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Amerant Reports Second Quarter 2021 Net Income of $16.0 Million, Diluted Earnings Per Share of $0.42

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Results include key actions taken to improve ongoing profitability

CORAL GABLES, Fla., July 21, 2021 (GLOBE NEWSWIRE) -- Amerant Bancorp Inc. (NASDAQ: AMTB and AMTBB) (the “Company” or “Amerant”) today reported net income attributable to the Company of $16.0 million in the second quarter of 2021, or $0.42 per diluted share, compared to net income attributable to the Company of $14.5 million, or $0.38 per diluted share, in the first quarter of 2021 and net loss attributable to the Company of $15.3 million, or $0.37 per diluted share, in the second quarter of 2020. Pre-provision net revenue (“PPNR”) (non-GAAP) was $15.4 million in the second quarter of 2021, a decrease from $18.1 million in the first quarter of 2021, and a decrease from $29.3 million in the second quarter of 2020. Core pre-provision net revenue (“Core PPNR”) (non-GAAP) was $16.9 million in the second quarter of 2021, an increase from $15.8 million in the first quarter of 2021, and a decrease from $23.0 million in the second quarter of 2020. Second quarter of 2020 included $7.8 million in deferred expenses directly related to the origination of PPP loans.

Annualized return on assets (“ROA”) and return on equity (“ROE”) were 0.83% and 8.11%, respectively, in the second quarter of 2021, compared to 0.76% and 7.47%, respectively, in the first quarter of 2021. Second quarter of 2020 ROA and ROE were negative 0.75% and 7.21%, respectively.

Jerry Plush, vice chairman and CEO said, “We are pleased to report improved results this quarter, even while taking a number of important actions to lower future funding costs and operating expenses. We are excited about the fintech partnerships we recently announced, as well as our new marketing agency partner. We believe these partnerships will help us drive greater brand recognition and profitable growth, leading to further improvement in operating results in the coming quarters.”

Summary Results

Results of the second quarter ended June 30, 2021 were as follows:

  • Net income was $16.0 million in the second quarter of 2021, up 10.4% from $14.5 million in the first quarter of 2021. In the second quarter of 2020 there was a net loss of $15.3 million. Core net income (non-GAAP) was $17.2 million in the second quarter of 2021 compared to core net income of $12.6 million in the first quarter of 2021 and core net loss (non-GAAP) of $20.3 million in the second quarter of 2020.

  • Net Interest Income (“NII”) was $50.0 million, up 5.1% from $47.6 million in the first quarter of 2021, and up 7.9% from $46.3 million in the second quarter of 2020. Net interest margin (“NIM”) was 2.81% in the second quarter of 2021, up 15 basis points from 2.66% in the first quarter of 2021 and up 37 basis points from 2.44% in the second quarter of 2020.

  • A release of $5.0 million from the allowance for loan losses was recorded during the second quarter of 2021, compared to a $48.6 million provision recorded in the second quarter of 2020. No provision for loan losses was recorded during the first quarter of 2021. The ratio of allowance for loan losses (“ALL”) to total loans was 1.86% as of June 30, 2021, down from 1.93% as of March 31, 2021 and down from 2.04% as of June 30, 2020. The ratio of net charge-offs to average total loans in the second quarter of 2021 was 0.12% compared to 0.13% in the second quarter of 2020. There were no net charge offs recorded in the first quarter of 2021.

  • Noninterest income was $15.7 million in the second quarter of 2021, up 11.1% from $14.2 million in the first quarter of 2021, and down 20.4% from $19.8 million in the second quarter of 2020, as second quarter of 2020 included higher net gains on sale of securities.

  • Noninterest expense was $51.1 million, up 17.2% from $43.6 million in the first quarter of 2021, and up 39.2% from $36.7 million in the second quarter of 2020, as second quarter of 2021 included higher nonrecurring charges.

  • The efficiency ratio was 77.8% in the second quarter of 2021, compared to 70.7% in the first quarter of 2021, and 55.6% for the second quarter of 2020. Core efficiency ratio (non-GAAP) was 74.45% in the second quarter of 2021, compared to 73.35% in the first quarter of 2021, and 60.65% for the second quarter of 2020.

  • Total loans were $5.6 billion at June 30, 2021, down $146.3 million, or 2.5%, compared to March 31, 2021. Total deposits were $5.7 billion at June 30, 2021, slightly down $3.2 million, or 0.1%, compared to March 31, 2021.

  • Stockholders’ book value per common share attributable to the Company increased to $21.27 at June 30, 2021, compared to $20.70 at March 31, 2021. Tangible book value per common share (“TBV”) (non-GAAP) increased to $20.69 as of June 30, 2021, compared to $20.13 at March 31, 2021.

Credit Quality

The ALL was $104.2 million as of the close of the second quarter of 2021, compared to $110.9 million at the close of the first quarter of 2021 and $119.7 million at the close of the second quarter of 2020. The Company released $5.0 million from the allowance for loan losses in the second quarter of 2021, compared to a $48.6 million provision for loan losses in the second quarter of 2020. No provision for loan losses was recorded during the first quarter of 2021. The reserve release during the second quarter of 2021 was primarily attributed to the improving macro-economic conditions and credit outlook, as the Florida and Texas economies continue to recover from the pandemic. The decrease in loan portfolio outstanding balance when compared to the first quarter of 2021, also contributed to lower reserve requirements. Offsetting the release were loan downgrades and additional reserves allocated in connection with the COVID-19 pandemic, primarily due to slower economic recovery of the New York market. The ALL associated with the pandemic was $14.8 million in the second quarter, compared to $10.5 million in the first quarter of 2021, and $32.9 million in the second quarter of 2020 at the onset of the pandemic.

Classified loans totaled $122.6 million at the end of the second quarter of 2021 compared to $91.3 million and $87.6 million in the first quarter of 2021 and second quarter of 2020, respectively. These loans increased $31.3 million, or 34.3%, compared to the first quarter of 2021 and $35.1 million, or 40.1%, compared to the second quarter of 2020. The quarter-over-quarter increases were primarily driven by the downgrade of three Commercial Real Estate (“CRE”) loans totaling $40.0 million, primarily in New York due to increased vacancies, and one commercial loan totaling $2.7 million. These increases were partially offset by upgrades of three loans totaling $6.2 million, the charge-off of two loans totaling $1.4 million and loan pay downs and payoffs during the second quarter of 2021. The year-over-year increase was primarily due to the loans mentioned above, as well as, specific loan downgrades disclosed in previous quarters. These loans include downgrades of a $12.7 million loan to a food wholesaler with exposure to the cruise industry, and two CRE multifamily loans totaling $9.9 million. Classified loans include the $39.8 million Coffee Trader loan relationship, out of which $19.3 million were charged-off and $0.9 million was offset as partial payment during the third quarter of 2020, with an outstanding balance of $19.6 million as of the second quarter of 2021

Special mention loans as of June 30, 2021 totaled $92.5 million, a decrease of $17.1 million, or 15.6%, from $109.6 million as of March 31, 2021. This decrease was primarily due to the downgrade to substandard of a $12.1 million CRE loan and a $2.7 million commercial loan, as well as the upgrade to pass of a $1.4 million owner occupied loan; partially offset by the downgrade to special mention of a $2.6 million CRE loan. Special mention loans as of June 30, 2021 increased $69.6 million, or 304.3%, compared to the second quarter of 2020, due to downgrades disclosed in previous quarters, primarily a $28.2 million CRE retail loan, two commercial loans totaling $36.5 million and two owner occupied loans totaling $14.6 million; and partially offset primarily by the payoff of a $7.2 million construction loan. All special mention loans remain current.

Non-performing assets totaled $121.5 million at the end of the second quarter of 2021, an increase of $31.6 million or 35.1%, compared to the first quarter of 2021, and $44.2 million, or 57.2%, compared to the second quarter of 2020 due to the increase in classified loans described above. The ratio of non-performing assets to total assets was 161 basis points, up 45 basis points from the first quarter of 2021 and up 66 basis points from the second quarter of 2020. In the second quarter of 2021, the ratio of ALL to non-performing loans decreased to 86.0%, from 123.9% at March 31, 2021 and 154.9% at the close of the second quarter of 2020. During the second quarter of 2021 the Company obtained independent third-party collateral valuations on the majority of non-performing loans supporting current ALL levels. No additional loan loss reserves were deemed necessary as a result of these valuations.

As of June 30, 2021, $54.4 million, or 1.0% of total loans, were still under applicable deferral and/or forbearance periods, a decrease from $61.5 million, or 1.1% of total loans, at the end of first quarter 2021, and significantly down from $1.1 billion, or 19.3% of total loans, at the beginning of the loan loss mitigation programs established in April 2020 in response to the pandemic. The quarter-over-quarter decrease was primarily due to $7.1 million in CRE loans that resumed regular payments after deferral and/or forbearance periods ended.

Additionally, 100% of the loans under deferral and/or forbearance are secured by real estate collateral with average Loan to Value (“LTV”) of 83% as of June 30, 2021, based on recent appraisal valuations. All loans that have moved out of forbearance status have resumed regular payments. The Company continues to closely monitor the performance of the remaining loans in deferral and/or forbearance periods under the terms of the temporary relief granted.

Loans and Deposits

Total loans as of June 30, 2021 were $5.6 billion, down $146.3 million, or 2.5%, compared to March 31, 2021. This decrease was primarily due to loan production being offset by (i) approximately $260 million in prepayments received in both CRE and C&I loans, (ii) the sale of $95.1 million in PPP loans in May of 2021; and (iii) $59.9 million in PPP loan forgiveness processed, while loan demand slowly recovers and pricing competition has intensified. During the second quarter of 2021, Amerant continued purchasing higher yielding consumer loans, as planned. Consumer loans, which include $62 million of higher-yielding indirect consumer lending, increased $32.0 million, or 11.5%, quarter over quarter.

As of June 30, 2021, total PPP loans outstanding were $23.6 million, or 0.4% of total loans, compared to $164.8 million, or 2.9% of total loans as of March 31, 2021. The Company estimates as of June 30, 2021, there were $131.4 million of deposits related to PPP loans compared to $173.2 million as of March 31, 2021.

During May 2021, Amerant Mortgage started taking loan applications, and, as previously announced, acquired an Idaho-based operation which allows it to operate its mortgage business nationally with direct access to important federal housing agencies.

Core deposits as of June 30, 2021 were $4.0 billion, an increase of $245.9 million or 6.5%, compared to March 31, 2021. This includes noninterest bearing deposits of $1.07 billion as of June 30, 2021 compared to $0.98 billion as of March 31, 2021. Total deposits as of June 30, 2021 totaled $5.7 billion, slightly down $3.2 million, or 0.1%, compared to March 31, 2021. Domestic deposits totaled $3.1 billion, down $35.0 million, or 1.1%, compared to March 31, 2021, while foreign deposits totaled $2.5 billion, up $31.8 million, or 1.3%, compared to March 31, 2021.

The quarter-over-quarter decline in total deposits was primarily attributable to a $145.1 million, or 10.5%, reduction in customer CDs compared to the prior quarter, as the Company continued to lower CD rates and focus on increasing core deposits and emphasizing multi-product relationships versus single product higher-cost CDs. This decline in CDs includes a $25.8 million, or 17.2%, reduction in online CD balances. During the second quarter of 2021 brokered deposits also decreased $21.5 million, or 3.9%. Brokered time and brokered interest bearing demand deposits decreased by $104.0 million and $41.7 million, respectively, offset by a $124.2 million increase in brokered money market deposits. The decreases in total customer CDs and brokered deposits were partially offset by an increase of $163.5 million, or 4.4%, in customer transaction accounts, with savings and money market, noninterest bearing and interest bearing deposits contributing 39%, 54% and 7% to such growth, respectively.

Net Interest Income and Net Interest Margin

Second quarter 2021 NII was $50.0 million, up $2.4 million, or 5.1%, from $47.6 million in the first quarter of 2021 and up $3.6 million, or 7.9%, from $46.3 million in the second quarter of 2020. The quarter-over-quarter increase was primarily driven by higher average loan yields due to (i) lower net amortization of net deferred loan origination costs in the second quarter due to PPP loan forgiveness activity during the first quarter in connection with the first round of PPP loans, which had higher deferred loan origination costs; (ii) an increase in higher-yielding consumer loans, as well as lower overall customer deposit costs and declines in average balances on customer and brokered CDs. Lower cost and average balances on FHLB advances and other borrowings also contributed to the increase in NII. In May 2021, the Company repaid $235 million fixed-rate FHLB advances and modified rates on $285 million of additional borrowings, resulting in $3.6 million in annual savings and $2.5 million savings for the remainder of 2021. Offsetting the increase in NII were lower average loan balances due to higher prepayment activity and lower loan production as the economy slowly recovers from the COVID-19 pandemic. Also contributing to the offset were lower average balances and yields on available for sale securities due to prepayments and sale of securities in the first and second quarters.

The year-over-year increase in NII was primarily driven by higher average loan yields and significantly lower costs across all deposit types as well as lower average balances on customer and brokered time deposits. Lower cost and average balances on FHLB advances and other borrowings also contributed to the increase. Offsetting the year-over-year NII increase were lower average loan balances as well as lower average balances and yields on available for sale securities. Additionally, the company completed its offering of $60.0 million of 5.75% senior notes in June 2020 contributing to the offset to NII during the period.

NIM was 2.81% in the second quarter of 2021, up 15 basis points from 2.66% in the first quarter of 2021 and up 37 basis points from 2.44% in the second quarter of 2020. As in previous quarters, during the second quarter of 2021, Amerant continued to focus on offsetting ongoing NIM pressure by (i) decreasing cost of funds via strategic repricing of customer time and relationship money market deposits and restructuring of FHLB advances; and (ii) proactively seeking to increase spreads in loan origination.

As of June 30, 2021, Amerant had $364 million of time deposits maturing in the third quarter of 2021. This is expected to decrease the average cost of CDs by approximately 12bps and the overall cost of deposits by approximately 3bps.

Noninterest income

In the second quarter of 2021, noninterest income was $15.7 million, up 11.1% from $14.2 million in the first quarter of 2021. The increase was primarily driven by a net gain of $3.8 million in connection with the sale of $95.1 million of PPP loans in May 2021 and $1.1 million in higher customer derivative income. The quarter-over-quarter increase in noninterest income was partially offset by a $2.5 million net loss on early extinguishment of FHLB advances as the company repaid $235 million of these borrowings and a decrease of $1.2 million in net gain on sale of securities compared to the previous quarter. In the second quarter of 2021, Amerant realized a total net gain on sale of securities of $1.3 million. Core noninterest income (non-GAAP) was $13.1 million in the second quarter of 2021 compared to $11.6 million in the first quarter of 2021 and $12.1 million in the second quarter of 2020.

Noninterest income decreased $4.0 million, or 20.3%, from $19.8 million in the second quarter of 2020. The year-over-year decrease in noninterest income was primarily driven by a $6.4 million decrease in net gains on sale of securities as well as a $2.5 million net loss on early extinguishment of FHLB advances incurred during the second quarter of 2021, as previously mentioned. Lower customer derivative income in the current period compared to the second quarter of 2020 also contributed to the decrease year-over-year. The decrease in noninterest income year-over-year was partially offset by a net gain of $3.8 million from the sale of $95.1 million of PPP loans, and higher wire transfer fees.

The Company’s assets under management and custody (“AUM”) totaled $2.13 billion as of June 30, 2021, increasing $113.6 million, or 5.6%, from $2.02 billion as of March 31, 2021, and $416.7 million, or 24.3%, from $1.72 billion as of June 30, 2020 primarily driven by increased market value in AUM. From these increases in AUM net new assets represent $33.8 million, or 1.7%, compared to the first quarter of 2021 and $114.0 million, or 6.6%, compared to the second quarter of 2020, as the Company continues to build on its client-focused and relationship-centric strategy. Amerant remains firmly focused on growing AUM, both domestically and internationally.

Noninterest expense

Second quarter of 2021 noninterest expense was $51.1 million, up $7.5 million, or 17.2%, from $43.6 million in the first quarter of 2021. The increase was primarily driven by higher salaries and employee benefits expenses primarily as a result of $3.3 million in severance expenses in connection with (i) the departure of the Company’s Chief Operating Officer; (ii) the closing of the New York City loan production Office (“NYC LPO”), as the Company ceased to originate loans there; (iii) the Company’s decision to outsource its internal audit function; and (iv) costs in connection with the elimination of various other support function positions. Additionally, the second quarter noninterest expense includes a $0.8 million lease impairment charge in connection with the closing of the NYC LPO. Lastly, there were higher recruitment fees and advertising expenses which also contributed to the increase quarter over quarter. There was no significant offset to the increase in noninterest expense during the period.

Noninterest expense for the second quarter of 2021, increased $14.4 million, or 39.2% compared to $36.7 million in the second quarter of 2020 primarily driven by higher salaries and employee benefits due to the absence of the $7.8 million deferral of expenses in the second quarter of 2020 directly related to the origination of PPP loans in accordance with GAAP. Higher severance costs and rent expense under leases, as previously mentioned, as well as higher other noninterest expenses due to the absence of deferral costs in connection with PPP loan originations and advertising expenses also contributed to the increase year-over-year.

Core noninterest expense (non-GAAP) was $47.0 million in the second quarter of 2021, up $3.6 million, or 8.2%, from $43.4 million in the first quarter of 2021, and up $11.5 million, or 32.6%, from $35.4 million in the second quarter of 2020. Restructuring expenses totaled $4.2 million in the second quarter of 2021, compared to $0.2 million in the first quarter of 2021 and $1.3 million in the second quarter of 2020, primarily due to higher severance expenses, as described above.

The efficiency ratio was 77.8% in the second quarter of 2021, compared to 70.7% during the first quarter of 2021, and 55.6% for the second quarter of 2020. The quarter-over-quarter increase in the efficiency ratio was driven by severance expenses incurred during the second quarter of 2021 in connection with the restructuring activities and events previously referenced above. The year-over-year increase was primarily attributable to higher salaries and employee benefits due to the absence of the $7.8 million deferral of expenses in the second quarter of 2020, as explained above. Core efficiency ratio was 74.45% in the second quarter of 2021 compared to 73.35% in the first quarter of 2021 and 60.65% in the second quarter of 2020.

Amerant remains dedicated to finding new ways to increase efficiencies across the Company while simultaneously providing an enhanced banking experience for customers. As part of these continued efforts, Amerant signed partnerships with leading fintech firms in the most recent quarter, Numerated and Marstone, Inc., driving forward the Company's digital transformation. Numerated's platform is expected to improve the business lending and deposit account opening processes while Marstone's online wealth management platform is expected to further improve banking relationships by empowering Amerant customers to fully understand their financial position, plans and outlook.

Additionally, as part of Amerant’s keen focus on profitable growth, in July of 2021, the Company engaged Zimmerman Advertising as its new marketing partner demonstrating its commitment to driving brand awareness and business development.

Finally, the Company recently determined to close its banking center in Wellington, FL which is expected to be completed in the third quarter of 2021. This closure results from extensive profitability analyses of the Company’s retail banking network and current and expected individual branch contributions towards Amerant's strategic goals.

Capital Resources and Liquidity

The Company’s capital continues to be strong and well in excess of the minimum regulatory requirements to be considered “well-capitalized” at June 30, 2021.

Stockholders’ equity attributable to the Company totaled $799.1 million as of June 30, 2021, up $14.1 million, or 1.8%, from $785.0 million as of March 31, 2021. This increase in stockholder’s equity was primarily driven by net income in the second quarter of 2021 and higher valuation of the Company’s debt securities available for sale as a result of lower long-term yield curves. Partially offsetting the increase was the $6.5 million Class B shares repurchased by the Company during the second quarter of 2021. Book value per common share increased to $21.27 at June 30, 2021 compared to $20.70 at March 31, 2021. TBV increased to $20.69 at June 30, 2021 compared to $20.13 at March 31, 2021.

As of June 30, 2021, the Company had repurchased approximately $8.4 million Class B shares since launching its Class B share repurchase program for the repurchase of up to $40 million of its Class B shares on March 11, 2021, demonstrating its commitment to increasing total return to shareholders.

Amerant’s liquidity position continues to be strong and includes cash and cash equivalents of $171.5 million at the close of the second quarter of 2021, compared to $233.5 million as of March 31, 2021. Additionally, as of June 30, 2021, the Company had $1.5 billion in available borrowing capacity with the FHLB, an increase from $1.3 billion in the first quarter of 2021.

Second Quarter 2021 Earnings Conference Call

As previously announced, the Company will hold an earnings conference call on Thursday, July 22nd, 2021 at 9:00 a.m. (Eastern Time) to discuss its second quarter 2021 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.

The Company is a bank holding company headquartered in Coral Gables, Florida since 1979. The Company operates through its subsidiaries, Amerant Bank, N.A. (the “Bank”), Amerant Investments, Inc., Elant Bank and Trust Ltd., and Amerant Mortgage, LLC. The Company provides individuals and businesses in the U.S., as well as select international clients, with deposit, credit and wealth management services. The Bank, which has operated for over 40 years, is the second largest community bank headquartered in Florida. The Bank operates 25 banking centers – 18 in South Florida and 7 in the Houston, Texas area.

nCino® is a registered trademark of nCino, Inc. used in accordance with contractual terms.

Numerated® is a trademark of Numerated Growth Technologies, Inc. and is used with permission.

Marstone® is a trademark of Marstone, Inc. and is used with permission.

Zimmerman Advertising, LLC is used with permission.

Visit our investor relations page at https://investor.amerantbank.com for additional information.

Cautionary Notice Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, including statements with respect to our 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 as 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, 2020 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 as of and for the three and six months ended June 30, 2021 and 2020, may not reflect our results of operations for our fiscal year ending, or financial condition as of December 31, 2021, or any other period of time or date.

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 expense”, “core net income (loss)”, “core net income (loss) per share (basic and diluted)”, “core return on assets (ROA)”, “core return on equity (ROE)”, and “core efficiency ratio”. This supplemental information is not required by, or are 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 have continued into 2021, including the effect of non-core banking activities such as the sale of loans and securities, and other non-recurring 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)

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

Consolidated Balance Sheets

Total assets

$

7,532,844

$

7,751,098

$

7,770,893

$

7,977,047

$

8,130,723

Total investments

1,359,240

1,375,292

1,372,567

1,468,796

1,674,811

Total gross loans (1)

5,608,548

5,754,838

5,842,337

5,924,617

5,872,271

Allowance for loan losses

104,185

110,940

110,902

116,819

119,652

Total deposits

5,674,908

5,678,079

5,731,643

5,877,546

6,024,702

Core deposits (2)

4,041,867

3,795,949

3,690,081

3,623,647

3,590,625

Advances from the FHLB and other borrowings

808,614

1,050,000

1,050,000

1,050,000

1,050,000

Senior notes (3)

58,736

58,656

58,577

58,498

58,419

Junior subordinated debentures

64,178

64,178

64,178

64,178

64,178

Stockholders' equity (4)

799,068

785,014

783,421

829,533

830,198

Assets under management and custody (5)

2,132,516

2,018,870

1,972,321

1,762,803

1,715,804


Three Months Ended

Six Months Ended June 30,

(in thousands, except percentages and per share amounts)

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

2021

2020

Consolidated Results of Operations

Net interest income

$

49,971

$

47,569

$

48,652

$

45,348

$

46,323

$

97,540

$

95,552

(Reversal of) provision for loan losses

(5,000

)

18,000

48,620

(5,000

)

70,620

Noninterest income

15,734

14,163

11,515

20,292

19,753

29,897

41,663

Noninterest expense

51,125

43,625

51,629

45,500

36,740

94,750

81,607

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

15,962

14,459

8,473

1,702

(15,279

)

30,421

(11,897

)

Effective income tax rate

22.65

%

20.15

%

0.76

%

20.47

%

20.77

%

21.45

%

20.75

%

Common Share Data

Stockholders' book value per common share

$

21.27

$

20.70

$

20.70

$

19.68

$

19.69

$

21.27

$

19.69

Tangible stockholders' equity (book value) per common share (7)

$

20.69

$

20.13

$

20.13

$

19.17

$

19.18

$

20.69

$

19.18

Basic earnings (loss) per common share

$

0.43

$

0.38

$

0.21

$

0.04

$

(0.37

)

$

0.81

$

(0.28

)

Diluted earnings (loss) per common share (8)

$

0.42

$

0.38

$

0.20

$

0.04

$

(0.37

)

$

0.81

$

(0.28

)

Basic weighted average shares outstanding

37,330

37,618

41,326

41,722

41,720

37,473

41,953

Diluted weighted average shares outstanding (8)

37,693

37,846

41,688

42,065

41,720

37,768

41,953


Three Months Ended

Six Months Ended June 30,

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

2021

2020

Other Financial and Operating Data (9)

Profitability Indicators (%)

Net interest income / Average total interest earning assets (NIM) (10)

2.81

%

2.66

%

2.61

%

2.39

%

2.44

%

2.74

%

2.55

%

Net income (loss) / Average total assets (ROA) (11)

0.83

%

0.76

%

0.42

%

0.08

%

(0.75

)

%

0.80

%

(0.30

)

%

Net income (loss) / Average stockholders' equity (ROE) (12)

8.11

%

7.47

%

4.09

%

0.81

%

(7.21

)

%

7.80

%

(2.82

)

%

Noninterest income / Total revenue (13)

23.95

%

22.94

%

19.14

%

30.91

%

29.89

%

23.46

%

30.36

%

Capital Indicators (%)

Total capital ratio (14)

14.17

%

14.12

%

13.96

%

14.56

%

14.34

%

14.17

%

14.34

%

Tier 1 capital ratio (15)

12.92

%

12.87

%

12.71

%

13.30

%

13.08

%

12.92

%

13.08

%

Tier 1 leverage ratio (16)

10.75

%

10.54

%

10.11

%

10.52

%

10.39

%

10.75

%

10.39

%

Common equity tier 1 capital ratio (CET1) (17)

11.96

%

11.90

%

11.73

%

12.34

%

12.13

%

11.96

%

12.13

%

Tangible common equity ratio (18)

10.35

%

9.88

%

9.83

%

10.16

%

9.97

%

10.35

%

9.97

%

Asset Quality Indicators (%)

Non-performing assets / Total assets (19)

1.61

%

1.16

%

1.13

%

1.08

%

0.95

%

1.61

%

0.95

%

Non-performing loans / Total loans (1) (20)

2.16

%

1.56

%

1.50

%

1.46

%

1.32

%

2.16

%

1.32

%

Allowance for loan losses / Total non-performing loans

86.02

%

123.92

%

126.46

%

135.09

%

154.87

%

86.02

%

154.87

%

Allowance for loan losses / Total loans (1)

1.86

%

1.93

%

1.90

%

1.97

%

2.04

%

1.86

%

2.04

%

Net charge-offs / Average total loans (21)

0.12

%

%

0.40

%

1.41

%

0.13

%

0.06

%

0.11

%

Efficiency Indicators (% except FTE)

Noninterest expense / Average total assets

2.67

%

2.28

%

2.59

%

2.24

%

1.81

%

2.48

%

2.04

%

Salaries and employee benefits / Average total assets

1.61

%

1.38

%

1.62

%

1.39

%

1.06

%

1.50

%

1.27

%

Other operating expenses/ Average total assets (22)

1.06

%

0.90

%

0.97

%

0.85

%

0.75

%

0.98

%

0.77

%

Efficiency ratio (23)

77.80

%

70.70

%

85.81

%

69.32

%

55.60

%

74.35

%

59.47

%

Full-Time-Equivalent Employees (FTEs) (24)

719

731

713

807

825

719

825


Three Months Ended

Six Months Ended June 30,

(in thousands, except percentages and per share amounts)

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

2021

2020

Core Selected Consolidated Results of Operations and Other Data (6)

Core pre-provision net revenue (Core PPNR)

$

16,934

$

15,765

$

17,641

$

13,387

$

22,983

$

32,699

$

39,996

Core net income (loss)

$

17,199

$

12,589

$

20,917

$

(3,638

)

$

(20,321

)

$

29,788

$

(24,270

)

Core basic earnings (loss) per common share

0.46

0.33

0.50

(0.09

)

(0.49

)

0.79

(0.58

)

Core earnings (loss) per diluted common share (7)

0.46

0.33

0.50

(0.09

)

(0.49

)

0.79

(0.58

)

Core net income (loss) / Average total assets (Core ROA) (11)

0.90

%

0.66

%

1.05

%

(0.18

)

%

(1.00

)

%

0.78

%

(0.61

)

%

Core net income (loss) / Average stockholders' equity (Core ROE) (12)

8.74

%

6.50

%

10.08

%

(1.74

)

%

(9.59

)

%

7.64

%

(5.76

)

%

Core efficiency ratio (25)

74.45

%

73.35

%

71.02

%

76.53

%

60.65

%

73.92

%

66.65

%

__________________
(1) Total gross loans are net of unamortized deferred loan origination fees and costs. At June 30, 2021 and March 31, 2021, total loans include $1.8 million and $1.0 million in loans held for sale, respectively. There were no loans held for sale at any of the other dates presented.
(2) Core deposits consist of total deposits excluding all time deposits.
(3) During the second quarter of 2020, the Company completed a $60 million offering of Senior Notes with a coupon rate of 5.75%. Senior Notes are presented net of direct issuance cost which is deferred and amortized over 5 years.
(4) On March 10, 2021, the Company’s Board of Directors approved a stock repurchase program which provides for the potential repurchase of up to $40 million of shares of the Company’s Class B common stock (the “2021 Stock Repurchase Program”). In the second and first quarters of 2021, the Company repurchased an aggregate of 386,195 and 116,037 shares of Class B common stock, respectively, at a weighted average price per share of $16.62 and $15.98, respectively, under the 2021 Stock Repurchase Program. In the fourth quarter of 2020, the Company completed a modified “Dutch auction” tender offer to purchase, for cash, up to $50.0 million of shares of its Class B common stock, and accepted to purchase 4,249,785 shares of Class B common stock in the tender offer at a price of $12.55 per share. The purchase price for this transaction was approximately $54.1 million, including $0.8 million in related fees and other expenses.
(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) Includes 49% minority interest of Amerant Mortgage LLC.
(7) 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.
(8) In the three and six months periods ended June 30, 2021, potential dilutive instruments consisted of unvested shares of restricted stock, restricted stock units and performance share units (restricted stock and restricted stock units for all of the other periods shown). For the three and six month periods ended June 30, 2020, potential dilutive instruments were not included in the diluted earnings per share computation because the Company reported a net loss and their inclusion would have an antidilutive effect. For all other 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 in per share earnings.
(9) Operating data for the periods presented have been annualized.
(10) 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.
(11) Calculated based upon the average daily balance of total assets.
(12) Calculated based upon the average daily balance of stockholders’ equity.
(13) Total revenue is the result of net interest income before provision for loan losses plus noninterest income.
(14) Total stockholders’ equity divided by total risk-weighted assets, calculated according to the standardized regulatory capital ratio calculations.
(15) 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 June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020.
(16) Tier 1 capital divided by quarter to date average assets.
(17) CET1 capital divided by total risk-weighted assets.
(18) 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 intangibles assets are included in other assets in the Company’s consolidated balance sheets.
(19) 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 OREO properties acquired through or in lieu of foreclosure.
(20) Non-performing loans include all accruing loans past due by 90 days or more, all nonaccrual loans and restructured loans that are considered TDRs.
(21) 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 loan losses. During the second quarter of 2021, there were net charge offs of $1.8 million. In the first quarter of 2021, there were zero net charge offs. During the third quarter of 2020, the Company charged off $19.3 million against the allowance for loan losses as result of the deterioration of one commercial loan relationship.
(22) Other operating expenses is the result of total noninterest expense less salary and employee benefits.
(23) Efficiency ratio is the result of noninterest expense divided by the sum of noninterest income and NII.
(24) As of June 30, 2021, includes 38 FTEs for Amerant Mortgage LLC.
(25) 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) loan losses, provision for income tax expense (benefit), the effect of non-core banking activities such as the sale of loans and securities, 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,

Six Months Ended June 30,

(in thousands)

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

2021

2020

Net income (loss) attributable to Amerant Bancorp Inc.

$

15,962

$

14,459

$

8,473

$

1,702

$

(15,279

)

$

30,421

$

(11,897

)

Plus: (reversal of) provision for loan losses

(5,000

)

18,000

48,620

(5,000

)

70,620

Plus: provision for income tax expense (benefit)

4,435

3,648

65

438

(4,005

)

8,083

(3,115

)

Pre-provision net revenue

15,397

18,107

8,538

20,140

29,336

33,504

55,608

Plus: restructuring costs before income tax effect

4,164

240

8,407

1,846

1,318

4,404

1,672

Less: non-routine noninterest income items

(2,627

)

(2,582

)

696

(8,599

)

(7,671

)

(5,209

)

(17,284

)

Core pre-provision net revenue

$

16,934

$

15,765

$

17,641

$

13,387

$

22,983

$

32,699

$

39,996

Total noninterest income

$

15,734

$

14,163

$

11,515

$

20,292

$

19,753

$

29,897

$

41,663

Less: Non-routine noninterest income items:

Loss on sale of the Beacon operations center (1)

(1,729

)

Securities gains, net

1,329

2,582

1,033

8,599

7,737

3,911

17,357

Loss on early extinguishment of FHLB advances, net

(2,488

)

(66

)

(2,488

)

(73

)

Gain on sale of loans

3,786

3,786

Total non-routine noninterest income items

$

2,627

$

2,582

$

(696

)

$

8,599

$

7,671

$

5,209

$

17,284

Core noninterest income

$

13,107

$

11,581

$

12,211

$

11,693

$

12,082

$

24,688

$

24,379

Total noninterest expenses

$

51,125

$

43,625

$

51,629

$

45,500

$

36,740

$

94,750

$

81,607

Less: restructuring costs (2):

Staff reduction costs (3)

3,322

6

5,345

646

360

3,328

414

Digital transformation expenses

32

234

658

1,200

958

266

1,258

Lease impairment charge

810

810

Branch closure expenses

2,404

Total restructuring costs

$

4,164

$

240

$

8,407

$

1,846

$

1,318

$

4,404

$

1,672

Core noninterest expenses

$

46,961

$

43,385

$

43,222

$

43,654

$

35,422

$

90,346

$

79,935

Net income (loss) attributable to Amerant Bancorp Inc.

$

15,962

$

14,459

$

8,473

$

1,702

$

(15,279

)

$

30,421

$

(11,897

)

Plus after-tax restructuring costs:

Restructuring costs before income tax effect

4,164

240

8,407

1,846

1,318

4,404

1,672

Income tax effect

(897

)

(48

)

(6,455

)

(385

)

(273

)

(945

)

(347

)

Total after-tax restructuring costs

3,267

192

1,952

1,461

1,045

3,459

1,325

Less before-tax non-routine items in noninterest income:

(2,627

)

(2,582

)

696

(8,599

)

(7,671

)

(5,209

)

(17,284

)

Income tax effect

597

520

9,796

1,798

1,584

1,117

3,586

Total after-tax non-routine items in noninterest income

(2,030

)

(2,062

)

10,492

(6,801

)

(6,087

)

(4,092

)

(13,698

)

Core net income (loss)

$

17,199

$

12,589

$

20,917

$

(3,638

)

$

(20,321

)

$

29,788

$

(24,270

)


Three Months Ended,

Six Months Ended June 30,

(in thousands, except percentages and per share amounts)

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

2021

2020

Basic earnings (loss) per share

$

0.43

$

0.38

$

0.21

$

0.04

$

(0.37

)

$

0.81

$

(0.28

)

Plus: after tax impact of restructuring costs

0.09

0.01

0.04

0.04

0.03

0.10

0.03

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

(0.06

)

(0.06

)

0.25

(0.17

)

(0.15

)

(0.12

)

(0.33

)

Total core basic earnings (loss) per common share

$

0.46

$

0.33

$

0.50

$

(0.09

)

$

(0.49

)

$

0.79

$

(0.58

)

Diluted earnings (loss) per share (4)

$

0.42

$

0.38

$

0.20

$

0.04

$

(0.37

)

$

0.81

$

(0.28

)

Plus: after tax impact of restructuring costs

0.09

0.01

0.05

0.04

0.03

0.09

0.03

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

(0.05

)

(0.06

)

0.25

(0.17

)

(0.15

)

(0.11

)

(0.33

)

Total core diluted earnings (loss) per common share

$

0.46

$

0.33

$

0.50

$

(0.09

)

$

(0.49

)

$

0.79

$

(0.58

)

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

0.83

%

0.76

%

0.42

%

0.08

%

(0.75

)

%

0.80

%

(0.30

)

%

Plus: after tax impact of restructuring costs

0.17

%

0.01

%

0.11

%

0.08

%

0.05

%

0.09

%

0.04

%

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

(0.10

)

%

(0.11

)

%

0.52

%

(0.34

)

%

(0.30

)

%

(0.11

)

%

(0.35

)

%

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

0.90

%

0.66

%

1.05

%

(0.18

)

%

(1.00

)

%

0.78

%

(0.61

)

%

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

8.11

%

7.47

%

4.09

%

0.81

%

(7.21

)

%

7.80

%

(2.82

)

%

Plus: after tax impact of restructuring costs

1.66

%

0.10

%

0.94

%

0.70

%

0.49

%

0.88

%

0.31

%

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

(1.03

)

%

(1.07

)

%

5.05

%

(3.25

)

%

(2.87

)

%

(1.04

)

%

(3.25

)

%

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

8.74

%

6.50

%

10.08

%

(1.74

)

%

(9.59

)

%

7.64

%

(5.76

)

%

Efficiency ratio

77.81

%

70.67

%

85.81

%

69.32

%

55.60

%

74.35

%

59.47

%

Less: impact of restructuring costs

(6.34

)

%

(0.39

)

%

(13.97

)

%

(2.81

)

%

(1.99

)

%

(3.46

)

%

(1.21

)

%

Plus: after tax impact of non-routine items in noninterest income

2.98

%

3.07

%

(0.82

)

%

10.02

%

7.04

%

3.03

%

8.39

%

Core efficiency ratio

74.45

%

73.35

%

71.02

%

76.53

%

60.65

%

73.92

%

66.65

%

Stockholders' equity

$

799,068

$

785,014

$

783,421

$

829,533

$

830,198

$

799,068

$

830,198

Less: goodwill and other intangibles

(21,969

)

(21,515

)

(21,561

)

(21,607

)

(21,653

)

(21,969

)

(21,653

)

Tangible common stockholders' equity

$

777,099

$

763,499

$

761,860

$

807,926

$

808,545

$

777,099

$

808,545

Total assets

7,532,844

7,751,098

7,770,893

7,977,047

8,130,723

7,532,844

8,130,723

Less: goodwill and other intangibles

(21,969

)

(21,515

)

(21,561

)

(21,607

)

(21,653

)

(21,969

)

(21,653

)

Tangible assets

$

7,510,875

$

7,729,583

$

7,749,332

$

7,955,440

$

8,109,070

$

7,510,875

$

8,109,070

Common shares outstanding

37,563

37,922

37,843

42,147

42,159

37,563

42,159

Tangible common equity ratio

10.35

%

9.88

%

9.83

%

10.16

%

9.97

%

10.35

%

9.97

%

Stockholders' book value per common share

$

21.27

$

20.70

$

20.70

$

19.68

$

19.69

$

21.27

$

19.69

Tangible stockholders' book value per common share

$

20.69

$

20.13

$

20.13

$

19.17

$

19.18

$

20.69

$

19.18

____________
(1) The Company leased-back the property for a 2-year term.
(2) Expenses incurred for actions designed to implement the Company’s strategy as a new independent company. These actions include, but are not limited to reductions in workforce, streamlining operational processes, rolling out the Amerant brand, implementation of new technology sys...tem applications, enhanced sales tools and training, expanded product offerings and improved customer analytics to identify opportunities.
(3) In the second quarter of 2021, includes expenses in connection with the departure of the Company’s Chief Operating Officer and the elimination of various other support function positions, including the NYC LPO. In the fourth quarter of 2020, the Board of Directors of the Company adopted a voluntary early retirement plan for certain eligible long-term employees and an involuntary severance plan for certain other positions consistent with the Company’s effort to streamline operations and better align its operating structure with its business activities. 31 employees elected to participate in the voluntary plan, all of whom retired on or before December 31, 2020. The involuntary plan impacted 31 employees most of whom no longer worked for the Company and/or its subsidiaries by December 31, 2020. On December 28, 2020, the Company determined the termination costs and annual savings related to the voluntary and involuntary plans. The Company incurred approximately $3.5 million and $1.8 million in one-time termination costs in the fourth quarter of 2020 in connection with the voluntary and involuntary plans, respectively, the majority of which will be paid over time in the form of installment payments until December 2021. The Company estimates that the voluntary and involuntary plans will yield estimated annual savings of approximately $4.2 million and $5.5 million, respectively, for combined estimated annual savings of approximately $9.7 million beginning in 2021.
(4) In the three and six month periods ended June 30, 2021, potential dilutive instruments consisted of unvested shares of restricted stock, restricted stock units and performance share units (restricted stock and restricted stock units for all of the other periods shown). For the three and six month periods ended June 30, 2020, potential dilutive instruments were not included in the diluted earnings per share computation because the Company reported a net loss and their inclusion would have an antidilutive effect. For all other 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 in per share earnings.

Exhibit 3 - Average Balance Sheet, Interest and Yield/Rate Analysis

The following tables present average balance sheet information, interest income, interest expense and the corresponding average yields earned and rates paid for the periods presented. The average balances for loans include both performing and nonperforming balances. Interest income on loans includes the effects of discount accretion and the amortization of non-refundable loan origination fees, net of direct loan origination costs, accounted for as yield adjustments. Average balances represent the daily average balances for the periods presented.

Three Months Ended

June 30, 2021

March 31, 2021

June 30, 2020

(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)

$

5,526,727

$

53,612

3.89

%

$

5,678,547

$

52,771

3.77

%

$

5,712,548

$

53,483

3.77

%

Debt securities available for sale (2)

1,180,766

6,393

2.17

%

1,207,764

6,495

2.18

%

1,545,335

9,283

2.42

%

Debt securities held to maturity (3)

97,208

481

1.98

%

67,729

302

1.81

%

68,237

308

1.82

%

Debt securities held for trading

258

2

3.11

%

104

1

3.90

%

%

Equity securities with readily determinable fair value not held for trading

24,010

75

1.25

%

24,225

84

1.41

%

24,303

121

2.00

%

Federal Reserve Bank and FHLB stock

51,764

548

4.25

%

63,781

625

3.97

%

69,801

916

5.28

%

Deposits with banks

239,951

62

0.10

%

205,355

51

0.10

%

215,406

56

0.10

%

Total interest-earning assets

7,120,684

61,173

3.45

%

7,247,505

60,329

3.38

%

7,635,630

64,167

3.38

%

Total non-interest-earning assets less allowance for loan losses

559,807

498,754

512,569

Total assets

$

7,680,491

$

7,746,259

$

8,148,199


Three Months Ended

June 30, 2021

March 31, 2021

June 30, 2020

(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

$

1,292,612

$

123

0.04

%

$

1,258,301

$

113

0.04

%

$

1,122,405

$

104

0.04

%

Money market

1,310,133

931

0.29

%

1,236,026

966

0.32

%

1,112,363

1,521

0.55

%

Savings

373,723

14

0.02

%

318,800

14

0.02

%

320,644

48

0.06

%

Total checking and saving accounts

2,976,468

1,068

0.14

%

2,813,127

1,093

0.16

%

2,555,412

1,673

0.26

%

Time deposits

1,789,517

6,327

1.42

%

1,956,559

7,360

1.53

%

2,484,219

12,406

2.01

%

Total deposits

4,765,985

7,395

0.62

%

4,769,686

8,453

0.72

%

5,039,631

14,079

1.12

%

Securities sold under agreements to repurchase

440

1

0.91

%

%

474

%

Advances from the FHLB and other borrowings (4)

922,050

2,255

0.98

%

1,050,000

2,758

1.07

%

1,163,022

3,110

1.08

%

Senior notes

58,697

942

6.44

%

58,618

942

6.52

%

5,136

84

6.58

%

Junior subordinated debentures

64,178

609

3.81

%

64,178

607

3.84

%

64,178

571

3.58

%

Total interest-bearing liabilities

5,811,350

11,202

0.77

%

5,942,482

12,760

0.87

%

6,272,441

17,844

1.14

%

Non-interest-bearing liabilities:

Non-interest bearing demand deposits

937,275

925,266

916,980

Accounts payable, accrued liabilities and other liabilities

142,226

93,450

106,738

Total non-interest-bearing liabilities

1,079,501

1,018,716

1,023,718

Total liabilities

6,890,851

6,961,198

7,296,159

Stockholders’ equity

789,640

785,061

852,040

Total liabilities and stockholders' equity

$

7,680,491

$

7,746,259

$

8,148,199

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

$

1,309,334

$

1,305,023

$

1,363,189

Net interest income

$

49,971

$

47,569

$

46,323

Net interest rate spread

2.68

%

2.51

%

2.24

%

Net interest margin (5)

2.81

%

2.66

%

2.44

%

Cost of total deposits (6)

0.52

%

0.60

%

0.95

%

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

122.53

%

121.96

%

121.73

%

Average non-performing loans/ Average total loans

1.84

%

1.54

%

0.87

%


Six Months Ended

June 30, 2021

June 30, 2020

(in thousands, except percentages)

Average
Balances

Income/
Expense

Yield/
Rates

Average Balances

Income/ Expense

Yield/ Rates

Interest-earning assets:

Loan portfolio, net (1)

$

5,602,218

$

106,383

3.83

%

$

5,643,088

$

113,271

4.04

%

Debt securities available for sale (2)

1,192,342

12,888

2.18

%

1,547,418

18,781

2.44

%

Debt securities held to maturity (3)

82,550

783

1.91

%

70,355

708

2.02

%

Debt securities held for trading

181

3

3.34

%

%

Equity securities with readily determinable fair value not held for trading

24,117

159

1.33

%

24,178

252

2.10

%

Federal Reserve Bank and FHLB stock

57,650

1,173

4.10

%

70,497

1,952

5.57

%

Deposits with banks

222,749

113

0.10

%

193,627

518

0.54

%

Total interest-earning assets

7,181,807

121,502

3.41

%

7,549,163

135,482

3.61

%

Total non-interest-earning assets less allowance for loan losses

532,232

500,363

Total assets

$

7,714,039

$

8,049,526

Interest-bearing liabilities:

Checking and saving accounts -

Interest bearing DDA

$

1,302,603

$

236

0.04

%

$

1,097,489

$

239

0.04

%

Money market

1,273,284

1,897

0.30

%

1,124,432

4,770

0.85

%

Savings

320,903

28

0.02

%

321,663

65

0.04

%

Total checking and saving accounts

2,896,790

2,161

0.15

%

2,543,584

5,074

0.40

%

Time deposits

1,872,577

13,687

1.47

%

2,472,646

25,890

2.11

%

Total deposits

4,769,367

15,848

0.67

%

5,016,230

30,964

1.24

%

Securities sold under agreements to repurchase

221

1

0.91

%

237

%

Advances from the FHLB and other borrowings (4)

985,672

5,013

1.03

%

1,179,368

7,522

1.28

%

Junior subordinated debentures

64,178

1,216

3.82

%

68,650

1,360

3.98

%

Senior notes

58,658

1,884

6.48

%

2,568

84

6.58

%

Total interest-bearing liabilities

5,878,096

23,962

0.82

%

6,267,053

39,930

1.28

%

Non-interest-bearing liabilities:

Non-interest bearing demand deposits

931,291

836,782

Accounts payable, accrued liabilities and other liabilities

118,021

97,816

Total non-interest-bearing liabilities

1,049,312

934,598

Total liabilities

6,927,408

7,201,651

Stockholders’ equity

786,631

847,875

Total liabilities and stockholders' equity

$

7,714,039

$

8,049,526

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

$

1,303,711

$

1,282,110

Net interest income

$

97,540

$

95,552

Net interest rate spread

2.59

%

2.33

%

Net interest margin (5)

2.74

%

2.55

%

Cost of total deposits

0.56

%

1.06

%

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

122.18

%

120.46

%

Average non-performing loans/ Average total loans

1.69

%

0.73

%

_______________
(1) Average non-performing loans of $103.6 million, $89.2 million and $50.4 million for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and $96.4 million and $41.6 million in the six months ended June 30, 2021 and 2020, respectively, are included in the average loan portfolio, net. Interest income that would have been recognized on these non-performing loans totaled $0.9 million, $0.8 million and $0.6 million, in the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and $1.7 million and $1.1 million in the six months ended June 30, 2021 and 2020, respectively.
(2) Includes nontaxable securities with average balances of $27.3 million, $54.7 million and $62.2 million for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and $47.9 million and $55.8 million in the six months ended June 30, 2021 and 2020, respectively. The tax equivalent yield for these nontaxable securities was 2.15%, 3.80% and 3.77% for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and 2.77% and 3.82% for the six months ended June 30, 2021 and 2020, respectively. In 2021 and 2020, the tax equivalent yields were calculated by assuming a 21% tax rate and dividing the actual yield by 0.79.
(3) Includes nontaxable securities with average balances of $52.2 million, $56.6 million and $68.2 million for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and $54.4 million and $70.4 million in the six months ended June 30, 2021 and 2020, respectively. The tax equivalent yield for these nontaxable securities was 2.19%, 2.40% and 2.30% for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and 2.30% and 2.56% for the six months ended June 30, 2021 and 2020, respectively. In 2021 and 2020, the tax equivalent yields were calculated assuming a 21% tax rate and dividing the actual yield by 0.79.
(4) The terms of the FHLB advance agreements require the Bank to maintain certain investment securities or loans as collateral for these advances.
(5) 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.
(6) 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

Six Months Ended June 30,

June 30, 2021

March 31, 2021

June 30, 2020

2021

2020

(in thousands, except percentages)

Amount

%

Amount

%

Amount

%

Amount

%

Amount

%

Deposits and service fees

$

4,284

27.2

%

$

4,106

29.0

%

$

3,438

17.4

%

$

8,390

28.1

%

$

7,728

18.6

%

Brokerage, advisory and fiduciary activities

4,431

28.2

%

4,603

32.5

%

4,325

21.9

%

9,034

30.2

%

8,458

20.3

%

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

1,368

8.7

%

1,356

9.6

%

1,427

7.2

%

2,724

9.1

%

2,841

6.8

%

Cards and trade finance servicing fees

388

2.5

%

339

2.4

%

273

1.4

%

727

2.4

%

668

1.6

%

Loss on early extinguishment of FHLB advances, net

(2,488

)

(15.8

)

%

%

(66

)

(0.3

)

%

(2,488

)

(8.3

)

%

(73

)

(0.2

)

%

Securities gains, net (2)

1,329

8.5

%

2,582

18.2

%

7,737

39.2

%

3,911

13.1

%

17,357

41.7

%

Other noninterest income (3)

6,404

40.7

%

1,177

8.3

%

2,619

13.2

%

7,581

25.4

%

4,684

11.2

%

Total noninterest income

$

15,734

100.0

%

$

14,163

100.0

%

$

19,753

100.0

%

$

29,897

100.0

%

$

41,663

100.0

%

__________________
(1) Changes in cash surrender value of BOLI are not taxable.
(2) Includes net gain on sale of securities of $1.3 million, $2.9 million and $7.5 million during the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and unrealized gains of $22 thousand, unrealized losses of $0.4 million and unrealized gains of $0.2 million during the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, related to the change in market value of mutual funds.
(3) Includes a gain of $3.8 million on the sale of PPP loans in the three and six month periods ended June 30, 2021. In addition, includes rental income, income from derivative and 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

Six Months Ended June 30,

June 30, 2021

March 31, 2021

June 30, 2020

2021

2020

(in thousands, except percentages)

Amount

%

Amount

%

Amount

%

Amount

%

Amount

%

Salaries and employee benefits (1)

$

30,796

60.2

%

$

26,427

60.6

%

$

21,570

58.7

%

$

57,223

60.4

%

$

50,896

62.4

%

Occupancy and equipment (2)

5,342

10.4

%

4,488

10.3

%

4,220

11.5

%

9,830

10.4

%

8,023

9.8

%

Professional and other services fees (3)

4,693

9.2

%

3,784

8.7

%

3,965

10.8

%

8,477

9.0

%

6,919

8.5

%

Telecommunications and data processing

3,515

6.9

%

3,727

8.5

%

3,157

8.6

%

7,242

7.6

%

6,621

8.1

%

Depreciation and amortization

1,872

3.7

%

1,786

4.1

%

1,960

5.3

%

3,658

3.9

%

3,919

4.8

%

FDIC assessments and insurance

1,702

3.3

%

1,755

4.0

%

1,240

3.4

%

3,457

3.7

%

2,358

2.9

%

Other operating expenses (4)

3,205

6.3

%

1,658

3.8

%

628

1.7

%

4,863

5.1

%

2,871

3.5

%

Total noninterest expense

$

51,125

100.0

%

$

43,625

100.0

%

$

36,740

100.0

%

$

94,750

100.0

%

$

81,607

100.0

%

___________
(1) Includes severance of $3.3 million in three months ended June 30, 2021 in connection with the departure of the Company’s COO and other actions, and $1.0 million and $0.5 million in the three months ended June 30, 2021 and March 31, 2021, respectively, in connection with a Long Term Incentive Compensation Program adopted in the first quarter of 2021.
(2) Includes $0.8 million of ROU asset impairment associated with lease in NYC for loan production office.
(3) Other services fees include expenses on derivative contracts.
(4) Includes advertising, marketing, 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.

Exhibit 6 - Consolidated Balance Sheets

(in thousands, except share data)

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

Assets

Cash and due from banks

$

45,198

$

37,744

$

30,179

$

34,091

$

35,651

Interest earning deposits with banks

126,314

195,755

184,207

193,069

181,698

Cash and cash equivalents

171,512

233,499

214,386

227,160

217,349

Securities

Debt securities available for sale

1,194,068

1,190,201

1,225,083

1,317,724

1,519,784

Debt securities held to maturity

93,311

104,657

58,127

61,676

65,616

Trading securities

198

Equity securities with readily determinable fair value not held for trading

23,988

23,965

24,342

24,381

24,425

Federal Reserve Bank and Federal Home Loan Bank stock

47,675

56,469

65,015

65,015

64,986

Securities

1,359,240

1,375,292

1,372,567

1,468,796

1,674,811

Mortgage loans held for sale (at fair value)

1,775

1,044

Loans held for investment, gross

5,606,773

5,753,794

5,842,337

5,924,617

5,872,271

Less: Allowance for loan losses

104,185

110,940

110,902

116,819

119,652

Loans held for investment, net

5,502,588

5,642,854

5,731,435

5,807,798

5,752,619

Bank owned life insurance

220,271

218,903

217,547

216,130

214,693

Premises and equipment, net

108,708

109,071

109,990

126,895

128,327

Deferred tax assets, net

13,516

15,607

11,691

16,206

15,647

Goodwill

19,506

19,506

19,506

19,506

19,506

Accrued interest receivable and other assets (1)

135,728

135,322

93,771

94,556

107,771

Total assets

$

7,532,844

$

7,751,098

$

7,770,893

$

7,977,047

$

8,130,723

Liabilities and Stockholders' Equity

Deposits

Demand

Noninterest bearing

$

1,065,622

$

977,595

$

872,151

$

916,889

$

956,351

Interest bearing

1,293,626

1,324,127

1,230,054

1,210,639

1,186,613

Savings and money market

1,682,619

1,494,227

1,587,876

1,496,119

1,447,661

Time

1,633,041

1,882,130

2,041,562

2,253,899

2,434,077

Total deposits

5,674,908

5,678,079

5,731,643

5,877,546

6,024,702

Advances from the Federal Home Loan Bank

808,614

1,050,000

1,050,000

1,050,000

1,050,000

Senior notes

58,736

58,656

58,577

58,498

58,419

Junior subordinated debentures held by trust subsidiaries

64,178

64,178

64,178

64,178

64,178

Accounts payable, accrued liabilities and other liabilities (1)

127,340

115,171

83,074

97,292

103,226

Total liabilities

6,733,776

6,966,084

6,987,472

7,147,514

7,300,525

Stockholders’ equity

Class A common stock

2,904

2,904

2,882

2,886

2,887

Class B common stock

853

892

904

1,329

1,329

Additional paid in capital

299,547

304,448

305,569

359,553

359,028

Retained earnings

472,823

456,861

442,402

433,929

432,227

Accumulated other comprehensive income

23,758

19,909

31,664

31,836

34,727

Total stockholders' equity before noncontrolling interest

799,885

785,014

783,421

829,533

830,198

Noncontrolling interest

(817

)

Total stockholders' equity

799,068

785,014

783,421

829,533

830,198

Total liabilities and stockholders' equity

$

7,532,844

$

7,751,098

$

7,770,893

$

7,977,047

$

8,130,723

__________
(1) As of June 30, 2021 and March 31, 2021, includes the effect of adopting ASU 2016-02 (Leases) in the first quarter of 2021.

Exhibit 7 - Loans
Loans by Type

The loan portfolio consists of the following loan classes:

(in thousands)

June 30,
2021

March 31,
2021

December 31,
2020

September 30,
2020

June 30,
2020

Real estate loans

Commercial real estate

Non-owner occupied

$

1,699,876

$

1,713,967

$

1,749,839

$

1,797,230

$

1,841,075

Multi-family residential

658,022

722,783

737,696

853,159

823,450

Land development and construction loans

361,077

351,502

349,800

335,184

284,766

2,718,975

2,788,252

2,837,335

2,985,573

2,949,291

Single-family residential

616,545

625,298

639,569

597,280

589,713

Owner occupied

943,342

940,126

947,127

937,946

938,511

4,278,862

4,353,676

4,424,031

4,520,799

4,477,515

Commercial loans

1,003,411

1,104,594

1,154,550

1,197,156

1,247,455

Loans to financial institutions and acceptances

13,672

16,658

16,636

16,623

16,597

Consumer loans and overdrafts

310,828

278,866

247,120

190,039

130,704

Total loans

$

5,606,773

$

5,753,794

$

5,842,337

$

5,924,617

$

5,872,271

Non-Performing Assets

This table shows a summary of our non-performing assets by loan class, which includes non-performing loans and other real estate owned, or OREO, at the dates presented. Non-performing loans consist of (i) nonaccrual loans; (ii) accruing loans 90 days or more contractually past due as to interest or principal; and (iii) restructured loans that are considered TDRs.

(in thousands)

June 30,
2021

March 31,
2021

December 31,
2020

September 30,
2020

June 30,
2020

Non-Accrual Loans(1)

Real Estate Loans

Commercial real estate (CRE)

Non-owner occupied

$

48,347

$

8,515

$

8,219

$

8,289

$

8,426

Multi-family residential

9,928

11,369

11,340

1,484

58,275

19,884

19,559

9,773

8,426

Single-family residential

7,174

10,814

10,667

11,071

7,975

Owner occupied

11,277

12,527

12,815

14,539

11,828

76,726

43,225

43,041

35,383

28,229

Commercial loans (2)

43,876

45,282

44,205

50,991

48,961

Consumer loans and overdrafts

198

270

233

104

70

Total Non-Accrual Loans

$

120,800

$

88,777

$

87,479

$

86,478

$

77,260

Past Due Accruing Loans(3)

Real Estate Loans

Commercial real estate (CRE)

Non-owner occupied

$

$

743

$

$

$

Single-family residential

20

1

Owner occupied

220

Commercial

295

Consumer loans and overdrafts

4

3

1

1

Total Past Due Accruing Loans

319

746

221

2

Total Non-Performing Loans

121,119

89,523

87,700

86,480

77,260

Other Real Estate Owned

400

400

427

42

42

Total Non-Performing Assets

$

121,519

$

89,923

$

88,127

$

86,522

$

77,302


__________________
(1) Includes loan modifications that met the definition of TDRs which may be performing in accordance with their modified loan terms. As of June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020, non-performing TDRs include $9.6 million, $9.8 million, $8.4 million, $9.0 million and $9.3 million, respectively, in a multiple loan relationship to a South Florida borrower.
(2) As of June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020, includes $19.6 million, $19.6 million, $19.6 million, $19.6 million, and $39.8 million, respectively, in a commercial relationship placed in nonaccrual status during the second quarter of 2020. During the third quarter of 2020, the Company charged off $19.3 million against the allowance for loan losses as result of the deterioration of this commercial relationship.
(3) Loans past due 90 days or more but still accruing.

Loans by Credit Quality Indicators

This table shows the Company’s loans by credit quality indicators. We have no purchased credit-impaired loans.

June 30, 2021

March 31, 2021

June 30, 2020

(in thousands)

Special Mention

Substandard

Doubtful

Total (1)

Special Mention

Substandard

Doubtful

Total (1)

Special Mention

Substandard

Doubtful

Total (1)

Real Estate Loans

Commercial Real
Estate (CRE)

Non-owner
occupied

$

32,858

$

36,040

$

12,306

$

81,204

$

45,206

$

5,684

$

3,576

$

54,466

$

2,127

$

7,242

$

1,936

$

11,305

Multi-family residential

9,928

9,928

11,369

11,369

Land development
and
construction
loans

7,196

7,196

32,858

45,968

12,306

91,132

45,206

17,053

3,576

65,835

9,323

7,242

1,936

18,501

Single-family residential

7,194

7,194

10,814

10,814

8,127

8,127

Owner occupied

19,456

11,375

30,831

21,045

12,627

33,672

7,884

14,142

22,026

52,314

64,537

12,306

129,157

66,251

40,494

3,576

110,321

17,207

29,511

1,936

48,654

Commercial loans (2)

40,151

23,055

22,546

85,752

43,313

21,045

25,917

90,275

5,664

35,211

20,822

61,697

Consumer loans and
overdrafts

201

201

298

298

81

81

$

92,465

$

87,793

$

34,852

$

215,110

$

109,564

$

61,837

$

29,493

$

200,894

$

22,871

$

64,803

$

22,758

$

110,432

__________
(1) There were no loans categorized as “Loss” as of the dates presented.
(2) Loan balances as of June 30, 2021, March 31, 2021 and June 30, 2020, include $19.6 million, $19.6 million and $39.8 million, respectively, in a commercial relationship placed in nonaccrual status and downgraded during the second quarter of 2020. As of June 30, 2021, March 31, 2021 and June 30, 2020, Substandard loans include $7.3 million, $7.3 million and $20.5 million, respectively, and doubtful loans include $12.3 million, $12.3 million and $19.3 million, respectively, related to this commercial relationship. During the third quarter of 2020, the Company charged off $19.3 million against the allowance for loan losses as result of the deterioration of this commercial relationship.

Exhibit 8 - Deposits by Country of Domicile


This table shows the Company’s deposits by country of domicile of the depositor as of the dates presented.

(in thousands)

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

Domestic

$

3,140,541

$

3,175,522

$

3,202,936

$

3,310,343

$

3,432,971

Foreign:

Venezuela

2,075,658

2,088,519

2,119,412

2,169,621

2,202,340

Others

458,709

414,038

409,295

397,582

389,391

Total foreign

2,534,367

2,502,557

2,528,707

2,567,203

2,591,731

Total deposits

$

5,674,908

$

5,678,079

$

5,731,643

$

5,877,546

$

6,024,702


CONTACTS:

Investors

Laura Rossi

InvestorRelations@amerantbank.com

(305) 460-8728

Media

Silvia M. Larrieu

media@amerantbank.com

(305) 441-8414