Amerant Bancorp Inc. (NASDAQ: AMTB) (the “Company” or “Amerant”)
today reported net income attributable to the Company of $20.2
million in the first quarter of 2023, or $0.60 per diluted share,
compared to net income attributable to the Company of $22.0
million(1), or $0.65 per diluted share(1), in the fourth quarter of
2022.
"We continued to see strong business
opportunities across our footprint this quarter and invested in
additional talented personnel for our commercial banking and
mortgage banking lines of business,” stated Jerry Plush, Chairman
and CEO. “We intend to continue to prudently go about our business
and execute on our strategic initiatives."
- Total assets increased $367.5 million, or 4.03%, to $9.5
billion compared to $9.1 billion as of 4Q22. Asset growth includes
an additional $200 million in cash held at the Federal Reserve Bank
since mid-March for a total of $485.8 million in cash and cash
equivalents at quarter end 1Q23.
- Total gross loans increased $195.4
million, or 2.8%, to $7.12 billion compared to $6.92 billion in
4Q22.
- Total deposits were $7.29 billion,
up $242.5 million, or 3.44%, compared to $7.04 billion in
4Q22.
- Total advances from Federal Home Loan Bank (“FHLB”) were $1.05
billion, up $145.5 million, or 16.05%, compared to $906.5 million
in 4Q22, the result of now holding additional liquidity on hand as
noted above. An additional $1.7 billion remained available from
FHLB as of March 31, 2023.
- Average yield on loans increased to
6.38% in 1Q23, compared to 5.85% in 4Q22.
- Total non-performing assets
increased to $48.7 million, up $11.1 million, or 29.6%, compared to
$37.6 million as of 4Q22.
- The allowance for credit losses
("ACL") was $84.4 million, an increase of $0.9 million, or 1.0%,
compared to $83.5 million as of 4Q22.
- Core deposits were $5.36 billion, up $41.4 million, or 0.8%,
compared to $5.32 billion in 4Q22.
- Average cost of total deposits increased to 1.91% in 1Q23
compared to 1.38% in 4Q22.
- Loan to deposit ratio improved to 97.64% compared to 98.23% in
4Q22.
- Assets Under Management and custody
(“AUM”) totaled $2.11 billion, up $111.9 million, or 5.6%, from
$2.00 billion in 4Q22.
- Pre-provision net revenue
(“PPNR”)(2) was $37.2 million in 1Q23, a decrease of $7.3 million
or 16.4%, compared to $44.5 million in 4Q22.
- Core Pre-Provision Net Revenue
(“Core PPNR”)(2) was $37.1 million in 1Q23, a decrease of $0.7
million, or 1.9%, from $37.8 million in 4Q22.
- Net Interest Margin (“NIM”) was
3.90% in 1Q23 compared to 3.96% in 4Q22.
- Net Interest Income (“NII”) was
$82.3 million, up $0.2 million, or 0.2%, from $82.2 million in
4Q22.
- Provision for credit losses was
$11.7 million in 1Q23, a decrease of $5.2 million, or 30.6%,
compared to $16.9 million in 4Q22(1). The provision for credit
losses in 1Q23 was comprised of $7.5 million in connection with
charge-offs and credit quality, $2.2 million related to loan growth
and $2.0 million to reflect updated economic factors.
- Non-interest income was $19.3
million in 1Q23, a decrease of $5.0 million, or 20.6%, from $24.4
million in 4Q22.
- Non-interest expense was $64.7
million, up $2.5 million, or 4.0%, from $62.2 million in 4Q22.
- The efficiency ratio was 63.7% in
1Q23 compared to 58.4% in 4Q22.
- Return on average assets (“ROA”)
was 0.88% in 1Q23 compared to 0.97% in 4Q22 (1).
- Return on average equity (“ROE”)
was 11.15% in 1Q23 compared to 12.10% in 4Q22 (1).
Additional details on first quarter 2023 results
can be found in the earnings presentation available under the
Investor Relations section of the Company’s website at
https://investor.amerantbank.com.
On April 19, 2023, the Company’s board of
directors declared a quarterly cash dividend of $0.09 per common
share. The dividend is payable on May 31, 2023 to shareholders of
record on May 15, 2023.
1 As previously disclosed, the Company adopted
the new guidance on accounting for current expected credit losses
on financial instruments (“CECL”) in the fourth quarter of 2022,
effective as of January 1, 2022. See Form 10-K for more details of
the CECL adoption and related effects to quarterly results for each
quarter in the year ended December 31, 2022.2 Non-GAAP measure, see
“Non-GAAP Financial Measures” for more information and Exhibit 2
for a reconciliation to GAAP.
First Quarter 2023 Earnings Conference
Call
The Company will hold an earnings conference
call on Friday, April 21, 2023 at 9:00 a.m. (Eastern Time) to
discuss its first quarter 2023 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. (NASDAQ: 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 23 banking centers – 16
in South Florida and 7 in the Houston, Texas area, as well as an
LPO in Tampa, Florida. For more information, visit
investor.amerantbank.com.
FIS® and any associated brand names/logos are the trademarks of
FIS and/or its affiliates.
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. 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, 2022 filed on March 1, 2023 (the “Form 10-K”),
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 months ended March 31, 2023,
December 31, 2022 and March 31, 2022, may not reflect our results
of operations for our fiscal year ending, or financial condition,
as of December 31, 2023, or any other period of time or date.
As previously disclosed in the Form 10-K, the
Company adopted the new guidance on accounting for current expected
credit losses on financial instruments (“CECL”) effective as of
January 1, 2022. Quarterly amounts previously reported on our
quarterly reports on Form 10-Q for the periods ended March 31,
2022, June 30, 2022 and September 30, 2022 do not reflect the
adoption of CECL. In the fourth quarter of 2022, the Company
recorded a provision for credit losses totaling $20.9 million,
including $11.1 million related to the retroactive effect of
adopting CECL for all previous quarterly periods in the year ended
December 31, 2022, including loan growth and changes to
macro-economic conditions during the period. Quarterly amounts
included in the Form 10-K and this earnings release and
accompanying presentation reflect the impacts of the adoption of
CECL on each interim period of 2022. See the Form 10-K for more
details on the adoption of CECL.
The following table shows changes to
previously-reported amounts for the quarter ended December 31, 2022
versus the corresponding amounts reflecting the adoption of CECL in
2022:
| (in thousands, except per
share amounts) |
As Reported |
|
As Recast |
|
Changes |
|
Total interest income |
$ |
113,374 |
|
|
$ |
113,374 |
|
|
$ |
— |
|
| Total interest expense |
|
31,196 |
|
|
|
31,196 |
|
|
|
— |
|
| Net interest income |
|
82,178 |
|
|
|
82,178 |
|
|
|
— |
|
| Provision for credit
losses |
|
20,945 |
|
|
|
16,857 |
|
|
|
(4,088 |
) |
| Net interest income after
provision for credit losses |
|
61,233 |
|
|
|
65,321 |
|
|
|
4,088 |
|
| Total noninterest income |
|
24,365 |
|
|
|
24,365 |
|
|
|
— |
|
| Total noninterest expense |
|
62,241 |
|
|
|
62,241 |
|
|
|
— |
|
| Income before income
taxes |
|
23,357 |
|
|
|
27,445 |
|
|
|
4,088 |
|
| Income tax expense |
|
(4,746 |
) |
|
|
(5,627 |
) |
|
|
(881 |
) |
| Net income before attribution
of noncontrolling interest |
|
18,611 |
|
|
|
21,818 |
|
|
|
3,207 |
|
| Noncontrolling interest |
|
(155 |
) |
|
|
(155 |
) |
|
|
— |
|
| Net income attributable to
Amerant Bancorp Inc. |
$ |
18,766 |
|
|
$ |
21,973 |
|
|
$ |
3,207 |
|
| Basic earnings per common
share |
$ |
0.56 |
|
|
$ |
0.66 |
|
|
$ |
0.10 |
|
| Diluted earnings per common
share |
$ |
0.55 |
|
|
$ |
0.65 |
|
|
$ |
0.10 |
|
| Cash dividends declared per
common share |
$ |
0.09 |
|
|
$ |
0.09 |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
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 expenses”, “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' 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 2023, including the
effect of non-core banking activities such as the sale of loans and
securities, the valuation of securities, derivatives, loans held
for sale and other real estate owned, early repayment of FHLB
advances, 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 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) |
March 31, 2023 |
|
December 31, 2022 |
| Consolidated Balance
Sheets |
|
|
(audited) |
|
Total assets |
$ |
9,495,302 |
|
|
$ |
9,127,804 |
|
| Total investments |
|
1,347,697 |
|
|
|
1,366,680 |
|
| Total gross loans (1) |
|
7,115,035 |
|
|
|
6,919,632 |
|
| Allowance for credit
losses |
|
84,361 |
|
|
|
83,500 |
|
| Total deposits |
|
7,286,726 |
|
|
|
7,044,199 |
|
| Core deposits (2) |
|
5,357,386 |
|
|
|
5,315,944 |
|
| Advances from the Federal Home
Loan Bank |
|
1,052,012 |
|
|
|
906,486 |
|
| Senior notes |
|
59,289 |
|
|
|
59,210 |
|
| Subordinated notes (3) |
|
29,326 |
|
|
|
29,284 |
|
| Junior subordinated
debentures |
|
64,178 |
|
|
|
64,178 |
|
| Stockholders' equity
(4)(5) |
|
729,056 |
|
|
|
705,726 |
|
| Assets under management and
custody (6) |
|
2,107,603 |
|
|
|
1,995,666 |
|
| |
|
|
|
|
|
|
|
| |
Three Months Ended |
| (in thousands, except
percentages, share data and per share amounts) |
March 31, 2023 |
|
December 31, 2022 |
| |
|
|
|
| Consolidated Results
of Operations |
|
|
|
|
Net interest income |
$ |
82,333 |
|
|
$ |
82,178 |
|
| Provision for credit losses
(7) |
|
11,700 |
|
|
|
16,857 |
|
| Noninterest income |
|
19,343 |
|
|
|
24,365 |
|
| Noninterest expense |
|
64,733 |
|
|
|
62,241 |
|
| Net income attributable to
Amerant Bancorp Inc. (7) (8) |
|
20,186 |
|
|
|
21,973 |
|
| Effective income tax rate
(7) |
|
21.00 |
% |
|
|
20.50 |
% |
| |
|
|
|
| Common Share
Data |
|
|
|
| Stockholders' book value per
common share |
$ |
21.56 |
|
|
$ |
20.87 |
|
| Tangible stockholders' equity
(book value) per common share (9) |
$ |
20.84 |
|
|
$ |
20.19 |
|
| Tangible stockholders' equity
(book value) per common share, adjusted for unrealized losses on
debt securities held to maturity (9) |
$ |
20.38 |
|
|
$ |
19.65 |
|
| Basic earnings per common
share (7) |
$ |
0.60 |
|
|
$ |
0.66 |
|
| Diluted earnings per common
share (7)(10) |
$ |
0.60 |
|
|
$ |
0.65 |
|
| Basic weighted average shares
outstanding |
|
33,559,718 |
|
|
|
33,496,096 |
|
| Diluted weighted average
shares outstanding (10) |
|
33,855,994 |
|
|
|
33,813,593 |
|
| Cash dividend declared per
common share (5) |
$ |
0.09 |
|
|
$ |
0.09 |
|
| |
|
|
|
|
|
|
|
| |
Three Months Ended |
| |
March 31, 2023 |
|
December 31, 2022 |
| Other Financial and
Operating Data (11) |
|
|
|
| |
|
|
|
| Profitability
Indicators (%) |
|
|
|
|
Net interest income / Average total interest earning assets (NIM)
(12) |
3.90 |
% |
|
3.96 |
% |
| Net income / Average total
assets (ROA) (7) (13) |
0.88 |
% |
|
0.97 |
% |
| Net income / Average
stockholders' equity (ROE) (7)(14) |
11.15 |
% |
|
12.10 |
% |
| Noninterest income / Total
revenue (15) |
19.02 |
% |
|
22.87 |
% |
| |
|
|
|
| Capital Indicators
(%) |
|
|
|
| Total capital ratio (16) |
12.36 |
% |
|
12.39 |
% |
| Tier 1 capital ratio (17) |
10.88 |
% |
|
10.89 |
% |
| Tier 1 leverage ratio
(18) |
9.04 |
% |
|
9.18 |
% |
| Common equity tier 1 capital
ratio (CET1) (19) |
10.10 |
% |
|
10.10 |
% |
| Tangible common equity ratio
(20) |
7.44 |
% |
|
7.50 |
% |
| Tangible common equity ratio,
adjusted for unrealized losses on debt securities held to maturity
(21) |
7.29 |
% |
|
7.31 |
% |
| |
|
|
|
| Liquidity Ratios
(%) |
|
|
|
| Loans to Deposits (22) |
97.64 |
% |
|
98.23 |
% |
| |
|
|
|
| Asset Quality
Indicators (%) |
|
|
|
| Non-performing assets / Total
assets (23) |
0.51 |
% |
|
0.41 |
% |
| Non-performing loans / Total
gross loans (1) (24) |
0.31 |
% |
|
0.54 |
% |
| Allowance for credit losses /
Total non-performing loans (24) |
380.31 |
% |
|
222.08 |
% |
| Allowance for credit losses /
Total loans held for investment |
1.20 |
% |
|
1.22 |
% |
| Net charge-offs /
Average total loans held for investment (25) |
0.64 |
% |
|
0.59 |
% |
| |
|
|
|
| Efficiency Indicators
(% except FTE) |
|
|
|
| Noninterest expense / Average
total assets |
2.82 |
% |
|
2.75 |
% |
| Salaries and employee benefits
/ Average total assets |
1.52 |
% |
|
1.45 |
% |
| Other operating expenses/
Average total assets (26) |
1.30 |
% |
|
1.30 |
% |
| Efficiency ratio (27) |
63.67 |
% |
|
58.42 |
% |
| Full-Time-Equivalent Employees
(FTEs) (28) |
722 |
|
|
692 |
|
| |
|
|
|
| |
Three Months Ended |
| (in thousands, except
percentages and per share amounts) |
March 31, 2023 |
|
December 31, 2022 |
| Core Selected
Consolidated Results of Operations and Other Data (9) |
|
|
|
| |
|
|
|
|
Pre-provision net revenue (PPNR) |
$ |
37,187 |
|
|
$ |
44,457 |
|
| Core pre-provision net revenue
(Core PPNR) |
$ |
37,103 |
|
|
$ |
37,838 |
|
| Core net income (7) |
$ |
20,120 |
|
|
$ |
16,817 |
|
| Core basic earnings per common
share (7) |
|
0.60 |
|
|
|
0.50 |
|
| Core earnings per diluted
common share (7) (10) |
|
0.59 |
|
|
|
0.50 |
|
| Core net income / Average
total assets (Core ROA) (7) (13) |
|
0.88 |
% |
|
|
0.74 |
% |
| Core net income / Average
stockholders' equity (Core ROE) (7) (14) |
|
11.11 |
% |
|
|
9.26 |
% |
| Core efficiency ratio
(29) |
|
62.47 |
% |
|
|
61.34 |
% |
| |
|
|
|
|
|
|
|
__________________(1) Total gross loans include loans held for
investment net of unamortized deferred loan origination fees and
costs. As of March 31, 2023 and December 31, 2022, total loans
include $65.3 million and $62.4 million, respectively, primarily in
mortgage loans held for sale carried at fair value.(2) Core
deposits consist of total deposits excluding all time deposits. (3)
On March 9, 2022, the Company completed a $30.0 million offering of
subordinated notes with a 4.25% fixed-to-floating rate and due
March 15, 2032 (the “Subordinated Notes”). The Subordinated Notes
bear interest at a fixed rate of 4.25% per annum, from and
including March 9, 2022, to but excluding March 15, 2027, with
interest payable semi-annually in arrears. From and including March
15, 2027, to but excluding the stated maturity date or early
redemption date, the interest rate will reset quarterly to an
annual floating rate equal to the then-current benchmark rate,
which will initially be the three-month Secured Overnight Financing
Rate (“SOFR”) plus 251 basis points, with interest during such
period payable quarterly in arrears. If the three-month SOFR cannot
be determined during the applicable floating rate period, a
different index will be determined and used in accordance with the
terms of the Subordinated Notes. The Subordinated Notes are
presented net of direct issuance costs which are deferred and
amortized over 10 years. The Subordinated Notes have been
structured to qualify as Tier 2 capital of the Company for
regulatory capital purposes, and rank equally in right of payment
to all of our existing and future subordinated indebtedness. (4) 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 first quarter of
2023, the Company repurchased an aggregate of 22,403 shares of
Class A common stock at a weighted average price of $25.25 per
share, under the 2023 Class A Common Stock Repurchase Program. In
the first quarter of 2023, the aggregate purchase price for these
transactions was approximately $0.6 million including transaction
costs. (5) In the
first quarter of 2023, and in the fourth quarter of 2022, the
Company’s Board of Directors declared cash dividends of $0.09 and
$0.09 per share of the Company’s common stock, respectively. The
dividend declared in the first quarter of 2023 was paid on February
28, 2023 to shareholders of record at the close of business on
February 13, 2023. The dividend declared in the fourth quarter of
2022 was paid on November 30, 2022 to shareholders of record at the
close of business on November 15, 2022. The aggregate amount paid
in connection with these dividends in the first quarter of 2023 and
in the fourth quarter of 2022 was $3.0 million and $3.0 million,
respectively.(6) 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.(7) As previously
disclosed, the Company adopted CECL in the fourth quarter of 2022,
effective as of January 1, 2022. See Form 10-K for more details on
the CECL adoption and related effects to quarterly results for each
quarter in the year ended December 31, 2022.(8) In the three months
ended March 31, 2023 and December 31, 2022, net income exclude
losses of $0.2 million and $0.2 million, respectively, attributable
to a 20% minority interest of Amerant Mortgage LLC.(9) 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.(10) In all the periods shown, potential dilutive
instruments consisted of unvested shares of restricted stock,
restricted stock units and performance stock units. Potential
dilutive instruments were included in the diluted earnings per
share computation because, when the unamortized deferred
compensation cost related to these shares was divided by the
average market price per share in all the periods shown, fewer
shares would have been purchased than restricted shares assumed
issued. Therefore, in those periods, such awards resulted in higher
diluted weighted average shares outstanding than basic weighted
average shares outstanding, and had a dilutive effect in per share
earnings. (11) Operating data for the periods presented have been
annualized.(12) NIM is defined as NII divided by average
interest-earning assets, which are loans, securities, deposits with
banks and other financial assets which yield interest or similar
income.(13) Calculated based upon the average daily balance of
total assets.(14) Calculated based upon the average daily balance
of stockholders’ equity.(15) Total revenue is the result of net
interest income before provision for credit losses plus noninterest
income.(16) Total stockholders’ equity divided by total
risk-weighted assets, calculated according to the standardized
regulatory capital ratio calculations.(17) 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.(18) Tier 1 capital divided by quarter to date average
assets. (19) CET1 capital divided by total risk-weighted
assets.(20) Tangible common equity is calculated as the ratio of
common equity less goodwill and other intangibles divided by total
assetsless goodwill and other intangible assets. Other intangible
assets consist of, among other things, mortgage servicing rights
and are included in other assets in the Company’s consolidated
balance sheets.(21) Calculated in the same manner described in
footnote 20 but also includes unrealized losses on debt securities
held to maturity in the balance common equity and total assets.(22)
Calculated as the ratio of total loans gross divided by total
deposits.(23) 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. (24) Non-performing
loans include all accruing loans past due by 90 days or more and
all nonaccrual loans(25) 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. During the first quarter of 2023 and the fourth
quarter of 2022, there were net charge offs of $10.8 million and
$9.8 million, respectively. During the first quarter of 2023, the
Company charged-off $6.5 million in connection with a commercial
loan relationship, $6.3 million related to multiple consumer loans
and $1.5 million related to multiple commercial and real estate
loans. During the fourth quarter of 2022, the Company charged-off
$3.9 million related to a CRE loan, $5.5 million related to
multiple consumer loans and $1.1 million related to multiple
commercial loans. (26) Other operating expenses is the result of
total noninterest expense less salary and employee benefits.(27)
Efficiency ratio is the result of noninterest expense divided by
the sum of noninterest income and NII.(28) As of
March 31, 2023 and December 31, 2022, includes 94 and 68 FTEs
for Amerant Mortgage LLC, respectively. (29) Core efficiency ratio
is the efficiency ratio less the effect of restructuring costs and
other adjustments, 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, the valuation of securities, derivatives, loans held
for sale and other real estate owned, early repayment of FHLB
advances, 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) |
March 31, 2023 |
|
December 31, 2022 |
| |
|
|
|
| |
|
|
|
|
Net income attributable to Amerant Bancorp Inc. (1) |
$ |
20,186 |
|
|
$ |
21,973 |
|
| Plus: provision for credit
losses (1) |
|
11,700 |
|
|
|
16,857 |
|
| Plus: provision for income tax
expense (1) |
|
5,301 |
|
|
|
5,627 |
|
| Pre-provision net
revenue (PPNR) |
|
37,187 |
|
|
|
44,457 |
|
| Plus: non-routine noninterest
expense items |
|
3,372 |
|
|
|
2,447 |
|
| Less: non-routine noninterest
income items |
|
(3,456 |
) |
|
|
(9,066 |
) |
| Core pre-provision net
revenue (Core PPNR) |
$ |
37,103 |
|
|
$ |
37,838 |
|
| |
|
|
|
| Total noninterest income |
$ |
19,343 |
|
|
$ |
24,365 |
|
| Less: Non-routine noninterest
income items: |
|
|
|
|
Derivatives gains, net |
|
14 |
|
|
|
1,040 |
|
|
Securities losses, net |
|
(9,731 |
) |
|
|
(3,364 |
) |
|
Gains on early extinguishment of FHLB advances, net |
|
13,173 |
|
|
|
11,390 |
|
|
Total non-routine noninterest income items |
$ |
3,456 |
|
|
$ |
9,066 |
|
| Core noninterest
income |
$ |
15,887 |
|
|
$ |
15,299 |
|
| |
|
|
|
| Total noninterest
expenses |
$ |
64,733 |
|
|
$ |
62,241 |
|
|
Less: non-routine noninterest expense items |
|
|
|
|
Restructuring costs (2): |
|
|
|
|
Staff reduction costs (3) |
|
213 |
|
|
|
1,221 |
|
|
Consulting and other professional fees (4) |
|
2,690 |
|
|
|
1,226 |
|
|
Lease impairment charge (5) |
|
469 |
|
|
|
— |
|
|
Total restructuring costs |
$ |
3,372 |
|
|
$ |
2,447 |
|
|
Total non-routine noninterest expense items |
$ |
3,372 |
|
|
$ |
2,447 |
|
| Core noninterest
expenses |
$ |
61,361 |
|
|
$ |
59,794 |
|
| |
|
|
|
| |
Three Months Ended, |
| (in thousands, except
percentages and per share amounts) |
March 31, 2023 |
|
December 31, 2022 |
| |
|
|
|
| Net income attributable to
Amerant Bancorp Inc. (1) |
$ |
20,186 |
|
|
$ |
21,973 |
|
| Plus after-tax non-routine
items in noninterest expense: |
|
|
|
| Non-routine items in
noninterest expense before income tax effect |
|
3,372 |
|
|
|
2,447 |
|
| Income tax effect (6) |
|
(708 |
) |
|
|
(460 |
) |
| Total after-tax non-routine
items in noninterest expense |
|
2,664 |
|
|
|
1,987 |
|
| Less after-tax non-routine
items in noninterest income: |
|
|
|
| Non-routine items in
noninterest income before income tax effect |
|
(3,456 |
) |
|
|
(9,066 |
) |
| Income tax effect (6) |
|
726 |
|
|
|
1,923 |
|
| Total after-tax non-routine
items in noninterest income |
|
(2,730 |
) |
|
|
(7,143 |
) |
| Core net income
(1) |
$ |
20,120 |
|
|
$ |
16,817 |
|
| |
|
|
|
| Basic earnings per share
(1) |
$ |
0.60 |
|
|
$ |
0.66 |
|
| Plus: after tax impact of
non-routine items in noninterest expense |
|
0.08 |
|
|
|
0.06 |
|
| Less: after tax impact of
non-routine items in noninterest income |
|
(0.08 |
) |
|
|
(0.22 |
) |
| Total core basic
earnings per common share (1) |
$ |
0.60 |
|
|
$ |
0.50 |
|
| |
|
|
|
| Diluted earnings per share (1)
(7) |
$ |
0.60 |
|
|
$ |
0.65 |
|
| Plus: after tax impact of
non-routine items in noninterest expense |
|
0.08 |
|
|
|
0.06 |
|
| Less: after tax impact of
non-routine items in noninterest income |
|
(0.09 |
) |
|
|
(0.21 |
) |
| Total core diluted
earnings per common share (1) |
$ |
0.59 |
|
|
$ |
0.50 |
|
| |
|
|
|
| Net income / Average total
assets (ROA) (1) |
|
0.88 |
% |
|
|
0.97 |
% |
| Plus: after tax impact of
non-routine items in noninterest expense |
|
0.12 |
% |
|
|
0.09 |
% |
| Less: after tax impact of
non-routine items in noninterest income |
|
(0.12 |
)% |
|
|
(0.32 |
)% |
| Core net income /
Average total assets (Core ROA) (1) |
|
0.88 |
% |
|
|
0.74 |
% |
| |
|
|
|
|
|
|
|
| Net income / Average
stockholders' equity (ROE) (1) |
|
11.15 |
% |
|
|
12.10 |
% |
| Plus: after tax impact of
non-routine items in noninterest expense |
|
1.47 |
% |
|
|
1.09 |
% |
| Less: after tax impact of
non-routine items in noninterest income |
|
(1.51 |
)% |
|
|
(3.93 |
)% |
| Core net income /
Average stockholders' equity (Core ROE) (1) |
|
11.11 |
% |
|
|
9.26 |
% |
| |
|
|
|
|
|
|
|
| Efficiency ratio |
|
63.67 |
% |
|
|
58.42 |
% |
| Less: impact of non-routine
items in noninterest expense |
|
(3.32 |
)% |
|
|
(2.30 |
)% |
| Plus: impact of non-routine
items in noninterest income |
|
2.12 |
% |
|
|
5.22 |
% |
| Core efficiency
ratio |
|
62.47 |
% |
|
|
61.34 |
% |
| |
|
|
|
|
|
|
|
| |
Three Months Ended, |
| (in thousands, except
percentages, share data and per share amounts) |
March 31, 2023 |
|
December 31, 2022 |
| |
|
|
|
|
Stockholders' equity |
$ |
729,056 |
|
|
$ |
705,726 |
|
| Less: goodwill and other
intangibles (8) |
|
(24,292 |
) |
|
|
(23,161 |
) |
| Tangible common stockholders'
equity |
$ |
704,764 |
|
|
$ |
682,565 |
|
| Total assets |
|
9,495,302 |
|
|
|
9,127,804 |
|
| Less: goodwill and other
intangibles (8) |
|
(24,292 |
) |
|
|
(23,161 |
) |
| Tangible assets |
$ |
9,471,010 |
|
|
$ |
9,104,643 |
|
| Common shares outstanding |
|
33,814,260 |
|
|
|
33,815,161 |
|
| Tangible common equity
ratio |
|
7.44 |
% |
|
|
7.50 |
% |
| Stockholders' book
value per common share |
$ |
21.56 |
|
|
$ |
20.87 |
|
| Tangible stockholders'
equity book value per common share |
$ |
20.84 |
|
|
$ |
20.19 |
|
| |
|
|
|
| |
|
|
|
| Tangible common stockholders'
equity |
$ |
704,764 |
|
|
$ |
682,565 |
|
| Less: Net unrealized
accumulated losses on debt securities held to maturity, net of tax
(9) |
|
(15,542 |
) |
|
|
(18,234 |
) |
| Tangible common stockholders'
equity, adjusted for unrealized losses on debt securities held to
maturity |
$ |
689,222 |
|
|
$ |
664,331 |
|
| Tangible assets |
$ |
9,471,010 |
|
|
$ |
9,104,643 |
|
| Less: Net unrealized
accumulated losses on debt securities held to maturity, net of tax
(9) |
|
(15,542 |
) |
|
|
(18,234 |
) |
| Tangible assets, adjusted for
unrealized losses on debt securities held to maturity |
$ |
9,455,468 |
|
|
$ |
9,086,409 |
|
| Common shares outstanding |
|
33,814,260 |
|
|
|
33,815,161 |
|
| |
|
|
|
| Tangible common equity
ratio, adjusted for unrealized losses on debt securities held to
maturity |
|
7.29 |
% |
|
|
7.31 |
% |
| Tangible stockholders'
book value per common share, adjusted for unrealized losses on debt
securities held to maturity |
$ |
20.38 |
|
|
$ |
19.65 |
|
| |
|
|
|
|
|
|
|
____________(1) As previously disclosed, the Company adopted
CECL in the fourth quarter of 2022, effective as of January 1,
2022. See Form 10-K for more details of the CECL adoption and
related effects to quarterly results for each quarter in the year
ended December 31, 2022.(2) 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. (3) Staff reduction costs in
the three months ended March 31, 2023 and December 31, 2022,
are mainly related to severance expenses in connection with
employment terminations and changes in certain positions.(4)
Includes expenses in connection with the engagement of FIS of $2.6
million and $1.1 million in the three months ended March 31, 2023
and December 31, 2022, respectively.(5) In the three months ended
March 31, 2023, includes $0.5 million of right-of-use asset, or
ROUA, impairment associated with the closure of a branch in Texas
in 2023. (6) In the three months ended March 31, 2023, amounts were
calculated based upon the effective tax rate for the period of
21.00%. For the three months ended December 31, 2022, amount
represents the difference between the prior and current period
year-to-date tax effect. (7) In the three months ended
March 31, 2023 and December 31, 2022, potential dilutive
instruments consisted of unvested shares of restricted stock,
restricted stock units and performance stock units. In all the
periods presented, potential dilutive instruments were included in
the diluted earnings per share computation because, when the
unamortized deferred compensation cost related to these shares was
divided by the average market price per share in those periods,
fewer shares would have been purchased than restricted shares
assumed issued. Therefore, in those periods, such awards resulted
in higher diluted weighted average shares outstanding than basic
weighted average shares outstanding, and had a dilutive effect on
per share earnings.(8) Other intangible assets consist of, among
other things, mortgage servicing rights (“MSRs”) of $1.4 million
and $1.3 million at March 31, 2023 and December 31, 2022,
respectively, and are included in other assets in the Company’s
consolidated balance sheets.(9) In the three months ended March 31,
2023 and December 31, 2022, amounts were calculated based upon the
fair value on debt securities held to maturity, and assuming a tax
rate of 25.53% and 25.55%, 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 |
| |
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
| (in thousands, except
percentages) |
AverageBalances |
Income/Expense |
Yield/Rates |
|
AverageBalances |
Income/Expense |
Yield/Rates |
|
Average Balances |
Income/Expense |
Yield/ Rates |
| Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Loan portfolio, net (1)(2) |
$ |
6,901,352 |
|
$ |
108,501 |
|
6.38 |
% |
|
$ |
6,688,839 |
|
$ |
98,579 |
|
5.85 |
% |
|
$ |
5,492,547 |
|
$ |
56,338 |
|
4.16 |
% |
|
Debt securities available for sale (3) (4) |
|
1,058,831 |
|
|
10,173 |
|
3.90 |
% |
|
|
1,060,240 |
|
|
9,817 |
|
3.67 |
% |
|
|
1,170,491 |
|
|
7,378 |
|
2.56 |
% |
|
Debt securities held to maturity (5) |
|
240,627 |
|
|
2,112 |
|
3.56 |
% |
|
|
239,680 |
|
|
2,052 |
|
3.40 |
% |
|
|
114,655 |
|
|
703 |
|
2.49 |
% |
|
Debt securities held for trading |
|
18 |
|
|
— |
|
— |
% |
|
|
56 |
|
|
1 |
|
7.08 |
% |
|
|
35 |
|
|
1 |
|
11.59 |
% |
|
Equity securities with readily determinable fair value not held for
trading |
|
4,886 |
|
|
— |
|
— |
% |
|
|
12,365 |
|
|
— |
|
— |
% |
|
|
1,301 |
|
|
— |
|
— |
% |
|
Federal Reserve Bank and FHLB stock |
|
57,803 |
|
|
1,014 |
|
7.11 |
% |
|
|
55,585 |
|
|
874 |
|
6.24 |
% |
|
|
51,505 |
|
|
546 |
|
4.30 |
% |
|
Deposits with banks |
|
302,791 |
|
|
3,330 |
|
4.46 |
% |
|
|
183,926 |
|
|
2,051 |
|
4.42 |
% |
|
|
259,225 |
|
|
132 |
|
0.21 |
% |
|
Total interest-earning assets |
|
8,566,308 |
|
|
125,130 |
|
5.92 |
% |
|
|
8,240,691 |
|
|
113,374 |
|
5.46 |
% |
|
|
7,089,759 |
|
|
65,098 |
|
3.72 |
% |
| Total
non-interest-earning assets (6) |
|
739,522 |
|
|
|
|
|
731,685 |
|
|
|
|
|
616,872 |
|
|
|
| Total assets |
$ |
9,305,830 |
|
|
|
|
$ |
8,972,376 |
|
|
|
|
$ |
7,706,631 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
| |
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
| (in thousands, except
percentages) |
AverageBalances |
Income/Expense |
Yield/Rates |
|
AverageBalances |
Income/Expense |
Yield/Rates |
|
Average Balances |
Income/Expense |
Yield/ Rates |
| Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| Checking and saving
accounts |
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing DDA |
$ |
2,342,620 |
|
$ |
12,855 |
|
2.23 |
% |
|
$ |
2,178,106 |
|
$ |
8,860 |
|
1.61 |
% |
|
$ |
1,556,480 |
|
$ |
290 |
|
0.08 |
% |
|
Money market |
|
1,333,465 |
|
|
7,881 |
|
2.40 |
% |
|
|
1,412,033 |
|
|
6,034 |
|
1.70 |
% |
|
|
1,253,293 |
|
|
734 |
|
0.24 |
% |
|
Savings |
|
299,501 |
|
|
46 |
|
0.06 |
% |
|
|
313,688 |
|
|
55 |
|
0.07 |
% |
|
|
325,121 |
|
|
11 |
|
0.01 |
% |
| Total checking and saving
accounts |
|
3,975,586 |
|
|
20,782 |
|
2.12 |
% |
|
|
3,903,827 |
|
|
14,949 |
|
1.52 |
% |
|
|
3,134,894 |
|
|
1,035 |
|
0.13 |
% |
| Time deposits |
|
1,767,603 |
|
|
12,834 |
|
2.94 |
% |
|
|
1,538,239 |
|
|
8,623 |
|
2.22 |
% |
|
|
1,295,278 |
|
|
4,281 |
|
1.34 |
% |
| Total deposits |
|
5,743,189 |
|
|
33,616 |
|
2.37 |
% |
|
|
5,442,066 |
|
|
23,572 |
|
1.72 |
% |
|
|
4,430,172 |
|
|
5,316 |
|
0.49 |
% |
| Securities sold under
agreements to repurchase |
|
— |
|
|
— |
|
— |
% |
|
|
68 |
|
|
1 |
|
5.83 |
% |
|
|
— |
|
|
— |
|
— |
% |
| Advances from the FHLB
(7) |
|
959,392 |
|
|
6,763 |
|
2.86 |
% |
|
|
994,185 |
|
|
5,293 |
|
2.11 |
% |
|
|
917,039 |
|
|
2,481 |
|
1.10 |
% |
| Senior notes |
|
59,250 |
|
|
942 |
|
6.45 |
% |
|
|
59,172 |
|
|
941 |
|
6.31 |
% |
|
|
58,934 |
|
|
942 |
|
6.48 |
% |
| Subordinated notes |
|
29,306 |
|
|
361 |
|
5.00 |
% |
|
|
29,263 |
|
|
361 |
|
4.89 |
% |
|
|
7,451 |
|
|
88 |
|
4.79 |
% |
| Junior subordinated
debentures |
|
64,178 |
|
|
1,115 |
|
7.05 |
% |
|
|
64,178 |
|
|
1,028 |
|
6.35 |
% |
|
|
64,178 |
|
|
626 |
|
3.96 |
% |
| Total interest-bearing
liabilities |
|
6,855,315 |
|
|
42,797 |
|
2.53 |
% |
|
|
6,588,932 |
|
|
31,196 |
|
1.88 |
% |
|
|
5,477,774 |
|
|
9,453 |
|
0.70 |
% |
| Non-interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| Non-interest bearing demand
deposits |
|
1,377,966 |
|
|
|
|
|
1,318,787 |
|
|
|
|
|
1,199,264 |
|
|
|
| Accounts payable, accrued
liabilities and other liabilities |
|
338,351 |
|
|
|
|
|
343,923 |
|
|
|
|
|
231,088 |
|
|
|
| Total non-interest-bearing
liabilities |
|
1,716,317 |
|
|
|
|
|
1,662,710 |
|
|
|
|
|
1,430,352 |
|
|
|
| Total liabilities |
|
8,571,632 |
|
|
|
|
|
8,251,642 |
|
|
|
|
|
6,908,126 |
|
|
|
| Stockholders’ equity |
|
734,198 |
|
|
|
|
|
720,734 |
|
|
|
|
|
798,505 |
|
|
|
| Total liabilities and
stockholders' equity |
$ |
9,305,830 |
|
|
|
|
$ |
8,972,376 |
|
|
|
|
$ |
7,706,631 |
|
|
|
| Excess of average
interest-earning assets over average interest-bearing
liabilities |
$ |
1,710,993 |
|
|
|
|
$ |
1,651,759 |
|
|
|
|
$ |
1,611,985 |
|
|
|
| Net interest
income |
|
$ |
82,333 |
|
|
|
|
$ |
82,178 |
|
|
|
|
$ |
55,645 |
|
|
| Net interest rate spread |
|
|
3.39 |
% |
|
|
|
3.58 |
% |
|
|
|
3.02 |
% |
| Net interest margin (8) |
|
|
3.90 |
% |
|
|
|
3.96 |
% |
|
|
|
3.18 |
% |
| Cost of total deposits
(9) |
|
|
1.91 |
% |
|
|
|
1.38 |
% |
|
|
|
0.38 |
% |
| Ratio of average
interest-earning assets to average interest-bearing
liabilities |
|
124.96 |
% |
|
|
|
|
125.07 |
% |
|
|
|
|
129.43 |
% |
|
|
| Average non-performing loans/
Average total loans |
|
0.46 |
% |
|
|
|
|
0.38 |
% |
|
|
|
|
0.71 |
% |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________(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 $81.4 million,
$54.9 million and $67.5 million in the three months ended
March 31, 2023, December 31, 2022 and March 31, 2022,
respectively. The average balance of total loans held for sale was
$66.4 million, $78.3 million and $137.7 million in the three months
ended March 31, 2023, December 31, 2022 and March 31, 2022,
respectively.(2) Includes average non-performing loans of $31.8
million, $25.5 million and $39.2 million for the three months ended
March 31, 2023, December 31, 2022 and March 31, 2022,
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 unrealized net losses of
$104.9 million and $120.1 million in the three months ended
March 31, 2023 and December 31, 2022, respectively, and
unrealized net gains of $2.4 million in the three months ended
March 31, 2022.(4) Includes nontaxable securities with average
balances of $19.7 million, $19.8 million and $16.2 million for the
three months ended March 31, 2023, December 31, 2022 and March
31, 2022, respectively. The tax equivalent yield for these
nontaxable securities was 4.56%, 4.26% and 2.81% for the three
months ended March 31, 2023, December 31, 2022 and March 31,
2022, respectively. In 2023 and 2022, 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 $50.7 million, $45.7 million and $37.8 million for the
three months ended March 31, 2023, December 31, 2022 and March
31, 2022, respectively. The tax equivalent yield for these
nontaxable securities was 4.20%, 3.88% and 3.67% for the three
months ended March 31, 2023, December 31, 2022 and March 31,
2022, respectively. In 2023 and 2022, 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) The
terms of the FHLB advance agreements require the Bank to maintain
certain investment securities or loans as collateral for these
advances.(8) NIM is defined as net interest income divided by
average interest-earning assets, which are loans, securities,
deposits with banks and other financial assets which yield interest
or similar income.(9) Calculated based upon the average balance of
total noninterest bearing and interest bearing deposits.
Exhibit 4 - Noninterest
Income
This table shows the amounts of each of the categories of
noninterest income for the periods presented.
| |
Three Months Ended |
| |
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
| (in thousands, except
percentages) |
Amount |
|
% |
|
Amount |
|
% |
|
Amount |
|
% |
| |
|
|
Deposits and service fees |
$ |
4,955 |
|
|
25.6 |
% |
|
$ |
4,766 |
|
|
19.6 |
% |
|
$ |
4,620 |
|
|
32.9 |
% |
| Brokerage, advisory and
fiduciary activities |
|
4,182 |
|
|
21.6 |
% |
|
|
4,054 |
|
|
16.6 |
% |
|
|
4,596 |
|
|
32.8 |
% |
| Change in cash surrender value
of bank owned life insurance (“BOLI”)(1) |
|
1,412 |
|
|
7.3 |
% |
|
|
1,378 |
|
|
5.7 |
% |
|
|
1,342 |
|
|
9.6 |
% |
| Cards and trade finance
servicing fees |
|
533 |
|
|
2.8 |
% |
|
|
556 |
|
|
2.3 |
% |
|
|
590 |
|
|
4.2 |
% |
| Gain (loss) on early
extinguishment of FHLB advances, net |
|
13,173 |
|
|
68.1 |
% |
|
|
11,390 |
|
|
46.8 |
% |
|
|
(714 |
) |
|
(5.1 |
)% |
| Securities (losses) gains, net
(2) |
|
(9,731 |
) |
|
(50.3 |
)% |
|
|
(3,364 |
) |
|
(13.8 |
)% |
|
|
769 |
|
|
5.5 |
% |
| Loan-level derivative income
(3) |
|
2,071 |
|
|
10.7 |
% |
|
|
3,413 |
|
|
14.0 |
% |
|
|
3,152 |
|
|
22.5 |
% |
| Derivative gains (losses), net
(4) |
|
14 |
|
|
0.1 |
% |
|
|
1,040 |
|
|
4.3 |
% |
|
|
(1,345 |
) |
|
(9.6 |
)% |
| Other noninterest income
(5) |
|
2,734 |
|
|
14.1 |
% |
|
|
1,132 |
|
|
4.5 |
% |
|
|
1,015 |
|
|
7.2 |
% |
|
Total noninterest income |
$ |
19,343 |
|
|
100.0 |
% |
|
$ |
24,365 |
|
|
100.0 |
% |
|
$ |
14,025 |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________(1) Changes in cash surrender value of BOLI
are not taxable.(2) Includes: (i) net loss on sale of debt
securities of $9.5 million and $2.5 million in the three months
ended March 31, 2023 and December 31, 2022, respectively, and
net gains on the sale of debt securities of $49 thousand in the
three months ended March 31, 2022, and (ii) unrealized gains of
$1.3 million and $0.7 million in the three months ended
March 31, 2023 and 2022, respectively, and unrealized losses of
$0.8 million in the three months ended December 31, 2022,
related to the change in fair value of marketable equity
securities. In addition, in the three months ended March 31,
2023, includes net loss of $1.5 million on the sale of marketable
equity securities.(3) Income from interest rate swaps and other
derivative transactions with customers. The Company incurred
expenses related to derivative transactions with customers of $1.6
million, $3.3 million and $1.0 million in the three months ended
March 31, 2023, December 31, 2022, and March 31, 2022,
respectively, which are included as part of noninterest expenses
under loan-level derivative expense.(4) Net unrealized gains and
losses related to uncovered interest rate caps with clients. (5)
Includes mortgage banking income of $1.8 million, $0.2 million and
$0.8 million in the three months ended March 31, 2023,
December 31, 2022, and March 31, 2022, respectively, related to
Amerant Mortgage. Other sources of income in the periods shown
include from 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 |
| |
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
| (in thousands, except
percentages) |
Amount |
% |
|
Amount |
% |
|
Amount |
% |
| |
|
|
Salaries and employee benefits (1) |
$ |
34,876 |
|
53.9 |
% |
|
$ |
32,786 |
|
52.7 |
% |
|
$ |
30,403 |
|
50.0 |
% |
| Occupancy and equipment
(2) |
|
6,798 |
|
10.5 |
% |
|
|
6,349 |
|
10.2 |
% |
|
|
6,725 |
|
11.1 |
% |
| Professional and other
services fees (3) |
|
7,628 |
|
11.8 |
% |
|
|
6,224 |
|
10.0 |
% |
|
|
6,139 |
|
10.1 |
% |
| Loan-level derivative expense
(4) |
|
1,600 |
|
2.5 |
% |
|
|
3,281 |
|
5.3 |
% |
|
|
1,043 |
|
1.7 |
% |
| Telecommunications and data
processing |
|
3,064 |
|
4.7 |
% |
|
|
3,622 |
|
5.8 |
% |
|
|
4,038 |
|
6.6 |
% |
| Depreciation and
amortization |
|
1,292 |
|
2.0 |
% |
|
|
1,956 |
|
3.1 |
% |
|
|
1,152 |
|
1.9 |
% |
| FDIC assessments and
insurance |
|
2,737 |
|
4.2 |
% |
|
|
1,930 |
|
3.1 |
% |
|
|
1,396 |
|
2.3 |
% |
| Loans held for sale valuation
expense (5) |
|
— |
|
— |
% |
|
|
— |
|
— |
% |
|
|
459 |
|
0.8 |
% |
| Advertising expenses |
|
2,586 |
|
4.0 |
% |
|
|
3,329 |
|
5.3 |
% |
|
|
2,972 |
|
4.9 |
% |
| Contract termination costs
(6) |
|
— |
|
— |
% |
|
|
— |
|
— |
% |
|
|
4,012 |
|
6.6 |
% |
| Other operating expenses
(7) |
|
4,152 |
|
6.4 |
% |
|
|
2,764 |
|
4.5 |
% |
|
|
2,479 |
|
4.0 |
% |
|
Total noninterest expense (8) |
$ |
64,733 |
|
100.0 |
% |
|
$ |
62,241 |
|
100.0 |
% |
|
$ |
60,818 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________(1) Includes staff reduction costs of $0.2 million,
$1.2 million and $0.8 million in the three months ended
March 31, 2023, December 31, 2022 and March 31, 2022,
respectively. Staff reduction costs in the three months ended
March 31, 2023 and December 31, 2022, are mainly related to
severance expenses in connection with employment terminations and
changes in certain positions. Staff reduction costs in the three
months ended March 31, 2022, were primarily related to severance
expenses in connection with restructuring of business lines and the
elimination of certain support functions. (2) In the three months
ended March 31, 2023, includes $0.5 million related to ROU
asset impairment in connection with the closure of a branch in
Houston, Texas in 2023.(3) In the three months ended March 31,
2023 and December 31, 2022, includes additional expenses of $2.6
million and $1.1 million, respectively, related to the engagement
of FIS. In the three months ended March 31, 2022, includes
additional expenses of $1.2 million, including: (i) $0.8 million
related to the engagement of FIS; (ii) $0.2 million in connection
with certain search and recruitment expenses; and (iii) $0.1
million of costs associated with the subleasing of the New York
office space. (4) Includes services fees in connection with our
loan-level derivative income generation activities. (5) 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.(6) Contract
termination and related costs associated with third party vendors
resulting from the Company’s engagement of FIS.(7) In all of the
periods shown, includes charitable contributions, community
engagement, postage and courier expenses, provisions for possible
losses on contingent loans, 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.(8) Includes $3.9
million, $2.7 million and $3.5 million in the three months ended
March 31, 2023, December 31, 2022 and March 31, 2022,
respectively, 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) |
March 31, 2023 |
|
December 31, 2022 |
| Assets |
|
|
(audited) |
|
Cash and due from banks |
$ |
41,489 |
|
|
$ |
19,486 |
|
| Interest earning deposits with
banks |
|
411,747 |
|
|
|
228,955 |
|
| Restricted cash |
|
32,541 |
|
|
|
42,160 |
|
|
Cash and cash equivalents |
|
485,777 |
|
|
|
290,601 |
|
| Securities |
|
|
|
| Debt securities available for
sale, at fair value |
|
1,045,883 |
|
|
|
1,057,621 |
|
| Debt securities held to
maturity, at amortized cost (estimated fair value of 218,388 and
217,609 at March 31, 2023 and December 31, 2022, respectively) |
|
239,258 |
|
|
|
242,101 |
|
| Equity securities with readily
determinable fair value not held for trading |
|
— |
|
|
|
11,383 |
|
| Federal Reserve Bank and
Federal Home Loan Bank stock |
|
62,556 |
|
|
|
55,575 |
|
|
Securities |
|
1,347,697 |
|
|
|
1,366,680 |
|
| Mortgage loans held for sale,
at fair value |
|
65,289 |
|
|
|
62,438 |
|
| Loans held for investment,
gross |
|
7,049,746 |
|
|
|
6,857,194 |
|
| Less: Allowance for credit
losses |
|
84,361 |
|
|
|
83,500 |
|
|
Loans held for investment, net |
|
6,965,385 |
|
|
|
6,773,694 |
|
| Bank owned life insurance |
|
229,824 |
|
|
|
228,412 |
|
| Premises and equipment,
net |
|
42,380 |
|
|
|
41,772 |
|
| Deferred tax assets, net |
|
46,112 |
|
|
|
48,703 |
|
| Operating lease right-of-use
assets |
|
119,503 |
|
|
|
139,987 |
|
| Goodwill |
|
20,525 |
|
|
|
19,506 |
|
| Accrued interest receivable
and other assets (1) |
|
172,810 |
|
|
|
156,011 |
|
|
Total assets |
$ |
9,495,302 |
|
|
$ |
9,127,804 |
|
| Liabilities and
Stockholders' Equity |
|
|
|
| Deposits |
|
|
|
| Demand |
|
|
|
| Noninterest bearing |
$ |
1,360,626 |
|
|
$ |
1,367,664 |
|
| Interest bearing |
|
2,489,565 |
|
|
|
2,300,469 |
|
| Savings and money market |
|
1,507,195 |
|
|
|
1,647,811 |
|
| Time |
|
1,929,340 |
|
|
|
1,728,255 |
|
|
Total deposits |
|
7,286,726 |
|
|
|
7,044,199 |
|
| Advances from the Federal Home
Loan Bank |
|
1,052,012 |
|
|
|
906,486 |
|
| Senior notes |
|
59,289 |
|
|
|
59,210 |
|
| Subordinated notes |
|
29,326 |
|
|
|
29,284 |
|
| Junior subordinated debentures
held by trust subsidiaries |
|
64,178 |
|
|
|
64,178 |
|
| Operating lease Liabilities
(2) |
|
122,214 |
|
|
|
140,147 |
|
| Accounts payable, accrued
liabilities and other liabilities (3) |
|
152,501 |
|
|
|
178,574 |
|
|
Total liabilities |
|
8,766,246 |
|
|
|
8,422,078 |
|
| |
|
|
|
| Stockholders’ equity |
|
|
|
| Class A common stock |
|
3,383 |
|
|
|
3,382 |
|
| Additional paid in
capital |
|
194,782 |
|
|
|
194,694 |
|
| Retained earnings |
|
607,544 |
|
|
|
590,375 |
|
| Accumulated other
comprehensive loss |
|
(74,319 |
) |
|
|
(80,635 |
) |
|
Total stockholders' equity before noncontrolling interest |
|
731,390 |
|
|
|
707,816 |
|
| Noncontrolling interest |
|
(2,334 |
) |
|
|
(2,090 |
) |
|
Total stockholders' equity |
|
729,056 |
|
|
|
705,726 |
|
|
Total liabilities and stockholders' equity |
$ |
9,495,302 |
|
|
$ |
9,127,804 |
|
| |
|
|
|
__________(1) As of March 31, 2023 and December 31, 2022,
include derivative assets with a total fair value of $60.8 million
and $78.3 million, respectively.(2) Consists of total long-term
lease liabilities. Total short-term lease liabilities are included
in other liabilities.(3) As of March 31, 2023 and December 31,
2022, include derivatives liabilities with a total fair value of
$59.5 million and $77.2 million, respectively.
Exhibit 7 - LoansLoans
by Type - Held For Investment
The loan portfolio held for investment consists of the following
loan classes:
| (in thousands) |
March 31,2023 |
|
December 31,2022 |
| Real estate loans |
|
|
|
|
Commercial real estate |
|
|
|
|
Non-owner occupied |
$ |
1,630,451 |
|
|
$ |
1,615,716 |
|
|
Multi-family residential |
|
796,125 |
|
|
|
820,023 |
|
|
Land development and construction loans |
|
303,268 |
|
|
|
273,174 |
|
| |
|
2,729,844 |
|
|
|
2,708,913 |
|
|
Single-family residential |
|
1,189,045 |
|
|
|
1,102,845 |
|
|
Owner occupied |
|
1,069,491 |
|
|
|
1,046,450 |
|
| |
|
4,988,380 |
|
|
|
4,858,208 |
|
| Commercial loans (1) |
|
1,497,649 |
|
|
|
1,381,234 |
|
| Loans to financial
institutions and acceptances |
|
13,312 |
|
|
|
13,292 |
|
| Consumer loans and overdrafts
(2) |
|
550,405 |
|
|
|
604,460 |
|
| Total loans |
$ |
7,049,746 |
|
|
$ |
6,857,194 |
|
| |
|
|
|
__________________(1) As of March 31, 2023 and December 31,
2022, includes approximately $46.7 million and $45.3 million,
respectively, in commercial loans and leases originated under a
white-label equipment financing solution launched in the second
quarter of 2022.(2) As of March 31, 2023 and December 31,
2022, includes $372.2 million and $433.3 million, respectively, in
consumer loans purchased under indirect lending programs. In
addition, as of March 31, 2023 and December 31, 2022, includes
$62.1 million, and $43.8 million, respectively, in consumer loans
originated under a white-label program.
Loans by Type - Held For Sale
The loan portfolio held for sale consists of the following loan
classes:
| (in thousands) |
March 31,2023 |
|
December 31,2022 |
| |
|
|
|
| Loans held for sale at
fair value |
|
|
|
|
Land development and construction loans |
|
15,527 |
|
|
|
9,424 |
|
|
Single-family residential |
|
49,762 |
|
|
|
53,014 |
|
| Total loans held for sale at
fair value (1)(2) |
$ |
65,289 |
|
|
$ |
62,438 |
|
| |
|
|
|
|
|
|
|
__________________
(1) Loans held for sale in connection with Amerant Mortgage
ongoing business.(2) 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) |
March 31,2023 |
|
December 31,2022 |
| Non-Accrual
Loans(1) |
|
|
(audited) |
| Real Estate Loans |
|
|
|
|
Commercial real estate (CRE) |
|
|
|
|
Non-owner occupied |
$ |
— |
|
|
$ |
20,057 |
|
| |
|
— |
|
|
|
20,057 |
|
|
Single-family residential |
|
1,367 |
|
|
|
1,526 |
|
|
Owner occupied |
|
7,118 |
|
|
|
6,270 |
|
| |
|
8,485 |
|
|
|
27,853 |
|
| Commercial loans |
|
13,643 |
|
|
|
9,271 |
|
| Consumer loans and overdrafts
(2) |
|
1 |
|
|
|
4 |
|
| Total Non-Accrual
Loans |
$ |
22,129 |
|
|
$ |
37,128 |
|
| |
|
|
|
| Past Due Accruing
Loans(3) |
|
|
|
| Real Estate Loans |
|
|
|
|
Commercial real estate (CRE) |
|
|
|
|
Single-family residential |
|
— |
|
|
|
253 |
|
|
Commercial |
|
— |
|
|
|
183 |
|
| Consumer loans and
overdrafts |
|
53 |
|
|
|
35 |
|
| Total Past Due
Accruing Loans |
$ |
53 |
|
|
$ |
471 |
|
| Total Non-Performing
Loans |
|
22,182 |
|
|
|
37,599 |
|
| OREO and other
repossessed assets |
|
26,534 |
|
|
|
— |
|
| Total Non-Performing
Assets |
$ |
48,716 |
|
|
$ |
37,599 |
|
| |
|
|
|
|
|
|
|
__________________(1) Prior to the first quarter of 2023,
included loan modifications that met the definition of troubled
debt restructurings, or TDR, which may be performing in accordance
with their modified loan terms. (2) In the fourth quarter of 2022,
the Company changed its charge-off policy for unsecured consumer
loans from 120 to 90 days past due. This change resulted in an
additional $3.4 million in charge-offs for unsecured consumer loans
in the fourth quarter of 2022.(3) 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.
| |
March 31, 2023 |
|
December 31, 2022 |
| |
|
|
(audited) |
| (in thousands) |
Special Mention |
Substandard |
Doubtful |
Total (1) |
|
Special Mention |
Substandard |
Doubtful |
Total (1) |
| Real Estate Loans |
|
|
|
|
|
|
|
|
|
|
Commercial Real Estate (CRE) |
|
|
|
|
|
|
|
|
|
|
Non-owner occupied |
$ |
8,335 |
|
$ |
— |
|
$ |
— |
|
$ |
8,335 |
|
|
$ |
8,378 |
|
$ |
20,113 |
|
$ |
— |
|
$ |
28,491 |
|
|
Multi-family residential |
|
24,348 |
|
|
— |
|
|
— |
|
|
24,348 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| |
|
32,683 |
|
|
— |
|
|
— |
|
|
32,683 |
|
|
|
8,378 |
|
|
20,113 |
|
|
— |
|
|
28,491 |
|
|
Single-family residential |
|
— |
|
|
1,514 |
|
|
— |
|
|
1,514 |
|
|
|
— |
|
|
1,930 |
|
|
— |
|
|
1,930 |
|
|
Owner occupied |
|
— |
|
|
7,202 |
|
|
— |
|
|
7,202 |
|
|
|
— |
|
|
6,356 |
|
|
— |
|
|
6,356 |
|
| |
|
32,683 |
|
|
8,716 |
|
|
— |
|
|
41,399 |
|
|
|
8,378 |
|
|
28,399 |
|
|
— |
|
|
36,777 |
|
| Commercial loans |
|
3,240 |
|
|
14,891 |
|
|
3 |
|
|
18,134 |
|
|
|
1,749 |
|
|
10,446 |
|
|
3 |
|
|
12,198 |
|
| Consumer loans
and overdrafts |
|
— |
|
|
1 |
|
|
— |
|
|
1 |
|
|
|
— |
|
|
230 |
|
|
— |
|
|
230 |
|
| Totals |
$ |
35,923 |
|
$ |
23,608 |
|
$ |
3 |
|
$ |
59,534 |
|
|
$ |
10,127 |
|
$ |
39,075 |
|
$ |
3 |
|
$ |
49,205 |
|
| |
|
|
|
|
|
|
|
|
|
__________(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) |
March 31, 2023 |
|
December 31, 2022 |
| |
|
|
(audited) |
|
Domestic |
$ |
4,891,873 |
|
|
$ |
4,620,906 |
|
| Foreign: |
|
|
|
|
Venezuela |
|
1,897,199 |
|
|
|
1,911,551 |
|
|
Others |
|
497,654 |
|
|
|
511,742 |
|
| Total foreign |
|
2,394,853 |
|
|
|
2,423,293 |
|
| Total deposits |
$ |
7,286,726 |
|
|
$ |
7,044,199 |
|
| |
|
|
|
|
|
|
|
CONTACTS:InvestorsLaura
RossiInvestorRelations@amerantbank.com(305) 460-8728
MediaVictoria VerdejaMediaRelations@amerantbank.com(305)
441-5541
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