Amerant Reports Second Quarter 2023 Results

CORAL GABLES, Fla., July 20, 2023 (GLOBE NEWSWIRE) -- Amerant Bancorp Inc. ( AMTB) (the “Company” or “Amerant”) today reported net income attributable to the Company of $7.3 million in the second quarter of 2023, or $0.22 per diluted share, compared to net income attributable to the Company of $20.2 million, or $0.60 per diluted share, in the first quarter of 2023.

“Achieving strong organic deposit growth was a significant accomplishment this quarter” stated Jerry Plush, Chairman and CEO. “While elevated reserve coverage levels were needed related to a legacy NY based commercial real estate loan along with updated economic forecasts, we continued to show solid growth in pre-provision net revenue, driven primarily by a strong net interest margin. We remain keenly focused on driving profitable growth and achieving our goal of becoming the bank of choice in the markets we serve.”

• Total assets increased $24.2 million, or 0.3%, to $9.5 billion compared to 1Q23.
• Total gross loans increased $101.9 million, or 1.4%, to $7.22 billion compared to $7.12 billion in 1Q23.
• Cash and cash equivalents were $445.1 million, down $40.7 million, or 8.4%, compared to $485.8 million in 1Q23.
• Total deposits were $7.58 billion, up $292.8 million, or 4.0%, compared to $7.29 billion in 1Q23. Organic deposit growth in commercial, consumer and international banking was $432 million, which enabled reductions in brokered deposits and institutional deposits of $52 million and $136 million, respectively.
• Total advances from Federal Home Loan Bank (“FHLB”) were $770.0 million, down $282.0 million, or 26.8%, compared to $1.1 billion in 1Q23, the result of early repayments of $355 million in the quarter in connection with asset/liability management strategies. An additional $2.1 billion remained available from FHLB as of June 30, 2023.
• Average yield on loans increased to 6.79% in 2Q23, compared to 6.38% in 1Q23.
• Total non-performing assets increased to $67.4 million, up $18.7 million, or 38.3%, compared to $48.7 million as of 1Q23.
• The allowance for credit losses ("ACL") was $106.0 million, an increase of $21.6 million, or 25.6%, compared to $84.4 million as of 1Q23.
• Core deposits were $5.50 billion, up $140.6 million, or 2.6%, compared to $5.36 billion in 1Q23.
• Average cost of total deposits increased to 2.40% in 2Q23 compared to 1.91% in 1Q23.
• Loan to deposit ratio improved to 95.22% in 2Q23 compared to 97.64% in 1Q23.
• Assets Under Management and custody (“AUM”) totaled $2.15 billion, slightly up $39.9 million, or 1.9%, from $2.11 billion in 1Q23.
• Pre-provision net revenue (“PPNR”)⁽¹⁾ was $38.3 million in 2Q23, an increase of $1.1 million or 2.9%, compared to $37.2 million in 1Q23.
• Core Pre-Provision Net Revenue (“Core PPNR”)⁽¹⁾ was $39.2 million in 2Q23, up $2.1 million, or 5.6%, from $37.1 million in 1Q23.
• Net Interest Margin (“NIM”) was 3.83% in 2Q23 compared to 3.90% in 1Q23.
• Net Interest Income (“NII”) was $83.9 million, up $1.5 million, or 1.9%, from $82.3 million in 1Q23.
• Provision for credit losses was $29.1 million in 2Q23, up $17.4 million, or 148.5%, compared to $11.7 million in 1Q23. The provision for credit losses in 2Q23 was comprised of $15.7 million in connection with charge-offs and credit quality, $1.4 million related to loan growth and $12.0 million to reflect updated economic factors.
• Non-interest income was $26.6 million in 2Q23, up $7.3 million, or 37.6%, from $19.3 million in 1Q23. 2Q23 included $12.4 million in non-routine net gains.
• Non-interest expense was $72.5 million, up $7.8 million, or 12.0%, from $64.7 million in 1Q23. 2Q23 included $13.4 million in non-routine noninterest expenses.
• The efficiency ratio was 65.6% in 2Q23 compared to 63.7% in 1Q23.
• Return on average assets (“ROA”) was 0.31% in 2Q23 compared to 0.88% in 1Q23.
• Return on average equity (“ROE”) was 3.92% in 2Q23 compared to 11.15% in 1Q23.
  

Additional details on second quarter 2023 results can be found in 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.

On July 19, 2023, the Company’s board of directors declared a quarterly cash dividend of $0.09 per common share. The dividend is payable on August 31, 2023 to shareholders of record on August 15, 2023.

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

Second Quarter 2023 Earnings Conference Call

The Company will hold an earnings conference call on Friday, July 21, 2023 at 9:00 a.m. (Eastern Time) to discuss its second quarter 2023 results. The conference call and presentation materials can be accessed via webcast by logging on from the Investor Relations section of the Company’s website at https://investor.amerantbank.com. The online replay will remain available for approximately one month following the call through the above link.

About Amerant Bancorp Inc. ( AMTB)

Amerant Bancorp Inc. is a bank holding company headquartered in Coral Gables, Florida since 1979. The Company operates through its main subsidiary, Amerant Bank, N.A. (the “Bank”), as well as its other subsidiaries: Amerant Investments, Inc., Elant Bank and Trust Ltd., and Amerant Mortgage, LLC. The Company provides individuals and businesses in the U.S. with deposit, credit and wealth management services. The Bank, which has operated for over 40 years, is the largest community bank headquartered in Florida. The Bank operates 23 banking centers – 17 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 and six month periods ended June 30, 2023 and 2022 and the three months ended March 31, 2023 and December 31, 2022, may not reflect our results of operations for our fiscal year ending, or financial condition, as of December 31, 2023, or any other period of time or date.

As previously disclosed in the Form 10-K, the Company adopted the new guidance on accounting for current expected credit losses on financial instruments (“CECL”) effective as of January 1, 2022. Quarterly amounts previously reported on our quarterly reports on Form 10-Q for the periods ended March 31, 2022, June 30, 2022 and September 30, 2022 do not reflect the adoption of CECL. In the fourth quarter of 2022, the Company recorded a provision for credit losses totaling $20.9 million, including $11.1 million related to the retroactive effect of adopting CECL for all previous quarterly periods in the year ended December 31, 2022, including loan growth and changes to macro-economic conditions during the period. Quarterly amounts included in the Form 10-K and this earnings release and accompanying presentation reflect the impacts of the adoption of CECL on each interim period of 2022. See the Form 10-K for more details on the adoption of CECL.

The following table shows changes to previously-reported amounts for the quarter ended December 31, 2022 versus the corresponding amounts reflecting the adoption of CECL in 2022:

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, and other non-routine actions intended to improve customer service and operating performance. While we believe that these non-GAAP financial measures are useful in evaluating our performance, this information should be considered as supplemental and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ from similar measures presented by other companies.

Exhibit 2 reconciles these non-GAAP financial measures to reported results.

Exhibit 1- Selected Financial Information

The following table sets forth selected financial information derived from our interim unaudited and annual audited consolidated financial statements.