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Amerant Reports Fourth Quarter 2023 and Full-Year 2023 Results

Amerant Bancorp Inc. (NYSE: AMTB) (the “Company” or “Amerant”) today reported a net loss attributable to the Company of $17.1 million in the fourth quarter of 2023, or $0.51 per diluted share. Net income attributable to the Company was $32.5 million for the full-year 2023, or $0.96 per diluted share.

“Strong organic loan and deposit growth were among the highlights of the quarter,” stated Jerry Plush, Chairman and CEO. “We completed our long-awaited conversion to new core systems as well and recently took a number of actions that, while resulting in a loss for the quarter, best position the Company for 2024 and the projected decline in interest rates. Our focus for 2024 now shifts to executing on our growth strategy.”

Results for the fourth quarter and for the year ended December 31, 2023 include a non-cash charge of $30.0 million before taxes on the sale of non-relationship, Houston-based commercial real estate loans with an estimated outstanding principal balance of $401 million, that was previously disclosed on January 16, 2024. These loans, of which $370 million were variable rate, were classified as held for sale as of December 31, 2023. The sale is expected to be completed on January 25, 2024.

Financial Highlights:

  • Total assets increased to $9.7 billion, up $376.0 million, or 4.02%, compared to $9.3 billion as of 3Q23 and up $0.6 billion, or 6.5%, compared to $9.1 billion as of 4Q22.
  • Total gross loans were $7.28 billion, an increase of $132.8 million, or 1.86%, compared to $7.1 billion in 3Q23 and an increase of $355.7 million, or 5.1%, compared to $6.9 billion in 4Q22.
  • Cash and cash equivalents were $321.1 million, up $12.2 million or 3.94%, compared to $309.0 million as of 3Q23 and up $31 million, or 11%, compared to $290.6 million as of 4Q22.
  • Total deposits were $7.9 billion, up $325.7 million, or 4.32%, compared to $7.5 billion in 3Q23 and up $828.4 million, or 11.8%, compared to $7.0 billion in 4Q22.
  • Total advances from Federal Home Loan Bank (“FHLB”) were $645.0 million, up $50.0 million, or 8.4%, compared to $595.0 million as of 3Q23 and down $261.5 million, or 28.8%, compared to $906.5 million as of 4Q22. The Bank had an additional $2.2 billion in availability from the FHLB as of December 31, 2023.
  • Average yield on loans was 7.09%, up compared to 6.77% and 5.85% in 3Q23 and 4Q22, respectively. Average yield on loans for the full-year 2023 was 6.78%, also up compared to 4.92% for the full-year 2022.
  • Total non-performing assets were $54.6 million, down $1.2 million, or 2.3%, compared to $53.4 million as of 3Q23 and up $17.0 million or 45.2%, compared to $37.6 million to 4Q22.
  • The allowance for credit losses ("ACL") was $95.5 million, a decrease of $3.3 million, or 3.3%, compared to $98.8 million as of 3Q23 and an increase of $12.0 million, or 14.4%, compared to $83.5 million in 4Q22.
  • Core deposits, which consist of total deposits excluding all time deposits, were $5.6 billion, up $331.5 million, or 6.3%, compared to $5.2 billion as of 3Q23 and up $259.6 million, or 4.9%, compared to $5.3 billion as of 4Q22.
  • Average cost of total deposits was 2.88% compared to 2.66% in 3Q23 and 1.38% in 4Q22. Average cost of total deposits for the full-year 2023 was 2.47% compared to 0.80% for the full-year 2022.
  • Loan to deposit ratio was 92.41% compared to 94.64% and 98.23% in 3Q23 and 4Q22, respectively.
  • Assets Under Management and custody (“AUM”) totaled $2.3 billion as of 4Q23, an increase of $196.9 million, or 9.4%, compared to $2.1 billion as of 3Q23 and an increase of $293.5 million, or 14.7%, compared to $2.0 billion in 4Q22.
  • Pre-provision net revenue (“PPNR”)(1) was negative $7.6 million in 4Q23, a decrease of $44.1 million, or 120.8%, compared to $36.5 million in 3Q23, and a decrease of $52.1 million, or 117.1%, compared to $44.5 million in 4Q22. PPNR2 was $104.3 million for the full-year 2023, an increase of $10.4 million, or 11.1%, compared to $93.9 million for the full-year 2022. PPNR in 4Q23 and full year 2023 included the impact of a $35.5 million in valuation allowance on the loans held for sale at the end of the year recorded in noninterest expense.
  • Net Interest Margin (“NIM”) was 3.72%, up compared to 3.57% and down compared to 3.96% in 3Q23 and 4Q22, respectively. NIM was 3.76% for the full-year 2023, an increase compared to 3.53% for the full-year 2022.
  • Net Interest Income (“NII”) was $81.7 million, up $3.1 million, or 4.0%, compared to $78.6 million in 3Q23 and down $0.5 million, or 0.6%, compared to $82.2 million in 4Q22. NII was $326.5 million for the full-year 2023, up $59.8 million, or 22.42%, compared to $266.7 million for the full-year 2022.
  • Provision for credit losses was $12.5 million, up compared to $8.0 million in 3Q23, and down compared to $16.9 million in 4Q22(2). Provision for credit losses was $61.3 million for the full-year 2023, compared to $13.9 million in the full-year 2022.
  • Non-interest income was $19.6 million, a decrease of $2.3 million, or 10.5%, compared to $21.9 million in 3Q23 and a decrease of $4.8 million, or 19.50%, compared to $24.4 million in 4Q22. Non-interest income was $87.5 million for the full-year 2023, an increase of $20.2 million, or 30.1%, compared to $67.3 million for the full-year 2022.
  • Non-interest expense was $109.7 million, up $45.3 million, or 70.3%, compared to $64.4 million in 3Q23 and up $47.5 million, or 76.3%, compared to $62.2 million in 4Q22. Non-interest expense was $311.4 million for the full-year 2023, up $69.9 million or 29.0%, compared to $241.4 million for the full-year 2022.
  • The efficiency ratio was 108.30% in 4Q23, up compared to 64.1% in 3Q23 and up compared to 58.42% in 4Q22. The efficiency ratio was 75.21% for the full-year 2023 compared to 72.29% for the full-year 2022.
  • Return on average assets (“ROA”) was negative 0.71% in 4Q23 compared to 0.92% and 0.97% in 3Q23 and 4Q22(2), respectively. ROA was 0.34% for the full-year 2023 compared to 0.77% for the full-year 2022.
  • Return on average equity (“ROE”) was negative 9.22% in 4Q23 compared to 11.93% and 12.1% in 3Q23 and 4Q22(2), respectively. ROE was 4.39% for the full-year 2023 compared to 8.45% for the full-year 2022.
  • Accumulated Other Comprehensive Loss (“AOCL”) decreased to $70.8 million as of 4Q23, an improvement of $34.8 million, or 33.0%, compared to $105.6 million as of 3Q23 and an improvement of $9.8 million, or 12.2%, compared to $80.6 million as of 4Q22.
  • The Company’s Board of Directors declared a cash dividend of $0.09 per share of common stock on January 17, 2024. The dividend is payable on February 29, 2024, to shareholders of record on February 14, 2024.

Additional details on fourth quarter and full-year 2023 results can be found in the Exhibits to this earnings release, and the earnings presentation available under the Investor Relations section of the Company’s website at https://investor.amerantbank.com.

1 Non-GAAP measure, see “Non-GAAP Financial Measures” for more information and Exhibit 2 for a reconciliation to GAAP.

2 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.

Fourth Quarter and Full Year 2023 Earnings Conference Call

The Company will hold an earnings conference call on Thursday, January 25, 2024 at 9:00 a.m. (Eastern Time) to discuss its fourth quarter and full-year 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. (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 22 banking centers – 16 in South Florida and 6 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”), our quarterly report on Form 10-Q for the quarter ended March 31, 2023 filed on May 2, 2023, and in our other filings with the U.S. Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website www.sec.gov.

Interim Financial Information

Unaudited financial information as of and for interim periods, including the three month periods ended September 30, 2023, June 30, 2023, March 31, 2023, and the three and twelve month periods ended December 31, 2023, may not reflect our results of operations for our fiscal year ended, 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.

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' 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 2023, including the effect of non-core banking activities such as the sale of loans and securities and other repossessed assets, 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 unaudited and audited consolidated financial statements.

(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.

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 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, enhancement of the bank owned life insurance 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,

 

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

)

Income tax effect (12)

 

1,032

 

 

1,607

 

 

2,613

 

 

726

 

 

1,923

 

 

 

5,978

 

 

1,558

 

Total after-tax non-routine items in noninterest income

 

(4,656

)

 

(5,272

)

 

(9,832

)

 

(2,730

)

 

(7,143

)

 

 

(22,490

)

 

(5,809

)

BOLI enhancement tax impact (3)

 

2,844

 

 

 

 

 

 

 

 

 

 

 

2,844

 

 

 

Core net income (1)

$

15,272

 

$

21,664

 

$

8,048

 

$

20,120

 

$

16,817

 

 

$

65,104

 

$

72,459

 

 

 

 

 

 

 

 

 

 

Basic (loss) earnings per share (1)

$

(0.51

)

$

0.66

 

$

0.22

 

$

0.60

 

$

0.66

 

 

$

0.97

 

$

1.87

 

Plus: after tax impact of non-routine items in noninterest expense and BOLI tax impact (14)

 

1.11

 

 

0.14

 

 

0.31

 

 

0.08

 

 

0.06

 

 

 

1.64

 

 

0.44

 

(Less): after tax impact of non-routine items in noninterest income

 

(0.14

)

 

(0.15

)

 

(0.29

)

 

(0.08

)

 

(0.22

)

 

 

(0.67

)

 

(0.17

)

Total core basic earnings per common share (1)

$

0.46

 

$

0.65

 

$

0.24

 

$

0.60

 

$

0.50

 

 

$

1.94

 

$

2.14

 

 

 

 

 

 

 

 

 

 

Diluted (loss) earnings per share (1)(13)

$

(0.51

)

$

0.66

 

$

0.22

 

$

0.60

 

$

0.65

 

 

$

0.96

 

$

1.85

 

Plus: after tax impact of non-routine items in noninterest expense and BOLI tax impact (14)

 

1.11

 

 

0.14

 

 

0.31

 

 

0.08

 

 

0.06

 

 

 

1.63

 

 

0.44

 

(Less): after tax impact of non-routine items in noninterest income

 

(0.14

)

 

(0.16

)

 

(0.29

)

 

(0.09

)

 

(0.21

)

 

 

(0.66

)

 

(0.17

)

Total core diluted earnings per common share (1)

$

0.46

 

$

0.64

 

$

0.24

 

$

0.59

 

$

0.50

 

 

$

1.93

 

$

2.12

 

 

 

 

 

 

 

 

 

 

Net (loss) income / Average total assets (ROA) (1)

 

(0.71

)%

 

0.92

%

 

0.31

%

 

0.88

%

 

0.97

%

 

 

0.34

%

 

0.77

%

Plus: after tax impact of non-routine items in noninterest expense and BOLI tax impact (14)

 

1.55

%

 

0.20

%

 

0.45

%

 

0.12

%

 

0.09

%

 

 

0.58

%

 

0.18

%

(Less): after tax impact of non-routine items in noninterest income

 

(0.20

)%

 

(0.21

)%

 

(0.42

)%

 

(0.12

)%

 

(0.32

)%

 

 

(0.23

)%

 

(0.07

)%

Core net income / Average total assets (Core ROA) (1)

 

0.64

%

 

0.91

%

 

0.34

%

 

0.88

%

 

0.74

%

 

 

0.69

%

 

0.88

%

 

 

 

 

 

 

 

 

 

Net (loss) income / Average stockholders' equity (ROE)

 

(9.22

)%

 

11.93

%

 

3.92

%

 

11.15

%

 

12.10

%

 

 

4.39

%

 

8.45

%

Plus: after tax impact of non-routine items in noninterest expense and BOLI tax impact (14)

 

19.96

%

 

2.60

%

 

5.68

%

 

1.47

%

 

1.09

%

 

 

7.44

%

 

2.00

%

(Less): after tax impact of non-routine items in noninterest income

 

(2.51

)%

 

(2.84

)%

 

(5.28

)%

 

(1.51

)%

 

(3.93

)%

 

 

(3.04

)%

 

(0.78

)%

Core net income / Average stockholders' equity (Core ROE) (1)

 

8.23

%

 

11.69

%

 

4.32

%

 

11.11

%

 

9.26

%

 

 

8.79

%

 

9.67

%

 

 

 

 

 

 

 

 

 

Efficiency ratio

 

108.30

%

 

64.10

%

 

65.61

%

 

63.67

%

 

58.42

%

 

 

75.21

%

 

72.29

%

(Less): impact of non-routine items in noninterest expense

 

(42.54

)%

 

(6.27

)%

 

(12.11

)%

 

(3.32

)%

 

(2.30

)%

 

 

(15.98

)%

 

(5.68

)%

Plus: impact of non-routine items in noninterest income

 

3.91

%

 

4.25

%

 

6.79

%

 

2.12

%

 

5.22

%

 

 

4.38

%

 

1.50

%

Core efficiency ratio

 

69.67

%

 

62.08

%

 

60.29

%

 

62.47

%

 

61.34

%

 

 

63.61

%

 

68.11

%

 

 

 

 

 

 

 

 

 

 

Three Months Ended,

 

Year Ended December 31,

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

December 31,

2023

September 30,

2023

June 30,

2023

March 31,

2023

December 31,

2022

 

2023

2022

(audited)

Stockholders' equity

$

736,068

 

$

719,787

 

$

720,956

 

$

729,056

 

$

705,726

 

 

$

736,068

 

$

705,726

 

Less: goodwill and other intangibles (15)

 

(25,029

)

 

(26,818

)

 

(24,124

)

 

(24,292

)

 

(23,161

)

 

 

(25,029

)

 

(23,161

)

Tangible common stockholders' equity

$

711,039

 

$

692,969

 

$

696,832

 

$

704,764

 

$

682,565

 

 

$

711,039

 

$

682,565

 

Total assets

 

9,721,741

 

 

9,345,700

 

 

9,519,526

 

 

9,495,302

 

 

9,127,804

 

 

 

9,721,741

 

 

9,127,804

 

Less: goodwill and other intangibles (15)

 

(25,029

)

 

(26,818

)

 

(24,124

)

 

(24,292

)

 

(23,161

)

 

 

(25,029

)

 

(23,161

)

Tangible assets

$

9,696,712

 

$

9,318,882

 

$

9,495,402

 

$

9,471,010

 

$

9,104,643

 

 

$

9,696,712

 

$

9,104,643

 

Common shares outstanding

 

33,603,242

 

 

33,583,621

 

 

33,736,159

 

 

33,814,260

 

 

33,815,161

 

 

 

33,603,242

 

 

33,815,161

 

Tangible common equity ratio

 

7.33

%

 

7.44

%

 

7.34

%

 

7.44

%

 

7.50

%

 

 

7.33

%

 

7.50

%

Stockholders' book value per common share

$

21.90

 

$

21.43

 

$

21.37

 

$

21.56

 

$

20.87

 

 

$

21.90

 

$

20.87

 

Tangible stockholders' book value per common share

$

21.16

 

$

20.63

 

$

20.66

 

$

20.84

 

$

20.19

 

 

$

21.16

 

$

20.19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common stockholders' equity

$

711,039

 

$

692,969

 

$

696,832

 

$

704,764

 

$

682,565

 

 

$

711,039

 

$

682,565

 

Less: Net unrealized accumulated losses on debt securities held to maturity, net of tax (16)

 

(16,197

)

 

(26,138

)

 

(18,503

)

 

(15,542

)

 

(18,234

)

 

 

(16,197

)

 

(18,234

)

Tangible common stockholders' equity, adjusted for net unrealized accumulated losses on debt securities held to maturity

$

694,842

 

$

666,831

 

$

678,329

 

$

689,222

 

$

664,331

 

 

$

694,842

 

$

664,331

 

Tangible assets

$

9,696,712

 

$

9,318,882

 

$

9,495,402

 

$

9,471,010

 

$

9,104,643

 

 

$

9,696,712

 

$

9,104,643

 

Less: Net unrealized accumulated losses on debt securities held to maturity, net of tax (16)

$

(16,197

)

 

(26,138

)

 

(18,503

)

 

(15,542

)

 

(18,234

)

 

$

(16,197

)

 

(18,234

)

Tangible assets, adjusted for net unrealized accumulated losses on debt securities held to maturity

$

9,680,515

 

$

9,292,744

 

$

9,476,899

 

$

9,455,468

 

$

9,086,409

 

 

$

9,680,515

 

$

9,086,409

 

Common shares outstanding

 

33,603,242

 

 

33,583,621

 

 

33,736,159

 

 

33,814,260

 

 

33,815,161

 

 

 

33,603,242

 

 

33,815,161

 

 

 

 

 

 

 

 

 

 

Tangible common equity ratio, adjusted for net unrealized accumulated losses on debt securities held to maturity

 

7.18

%

 

7.18

%

 

7.16

%

 

7.29

%

 

7.31

%

 

 

7.18

%

 

7.31

%

Tangible stockholders' book value per common share, adjusted for net unrealized accumulated losses on debt securities held to maturity

$

20.68

 

$

19.86

 

$

20.11

 

$

20.38

 

$

19.65

 

 

$

20.68

 

$

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)

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.

(3)

In the fourth quarter of 2023, the Company completed a restructuring of its bank-owned life insurance (“BOLI”) program. This was executed through a combination of a 1035 exchange and a surrender and reinvestment into higher-yielding general account with a new investment grade insurance carrier. This transaction allowed for higher team member participation through an enhanced split-dollar plan. Estimated improved yields resulting from the enhancement have an earn-back period of approximately 2 years. In the fourth quarter of 2023, we recorded total additional expenses and charges of $4.6 million in connection with this transaction, including: (i) a reduction of $0.7 million to the cash surrender value of BOLI; (ii) transaction costs of $1.1 million, and (iii) income tax expense of $2.8 million.

(4)

Expenses incurred for actions designed to implement the Company’s business strategy. These actions include, but are not limited to reductions in workforce, streamlining operational processes, promoting the Amerant brand, implementation of new technology system applications, decommissioning of legacy technologies, enhanced sales tools and training, expanded product offerings and improved customer analytics to identify opportunities.

(5)

Staff reduction costs consist of severance expenses related to organizational rationalization.

(6)

Contract termination and related costs associated with third party vendors resulting from the Company’s engagement of FIS.

(7)

In the three months and year ended December 31, 2023, includes an aggregate of $1.6 million and $6.4 million, respectively, of nonrecurrent expenses in connection with the engagement of FIS and, to a lesser extent, software expenses related to legacy applications running in parallel to new core banking applications. There were no significant nonrecurrent expenses in connection with engagement of FIS in the three months ended September 30, 2023. In the three months ended June 30, 2023, March 31, 2023 and December 31, 2022, and the year ended December 31, 2022, include expenses of $2.0 million, $2.6 million, $1.1 million and $2.9 million, respectively, in connection with engagement of FIS. In addition, includes $0.2 million in connection with certain search and recruitment expenses and $0.1 million of costs associated with the subleasing of the New York office space in the year ended December 31, 2022.

(8)

Include expenses in connection with the disposition of fixed assets due to the write-off of in-development software in each of the three months ended June 30, 2023 and year ended December 31, 2023.

(9)

In each of the three months ended September 30, 2023 and year ended December 31, 2023, include expenses of $0.3 million in connection with the closure of a branch in Houston, Texas in 2023. In addition, in each of the three months ended June 30, 2023 and year ended December 31, 2023, include $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, Florida in 2023. Also, in each of the three months ended March 31, 2023 and year ended December 31, 2023, include $0.5 million of ROU asset impairment associated with the closure of a branch in Houston, Texas in 2023. In the year ended December 31, 2022, includes $1.6 million of ROU asset impairment associated with the closure of a branch in Pembroke Pines, Florida in 2022.

(10

In each of the three months and year ended December 31, 2023, includes: (i) a 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 fair value or cost, and (ii) a loss on sale of $2.0 million related to a New York-based CRE loan previously carried at the lower of fair value or cost. In each of the three months ended September 30, 2023 and the year ended December 31, 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 fair value or cost. In the year ended December 31, 2022, amount represents the fair value adjustment related to the New York loan portfolio held for sale carried at the lower of cost or fair value.

(11)

In each of the three months ended June 30, 2023 and year ended December 31, 2023, amount represents the loss on sale of repossessed assets in connection with our equipment-financing activities. In the year ended December 31, 2022, amount represents the fair value adjustment related to one OREO property in New York.

(12)

In the year ended December 31, 2023, amounts were calculated using an estimated tax rate of 21.00%. In the year ended December 31, 2022 and the three months ended March 31, 2023, amounts were calculated based upon the effective tax rate for the periods of 21.15% and 21.00%, respectively. For all of the other periods shown, amounts represent the difference between the prior and current period year-to-date tax effect.

(13)

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.

(14)

In the three months and year 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 $52.3 million, respectively, and BOLI tax impact of $2.8 million in each 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)

At December 31, 2023 and September 30, 2023, other intangible assets primarily consist of naming rights of $2.5 million and $2.7 million, respectively, and mortgage servicing rights (“MSRs”)of $1.4 million and $1.3 million, respectively. At June 30, 2023, March 31, 2023 and December 31, 2022, other intangible assets primarily consist of MSRs of $1.3 million, $1.4 million and $1.3 million, respectively. Other intangible assets are included in other assets in the Company’s consolidated balance sheets.

(16)

As of December 31, 2023, September 30, 2023, June 30, 2023, 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 25.36%, 25.51%, 25.46%, 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, as well as premiums paid on purchased loans, accounted for as yield adjustments. Average balances represent the daily average balances for the periods presented.

 

Three Months Ended

 

December 31, 2023

 

September 30, 2023

 

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

(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)

$

7,107,222

$

127,090

7.09

%

 

$

7,048,891

$

120,244

6.77

%

 

$

6,688,839

$

98,579

5.85

%

Debt securities available for sale (3)(4)

 

1,060,113

 

11,603

4.34

%

 

 

1,052,147

 

10,924

4.12

%

 

 

1,060,240

 

9,817

3.67

%

Debt securities held to maturity (5)

 

227,765

 

1,951

3.40

%

 

 

232,146

 

1,958

3.35

%

 

 

239,680

 

2,052

3.40

%

Debt securities held for trading

 

 

%

 

 

2,048

 

4

0.77

%

 

 

56

 

1

7.08

%

Equity securities with readily determinable fair value not held for trading

 

2,450

 

12

1.94

%

 

 

2,479

 

21

3.36

%

 

 

12,365

 

%

Federal Reserve Bank and FHLB stock

 

49,741

 

894

7.13

%

 

 

54,056

 

961

7.05

%

 

 

55,585

 

874

6.24

%

Deposits with banks

 

265,657

 

3,940

5.88

%

 

 

344,015

 

5,248

6.05

%

 

 

183,926

 

2,051

4.42

%

Other short-term investments

 

5,928

 

79

5.29

%

 

 

1,964

 

23

4.65

%

 

 

 

%

Total interest-earning assets

 

8,718,876

 

145,569

6.62

%

 

 

8,737,746

 

139,383

6.33

%

 

 

8,240,691

 

113,374

5.46

%

Total non-interest-earning assets (6)

 

794,844

 

 

 

 

756,141

 

 

 

 

731,685

 

 

Total assets

$

9,513,720

 

 

 

$

9,493,887

 

 

 

$

8,972,376

 

 

 

Three Months Ended

 

December 31, 2023

 

September 30, 2023

 

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

(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

$

2,435,871

 

$

16,350

2.66

%

 

$

2,523,092

 

$

16,668

2.62

%

 

$

2,178,106

 

$

8,860

1.61

%

Money market

 

1,259,859

 

 

13,917

4.38

%

 

 

1,144,580

 

 

11,013

3.82

%

 

 

1,412,033

 

 

6,034

1.70

%

Savings

 

271,307

 

 

30

0.04

%

 

 

280,096

 

 

32

0.05

%

 

 

313,688

 

 

55

0.07

%

Total checking and saving accounts

 

3,967,037

 

 

30,297

3.03

%

 

 

3,947,768

 

 

27,713

2.79

%

 

 

3,903,827

 

 

14,949

1.52

%

Time deposits

 

2,276,720

 

 

24,985

4.35

%

 

 

2,201,138

 

 

22,482

4.05

%

 

 

1,538,239

 

 

8,623

2.22

%

Total deposits

 

6,243,757

 

 

55,282

3.51

%

 

 

6,148,906

 

 

50,195

3.24

%

 

 

5,442,066

 

 

23,572

1.72

%

Securities sold under agreements to repurchase

 

106

 

 

2

7.49

%

 

 

326

 

 

4

4.87

%

 

 

68

 

 

1

5.83

%

Advances from the FHLB (7)

 

635,272

 

 

6,225

3.89

%

 

 

800,978

 

 

8,207

4.07

%

 

 

994,185

 

 

5,293

2.11

%

Senior notes

 

59,488

 

 

941

6.28

%

 

 

59,409

 

 

942

6.29

%

 

 

59,172

 

 

941

6.31

%

Subordinated notes

 

29,433

 

 

361

4.87

%

 

 

29,391

 

 

361

4.87

%

 

 

29,263

 

 

361

4.89

%

Junior subordinated debentures

 

64,178

 

 

1,081

6.68

%

 

 

64,178

 

 

1,097

6.78

%

 

 

64,178

 

 

1,028

6.35

%

Total interest-bearing liabilities

 

7,032,234

 

 

63,892

3.60

%

 

 

7,103,188

 

 

60,806

3.40

%

 

 

6,588,932

 

 

31,196

1.88

%

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing demand deposits

 

1,381,157

 

 

 

 

 

1,335,041

 

 

 

 

 

1,318,787

 

 

 

Accounts payable, accrued liabilities and other liabilities

 

363,711

 

 

 

 

 

320,369

 

 

 

 

 

343,923

 

 

 

Total non-interest-bearing liabilities

 

1,744,868

 

 

 

 

 

1,655,410

 

 

 

 

 

1,662,710

 

 

 

Total liabilities

 

8,777,102

 

 

 

 

 

8,758,598

 

 

 

 

 

8,251,642

 

 

 

Stockholders’ equity

 

736,618

 

 

 

 

 

735,289

 

 

 

 

 

720,734

 

 

 

Total liabilities and stockholders' equity

$

9,513,720

 

 

 

 

$

9,493,887

 

 

 

 

$

8,972,376

 

 

 

Excess of average interest-earning assets over average interest-bearing liabilities

$

1,686,642

 

 

 

 

$

1,634,558

 

 

 

 

$

1,651,759

 

 

 

Net interest income

 

$

81,677

 

 

 

$

78,577

 

 

 

$

82,178

 

Net interest rate spread

 

 

3.02

%

 

 

 

2.93

%

 

 

 

3.58

%

Net interest margin (8)

 

 

3.72

%

 

 

 

3.57

%

 

 

 

3.96

%

Cost of total deposits (9)

 

 

2.88

%

 

 

 

2.66

%

 

 

 

1.38

%

Ratio of average interest-earning assets to average interest-bearing liabilities

 

123.98

%

 

 

 

 

123.01

%

 

 

 

 

125.07

%

 

 

Average non-performing loans/ Average total loans

 

0.49

%

 

 

 

 

0.56

%

 

 

 

 

0.38

%

 

 

 

Year Ended December 31,

2023

 

2022

(audited)

(in thousands, except percentages)

Average

Balances

Income/

Expense

Yield/

Rates

 

Average

Balances

Income/

Expense

Yield/

Rates

Interest-earning assets:

 

 

 

 

 

 

 

Loan portfolio, net (1)(2)

$

7,006,919

 

$

475,405

6.78

%

 

$

5,963,190

 

$

293,210

4.92

%

Debt securities available for sale (3)(4)

 

1,053,034

 

 

43,096

4.09

%

 

 

1,112,590

 

 

33,187

2.98

%

Debt securities held to maturity (5)

 

234,168

 

 

7,997

3.42

%

 

 

192,397

 

 

5,657

2.94

%

Debt securities held for trading

 

586

 

 

7

1.19

%

 

 

64

 

 

4

6.25

%

Equity securities with readily determinable fair value not held for trading

 

2,454

 

 

33

1.34

%

 

 

9,560

 

 

%

Federal Reserve Bank and FHLB stock

 

53,608

 

 

3,727

6.95

%

 

 

51,496

 

 

2,565

4.98

%

Deposits with banks

 

322,853

 

 

18,212

5.64

%

 

 

231,402

 

 

4,153

1.79

%

Other short-term investments

 

2,115

 

 

102

4.80

%

 

 

 

 

%

Total interest-earning assets

 

8,675,737

 

 

548,579

6.32

%

 

 

7,560,699

 

 

338,776

4.48

%

Total non-interest-earning assets (6)

 

776,484

 

 

 

 

 

626,989

 

 

 

Total assets

$

9,452,221

 

 

 

 

$

8,187,688

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

Checking and saving accounts -

 

 

 

 

 

 

 

Interest bearing DDA

$

2,486,190

 

$

62,551

2.52

%

 

$

1,872,100

 

$

15,118

0.81

%

Money market

 

1,226,311

 

 

42,212

3.44

%

 

 

1,323,563

 

 

11,673

0.88

%

Savings

 

284,510

 

 

144

0.05

%

 

 

319,631

 

 

135

0.04

%

Total checking and saving accounts

 

3,997,011

 

 

104,907

2.62

%

 

 

3,515,294

 

 

26,926

0.77

%

Time deposits

 

2,074,549

 

 

78,829

3.80

%

 

 

1,334,605

 

 

22,124

1.66

%

Total deposits

 

6,071,560

 

 

183,736

3.03

%

 

 

4,849,899

 

 

49,050

1.01

%

Securities sold under agreements to repurchase

 

124

 

 

7

5.65

%

 

 

32

 

 

1

3.13

%

Advances from the FHLB (7)

 

805,084

 

 

28,816

3.58

%

 

 

911,448

 

 

15,092

1.66

%

Senior notes

 

59,370

 

 

3,766

6.34

%

 

 

59,054

 

 

3,766

6.38

%

Subordinated notes

 

29,370

 

 

1,445

4.92

%

 

 

23,853

 

 

1,172

4.91

%

Junior subordinated debentures

 

64,178

 

 

4,345

6.77

%

 

 

64,178

 

 

3,030

4.72

%

Total interest-bearing liabilities

 

7,029,686

 

 

222,115

3.16

%

 

 

5,908,464

 

 

72,111

1.22

%

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

Non-interest bearing demand deposits

 

1,356,538

 

 

 

 

 

1,286,570

 

 

 

Accounts payable, accrued liabilities and other liabilities

 

325,367

 

 

 

 

 

243,105

 

 

 

Total non-interest-bearing liabilities

 

1,681,905

 

 

 

 

 

1,529,675

 

 

 

Total liabilities

 

8,711,591

 

 

 

 

 

7,438,139

 

 

 

Stockholders’ equity

 

740,630

 

 

 

 

 

749,549

 

 

 

Total liabilities and stockholders' equity

$

9,452,221

 

 

 

 

$

8,187,688

 

 

 

Excess of average interest-earning assets over average interest-bearing liabilities

$

1,646,051

 

 

 

 

$

1,652,235

 

 

 

Net interest income

 

$

326,464

 

 

 

$

266,665

 

Net interest rate spread

 

 

3.16

%

 

 

 

3.26

%

Net interest margin (8)

 

 

3.76

%

 

 

 

3.53

%

Cost of total deposits (9)

 

 

2.47

%

 

 

 

0.80

%

Ratio of average interest-earning assets to average interest-bearing liabilities

 

123.42

%

 

 

 

 

127.96

%

 

 

Average non-performing loans/ Average total loans

 

0.48

%

 

 

 

 

0.51

%

 

 

_______________

(1)

Includes loans held for investment, net of the allowance for credit losses, and loans held for sale. The average balance of the allowance for credit losses was $92.7 million, $101.2 million and $54.9 million in the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively, and $90.0 million and $57.5 million in the years ended December 31, 2023 and 2022, respectively. The average balance of total loans held for sale was $100.7 million, $58.8 million and $78.3 million in the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively, and $77.8 million and $117.6 million in the years ended December 31, 2023 and 2022, respectively.

(2)

Includes average non-performing loans of $35.1 million, $39.8 million and $25.5 million for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively, and $34.3 million and $30.7 million for the years ended December 31, 2023 and 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 net unrealized losses of $142.1 million, $119.8 million and $120.1 million in the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively, and $118.5 million and $62.3 million in the years ended December 31, 2023 and 2022, respectively.

(4)

Includes nontaxable securities with average balances of $17.8 million, $18.6 million and $19.8 million for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively, and $17.8 million and $18.4 million in the years ended December 31, 2023 and 2022, respectively. The tax equivalent yield for these nontaxable securities was 4.78%, 4.34% and 4.26% for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively, and 4.83% and 3.00% for the years ended December 31, 2023 and 2022, respectively. In 2023 and 2022, the tax equivalent yields were calculated by assuming a 21% tax rate and dividing the actual yield by 0.79.

(5)

Includes nontaxable securities with average balances of $48.9 million, $49.6 million and $45.7 million for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively, and $49.8 million and $43.6 million in the years ended December 31, 2023 and 2022, respectively. The tax equivalent yield for these nontaxable securities was 4.26%, 4.26% and 3.88% for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively, and 4.22% and 3.46% for the years ended December 31, 2023 and 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

 

Year Ended December 31,

 

December 31, 2023

 

September 30, 2023

 

December 31, 2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

(audited)

(in thousands, except percentages)

Amount

%

 

Amount

%

 

Amount

%

 

Amount

%

 

Amount

%

 

 

 

 

 

 

 

 

Deposits and service fees

$

4,424

 

22.5

%

 

$

5,053

 

23.1

%

 

$

4,766

 

19.6

%

 

$

19,376

 

22.1

%

 

$

18,592

 

27.6

%

Brokerage, advisory and fiduciary activities

 

4,249

 

21.7

%

 

 

4,370

 

19.9

%

 

 

4,054

 

16.6

%

 

 

17,057

 

19.5

%

 

 

17,708

 

26.3

%

Change in cash surrender value of bank owned life insurance (“BOLI”)(1)

 

849

 

4.3

%

 

 

1,483

 

6.8

%

 

 

1,378

 

5.7

%

 

 

5,173

 

5.9

%

 

 

5,406

 

8.0

%

Cards and trade finance servicing fees

 

1,238

 

6.3

%

 

 

734

 

3.4

%

 

 

556

 

2.3

%

 

 

3,067

 

3.5

%

 

 

2,276

 

3.4

%

Gain (loss) on early extinguishment of FHLB advances, net

 

6,461

 

32.9

%

 

 

7,010

 

32.0

%

 

 

11,390

 

46.8

%

 

 

40,084

 

45.8

%

 

 

10,678

 

15.9

%

Securities gains (losses), net (2)

 

33

 

0.2

%

 

 

(54

)

(0.3

)%

 

 

(3,364

)

(13.8

)%

 

 

(10,989

)

(12.6

)%

 

 

(3,689

)

(5.5

)%

Derivative (losses) gains, net (3)

 

(151

)

(0.8

)%

 

 

(77

)

(0.4

)%

 

 

1,040

 

4.3

%

 

 

28

 

%

 

 

455

 

0.7

%

Loan-level derivative income (4)

 

837

 

4.3

%

 

 

1,196

 

5.5

%

 

 

3,413

 

14.0

%

 

 

4,580

 

5.2

%

 

 

10,360

 

15.4

%

Other noninterest income (5)

 

1,673

 

8.5

%

 

 

2,206

 

10.0

%

 

 

1,132

 

4.5

%

 

 

9,120

 

10.6

%

 

 

5,491

 

8.2

%

Total noninterest income

$

19,613

 

100.0

%

 

$

21,921

 

100.0

%

 

$

24,365

 

100.0

%

 

$

87,496

 

100.0

%

 

$

67,277

 

100.0

%

__________________

(1)

Changes in cash surrender value of BOLI are not taxable. In the three months and year ended December 31, 2023, includes a charge of $0.7 million in connection with the enhancement/restructuring of BOLI in the fourth quarter of 2023.

(2)

Includes: (i) net loss of $0.1 million and $2.5 million in the three months ended December 31, 2023 and December 31, 2022, respectively, and net loss of $10.8 million and $2.4 million in the years ended December 31, 2023 and 2022, respectively, in connection with the sale of debt securities available for sale. There were no significant gains and losses in connection with the sale of debt securities available for sale in the three months ended September 30, 2023. In addition, includes unrealized gains of $0.1 million and unrealized losses of $0.1 million and $0.8 million in the three months ended December 31, 2023, September 30, 2023, and December 31, 2022, respectively, and unrealized gains of $33 thousand and unrealized losses of $1.3 million in the years ended December 31, 2023 and 2022, respectively, 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. Also, in the year ended December 31, 2023, the Company sold equity securities with readily available fair value not held for trading, with a total fair value of $11.2 million at the time of sale, and recognized a net loss of $0.2 million in connection with this transaction.

(3)

Net unrealized gains and losses related to uncovered interest rate caps with clients.

(4)

Income from interest rate swaps and other derivative transactions with customers. The Company incurred expenses related to derivative transactions with customers of $0.2 million, $18.0 thousand and $3.3 million in the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively, and $1.9 million and $8.1 million in the years ended December 31, 2023 and 2022, respectively, which are included as part of noninterest expenses under professional and other services fees.

(5)

Includes mortgage banking income of $0.6 million, $0.5 million and $0.2 million in the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively, and $4.5 million and $3.4 million in the years ended December 31, 2023 and 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

 

Year Ended December 31,

 

December 31, 2023

 

September 30, 2023

 

December 31, 2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

(audited)

(in thousands, except percentages)

Amount

%

 

Amount

%

 

Amount

%

 

Amount

%

 

Amount

%

 

 

 

 

 

 

 

 

Salaries and employee benefits (1)

$

33,049

 

30.1

%

 

$

31,334

 

48.6

%

 

$

32,786

52.7

%

 

$

133,506

42.9

%

 

$

123,510

51.2

%

Occupancy and equipment (2)

 

7,015

 

6.4

%

 

 

7,293

 

11.3

%

 

 

6,349

10.2

%

 

 

27,843

8.9

%

 

 

27,393

11.3

%

Professional and other services fees (3)

 

14,201

 

12.9

%

 

 

5,325

 

8.3

%

 

 

6,224

10.0

%

 

 

34,569

11.1

%

 

 

22,142

9.2

%

Loan-level derivative expense (4)

 

182

 

0.2

%

 

 

18

 

%

 

 

3,281

5.3

%

 

 

1,910

0.6

%

 

 

8,146

3.4

%

Telecommunications and data processing (5)

 

3,838

 

3.5

%

 

 

3,556

 

5.5

%

 

 

3,622

5.8

%

 

 

15,485

5.0

%

 

 

14,735

6.1

%

Depreciation and amortization (6)

 

1,480

 

1.3

%

 

 

1,795

 

2.8

%

 

 

1,956

3.1

%

 

 

6,842

2.2

%

 

 

5,883

2.4

%

FDIC assessments and insurance

 

2,535

 

2.3

%

 

 

2,590

 

4.0

%

 

 

1,930

3.1

%

 

 

10,601

3.4

%

 

 

6,598

2.7

%

Losses on loans held for sale (7)

 

37,495

 

34.2

%

 

 

5,562

 

8.6

%

 

 

%

 

 

43,057

13.8

%

 

 

159

0.1

%

Advertising expenses

 

3,169

 

2.9

%

 

 

2,724

 

4.2

%

 

 

3,329

5.3

%

 

 

12,811

4.1

%

 

 

11,620

4.8

%

Other real estate owned and repossessed assets (income) expense, net (8)(9)

 

(205

)

(0.2

)%

 

 

(134

)

(0.2

)%

 

 

%

 

 

2,092

0.7

%

 

 

3,408

1.4

%

Contract termination costs (10)

 

 

%

 

 

 

%

 

 

%

 

 

1,550

0.5

%

 

 

7,103

2.9

%

Other operating expenses (11)

 

6,943

 

6.4

%

 

 

4,357

 

6.9

%

 

 

2,764

4.5

%

 

 

21,089

6.8

%

 

 

10,716

4.5

%

Total noninterest expense (12)

$

109,702

 

100.0

%

 

$

64,420

 

100.0

%

 

$

62,241

100.0

%

 

$

311,355

100.0

%

 

$

241,413

100.0

%

__________

(1)

Includes staff reduction costs of $1.1 million, $0.5 million and $1.2 million in the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively, and $4.0 million and $4.0 million in the years ended December 31, 2023 and 2022, respectively, which consist of severance expenses primarily related to organizational rationalization.

(2)

In each of the three months ended September 30, 2023 and year ended December 31, 2023, includes a rent termination fee of $0.3 million in connection with the closure of a branch in Houston, Texas. In the year ended December 31, 2023, includes an aggregate of $1.1 million related to ROU asset impairments in connection with the closure of two branches in 2023 (one branch in Miami, Florida and another branch in Houston, Texas). In the year ended December 31, 2022, includes $1.6 million of ROU asset impairment in connection with the closure of a branch in Pembroke Pines, Florida in 2022.

(3)

Includes additional, nonrecurrent expenses of $1.2 million, $1.1 million in the three months ended December 31, 2023 and 2022, respectively, and $5.8 million and $2.9 million in the years ended December 31, 2023 and 2022, respectively, related to the engagement of FIS. There were no significant nonrecurrent expenses related to the engagement of FIS in the three months ended September 30, 2023. In addition, includes $0.2 million in connection with certain search and recruitment expenses in the year ended December 31, 2022 and $0.1 million of costs associated with the subleasing of the New York office space in the year ended December 31, 2022.

(4)

Includes services fees in connection with our loan-level derivative income generation activities.

(5)

Includes a charge of $1.4 million in the year ended December 31, 2023 related to the disposition of fixed assets due to the write off of in-development software. In addition, in the three months and year ended December 31, 2023, includes $0.4 million of software expenses related to legacy applications running in parallel to new core banking applications.

(6)

Includes a charge of $0.9 million in the year ended December 31, 2023 for the accelerated depreciation of leasehold improvements in connection with the closure of a branch in Miami, Florida in 2023.

(7)

In the three months and year ended December 31, 2023, consists of losses on loans held for sale carried at the lower of fair value or cost, including valuation allowance as a result of changes in their fair value and losses on the sale of these loans. In the three months ended December 31, 2023 and year ended December 31, 2023, these amounts were $35.5 million, $2.0 million and $41.1 million, $2.0 million respectively. In the three months ended September 30, 2023 and the year ended December 31, 2022, represents the valuation allowance as a result of changes in the fair value of loans held for sale carried at the lower of fair value or cost of $5.6 million and $0.2 million, respectively.

(8)

In the year ended December 31, 2023, includes a loss on sale of repossessed assets in connection with our equipment-financing activities of $2.6 million. In the year end December 31, 2022, includes $3.4 million related to the fair value adjustments of one other real estate owned (“OREO”) property in New York. In addition, includes OREO rental income of $0.4 million, $0.4 million and $1.3 million in the three months ended December 31, 2023, September 30, 2023 and year ended December 31, 2023, respectively. We had no OREO rental income in the three months and year ended December 31, 2022.

(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. In 2022, while OREO valuation expense was presented separately, all other OREO-related expenses were presented as part of other operating expenses in the Company’s consolidated statement of operations and comprehensive (loss) income. We had no other repossessed assets in 2022.

(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 three months and the year ended December 31, 2023, includes goodwill and intangible assets impairments totaling $1.7 million related to two of our subsidiaries (Amerant Mortgage and Elant, a Cayman-based trust company). In addition, in each of three months and the year ended December 31, 2023, includes additional costs of $1.1 million in connection with the restructuring of the Company’s BOLI. Also,in the year ended December 31, 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 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.

(12)

Includes $3.5 million, $3.0 million, and $2.7 million in the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively, and $14.4 million and $12.5 million in the years ended December 31, 2023 and 2022, respectively, related to Amerant Mortgage, primarily consisting of salaries and employee benefits, mortgage lending costs and professional and other service fees.

Exhibit 6 - Consolidated Balance Sheets

(in thousands, except share data)

December 31,

2023

 

September 30,

2023

 

June 30,

2023

 

March 31,

2023

 

December 31,

2022

Assets

 

 

 

 

 

 

 

 

(audited)

Cash and due from banks

$

43,966

 

 

$

48,145

 

 

$

45,184

 

 

$

41,489

 

 

$

19,486

 

Interest earning deposits with banks

 

245,233

 

 

 

202,946

 

 

 

365,673

 

 

 

411,747

 

 

 

228,955

 

Restricted cash

 

25,849

 

 

 

51,837

 

 

 

34,204

 

 

 

32,541

 

 

 

42,160

 

Other short-term investments

 

6,080

 

 

 

6,024

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

321,128

 

 

 

308,952

 

 

 

445,061

 

 

 

485,777

 

 

 

290,601

 

Securities

 

 

 

 

 

 

 

 

 

Debt securities available for sale, at fair value

 

1,217,502

 

 

 

1,033,797

 

 

 

1,027,676

 

 

 

1,045,883

 

 

 

1,057,621

 

Debt securities held to maturity, at amortized cost (estimated fair value of $204,946, $195,165, $209,546, $218,388 and $217, 609 at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively)

 

226,645

 

 

 

230,254

 

 

 

234,369

 

 

 

239,258

 

 

 

242,101

 

Trading securities

 

 

 

 

 

 

 

298

 

 

 

 

 

 

 

Equity securities with readily determinable fair value not held for trading

 

2,534

 

 

 

2,438

 

 

 

2,500

 

 

 

 

 

 

11,383

 

Federal Reserve Bank and Federal Home Loan Bank stock

 

50,294

 

 

 

47,878

 

 

 

50,460

 

 

 

62,556

 

 

 

55,575

 

Securities

 

1,496,975

 

 

 

1,314,367

 

 

 

1,315,303

 

 

 

1,347,697

 

 

 

1,366,680

 

Loans held for sale, at lower of cost or fair value (1)

 

365,219

 

 

 

43,257

 

 

 

 

 

 

 

 

 

 

Mortgage loans held for sale, at fair value

 

26,200

 

 

 

25,952

 

 

 

49,942

 

 

 

65,289

 

 

 

62,438

 

Loans held for investment, gross

 

6,883,951

 

 

 

7,073,387

 

 

 

7,167,016

 

 

 

7,049,746

 

 

 

6,857,194

 

Less: Allowance for credit losses

 

95,504

 

 

 

98,773

 

 

 

105,956

 

 

 

84,361

 

 

 

83,500

 

Loans held for investment, net

 

6,788,447

 

 

 

6,974,614

 

 

 

7,061,060

 

 

 

6,965,385

 

 

 

6,773,694

 

Bank owned life insurance

 

234,972

 

 

 

232,736

 

 

 

231,253

 

 

 

229,824

 

 

 

228,412

 

Premises and equipment, net

 

43,603

 

 

 

43,004

 

 

 

43,714

 

 

 

42,380

 

 

 

41,772

 

Deferred tax assets, net

 

55,635

 

 

 

63,501

 

 

 

56,779

 

 

 

46,112

 

 

 

48,703

 

Operating lease right-of-use assets

 

118,484

 

 

 

116,763

 

 

 

116,161

 

 

 

119,503

 

 

 

139,987

 

Goodwill

 

19,193

 

 

 

20,525

 

 

 

20,525

 

 

 

20,525

 

 

 

19,506

 

Accrued interest receivable and other assets (2)

 

251,885

 

 

 

202,029

 

 

 

179,728

 

 

 

172,810

 

 

 

156,011

 

Total assets

$

9,721,741

 

 

$

9,345,700

 

 

$

9,519,526

 

 

$

9,495,302

 

 

$

9,127,804

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

Demand

 

 

 

 

 

 

 

 

 

Noninterest bearing

$

1,404,656

 

 

$

1,370,157

 

 

$

1,293,522

 

 

$

1,360,626

 

 

$

1,367,664

 

Interest bearing

 

2,560,629

 

 

 

2,416,797

 

 

 

2,773,120

 

 

 

2,489,565

 

 

 

2,300,469

 

Savings and money market

 

1,610,218

 

 

 

1,457,080

 

 

 

1,431,375

 

 

 

1,507,195

 

 

 

1,647,811

 

Time

 

2,297,097

 

 

 

2,302,878

 

 

 

2,081,554

 

 

 

1,929,340

 

 

 

1,728,255

 

Total deposits

 

7,872,600

 

 

 

7,546,912

 

 

 

7,579,571

 

 

 

7,286,726

 

 

 

7,044,199

 

Advances from the Federal Home Loan Bank

 

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 held by trust subsidiaries

 

64,178

 

 

 

64,178

 

 

 

64,178

 

 

 

64,178

 

 

 

64,178

 

Operating lease liabilities (3)

 

123,167

 

 

 

120,665

 

 

 

119,921

 

 

 

122,214

 

 

 

140,147

 

Accounts payable, accrued liabilities and other liabilities (4)

 

191,748

 

 

 

210,299

 

 

 

176,163

 

 

 

152,501

 

 

 

178,574

 

Total liabilities

 

8,985,673

 

 

 

8,625,913

 

 

 

8,798,570

 

 

 

8,766,246

 

 

 

8,422,078

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

 

Class A common stock

 

3,361

 

 

 

3,359

 

 

 

3,374

 

 

 

3,383

 

 

 

3,382

 

Additional paid in capital

 

192,701

</