• Total Assets: $9.9 billion at the end of Q4 2024, down from $10.35 billion in Q3 2024.
• Cash and Equivalents: Decreased by $81.5 million to $590.4 million from $671.8 million in Q3 2024.
• Total Investments: $1.5 billion, down from $1.54 billion in Q3 2024.
• Total Gross Loans: Decreased by $294.7 million to $7.27 billion from $7.56 billion in Q3 2024.
• Total Deposits: Decreased by $256.9 million to $7.85 billion from $8.11 billion in Q3 2024.
• Total Capital Ratio: 13.43% in Q4 2024, up from 12.72% in Q3 2024.
• CET1 Ratio: 11.21% in Q4 2024, up from 10.65% in Q3 2024.
• Net Interest Income: $87.6 million, up from $81 million in Q3 2024.
• Net Interest Margin: Increased to 3.75% from 3.49% in Q3 2024.
• Provision for Credit Losses: $9.9 million, down from $19 million in Q3 2024.
• Non-Interest Income: $23.7 million, up from negative $47.7 million in Q3 2024.
• Non-Interest Expense: $83.4 million, up from $76.2 million in Q3 2024.
• Pre-Provision Net Revenue (PPNR): $27.9 million, compared to a loss of $42.9 million in Q3 2024.
• Efficiency Ratio: 74.91%, improved from 228.74% in Q3 2024.
• Return on Assets (ROA): 0.67%, compared to negative 1.92% in Q3 2024.
• Return on Equity (ROE): 7.38%, compared to negative 24.98% in Q3 2024.
• Allowance for Credit Losses to Total Loans: 1.18%, up from 1.15% in Q3 2024.
• Assets Under Management: Increased by $339.5 million to $2.89 billion from $2.55 billion in Q3 2024.
• Diluted Earnings Per Share: $0.40, compared to a diluted loss per share of $1.43 in Q3 2024.

• Warning! GuruFocus has detected 4 Warning Signs with AMTB.

Release Date: January 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Amerant Bancorp Inc (NYSE:AMTB) reported strong organic loan and deposit growth in the fourth quarter of 2024.
• Net interest income increased to $87.6 million, up from $81 million in the third quarter, with a net interest margin improvement to 3.75%.
• The company successfully completed the sale of its Houston franchise, resulting in a deposit premium of $12.5 million.
• Amerant Bancorp Inc (NYSE:AMTB) improved its capital ratios, with a total capital ratio of 13.43% and a CET1 ratio of 11.21% as of the fourth quarter.
• The company reported a significant improvement in its efficiency ratio, reducing it to 74.91% from 228.74% in the third quarter.

Negative Points

• Total assets decreased to $9.9 billion from $10.35 billion in the third quarter, primarily due to the Houston franchise sale.
• Total deposits decreased by $256.9 million to $7.85 billion, also as a result of the Houston franchise sale.
• Non-performing loans increased by $69.7 million compared to the fourth quarter of 2023, despite a decrease from the third quarter.
• The company recorded a loss of $12.6 million on the sale of business-purpose investment property residential mortgage loans.
• Non-interest expense increased by $7.2 million from the third quarter, driven by transaction costs related to the Houston franchise sale and other non-routine items.

Q & A Highlights

Q: Can you clarify the expected $14.2 million reduction in non-performing loans (NPL) and discuss the outlook for classified assets? A: Yes, the $14.2 million reduction is expected from the NPL bucket. We are focused on resolving classified assets and aim to reduce this balance quarter over quarter. We are laser-focused on reducing the non-performing list to just a handful, with weekly progress reports on each deal.

Q: What is the outlook for net charge-offs and allowance for credit losses (ACL) levels throughout the year? A: We maintain our guidance of charge-offs around 25 to 30 basis points. The indirect consumer portfolio, now down to $83 million, will start reducing that level. The results this quarter at 26 basis points are a good reference for upcoming quarters.

Q: How should we think about expenses and efficiency ratio for the year, given continued franchise investment? A: The first half of the year typically carries higher costs, including payroll taxes. We expect expenses to normalize slightly lower in the second half. The path to improved efficiency and ROA is primarily driven by growth and revenue.

Q: What are your expectations for the investment portfolio size going forward? A: The investment portfolio size should remain relatively stable at its current level.

Q: Can you discuss the expected margin pressure in the first quarter and the drivers behind it? A: The margin improvement in Q4 was due to the Houston franchise sale, securities repositioning, and reduction of FHLB advances. In Q1 2025, assets that repriced at the end of Q4 will have a full quarter impact, leading to a slightly lower margin.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.