AMTB - Amerant Reports Fourth Quarter 2023 and Full-Year 2023 Results

(in thousands)

December 31,

2023

September 30,

2023

June 30,

2023

March 31,

2023

December 31,

2022

Consolidated Balance Sheets

(audited)

Total assets

$

9,721,741

$

9,345,700

$

9,519,526

$

9,495,302

$

9,127,804

Total investments

1,496,975

1,314,367

1,315,303

1,347,697

1,366,680

Total gross loans (1)

7,275,370

7,142,596

7,216,958

7,115,035

6,919,632

Allowance for credit losses

95,504

98,773

105,956

84,361

83,500

Total deposits

7,872,600

7,546,912

7,579,571

7,286,726

7,044,199

Core deposits (2)

5,575,503

5,244,034

5,498,017

5,357,386

5,315,944

Advances from the FHLB and other borrowings

645,000

595,000

770,000

1,052,012

906,486

Senior notes

59,526

59,447

59,368

59,289

59,210

Subordinated notes

29,454

29,412

29,369

29,326

29,284

Junior subordinated debentures

64,178

64,178

64,178

64,178

64,178

Stockholders' equity (3)(4)

736,068

719,787

720,956

729,056

705,726

Assets under management and custody (5)

2,289,135

2,092,200

2,147,465

2,107,603

1,995,666

Three Months Ended

Years Ended December 31,

(in thousands, except percentages, share data and per share amounts)

December 31,

2023

September 30,

2023

June 30,

2023

March 31,

2023

December 31,

2022

2023

2022

Consolidated Results of Operations

(audited)

Net interest income

$

81,677

$

78,577

$

83,877

$

82,333

$

82,178

$

326,464

$

266,665

Provision for credit losses (6)(7)

12,500

8,000

29,077

11,700

16,857

61,277

13,945

Noninterest income

19,613

21,921

26,619

19,343

24,365

87,496

67,277

Noninterest expense

109,702

64,420

72,500

64,733

62,241

311,355

241,413

Net (loss)income attributable to Amerant Bancorp Inc. (6)(8)

(17,123

)

22,119

7,308

20,186

21,973

32,490

63,310

Effective income tax rate (6)

14.21

%

22.57

%

21.00

%

21.00

%

20.50

%

25.50

%

21.15

%

Common Share Data

Stockholders' book value per common share

$

21.90

$

21.43

$

21.37

$

21.56

$

20.87

$

21.90

$

20.87

Tangible stockholders' equity (book value) per common share (9)

$

21.16

$

20.63

$

20.66

$

20.84

$

20.19

$

21.16

$

20.19

Tangible stockholders’ equity (book value) per common share, adjusted for unrealized losses on debt securities held to maturity (9)

$

20.68

$

19.86

$

20.11

$

20.38

$

19.65

$

20.68

$

19.65

Basic (loss) earnings per common share (6)

$

(0.51

)

$

0.66

$

0.22

$

0.60

$

0.66

$

0.97

$

1.87

Diluted (loss) earnings per common share (6)(10)

$

(0.51

)

$

0.66

$

0.22

$

0.60

$

0.65

$

0.96

$

1.85

Basic weighted average shares outstanding

33,432,871

33,489,560

33,564,770

33,559,718

33,496,096

33,511,321

33,862,410

Diluted weighted average shares outstanding (10)

33,432,871

33,696,620

33,717,702

33,855,994

33,813,593

33,675,388

34,142,563

Cash dividend declared per common share (4)

$

0.09

$

0.09

$

0.09

$

0.09

$

0.09

$

0.36

$

0.36

Three Months Ended

Years Ended December 31,

December 31,

2023

September 30,

2023

June 30,

2023

March 31,

2023

December 31,

2022

2023

2022

Other Financial and Operating Data ⁽¹¹⁾

(audited)

Profitability Indicators (%)

Net interest income / Average total interest earning assets (NIM) ⁽¹²⁾

3.72

%

3.57

%

3.83

%

3.90

%

3.96

%

3.76

%

3.53

%

Net (loss) income / Average total assets (ROA) ^(6)(13)

(0.71

) %

0.92

%

0.31

%

0.88

%

0.97

%

0.34

%

0.77

%

Net (loss) income / Average stockholders' equity (ROE) ^(6)(14)

(9.22

) %

11.93

%

3.92

%

11.15

%

12.10

%

4.39

%

8.45

%

Noninterest income / Total revenue ⁽¹⁵⁾

19.36

%

21.81

%

24.09

%

19.02

%

22.87

%

21.14

%

20.15

%

Capital Indicators (%)

Total capital ratio ⁽¹⁶⁾

12.19

%

12.70

%

12.39

%

12.36

%

12.39

%

12.19

%

12.39

%

Tier 1 capital ratio ⁽¹⁷⁾

10.60

%

11.08

%

10.77

%

10.88

%

10.89

%

10.60

%

10.89

%

Tier 1 leverage ratio ⁽¹⁸⁾

8.84

%

9.05

%

8.91

%

9.04

%

9.18

%

8.84

%

9.18

%

Common equity tier 1 capital ratio (CET1) ⁽¹⁹⁾

9.84

%

10.30

%

10.00

%

10.10

%

10.10

%

9.84

%

10.10

%

Tangible common equity ratio ⁽²⁰⁾

7.33

%

7.44

%

7.34

%

7.44

%

7.50

%

7.33

%

7.50

%

Tangible common equity ratio, adjusted for unrealized losses on debt securities held to maturity ⁽²¹⁾

7.18

%

7.18

%

7.16

%

7.29

%

7.31

%

7.18

%

7.31

%

Liquidity Ratios (%)

Loans to Deposits ⁽²²⁾

92.41

%

94.64

%

95.22

%

97.64

%

98.23

%

92.41

%

98.23

%

Asset Quality Indicators (%)

Non-performing assets / Total assets ⁽²³⁾

0.56

%

0.57

%

0.71

%

0.51

%

0.41

%

0.56

%

0.41

%

Non-performing loans / Total loans ^{(1) (24)}

0.47

%

0.46

%

0.65

%

0.31

%

0.54

%

0.47

%

0.54

%

Allowance for credit losses / Total non-performing loans ^(2)(24)

277.63

%

297.55

%

224.51

%

380.31

%

222.08

%

277.63

%

222.08

%

Allowance for loan credit losses / Total loans held for investment ⁽¹⁾⁽²⁾

1.39

%

1.40

%

1.48

%

1.20

%

1.22

%

1.39

%

1.22

%

Net charge-offs / Average total loans held for investment ⁽²⁵⁾

0.85

%

0.82

%

0.42

%

0.64

%

0.59

%

0.69

%

0.32

%

Efficiency Indicators (% except FTE)

Noninterest expense / Average total assets

4.57

%

2.69

%

3.06

%

2.82

%

2.75

%

3.29

%

2.95

%

Salaries and employee benefits / Average total assets

1.38

%

1.31

%

1.45

%

1.52

%

1.45

%

1.41

%

1.51

%

Other operating expenses/ Average total assets ⁽²⁶⁾

3.20

%

1.38

%

1.62

%

1.30

%

1.30

%

1.88

%

1.44

%

Efficiency ratio ⁽²⁷⁾

108.30

%

64.10

%

65.61

%

63.67

%

58.42

%

75.21

%

72.29

%

Full-Time-Equivalent Employees (FTEs) ⁽²⁸⁾

682

700

710

722

692

682

692

Three Months Ended

Years Ended

December 31,

(in thousands, except percentages and per share amounts)

December 31,

2023

September 30,

2023

June 30,

2023

March 31,

2023

December 31,

2022

2023

2022

Core Selected Consolidated Results of Operations and Other Data ⁽⁹⁾

(audited)

Pre-provision net revenue (PPNR)

$

(7,595

)

$

36,456

$

38,258

$

37,187

$

44,457

$

104,306

$

93,876

Core pre-provision net revenue (Core PPNR)

$

29,811

$

35,880

$

39,196

$

37,103

$

37,838

$

141,990

$

105,479

Core net income ⁽⁶⁾

$

15,272

$

21,664

$

8,048

$

20,120

$

16,817

$

65,104

$

72,459

Core basic earnings per common share ⁽⁶⁾

0.46

0.65

0.24

0.60

0.50

1.94

2.14

Core earnings per diluted common share ^(6)(10)

0.46

0.64

0.24

0.59

0.50

1.93

2.12

Core net income / Average total assets (Core ROA) ^(6)(13)

0.64

%

0.91

%

0.34

%

0.88

%

0.74

%

0.69

%

0.88

%

Core net income / Average stockholders' equity (Core ROE) ^(6)(14)

8.23

%

11.69

%

4.32

%

11.11

%

9.26

%

8.79

%

9.67

%

Core efficiency ratio ⁽²⁹⁾

69.67

%

62.08

%

60.29

%

62.47

%

61.34

%

63.61

%

68.11

%

(1)

Total gross loans include loans held for investment, net of unamortized deferred loan origination fees and costs, as well as loans held for sale. As of December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, mortgage loans held for sale carried at fair value totaled $26.2 million, $26.0 million, $49.9 million, $65.3 million and $62.4 million, respectively. In addition, as of December 31, 2023 and September 30, 2023, includes $365.2 million and $43.3 million in loans held for sale carried at the lower of estimated fair value or cost.

(2)

Core deposits consist of total deposits excluding all time deposits.

(3)

In the fourth quarter of 2022, the Company announced that the Board of Directors authorized a new repurchase program pursuant to which the Company may purchase, from time to time, up to an aggregate amount of $25 million of its shares of Class A common stock (the “2023 Class A Common Stock Repurchase Program”). In the third, second and first quarters of 2023, the Company repurchased an aggregate of 142,188 shares of Class A common stock, 95,262 shares of Class A common stock and 22,403 shares of Class A common stock, respectively, at a weighted average price of $19.05 per share, $17.42 per share and $25.25 per share, respectively, under the 2023 Class A Common Stock Repurchase Program. In the third, second and first quarters of 2023, the aggregate purchase price for these transactions was approximately $2.7 million, $1.7 million and $0.6 million, respectively, including transaction costs. There were no repurchases of Class A common stock in the fourth quarter of 2023.

(4)

For each of the fourth, third, second and first quarters of 2023 and the fourth quarter of 2022, 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 fourth quarter of 2023 was paid on November 30, 2023 to shareholders of record at the close of business on November 14, 2023. The dividend declared in the third quarter of 2023 was paid on August 31, 2023 to shareholders of record at the close of business on August 15, 2023. The dividend declared in the second quarter of 2023 was paid on May 31, 2023 to shareholders of record at the close of business on May 15, 2023. 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.

(5)

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.

(6)

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.

(7)

In the fourth and third quarter of 2023, includes provision for credit losses on loans of $12.0 million and $7.4 million, respectively, and unfunded commitments (contingencies) of $0.5 million and $0.6 million, respectively. 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 and the fourth quarter of 2022. In the first quarter of 2023, the provision for credit losses on unfunded commitments was $0.3 million.

(8)

In the three months ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, net income excludes losses of $0.8 million, $0.4 million, $0.3 million, $0.2 million and $0.2 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 and year 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.

(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. In the fourth quarter of 2023, potential dilutive instruments were excluded from the diluted earnings per share computation because the Company reported a net loss and their inclusion would have an anti-dilutive effect in per share earnings in that period. In all other periods shown, 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 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 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.

(21)

Calculated in the same manner described in footnote 20 but also includes unrealized losses on debt securities held to maturity in the balance of 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 fourth, third, second and first quarters of 2023, and in the fourth quarter of 2022, there were net charge offs of $15.3 million, $14.6 million, $7.5 million, $10.8 million, and $9.8 million, respectively. During the fourth quarter of 2023, the Company charged-off $10.3 million related to the NY CRE loan portfolio, $7.0 million related to indirect purchased consumer loans and $3.3 million related to multiple smaller business banking loans. During the third quarter of 2023, the Company charged-off $6.4 million related to multiple consumer loans, primarily purchased indirect consumer loans, and $9.3 million related to multiple commercial loans. During the second quarter of 2023, the Company charged-off $7.6 million related to multiple purchased indirect consumer loans and $1.5 million related to multiple commercial loans. 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 December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, includes 67, 98, 93, 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.

Three Months Ended,

Years Ended December 31,

(in thousands)

December 31,

2023

September 30,

2023

June 30,

2023

March 31,

2023

December 31,

2022

2023

2022

(audited)

Net (loss) income attributable to Amerant Bancorp Inc. ⁽¹⁾

$

(17,123

)

$

22,119

$

7,308

$

20,186

$

21,973

$

32,490

$

63,310

Plus: provision for credit losses ⁽¹⁾⁽²⁾

12,500

8,000

29,077

11,700

16,857

61,277

13,945

Plus: provision for income tax (benefit) expense ⁽¹⁾

(2,972

)

6,337

1,873

5,301

5,627

10,539

16,621

Pre-provision net revenue (PPNR)

(7,595

)

36,456

38,258

37,187

44,457

104,306

93,876

Plus: non-routine noninterest expense items

43,094

6,303

13,383

3,372

2,447

66,152

18,970

(Less): non-routine noninterest income items

(5,688

)

(6,879

)

(12,445

)

(3,456

)

(9,066

)

(28,468

)

(7,367

)

Core pre-provision net revenue (Core PPNR)

$

29,811

$

35,880

$

39,196

$

37,103

$

37,838

$

141,990

$

105,479

Total noninterest income

$

19,613

$

21,921

$

26,619

$

19,343

$

24,365

$

87,496

$

67,277

Less: Non-routine noninterest income items:

Derivative gains (losses), net

(151

)

(77

)

242

14

1,040

28

455

Securities gains (losses), net

33

(54

)

(1,237

)

(9,731

)

(3,364

)

(10,989

)

(3,689

)

Bank owned life insurance charge ⁽³⁾

(655

)

—

—

—

—

(655

)

—

Gains on early extinguishment of FHLB advances, net

6,461

7,010

13,440

13,173

11,390

40,084

10,678

Loss on sale of loans

—

—

—

—

—

—

(77

)

Total non-routine noninterest income items

$

5,688

$

6,879

$

12,445

$

3,456

$

9,066

$

28,468

$

7,367

Core noninterest income

$

13,925

$

15,042

$

14,174

$

15,887

$

15,299

$

59,028

$

59,910

Total noninterest expenses

$

109,702

$

64,420

$

72,500

$

64,733

$

62,241

$

311,355

$

241,413

Less: non-routine noninterest expense items

Restructuring costs ⁽⁴⁾

Staff reduction costs ⁽⁵⁾

1,120

489

2,184

213

1,221

4,006

3,018

Contract termination costs ⁽⁶⁾

—

—

1,550

—

—

1,550

7,103

Consulting and other professional fees and software expenses ⁽⁷⁾

1,629

—

2,060

2,690

1,226

6,379

3,625

Digital transformation expenses

—

—

—

—

—

—

45

Disposition of fixed assets ⁽⁸⁾

—

—

1,419

—

—

1,419

—

Branch closure and related charges ⁽⁹⁾

—

252

1,558

469

—

2,279

1,612

Total restructuring costs

$

2,749

$

741

$

8,771

$

3,372

$

2,447

$

15,633

$

15,403

Other non-routine noninterest expense items:

Losses on loans held for sale ⁽¹⁰⁾

37,495

5,562

—

—

—

43,057

159

Loss on sale of repossessed assets and other real estate owned valuation expense ⁽¹¹⁾

—

—

2,649

—

—

2,649

3,408

Goodwill and intangible assets impairment

1,713

—

—

—

—

1,713

—

Bank owned life insurance enhancement costs ⁽³⁾

1,137

—

—

—

—

1,137

—

Impairment charge on investment carried at cost

—

—

1,963

—

—

1,963

—

Total non-routine noninterest expense items

$

43,094

$

6,303

$

13,383

$

3,372

$

2,447

$

66,152

$

18,970

Core noninterest expenses

$

66,608

$

58,117

$

59,117

$

61,361

$

59,794

$

245,203

$

222,443

Three Months Ended,

Years Ended December 31,

(in thousands, except percentages and per share data)

December 31,

2023

September 30,

2023

June 30,

2023

March 31,

2023

December 31,

2022

2023

2022

(audited)

Net (loss) income attributable to Amerant Bancorp Inc. ⁽¹⁾

$

(17,123

)

$

22,119

$

7,308

$

20,186

$

21,973

$

32,490

$

63,310

Plus after-tax non-routine items in noninterest expense:

Non-routine items in noninterest expense before income tax effect

43,094

6,303

13,383

3,372

2,447

66,152

18,970

Income tax effect ⁽¹²⁾

(8,887

)

(1,486

)

(2,811

)

(708

)

(460

)

(13,892

)

(4,012

)

Total after-tax non-routine items in noninterest expense

34,207

4,817

10,572

2,664

1,987

52,260

14,958

Plus (less): before-tax non-routine items in noninterest income:

Non-routine items in noninterest income before income tax effect

(5,688

)

(6,879

)

(12,445

)

(3,456

)

(9,066

)

(28,468

)

(7,367