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Amerant Reports Fourth Quarter 2022 and Full-Year 2022 Results

Amerant Bancorp Inc.
Amerant Bancorp Inc.

Board of Directors Declares Cash Dividend of $0.09 per Common Share

CORAL GABLES, Fla., Jan. 19, 2023 (GLOBE NEWSWIRE) -- Amerant Bancorp Inc. (NASDAQ: AMTB) (the “Company” or “Amerant”) today reported net income attributable to the Company of $18.8 million in the fourth quarter of 2022 , or $0.55 per diluted share. Results in the fourth quarter reflect a provision for credit losses of $20.9 million, including the retroactive effect of the Current Expected Credit Loss (“CECL”) accounting standard for all previous quarterly periods in the year ended December 31, 2022 for an amount of approximately $11.1 million1. Net income attributable to the Company was $63.3 million for the full-year 2022, or $1.85 per diluted share.

Selected Financial Highlights:

  • Total assets were $9.1 billion, up $387.8 million, or 4.44%, compared to $8.7 billion as of 3Q22 and up $1.5 billion, or 19.5%, compared to $7.6 billion as of 4Q21.

  • Total gross loans were $6.92 billion, an increase of $416.3 million, or 6.40%, compared to $6.50 billion in 3Q22 and an increase of $1.35 billion, or 24.3%, compared to $5.57 billion in 4Q21.

  • Total deposits were $7.04 billion, up $456.1 million, or 6.92%, compared to $6.59 billion in 3Q22 and up $1.41 billion, or 25.1%, compared to $5.63 billion in 4Q21.

Amerant Chairman and CEO Jerry Plush stated “We are pleased to again report strong asset, deposit and revenue growth this quarter. Our team delivered, building on the upward momentum we have shown throughout 2022.”

Adoption of the CECL Accounting Standard

In the fourth quarter of 2022, the Company adopted the CECL accounting standard for estimating allowance for credit losses. The adoption of CECL as of December 31, 2022, resulted in an increase to the allowance for credit losses of $18.7 million, with a corresponding after tax cumulative effect adjustment to retained earnings of $13.9 million as of January 1, 2022, as required by the standard. In addition, in the fourth quarter of 2022, the Company recorded a provision for credit losses totaling $20.9 million, which includes the retroactive effect of CECL adoption for all previous quarterly periods in the year ended December 31, 2022 for an amount of approximately $11.1 million1, including loan growth and changes to macro-economic conditions during the year 2022. Quarterly amounts for the first, second and third quarters of 2022 do not reflect the adoption of CECL. The Company will provide an update to its interim consolidated financial information for each of the quarters in 2022 in its Annual Report on Form 10-K for the year ended December 31, 2022, reflecting the impacts of the adoption of CECL on each interim period of 2022.

Under the CECL accounting standard, the model for estimating credit losses on financial assets, including loans held for investment, changes from an incurred loss model to an expected loss model. The allowance for credit losses under the expected loss model is an estimate of life-of-loan losses for the Company’s loans held for investment.

Financial Highlights Continued:

  • Average yield on loans was 5.85%, up compared to 5.06% and 4.10% in 3Q22 and 4Q21, respectively. Average yield on loans for the full-year 2022 was 4.92%, also up compared to 3.92% for the full-year 2021.

  • Non-performing loans were $37.6 million, an increase of $18.9 million, or 100.6%, compared to $18.7 million as of 3Q22 and a decrease of $12.2 million, or 24.5%, compared to $49.8 million as of 4Q21. The increase resulted from a single commercial loan that is expected to become real estate owned without additional charges in 1Q23.

  • The allowance for credit losses ("ACL") was $83.5 million, an increase of $29.8 million, or 55.5%, compared to $53.7 million as of 3Q22 and an increase of $13.6 million, or 19.5%, compared to $69.9 million in 4Q21. The increase to the ACL was primarily driven by the adoption of CECL as of December 31, 2022. Quarterly amounts for third quarter of 2022 do not reflect the adoption of CECL.

  • Core deposits were $5.32 billion, up $114.3 million, or 2.2%, compared to $5.20 billion as of 3Q22 and up $1.0 billion, or 23.8%, compared to $4.29 billion as of 4Q21.

  • Average cost of total deposits was 1.38%, an increase compared to 0.83% in 3Q22 and 0.41% in 4Q21. Average cost of total deposits for the full-year 2022 was 0.80%, also an increase compared to 0.49% for the full-year 2021.

  • Loan to deposit ratio was 98.23% compared to 98.71% and 98.88% in 3Q22 and 4Q21, respectively.

  • Assets Under Management and custody (“AUM”) totaled $2.00 billion as of 4Q22, an increase of $0.2 billion, or 10.2%, compared to $1.81 billion as of 3Q22 and a decrease of $0.2 billion, or 10.1%, compared to $2.22 billion in 4Q21.

  • Pre-provision net revenue (“PPNR”)2 was $44.5 million in 4Q22, an increase of $14.7 million, or 49.3%, compared to $29.8 million in 3Q22, and a decrease of $34.7 million, or 43.8%, compared to $79.1 million in 4Q21. PPNR2 was $93.9 million for the full-year 2022, a decrease of $36.3 million, or 27.9%, compared to $130.1 million for the full-year 2021. Core Pre-Provision Net Revenue (“Core PPNR”)2 was $37.8 million, an increase of $7.5 million, or 24.8%, from $30.3 million in 3Q22 and an increase of $18.9 million, or 100.1%, from $18.9 million in 4Q21. Core PPNR2 was $105.5 million for the full-year 2022, an increase of $35.6 million, or 50.9%, compared to $69.9 million for the full-year 2021.

  • Net Interest Margin (“NIM”) was 3.96%, up compared to 3.61% and 3.17% in 3Q22 and 4Q21, respectively. NIM was 3.53% for the full-year 2022, an increase compared to 2.90% for the full-year 2021.

  • Net Interest Income (“NII”) was $82.2 million, up $12.3 million, or 17.6%, compared to $69.9 million in 3Q22 and up $26.4 million, or 47.3%, compared to $55.8 million in 4Q21. NII was $266.7 million for the full-year 2022, up $61.5 million, or 29.99%, compared to $205.1 million for the full-year 2021.

  • Provision for credit losses was $20.9 million, up compared to $3.0 million in 3Q22, and a release from the provision of $6.5 million in 4Q21. Provision for credit losses was $13.9 million for the full-year 2022, compared to a release of $16.5 million in the full-year 2021. The increase in the provision for credit losses in 4Q22 includes the retroactive effect of CECL adoption for all previous quarterly periods in the year ended December 31, 2022 for an amount of approximately $11.1 million1, including loan growth and changes to macro-economic conditions during the year 2022. The Company also recorded $9.8 million in provision for credit losses in 4Q22, of which a $2.2 million was for a specific reserve on a commercial loan, and $5.5 million related to consumer loans and a change in the consumer credit charge-off policy.

  • Non-interest income was $24.4 million, an increase of $8.4 million, or 52.7%, compared to $16.0 million in 3Q22 and a decrease of $52.9 million, or 68.48%, compared to $77.3 million in 4Q21. Non-interest income was $67.3 million for the full-year 2022, a decrease of $53.3 million, or 44.2%, compared to $120.6 million for the full-year 2021.

  • Non-interest expense was $62.2 million, up $6.1 million, or 10.9%, compared to $56.1 million in 3Q22 and up $7.2 million, or 13.0%, compared to $55.1 million in 4Q21. Non-interest expense was $241.4 million for the full-year 2022, up $43.2 million or 21.78%, compared to $198.2 million for the full-year 2021.

  • The efficiency ratio was 58.42%, down compared to 65.36% in 3Q22 and up compared to 41.40% in 4Q21. The efficiency ratio was 72.29% for the full-year 2022 compared to 60.85% for the full-year 2021.

  • Return on average assets (“ROA”) was 0.83% compared to 1.00% and 3.45% in 3Q22 and 4Q21, respectively. ROA was 0.77% for the full-year 2022 compared to 1.50% for the full-year 2021.

  • Return on average equity (“ROE”) was 10.33% compared to 11.28% and 32.04% in 3Q22 and 4Q21, respectively. ROE was 8.45% for the full-year 2022 compared to 14.19% for the full-year 2021.

On January 18, 2023, the Company’s Board of Directors declared a cash dividend of $0.09 per common share. The dividend is payable on February 28, 2023, to shareholders of record on February 13, 2023.

1 The provision for credit losses in the fourth quarter under CECL, excluding the retroactive effect corresponding to the first, second and third quarters of 2022, is approximately $7.0 million dollars, which results in net income attributable to the Company of $22.0 million in the fourth quarter of 2022, or $0.65 per diluted share.

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


Fourth Quarter and Full Year 2022 Earnings Conference Call

As previously announced, the Company will hold an earnings conference call on Friday, January 20, 2023 at 9:00 a.m. (Eastern Time) to discuss its fourth quarter and full-year 2022 results. The conference call and presentation materials can be accessed via webcast by logging on from the Investor Relations section of the Company’s website at https://investor.amerantbank.com. The online replay will remain available for approximately one month following the call through the above link.

About Amerant Bancorp Inc. (NASDAQ: AMTB)

Amerant Bancorp Inc. is a bank holding company headquartered in Coral Gables, Florida since 1979. The Company operates through its main subsidiary, Amerant Bank, N.A. (the “Bank”), as well as its other subsidiaries: Amerant Investments, Inc., Elant Bank and Trust Ltd., and Amerant Mortgage, LLC. The Company provides individuals and businesses in the U.S. with deposit, credit and wealth management services. The Bank, which has operated for over 40 years, is the largest community bank headquartered in Florida. The Bank operates 23 banking centers – 16 in South Florida and 7 in the Houston, Texas area, as well as an LPO in Tampa, Florida. For more information, visit investor.amerantbank.com.

FIS® and any associated brand names/logos are the trademarks of FIS and/or its affiliates.

Cautionary Notice Regarding Forward-Looking Statements

This press release contains “forward-looking statements” including statements with respect to the Company’s objectives, expectations and intentions and other statements that are not historical facts. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “point to,” “project,” “could,” “intend,” “target,” “goals,” “outlooks,” “modeled,” “dedicated,” “create,” and other similar words and expressions of the future.

Forward-looking statements, including those relating to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the Company’s actual results, performance, achievements, or financial condition to be materially different from future results, performance, achievements, or financial condition expressed or implied by such forward-looking statements. You should not rely on any forward-looking statements as predictions of future events. You should not expect us to update any forward-looking statements, except as required by law. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, together with those risks and uncertainties described in “Risk factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2021, our quarterly reports on Form 10-Q for the quarters ended March 31, 2022, June 30, 2022, and September 30, 2022 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 twelve month periods ended December 31, 2022 and the three month period ended December 31, 2021, may not reflect our results of operations for our fiscal year ended, or financial condition as of December 31, 2022, or any other period of time or date.

In the fourth quarter of 2022, the Company adopted the Current Expected Credit Loss (“CECL”) accounting standard for estimating allowance for credit losses. The adoption of CECL as of December 31, 2022, resulted in an increase to the allowance for credit losses of $18.7 million, with a corresponding after tax cumulative effect adjustment to retained earnings of $13.9 million as of January 1, 2022, as required by the standard. In addition, in the fourth quarter of 2022, the Company recorded a provision for credit losses totaling $20.9 million, which includes the retroactive effect of CECL adoption for all previous quarterly periods in the year ended December 31, 2022 for an amount of approximately $11.1 million, including loan growth and changes to macro-economic conditions during the year 2022. Quarterly amounts for the first, second and third quarters of 2022 do not reflect the adoption of CECL. The Company will provide an update to its interim consolidated financial information for each of the quarters in 2022 in its Annual Report on Form 10-K for the year ended December 31, 2022, reflecting the impacts of the adoption of CECL on each interim period of 2022.

Under the CECL accounting standard, the model for estimating credit losses on financial assets, including loans held for investment, changes from an incurred loss model to an expected loss model. The allowance for credit losses under the expected loss model is an estimate of life-of-loan losses for the Company’s loans held for investment.

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”, and “tangible stockholders’ equity book value per common share”. 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 Company’s adoption of CECL as of December 31, 2022 and for the year then ended, as well as the additional costs we have incurred in connection with the Company’s restructuring activities that began in 2018 and continued in 2022, including the effect of non-core banking activities such as the sale of loans and securities, the valuation of securities, derivatives, loans held for sale and other real estate owned, the sale of our corporate headquarters in the fourth quarter of 2021, 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 unaudited and audited consolidated financial statements.

(in thousands)

December 31,
2022

 

September 30,
2022

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

Consolidated Balance Sheets

 

 

 

 

 

 

 

 

(audited)

Total assets

$

9,127,804

 

$

8,739,979

 

$

8,151,242

 

$

7,805,836

 

$

7,638,399

Total investments

 

1,366,680

 

 

1,352,782

 

 

1,422,479

 

 

1,324,969

 

 

1,341,241

Total gross loans (1)

 

6,919,632

 

 

6,503,359

 

 

5,847,384

 

 

5,721,177

 

 

5,567,540

Allowance for credit losses (2)

 

83,500

 

 

53,711

 

 

52,027

 

 

56,051

 

 

69,899

Total deposits

 

7,044,199

 

 

6,588,122

 

 

6,202,854

 

 

5,691,701

 

 

5,630,871

Core deposits (3)

 

5,315,944

 

 

5,201,681

 

 

4,948,445

 

 

4,443,414

 

 

4,293,031

Advances from the FHLB and other borrowings

 

906,486

 

 

981,005

 

 

830,524

 

 

980,047

 

 

809,577

Senior notes

 

59,210

 

 

59,131

 

 

59,052

 

 

58,973

 

 

58,894

Subordinated notes (4)

 

29,284

 

 

29,241

 

 

29,199

 

 

29,156

 

 

Junior subordinated debentures

 

64,178

 

 

64,178

 

 

64,178

 

 

64,178

 

 

64,178

Stockholders' equity (2)(5)(6)(7)

 

705,726

 

 

695,698

 

 

711,450

 

 

749,396

 

 

831,873

Assets under management and custody (8)

 

1,995,666

 

 

1,811,265

 

 

1,868,017

 

 

2,129,387

 

 

2,221,077


 

Three Months Ended

 

Years Ended December 31,

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

December 31, 2022

 

September 30, 2022

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

 

2022

 

 

 

2021

 

Consolidated Results of Operations

 

 

 

 

 

 

 

 

 

 

 

 

(audited)

Net interest income

$

82,178

 

 

$

69,897

 

 

$

58,945

 

 

$

55,645

 

 

$

55,780

 

 

$

266,665

 

 

$

205,141

 

Provision for (reversal of) credit losses (2)

 

20,945

 

 

 

3,000

 

 

 

 

 

 

(10,000

)

 

 

(6,500

)

 

 

13,945

 

 

 

(16,500

)

Noninterest income

 

24,365

 

 

 

15,956

 

 

 

12,931

 

 

 

14,025

 

 

 

77,290

 

 

 

67,277

 

 

 

120,621

 

Noninterest expense

 

62,241

 

 

 

56,113

 

 

 

62,241

 

 

 

60,818

 

 

 

55,088

 

 

 

241,413

 

 

 

198,242

 

Net income attributable to Amerant Bancorp Inc. (9)

 

18,766

 

 

 

20,920

 

 

 

7,674

 

 

 

15,950

 

 

 

65,469

 

 

 

63,310

 

 

 

112,921

 

Effective income tax rate

 

20.32

%

 

 

21.93

%

 

 

21.10

%

 

 

21.10

%

 

 

23.88

%

 

 

21.15

%

 

 

23.41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' book value per common share

$

20.87

 

 

$

20.60

 

 

$

21.07

 

 

$

21.82

 

 

$

23.18

 

 

$

20.87

 

 

$

23.18

 

Tangible stockholders' equity (book value) per common share (10)

$

20.19

 

 

$

19.92

 

 

$

20.40

 

 

$

21.15

 

 

$

22.55

 

 

$

20.19

 

 

$

22.55

 

Basic earnings per common share

$

0.56

 

 

$

0.62

 

 

$

0.23

 

 

$

0.46

 

 

$

1.79

 

 

$

1.87

 

 

$

3.04

 

Diluted earnings per common share (11)

$

0.55

 

 

$

0.62

 

 

$

0.23

 

 

$

0.45

 

 

$

1.77

 

 

$

1.85

 

 

$

3.01

 

Basic weighted average shares outstanding

 

33,496,096

 

 

 

33,476,418

 

 

 

33,675,930

 

 

 

34,819,984

 

 

 

36,606,969

 

 

 

33,862,410

 

 

 

37,169,283

 

Diluted weighted average shares outstanding (11)

 

33,813,593

 

 

 

33,746,878

 

 

 

33,914,529

 

 

 

35,114,043

 

 

 

37,064,769

 

 

 

34,142,563

 

 

 

37,527,523

 

Cash dividend declared per common share (7)

$

0.09

 

 

$

0.09

 

 

$

0.09

 

 

$

0.09

 

 

$

0.06

 

 

$

0.36

 

 

$

0.06

 


 

Three Months Ended

 

Years Ended December 31,

 

December 31, 2022

 

September 30, 2022

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

2022

 

 

2021

 

Other Financial and Operating Data (12)

 

 

 

 

 

 

 

 

 

 

 

 

(audited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profitability Indicators (%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income / Average total interest earning assets (NIM) (13)

3.96

%

 

3.61

%

 

3.28

%

 

3.18

%

 

3.17

%

 

3.53

%

 

2.90

%

Net income / Average total assets (ROA) (14)

0.83

%

 

1.00

%

 

0.39

%

 

0.84

%

 

3.45

%

 

0.77

%

 

1.50

%

Net income / Average stockholders' equity (ROE) (15)

10.33

%

 

11.28

%

 

4.14

%

 

8.10

%

 

32.04

%

 

8.45

%

 

14.19

%

Noninterest income / Total revenue (16)

22.87

%

 

18.59

%

 

17.99

%

 

20.13

%

 

58.08

%

 

20.15

%

 

37.03

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Indicators (%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital ratio (17)

12.39

%

 

12.49

%

 

13.21

%

 

13.80

%

 

14.56

%

 

12.39

%

 

14.56

%

Tier 1 capital ratio (18)

10.89

%

 

11.34

%

 

11.99

%

 

12.48

%

 

13.45

%

 

10.89

%

 

13.45

%

Tier 1 leverage ratio (19)

9.18

%

 

9.88

%

 

10.25

%

 

10.67

%

 

11.52

%

 

9.18

%

 

11.52

%

Common equity tier 1 capital ratio (CET1) (20)

10.10

%

 

10.50

%

 

11.08

%

 

11.55

%

 

12.50

%

 

10.10

%

 

12.50

%

Tangible common equity ratio (21)

7.50

%

 

7.72

%

 

8.47

%

 

9.34

%

 

10.63

%

 

7.50

%

 

10.63

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liquidity Ratios (%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans to Deposits (22)

98.23

%

 

98.71

%

 

94.27

%

 

100.52

%

 

98.88

%

 

98.23

%

 

98.88

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Indicators (%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing assets / Total assets (23)

0.41

%

 

0.29

%

 

0.39

%

 

0.73

%

 

0.78

%

 

0.41

%

 

0.78

%

Non-performing loans / Total loans (1) (24)

0.54

%

 

0.29

%

 

0.43

%

 

0.82

%

 

0.89

%

 

0.54

%

 

0.89

%

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

222.08

%

 

287.56

%

 

206.84

%

 

119.34

%

 

140.41

%

 

222.08

%

 

140.41

%

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

1.22

%

 

0.83

%

 

0.91

%

 

0.99

%

 

1.29

%

 

1.22

%

 

1.29

%

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

0.59

%

 

0.09

%

 

0.29

%

 

0.29

%

 

0.52

%

 

0.32

%

 

0.44

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency Indicators (% except FTE)

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense / Average total assets

2.75

%

 

2.67

%

 

3.18

%

 

3.20

%

 

2.90

%

 

2.95

%

 

2.63

%

Salaries and employee benefits / Average total assets

1.45

%

 

1.43

%

 

1.54

%

 

1.60

%

 

1.65

%

 

1.51

%

 

1.56

%

Other operating expenses/ Average total assets (26)

1.30

%

 

1.24

%

 

1.64

%

 

1.60

%

 

1.25

%

 

1.44

%

 

1.07

%

Efficiency ratio (27)

58.42

%

 

65.36

%

 

86.59

%

 

87.29

%

 

41.40

%

 

72.29

%

 

60.85

%

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

692

 

 

681

 

 

680

 

 

677

 

 

763

 

 

692

 

 

763

 


 

Three Months Ended

 

Years Ended December 31,

(in thousands, except percentages and per share amounts)

December 31, 2022

 

September 30, 2022

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

 

2022

 

 

 

2021

 

Core Selected Consolidated Results of Operations and Other Data (10)

 

 

 

 

 

 

 

 

 

 

 

 

(audited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-provision net revenue (PPNR)

$

44,457

 

 

$

29,784

 

 

$

9,707

 

 

$

9,928

 

 

$

79,141

 

 

$

93,876

 

 

$

130,130

 

Core pre-provision net revenue (Core PPNR)

$

37,838

 

 

$

30,325

 

 

$

19,447

 

 

$

17,869

 

 

$

18,911

 

 

$

105,479

 

 

$

69,907

 

Core net income

$

13,610

 

 

$

21,275

 

 

$

15,358

 

 

$

22,216

 

 

$

19,339

 

 

$

72,459

 

 

$

66,796

 

Core basic earnings per common share

 

0.41

 

 

 

0.64

 

 

 

0.46

 

 

 

0.64

 

 

 

0.53

 

 

 

2.14

 

 

 

1.80

 

Core earnings per diluted common share (11)

 

0.40

 

 

 

0.63

 

 

 

0.45

 

 

 

0.63

 

 

 

0.52

 

 

 

2.12

 

 

 

1.78

 

Core net income / Average total assets (Core ROA) (14)

 

0.60

%

 

 

1.01

%

 

 

0.78

%

 

 

1.17

%

 

 

1.02

%

 

 

0.88

%

 

 

0.89

%

Core net income / Average stockholders' equity (Core ROE) (15)

 

7.49

%

 

 

11.47

%

 

 

8.28

%

 

 

11.28

%

 

 

9.46

%

 

 

9.67

%

 

 

8.39

%

Core efficiency ratio (29)

 

61.34

%

 

 

64.14

%

 

 

73.68

%

 

 

76.36

%

 

 

74.98

%

 

 

68.11

%

 

 

73.96

%

__________________
(1)   Total gross loans include loans held for investment net of unamortized deferred loan origination fees and costs. In addition, at June 30, 2022, March 31, 2022 and December 31, 2021, total loans include $66.4 million, $68.6 million and $143.2 million, respectively, in NYC real estate loans held for sale carried at the lower of cost or estimated fair value. In the third quarter of 2022, the Company transferred the NYC real estate loans held for sale to the loans held for investment category. Also, in the first quarter of 2022 and the fourth quarter of 2021, the Company sold approximately $57.3 million and $49.4 million, respectively, in loans held for sale carried at the lower of cost or estimated fair value related to the New York portfolio. In addition, as of December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021, total loans include $62.4 million, $57.6 million, $54.9 million, $17.1 million and $14.9 million, respectively, primarily in mortgage loans held for sale carried at fair value.
(2)   In the fourth quarter of 2022, the Company adopted the Current Expected Credit Loss (“CECL”) accounting standard using a modified retrospective approach. Therefore, quarterly amounts for the first, second and third quarters of 2022 do not reflect the adoption of CECL. In the fourth quarter of 2022, the Company recorded an increase to its allowance for credit losses (“ACL”) of $18.7 million as of January 1, 2022, with a corresponding after tax cumulative effect adjustment to retained earnings of $13.9 million. In addition, in the fourth quarter of 2022, the Company recorded the impact of CECL on its ACL in 2022 through a provision for credit losses of $11.1 million, including the retroactive effect of CECL for all previous quarterly periods in the year ended December 31, 2022. The Company has not elected to apply an available three-year transition provision to its regulatory capital computations as a result of its adoption of CECL in 2022.
(3)   Core deposits consist of total deposits excluding all time deposits.
(4)   On March 9, 2022, the Company completed a $30.0 million offering of subordinated notes with a 4.25% fixed-to-floating rate and due March 15, 2032 (the “Subordinated Notes”). The Subordinated Notes bear interest at a fixed rate of 4.25% per annum, from and including March 9, 2022, to but excluding March 15, 2027, with interest payable semi-annually in arrears. From and including March 15, 2027, to but excluding the stated maturity date or early redemption date, the interest rate will reset quarterly to an annual floating rate equal to the then-current benchmark rate, which will initially be the three-month Secured Overnight Financing Rate (“SOFR”) plus 251 basis points, with interest during such period payable quarterly in arrears. If the three-month SOFR cannot be determined during the applicable floating rate period, a different index will be determined and used in accordance with the terms of the Subordinated Notes. Notes are presented net of direct issuance costs which are deferred and amortized over 10 years. The Subordinated Notes have been structured to qualify as Tier 2 capital of the Company for regulatory capital purposes, and rank equally in right of payment to all of our existing and future subordinated indebtedness.
(5)   In the first quarter of 2022, the Company repurchased an aggregate of 652,118 shares of Class A common stock at a weighted average price of $33.96 per share, under the Class A common stock repurchase program launched in 2021 (the “Class A Common Stock Repurchase Program”). The aggregate purchase price for these transactions was approximately $22.1 million, including transaction costs. On January 31, 2022, the Company announced the completion of the Class A Common Stock repurchase program. In addition, in the first quarter of 2022, the Company announced the launch of a new repurchase program pursuant to which the Company may purchase, from time to time, up to an aggregate amount of $50 million of its shares of Class A common stock (the “New Class A Common Stock Repurchase Program”). In the second and first quarters of 2022, the Company repurchased an aggregate of 611,525 shares and 991,362 shares, respectively, of Class A common stock at a weighted average price of $28.19 per share and $32.96 per share, respectively, under the New Class A Common Stock Repurchase Program. In the second and first quarters of 2022, the aggregate purchase price for these transactions was approximately $17.2 million and $32.7 million, respectively, including transaction costs. On May 19, 2022, the Company announced the completion of repurchased under the New Class A Common Stock Repurchase Program.
(6)   In the fourth quarter of 2021, the Company’s shareholders approved a clean-up merger, previously announced by the Company, pursuant to which a subsidiary of the Company merged with and into the Company (the “Merger”). Under the terms of the Merger, each outstanding share of Class B common stock was converted to 0.95 of a share of Class A common stock. In addition, any shareholder who owned fewer than 100 shares of Class A common stock upon completion of the Merger, received cash in lieu of Class A common stock. There were no authorized or outstanding Class B common stock at December 31, 2021. Furthermore, in connection with the Merger, the Company’s Board of Directors authorized the Class A Common Stock Repurchase Program which provided for the potential to repurchase up to $50 million of shares of Class A common stock. In the fourth quarter of 2021, the Company repurchased an aggregate of 1,175,119 shares of Class A common stock for an aggregate purchase price of $36.3 million, including $27.9 million repurchased under the Class A Common Stock Repurchase Program and $8.5 million shares cashed out in accordance with the terms of the Merger. The total weighted average market price of these transactions was $30.92 per share.
(7)   In the fourth, third, second and first quarters of 2022, and in the fourth quarter of 2021, the Company’s Board of Directors declared cash dividends of $0.09, $0.09, $0.09, $0.09 and $0.06 per share of the Company’s common stock, respectively. The dividend declared in the fourth quarter of 2022 was paid on November 30, 2022 to shareholders record at the close of business on November 15, 2022. The dividend declared in the third quarter of 2022 was paid on August 31, 2022 to shareholders of record at the close of business on August 17, 2022.The dividend declared in the second quarter of 2022 was paid on May 31, 2022 to shareholders of record at the close of business on May 13, 2022.The dividend declared in the first quarter of 2022 was paid on February 28, 2022 to shareholders of record at the close of business on February 11, 2022. The dividend declared in the fourth quarter of 2021 was paid on or before January 15, 2022 to holders of record as of December 22, 2021. The aggregate amount paid in connection with these dividends in the fourth, third, second and first quarters of 2022, and in the fourth quarter of 2021 was $3.0 million, $3.0 million, $3.0 million, $3.2 million and $2.2 million, respectively
(8)   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.
(9)   In the three months ended December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021, net income exclude losses of $0.2 million, $44 thousand, $0.1 million, $1.1 million and $1.2 million, respectively, attributable to the minority interest of Amerant Mortgage LLC. Beginning March 31, 2022, the minority interest share changed from 49% to 42.6%. This change had no impact to the Company’s financial condition or results of operations as of and for the first quarter ended March 31, 2022. In addition, in the second quarter of 2022, the minority interest share changed from 42.6% to 20%. In connection with the change in minority interest share in the second quarter of 2022, the Company reduced its additional paid-in capital for a total of $1.9 million with a corresponding increase to the equity attributable to noncontrolling interests.
(10)   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.
(11)   In all the periods shown, potential dilutive instruments consisted of unvested shares of restricted stock, restricted stock units and performance stock units. Potential dilutive instruments were included in the diluted earnings per share computation because, when the unamortized deferred compensation cost related to these shares was divided by the average market price per share in all the periods shown, fewer shares would have been purchased than restricted shares assumed issued. Therefore, in those periods, such awards resulted in higher diluted weighted average shares outstanding than basic weighted average shares outstanding, and had a dilutive effect in per share earnings.
(12)   Operating data for the periods presented have been annualized.
(13)   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.
(14)   Calculated based upon the average daily balance of total assets.
(15)   Calculated based upon the average daily balance of stockholders’ equity.
(16)   Total revenue is the result of net interest income before provision for credit losses plus noninterest income.
(17)   Total stockholders’ equity divided by total risk-weighted assets, calculated according to the standardized regulatory capital ratio calculations.
(18)   Tier 1 capital divided by total risk-weighted assets. Tier 1 capital is composed of Common Equity Tier 1 (CET1) capital plus outstanding qualifying trust preferred securities of $62.3 million at each of all the dates presented.
(19)   Tier 1 capital divided by quarter to date average assets.
(20)   CET1 capital divided by total risk-weighted assets.
(21)   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 consist of, among other things, mortgage servicing rights and are included in other assets in the Company’s consolidated balance sheets.
(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, restructured loans that are considered “troubled debt restructurings” or “TDRs”, and other real estate owned (“OREO”) properties acquired through or in lieu of foreclosure.
(24)   Non-performing loans include all accruing loans past due by 90 days or more, all nonaccrual loans and restructured loans that are considered TDRs.
(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 2022, and the fourth quarter of 2021, there were net charge offs of $9.8 million, $1.3 million, $4.0 million, $3.8 million, and $7.0 million, respectively. 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. During the third quarter of 2022, the Company charged-off $1.7 million related to multiple consumer loans and $0.2 million in connection with two commercial loans. During the second quarter of 2022, the Company charged-off $3.6 million in connection with a loan relationship with a Miami-based U.S. coffee trader. During the first quarter of 2022, the Company charged-off $3.3 million in two commercial loans, including $2.5 million related to a nonaccrual loan paid off during the period. During the fourth quarter of 2021, the Company charged-off an aggregate of $4.2 million related to various commercial loans and $1.8 million related to one real estate loan.
(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, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021, includes 68, 67, 67, 79, and 72 FTEs for Amerant Mortgage LLC, respectively. In addition, effective January 1, 2022, there were 80 employees who are no longer working for the Company as a result of the new agreement with Fidelity National Information Services, Inc. (“FIS”).
(29)   Core efficiency ratio is the efficiency ratio less the effect of restructuring costs and other adjustments, described in Exhibit 2 - Non-GAAP Financial Measures Reconciliation.


Exhibit 2- Non-GAAP Financial Measures Reconciliation

The following table sets forth selected financial information derived from the Company’s interim unaudited and annual audited consolidated financial statements, adjusted for certain costs incurred by the Company in the periods presented related to tax deductible restructuring costs, provision for (reversal of) credit losses, provision for income tax expense (benefit), the effect of non-core banking activities such as the sale of loans and securities,the valuation of securities, derivatives, loans held for sale and other real estate owned, the sale and leaseback of our corporate headquarters in the fourth quarter of 2021, and other non-recurring 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, 2022

September 30, 2022

June 30,
2022

March 31,
2022

December 31, 2021

 

 

2022

 

2021
(audited)

 

 

 

 

 

 

 

 

 

Net income attributable to Amerant Bancorp Inc. (1)

$

18,766

 

$

20,920

 

$

7,674

 

$

15,950

 

$

65,469

 

 

$

63,310

 

$

112,921

 

Plus: provision for (reversal of) credit losses (1)

 

20,945

 

 

3,000

 

 

 

 

(10,000

)

 

(6,500

)

 

 

13,945

 

 

(16,500

)

Plus: provision for income tax expense (2)

 

4,746

 

 

5,864

 

 

2,033

 

 

3,978

 

 

20,172

 

 

 

16,621

 

 

33,709

 

Pre-provision net revenue (PPNR)

$

44,457

 

$

29,784

 

$

9,707

 

$

9,928

 

$

79,141

 

 

$

93,876

 

$

130,130

 

Plus: non-routine noninterest expense items

 

2,447

 

 

1,954

 

 

7,995

 

 

6,574

 

 

1,895

 

 

 

18,970

 

 

7,057

 

(Less) Plus: non-routine noninterest income items

 

(9,066

)

 

(1,413

)

 

1,745

 

 

1,367

 

 

(62,125

)

 

 

(7,367

)

 

(67,280

)

Core pre-provision net revenue (Core PPNR)

$

37,838

 

$

30,325

 

$

19,447

 

$

17,869

 

$

18,911

 

 

$

105,479

 

$

69,907

 

 

 

 

 

 

 

 

 

 

Total noninterest income

$

24,365

 

$

15,956

 

$

12,931

 

$

14,025

 

$

77,290

 

 

$

67,277

 

$

120,621

 

Less: Non-routine noninterest income items:

 

 

 

 

 

 

 

 

Less: gain on sale of Headquarters building (2)

 

 

 

 

 

 

 

 

 

62,387

 

 

 

 

 

62,387

 

Derivative gains (losses), net

 

1,040

 

 

(95

)

 

855

 

 

(1,345

)

 

 

 

 

455

 

 

 

Securities (loss) gains, net

 

(3,364

)

 

1,508

 

 

(2,602

)

 

769

 

 

(117

)

 

 

(3,689

)

 

3,740

 

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

 

11,390

 

 

 

 

2

 

 

(714

)

 

 

 

 

10,678

 

 

(2,488

)

(Loss) gain on sale of loans

 

 

 

 

 

 

 

(77

)

 

(145

)

 

 

(77

)

 

3,641

 

Total non-routine noninterest income items

$

9,066

 

$

1,413

 

$

(1,745

)

$

(1,367

)

$

62,125

 

 

$

7,367

 

$

67,280

 

Core noninterest income

$

15,299

 

$

14,543

 

$

14,676

 

$

15,392

 

$

15,165

 

 

$

59,910

 

$

53,341

 

 

 

 

 

 

 

 

 

 

Total noninterest expenses

$

62,241

 

$

56,113

 

$

62,241

 

$

60,818

 

$

55,088

 

 

$

241,413

 

$

198,242

 

Less: non-routine noninterest expense items

 

 

 

 

 

 

 

 

Restructuring costs (3)

 

 

 

 

 

 

 

 

Staff reduction costs (4)

 

1,221

 

 

358

 

 

674

 

 

765

 

 

26

 

 

 

3,018

 

 

3,604

 

Contract termination costs (5)

 

 

 

289

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