Amerant Reports Second Quarter 2024 Results

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

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

21.43

21.37

Tangible stockholders' equity (book value) per common share (7)

21.15

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

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

7.16

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

)

(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

(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)

(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

21.43

21.37

Tangible stockholders' equity book value per common share

21.15

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

7.16

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

4.59

Equity securities with readily determinable fair value not held for trading

2,466

2.12

2,477

8.93

—

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

5.15

5,932

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

0.04

262,528

0.04

287,493

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

6.49

—

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

5.72

Equity securities with readily determinable fair value not held for trading

2,472

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

0.04

293,464

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

6.49

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

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

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

—

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

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

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

—

23,344

24,306

—

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

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

—

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

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

—

24,306

—

24,306

Land development

and

construction

loans

—

6,497

—

6,497

33,979

—

33,985

—

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

26,344

Consumer loans and

overdrafts

—

Totals

95,292

97,907

—

193,199

103,838

28,580

—

132,418

30,063

48,567

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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