |||||
| Consumer loans and overdrafts | - | 4 | 45 | 38 | 1 | |||||
|
Total Non-Accrual Loans (1)
|
$ | 113,262 | $ | 97,050 | $ | 28,236 | $ | 28,276 | $ | 32,691 |
|
Past Due Accruing Loans(2)
|
||||||||||
| Real Estate Loans | ||||||||||
| Owner occupied | - | 769 | - | - | - | |||||
| Single-family residential | 1,129 | 2,656 | 1,149 | 5,218 | - | |||||
| Commercial | 104 | - | 918 | 857 | - | 504 | ||||
| Consumer loans and overdrafts | 434 | 477 | - | 49 | - | |||||
| Total Past Due Accruing Loans | $ | 1,667 | $ | 3,902 | $ | 2,067 | $ | 6,124 | $ | 504 |
| Total Non-Performing Loans | 114,929 | 100,952 | 30,303 | 34,400 | 33,195 | |||||
| Other Real Estate Owned | 14,509 | 20,181 | 20,181 | 20,181 | 20,181 | |||||
| Total Non-Performing Assets | $ | 129,438 | $ | 121,133 | $ | 50,484 | $ | 54,581 | $ | 53,376 |
__________________
(1) See June 30, 2024 Form 10-Q, March 31, 2024 Form 10-Q and 2023 Form 10-K for more information about the activity of non-accrual loans in the second and first quarters of 2024 and all periods in 2023.
(2) Loans past due 90 days or more but still accruing.
23
Loans by Credit Quality Indicators
This table shows the Company's loans by credit quality indicators. The Company has not purchased credit-deteriorated loans.
| September 30, 2024 | June 30, 2024 | September 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 |
$ | 34,374 | $ | 1,916 | $ | - | $ | 36,290 | $ | 33,979 | $ | - | $ | - | $ | 33,979 | $ | - | $ | - | $ | - | $ | - |
| Multi-family residential | - | - | - | - | - | 6 | - | 6 | - | 23,344 | - | 23,344 | ||||||||||||
|
Land development and construction loans |
- | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||
| 34,374 | 1,916 | - | 36,290 | 33,979 | 6 | - | 33,985 | - | 23,344 | - | 23,344 | |||||||||||||
| Single-family residential | - | 9,637 | - | 9,637 | - | 3,684 | - | 3,684 | - | 3,085 | - | 3,085 | ||||||||||||
| Owner occupied | 29,603 | 29,310 | - | 58,913 | 35,642 | 26,381 | - | 62,023 | 2,234 | 2,180 | - | 4,414 | ||||||||||||
| 63,977 | 40,863 | - | 104,840 | 69,621 | 30,071 | - | 99,692 | 2,234 | 28,609 | - | 30,843 | |||||||||||||
|
Commercial loans
|
12,442 | 66,212 | - | 78,654 | 25,671 | 67,836 | - | 93,507 | 26,975 | 5,732 | 3 | 32,710 | ||||||||||||
|
Consumer loans and overdrafts |
- | - | - | - | - | - | - | - | - | 1 | - | 1 | ||||||||||||
| Totals | $ | 76,419 | $ | 107,075 | $ | - | $ | 183,494 | $ | 95,292 | $ | 97,907 | $ | - | $ | 193,199 | $ | 29,209 | $ | 34,342 | $ | 3 | $ | 63,554 |
__________
(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) | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | |||||
| (audited) | ||||||||||
| Domestic | $ | 5,553,336 | $ | 5,281,946 | $ | 5,288,702 | $ | 5,430,059 | $ | 5,067,937 |
| Foreign: | ||||||||||
| Venezuela | 1,887,282 | 1,918,134 | 1,988,470 | 1,870,979 | 1,892,453 | |||||
| Others | 670,326 | 615,931 | 601,071 | 593,825 | 586,522 | |||||
| Total foreign | 2,557,608 | 2,534,065 | 2,589,541 | 2,464,804 | 2,478,975 | |||||
| Total deposits | $ | 8,110,944 | $ | 7,816,011 | $ | 7,878,243 | $ | 7,894,863 | $ | 7,546,912 |
24
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.
•AFS: Available-for-sale debt securities
•HTM: Held-to-maturity debt securities
25