- Total Assets: $10.38 billion, up from $9.75 billion in the second quarter.
- Cash and Cash Equivalents: Increased by $361.5 million to $671.8 million.
- Total Gross Loans: Increased by $239.1 million to $7.56 billion.
- Total Deposits: Increased by $294.9 million to $8.11 billion.
- Total Capital Ratio: 12.66%, up from 11.88% in the second quarter.
- CET1 Ratio: 10.6%, up from 9.6% in the second quarter.
- Tier 1 Capital Ratio: 11.31%, up from 10.34% in the second quarter.
- Net Interest Margin: 3.49%, down from 3.56% in the second quarter.
- Net Interest Income: $81 million, up from $79.4 million in the second quarter.
- Provision for Credit Losses: $19 million, slightly down from $19.2 million in the second quarter.
- Non-Interest Income: Negative $47.7 million due to securities portfolio repositioning.
- Non-Interest Expense: Increased to $76.2 million, including $6 million in REO valuation expense.
- Pre-Provision Net Revenue (PPNR): Loss of $42.9 million, compared to $25.5 million in the second quarter.
- Efficiency Ratio: 228.74%, up from 74.21% in the second quarter.
- ROA: Negative 1.92%, compared to 2.21% in the second quarter.
- ROE: Negative 24.98%, compared to 2.68% in the second quarter.
- Allowance for Credit Losses to Total Loans: Decreased to 1.15% from 1.41% in the second quarter.
- Assets Under Management: Increased by $98.7 million to $2.6 billion.
- Public Offering: Raised approximately $165 million in gross proceeds.
- Quarterly Dividend: $0.09 per share approved for November 29, 2024.
Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Amerant Bancorp Inc (AMTB, Financial) achieved strong organic loan and deposit growth, with total gross loans increasing by $239.1 million and total deposits rising by $294.9 million in the third quarter.
- The company successfully crossed the $10 billion mark in total assets, reaching $10.38 billion by the end of the third quarter.
- Amerant Bancorp Inc (AMTB) completed a public offering, raising approximately $165 million in gross proceeds, which strengthened its capital position.
- The company reported a significant improvement in its total capital ratio, increasing to 12.66% from 11.88% in the previous quarter.
- Amerant Bancorp Inc (AMTB) is expanding its presence in Florida, with plans to open new banking centers in Miami Beach and downtown Tampa by mid-2025.
Negative Points
- Amerant Bancorp Inc (AMTB) recorded a substantial charge to earnings due to the repositioning of its investment portfolio, resulting in a loss of $48.2 million for the quarter.
- The company's net interest margin decreased to 3.49% from 3.56% in the previous quarter, primarily due to higher average balances in nonperforming loans and interest-bearing liabilities.
- Nonperforming loans increased, with the ratio of nonperforming loans to total loans rising to 162 basis points from 138 basis points in the previous quarter.
- The efficiency ratio significantly worsened to 228.74% in the third quarter, compared to 74.21% in the second quarter, due to securities losses and valuation expenses.
- Amerant Bancorp Inc (AMTB) experienced a decrease in noninterest income, which was negative $47.7 million, primarily due to the repositioning of the securities portfolio.
Q & A Highlights
Q: Can you provide more details on the drivers of loan growth and expectations for 2025?
A: Gerald Plush, Chairman and CEO, explained that the growth is driven by strategic additions to the team across various sectors such as private banking, commercial real estate, and C&I. These additions have strengthened the company's production capabilities, and the focus is on leveraging these relationships for continued growth into 2025.
Q: What are the expectations for net interest margin (NIM) in the coming quarters?
A: Sharymar Calderon, CFO, stated that new loan production is coming in at yields between 7.5% to 8%. The NIM is expected to improve due to securities repositioning and redeployment of non-performing loans into interest-earning assets. The NIM is projected to be in the mid-3.50% range for the fourth quarter and between 3.55% and 3.60% for the first half of 2025.
Q: Can you elaborate on the strategic focus on international banking?
A: Gerald Plush highlighted that international banking is becoming a significant source of funding. The company has been working to replace attrition and diversify its international customer base, which has been beneficial for cost of funds. The focus will be on expanding this area as a strong alternative funding source moving forward.
Q: How do you anticipate deposit betas to behave as rates fall, and are there differences between domestic and international customers?
A: Sharymar Calderon noted that deposit betas are expected to be around 40 to 45 basis points, influenced by the composition of interest-bearing deposits. The company is actively repricing deposits to align with rate cuts while maintaining competitive deposit levels. International deposits include a significant portion of non-interest-bearing accounts, which are less impacted by rate changes.
Q: What are the expectations for expense growth into 2025, considering ongoing talent additions and office expansions?
A: Gerald Plush and Sharymar Calderon indicated that expenses related to the Houston franchise will decrease, and these savings will be reallocated to support business growth in Florida. The guidance suggests maintaining a run rate around $68.5 million, reflecting the addition of personnel and new offices.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
