Amerant Bancorp Inc. 2024 Annual Report
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________ to __________
Commission File Number 001-38534
Amerant Bancorp Inc.
(Exact Name of Registrant as Specified in Its Charter)
Florida
65-0032379
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
220 Alhambra Circle, Coral Gables, Florida
33134
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s telephone number, including area code: (305) 460-8728
_________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol (s)
Name of each exchange on which registered
Class A Common Stock, par value $0.10 per share
AMTB
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐
No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐
No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒
No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☒
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under
Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error
to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive
officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes ☐
No ☒
The aggregate market value of the Class A common stock held by non-affiliates of the registrant, based on the closing price of a share of the registrant’s common stock on June 30, 2024 as
reported by the NASDAQ Global Select Market on such date, was approximately $666.9 million.
The number of shares outstanding of the registrant’s classes of common stock as of February 27, 2025: Common Stock Class A, par value $0.10 per share, 41,920,381 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement pursuant to Regulation 14A for the 2025 Annual Meeting of Shareholders, to be filed within 120 days of the registrant’s fiscal year end,
are incorporated by reference into Part III hereof.
AMERANT BANCORP INC.
FORM 10-K
December 31, 2024
PART I
Item 1.
Business
4
Supp. Item
Information about our Executive Officers
29
Item 1A.
Risk Factors
32
Item 1B.
Unresolved Staff Comments
54
Item 1C.
Cybersecurity
55
Item 2.
Properties
56
Item 3.
Legal Proceedings
57
Item 4.
Mine Safety Disclosures
57
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
58
Item 6.
Reserved
60
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations
61
Item 7A.
Quantitative and Qualitative Disclosures about Market Risk
131
Item 8.
Financial Statements and Supplementary Data
135
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure
135
Item 9A.
Controls and Procedures
135
Item 9B.
Other Information
136
Item 9C.
Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
137
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
138
Item 11.
Executive Compensation
138
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
138
Item 13.
Certain Relationships and Related Transactions, and Director Independence
138
Item 14.
Principal Accountant Fees and Services
139
PART IV
Item 15.
Exhibit and Financial Statement Schedules
140
Item 16.
Form 10-K Summary
144
Signatures
145
Item 15.1.
Consolidated Financial Statements
F-1
TABLE OF CONTENTS
Page
PART I
In this Annual Report on Form 10-K, or Form 10-K, unless otherwise required by the context, the terms “we,”
“our,” “us,”, “Amerant”, and the “Company,” refer to Amerant Bancorp Inc. and its consolidated subsidiaries
including its wholly-owned main operating subsidiary, Amerant Bank, N.A., which we individually refer to as “the
Bank”.
Cautionary Note Regarding Forward-Looking Statements
Various of the statements made in this Form 10-K, including information incorporated herein by reference to
other documents, are “forward-looking statements” within the meaning of, and subject to, the protections of
Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).
Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals,
expectations, anticipations, assumptions, estimates, intentions and future performance and condition, and involve
known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause
the actual results, performance, achievements, or financial condition of the Company to be materially different from
future results, performance, achievements, or financial condition expressed or implied by such forward-looking
statements. You should not expect us to update any forward-looking statements, except as required by law. These
forward-looking statements should be read together with the “Risk Factors” included in this Form 10-K and our
other reports filed with the Securities and Exchange Commission (the “SEC”).
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,” “seek,” “should,” “indicate,” “would,” “believe,” “contemplate,” “consider”, “expect,” “estimate,”
“continue,” “plan,” “point to,” “project,” “could,” “intend,” “target”, “goals”, “outlooks”, “modeled”, “dedicated”,
“create” and other similar words and expressions of the future. These forward-looking statements may not be
realized due to a variety of factors, including, without limitation:
•
Liquidity risks could affect our operations and jeopardize our financial condition and certain funding
sources could increase our interest rate expense;
•
We may not be able to develop and maintain a strong core deposit base or other low-cost funding sources;
•
We may elect or be compelled to seek additional capital in the future, but that capital may not be available
when it is needed or on acceptable terms;
•
Our ability to receive dividends from our subsidiaries could affect our liquidity and our ability to pay
dividends;
•
Our profitability is subject to interest rate risk;
•
Our allowance for credit losses may prove inadequate;
•
Our concentration of CRE loans could result in increased loan losses;
•
Many of our loans are to commercial borrowers, which have unique risks compared to other types of loans;
•
Our valuation of securities and the determination of a credit loss allowance in our investment securities
portfolio are subjective and, if changed, could materially adversely affect our results of operations or
financial condition;
•
Nonperforming and similar assets take significant time to resolve and may adversely affect our business,
financial condition, results of operations, or cash flows;
•
We are subject to environmental liability risk associated with lending activities;
•
Weakness in the demand for mortgage loans or in the secondary market for residential mortgage loans can
adversely affect us.
•
Many of our major systems depend on and are operated by third-party vendors, and any systems failures or
interruptions could adversely affect our operations and the services we provide to our customers;
•
Our information systems are exposed to cybersecurity threats and may experience interruptions and security
breaches that could adversely affect our business and reputation;
•
Our strategic plan and growth strategy may not be achieved as quickly or as fully as we seek;
•
Defaults by or deteriorating asset quality of other financial institutions could adversely affect us;
•
New lines of business, new products and services, or strategic project initiatives may subject us to
additional risks;
•
We are susceptible to operational risks in general and fraudulent risk in particular;
1
•
We may not have the ability or resources to keep pace with rapid technological changes in the financial
services industry or implement new technology effectively;
•
Conditions in Venezuela could adversely affect our operations;
•
We are subject to environmental, social and governance, or ESG, risks, many of which are outside of our
control, that could harm our reputation, our business, operations, financial condition, and/or the price of our
common stock;
•
We may be unable to attract and retain key people to support our business;
•
Severe weather, natural disasters, global pandemics, acts of war or terrorism, theft, civil unrest, government
expropriation or other external events could have significant effects on our business;
•
Any failure to protect the confidentiality of customer information could adversely affect our reputation and
subject us to financial sanctions and other costs that could adversely affect our business, financial
condition, results of operations, or cash flows;
•
We could be required to write down our goodwill or other intangible assets;
•
We have a net deferred tax asset that may or may not be fully realized;
•
We may incur losses due to minority investments in fintech and specialty finance companies;
•
We are subject to risks associated with sub-leasing portions of our corporate headquarters building;
•
Our success depends on our ability to compete effectively in highly competitive markets;
•
Potential gaps in our risk management policies and internal audit procedures may leave us exposed to
unidentified or unanticipated risk, which could negatively affect our business;
•
Any failure to maintain effective internal control over financial reporting could impair the reliability of our
financial statements, which in turn could harm our business, impair investor confidence in the accuracy and
completeness of our financial reports and our access to the capital markets and cause the price of our
common stock to decline and subject us to regulatory penalties;
•
Changes in accounting standards could materially impact our financial statements;
•
Material and negative developments adversely impacting the financial services industry at large and
causing volatility in financial markets and the economy may have materially adverse effects on our
liquidity, business, financial condition and results of operations;
•
Our business may be adversely affected by economic conditions in general and by conditions in the
financial markets;
•
We are subject to extensive regulation that could limit or restrict our activities and adversely affect our
earnings;
•
There is uncertainty surrounding the potential legal, regulatory and policy changes by the presidential
administration in the United States that may directly affect financial institutions;
•
Changes in federal, state or local tax laws, or audits from tax authorities, could negatively affect our
business, financial condition, results of operations or cash flows;
•
Litigation and regulatory investigations are increasingly common in our businesses and may result in
significant financial losses and/or harm to our reputation;
•
We are subject to capital adequacy and liquidity standards, and if we fail to meet these standards, whether
due to losses, growth opportunities or an inability to raise additional capital or otherwise, our business,
financial condition, results of operations, or cash flows would be adversely affected;
•
Increases in FDIC deposit insurance premiums and assessments could adversely affect our financial
condition;
•
Federal banking agencies periodically conduct examinations of our business, including our compliance
with laws and regulations, and our failure to comply with any regulatory actions, if any, could adversely
impact us;
•
The Federal Reserve may require us to commit capital resources to support the Bank;
•
We may face higher risks of noncompliance with the Bank Secrecy Act and other anti-money laundering
statutes and regulations than other financial institutions;
•
Failures to comply with the fair lending laws, CFPB regulations or the Community Reinvestment Act, or
CRA, could adversely affect us;
•
Our principal shareholders and management own a significant percentage of our shares of voting common
stock and will be able to exert significant control over matters subject to shareholder approval;
•
The rights of our common shareholders are subordinate to the holders of any debt securities that we have
issued or may issue from time to time;
•
The stock price of financial institutions, like Amerant, may fluctuate significantly;
•
We can issue additional equity securities, which would lead to dilution of our issued and outstanding Class
A common stock;
•
Certain provisions of our amended and restated articles of incorporation and amended and restated bylaws,
Florida law, and U.S. banking laws could have anti-takeover effects;
•
We may not be able to generate sufficient cash to service all of our debt, including the Subordinated Notes
and the Debentures;
•
We are a holding company with limited operations and depend on our subsidiaries for the funds required to
make payments of principal and interest on the Subordinated Notes and the Debentures;
2
•
We may incur a substantial level of debt that could materially adversely affect our ability to generate
sufficient cash to fulfill our obligations under the Subordinated Notes and the Debentures; and
•
The other factors and information in this Form 10-K and other filings that we make with the SEC under the
Exchange Act and Securities Act. See “Risk Factors” in this Form 10-K.
The foregoing factors should not be construed as exhaustive and should be read together with the other
cautionary statements included in this Form 10-K. Because of these risks and other uncertainties, our actual future
financial condition, results, performance or achievements, or industry results, may be materially different from the
results indicated by the forward-looking statements in this Form 10-K. In addition, our past results of operations are
not necessarily indicative of our future results of operations. You should not rely on any forward-looking statements
as predictions of future events.
All written or oral forward-looking statements that are made by us or are attributable to us are expressly
qualified in their entirety by this cautionary note. Any forward-looking statement speaks only as of the date on
which it is made, and we do not undertake any obligation to update, revise or correct any forward-looking statement,
whether as a result of new information, future developments or otherwise, except as required by law.
3
Item 1. BUSINESS
Our Company
We are a bank holding company headquartered in Coral Gables, FL, with $9.9 billion in assets, $7.2 billion in
loans held for investment, $7.9 billion in deposits, $890.5 million of shareholders’ equity, and $2.9 billion in assets
under management and custody (“AUM”) as of December 31, 2024. We provide individuals and businesses with a
comprehensive array of deposit, credit, investment, wealth management, retail banking, mortgage services and
fiduciary services. We serve customers in our United States markets and select international customers. These
services are offered through Amerant Bank, N.A., or the Bank, which is also headquartered in Coral Gables, FL, and
its subsidiaries. Fiduciary, investment, wealth management and mortgage services are provided by the Bank, the
Bank’s securities broker-dealer subsidiary, Amerant Investments, Inc., or Amerant Investments, and Amerant
Mortgage, LLC, or Amerant Mortgage.
The Bank was founded in 1979. We currently operate 19 banking centers where we offer personal and
commercial banking services. The Bank’s primary markets are South Florida, where we are headquartered and
operate 18 banking centers in Miami-Dade, Broward and Palm Beach counties. The Bank also operates one banking
center, as well as a regional headquarter office in Tampa, FL. In 2024, we opened new banking centers in downtown
Fort Lauderdale, FL and in downtown Miami, FL. We also opened our new regional headquarters office for
Broward County, located in Plantation, FL. More recently, we signed a letter of intent for a second banking center in
Miami Beach, following the signed agreement we previously announced for our first Miami Beach banking center.
One location is expected to open in the first half of 2025, while the other is expected to open in the second half of
2025. We also signed a letter of intent for our second Tampa banking center location which we expect to open in
the second half of 2025. We also expect to open a new regional headquarter office for Palm Beach County, located
in West Palm Beach, FL, in the first half of 2025, in addition to opening a new banking center adjacent to our new
regional headquarters office there.
Amerant Investments is a member of the Financial Industry Regulatory Authority (“FINRA”), the Securities
Investor Protection Corporation (“SIPC”) and a registered investment adviser with the Securities and Exchange
Commission, or SEC. Amerant Investments provides introductory brokerage, investment and transactions services
primarily for customers of the Bank. Amerant Mortgage offers a full complement of residential lending solutions
including conventional, government, construction, jumbo loans, and other residential lending product offerings.
The Cayman Bank is a bank and trust company domiciled in George Town, Grand Cayman. The Cayman Bank
operates under a Cayman Offshore Bank license, or B license, and a Trust license and is supervised by the Cayman
Islands Monetary Authority, or CIMA. The Cayman Bank has no staff and its fiduciary services and general
administration are provided by the staff of the Bank. The OCC periodically examines the Bank and historically as
part of its examination would review the fiduciary relationships and transactions that the Bank managed for the
Cayman Bank. We have no foreign offices. The Cayman Bank does not maintain any physical offices in the Cayman
Islands and has a registered agent in Grand Cayman as required by applicable regulations.
The Company is executing a plan for the dissolution of the Cayman Bank and, as of the end of the fourth
quarter of 2024, the Cayman Bank no longer had any trust relationships, many of which were transferred to the
Bank. The dissolution of the Cayman Bank, is expected to be completed in 2025, once regulatory approval from the
applicable regulatory agency is received.
Through the Bank’s subsidiary, CB Reit Holding Corporation, or REIT Hold Co., we maintain a real estate
investment trust, CB Real Estate Investments, or REIT, which is taxed as a real estate investment trust. The REIT
holds various of the Bank’s real estate loans, and allows the Bank to better manage the Bank’s real estate portfolio.
4
Our History
From 1987 through December 31, 2017, we were a wholly-owned subsidiary of Mercantil Servicios
Financieros, C.A., which we refer to as the “Former Parent”. On August 10, 2018, we completed our spin-off from
the Former Parent, or the Spin-off. Our shares of Class A common stock and Class B common stock began trading
on the Nasdaq Global Select Market (“NASDAQ”) on August 13, 2018.
On December 21, 2018, we completed an initial public offering, the IPO, of 6,300,000 shares of Class A
common stock. In January 2019, we sold additional shares of our Class A common stock when the underwriters in
the IPO completed the partial exercise of their over-allotment option which was granted in connection with the IPO.
In November 18, 2021, we completed a clean-up merger resulting in the simplification of our capital structure
by automatically converting shares of the Company’s Class B common stock into shares of the Company’s Class A
common stock. November 17, 2021 was the last day of trading of the Company’s shares of Class B common stock
on NASDAQ after which only the Company’s shares of Class A common stock traded on the NASDAQ under the
symbol “AMTB”.
On August 3, 2023, the Company provided written notice to NASDAQ of its determination to voluntarily
withdraw the principal listing of the Company’s Class A common stock, $0.10 par value per share (the “Class A
common stock”), from NASDAQ and transfer the listing of the Class A Common Stock to the New York Stock
Exchange (“NYSE”). The Company’s Class A Common Stock listing and trading on NASDAQ ended at market
close on August 28, 2023, and trading commenced on the NYSE at market open on August 29, 2023 where it
continues to trade under the stock symbol “AMTB”.
Our Markets
Our primary market areas are South Florida (Miami-Dade, Broward and Palm Beach counties), and Tampa, FL.
We serve our market areas from our headquarters in Coral Gables, FL and through a network of 18 banking centers
throughout South Florida, and 1 located in Tampa, FL. Our subsidiary, Amerant Mortgage, operates its business
nationally and has direct access to federal housing agencies.
Business Developments
Public Offering and Securities Repositioning
On September 27, 2024, the Company completed a public offering of 8,684,210 shares of its Class A voting
common stock, at a price to the public of $19.00 per share, which included 784,210 shares issued upon the exercise
in full by the underwriters of their option to purchase additional shares of common stock (the “Public Offering”).
The total gross proceeds from the offering were approximately $165.0 million, with net proceeds of approximately
$155.8 million after deducting underwriting discounts and commissions and estimated offering expenses payable by
the Company. The Company intends to use the net proceeds of the Public Offering for general corporate purposes
and to support its continued organic growth, which may include, among other things, working capital, investments in
the Bank, resolution of non-performing loans, and potential balance sheet optimization strategies.
Upon successfully completing the Public Offering, the Company initiated a repositioning of the Company’s
securities portfolio (the “Securities Repositioning”). The Securities Repositioning consisted of the following actions:
(i) transfer at their fair value (which was below their amortized cost) of all of the Company’s debt securities
previously classified as held to maturity and carried at amortized cost to the available for sale category; (ii) sale of
all corporate notes and subordinated debt; and (iii) sale of all other debt securities classified as available for sale
(including those previously classified as held to maturity) with a book yield of less than 2.75%. As a result of the
Securities Repositioning, the Company recorded a total pre-tax loss of approximately $76.7 million in the year
ended December 31, 2024. The Company completed the Securities Repositioning in October 2024, which resulted in
an additional pre-tax loss on sale of approximately $8.1 million. See Note 3 - Securities for additional information
on the Company’s securities portfolio.
5
Sale of Houston Banking Operations
On April 16, 2024, the Bank entered into a Purchase and Assumption Agreement (the “Purchase Agreement”)
with MidFirst Bank (“MidFirst”) pursuant to which MidFirst purchased certain assets and assume certain liabilities
(the “Houston Sale Transaction”) of the banking operations and six branches in the Houston, Texas metropolitan
statistical area (collectively, the “Branches”). Pursuant to the terms of the Purchase Agreement, MidFirst agreed to
assume certain deposit liabilities and to acquire certain loans, as well as cash, real property, personal property and
other fixed assets associated with the Branches, as well as 45 team members. On July 30, 2024, regulatory approval
for the Houston Sale Transaction was received. The Company announced the completion of the Houston Sale
Transaction on November 8, 2024.
The purchase price for the purchased assets was computed as the sum of: (a) $13.0 million (the “Deposit
Premium”), provided that, if the balance of non-interest checking deposits included in deposits or the total balance
of deposits (excluding insured cash sweep deposits) decreased by more than 15% between March 13, 2024 and the
closing date, then the Deposit Premium should be equal to the sum of (i) 9.50% of the average daily balance of non-
interest checking deposits included in deposits, (ii) 1.85% of the average daily balance of deposits other than non-
interest checking deposits, insured cash sweep deposits and time deposits included in deposits, (iii) 0.25% of the
average daily balance of insured cash sweep deposits included in Deposits, and (iv) 0.50% of the average daily
balance of time deposits included in deposits, with the average daily balance in each case being for the 30-day
period ending on the fifth business day prior to closing, provided further, that the Deposit Premium should in no
event be lower than $9.25 million, (b) the aggregate amount of cash on hand as of the closing date, (c) the aggregate
net book value of all assets being assumed (excluding cash on hand, real property and accrued interest with respect
to the loans to be acquired), (d) the appraised value of the real property to be acquired, and (e) accrued interest with
respect to the loans to be acquired. The purchase price was subject to a customary post-closing adjustment based on
the delivery within 30 calendar days following the closing date of a final closing statement setting forth the purchase
price and any necessary adjustment payment amount. The final Deposit Premium was $12.5 million.
In 2024, the Company recorded non-routine expense items in connection with the Houston Sale Transaction
totaling approximately $6.8 million as follows: (i) $3.4 million in market value adjustments based on third party
appraisals for two banking centers that were owned, ; (ii) $3.1 million in legal, broker fees and other costs, including
a loan valuation allowance, and (iii) $0.3 million in intangible asset write-off. These charges were partially offset by
a $4.4 million release in credit reserves after transferring the loans to held for sale.
6
The below table shows detailed information about assets and liabilities sold as part of the Houston Sale
Transaction:
(in thousands)
Assets sold
Cash ............................................................................................................................................. $
994
Loans ..........................................................................................................................................
473,901
Accrued interest receivable and other assets (1) .........................................................................
21,679
Total assets sold............................................................................................................. $
496,574
Liabilities sold
Noninterest bearing demand deposits (2)..................................................................................... $
66,631
Interest bearing demand deposits.................................................................................................
54,627
Savings and money market ..........................................................................................................
113,305
Time deposits ...............................................................................................................................
333,247
Total deposits.................................................................................................................
567,810
Total other liabilities (3)...............................................................................................................
12,749
Total liabilities sold ....................................................................................................... $
580,559
(1)
Includes premises and equipment for $7.8 million, operating lease right-of-use assets for $6.4 million, $5.1 million in derivative assets and
other assets for $2.3 million.
(2)
Includes $6.8 million in escrow accounts.
(3)
Includes operating lease liabilities for $7.1 million, $5.1 million in derivative liabilities and 0.5 million in accrued interest payable.
Redemption of Senior Notes
On June 23, 2020, the Company completed a $60.0 million offering of senior notes with a coupon rate of 5.75%
and a maturity date of June 30, 2025 (the “Senior Notes”). On March 3, 2025, the Company notified the holders of
the Senior Notes of its election to redeem, on April 1, 2025 (the “Redemption Date”), the Senior Notes at a
redemption price of 100% of the principal amount of each note being redeemed, plus accrued and unpaid interest
thereon. Interest on the Senior Notes will cease to accrue on and after the Redemption Date.
Share Repurchase Program
On December 11, 2024, the Company announced that the Board of Directors approved to extend the expiration
date of the Company’s current share repurchase program (the “2023 Class A Common Stock Repurchase Program”)
which was previously set to expire on December 31, 2024 to December 31, 2025. In 2024, we repurchased an
aggregate of 344,326 shares of Class A common stock at a weighted average price of $21.94 per share under the
2023 Class A Common Stock Repurchase Program. The aggregate purchase price for these transactions was
approximately $7.6 million, including transaction costs. At December 31, 2024, the Company had $12.4 million
available for repurchase under this repurchase program.
Amerant Mortgage
As of December 31, 2024 and 2023, the Company had a 100% ownership interest in Amerant Mortgage,
respectively. In the fourth quarter of 2023, the Company increased its ownership interest in Amerant Mortgage to
100% from 80%. This transaction had no material impact to the Company’s results of operations in 2023. In
connection with the change in ownership interest, which brought the minority interest share to zero at that date, the
Company derecognized the equity attributable to noncontrolling interest of $3.8 million at December 31, 2023, with
a corresponding reduction to additional paid-in capital.
Total mortgage loans held for sale were $42.9 million as of December 31, 2024, compared to $26.2 million at
December 31, 2023.
7
Employee Stock Purchase Plan
In 2024, the Company continued to offer its Employee Stock Purchase Plan (“ESPP”) which was approved by
shareholders in 2022. The number of shares of Class A common stock issued under the ESPP was 55,407 in 2024
compared to 56,927 in 2023.
The purpose of the ESPP is to provide eligible employees of the Company and its designated subsidiaries with
the opportunity to acquire a stock ownership interest in the Company on favorable terms. The ESPP provides for six
months offering periods commencing each December 1st and ending on May 31st of the following year and
beginning on each June 1st and ending on the following November 30th. Our ESPP permits participating employees
to purchase shares of our Class A common stock through payroll deductions of up to 15% of their eligible
compensation. Each participating employee is able to purchase a maximum of 5,000 shares of our Class A common
stock during an offering period (subject to a limit of $25,000 in fair value of shares of our Class A common stock for
each calendar year). The price per share is equal to the lower of 85% of the fair market price on the first trading day
of the offering period or 85% of the fair market price on the last trading day of the offering period.
Amerant SPV, LLC
In May 2021, we incorporated Amerant SPV. As we seek to innovate, address customer needs and compete in a
fast changing and competitive environment, we evaluate opportunities to partner with fintech and specialty finance
companies that are developing cutting edge solutions and products and have the potential to improve our products
and services to help our clients achieve their goals in a fast changing world. From time to time, the Company has
evaluated select opportunities to invest and acquire non-controlling interests, through Amerant SPV, in companies it
partners with, or may acquire non-controlling interests of fintech and specialty finance companies that the Company
believes will be strategic or accretive. In addition, through Amerant SPV, we may also invest in companies and
funds that invest in technology companies that are developing solutions aimed at allowing financial institutions and
community banks to more effectively compete and serve their customers. At December 31, 2024, the Company’s
equity investments through Amerant SPV totaled $8.2 million.
Our Business Strategy
Amerant’s strategy is designed to improve value for its three most important stakeholders: shareholders, clients,
and team members.
Improve shareholder value by achieving top-quartile performance vs. peers
•
Bring the entire workforce aligned with a culture of attaining client primacy and driving organic
growth.
•
Measure everything against profitability to ensure prioritization of highest value opportunities.
•
Align enterprise-wide focus on executing defined strategic initiatives.
Be the “Bank of Choice” in the markets we serve by earning the Trusted Advisor role to the client
•
Deliver a relationship-first, solution-oriented approach.
•
Provide consistent, personalized client experiences driven by the proactive delivery of tailored
solutions, relationship-based pricing, and service excellence.
•
Create a simple, seamless, and streamlined onboarding and servicing experience.
Be the “Employer of Choice” in the markets we serve by attracting, retaining, developing, recognizing, and
rewarding our team members
•
Implement talent development programs that enable our people to pursue career aspirations,
expand their depth of knowledge, and improve their skill set.
•
Align incentives to strategic priorities and reward our team members for improving value to our
stakeholders.
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Our goals and objectives can be realized through the successful execution of a focused set of high-value
strategic pillars. Our strategic pillars include:
•
Further Strengthen the Foundation to extract maximum value from our modern technology ecosystem
and continuously strengthen our operational and technology infrastructure to keep pace with competitors
and enable scalability and organizational agility.
•
Our Relationship-first Focus centered on acquiring client relationships with high long-term value
potential by creating a culture of sales excellence and analytically empowering our people to deliver
personalized experiences, tailored holistic solutions, and earn the role of trusted advisor.
•
Drive Superior Experience and Operational Excellence through enhanced client onboarding,
origination, and servicing to deliver streamlined, simple, and satisfying client experiences, reduce expenses,
and fortify operational efficiency.
•
Attract, Retain, and Reward the Right People: Our people are the cornerstone of our success and have
propelled the Bank forward amid numerous challenges. To sustain this momentum, we are committed to
developing both internal and external pipelines and aligning incentives to strategic goals to acquire, retain,
and reward the right people.
•
Profitably Grow the Bank by driving organic growth in priority markets, expanding international
banking, developing a proven blueprint for new domestic market entry, and continuing to strengthen our
foundation to cross $10 billion in total assets in 2025.
Progress on Strategic Initiatives
Further strengthen the foundation. The Company believes that having both the right foundation and the right
technology is key to achieve this objective. Our focus is on monetizing the technology ecosystem by improving the
ratio of total cost of our technology ecosystem to the revenue generated. We strive for this improvement to be driven
primarily by higher revenue, which signals scale and efficiencies obtained through growth. Our commitment to
digital enablement has resulted in increases in digital enrollments noted for businesses and individuals. Also, in
2024, we began implementing a framework for monitoring and tracking of strategic initiatives through performance
metrics and indicators that we expect to fully implement by year-end 2025.
Relationship-first focus. We are focused on seizing opportunities in the markets we serve to increase our share of
consumer, small business, and commercial core deposits while reducing our reliance on brokered funds, by
implementing a sales excellence culture. Our growth in 2024 was reflective of our deposits-first, organic,
relationship-based approach. We generally use our loan-to-deposit ratio and the ratio of non-interest bearing deposits
to total deposits to track our progress on our relationship-first strategy. The loan to deposit ratio at December 31,
2024 was 92.6%, compared to 92.0% at December 31, 2023. Also, having completed the conversion, we have been
actively reviewing and enhancing our product offering not only for services associated to treasury management but
also to deposits and payments. Lastly, those efforts have been accompanied by targeting marketing campaigns
focused on increasing brand awareness primarily using our sports partnerships. In 2024, Amerant Bank entered into
strategic partnerships and was named the “Official Bank” of the Fort Lauderdale United FC women’s soccer team
and the Tampa Bay Rays. These new partnerships have complemented its banking center expansion plans across
South and Central Florida and Tampa, with an extensive program of strategic, multi-year sports partnerships that
also include the Miami Marlins, Miami Heat and the Florida Panthers.
Superior Client Experience and Operational Excellence. The Company continues to work on optimizing its
operating structure to support its business activities, by focusing on activities associated with improving the client’s
onboarding and servicing as well as optimizing our banking center channel. In 2024, we opened three banking
centers and continue working on expanding our presence in South Florida and Tampa, while continuing to work on
providing self-service capabilities to our clients.
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Attract, retain & reward the right people. In 2024, we remained committed to developing both internal and
external pipelines and aligning incentives to strategic goals to acquire and retain the right people and continue to
reward them. We recruited the market presidents for the Tampa, Broward and Palm Beach markets, and also
enhanced our business efforts by adding not only a Chief Business Development Officer but also several executives,
at different levels, on the commercial and consumer sales teams. We consistently develop our talent through a
growth mindset by building on existing skills and providing the right resources and opportunities to ensure early
career talent can thrive at Amerant.
Profitably grow the Bank. In 2024, we continued to drive organic growth in priority markets. We optimized our
international banking structure with the intent to grow international deposits as a source of funds given favorable
pricing while also continuing to add diversification to our funding base. As previously mentioned, we recently
opened a new banking center in Tampa, FL as part of our ongoing efforts in capturing domestic market share. Also,
during 2024, we made significant progress on building a strong foundation to cross the $10 billion assets threshold
on a sustained basis in 2025, including enhancements to our existing risk management framework and other
initiatives.
ERM and Credit Policies and Procedures
Enterprise Risk Management (“ERM”) is an enterprise-wide approach to risk management, driven from the top
by the Board and the Management Risk Committee. This committee establishes the framework and governance
structures to enable better understanding of the risk environment, enhance decision making, and ensure adherence to
established risk appetite.
The Bank is focused on enhancing the design of the risk management framework to support growth, scalability,
and change. We are committed to designing practices that allow us to efficiently adopt to changes and continuously
advance our programs.Th is includes strengthening risk identification, risk monitoring, risk reporting, and risk
assessment processes, as well as refining our control frameworks. Additionally, we are advancing our capabilities in
product and service offerings, technology, consumer compliance, and talent development to meet heightened
regulatory and operational demands.
General. We adhere to what we believe are disciplined underwriting standards. We maintain asset quality
through an emphasis on local market knowledge, long-term customer relationships, consistent and thorough
underwriting for all loans and a prudent credit culture. We also seek to maintain a broadly diversified loan portfolio
across geographies (within Florida or with Florida based sponsors), customers, products and industries. Our lending
policies do not provide for any loans that are highly speculative, subprime, or that have high loan-to-value ratios.
These components, together with active credit management, are the foundation of our credit culture, which we
believe is critical to enhancing the long-term value of our organization to our customers, employees, shareholders
and communities.
Credit Concentrations. In connection with the management of our credit portfolio, we actively manage the
composition of our loan portfolio, including credit concentrations. Our loan approval policies establish concentration
limits with respect to industry and loan product type to ensure portfolio diversification, which are reviewed at least
annually. The CRE concentration limits include sub-limits by property type and geographic market, which are
reviewed semi-annually. Country limits for loans to foreign borrowers are also assessed annually. In general, all
concentration levels are monitored on a monthly basis.
Loan Approval Process. We seek to achieve an appropriate balance between prudent and disciplined
underwriting and in our decision-making and timely responsiveness to our customers. As of December 31, 2024, the
Bank had a legal lending limit of approximately $144.7 million for unsecured loans, and its “in-house” single
obligor lending limit was $35.0 million for CRE loans, representing 24.2% of our legal lending limit and $30.0
million for all other loans, representing 20.7% of our legal lending limit as of such date. Our credit approval policies
provide the highest lending authority to our credit committee, as well as various levels of officer and senior
management lending authority for new credits and renewals, which are based on position, capability and experience.
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These limits are reviewed periodically by the Bank’s Board of Directors. We believe that our credit approval process
provides for thorough underwriting and sound and efficient decision making.
Credit Risk Management. We use what we believe is a comprehensive methodology to monitor credit quality
and prudently manage credit concentrations within our loan portfolio. Our underwriting policies and practices
govern the risk profile and credit and geographic concentration of our loan portfolio. We also have what we believe
to be a comprehensive methodology to monitor these credit quality standards, including a risk classification system
that identifies possible problem loans based on risk characteristics by loan type as well as the early identification of
deterioration at the individual loan level.
Credit risk management involves a collective effort among our relationship managers and credit underwriting,
portfolio management, credit administration, credit risk and Special Assets personnel. We generally conduct weekly
credit committee meetings to approve loans at or above $5 million (loans for customers with an aggregate exposure
equal to or above $20 million are also considered by the credit committee) and review other relevant credit related
matters. In addition, the credit committee recently created a special assets committee that generally meets twice
every month and reviews the non-performing and special mention loan portfolio, with a goal of prudently reducing
the levels of these criticized assets. Asset quality trends and delinquencies are also reviewed by the credit committee
and reports are elevated to senior management and the Board of Directors. Our policies require rapid notification of
delinquency and prompt initiation of collection actions. Relationship managers, credit administration personnel and
senior management proactively support collection activities. The variable incentive compensation of our relationship
managers is subject to downward adjustment based on the asset quality of each relationship manager’s portfolio. We
believe that having the ability to adjust their incentive compensation based on asset quality motivates the
relationship managers to focus on the origination and maintenance of high-quality credits consistent with our
strategic focus on asset quality.
Deposits
Our deposits serve as the primary funding source for lending, investing and other general banking purposes. We
provide a full range of deposit products and services, including a variety of checking and savings accounts,
certificates of deposit, money market accounts, debit cards, remote deposit capture, online banking, mobile banking,
and direct deposit services. We also offer business accounts and cash management services, including business
checking and savings accounts and treasury management services for our commercial clients. We solicit deposits
through our relationship-driven team of dedicated and accessible bankers, through community-focused marketing
and, increasingly, through our dedicated national online channel. We also seek to cross-sell deposit and wealth
management products and services at loan origination, and loans to our depository and other customers. Our deposits
are fully-insured by the Federal Deposit Insurance Corporation (“FDIC”), subject to applicable limits. See “-
Supervision and Regulation.”
As of December 31, 2024 and 2023, core deposits were $5.6 billion, and $5.6 billion, 71.6% and 70.9% of our
total deposits at those dates, respectively. Our core deposits consist of total deposits excluding all time deposits.
As of December 31, 2024 and 2023, time deposits were $2.2 billion and $2.3 billion , 28.4% and 29.1% of our
total deposits at those dates, respectively.
As of December 31, 2024 and 2023, brokered deposits were $701.9 million and $736.9 million, 8.9% and 9.3%
of our total deposits at those dates, respectively.
Investment, Advisory and Trust Services
We offer a wide variety of trust and estate planning products and services catering to high net worth customers,
our trust and estate planning products include simple and complex trusts, private foundations and personal
investment companies.
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The Cayman Bank was originally established to serve a number of our trust and wealth management customers,
and developed high net worth international customer relationships with offshore trust and estate planning services.
In 2023, the Company approved a plan for the dissolution of the Cayman Bank, and, as of the end of the third
quarter of 2024, the Cayman Bank no longer had any trust relationships, many of which were transferred to the
Bank. The dissolution of the Cayman Bank is expected to be completed in 2025, once regulatory approval from the
applicable regulatory agency is received.
We also offer brokerage and investment advisory services in global capital markets through Amerant
Investments. Amerant Investments acts as an introducing broker-dealer through Pershing (a wholly-owned
subsidiary of The Bank of New York Mellon) to obtain clearing, custody and other ancillary services. Amerant
Investments offers a wide range of products, including mutual funds, exchange-traded funds, equity securities, fixed
income securities, structured products, discretionary portfolio management, margin lending and online equities
trading. Amerant Investments has distribution agreements with many major U.S. and international asset managers,
as well as with some focused boutique providers. Amerant Investments provides its services to the Bank’s U.S.
domestic and international customers. The Bank’s retail customers are offered non-FDIC insured investment
products and services exclusively through Amerant Investments.
Other Products and Services
We offer banking products and services that we believe are attractively priced with a focus on customer
convenience and accessibility. We offer a full suite of online banking services including online account opening for
domestic and international customers, access to account balances, statements and other documents, Zelle for
consumer and businesses, online transfers, online bill payment and electronic delivery of customer statements, as
well as automated teller machines (“ATMs”), and banking by mobile devices, telephone and mail.
We are continuously looking for ways to improve our products, services and delivery channels. For example, in
2024, in partnership with IntraFi, the Bank launched “CDARS”, a service that allows investors to place large
deposits across multiple banks and savings associations while still earning the benefits of a certificate of deposit,
covered by the FDIC coverage. Also, we launched “Land Trust”, a legal entity that takes ownership of or authority
over a property at the request of the property owner, allowing the management of property while the owner is still
alive, making them a convenient and secure solution for real estate holdings. Lastly, we launched “FedNow Instant
Payment” allowing our customers to receive larger payments faster, directly through the Federal Reserve’s FedNow
Service, subject to certain limits.
Many of the services provided through our online platform are also available via our mobile application for
smart devices. We also offer debit cards, night depositories, direct deposit, cashier’s checks, safe deposit boxes in
various locations and letters of credit, as well as treasury management services, including wire transfer services,
remote deposit capture and automated clearinghouse services. In addition, we offer other more complex financial
products such as derivative instruments, including interest rate swap and cap contracts, to certain lending customers.
Investments
Our investment policy, set by our Board of Directors, requires that investment decisions be made based on, but
not limited to, the following four principles: investment quality, liquidity requirements, interest-rate risk sensitivity
and estimated return on investment. These characteristics are pillars of our investment decision-making process,
which seeks to minimize exposure to risks while providing a reasonable yield and liquidity. Under the direction of
the Asset-liability Management Committee (“ALCO”) and senior management, investment in securities are made
following specified policy and program guidelines.
Information Technology Systems
As part of our continued efforts to improve our information technology platforms and drive operating
efficiency, in the fourth quarter of 2021 the Company entered into a new multi-year outsourcing agreement with
financial technology leader FIS to assume full responsibility over a significant number of the Bank’s support
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functions and staff, including certain back-office operations. The Company completed the transition of its core data
processing platform and other applications in the fourth quarter of 2023. We believe these platforms and
applications have essential functionalities and scalability to support our continued growth and expansion strategy.
Under this outsourcing relationship, the Bank expects to achieve greater operational efficiencies and to deliver
advanced solutions and services to its customers. The Bank has developed new internal functions in charge to
enhance the third party risk management process and performance for third party providers.
The Bank is actively engaged in identifying and managing cybersecurity risks. Protecting company data, non-
public customer and employee data, and the systems that collect, process, and maintain this information is deemed
critical. The Bank has an enterprise-wide Information Security Program, or Security Program, which is designed to
protect the confidentiality, integrity and availability of customer non-public information and bank data. The
Security Program was also designed to protect our operations and assets through a continuous and comprehensive
cybersecurity detection, protection and prevention program. This program includes an information security
governance structure and related policies and procedures, security controls, protocols governing data and systems,
monitoring processes, and processes to ensure that the information security programs of third-party service providers
are adequate. Our Security Program also continuously promotes cybersecurity awareness and culture across the
organization. See Section 1C. Cybersecurity for additional information on how we address and manage
cybersecurity risks.
The Bank also has a business continuity/disaster recovery plan, or BCP, which it actively manages to prepare
for business continuity challenges it may face. Our BCP provides for the resiliency and recovery of our operations
and services to our customers. As part of the third-party risk management process, the Bank ensures that there are
specific recovery times for critical platforms. The plan is supported and complemented by a robust business
continuity governance framework, a life safety program as well as an enterprise-wide annual exercise and training to
keep the program and strategies effective, scalable and understood by all employees. We believe both the
Information Security Program and BCP adhere to industry best practices and comply with the guidelines of the
Federal Financial Institutions Examination Council, or FFIEC, and are subject to periodic testing and independent
audits.
Competition
The banking and financial services industry in our footprint is highly competitive, and we compete with a wide
range of lenders and other financial institutions within our markets, including local, regional, national and
international commercial banks and credit unions. We also compete with mortgage companies, brokerage firms,
trust service providers, consumer finance companies, mutual funds, securities firms, insurance companies, third-
party payment processors, financial technology companies, or fintechs, and other financial intermediaries on various
of our products and services. Some of our competitors are not subject to the regulatory restrictions and the level of
regulatory supervision applicable to us. Interest rates on loans and deposits, as well as prices on fee-based services,
are typically significant competitive factors within the banking and financial services industry. Many of our
competitors are much larger financial institutions that have greater financial resources than we do and compete
aggressively for market share. These competitors attempt to gain market share through their financial product mix,
pricing strategies and larger banking center networks. Other important competitive factors in our industry and
markets include office locations and hours, quality of customer service, community reputation, continuity of
personnel and services, capacity and willingness to extend credit, electronic delivery systems and ability to offer
sophisticated banking products and services. While we seek to remain competitive with respect to fees charged,
interest rates and pricing, we believe that our broad and sophisticated banking and financial products suite, our high-
quality customer service culture, our positive reputation, brand recognition, and long-standing community
relationships enable us to compete successfully within our markets and enhance our ability to attract and retain
customers and employees.
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Human Capital Management
The Company’s key human capital management objectives are to attract, retain and develop the right talent. To
support these objectives, the Company’s human resources programs are designed to continuously develop talent;
reward and support our team members through competitive pay and benefits; enhance the Company’s culture
through efforts aimed at making the workplace more engaging and inclusive; and engage team members as brand
ambassadors of our products and experiences.
Guided by our precepts, the people at Amerant are committed to providing our customers with the right
products, services and advisory services; treating everyone as we expect to be treated; being leaders in innovation,
quality, efficiency, and customer satisfaction; consistently exceeding expectations; promoting a diverse and
inclusive work environment; holding ourselves and each other accountable; and being the bank of choice in the
markets we serve. We believe we have a strong workforce, with a good mix of professional credentials, experience,
tenure and diversity, which coupled with their commitment to uncompromising values, provide the foundation for
our Company’s success.
The Company’s Human Capital Management includes the following areas of focus:
Talent. Attracting, developing, and retaining the best talent with the right skills and values, in accordance with
our precepts, is central to our long-term strategy to drive our success.
Our workforce composition is aligned with our business needs. Management trusts it has adequate human
capital to operate its business successfully. The Company and its subsidiaries had 698 full-time equivalent
employees, or FTEs, at the end of 2024. Approximately 86% of our workforce is in Florida and 14% in other states,
mainly to support our residential mortgage lending activities.
Talent acquisition efforts remained focused on revenue generating and external customer service contact roles,
accounting for 43% of all hires. We acquired talent to lead our expansion into the West Palm Beach and greater
Tampa markets; and to support the Company’s growth strategy by opening new banking centers in Downtown
Miami, and in Downtown Ft. Lauderdale. A key milestone in 2024 was the enhancement of our LinkedIn platform,
where we are now able to share stories about the Amerant community, giving our potential candidates a sneak peak
of life at Amerant, and a more comprehensive understanding of our organizational structure and the role of each
subsidiary. Our talent acquisition team uses internal and external resources to recruit highly skilled and talented
workers, and we encourage and reward referrals for open positions. We hire the right person for the job without
regard to gender, ethnicity or other protected traits and it is our policy to comply fully with all federal and state laws
relating to discrimination in the workplace.
Learning and Development. Our team members are inspired to achieve their full potential through learning and
development opportunities, recognition, and motivation. We invest in creating opportunities to help them grow and
build their careers through a multitude of learning and development programs. These include online instructor-led
and on-the-job learning assignments. Our learning and development strategy is aligned with the Global Association
for Talent Development and our business strategy. Understanding that everyone learns differently, we offer various
learning options, including traditional classroom, virtual, any-time, mobile, and social collaboration.
In 2024, we continued to empower our team members to reach their full potential by providing diverse learning
programs, opportunities, and resources. We used an online talent development tool to provide team members with
various learning options, including instructor-led classroom and virtual courses, on-demand recorded sessions and
self-paced web-based courses. We also promoted our partnership with Cornerstone Content Anytime and LinkedIn
Learning to support our team members' ongoing, ever-changing needs on topics such as leading effectively, overall
mental health and well-being, and organizational time management.
The primary focus for learning in 2024 included supporting the organization in the adoption of our FIS systems,
driving a sales culture and supporting leaders in upskilling their ability to lead teams effectively, manage
performance and drive change to reach organizational business goals. Additionally, we focused on digital sales
enablement by supporting the digital transformation team in driving adoption to our Customer Relationship
Management, or CRM, tool, known internally as Harmony.
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We delivered over 30,000 learning hours and allocated a learning investment of an average of $1,213.00 per
team member in all our learning programs. To support consistency with maintaining learning hours in alignment
with industry standards, we launched a partnership with LinkedIn Learning. This partnership will allow team
members to complete learning courses on demand based on individualized development needs.
We also continue offering higher-education tuition cost reimbursement programs, which are aimed at helping
our team members put their career goals within reach and provide them with access to a wide variety of degrees and
certificates. In 2024 we established a partnership with Barry University which provides our team members an
opportunity to complete degrees at a reduced cost.
In alignment with the efforts for learning and development, in 2024 we launched the “Be an Allstar in Your
Career” Development program. This program focuses on talent management and ensures we strengthen the
organization’s overall capability by identifying the strengths and weaknesses of the organization and ensuring team
members are being developed into their future roles. The development plans are heavily focused on meeting the
organization’s future needs. To support the Career Development program, we launched Career Development Week.
During this week we offered 15 courses, with 295 participants in attendance and 995 dedicated learning hours.
As we continue in our efforts to develop and promote women, the participants of the Grit and Grace Women’s
Development program graduated at the end of 2024. To celebrate their graduation, we hosted a Women’s
Development panel to provide opportunities for the graduates to share the knowledge they gained in the program.
The program aims to elevate and develop high performing, high potential women, as we continue to prepare talent
for the senior leadership bench. We will have a new graduating class in 2025.
Employee engagement. To assess and improve retention and engagement, the Company regularly conducts
anonymous surveys to seek feedback from our team members on a variety of topics, including but not limited to
confidence in company leadership, the competitiveness of our compensation and benefits package, career growth
opportunities, and improvements on how we could make our company an employer of choice.
In 2024 we continued to capture team member sentiments at all stages of the team member’s life cycle, from
onboarding to offboarding. We also launched our annual engagement survey. We achieved a 76% engagement score
(As per the engagement survey vendor’s thresholds, any score that is above 60% represents extremely high
engagement).
In addition to surveying, we spent time on a team member listening tour to capture team members’ thoughts on
life at Amerant, including Amerant Culture, Benefits, Learning and Development opportunities, and recognition.
These sentiments were shared with the senior management team, and we created an action plan to address the
feedback received. All action items related to Career Growth, Increased Communication, Wellness and Camaraderie
were completed. Additionally, we worked with teams with low engagement scores to create specific action plans to
increase overall engagement. We will launch an engagement pulse survey in 2025 to monitor the effectiveness of
our plans.
In addition, for the third year in a row, Amerant was recognized as one of the “America’s Top Most Loved
Workplace®” by Newsweek; Amerant is ranked No. 41, up seven spots from the previous year. The 2024 Top 100
Most Loved Workplaces® are the result of a collaboration between Newsweek and the Best Practice Institute (BPI),
a leadership development and benchmark research company. The list recognizes companies that have created a
workplace where employees feel respected, inspired, and appreciated and are at the center of the business model.
Health and Safety. Consistent with our operating principles, the health and safety of our team members is of
top priority. Hazards in the workplace are actively identified and management tracks incidents so remedial actions
can be taken to improve workplace safety.
Impact. In 2024, the “I Belong” program, continued launching activities within its strategic roadmap, pillars,
and goals. Our four pillars focus on Talent, Workplace, Communication, and Community.
Our belonging goals are to build teams that reflect the communities we serve while hiring and supporting all
talent. The ethnicity of our workforce was 73% Hispanic, 18% White, 3% Black, 2% Asian, and 4% other. Our
workforce was 46% male and 54% female at the close of 2024, and women represented 46% of Amerant’s middle
management leadership (as classified by Equal Employment Opportunity Commission Category “Middle, First
15
Management Officials”). Over 50% of our workforce is female, and the majority of our workforce self-identifies as
Hispanic or Latino. Also, the Bank has a 39% representation of females in senior leadership roles. In addition, the
Company’s Board of Directors, which consists of 11 members, currently has 4 female independent directors.
Additionally, five of our ten non-executive board members represent diverse backgrounds.
In alignment with our Talent pillar, the “I Belong” program is focused on attracting early career talent through
partnerships with local schools, including Florida International University, Barry University, and Miami Dade
College. In 2024 we hosted 5 interns, and the program resulted in all interns being offered continued employment.
As part of our Workplace pillar, educating our team members, increasing the I Belong brand presence, and
driving an inclusive environment through our Business Resources Groups were a focus for 2024. The “We Are
Multicultural” continued to find opportunities for team members to connect, while sharing best practices to drive
inclusion.
As we continue building an inclusive awareness culture, team members were assigned a customized
Unconscious Bias course to ensure team members have the skills to recognize and counter biases and people leaders
were assigned a course on Inclusive Leadership.
For over 20 years, we have championed targeted development programs for underrepresented talent in
partnership with the Center for Financial Training, a local chapter of the American Bankers Association.
Total Rewards (compensation and benefits). We believe in a competitive, total rewards program aligned with
our business objectives and the interests of our stakeholders. We remain committed to delivering a compensation
program with the fundamental principles of fairness, transparency, efficiency, and compliance with laws and
regulations. Based on specific job position and market conditions, our total rewards program combines fixed and
variable compensation: base salary, short-term incentive, equity-based long-term incentive, and a broad range of
benefits. This compensation approach plays a significant role in our ability to attract, retain and motivate the quality
of talent necessary to achieve our strategic business goals and drive sustained performance. As part of our total
rewards strategy, the Company offers an Employee Stock Purchase Plan (ESPP) to team members, which enables
team members to purchase Amerant shares at a 15% discount with a look back feature. This plan aligns the interest
of our team members with those of our shareholders and fosters a sense of ownership and commitment to the long-
term success of the business. Participation in the ESPP is an integral component of our broader compensation and
benefits programs.
Our compensation model encourages team members to contribute towards the achievement of shared corporate
objectives, while differentiating pay on performance based on individual contributions. In addition to our variable
compensation plans, the internal referral incentive programs offer financial rewards for successful referrals,
encouraging team members to leverage their networks to bring new clients, business or even the on-boarding of new
talent.
Based on our commitment to and knowledge that maintaining fair and transparent compensation principles and
a diverse and inclusive culture for our teams has a direct impact on engagement, drive and performance, in 2024, we
revamped our Comp-Talk Program though individual sessions with team members to discuss our total rewards
model and address their individual positioning, both within the organization and in the broader market. This one-on-
one approach fosters a culture of open communication, employee recognition and understanding of future
compensation opportunities and growth within the organization.
Wellness: As part of the holistic approach to team members’ well-being and our total rewards strategy, the
Company takes pride in providing comprehensive health and wellness benefits to our team members and their
families. The program is designed to support the physical, mental, and emotional health of our team members. Our
wellness initiatives are aimed at encouraging healthy life habits and promoting overall well-being, which we believe
are crucial for maintaining a productive and engaging workflow.
Our benefits package offering includes comprehensive medical, dental, vision, as well as supplemental short
and long-term life and out of pocket costs insurance. Along with these benefits we also offer Flexible Spending
Accounts (FSA) and Health Savings Accounts (HSA).
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Medical Plans: Our comprehensive nationwide healthcare plans allow full-time and part-time team members
and their dependents to select from multiple health plan options. The company provides robust health insurance with
a wide range of coverage options at competitive medical premiums, including a wellness premium discount when
team members complete preventive requirements. The Company contributes up to 92% towards the medical
premium depending on the tier chosen and whether wellness requirements have been completed. The Company also
contributes $500 towards the HSA accounts at the beginning of each year when the team member has the high
deductible medical plan for the team member only coverage, and $1,000 for all other tiers on the high deductible
plans.
Dental, Vision and Legal Plans: Full-time and part-time team members are eligible to participate in our dental,
vision, and legal plan offerings. The Company contributes up to 100% depending on the plan and chosen tier and
provides access to numerous providers across the country. Team members can also choose to purchase out of pocket
insurance policies providing income protection and cash for services with five different plans from accident, short
term disability, cancer, hospital indemnity, and critical care. The Legal Plan is an attorney owned and operated legal
plan offering comprehensive legal assistance, advice, and discounted representation on all types of legal services.
Life, AD&D and Disability: Group Basic Life and AD&D Insurance is offered to all full-time and part-time
team members, at two times their annual salary with a maximum coverage of $500,000.
Team members may
choose to purchase additional life insurance up to 5 times their annual salary to a max of $750,000. Full time and
part-time team members also benefit from free Short & Long-Term Disability insurance.
Retirement Plans: In addition to health insurance benefits, the Company also offers to all team members a pre-
tax qualified retirement contribution plan with the Company’s 100% matching contribution up to 5% of a
participant’s eligible compensation, and a non-tax qualified retirement contribution plan to certain eligible highly
compensated team members. Our total benefits package supports our team member’s well-being to achieve a healthy
and financial lifestyle goal.
Sustainability
In 2024, our Impact Program continued to evolve as our sustainability efforts were embedded into our everyday
work. We completed a series of activities within the program. On the environmental front, some of those activities
included: i) tracking scope 1 and 2 carbon emissions, discussing long-term carbon emission targets, and using
greenhouse gas emission offsets to reach our goal of achieving carbon neutrality in 2030.
We continued to leverage our data management tools in our loan and core systems to code and monitor for
Environmentally Conscious Financing (“ECF”). We sponsored Zoo Miami Foundation and Dream in Green. Both
programs aim to create educational and environmental impacts for our South Florida Climate. Additionally, we
reinforced our recycling efforts at our Amerant Bank operations center by removing all trash bins from cubicles,
placing additional recycling bins throughout the location, and educating team members on the proper use of the bins.
Lastly, as our Tampa location faced the impacts of Hurricanes Helene and Milton, our team members volunteered on
the Gulf Coast in an extensive beach cleanup to restore Tampa Bay shores.
On the social front, some of those activities included: i) hosting our various Internship Programs in partnership
with local colleges and universities in South Florida, which serve as a source of talent; performing team member
engagement surveys and internal fair pay gap assessment based on gender; ii) hosting a “Top Women Performers"
Program and mandatory online education course on unconscious bias for all team members and inclusive leadership
for all people leaders; iii) Additionally, we supported the Ingold Foundation by offering a full-day Financial Literacy
program to children in the foster care system, including topics such as the basics of checking, savings and budgeting,
credit, identity theft, creating your brand, and navigating your career path; iv) Lastly, as we continue to support our
communities, Amerant Bank donated $100,000 on Give Miami Day to organizations, including The Zoo Miami
Foundation, Dream in Green, The Everglades Foundation, and Le Jardin Community Center, Inc. On the governance
front, some activities included: (i) maintaining women and minority representation on our Board of Directors and
(ii) integrating sustainability factors into our procurement and third-party, strategic, and reputational risk
frameworks.
In 2024, we continued to advance our Impact Program initiatives and completed a series of activities within the
program's scope. Those activities included: i) using our pre-purchased carbon emission offsets to cover our
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calculated baseline scope 1 and 2 carbon emissions; ii) launching and offering team members an online course on
“Sustainability 101” as part of our efforts to sponsor environmentally conscious activities; iii) sponsoring the
“Dream in Green” program - the Green Schools Challenge, which engages students in hands-on activities to save
energy and water at school and teaches them about the links between natural resources, climate change and
community sustainability; and iv) sponsoring the 14th Annual Miami Heat Beach sweep where volunteers planted
500 native plants to support the city of Miami’s target of achieving a robust 30% tree canopy coverage by 2030.
SUPERVISION AND REGULATION
We and the Bank are extensively regulated under U.S. Federal and state laws applicable to financial institutions.
Our and the Bank’s supervision, regulation and examination are primarily intended to protect depositors and
customers, the Deposit Insurance Fund (“DIF”) of the FDIC, and the stability of the U.S. financial system and are
not intended to protect our shareholders or debt holders. Any change in applicable law or regulation may have a
material effect on our business. The following is a brief summary that does not intend to be a complete description
of all regulations that affect the Company and the Bank and this summary is qualified in its entirety by reference to
the particular statutory and regulatory provisions referred to below.
Bank Holding Company and Bank Regulation
The Company is a bank holding company, subject to supervision, regulation and examination by the Federal
Reserve under the Bank Holding Company Act (“BHC Act”). Bank holding companies generally are limited to the
business of banking, managing or controlling banks, and certain related activities. We are required to file periodic
reports and other information with the Federal Reserve, which examines us and our non-bank subsidiaries.
Bank holding companies that meet certain criteria may elect to become “Financial Holding Companies.”
Financial Holding Companies and their subsidiaries are permitted to acquire or engage in activities such as insurance
underwriting, securities underwriting, travel agency activities, broad insurance agency activities, merchant banking
and other activities that the Federal Reserve determines to be financial in nature or complementary thereto. Financial
holding companies continue to be subject to Federal Reserve supervision, regulation and examination. The Company
has not elected to become a financial holding company, but it may elect to do so in the future. Bank holding
companies that have not elected such treatment generally must limit their activities to banking activities and
activities that are closely related to banking.
The Bank is a national bank subject to regulation and regular examinations by the OCC and is a member of the
Federal Reserve Bank of Atlanta. OCC regulations govern permissible activities, capital requirements, branching,
dividend limitations, investments, loans and other matters.
The Bank is a member of the FDIC’s DIF, and its deposits are insured by the FDIC up to the applicable limits,
and, as a result, it is subject to regulation and deposit insurance assessments by the FDIC. See “FDIC Insurance
Assessments”. The FDIC also has backup examination authority and certain enforcement powers over the Bank.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), the
Bank also is subject to regulations issued by the Consumer Financial Protection Bureau (“CFPB”), with respect to
consumer financial services and products, but is not subject to direct CFPB supervision or examination because the
Bank has less than $10 billion in assets. If the Bank reports assets over $10 billion for four consecutive quarters, it
would meet the FDIC’s definition of a “large financial institution” and would be subject to direct supervision by the
CFPB for compliance with a variety of consumer compliance laws, and for assessment of the effectiveness of the
Bank’s compliance management system. As we began approaching the $10 billion in assets threshold, in the fourth
quarter of 2023 we engaged a consulting firm to perform an assessment of our compliance management system and
our risk management program to gauge our preparedness to meet the additional regulatory requirements and CFPB
supervision that would be applicable to us after surpassing the threshold. The assessment yielded several
observations with recommended actions that have been classified and prioritized based on criticality. We began
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implementing action plans to address these recommendations in 2024 and expect to continue to do so throughout
2025.
Source of Strength
Federal Reserve policy and federal law, require a bank holding company, such as the Company, to act as a
source of financial and managerial strength to its FDIC-insured Bank subsidiary, and to commit resources to support
its subsidiary, particularly when such subsidiary is in financial distress. In furtherance of this policy, the Federal
Reserve may require a bank holding company to terminate any activity or relinquish control of a non-bank
subsidiary (other than a non-bank subsidiary of a bank) upon the Federal Reserve’s determination that such activity
or control constitutes a serious risk to the financial soundness or stability of any subsidiary depository institution.
Further, federal bank regulatory authorities have additional discretion to require a financial holding company to
divest itself of any bank or non-bank subsidiary if the agency determines that divestiture may aid the depository
institution’s financial condition.
Change in Control
Federal law limits the amount of voting stock of a bank holding company or a bank that a person may acquire
without the prior approval of banking regulators. Under the Change in Bank Control Act (“CBC Act”), and the
regulations thereunder, before acquiring control of any bank holding company or any national bank a person or
group must give advance notice to the Federal Reserve and the OCC. Upon receipt of such notice, the regulatory
agencies may or may not approve the acquisition. The CBC Act creates a rebuttable presumption of control if a
person or group acquires the power to vote 10% or more of our outstanding voting common stock. These federal
laws and regulations generally make it more difficult to acquire a bank holding company or a bank by tender offer or
similar means than it might be to acquire control of another type of corporation. As a result, our shareholders may be
less likely to benefit from the rapid increases in stock prices that may result from tender offers or similar efforts to
acquire control of other companies. Investors should be aware of these requirements when acquiring our shares of
common stock.
Acquisitions
The BHC Act requires prior Federal Reserve approval for, among other things, the acquisition by a bank
holding company of direct or indirect ownership or “control” of more than 5% of the voting shares or substantially
all the assets of any bank, or for a merger or consolidation of a bank holding company with another bank holding
company. The BHC Act permits acquisitions of banks by bank holding companies, subject to various restrictions,
including that the acquirer is “well capitalized” and “well managed”. With certain exceptions, the BHC Act prohibits
a bank holding company from acquiring direct or indirect ownership or “control” of voting shares of any company
that is not a bank or bank holding company and from engaging directly or indirectly in any activity other than
banking or managing or controlling banks or performing services for its authorized subsidiaries. However, a bank
holding company may engage in or acquire an interest in a company that engages in activities that the Federal
Reserve has determined to be so closely related to banking, or managing or controlling banks.
A national bank located in Florida, with the prior approval of the OCC, may acquire and operate one or more
banks in other states. In addition, national banks located in Florida may enter into a merger transaction with one or
more out-of-state banks, and an out-of-state bank resulting from such transaction may continue to operate the
acquired branches in Florida. Under the Bank Merger Act, prior OCC approval is required for a national bank to
merge or consolidate with, or purchase the assets or assume the deposits of, another bank. In reviewing applications
to approve mergers and other acquisition transactions, the OCC is required to consider factors similar to the Federal
Reserve under the BHC Act, including the applicant’s financial and managerial resources, competitive effects and
public benefits of the transaction, the applicant’s performance in meeting community needs, and the effectiveness of
the entities in combating money laundering activities. The Dodd-Frank Act permits banks, including national banks,
to branch anywhere in the United States.
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Governance and Financial Reporting Obligations
We are required to comply with various corporate governance and financial reporting requirements under the
Sarbanes-Oxley Act of 2002 (“SOX Act”), as well as rules and regulations adopted by the SEC, the Public Company
Accounting Oversight Board (“PCAOB”), and the New York Stock Exchange (the “NYSE”). In particular, in order
to comply with Section 404 of the SOX Act, we are required to include management’s report on internal controls as
part of our Annual Report on Form 10-K, as well as our independent registered public accounting firm’s report on
internal controls. The assessments of the Company's internal control over financial reporting as of December 31,
2024 are included in this report under “Item 9A. Controls and Procedures.”
Shareholder Say-On-Pay Votes
Under the Dodd-Frank Act public companies are required to provide shareholders with an advisory vote on
executive compensation (known as say-on-pay votes), the frequency of a say-on-pay vote, and the golden parachutes
available to executives in connection with change-in-control transactions. Public companies must give shareholders
the opportunity to vote on say-on-pay proposals at least every three years and the opportunity to vote on the
frequency of say-on-pay votes at least every six years, indicating whether the say-on-pay vote should be held
annually, biennially, or triennially. Prior to 2022 as an EGC, the Company was not required to comply with these
provisions of the Dodd-Frank Act. The Company began complying with these provisions in 2022, after it exited its
EGC status. Since then, the Company provides its shareholders with the opportunity to vote on say-on-pay proposals
every year.
Volcker Rule
The “Volcker Rule” issued under the Dodd-Frank Act, which became effective in July 2015, generally prohibits
banking organizations with over $10 billion in assets from (i) engaging in certain types of proprietary trading, and
(ii) acquiring or retaining an ownership interest in or sponsoring a “covered fund,” all subject to certain exceptions.
The Volcker Rule also details certain limited activities in which bank holding companies and their subsidiaries may
continue to engage and requires banking organizations to implement compliance programs. In 2020, amendments to
the proprietary trading and covered funds regulations took effect, simplifying compliance and providing additional
exclusions and exemptions. Given our asset size, we and the Bank were not subject to the Volcker Rule in 2024, but
may become so in the future.
Transactions with Affiliates and Insiders
Pursuant to Sections 23A and 23B of the Federal Reserve Act, and Federal Reserve Regulation W thereunder,
the Bank is subject to restrictions that limit certain types of transactions between the Bank and its non-bank
affiliates. In general, U.S. banks are subject to quantitative and qualitative limits on extensions of credit, purchases
of assets and certain other transactions involving its non-bank affiliates. Additionally, transactions between U.S.
banks and their non-bank affiliates are required to be on arm’s length terms and must be consistent with standards of
safety and soundness.
Reserves
The Federal Reserve requires all depository institutions, such as the Bank, to maintain reserves against
transaction accounts (primarily noninterest-bearing and Negotiable Orders of Withdrawal, or NOW, checking
accounts). Effective March 26, 2020, the Federal Reserve reduced reserve requirement ratios to zero percent,
effectively eliminating reserve requirements for all depository institutions. These reserve requirements are subject to
annual adjustment by the Federal Reserve.
Privacy and Data Security
A variety of federal and state privacy laws govern the collection, safeguarding, sharing and use of customer
information, and require that financial institutions have policies regarding information privacy and security. The
Gramm-Leach-Bliley Act (“GLB Act”), and related regulations require banks and their affiliated companies to adopt
and disclose privacy policies, including policies regarding the sharing of personal information with third-parties.
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Some state laws also protect the privacy of information of state residents and require adequate security of such data,
and certain state laws may, in some circumstances, require us to notify affected individuals of security breaches of
computer databases that contain their personal information. These laws may also require us to notify law
enforcement, regulators or consumer reporting agencies in the event of a data breach, as well as businesses and
governmental agencies that own data. See Section 1C. Cybersecurity for information on how we address and
manage cybersecurity risks.
Community Reinvestment Act and Consumer Laws
The Community Reinvestment Act (“CRA”) and its corresponding regulations are intended to encourage banks
to help meet the credit needs of the communities they serve, including low and moderate income neighborhoods,
consistent with safe and sound banking practices. These regulations provide for regulatory assessment of a bank’s
record in meeting the credit needs of its market area. Federal banking agencies are required to publicly disclose each
bank’s rating under the CRA. The OCC considers a bank’s CRA rating when the bank submits an application to
establish bank branches, merge with another bank, or acquire the assets and assume the liabilities of another bank. In
the case of a bank holding company or financial holding company, the Federal Reserve reviews the CRA
performance record in connection with the application to acquire ownership or control of shares of a bank holding
company. An unsatisfactory record can substantially delay or block the transaction. The Bank has received an
“outstanding” rating since 2000, including its most recent CRA evaluation completed in 2022.
On October 24, 2023, the Federal Reserve, the FDIC, and the OCC issued a final rule amending the agencies’
CRA regulations. In developing the final rule, the agencies’ objectives included updating the CRA regulations to
strengthen the achievement of the core purpose of the statute, and adapting to changes in the banking industry,
including the expanded role of mobile and online banking. Most of the final rule’s new requirements are applicable
beginning January 1, 2026. The remaining new requirements, including data reporting requirements, are applicable
on January 1, 2027. We continue to evaluate the impact of any CRA changes and their impact to our financial
condition, results of operations, and liquidity, which cannot be predicted at this time.
The Bank is also subject to, among other things, other federal and state consumer laws and regulations that are
designed to protect consumers in transactions with banks. While the list set forth below is not exhaustive, these laws
and regulations include the Equal Credit Opportunity Act, the Home Mortgage Disclosure Act, the Electronic Funds
Transfer Act, the Fair Credit Reporting Act, the Real Estate Settlement Procedures Act, the Truth in Lending Act,
the Expedited Funds Availability Act, the Truth in Savings Act, the Fair Housing Act, the Check Clearing for the
21st Century Act, the Fair Debt Collection Practices Act, the Fair and Accurate Credit Transactions Act, and, as
applicable, their implementing regulations (i.e., Regulations B, C, E, V, X, Z, CC, and DD among others). These
laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions
must deal with clients when taking deposits, making loans processing checks or certain electronic payments, and
collecting consumer debts. The Bank must comply with the applicable provisions of these consumer protection laws
and regulations as part of its ongoing client relations.
The CFPB has the authority over many consumer financial protection laws, and is authorized to adopt regulations
with respect to the same. Although the CFPB does not examine or supervise banks with less than $10 billion in
assets, it exercises broad authority in making rules and providing guidance that affects bank regulation in these areas
and the scope of bank regulators’ consumer regulation, examination and enforcement. Banks of all sizes are affected
by the CFPB’s regulations, and the precedents set by CFPB enforcement actions and interpretations. The CFPB has
focused on various practices to date, including revising mortgage lending rules, overdrafts, credit card add-on
products, indirect automobile lending, student lending, and payday and similar short-term lending, and has a broad
mandate to regulate consumer financial products and services, whether or not offered by banks or their affiliates. As
of the date of this 10-K, the current administration has instructed CFPB employees to "not perform any work tasks"
and "cease all supervision and examination activity." It is unclear whether this directive is temporary or will result in
permanent changes to the CFPB's regulatory and enforcement authority or how it will impact banks and bank
holding companies. In the meantime, existing laws remain in effect. We expect the OCC to continue to examine the
Bank for compliance with these laws.
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Standards for Safety and Soundness
The Federal Deposit Insurance Act requires the federal bank regulatory agencies to prescribe, by regulation or
guideline, operational and managerial standards for all insured depository institutions relating to: (1) internal
controls; (2) information systems and audit systems; (3) loan documentation; (4) credit underwriting; (5) interest rate
risk exposure; and (6) asset quality. The federal banking agencies have adopted regulations and Interagency
Guidelines Establishing Standards for Safety and Soundness to implement these required standards. These
guidelines set forth the safety and soundness standards used to identify and address problems at insured depository
institutions before capital becomes impaired. Under the regulations, if a regulator determines that a bank fails to
meet any standards prescribed by the guidelines, the regulator may require the bank to submit an acceptable plan to
achieve compliance, consistent with deadlines for the submission and review of such safety and soundness
compliance plans.
Anti-money Laundering
The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (the “USA Patriot Act”), provides the federal government with additional powers to address
terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information
sharing and broadened anti-money laundering requirements. By way of amendments to the Bank Secrecy Act
(“BSA”), the USA Patriot Act puts in place measures intended to encourage information sharing among bank
regulatory and law enforcement agencies. In addition, certain provisions of the USA Patriot Act impose affirmative
obligations on a broad range of financial institutions.
The USA Patriot Act, the BSA and related federal regulations require banks to establish anti-money laundering
programs that include policies, procedures and controls to detect, prevent and report money laundering and terrorist
financing and to verify the identity of their customers and of beneficial owners of their legal entity customers.
The Anti-Money Laundering Act ("AMLA"), which amends the BSA, was enacted in early 2021. The AMLA is
intended to be a comprehensive reform and modernization of U.S. bank secrecy and anti-money laundering laws. In
particular, it codifies a risk-based approach to anti-money laundering compliance for financial institutions, requires
the U.S. Department of the Treasury to promulgate priorities for anti-money laundering and countering the financing
of terrorism policy, requires the development of standards for testing technology and internal processes for BSA
compliance, expands enforcement- and investigation-related authority (including increasing available sanctions for
certain BSA violations), and expands BSA whistleblower incentives and protections.
Many AMLA provisions will require additional rulemakings, reports and other measures, and the impact of the
AMLA will depend on, among other things, rulemaking and implementation guidance. In June 2021, the Financial
Crimes Enforcement Network (“FinCEN”), a bureau of the U.S. Department of the Treasury, issued the priorities for
anti-money laundering and countering the financing of terrorism policy required under the AMLA. The priorities
include corruption, cybercrime, terrorist financing, fraud, transnational crime, drug trafficking, human trafficking
and proliferation financing.
In addition, South Florida has been designated as a High Intensity Financial Crime Area (“HIFCA”), by
FinCEN and a High Intensity Drug Trafficking Area (“HIDTA”), by the Office of National Drug Control Policy.
The HIFCA program is intended to concentrate law enforcement efforts to combat money laundering efforts in
higher-risk areas. The HIDTA designation makes it possible for local agencies to benefit from ongoing HIDTA-
coordinated program initiatives that are working to reduce drug use.
There is also increased scrutiny of compliance with the sanctions programs and rules administered and enforced
by the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury. OFAC administers and
enforces economic and trade sanctions against targeted foreign countries and regimes, terrorists, international
narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and
other threats to the national security, foreign policy or economy of the United States, based on U.S. foreign policy
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and national security goals. OFAC issues regulations that restrict transactions by U.S. persons or entities (including
banks), located in the U.S. or abroad, with certain foreign countries, their nationals or “specially designated
nationals.” OFAC regularly publishes listings of foreign countries and designated nationals that are prohibited from
conducting business with any U.S. entity or individual. While OFAC is responsible for promulgating, developing
and administering these controls and sanctions, all of the bank regulatory agencies are responsible for ensuring that
financial institutions comply with these regulations.
Lending Practices
Federal bank regulatory guidance titled “Concentrations in Commercial Real Estate Lending, Sound Risk
Management Practices” (the “CRE Guidance”) requires that appropriate processes be in place to identify, monitor
and control risks associated with real estate lending concentrations. This could include enhanced strategic planning,
CRE underwriting policies, risk management, internal controls, portfolio stress testing and risk exposure limits as
well as appropriately designed compensation and incentive programs. Higher allowances for loan losses and capital
levels may also be required. The CRE Guidance provides the following criteria regulatory agencies will use as
indicators to identify institutions that may be exposed to CRE concentration risk: (i) experienced rapid growth in
CRE lending; (ii) notable exposure to a specific type of CRE; (iii) Total reported loans for construction, land
development, and other land of 100% or more of a bank’s total risk-based capital; or (iv) Total commercial real
estate, which includes loans secured by multifamily and nonfarm nonresidential properties and loans for
construction, land development, and other land are 300% or more of a bank’s total risk-based capital and the
outstanding balance of the institutions’ CRE portfolio has increased by 50% or more during the prior 36 months. We
have always had significant exposures to loans secured by CRE due to the nature of our markets. We believe our
long term experience in CRE lending, underwriting policies, internal controls, and other policies currently in place,
as well as our loan and credit monitoring and administration procedures, are generally appropriate to manage our
concentrations as required under the guidance.
Federal law limits a bank's authority to extend credit to directors and executive officers of the bank or its
affiliates and persons or companies that own, control or have power to vote more than 10% of any class of securities
of a bank or an affiliate of a bank, as well as to entities controlled by such persons. Among other things, extensions
of credit to insiders are required to be made on terms that are substantially the same as, and follow credit
underwriting procedures that are not less stringent than those prevailing for comparable transactions with
unaffiliated persons. Also, the terms of such extensions of credit may not involve more than the normal risk of
repayment or present other unfavorable features and may not exceed certain limitations on the amount of credit
extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of the
bank's capital.
Debit Interchange Fees
Interchange fees are fees that merchants pay to card companies and card-issuing banks such as the Bank for
processing electronic payment transactions on their behalf. The “Durbin Amendment” in the Dodd-Frank Act
provides limits on the amount of debit card interchange that may be received or charged by the debit card issuer, for
insured depository institutions with $10 billion or more in assets (inclusive of affiliates) as of the end of the calendar
year. Subject to certain exemptions and potential adjustments, the Durbin Amendment limits debit card interchange
received or charged by the issuer to $0.21 plus 5 basis points multiplied by the value of the transaction. Upon
crossing the $10 billion asset threshold in a calendar year, the rules require compliance with these limits by no later
than July 1 of the following year. The Bank did not exceed the $10 billion asset threshold at the end of 2024, but
may exceed this threshold in 2025. If so, the Company's compliance with the provisions of the Durbin amendment
would be required no later than July 1, 2026, and we do not expect the limits to debit card interchange to materially
reduce the Company's revenue.
Payment of Dividends and Repurchases
We and the Bank are subject to various general regulatory policies and requirements relating to the payment of
dividends, including requirements to maintain capital above regulatory minimums. The Federal Reserve and the
OCC are authorized to determine when the payment of dividends by the Company and the Bank, respectively, would
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be an unsafe or unsound practice, and may prohibit such dividends. The Federal Reserve and the OCC have
indicated that paying dividends that deplete a bank’s capital base to an inadequate level would be an unsafe and
unsound banking practice. The Federal Reserve and the OCC have each indicated that depository institutions and
their holding companies should generally pay dividends only out of current year’s operating earnings.
A bank holding company must give the Federal Reserve prior notice of any purchase or redemption of its equity
securities if the consideration for the purchase or redemption, when combined with the consideration for all such
purchases or redemptions in the preceding 12 months, is equal to 10% or more of its consolidated net worth. The
Federal Reserve may disapprove such a purchase or redemption if it determines that the proposal would be an unsafe
or unsound practice or would violate any law, regulation, Federal Reserve order, or condition imposed in writing by
the Federal Reserve. This notification requirement does not apply to a bank holding company that qualifies as well-
capitalized, received a composite rating and a rating for management of “1” or “2” in its last examination and is not
subject to any unresolved supervisory issue.
The Basel III Capital Rules, which we discuss below, further limit our permissible dividends, stock repurchases
and discretionary bonuses, including those of the Bank, unless we and the Bank continue to meet the fully phased-in
capital conservation buffer requirement. The Company and the Bank exceeded the capital conservation requirement
at year end 2024. See “Capital Requirements”.
Under Florida law, the Company may only pay dividends if, after giving effect to each dividend, the Company
would be able to pay its debts as they become due and the Company’s total assets would exceed the sum of its total
liabilities plus the amount that would be needed, if the Company were to be dissolved at the time of each dividend,
to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those
entitled to receive the dividend.
Capital Requirements
We and the Bank are required under federal law to maintain certain minimum capital levels based on ratios of
capital to assets and capital to risk-weighted assets. The required capital ratios are minimums, and the Federal
Reserve and OCC may determine that a banking organization, based on its size, complexity or risk profile, must
maintain a higher level of capital in order to operate in a safe and sound manner. Risks such as concentration of
credit risks and the risk arising from non-traditional activities, as well as the institution’s exposure to a decline in the
economic value of its capital due to changes in interest rates, and an institution’s ability to manage those risks are
important factors that are to be taken into account by the federal banking agencies in assessing an institution’s
overall capital adequacy. The following is a brief description of the relevant provisions of these capital rules and
their potential impact on our and the Bank's capital levels. The relevant capital measures are the total risk-based
capital ratio, Tier 1 risk-based capital ratio, common equity Tier 1 or “CET1” capital ratio, as well as, the leverage
capital ratio.
The Federal Reserve has risk-based capital rules for bank holding companies and the OCC has similar rules for
national banks. These rules require a minimum ratio of capital to risk-weighted assets (including certain off-balance
sheet activities, such as standby letters of credit) and capital conservation buffer of 10.50%. Tier 1 capital includes
common equity and related retained earnings and a limited amount of qualifying preferred stock, less goodwill and
certain core deposit intangibles. Voting common equity must be the predominant form of capital. Tier 2 capital
consists of non-qualifying preferred stock, qualifying subordinated, perpetual, and/or mandatory convertible debt,
term subordinated debt and intermediate term preferred stock, up to 45% of pre-tax unrealized holding gains on
available for sale equity securities with readily determinable market values that are prudently valued, and a loan loss
allowance up to 1.25% of its standardized total risk-weighted assets, excluding the allowance. The capital rules also
define the risk-weights assigned to assets and off-balance sheet items to determine the risk-weighted asset
components of the risk-based capital rules, including, for example, “high volatility” commercial real estate, past due
assets, structured securities and equity holdings. We collectively refer to Tier 1 risk based capital and Tier 2 capital
as Total risk-based capital.
In addition, the Federal Reserve has established minimum leverage ratio guidelines for bank holding companies,
which provide for a minimum leverage ratio of Tier 1 capital to adjusted average quarterly assets (“leverage ratio”)
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equal to 4%. However, regulators expect bank holding companies and banks to operate with leverage ratios above
the minimum. The guidelines also provide that institutions experiencing internal growth or making acquisitions will
be expected to maintain strong capital positions substantially above the minimum supervisory levels without
significant reliance on intangible assets. The Federal Reserve has indicated that it will continue to consider a
“tangible Tier 1 leverage ratio” (deducting all intangibles) in evaluating proposals for expansion or new activity.
Higher capital may be required in individual cases and depending upon a bank holding company’s risk profile. All
bank holding companies and banks are expected to hold capital commensurate with the level and nature of their
risks, including the volume and severity of their problem loans. The level of Tier 1 capital to risk-adjusted assets is
becoming more widely used by the bank regulators to measure capital adequacy. Neither the Federal Reserve nor the
OCC has advised us of any specific minimum leverage ratio or tangible Tier 1 leverage ratio applicable to the
Company or the Bank, respectively. Under Federal Reserve policies, bank holding companies are generally expected
to operate with capital positions well above the minimum ratios. The Federal Reserve believes the risk-based ratios
do not fully take into account the quality of capital and interest rate, liquidity, market and operational risks.
Accordingly, supervisory assessments of capital adequacy may differ significantly from conclusions based solely on
the level of an organization’s risk-based capital ratio.
In order to avoid certain restrictions on permissible dividends, stock repurchases and discretionary bonuses, a
minimum “capital conservation buffer” of CET1 capital of at least 2.5% of total risk-weighted assets, is required.
The capital conservation buffer is calculated as the lowest of: (i) the banking organization’s CET1 capital ratio
minus 4.5%; (ii) the banking organization’s Tier 1 risk-based capital ratio minus 6.0%; or (iii) the banking
organization’s total risk-based capital ratio minus 8.0%.
The capital elements and total capital under the Basel III Capital Rules are as follows:
Minimum CET1
4.50%
Capital Conservation Buffer
2.50%
Total CET1
7.00%
Deductions from CET1
100.00%
Minimum Tier 1 Capital
6.00%
Minimum Tier 1 Capital plus conservation buffer
8.50%
Minimum Total Capital
8.00%
Minimum Total Capital plus conservation buffer
10.50%
The Federal Reserve, the OCC, and the FDIC, published a final rule on July 22, 2019 (“the Capital
Simplifications Final Rule”) that simplifies existing regulatory capital rules for non-advanced approaches
institutions, such as the Company. Non-advanced approaches institutions were permitted to implement the Capital
Simplifications Final Rule as of its revised effective date in the quarter beginning January 1, 2020, or wait until the
quarter beginning April 1, 2020. As of the date of implementation, the required deductions from regulatory capital
CET1 elements for mortgage servicing assets (“MSAs”) and temporary difference deferred tax assets (“DTAs”) are
only required to the extent these assets exceed 25% of CET1 capital elements, less any adjustments and deductions
(the “CET1 Deduction Threshold”). MSAs and temporary difference DTAs that are not deducted from capital are
assigned a 250% risk weight. Investments in the capital instruments of unconsolidated financial institutions are
deducted from capital when these exceed the 25% CET1 Deduction Threshold. Minority interests in up to 10% of
the parent banking organization’s CET1, Tier capital and total capital, after deductions and adjustments are
permitted to be included in capital effective October 1, 2019. Also, effective October 1, 2019, the final rule made
various technical amendments, including reconciling a difference in the capital rules and the bank holding company
rules that permits the redemption of bank holding company common stock without prior Federal Reserve approval
under the capital rules. Such redemptions remain subject to other requirements, including the BHC Act and Federal
Reserve Regulation Y. The Company adopted these simplified capital rules in the first quarter of 2020 and they had
no material effect on the Company’s regulatory capital and ratios.
The Basel Committee on Banking Supervision published the last version of the Basel III accord in 2017,
generally referred to as “Basel IV.” The Basel Committee stated that a key objective of the revisions incorporated
25
into the framework is to reduce excessive variability of risk-weighted assets, which will be accomplished by
enhancing the robustness and risk sensitivity of the standardized approaches for credit risk and operational risk. This
will facilitate the comparability of banks’ capital ratios, constraining the use of internally modeled approaches, and
complementing the risk-weighted capital ratio with a finalized leverage ratio and a revised and robust capital floor.
Leadership of the Federal Reserve, OCC, and FDIC, who are tasked with implementing Basel IV, supported the
revisions. Under the current U.S. capital rules, operational risk capital requirements and a capital floor apply only to
advanced approaches institutions, and not to us. The impact of Basel IV on us will depend on the manner in which it
is implemented by the federal bank regulators.
As of December 31, 2024, the Company’s and the Bank's CET1 ratio were 11.21% and 11.73%, respectively. In
addition, the Company’s and the Bank’s total risk-based capital ratio as of December 31, 2024 were 13.43% and
12.84%, respectively. As a result, both the Company and the Bank are currently classified as "well-capitalized" for
purposes of the OCC's prompt corrective action regulations.
Prompt Corrective Action Rules
The federal banking agencies are required to take "prompt corrective action" with respect to financial institutions
that do not meet minimum capital requirements. The law establishes five categories for this purpose: "well-
capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized" and "critically
undercapitalized." To be considered "well-capitalized," an insured depository institution must maintain minimum
capital ratios and must not be subject to any order or written directive to meet and maintain a specific capital level
for any capital measure. To be well-capitalized, the Bank must maintain at least the following capital ratios:
•
10.0% Total capital to risk-weighted assets
•
8.0% Tier 1 capital to risk-weighted asset
•
6.5% CET1 to risk-weighted assets; and
•
5.0% leverage ratio.
An institution that fails to remain well-capitalized becomes subject to a series of restrictions that increase in
severity as its capital condition weakens. Such restrictions may include a prohibition on capital distributions,
restrictions on asset growth or restrictions on the ability to receive regulatory approval of applications. The
regulations apply only to banks and not to BHCs. However, the Federal Reserve is authorized to take appropriate
action at the holding company level, based on the undercapitalized status of the holding company's subsidiary
banking institutions. In certain instances, relating to an undercapitalized banking institution, the BHC would be
required to guarantee the performance of the undercapitalized subsidiary's capital restoration plan and could be
liable for civil money damages for failure to fulfill those guarantee commitments.
In addition, failure to meet capital requirements may cause an institution to be directed to raise additional
capital. Federal law further mandates that the agencies adopt safety and soundness standards generally relating to
operations and management, asset quality and executive compensation, and authorizes administrative action against
an institution that fails to meet such standards. Failure to meet capital guidelines may subject a banking organization
to a variety of other enforcement remedies, including additional substantial restrictions on its operations and
activities, termination of deposit insurance by the FDIC and, under certain conditions, the appointment of a
conservator or receiver.
Enforcement Policies and Actions
The Federal Reserve and the OCC monitor compliance with laws and regulations. The CFPB monitors
compliance with laws and regulations applicable to consumer financial products and services. Violations of laws and
regulations, or other unsafe and unsound practices, may result in these agencies imposing fines, penalties and/or
restitution, cease and desist orders, or taking other formal or informal enforcement actions. Under certain
circumstances, these agencies may enforce similar remedies directly against officers, directors, employees and
others participating in the affairs of a bank or bank holding company, including fines, penalties and the recovery, or
claw-back, of compensation.
26
FDIC Insurance Assessments
Deposits at U.S. domiciled banks are insured by the FDIC, subject to limits and conditions of applicable laws
and regulations. Our deposit accounts are insured by the DIF generally up to a maximum of $250,000 per separately
insured depositor and for each account ownership category. In order to fund the DIF, all insured depository
institutions are required to pay quarterly assessments to the FDIC that are based on an institutions assignment to one
of four risk categories based on supervisory evaluations, regulatory capital levels and certain other factors. The
FDIC has the discretion to adjust an institution’s risk rating and may terminate its insurance of deposits upon a
finding that the institution engaged or is engaging in unsafe and unsound practices, is in an unsafe or unsound
condition to continue operations, or violated any applicable law, regulation, rule, order or condition imposed by the
FDIC or written agreement entered into with the FDIC. The FDIC may also prohibit any FDIC-insured institution
from engaging in any activity it determines to pose a serious risk to the DIF.
London Inter-Bank Offered Rate (LIBOR) Cessation and Replacement Rates
The Company owns all of the common capital securities issued by five statutory trust subsidiaries (“the Trust
Subsidiaries”), respectively. These Trust Subsidiaries were first formed by the Company for the purpose of issuing
trust preferred securities (“the Trust Preferred Securities”) and investing the proceeds in junior subordinated
debentures issued by the Company (the “Debentures”). The Debentures are guaranteed by the Company. The Trust
Preferred Securities and the Debentures issued by the Company originally included calculations that were based on
3-month LIBOR, on June 30, 2023, the 3-month LIBOR was discontinued in accordance with the LIBOR Act. As of
June 30, 2023, the 3-month LIBOR, as used in the Trust Preferred Securities and Debentures documents, was
replaced with the 3-month CME term secured Overnight Financing Rate (“SOFR”) as adjusted by the relevant
spread adjustment of 0.26161%.
Lender Net Worth Adjusted Requirements
Amerant Mortgage is currently an approved seller and servicer with Fannie Mae for the purpose of selling
Fannie Mae eligible loan production and retaining the Mortgage Servicing Rights, or MSRs, of those same loans. As
an approved Fannie Mae seller and servicer, Amerant Mortgage must meet certain net worth covenants outlined in
the Maintaining Seller/Servicer Eligibility section of the Fannie Mae Selling Guide (the “Selling Guide”).
Under the Selling Guide, Amerant Mortgage must meet a minimum net worth requirement of $2.5 million plus
0.25% of the outstanding unpaid principal balance of the portfolio of loans Amerant Mortgage is contractually
obligated to service for Fannie Mae (the “Lender Adjusted Net Worth”). Failure to meet the minimum net worth or
net worth decline tolerance outlined above, may prompt the suspension of Amerant Mortgage as an approved seller
and/or servicer, which would prevent Amerant Mortgage from taking down new commitments to deliver loans to
Fannie Mae and adding loans to any portfolio that Amerant Mortgage services for Fannie Mae.
Cybersecurity Regulations and Guidelines
The federal banking regulators regularly issue new guidance and standards, and update existing guidance and
standards, regarding cybersecurity, which are intended to enhance cyber risk management by financial institutions.
Financial institutions are expected to comply with such guidance and standards and to accordingly develop
appropriate security controls and risk management processes. If we fail to observe this regulatory guidance or
standards, we could be subject to various regulatory sanctions, including financial penalties.
Since May 2022, a rule adopted by the federal banking agencies requires banking organizations to notify their
primary banking regulator within 36 hours of determining that a "computer-security incident" has materially
disrupted or degraded, or is reasonably likely to materially disrupt or degrade, the banking organization's ability to
carry out banking operations or deliver banking products and services to a material portion of its customer base, its
businesses and operations that would result in material loss, or its operations that would impact the stability of the
United States.
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In December 2023, new SEC rules became effective that require public companies, among other things, to
report material cybersecurity incidents in current reports on Form 8-K. The new rules also require reporting about a
public company’s policies and procedures to identify and manage cybersecurity risks; as well as disclosure about the
Board of Directors' oversight of cybersecurity risk; and management’s role and expertise in assessing and managing
cybersecurity risk and implementing cybersecurity policies and procedures.
State regulators have also been increasingly active in implementing privacy and cybersecurity standards and
regulations. Recently, several states have adopted regulations requiring certain financial institutions to implement
cybersecurity programs and providing detailed requirements with respect to these programs, including data
encryption requirements. Many states have also recently implemented or modified their data breach notification,
information security and data privacy requirements. We expect this trend of state-level activity in those areas to
continue and are continually monitoring developments where our customers are located.
Risks and exposures related to cybersecurity attacks, including litigation and enforcement risks, are expected to
be elevated for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, as well as
due to the expanding use of Internet banking, mobile banking and other technology-based products and services by
us and our customers. See Item 1A. Risk Factors for a further discussion of risks related to cybersecurity and Item
1c. Cybersecurity for further information on how we address and manage cybersecurity risks .
Future Legislative Developments
Congress may enact legislation from time to time that affects the regulation of the financial services industry,
and state legislatures may enact legislation from time to time affecting the regulation of financial institutions
chartered by or operating in their states. Federal and state regulatory agencies also periodically propose and adopt
changes to their regulations or change the manner in which existing regulations are applied. The substance or impact
of pending or future legislation or regulation, or the application thereof, cannot be predicted, although any change
could impact the regulatory structure under which we or our competitors operate and may significantly increase
costs, impede the efficiency of internal business processes, require an increase in regulatory capital, require
modifications to our business strategy, and limit our ability to pursue business opportunities in an efficient manner.
It could also affect our competitors differently than us, including in a manner that would make them more or less
competitive. A change in statutes, regulations or regulatory policies applicable to us or any of our affiliates could
have a material, adverse effect on our business, financial condition and results of operations.
Available Information
We maintain a website at the address www.amerantbank.com. On our website, you can access, free of charge,
our reports on Forms 10-K, 10-Q and 8-K, as well as proxy statements on Schedule 14A and amendments to these
reports and materials. Materials are available online as soon as practicable after we file them with the SEC.
Additionally, the SEC maintains a website at the address www.sec.gov that contains the information we file or
furnish electronically with the SEC. The information contained on our website is not incorporated by reference in, or
considered part of, this Form 10-K.
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Supplementary Item, Information about our Executive Officers
The Executive Officers of the Company as of March 4, 2025, are as follows:
Gerald P. Plush. Mr. Plush (“Jerry”), age 66, serves as the Company’s Chairman, President and Chief
Executive Officer since June 2, 2022. He is a senior financial services executive known for achievements in leading
organizations to standards of excellence in growth, operational efficiency, and profitability. Mr. Plush joined
Amerant in February 2021 as Vice-Chairman; in March 2021, he was appointed President and CEO, and in June
2022, he was appointed Chairman and CEO. He has served on the Board of Directors of Amerant since July 2019.
From 2019 to 2021, Mr. Plush was a partner with Patriot Financial Partners, L.P., a private equity firm based in
Radnor, PA. There, he sourced new investment opportunities for the firm and represented Patriot on the boards of
directors for multiple portfolio banks, specialty finance, and fintech companies.
In 2018, he served as CEO of Verdigris Holdings, Inc., leading this start-up through the regulatory application,
organization, and initial funding processes. Prior to that, Mr. Plush was the Chief Administrative Officer of
Santander US from 2016 to 2017. He joined Santander US in April 2014 as Chief Financial Officer, where he served
as a member of the Santander US Executive Committee and simultaneously served as a director for Santander
Consumer USA from 2014 to 2016. He was also a director for the Federal Home Loan Bank of Pittsburgh from
2016 to 2017.
Before joining Santander, Mr. Plush served as President of Webster Financial Corp (NYSE: WBS) and Webster
Bank, where he held several roles including Vice Chairman and Chief Operating Officer, CFO, Chief Risk Officer,
and was a member of Webster’s board of directors. Prior to Webster Bank, he worked at MBNA America, most
recently as Senior Executive Vice President and Managing Director for corporate development and acquisitions. He
had previously served in several senior roles for MBNA, including as CFO-North America.
Mr. Plush holds a Bachelor of Science degree in Accounting from St. Joseph’s University in Philadelphia. He is
a certified public accountant and a certified management accountant (inactive). He is a member of the National
Association of Corporate Directors (NACD) and in July 2024 earned the director certification designation
(NACD.DC).
He serves on the board of directors of the FIFA World Cup 2026™Miami Host Committee, the Orange Bowl
Committee and the Broward Workshop. He is also a member of the CEO Council of the Greater Ft. Lauderdale
Alliance and was recently elected to the Florida Council of 100.
Sharymar Calderón. Mrs. Calderón, age 37, was appointed Executive Vice President, Chief Financial Officer
(CFO) in June 2023 and Senior Executive Vice President in November 2024. Calderón is responsible for Amerant’s
financial management, including treasury, financial reporting and accounting, financial planning and analysis,
investor relations, strategy, internal controls over financial reporting, corporate tax and products. She also chairs the
Asset-Liability Committee and is a member of the Board of Amerant Investments. Prior to her appointment as CFO,
Mrs. Calderón served as Senior Vice President, Head of Internal Audit at Amerant since June 2021, where she led
the implementation and monitoring of the Company’s audit plan and risk assessments, including coordination with
external auditors and the integration of SOX audits. She is a licensed CPA in both Florida and Puerto Rico. Prior to
Amerant, Mrs. Calderón worked at Ocean Bank as SVP, Head of Payment Operations from September 2020 through
early June 2021. Before that, she worked at PricewaterhouseCoopers for nine years, where she began her career as
an Associate and rose to Senior Manager over the course of her tenure, gaining extensive experience in financial
services, including banking, broker dealers and asset management.
Mrs. Calderón received a double Bachelor of Business Administration in Accounting and Marketing from the
University of Puerto Rico. She is a licensed Certified Public Accountant (CPA) in Florida and Puerto Rico, a
member of the American Institute of Certified Public Accountants (AICPA), a member of the Puerto Rico State
Society of CPAs and its Florida Chapter, and the Association of Latino Professionals for America (ALPFA). Mrs.
Calderón currently serves on the board of directors of the Zoo Miami Foundation.
29
Alberto Capriles. Mr. Capriles, age 57, serves as Senior Executive Vice-President and Chief Risk Officer since
January 2023, having previously served as Executive Vice-President and Chief Risk Officer since February 2018
and previously as the Company’s Chief Risk Officer since 2016. Mr. Capriles is responsible for all enterprise risk
management oversight, including credit, market, operational and information security risk, BSA/AML and consumer
compliance. Mr. Capriles served in various roles with the former parent of the Bank, Mercantil Servicios
Financieros, or MSF since 1995, including as Corporate Treasurer from 2008 to 2015, head of Corporate Market
Risk Management from 1999 to 2008, and as Corporate Risk Specialist from 1995 to 1999, where he led the project
to implement MSF’s enterprise risk management model. Prior to joining MSF, Mr. Capriles served as a foreign
exchange trader with the Banco Central de Venezuela (Venezuelan Central Bank) from 1989 to 1991. Mr. Capriles
also served as a Professor in the Economics Department at Universidad Católica Andrés Bello in Caracas,
Venezuela from 1996 to 2008.
Mr. Capriles graduated with a degree in Economics from Universidad Católica Andrés Bello in Caracas,
Venezuela and earned a master’s degree in International Development Economics from Yale University, and a MBA
from the Massachusetts Institute of Technology.
Juan Esterripa. Mr. Esterripa, age 51, serves as Senior Executive Vice-President and Chief Commercial
Banking Officer since April 2023. He is a seasoned banking professional with significant experience in corporate
and commercial banking. In his role, Esterripa oversees multiple business sectors, including commercial banking,
commercial real estate, syndication, and specialty finance. Before joining the Company, Mr. Esterripa served as
EVP, Wholesale Banking Executive at City National Bank - Florida since 2016. From 2013 to 2016, he was SVP,
Corporate & Commercial Banking Manager at BankUnited, NA. He served as Executive Vice President at Stonegate
Bank from 2012 to 2013 and as Senior Vice President at Capital Bank since 2010 prior to that. From 2009 to 2010,
Esterripa was SVP, Chief Lending Officer at Pacific National Bank, and from 2006 to 2009, he served as SVP, Head
of Middle Market Division at Mercantil Commercebank, NA. Mr. Esterripa is a graduate of the Harvard Business
School executive management program. He currently serves on the board of Big Brothers Big Sisters of Miami.
Carlos Iafigliola. Mr. Iafigliola, age 48, was appointed Senior Executive Vice President, Chief Operating
Officer (COO) in June 2023. He is responsible for Amerant’s loan and deposit operations, project management,
technology services, procurement, facilities, treasury management, and digital projects. Mr. Iafigliola chairs the
Board of Amerant Investments and is member of the Board of Amerant Mortgage. Prior to his appointment as COO,
Mr. Iafigliola served as EVP, Chief Financial Officer (CFO) since May 2020 spearheading Amerant’s financial
management, including treasury, financial reporting and accounting, financial analysis, investor relations &
sustainability, internal controls and corporate tax. Mr. Iafigliola also served as SVP, Treasury Manager from 2015 to
May 2020 and held various management positions in the Treasury area from 2004 to 2015. Prior to joining Amerant,
he served in senior roles in Market Risk at Banco Mercantil, also known as Mercantil Servicios Financieros (MSF),
from 2000 to 2004. He joined MSF in April 1998.
Mr. Iafigliola earned a degree in Economics from Universidad Católica Andrés Bello in Caracas, Venezuela in
1998 and a Masters in Finance from Instituto de Estudios Superiores de Administración (IESA) in 2003. He was
also part of Miami Leadership Program cohort 2011. He serves as Board member for Habitat for Humanity Broward
and is a member of the Investment Committee of United Way Miami.
Braden Smith. Mr. Smith, age 51, serves as the Senior Executive Vice President and Chief Business
Development Officer since November 2024. He leads strategic growth initiatives, evaluates new business
opportunities and fosters partnerships aimed at expanding the Company’s influence. From 2009 until November
2024 Mr. Smith established and was the Chief Executive Officer of the Private Banking Group at Wintrust Financial
Corporation and led a team that included bankers, investment professionals, credit and support staff overseeing
billions in assets, loans and deposits. Mr. Smith was also a member of Wintrust’s Operating Committee.
Mr. Smith earned a Bachelor of Science degree in Finance from the Rochester Institute of Technology in 1996.
Mr. Smith serves on the boards of John Cabot University, Prentice Hospital, the Children’s Brittle Bone Foundation,
and on the advisory Board of the Rochester Institute of Technology - Saunders College of Business.
30
Mariola Sanchez. Mrs. Sanchez, age 52, serves as Senior Executive Vice-President and Chief People Officer
since June 2022 and leads the Company’s approach to people and organizational culture. Previously, Mrs. Sanchez
served as the Company and the Bank’s General Counsel since 2010. With an educational background in human
behavior and law, in addition to 15 years working at the Bank, she brings a wealth of organizational knowledge and
an informed perspective to her role. She and her leadership team are focused on learning and development,
management practices, and diversity and inclusion. As General Counsel, Mrs. Sanchez advised the Company on a
range of legal matters, including labor and employment. She has practiced law for over 25 years, primarily as in-
house counsel for financial institutions. Prior to joining Amerant in 2007 as Associate General Counsel, she served
as Associate General Counsel at Regions Bank (formerly Union Planters Bank).
Mrs. Sanchez earned a bachelor’s degree in Psychology from the University of Miami and a Juris Doctorate
from St. Thomas University. In April 2021, she also graduated from the Yale School of Management’s
ExecOnline’s Fostering Inclusion and Diversity Program . Active in the community, Mrs. Sanchez serves on the
board of directors for the Center for Financial Training and the Overtown Youth Center.
Armando Fleitas, age 48, serves as Executive Vice-President, Chief Accounting Officer (“CAO”) since March
2023 overseeing general accounting and accounts payable; investment accounting and operations; mortgage banking
finance and accounting; and financial reporting to the Federal Reserve Bank and other federal and state banking
supervisory authorities, the Securities and Exchange Commission, and the Office of Comptroller of the Currency.
Prior to being named CAO, Mr. Fleitas served as Senior Vice-President and Controller of the Company from
January 1, 2021 until March 2023. Mr. Fleitas joined Amerant in 2010, serving in various management positions in
the financial reporting area, including most recently, prior to his current role, as Senior Vice-President and Financial
Reporting Manager. In his prior and current role, he has been responsible for overseeing the preparation of
consolidated and stand-alone statutory financial statements, the quarterly and annual reports on Forms 10-Q and 10-
K of the Company filed with the SEC. Previously, he was also responsible for overseeing the Company’s internal
controls over financial reporting and vendor management functions. Mr. Fleitas began his career in 1996 at PwC
Venezuela, transitioning in 2003 to PwC in the US. At PwC, he held various roles in the areas of audit and
accounting consulting services primarily serving customers in the financial services industry.
Mr. Fleitas earned a bachelor’s degree in accounting from Universidad Católica Andrés Bello in Caracas,
Venezuela, in 1998 and a master’s degree in accounting from the Huizenga School of Business and
Entrepreneurship at Nova Southeastern University, Fort Lauderdale, USA, in 2011. He is a Certified Public
Accountant (CPA) in the United States (NH-2005-active, NY-2010-inactive), and in Venezuela (2006). He holds a
Chartered Global Management Accountant (CGMA) designation and is a member of the Florida Institute of
Certified Public Accountants (FICPA) and the American Institute of Certified Public Accountants (AICPA). He
serves on the Advisory Board of the Salvation Army of Broward County since 2024.
31
SUMMARY OF RISK FACTORS
Our business is subject to a number of risks that could cause actual results to differ materially from those
indicated by forward-looking statements made in this Form 10-K or presented elsewhere from time to time. These
risks are discussed more fully under “Item 1A. Risk Factors” and include, but are not limited to the following:
Risk related to Funding and Liquidity
•
Liquidity risks could affect our operations and jeopardize our financial condition and certain funding
sources could increase our interest rate expense.
•
We may not be able to develop and maintain a strong core deposit base or other low-cost funding sources.
•
We may elect or be compelled to seek additional capital in the future, but that capital may not be available
when it is needed or on acceptable terms.
•
Our ability to receive dividends from our subsidiaries could affect our liquidity and our ability to pay
dividends.
Risk related to Credit and Interest Rate
•
Our profitability is subject to interest rate risk.
•
Our allowance for credit losses may prove inadequate.
•
Our concentration of CRE loans could result in increased loan losses.
•
Many of our loans are to commercial borrowers, which have unique risks compared to other types of loans.
•
Our valuation of securities and the determination of a credit loss allowance in our investment securities
portfolio are subjective and, if changed, could materially adversely affect our results of operations or
financial condition.
•
Nonperforming and similar assets take significant time to resolve and may adversely affect our business,
financial condition, results of operations, or cash flows.
•
We are subject to environmental liability risk associated with lending activities.
•
Weakness in the demand for mortgage loans or in the secondary market for residential mortgage loans can
adversely affect us.
Risks Related to Our Business and Operations
•
Many of our major systems depend on and are operated by third-party vendors, and any systems failures or
interruptions could adversely affect our operations and the services we provide to our customers.
•
Our information systems are exposed to cybersecurity threats and may experience interruptions and security
breaches that could adversely affect our business and reputation.
•
Our strategic plan and growth strategy may not be achieved as quickly or as fully as we seek.
•
Defaults by or deteriorating asset quality of other financial institutions could adversely affect us.
•
New lines of business, new products and services, or strategic project initiatives may subject us to
additional risks.
•
We are susceptible to operational risks in general and fraudulent risk in particular.
•
We may not have the ability or resources to keep pace with rapid technological changes in the financial
services industry or implement new technology effectively.
•
Conditions in Venezuela could adversely affect our operations.
•
We are subject to environmental, social and governance, or ESG, risks, many of which are outside of our
control, that could harm our reputation, our business, operations, financial condition, and/or the price of our
common stock.
•
We may be unable to attract and retain key people to support our business.
•
Severe weather, natural disasters, global pandemics, acts of war or terrorism, theft, civil unrest, government
expropriation or other external events could have significant effects on our business.
•
Any failure to protect the confidentiality of customer information could adversely affect our reputation and
subject us to financial sanctions and other costs that could adversely affect our business, financial
condition, results of operations, or cash flows.
•
We could be required to write down our goodwill or other intangible assets.
•
We have a net deferred tax asset that may or may not be fully realized.
•
We may incur losses due to minority investments in fintech and specialty finance companies.
32
•
We are subject to risks associated with sub-leasing portions of our corporate headquarters building.
•
Our success depends on our ability to compete effectively in highly competitive markets.
Risks Related to Risk Management, Internal Audit, Internal and Disclosure Controls
•
Potential gaps in our risk management policies and internal audit procedures may leave us exposed to
unidentified or unanticipated risk, which could negatively affect our business.
•
Any failure to maintain effective internal control over financial reporting could impair the reliability of our
financial statements, which in turn could harm our business, impair investor confidence in the accuracy and
completeness of our financial reports and our access to the capital markets and cause the price of our
common stock to decline and subject us to regulatory penalties.
•
Changes in accounting standards could materially impact our financial statements.
Risks Related to External and Market Factors
•
Material and negative developments adversely impacting the financial services industry at large and
causing volatility in financial markets and the economy may have materially adverse effects on our
liquidity, business, financial condition and results of operations.
•
Our business may be adversely affected by economic conditions in general and by conditions in the
financial markets.
Risks Related to Regulatory and Legal Matters
•
We are subject to extensive regulation that could limit or restrict our activities and adversely affect our
earnings.
•
There is uncertainty surrounding the potential legal, regulatory and policy changes by the presidential
administration in the United States that may directly affect financial institutions.
•
Changes in federal, state or local tax laws, or audits from tax authorities, could negatively affect our
business, financial condition, results of operations or cash flows.
•
Litigation and regulatory investigations are increasingly common in our businesses and may result in
significant financial losses and/or harm to our reputation.
•
We are subject to capital adequacy and liquidity standards, and if we fail to meet these standards, whether
due to losses, growth opportunities or an inability to raise additional capital or otherwise, our business,
financial condition, results of operations, or cash flows would be adversely affected.
•
Increases in FDIC deposit insurance premiums and assessments could adversely affect our financial
condition.
•
Federal banking agencies periodically conduct examinations of our business, including our compliance
with laws and regulations, and our failure to comply with any regulatory actions, if any, could adversely
impact us.
•
The Federal Reserve may require us to commit capital resources to support the Bank.
•
We may face higher risks of noncompliance with the Bank Secrecy Act and other anti-money laundering
statutes and regulations than other financial institutions.
•
Failures to comply with the fair lending laws, CFPB regulations or the Community Reinvestment Act, or
CRA, could adversely affect us.
Risks Related to Ownership of Our Common Stock
•
Our principal shareholders and management own a significant percentage of our shares of voting common
stock and will be able to exert significant control over matters subject to shareholder approval.
•
The rights of our common shareholders are subordinate to the holders of any debt securities that we have
issued or may issue from time to time.
•
The stock price of financial institutions, like Amerant, may fluctuate significantly.
•
We can issue additional equity securities, which would lead to dilution of our issued and outstanding Class
A common stock.
•
Certain provisions of our amended and restated articles of incorporation and amended and restated bylaws,
Florida law, and U.S. banking laws could have anti-takeover effects.
Risks Related to our Indebtedness
•
We may not be able to generate sufficient cash to service all of our debt, including the Subordinated Notes
and the Debentures.
•
We are a holding company with limited operations and depend on our subsidiaries for the funds required to
make payments of principal and interest on the Subordinated Notes and the Debentures.
33
•
We may incur a substantial level of debt that could materially adversely affect our ability to generate
sufficient cash to fulfill our obligations under the Subordinated Notes and the Debentures.
1A. RISK FACTORS
We are subject to risks and uncertainties that could potentially negatively impact our business, financial
conditions, results of operations and cash flows. In evaluating us and our business and making or continuing an
investment in our securities, you should carefully consider the risks described below as well as other information
contained in this Form 10-K and any risk factors and uncertainties discussed in our other public filings with the SEC
under the caption “Risk Factors”. We may face other risks that are not contained in this Form 10-K, including
additional risks that are not presently known, or that we presently deem immaterial. This Form 10-K and the risks
discussed below also include forward-looking statements, and our actual results may differ substantially from those
discussed in such forward-looking statements. Please refer to the section in this Form 10-K titled “Cautionary Note
Regarding Forward-Looking Statements” for additional information regarding forward-looking statements.
Risks related to Funding and Liquidity
Liquidity risks could affect our operations and jeopardize our financial condition and certain funding
sources could increase our interest rate expense.
Liquidity is essential to our business. An inability to raise funds through deposits, borrowings, proceeds from
loan repayments or sales, and other sources could have a substantial negative effect on our liquidity. Our funding
sources include deposits (core and non-core), federal funds purchased, securities sold under repurchase agreements,
short-and long-term debt, the Federal Reserve Discount Window (Discount Window) and Federal Home Loan Bank
of Atlanta, or FHLB, advances. We also maintain a portfolio of securities that can be used as a source of liquidity.
A substantial portion of our liabilities consist of deposit accounts that are payable on demand or upon several
days' notice, including deposit accounts from Large Fund Providers (third-party customer relationships with
balances of over $20 million). We also use brokered deposits and wholesale funding, which not only increases our
liquidity risk but could also increase our interest rate expense and potentially increase our deposit insurance costs.
Institutions that are less than well-capitalized may be unable to raise or renew brokered deposits under the prompt
corrective action rules. See “Supervision and Regulation—Capital Requirements” in the Form 10-K.
Any significant restriction or disruption of our ability to obtain funding from these or other sources could have a
negative effect on our ability to satisfy our current and future financial obligations, which could materially affect our
financial condition or results of operations. Our access to funding sources in amounts adequate to finance or
capitalize our activities on terms which are acceptable to us could be impaired by factors that affect us specifically or
the financial services industry or the economy in general, including but not limited to: a downturn in economic
conditions in the geographic markets in which we operate or in the financial or credit markets in general; increases
in interest rates; the liquidity needs of our depositors as well as competition for deposits; the availability of sufficient
collateral that is acceptable to the FHLB and the Federal Reserve Bank, fiscal and monetary policy; and regulatory
changes. In addition, our ability to otherwise borrow money or issue and sell debt will depend on a variety of factors
such as market conditions, the general availability of credit, our credit ratings, and our credit capacity.
Alternative funding to deposits may carry higher costs. If we are required to rely more heavily on more
expensive and potentially less stable funding sources or if additional financing sources are unavailable or are not
available on acceptable terms, our profitability, liquidity, and prospects could be adversely affected.
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We may not be able to develop and maintain a strong core deposit base or other low-cost funding sources.
Our deposits (including checking, savings, money market and other deposits) are the primary funding source for
our lending activities. Our future growth will largely depend on our ability to expand core deposits, which provide a
less costly and stable funding source. The deposit markets are competitive; therefore, growing our core deposit base
could be difficult. In a competitive market, depositors have many choices for where to place their deposits. As we
continue to grow our core deposit base and seek to reduce our exposure to high rate/high volatility accounts, we may
experience a net deposit outflow, which could negatively impact our business, financial condition, results of
operations, or cash flows.
We may elect or be compelled to seek additional capital in the future, but that capital may not be
available when it is needed or on acceptable terms.
We and the Bank are required by federal regulatory authorities to maintain adequate levels of capital to support
our operations. While we believe that our existing capital (which currently exceeds the capital requirements) will be
sufficient to support our current operations and expected growth. However, factors such as faster-than-anticipated
growth, reduced earnings levels, operating losses, changes in economic conditions, revisions in regulatory
requirements, or acquisition opportunities may lead us to seek additional capital. Our ability to raise additional
capital, if needed, will depend on our financial performance and the conditions in the capital markets, economic
conditions, and other factors, many of which are outside our control. Accordingly, we may be unable to raise
additional capital if needed or on acceptable terms. If we cannot raise additional capital when needed, our ability to
further expand our operations, business, financial condition, results of operations, and cash flows could be adversely
affected, and the price of our securities may decline.
Our ability to receive dividends from our subsidiaries could affect our liquidity and our ability to pay
dividends.
We are a legal entity separate and distinct from the Bank and our other subsidiaries. The Federal Reserve Act,
Section 23A, limits our ability to borrow from the Bank and our principal source of cash, other than securities
offerings, is dividends from the Bank. These dividends are the principal source of funds to pay dividends on our
common stock, as well as interest on our junior subordinated debentures and interest and principal on our Senior
Notes and our Subordinated Notes. Several laws and regulations limit the amount of dividends that the Bank may
pay us as well as the dividends that we may pay on our common stock, see “Supervision and Regulation - Payment
of Dividends.” Limitations on our ability to receive dividends from our subsidiaries could adversely affect our
liquidity and on our ability to service our debt and pay dividends.
We cannot assure that we will continue to pay dividends on our common stock in the future. Future dividends
will be declared and paid at the discretion of our Board of Directors and will depend on a number of factors
including, our results of operations, financial condition, liquidity, capital adequacy, cash requirements, prospects,
regulatory capital and limitations, among others. Our inability to service our debt, pay our other obligations or pay
dividends to our shareholders could adversely impact our financial condition and the value our securities.
Risks related to Credit and Interest Rate
Our profitability is subject to interest rate risk.
Our profitability depends largely upon net interest income, which is the difference between interest earned on
assets, such as loans and investments, and interest expense on interest-bearing liabilities, such as deposits and
borrowings. Interest rate changes may impact our profits and the values of several of our assets and liabilities. We
expect to periodically experience “gaps” in the interest rate sensitivities of the Company’s assets and liabilities,
meaning that either our interest-bearing liabilities will be more sensitive to changes in market interest rates than our
interest-earning assets, or vice versa.
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If interest rates rise, our net interest income and the value of our assets could be reduced if interest paid on
interest-bearing liabilities, such as deposits and borrowings, increases more quickly than interest received on
interest-earning assets, such as loans and investment securities. In addition, rising interest rates may reduce the
demand for loans and the volume of mortgage originations and re-financings, adversely affecting the profitability of
our business. Increases in market interest rates may also impact our customers’ ability to repay their loans, which
could increase the potential for default and our level of nonperforming assets and adversely affect our operating
results. Further, when loans are placed on nonaccrual status any accrued but unpaid interest receivable is reversed,
which decreases interest income; simultaneously, we will continue to have a cost to fund the loan, which is reflected
as interest expense, without any interest income to offset the associated funding expense. Thus, an increase in the
amount of nonperforming assets would have an adverse impact on net interest income. Also, in a rising interest rate
environment, fixed-rate loans may adversely affect our margin and present asset/liability mismatches and risks since
our liabilities are generally floating rate or have shorter maturities.
In declining rate environments, we may experience numerous loan prepayments and replacement loans may be
priced at a lower rate, decreasing our net interest income. Further, should market interest rates fall below current
levels, our net interest income could also be negatively affected if competitive pressures keep us from further
reducing rates on our deposits, while the yields on our assets decrease through loan prepayments and interest rate
adjustments. Since our balance sheet is asset sensitive, a decrease in interest rates or a flattening or inversion of the
yield curve could adversely affect us.
Market interest rate changes are unpredictable and caused by many factors beyond our control, including
general economic conditions (inflation, recession, and unemployment), fiscal and monetary policy, and changes in
the United States and other financial markets. In a rapidly changing interest rate environment, we may be unable to
manage our interest rate risk effectively, which could adversely impact our business, financial condition, results of
operations, or cash flows.
Our allowance for credit losses may prove inadequate.
The determination of the appropriate level of the allowance for credit losses inherently involves a high degree of
subjectivity and judgment and requires us to make various assumptions and estimates about the collectability of our
loan portfolio, including the creditworthiness of our borrowers, the value of the collateral securing our loans, our
delinquency experience, economic conditions and trends, reasonable and supportable forecasts, and credit quality
indicators (including past charge-off experience and levels of past due loans and nonperforming assets).We cannot
assure that these assumptions and estimates will be adequate over time to cover expected credit losses in our
portfolio. These assumptions and estimates may be affected by changes in the economy, market conditions, or
events negatively impacting specific customers, industries or markets, or borrowers repaying their loans. If our
allowance for credit losses on loans is not adequate, our business, financial condition, results of operations, or cash
flows could be adversely affected. In addition, bank regulatory agencies periodically review our allowance for credit
losses and may require an increase in the provision for credit losses or the recognition of further charge-offs. Any
increases in the provision for credit losses will result in a decrease in net income and may adversely affect our
business, financial condition, results of operations, or cash flows.
On December 31, 2022, we ceased to be an Emerging Growth Company, and we implemented FASB’s
Accounting Standards Codification (“ASC”) Topic 326, Financial Instruments - Credit Losses, a new guidance on
accounting for current expected credit losses on financial instruments (“CECL”). This guidance substantially
changed the accounting for credit losses on loans and other financial assets held by banks, financial institutions, and
other organizations. The standard changed the previous incurred loss impairment methodology in GAAP. Under the
incurred loss model, we recognized losses when they were incurred. On the other hand, CECL requires loans held
for investment and debt securities held to maturity to be presented at the net amount expected to be collected (net of
the allowance for credit losses). CECL generally results in earlier recognition of expected credit losses and may
result in higher provision for credit losses and higher volatility in the quarterly provision for credit losses. Future
provisions under the CECL model could adversely affect our business, financial condition, results of operations, or
cash flows.
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Our concentration of CRE loans could result in increased loan losses.
CRE is cyclical and poses risks of possible loss due to concentration levels and risks of the assets being
financed. Disruptions in markets, economic conditions, including those resulting from a pandemic, changes in laws
or regulations or other events could have a significant impact on the ability of our customers to repay and may
adversely affect our business, financial condition, results of operations, or cash flows.
Our CRE loans included approximately $1.1 billion and $1.2 billion of fixed rate loans at December 31, 2024
and 2023, respectively. In a rising interest rate environment, fixed rate loans may adversely affect our margin and
present asset/liability mismatches and risks since our liabilities are generally floating rate or have shorter maturities.
As of December 31, 2024, the Bank’s portfolio of CRE loans was 239.4% of its risk-based capital, or 34.5% of
its total loans, as of December 31, 2024 compared to 274.3% of its risk-based capital, or 38.4% of its total loans, as
of December 31, 2023. We cannot assure that our CRE concentration risk management program will effectively
manage our CRE concentration.
CRE loans as well as other loans in our portfolio are secured by real estate. We may experience a significant
level of nonperforming real estate loans if the economic conditions of the markets where we operate deteriorate, or
in areas where real estate market conditions become distressed. The value of the collateral securing those loans and
the revenue stream from those loans could be negatively impacted, and additional provisions for the allowance for
credit losses could be required. Our ability to dispose of Other Real Estate Owned (“OREO”) properties at prices at
or above the respective carrying values could also be impaired, causing additional losses.
In addition, if the United States economy returns to a recessionary state, management believes that it could
significantly affect the economic conditions of the market areas we serve and we could experience significantly
higher delinquencies and loan losses, and therefore impact our earnings and financial condition, including our
capital and liquidity.
Many of our loans are to commercial borrowers, which have unique risks compared to other types of
loans.
As of December 31, 2024, approximately $2.5 billion, or 35%, and $1.8 billion, or 26%, of our loan portfolio
was comprised of CRE loans and commercial loans, respectively. Since payments on these loans are often dependent
on the successful operation or development of the property or business involved, their repayment is sensitive to
adverse conditions in the real estate market and the general economy and the collateral securing these loans may not
be sufficient to repay the loan in the event of default. Consequently, downturns in the real estate market and
economy increase the risk related to commercial loans, including CRE loans. Unlike residential mortgage loans,
which generally are made on the basis of the borrowers’ ability to make repayment from their employment and other
income and which are secured by real property whose value tends to be more easily ascertainable, commercial loans
typically are made on the basis of the borrowers’ ability to make repayment from the cash flow of the commercial
venture. Our commercial loans are primarily made based on the identified cash flow of the borrower and secondarily
on the collateral underlying the loans. Most often, this collateral consists of accounts receivable, inventory and
equipment. Inventory and equipment may depreciate over time, may be difficult to appraise and may fluctuate in
value based on the success of the business. In some cases, the repossession of collateral may not be possible or may
be delayed which could negatively impact the value we may realize from that collateral to repay the loan. If the cash
flow from business operations is reduced, the borrower’s ability to repay the loan may be impaired. We attempt to
mitigate this risk through our underwriting standards, including evaluating the creditworthiness of the borrower, and
regular monitoring. However, these procedures cannot entirely eliminate the risk of loss associated with commercial
lending. Due to the larger average size of each commercial loan as compared with other loans such as residential
loans, as well as collateral that is generally less readily-marketable, losses incurred on a small number of commercial
loans could have a material adverse impact on our financial condition and results of operations.
In addition, many of these loans are made to small business or middle market customers. In general, these
businesses have less capital or borrowing capacity than larger businesses, may be more vulnerable to declines in
economic conditions, often need substantial additional capital to expand or compete, and may experience significant
volatility in operating results, any of which, individually or in the aggregate, may impair their ability to repay their
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loans, which could have a material adverse effect on our business, financial condition, results of operations or cash
flows.
If a decline in economic conditions, natural disasters affecting business development or other issues cause
difficulties for our borrowers of these types of loans, if we fail to assess the credit of these loans accurately when
underwriting them or if we fail to adequately continue to monitor the performance of these loans, our loan portfolio
could experience delinquencies, defaults and credit losses that could have a material adverse effect on our business,
financial condition, results of operations or cash flows.
Our valuation of securities and the determination of a credit loss allowance in our investment securities
portfolio are subjective and, if changed, could materially adversely affect our results of operations or
financial condition.
Fixed-maturity securities, as well as short-term investments which are reported at estimated fair value, represent
the majority of our total investments. We generally define fair value as the price that would be received in the sale of
an asset or paid to transfer a liability. Considerable judgment is often required in interpreting market data to develop
estimates of fair value, and the use of different assumptions or valuation methodologies may have a material effect
on the estimated fair value amounts. During periods of market disruption (including periods of significantly rising or
high interest rates, or rapidly widening credit spreads) certain asset classes may become illiquid and it may be
difficult to value certain of our securities if trading becomes less frequent or market data becomes less observable. In
those cases, the valuation process includes inputs that are less observable and require more subjectivity and
management judgment. Valuations may result in estimated fair values which vary significantly from the amount at
which the investments may ultimately be sold. Further, rapidly changing and unprecedented credit and equity market
conditions could materially affect the valuation of securities in our financial statements and the period-to-period
changes in estimated fair value could vary significantly.
As of December 31, 2024, the fair value of the Company’s debt securities available for sale was approximately
$1.4 billion, compared to $1.2 billion as of December 31, 2023. As of December 31, 2024 debt securities available-
for-sale had net unrealized holding losses of $55.7 million ($100.3 million in 2023) and net unrealized holding gains
of $0.9 million ($3.2 million in 2023). In 2024, the Company recorded pre-tax net unrealized holding losses of $42.2
million ($14.9 million in 2023) which are included in accumulated other comprehensive (loss) income for the
period. These unrealized losses were mainly attributable to increases in market interest rates during the periods
which translated into a decline in the estimated fair value of debt securities and other instruments.
Beginning January 1, 2022, debt securities available for sale are analyzed for credit losses under the new
guidance on accounting for CECL, which requires the Company to determine whether the securities are considered
impaired because their fair value is below their amortized cost basis as of the reporting date, and whether there is a
need of a credit loss allowance. An allowance for credit losses is established for losses on debt securities available
for sale due to credit losses and is reported as a component of provision for credit losses. Accrued interest is
excluded from our expected credit loss estimates. In 2024, the Company did not record an allowance for estimated
credit losses on any of its debt securities available for sale. For more information about CECL, see Note 1 of our
audited consolidated financial statements in this Form-10-K. Prior to January 1, 2022, our debt securities classified
as available for sale or held to maturity were generally evaluated for other than temporary impairment under the
applicable accounting guidance.
The valuation of our investment portfolio is also influenced by external market and other factors, including
implementation of SEC and FASB guidance on fair value accounting. Accordingly, if market conditions deteriorate
further and/or accounting guidance is updated and we determine our holdings of investment securities have
experienced credit losses, our future earnings, financial condition, regulatory capital and continuing operations could
be materially adversely affected.
Nonperforming and similar assets take significant time to resolve and may adversely affect our business,
financial condition, results of operations, or cash flows.
At December 31, 2024 and 2023, our nonperforming loans totaled $104.1 million and $34.4 million,
respectively, or 1.43% and 0.47% of total loans, respectively. We had OREO balances of $18.1 million and $20.2
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million at December 31, 2024 and 2023, respectively. Our non-performing assets may adversely affect our net
income in various ways. We do not record interest income on nonaccrual loans or OREO, and these assets require
higher loan administration and other costs, thereby adversely affecting our income. Decreases in the value of these
assets, or the underlying collateral, or in the related borrowers’ performance or financial condition, whether or not
due to economic and market conditions beyond our control, could adversely affect our business, financial condition,
results of operations, or cash flows. Any increase in our nonperforming assets and related increases in our provision
for credit losses could negatively affect our business and could have a material adverse effect on our capital,
financial condition and results of operations. In addition, the resolution of nonperforming assets requires
commitments of time from management, which can be detrimental to their other responsibilities. We cannot assure
you we will not experience increases in nonperforming loans, OREO and similar nonperforming assets in the future.
We are subject to environmental liability risk associated with lending activities.
A significant portion of our loan portfolio is secured by real property. During our ordinary course of business,
we may foreclose on and take title to properties securing certain loans. There is a risk that hazardous or toxic
substances could be found on these properties. If hazardous or toxic substances are found, we may be liable for
remediation costs, as well as for personal injury and property damage. Environmental laws may require the
Company to incur substantial expenses and may materially reduce the affected property’s value or limit our ability
to use or sell the affected property. In addition, future laws or more stringent interpretations or enforcement policies
with respect to existing laws and regulations may increase our exposure to environmental liability. Environmental
reviews of real property before initiating foreclosure may not be sufficient to detect all potential environmental
hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could
have a material adverse effect on the Company’s business, financial condition, results of operations, or cash flows.
Weakness in the demand for mortgage loans or in the secondary market for residential mortgage loans
can adversely affect us.
Interest rates, housing inventory, housing demand, and other market conditions have a direct effect on mortgage
loan originations. Since 2022, as market interest rates increased, the demand for residential mortgage loans has
declined, negatively impacting revenue from our mortgage business, primarily due to lower mortgage volumes.
Noninterest income from our mortgage operations may continue to suffer as a result of decreased loan origination
activity caused by an economic downturn, fewer refinancing transactions, higher interest rates, or housing price
pressure. Also, our results of operations are affected by the amount of noninterest expenses (including personnel and
systems infrastructure expenses) associated with our mortgage business activities. During periods of reduced loan
demand, our results of operations may be adversely affected should we be unable to reduce expenses proportionate
with the decline in mortgage loan origination activity.
In addition, a decrease in residential real estate market prices or lower levels of home sales, could result in
lower single family home values, adversely affecting the value of collateral securing residential mortgage loans and
residential property collateral securing loans that we hold, mortgage loan originations and gains on the sale of
mortgage loans. A decline in real estate prices increases delinquencies and losses on certain mortgage loans,
generally, and particularly on second lien mortgages and home equity lines of credit. A substantial portion of our
single family loans consist of jumbo loans, and the secondary market for jumbo mortgages has historically been less
liquid compared to conforming loans. Significant ongoing disruptions in the secondary market for residential
mortgage loans can limit the market for and liquidity of most residential mortgage loans other than conforming
Fannie Mae and Freddie Mac loans. Deteriorating trends could occur, including declines in real estate values, home
sales volumes, financial stress on borrowers as a result of job losses, increase in interest rates or other factors. These
could adversely impact borrowers and result in higher delinquencies and greater charge-offs in future periods, which
would adversely affect our business, financial condition, results of operations, or cash flows. In the event our
allowance for credit losses on these loans is insufficient to cover such losses, our business, financial condition,
results of operations, or cash flows could be adversely affected.
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Risks Related to Our Business and Operations
Many of our major systems depend on and are operated by third-party vendors, and any systems failures
or interruptions could adversely affect our operations and the services we provide to our customers.
We outsource many of our major systems and critical back-office operations, such as data processing,
recording, and monitoring transactions, online banking interfaces and service, internet connections and network
access. For example, we entered into a new multi-year outsourcing agreement with the world's largest provider of
banking and payments technology, to assume full responsibility over a significant number of the Bank’s support
functions and staff, including certain critical back-office operations. In November 2023 we transitioned our entire
core banking system to the one this vendor offers and services. An interruption or failure of the services we receive
through these outsourced systems could cause an interruption of our operations. The occurrence of any systems
failure or interruption could damage our reputation and result in a loss of customers and business, could subject us to
additional regulatory scrutiny, or could expose us to legal liability. Any of these occurrences could have a material
adverse effect on our business, financial condition, results of operations, or cash flows.
Our information systems are exposed to cybersecurity threats and may experience interruptions and
security breaches that could adversely affect our business and reputation.
We rely heavily on communications and information systems, including those provided by third-party service
providers, to conduct our business. Any failure, interruption, or security breach of these systems could result in
failures or disruptions which could impact our ability to serve our customers, operate our business and affect our
customers’ privacy and could damage our reputation, result in a loss of business, subject us to additional regulatory
scrutiny or enforcement or expose us to civil litigation and possible financial liability. Our systems and networks, as
well as those of our third-party service providers, are subject to security risks and could be susceptible to
cyberattacks by third parties, including through coordinated attacks sponsored by foreign nations and criminal
organizations to disrupt business operations and other compromises to data and systems for political or criminal
purposes. Cyber threats are rapidly evolving and we may not be able to anticipate or prevent all such attacks and
could be held liable for any security breach or loss. These risks have increased with the implementation of remote
and/or hybrid work protocols and may continue to increase in the future as the use of mobile banking and other
internet-based products and services continues to grow.
For example, in August 2022 and November 2023, we were notified by different third-party vendors that they
had experienced potential cybersecurity incidents. On both occasions, we activated our incident response plan and
the vendors completed forensic analyses to determine whether information from the Bank's customers was accessed
and exfiltrated in an unauthorized manner. Once the forensic analyses were completed, we worked with the vendors
and outside advisors to determine the appropriate course of action, including having the vendors provide notice to
our affected customers and offer free credit monitoring services when appropriate. Our business, financial condition,
or results of operations were not materially adversely affected by these cybersecurity incidents. We are not aware of
any continuing cybersecurity threats or breaches involving these vendors, however, we, as well as our customers,
regulators, and service providers, have experienced and will likely continue to experience a significant increase in
information security and cybersecurity threats and attacks, see Item 1C. Cybersecurity for an additional discussion
on our information security program.
Despite our cybersecurity policies and procedures and our efforts to monitor and ensure the integrity of our and
our service providers’ systems, we may not be able to anticipate all types of security threats, nor may we be able to
implement preventive measures effective against all such security threats. In addition, the impact and severity of a
particular cyberattack may not be immediately clear, and it may take a significant amount of time before such
determination can be made. While the investigation of a cyberattack is ongoing, we may not be fully aware of the
extent of the harm caused by the cyberattack and it may not be clear how to contain and remediate such harm and
any damage may continue to spread.
Security breaches or failures may have serious adverse financial and other consequences, including significant
legal and remediation costs, disruption of operations, misappropriation of confidential information, damage to
systems operated by us or our third-party service providers, as well as damaging our customers and our
counterparties. Such losses and claims may not be covered by our insurance. In addition to the immediate costs of
any failure, interruption or security breach, including those at our third-party service providers, these events could
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damage our reputation, result in a loss of customer business, subject us to additional regulatory scrutiny, or expose
us to civil litigation and possible financial liability, any of which could adversely affect on business, financial
condition, results of operations, or cash flows.
Our strategic plan and growth strategy may not be achieved as quickly or as fully as we seek.
The implementation of our strategic plan and growth strategy may take longer than we anticipate to implement,
and the results we achieve may not be as successful as we seek, all of which could adversely affect our business,
financial conditions, results of operations, or cash flows. Additionally, the results of our strategic plan and growth
strategy are subject to the other risks described herein that affect our business, which include: lending, interest rate
risk, seeking deposits and wealth management clients in highly competitive domestic markets; our ability to achieve
our growth plans or to manage our growth effectively; the benefits from our technology investments may not be
realized or may take longer than expected to be realized and may not be as large as expected, or may require
additional investments; and if we are unable to achieve economies of scale or reduce our cost structure, we may not
be able to meet our profitability objectives.
Defaults by or deteriorating asset quality of other financial institutions could adversely affect us.
Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other
relationships. We routinely execute transactions with counterparties in the financial services industry, including
brokers and dealers, commercial banks, investment banks, and other institutional clients. Many of these transactions
expose us to credit risk and losses in the event of a default by a counterparty. Any such losses could have a material
adverse effect on our business, financial condition, results of operations or cash flows. We also may have exposure
to these financial institutions in the form of unsecured debt instruments, derivatives and other securities. As a result,
defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services
industry in general, have led to market-wide liquidity problems and could lead to losses or defaults by us or by other
institutions in the future. Further, potential action by governments and regulatory bodies in response to financial
crises affecting the global and U.S. banking systems and financial markets, such as nationalization, conservatorship,
receivership and other intervention, or lack of action by governments and central banks, as well as deterioration in a
financial institution’s creditworthiness, could adversely affect the value and/or liquidity of these instruments,
securities, transactions and investments or limit our ability to trade with them. Any losses or impairments to the
carrying value of these investments or other changes may adversely affect our business, financial condition, results
of operations, or cash flows.
New lines of business, new products and services, or strategic project initiatives may subject us to
additional risks.
We periodically evaluate our service offerings and, occasionally, may seek to implement new lines of business
or offer new products and services within existing lines of business. There are substantial risks and uncertainties
associated with these efforts, including external factors, such as compliance with regulations, competitive
alternatives, and shifting market preferences, that may impact the successful implementation of a new line of
business and/or a new product or service. In developing and marketing new lines of business and/or new products
and services, we may invest significant time and resources. Initial timetables for the introduction and development
of new lines of business and/or new products or services may not be achieved, and price and profitability targets
may not prove feasible, which could in turn have a material negative effect on our operating results. Additionally,
any new line of business and/or new product or service could require the establishment of new key and other
controls and have a significant impact on our existing system of internal controls. Failure to successfully manage
these risks in the development and implementation of new lines of business and/or new products or services could
adversely affect our business, financial condition, results of operations, or cash flows.
We are susceptible to operational risks in general and fraudulent risk in particular.
We operate many different financial service functions and rely on the ability of our employees, third party
vendors and systems to process a significant number of transactions. Operational risk is the risk of loss from
operations, including fraud by employees or outside persons, employees’ execution of incorrect or unauthorized
transactions, data processing and technology errors or hacking and breaches of internal control systems. We have
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adopted flexible work arrangements that permit some employees to work from home full or part time, and these
work arrangements could strain our technology resources and introduce operational risks, including heightened
cybersecurity risk, as remote working environments can be less secure.
We, as other financial institutions, are inherently exposed to fraud risk. Fraudsters are leveraging new
technologies, including artificial intelligence, to impersonate our customers and/or steal personally identifiable
information to commit fraud. Fraudulent activity can take many forms and has increased as new products and
features that facilitate the access for financial services are implemented, such as real-time payment services. We are
susceptible to fraud being perpetrated by customers, employees, vendors, or members of the general public. We are
subject to fraud risk in connection with loan origination, payment transactions (including ACH transactions, wire
transactions, and digital payments), ATM transactions, checking, withdrawal transactions and other transactions. In
connection with loan origination, we significantly rely on information supplied by loan applicants and third parties,
including the information contained in the loan application, appraisals of property, title information as well as
employment and income documentation provided by third parties. If any of this information is misrepresented and
we do not detect such misrepresentation prior to funding, we generally bear the risk of loss related to the
misrepresentation. Although we are constantly investing in systems, resources, and controls aimed at mitigating
fraud risk, there can be no assurance that our efforts will be effective in detecting and preventing fraud or that we
will not incur fraud losses or costs or other damage related to such fraud, at levels that adversely affect our business,
financial condition, results of operations, cash flows, or reputation.
We may not have the ability or resources to keep pace with rapid technological changes in the financial
services industry or implement new technology effectively.
The financial services industry is undergoing rapid technological changes with frequent introductions of new
technology-driven products and services. In addition to allowing us to service our clients better, the effective use of
technology may increase efficiency and may enable financial institutions to reduce costs and the risks associated
with fraud and other operational risks. Our future success will partially depend upon our ability to use technology
effectively. We may be unable to effectively implement new technology-driven enhancements of products and
services as quickly or at the costs anticipated, which could impair our ability to realize the anticipated benefits from
such new technology or require us to incur significant costs to remedy any such challenges in a timely manner.
Many larger competitors have substantially greater resources to invest in technological improvements and,
increasingly, non-banking firms are using technology to compete with traditional lenders for loans and other banking
services. Third parties and vendors upon which we rely for our technology needs may not be able to develop, on a
cost-effective basis, systems that will enable us to keep pace with such developments. As a result, our larger
competitors may be able to offer additional or superior products compared to those that we will be able to provide,
which would put us at a competitive disadvantage. We may lose customers seeking new technology-driven products
and services to the extent we are unable to provide such products and services. The ability to keep pace with
technological change is important and the failure to do so could adversely affect our business, financial condition,
results of operations, or cash flows.
Conditions in Venezuela could adversely affect our operations.
At December 31, 2024, 24% of our deposits, or approximately $1.9 billion, were from Venezuelan residents.
All of the Bank’s deposits are denominated in U.S. Dollars. Adverse economic conditions in Venezuela may
continue to negatively affect our Venezuelan deposit base, as customers residing in Venezuela rely on their U.S.
Dollar deposits to fund living expenses and other necessities without being able to generate additional U.S. Dollars.
In addition, although we seek to increase our trust, brokerage and investment advisory business from our
domestic markets, substantially all our revenue from these services currently is from Venezuelan customers.
Economic and other conditions in Venezuela, or U.S. regulations or sanctions affecting the services we may provide
to our Venezuelan customers may adversely affect the amounts of assets we manage or custody, and the trading
volumes of our Venezuelan customers, reducing fees and commissions we earn from these businesses, and may
adversely affect our business, financial condition, results of operations, or cash flows.
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We are subject to environmental, social and governance, or ESG, risks, many of which are outside of our
control, that could harm our reputation, our business, operations, financial condition, and/or the price of our
common stock.
Companies across all industries are facing scrutiny from stakeholders (among them shareholders, customers,
employees, federal and state regulatory authorities, and policy makers) related to ESG matters. These stakeholders
may often have differing, and sometimes conflicting, priorities and expectations regarding ESG issues. Recently,
there have been an increase in the number of state-level anti-ESG initiatives in the U.S. that may conflict with
regulatory requirements or our various stakeholders’ expectations. Also, diversity, equity and inclusion (“DEI”)
practices being implemented by corporations have recently come under increased scrutiny and recent actions taken
by federal executive branch agencies and federal and state attorneys general may signal an increased focus on
investigating private entities with respect to DEI programs and policies, including publicly traded companies. These
conflicting and divergent attitudes towards ESG-related matters increase the risk that any action or lack thereof by
us on such matters will be perceived negatively by some stakeholders. If we are unable to meet expectations and
standards from stakeholders, including policy makers, regarding ESG related issues, or if we are perceived to have
not responded appropriately, or take action in conflict with one or another of those stakeholder’s expectations, our
reputation could be negatively impacted and could lead to loss of business, adverse publicity, or customer
complaints. Any negative impact on our reputation in connection with ESG matters, changes in investing priorities
among investors, or any loss of business resulting from these issues, may adversely affect our business, financial
condition, operations, and/or effects the trading price of our common stock.
We may be unable to attract and retain key people to support our business.
Our success depends, in large part, on our ability to attract and retain experienced personnel in key positions.
Intense competition exists in the activities and markets that we serve for candidates with appropriate qualifications
and demonstrated ability. If we are unable to hire and retain key individuals, we may be unable to implement our
business strategy and our business, financial condition and results of operations may be negatively impacted. Our
ability to attract and retain employees could also be impacted by changing workforce expectations, practices, and
preferences, including remote work and hybrid work preferences, and increasing labor shortages and competition for
labor, which could increase labor costs. Failure to attract well-qualified employees or to develop and retain our
employees may adversely affect our business, financial condition, results of operations, or cash flows.
Severe weather, natural disasters, global pandemics, acts of war or terrorism, theft, civil unrest,
government expropriation or other external events could have significant effects on our business.
Severe weather and natural disasters, (including hurricanes, tornados, earthquakes, fires, droughts and floods),
acts of war or terrorism (such as hostilities in Ukraine and the Middle-East region), epidemics and global pandemics
(such as the COVID-19 outbreak), theft, civil unrest, government expropriation, condemnation or other external
events in the markets where we operate or where our customers live (including Venezuela) could have a significant
effect on our ability to conduct business. Such events could affect the stability of our deposit base, impair the ability
of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property
damage, impair employee productivity, result in loss of revenue and/or cause us to incur additional expenses. The
occurrence of any such event could adversely affect our business, financial condition, results of operations, or cash
flows.
Our business is mainly concentrated in South Florida and the greater Tampa, Florida area, which may increase
our risks from extreme weather. These market areas are susceptible to hurricanes, tropical storms and other similar
severe weather events which could have the effects indicated above. Additionally, the potential for such weather
events has and may continue to cause our customers to incur higher property and casualty insurance premiums
which may adversely affect the value and sales of real estate in the markets we operate. Additionally, the impact of
severe weather in the markets where we operate has and may continue to increase the cost and reduce the availability
of insurance needed for our business operations.
Any failure to protect the confidentiality of customer information could adversely affect our reputation
and subject us to financial sanctions and other costs that could adversely affect our business, financial
condition, results of operations, or cash flows.
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Various federal, state and foreign laws enforced by the bank regulators and other agencies protect the privacy
and security of customers’ non-public personal information. Many of our employees have access to, and routinely
process, sensitive personal customer information, including through their access to information technology systems.
An employee could, intentionally or unintentionally, disclose or misappropriate confidential client information or
our data could be the subject of a cybersecurity attack (including intrusion by hackers, and phishing attacks). If we
or any of our third party vendors are subject to a successful cyberattack or fail to maintain adequate internal controls,
or if our employees fail to comply with our policies and procedures, misappropriation or intentional or unintentional
inappropriate disclosure or misuse of client information could occur. Such cyberattacks, if they result from internal
control inadequacies or non-compliance, could materially damage our reputation, lead to civil or criminal penalties,
or both, which, in turn, could adversely affect our business, financial condition, results of operations, or cash flows.
We could be required to write down our goodwill and other intangible assets.
We had goodwill of $19.2 million and other intangible assets of $5.8 million at December 31, 2024. Our
business acquisitions typically have resulted in goodwill and other intangible assets and these may result in a future
impairment expense. We make estimates and assumptions in valuing such goodwill and intangible assets that affect
our consolidated financial statements. In accordance with GAAP, our goodwill and indefinite-lived intangible assets
are not amortized, but are tested for impairment annually, or more frequently if events or changes in circumstances
indicate that an asset might be impaired. The estimated fair value is affected by the performance of the business,
which may be especially diminished by prolonged market declines. If the goodwill has been impaired, we must write
down the goodwill by the amount of the impairment, with a corresponding charge to net income. Based on the
annual impairment analysis, the Company determined that goodwill was not impaired as of December 31, 2024. In
2024, the Company recorded a $0.3 million pre-tax write off in other intangibles assets in connection with the
Houston Sale Transaction If we record any future impairment loss related to our goodwill or other intangible assets,
it could adversely affect our business, financial condition, results of operations, or cash flows. Notwithstanding the
foregoing, the results of impairment testing on our goodwill or other intangible assets have no impact on our
tangible book value or regulatory capital levels.
We have a net deferred tax asset that may or may not be fully realized.
Deferred income tax represents the tax effect of the timing differences between financial accounting and tax
reporting. Deferred tax assets, or DTAs, are assessed periodically by management to determine whether they are
realizable. Factors in management’s determination include the performance of the business, including the ability to
generate future taxable income. Realizing a deferred tax asset requires us to apply significant judgment and such
judgment is inherently speculative because it requires estimates that cannot be made with certainty. If, based on
available information, it is more likely than not that the deferred income tax asset will not be realized, then a
valuation allowance must be established with a corresponding charge to net income. Such charges could adversely
affect our business, financial condition, results of operations, or cash flows. In addition, changes in the corporate tax
rates could affect the value of our DTAs and may require a write-off of a portion of some of those assets. At
December 31, 2024, we had net DTAs with a book value of $53.5 million, based on a U.S. corporate income tax rate
of 21%. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical
Accounting Policies and Estimates.”
We may incur losses due to minority investments in fintech and specialty finance companies.
From time to time, we may make or consider making minority investments in fintech and specialty finance
companies. If we do so, we may not be able to influence the activities of companies in which we invest and may
suffer losses due to these activities. For example, the companies we invest in may have economic or business
interests, values, or goals that are inconsistent or conflict with ours, which could damage our reputation or business.
Additionally, the companies we invest in may experience financial difficulties, default on their obligations,
diminished liquidity or insolvency; or our management team’s distraction relative to the potential financial benefit
may be disproportional. In addition, although we may seek board representation in connection with certain
investments, we cannot assure you that such representation will be obtained or that such representation will result in
Amerant having a meaningful say in the Board decisions of such company. If the companies we invest in seek
additional financing in the future to fund their growth strategies, these financing transactions may result in dilution
to our ownership stakes and these transactions may occur at lower valuations than the investment transaction
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through which we acquired such ownership interest, which could significantly decrease the fair value of our
investment in those entities. We may also be unable to dispose of our minority investments within our contemplated
time horizon or at all. Our inability to dispose of our minority investment in an entity or a downward adjustment to
or impairment of an equity investment could adversely impact our business, financial condition, results of
operations, or cash flows.
We are subject to risks associated with sub-leasing portions of our corporate headquarters building.
In December 2021, we sold our approximately 177,000 square foot headquarters building (the “Property”) and
entered into an 18-year triple net lease for the Property (the “Lease”) at an initial base rent of $7,500,000 per year
(escalating 1.5% each year), under which we are also responsible for the Property’s insurance, real estate taxes, and
maintenance and repair expenses. During the term of the Lease, we have the right to sublet the whole or any part of
the Property.
While we occupy and we expect to continue to occupy a portion of the Property, we also currently sublease and
intend to continue to sublease a significant portion of the Property to third parties. When we sublease spaces in the
Property to third parties, we are not released from our underlying obligations under the Lease. We rely on the
sublease income from subtenants to offset the expenses incurred related to our obligations under the Lease.
Although we assess the financial condition of each subtenant to which we sublease space in the Property, the
financial condition of each such subtenant or of a sublease guarantor(s), if any, may deteriorate over time. If a
subtenant of the Property does not perform under the terms of a sublease agreement (due to its financial condition or
other factors), we may not be able to recover amounts owed to us under the terms of each sublease agreement or the
related guarantees, if any. If subtenants default or terminate their subleases with us, we may experience a loss of
planned sublease rental income, which could adversely impact our business, financial condition, results of
operations, or cash flows. Additionally, if subtenants default on their sublease obligations with us or otherwise
terminate their sublease agreement with us, we may be unable to secure a new subtenant on a timely basis, or at all,
on the same or more favorable rent terms.
Our success depends on our ability to compete effectively in highly competitive markets.
The Florida banking markets in which we do business are highly competitive; therefore, our future growth and
success will depend on our ability to compete effectively in these markets. We compete for deposits, loans, and
other financial services in our markets with other local, regional and national commercial banks, thrifts, credit
unions, mortgage lenders, trust services providers and securities advisory and brokerage firms. Marketplace lenders
operating nationwide over the internet are also growing rapidly, other fintech developments, including blockchain
and other technologies, may potentially disrupt the financial services industry and impact the way banks do business.
Many of our competitors offer products and services different from us, and have substantially greater resources,
name recognition and market presence than we do, which benefits them in attracting business. In addition, larger
competitors may be able to price loans and deposits more aggressively than we are able to and have broader and
more diverse customer and geographic bases to draw upon.
Risks Related to Risk Management, Internal Audit, Internal and Disclosure Controls
Potential gaps in our risk management policies and internal audit procedures may leave us exposed to
unidentified or unanticipated risk, which could negatively affect our business.
Our enterprise risk management and internal audit programs are designed to mitigate material risks. There may
be inherent limitations to our current and future risk management strategies, including risks that we have not
appropriately anticipated or identified. Additionally, our internal audit process may fail to detect such weaknesses or
deficiencies in our risk management framework. Many of our methods for managing risk and exposures are based on
observed historical market behavior to model or project potential future exposure. Models used by our business are
based on assumptions and projections. These models may not operate properly, or our inputs and assumptions may
be inaccurate or not be adopted quickly enough to reflect changes in behavior, markets, or technology. As a result,
these methods may not fully predict future exposures, which can be significantly different and greater than historical
measures indicate. In addition, our business and the markets in which we operate are continuously evolving, and we
may fail to fully understand the implications of changes in our business or the financial markets or fail to adequately
45
or timely enhance our enterprise risk framework to address those changes. Furthermore, we cannot assure that we
can effectively review and monitor all risks or that all of our employees will closely follow our risk management
policies and procedures, or that our risk management policies and procedures will enable us to accurately identify all
risks and limit timely our exposures based on our assessments. If our enterprise risk management framework proves
ineffective, we could suffer unexpected losses, which could adversely affect our business, financial condition, results
of operations, or cash flows.
Any failure to maintain effective internal control over financial reporting could impair the reliability of
our financial statements, which in turn could harm our business, impair investor confidence in the accuracy
and completeness of our financial reports and our access to the capital markets and cause the price of our
common stock to decline and subject us to regulatory penalties.
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, or ICFR and for evaluating and reporting on that system of internal control. Our ICFR is a process
designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. Section 404
of the Sarbanes-Oxley Act requires us to furnish annually a report by management on the effectiveness of our ICFR.
In addition, our independent registered public accounting firm is required to report on the effectiveness of our ICFR.
If we fail to implement and maintain effective ICFR, our ability to accurately and timely report our financial
results could be impaired, which could result in late filings of our periodic reports under the Exchange Act,
restatements of our consolidated financial statements, and suspension or delisting of our common stock from the
New York Stock Exchange. Such events could harm our business, cause investors to lose confidence in the accuracy
and completeness of our reported financial information, cause the trading price of our shares of common stock to
decline, our access to the capital markets or other financing sources could be limited and subject us to investigations,
enforcement actions or regulatory penalties.
Changes in accounting standards could materially impact our financial statements
From time to time, accounting standards setters change the financial accounting and reporting standards that
govern the preparation of our consolidated financial statements. These changes can be difficult to predict and can
materially impact how we record and report our consolidated financial condition and consolidated results of
operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in
changes to previously reported financial results or a cumulative charge to retained earnings. See Note 1 - Business,
Basis of Presentation and Summary of Significant Accounting Policies in the notes to consolidated financial
statements included in Item 15.1 Consolidated Financial Statements in this report for further information regarding
accounting standards updates.
Risks Related to External and Market Factors
Material and negative developments adversely impacting the financial services industry at large and
causing volatility in financial markets and the economy may have materially adverse effects on our liquidity,
business, financial condition and results of operations.
The actual occurrence or widespread concerns regarding the potential occurrence of illiquidity, operational
failures, defaults, non-performance or other material and adverse developments that impact financial institutions and
transactional counterparties, or other entities within the financial services industry at large, have previously caused,
and could continue to cause, market-wide liquidity issues, bank-runs and general contagion across the global and
U.S. financial services industry. For example, in March and April 2023, significant deposit withdrawals or bank runs
precipitated the failure of four banks in the U.S. causing a state of volatility in the capital and credit markets and
uncertainty regarding the health of the U.S. banking system, particularly around liquidity, uninsured deposits and
customer concentrations. This volatility particularly impacted the price of securities issued by financial institutions,
including ours. While during this crisis and historically, the U.S. Department of the Treasury, the Federal Reserve
46
Board and the FDIC have ensured that depositors of failed banks had access to their deposits, including uninsured
deposit accounts, there is no guarantee that such actions will continue to be successful in restoring customer
confidence in regional banks and the banking system more broadly. Similarly, there can be no assurance that there
will not be additional bank failures or issues in the broader financial system or that these U.S. government entities
will act in a similar fashion in the event of the future closure or failure of any other banks or financial institutions. In
addition, the cost of resolving bank failures may prompt the FDIC to charge higher premiums above the current
levels or to issue additional special assessments. Additionally, although the industry has stabilized since these
failures and the customer confidence in the safety and soundness of smaller regional and community banks has
improved, the risk remains that customers may choose to maintain deposits with large financial institutions or invest
in higher yielding short-term fixed income securities, all of which could materially adversely impact the Company's
liquidity, loan funding capacity, net interest margin, capital and results of operations.
Adverse financial market and economic conditions may continue to exert downward pressure on the prices of
stock and other securities and negatively impact credit availability for certain issuers, including us, without regard to
their underlying financial strength. Any future events that cause financial market and economic disruption, volatility
and decreased levels of customer confidence may cause us to experience adverse effects, which may materially
impact our liquidity, business, financial condition, and results of operations.
Our business may be adversely affected by economic conditions in general and by conditions in the
financial markets.
We are exposed to downturns in the U.S. economy and market conditions generally. We cannot accurately
predict the possibility of the national or local economy’s return to a period of economic weakness or to recessionary
conditions. Our primary markets are concentrated the in Miami-Dade, Broward, Palm Beach and Hillsborough
(Tampa) counties in Florida. Adverse economic conditions in any of these areas and in the national economy may
impact us significantly and unpredictably. Markets in the U.S. may be affected by the level and volatility of interest
rates, availability and market conditions of financing, unexpected changes in gross domestic product, economic
growth or its sustainability, inflation, supply chain disruptions, consumer spending, employment levels, labor
shortages, wage stagnation, federal government shutdowns, developments related to the U.S. federal debt ceiling,
energy prices, home prices, commercial property values, fluctuations or other significant changes in both debt and
equity capital markets and currencies, liquidity of the global financial markets, the growth of global trade and
commerce, trade policies, tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade
wars, the availability and cost of capital and credit, disruption of communication, transportation or energy
infrastructure and investor sentiment and confidence.
We may face the following particular risks: the demand for loans and our other products and services could
decline, market developments may negatively affect industries we extend credit to and may result in increased
delinquencies and default rates, which, among other effects, could negatively impact our charge-offs and allowance
for credit losses; market disruptions could make valuation of assets more difficult and subjective and may negatively
affect our ability to measure the fair value of our assets; and, loan performance could deteriorate, loan default levels
and foreclosure activity increase and or our assets could materially decline in value. Any of these risks individually
or a combination could adversely affect our business, financial condition, results of operations, or cash flows.
Risks Related to Regulatory and Legal Matters
We are subject to extensive regulation that could limit or restrict our activities and adversely affect our
earnings.
Several regulators, including the Federal Reserve, the OCC, the FDIC, the Securities and Exchange
Commission, the Financial Industry Regulatory Authority, and the Cayman Islands Monetary Authority, regulate us
and our subsidiaries. Our success is impacted by regulations affecting banks and bank holding companies, and the
securities markets, and our costs of compliance could adversely affect our earnings. Banking regulations are
primarily intended to protect depositors, consumers and the FDIC’s DIF, not shareholders. The financial services
industry also is subject to frequent legislative and regulatory changes. The nature, effects and timing of legislative
and regulatory changes, cannot be predicted. Changes, if adopted, could require us to maintain more capital,
liquidity, or adopt changes to our operating policies and procedures and risk controls which could adversely affect
47
our growth, profitability and financial condition. Compliance with applicable laws and regulations is time
consuming and costly and may affect our profitability.
Additionally, banks with greater than $10 billion in total consolidated assets are subject to additional regulatory
requirements. As of December 31, 2024, our total assets were $9.9 billion. Based on our current total assets and
growth strategy, we anticipate our total assets may exceed $10 billion in 2025. In addition to our current regulatory
requirements, banks with $10 billion or more in total assets are, among other things: examined directly by the CFPB
with respect to various federal consumer financial laws; subject to reduced dividends on the Bank’s holdings of
Federal Reserve Bank of Atlanta common stock; subject to limits on interchange fees pursuant to the “Durbin
Amendment” to the Dodd-Frank Act; subject to certain enhanced prudential standards; and no longer treated as a
“small institution” for FDIC deposit insurance assessment purposes.
Compliance with these additional ongoing requirements may necessitate additional personnel, the design and
implementation of additional internal controls, or may result in other significant expenses, any of which could
adversely affect our business, financial condition, results of operations or cash flows.
There is uncertainty surrounding the potential legal, regulatory and policy changes by the presidential
administration in the United States that may directly affect financial institutions.
At this time, it is difficult to predict the legislative and regulatory changes that will result from the combination
of President Trump’s reelection and both Houses of Congress having majority memberships from the Republican
party. However, we anticipate that the Presidential administration will seek to implement a regulatory reform agenda
that is significantly different than that of the Biden administration. In addition, the change in presidential
administration has, and is expected to continue to, result in certain changes in the leadership and senior staffs of the
federal banking agencies. Such changes are likely to impact the rulemaking, supervision, examination and
enforcement priorities and policies of the agencies. In addition, changes in key personnel at the agencies that
regulate such banking organizations, including the federal banking agencies, may result in differing interpretations
of existing rules and guidelines and potentially different enforcement priorities. While we do not specifically know
what these changes will be, we may be required to implement different compliance procedures and modify our
policies and activities to comply with changes set forth by the new administration. To achieve compliance with any
changes from the Presidential administration, we may have to incur additional costs and expenses, and dedicate
additional resources, which could adversely affect our business, financial condition, results of operations or cash
flows.
Changes in federal, state or local tax laws, or audits from tax authorities, could negatively affect our
business, financial condition, results of operations or cash flows.
We are subject to changes in tax law that could increase our effective tax rates. These law changes may be
retroactive to previous periods and as a result could negatively affect our current and future financial performance.
In particular, the Inflation Reduction Act, which was signed into law in the United States in August 2022, among
other things, imposes a surcharge on stock repurchases. Changes to our tax liability could have a material effect on
our results of operations. In addition, our customers are subject to a wide variety of federal, state and local taxes.
Changes in taxes paid by our customers may affect their ability to purchase homes or consumer products and could
also make some businesses and industries less inclined to borrow, potentially reducing demand for our loans and
deposit products. In addition, such negative effects on our customers could result in defaults on the loans we have
made which would reduce our profitability and could materially adversely affect our business, financial condition,
results of operations, or cash flows.
We are also subject to potential tax audits in various jurisdictions and in such event, tax authorities may
disagree with certain positions we have taken and assess penalties or additional taxes. While we assess regularly the
likely outcomes of these potential audits, there can be no assurance that we will accurately predict the outcome of a
potential audit, and an audit could have a material adverse impact on our business, financial condition, results of
operations, or cash flows.
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Litigation and regulatory investigations are increasingly common in our businesses and may result in
significant financial losses and/or harm to our reputation.
We face risks of litigation and regulatory investigations and actions, including the risk of class action lawsuits.
Plaintiffs in class action and other lawsuits against us may seek very large or indeterminate amounts, including
punitive and treble damages. Due to the vagaries of litigation, the outcome of a litigation matter and the amount or
range of potential loss at particular points in time may normally be difficult to ascertain.
A substantial legal liability or a significant federal, state or regulatory action, inquiry or investigation could
harm our reputation, result in material fines, penalties, or legal costs, divert management resources away from our
business, and otherwise adversely affect our business, financial condition, results of operations, or cash flows. Even
if we ultimately prevail in a litigation, regulatory action or investigation, our ability to attract new customers, retain
our current customers and recruit and retain employees could be adversely affected. Regulatory inquiries and
litigation may also adversely affect the prices or volatility of our securities specifically, or the securities of our
industry, generally.
We are subject to capital adequacy and liquidity standards, and if we fail to meet these standards,
whether due to losses, growth opportunities or an inability to raise additional capital or otherwise, our
business, financial condition, results of operations, or cash flows would be adversely affected.
We, as a bank holding company, and the Bank are subject to capital rules of the Federal Reserve and the OCC,
that implement a set of capital requirements issued by the Basel Committee on Banking Supervision known as Basel
III. See “Supervision and Regulation—Capital Requirements.” The regulatory capital rules applicable to us and the
Bank may continue to change. We cannot predict the effect on us and the Bank of changes to the current capital
requirements.
Our ability to raise additional capital, if needed, will depend, among other, on the capital market conditions and
on our financial condition and performance. Any failure to remain “well capitalized” for bank regulatory purposes
could adversely affect our business, financial condition, results of operations, or cash flows, In addition, any failure
to meet these capital and other regulatory requirements could affect our customers’ confidence, our cost of and
availability of funds or FDIC deposit insurance premiums; and our ability to grow, raise, rollover or replace
brokered deposits; make acquisitions, open new branches or engage in new activities; make payments of principal
and interest on our debt instruments; and pay dividends on our capital stock.
Increases in FDIC deposit insurance premiums and assessments could adversely affect our financial
condition.
FDIC insurance premiums we pay may change and be significantly higher in the future. The FDIC may be
forced to charge higher premiums in the future if market developments significantly deplete the insurance fund of
the FDIC and reduce the ratio of reserves to insured deposits. In addition, the method that the FDIC uses to
determine the amount of our deposit insurance premium will change once our total consolidated assets exceed $10
billion, which we expect may happen in 2025. Any increases in our assessment rate, future special assessments, or
required prepayments in FDIC insurance premiums could reduce our profitability or limit our ability to pursue
certain business opportunities, which could adversely affect our business, financial condition, results of operations,
or cash flows.
Federal banking agencies periodically conduct examinations of our business, including our compliance
with laws and regulations, and our failure to comply with any regulatory actions, if any, could adversely
impact us.
The Federal Reserve and the OCC periodically conduct examinations of our business and the Bank’s business,
including compliance with laws and regulations. A federal banking agency may take such remedial actions as it
deems appropriate, if, as a result of an examination, it were to determine that the financial condition, capital
resources, asset quality, asset concentrations, earnings prospects, management, liquidity, asset sensitivity, risk
management or other aspects of any of our operations have become unsatisfactory, or that we or our management
49
were in violation of any law or regulation. If we become subject to such regulatory actions, our business, financial
condition, results of operations, or cash flows and reputation would likely be adversely affected.
The Federal Reserve may require us to commit capital resources to support the Bank.
As a matter of policy, the Federal Reserve, which examines us, expects a bank holding company to act as a
source of financial and managerial strength to a subsidiary bank and to commit resources to support such subsidiary
bank. The Federal Reserve may require a bank holding company to inject capital into a troubled subsidiary bank. In
addition, the Federal Deposit Insurance Corporation Act, as amended by the Dodd-Frank Act, requires that all
companies that control an FDIC-insured depository institution must serve as a source of financial strength to the
depository institution. Under this requirement, we could be required to provide financial assistance to the Bank
should it experience financial distress, even if further investments were not otherwise warranted. See “Source of
Strength in Supervision and Regulation.”
We may face higher risks of noncompliance with the Bank Secrecy Act and other anti-money laundering
statutes and regulations than other financial institutions.
The USA Patriot and BSA and the related federal regulations require banks to establish anti-money laundering
programs that include, policies, procedures and controls to detect, prevent and report money laundering and terrorist
financing and to verify the identity of their customers and of beneficial owners of their legal entity customers. In
addition, FinCEN, which was established as part of the Treasury Department to combat money laundering, is
authorized to impose significant civil money penalties for violations of anti-money laundering rules.
The Bank is also subject to regulatory scrutiny of compliance with the rules of the Treasury Department’s
Office of Foreign Assets Control, or OFAC which administers and enforces economic and trade sanctions based on
U.S. foreign policy and national security goals, including sanctions against foreign countries, regimes and
individuals, terrorists, international narcotics traffickers, and those involved in the proliferation of weapons of mass
destruction. Executive Orders have sanctioned the Venezuelan government and entities it owns, and certain
Venezuelan persons. In addition, the OCC has broad authority to bring enforcement actions and to impose monetary
penalties if it finds deficiencies in the Bank’s compliance with anti-money laundering laws.
Monitoring compliance with anti-money laundering and OFAC rules is complex and expensive. The risk of
noncompliance with such rules can be more acute for financial institutions like us that have numerous customers
from Latin America or who do business there. As of December 31, 2024, $1.9 billion, or 24.1%, of our total deposits
and a significant portion of our assets under management were from residents of Venezuela. Our total loan exposure
to international markets, primarily individuals in Venezuela and corporations in other Latin American countries, was
$40.7 million, or less than 1.5%, of our total loans, at December 31, 2024.
If our policies, procedures and systems are deemed deficient or fail to prevent violations of law or the policies,
procedures and systems of the financial institutions that we may acquire in the future are deficient, we would be
subject to liability (including fines); formal regulatory enforcement actions (including possible cease and desist
orders, restrictions on our ability to pay dividends, regulatory limitations on implementing certain aspects of our
business plan, including acquisitions or banking center relocation or expansion); and additional expenses to cure any
deficiency, which could adversely affect our business, financial condition, results of operations, or cash flows.
Failures to comply with the fair lending laws, CFPB regulations or the Community Reinvestment Act, or
CRA, could adversely affect us.
The Bank is subject to the provisions of the Equal Credit Opportunity Act, or ECOA, and the Fair Housing Act,
both of which prohibit discrimination based on race or color, religion, national origin, sex and familial status in any
aspect of a consumer, commercial credit or residential real estate transaction. Failures to comply with ECOA, the
Fair Housing Act and other fair lending laws and regulations, including CFPB regulations, could subject us to
enforcement actions or litigation, which could adversely affect our business, financial condition, results of
operations, or cash flows. Our Bank is also subject to the CRA, and periodic CRA examinations by the OCC. The
50
CRA requires us to serve our entire communities, including low- and moderate-income neighborhoods. Our CRA
ratings could be adversely affected by actual or alleged violations of the fair lending or consumer financial
protection laws. Violations of fair lending laws or if our CRA rating falls to less than “satisfactory” could adversely
affect our business, including expansion through branching or acquisitions.
Risks Related to Ownership of Our Common Stock
Our principal shareholders and management own a significant percentage of our shares of voting
common stock and will be able to exert significant control over matters subject to shareholder approval.
As of December 31, 2024, our executive officers, directors and each of the 5% or greater holders of our voting
Class A common stock beneficially owned outstanding shares representing, in the aggregate, approximately 36% of
the outstanding shares of our voting Class A common stock (without giving effect to the broad family holdings of
the Capriles, Marturet and Vollmer families which will bring the percentage to an aggregate of approximately 57%).
As a result, these shareholders, if they act individually or together, may exert a significant degree of influence over
our management and affairs and over matters requiring shareholder approval, including the election of directors and
approval of significant corporate transactions, such as mergers, the sale of substantially all of our assets and other
extraordinary corporate matters. Furthermore, the interests of these shareholders may not always coincide with the
interests of other shareholders, including you and, accordingly, they could cause us to enter into transactions or
agreements which we might not otherwise consider or prevent us from adopting actions that we might otherwise
implement.
The rights of our common shareholders are subordinate to the holders of any debt securities that we have
issued or may issue from time to time.
We have outstanding debt instruments that rank senior to our common stock, if we fail to timely make principal
and interest payments on any of these debt instruments, we may not pay any dividends on our common stock.
Further, if we declare bankruptcy, dissolve, or liquidate, the holders of these debt instruments must be satisfied
before any distributions can be made to the holders of our common stock.
The stock price of financial institutions, like Amerant, may fluctuate significantly.
We cannot predict the prices at which our shares of common stock will continue to trade. You should consider
an investment in our common stock to be risky. The trading price may be highly volatile, which may make it
difficult for you to resell your shares at the volume, prices and times desired. There are many factors that may affect
the market price and trading volume of our shares of common stock, including the factors described in this “Risk
Factors” section, and other factors, most of which are outside of our control.
Stock markets in general have experienced volatility that has often been unrelated to the operating performance
of a particular company or industry. These broad market fluctuations, as well as general economic, systemic,
political and market conditions, including recessions, loss of investor confidence, and interest rate changes, may
negatively affect the market price of our common stock. Increased market volatility may materially and adversely
affect the market price of our common stock, which could make it difficult to sell your shares at the volume, prices
and times desired.
If at a specific measurement time period, our public float calculation is below $700 million, we may not qualify
as a well-known seasoned issuer and suffer negative consequences. If we do not qualify as a well-known seasoned
issuer, we will not be able to file automatic shelf registration statements on Form S-3ASR and enjoy the benefits
associated with such registration statements, such as automatic effectiveness immediately upon filing, permitting
companies to omit more information from the base prospectus than permitted for other shelf registration statements,
allowing companies to register unspecified amounts of securities and doing so without allocating among securities
or between primary and secondary offerings, and permitting companies to pay filing fees on a “pay-as-you-go” basis
at the time of each takedown from the shelf registration statement. Not qualifying as a well-known seasoned issuer
51
may also impact the views or perceptions of investors and analysts and may influence investors’ willingness to
purchase or hold our securities or analysts’ recommendations regarding our securities.
We can issue additional equity securities, which would lead to dilution of our issued and outstanding
Class A common stock.
The issuance of additional equity securities or securities convertible into equity securities would result in
dilution of our existing shareholders’ equity interests. We are authorized to issue up to 250 million shares of our
Class A common stock. We are authorized to issue, without shareholder approval, up to 50 million shares of
preferred stock in one or more series, which may give other shareholders dividend, conversion, voting, and
liquidation rights, among other rights, which may be superior to the rights of holders of our Class A common stock.
We are authorized to issue, without shareholder approval, except as required by law or the New York Stock
Exchange, securities convertible into either common stock or preferred stock. Furthermore, we have adopted an
equity compensation program for our employees and an employee stock purchase plan, which also could result in
dilution of our existing shareholders’ equity interests.
Certain provisions of our amended and restated articles of incorporation and amended and restated
bylaws, Florida law, and U.S. banking laws could have anti-takeover effects.
Certain provisions of our amended and restated articles of incorporation and amended and restated bylaws, as
well as Florida law, and the BHC Act, and Change in Bank Control Act, could delay or prevent a change of control
that you may favor. Our amended and restated articles of incorporation and amended and restated bylaws include
certain provisions that could delay a takeover or change in control of us, including: the exclusive right of our board
to fill any director vacancy; advance notice requirements for shareholder proposals and director nominations;
provisions limiting the shareholders’ ability to call special meetings of shareholders or to take action by written
consent; and the ability of our board to designate the terms of and issue new series of preferred stock without
shareholder approval, which could be used, among other things, to institute a rights plan that would have the effect
of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have
not been approved by our board.
The Florida Business Corporation Act contains a control-share acquisition statute that provides that a person
who acquires shares in an “issuing public corporation,” as defined in the statute, in excess of certain specified
thresholds generally will not have any voting rights with respect to such shares, unless such voting rights are
approved by the holders of a majority of the votes of each class of securities entitled to vote separately, excluding
shares held or controlled by the acquiring person. Furthermore, the BHC Act and the Change in Bank Control Act
impose notice, application and approvals and ongoing regulatory requirements on any shareholder or other party that
seeks to acquire direct or indirect “control” of bank holding companies, such as ourselves.
Risks Related to our Indebtedness
We may not be able to generate sufficient cash to service all of our debt, including the Subordinated
Notes and the Debentures.
As of December 31, 2024, we had outstanding an aggregate principal amount of $60.0 million of senior notes
with a coupon rate of 5.75% and a maturity date of June 30, 2025 (the “Senior Notes”); an aggregate principal
amount of $30.0 million of 4.25% Fixed-to-Floating Rate Subordinated Notes due March 15, 2032 (the
“Subordinated Notes”); and an aggregate principal amount of $64.2 million in junior subordinated debentures (the
“Debentures”). We have exercised our right under the applicable indenture to redeem the Senior Notes, which we
expect to complete on April 1, 2025, see “Redemption of Senior Notes” in Item 1. Business Developments. Once we
complete the early redemption of our Senior Notes, the aggregate principal balances of our Subordinated Notes and
the Debentures will remain outstanding.
Our ability to make scheduled payments of principal and interest or to satisfy our obligations in respect of our
Subordinated Notes and the Debentures or to refinance them will depend on our future operating performance.
52
Prevailing economic conditions (including inflationary pressures, rising interest rates, and uncertainty surrounding
global markets), regulatory constraints (including limitations on distributions to us from our subsidiaries and
required capital levels with respect to our subsidiary bank and non-banking subsidiaries), and financial, business and
other factors will also affect our ability to meet these needs. We may not be able to generate sufficient cash flows
from operations, or obtain future borrowings in an amount sufficient to enable us to pay our debt, or to fund our
other liquidity needs. We may need to refinance all or a portion of our debt on or before maturity. We may be unable
to refinance any of our debt when needed on commercially reasonable terms or at all.
We are a holding company with limited operations and depend on our subsidiaries for the funds required
to make payments of principal and interest on the Subordinated Notes and the Debentures.
We are a separate and distinct legal entity from the Bank and our other subsidiaries. Our primary source of
funds to make payments of principal and interest on the Subordinated Notes and the Debentures, and to satisfy any
other financial obligations are dividends from the Bank. Our ability to receive dividends from the Bank is contingent
on a number of factors, including the Bank’s ability to meet applicable regulatory capital requirements, the Bank’s
profitability and earnings, and the general strength of its balance sheet. Various federal and state regulatory
provisions limit the amount of dividends bank subsidiaries are permitted to pay to their holding companies without
regulatory approval. In general, the Bank may only pay dividends either out of its net income after any required
transfers to surplus or reserves have been made or out of its retained earnings. In addition, the Federal Reserve and
the FDIC have issued policy statements stating that insured banks and bank holding companies generally should pay
dividends only out of current operating earnings.
Banks and their holding companies are required to maintain a capital conservation buffer of 2.5% and satisfy
other applicable regulatory capital ratios. Banking institutions that do not maintain capital in excess of the capital
conservation buffer may face constraints on dividends, equity repurchases and executive compensation .
Accordingly, if the Bank fails to maintain the applicable minimum capital ratios and the capital conservation buffer,
dividends to us from the Bank may be prohibited or limited, and there may be insufficient funds to make principal
and interest payments on the Subordinated Notes and the Debentures.
In addition, state or federal banking regulators have broad authority to restrict the payment of dividends,
including in circumstances where a bank under such regulator’s jurisdiction engages in (or is about to engage in)
unsafe or unsound practices. Such regulators have the authority to require that a bank cease and desist from unsafe
and unsound practices and to prevent a bank from paying a dividend if its financial condition is such that the
regulator views the payment of a dividend to constitute an unsafe or unsound practice.
Accordingly, we can provide no assurance that we will receive dividends from the Bank in an amount sufficient
to pay the principal of, or interest on, the Subordinated Notes and the Debentures. In addition, our right and the
rights of our creditors, including holders of the Subordinated Notes and the Debentures to participate in the assets of
any non-guarantor subsidiary upon its liquidation or reorganization would be subject to the prior claims of such non-
guarantor subsidiary’s creditors, except to the extent that we may ourselves be a creditor with recognized claims
against such non-guarantor subsidiary.
We may incur a substantial level of debt that could materially adversely affect our ability to generate
sufficient cash to fulfill our obligations under the Subordinated Notes and the Debentures.
Neither we, nor any of our subsidiaries, are subject to any limitations under the terms of the indentures
governing the terms of the Subordinated Notes and the Debentures from issuing, accepting or incurring any amount
of additional debt, deposits or other liabilities, including senior indebtedness or other obligations ranking equally
with the Subordinated Notes and the Debentures. We expect that we and our subsidiaries will incur additional debt
and other liabilities from time to time, and our level of debt and the risks related thereto could increase.
A substantial level of debt could have important consequences to us, holders of our Subordinated Notes, of our
Debentures and our shareholders, including making it more difficult for us to satisfy our financial obligations
53
(including the Subordinated Notes and the Debentures); requiring us to dedicate a substantial portion of our cash
flow from operations to payments on our debt, thereby reducing funds available for other purposes; increasing our
vulnerability to adverse economic and industry conditions, which could place us at a disadvantage relative to our
competitors that have less debt; limiting our flexibility in planning for, or reacting to, changes in our business and
the industries in which we operate; and limiting our ability to borrow additional funds, or to dispose of assets to raise
funds, if needed, for working capital, capital expenditures, acquisitions and other corporate purposes.
In addition, a breach of any of the restrictions or covenants in our existing debt agreements could cause a cross-
default under other debt agreements. A significant portion of our debt then may become immediately due and
payable. If this were to occur, we cannot assure you we would have or be able to obtain sufficient funds to make
these accelerated payments. If any of our debt is accelerated, our assets may not be sufficient to repay such debt in
full.
Item 1B. UNRESOLVED STAFF COMMENTS
None.
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Item 1C. CYBERSECURITY
We recognize the security of our banking operations is critical to protecting our customers, maintaining our
reputation and preserving the value of the Company. We have an enterprise risk management framework that is
designed to identify, measure, control, monitor and mitigate risks across various aspects of our business and
operations, including, credit, interest rate, liquidity, operational, regulatory compliance, strategic, reputational, and
legal risks. As we rely and continue to increase our reliance on technology and given the constant state of cyber
threats, information security or cybersecurity is a significant component of our enterprise risk management
framework. Our Chief Information Security Officer, a key member of our risk management organization, who has
overall responsibility, accountability, and ownership for this cybersecurity component, reports directly to the Chief
Risk Officer and periodically presents reports to the Risk Committee of our Board of Directors.
We are actively engaged in identifying, managing, and mitigating cybersecurity risks with the objective of
avoiding or minimizing the impact of malicious and non-malicious actions and threats aimed at penetrating,
disrupting or misusing our systems and information. Protecting company data, non-public customer and employee
data, and the systems that collect, process, and maintain this information is deemed critical. We have developed and
implemented an enterprise-wide information security program, which is designed to protect the availability,
integrity, and confidentiality of customer non-public information and company data, including the protection of the
hardware and infrastructure used to store and transmit such information. Our Information Security Program is
structured and aligned with the Federal Financial Institution Examination Council (“FFIEC”) guidelines for
information security, regulatory guidance, and other industry standards. To promote the continued effectiveness of
our information security program, we periodically conduct risk assessments, complete audits and tests, participate in
industry associations, and review information from threat intelligence feeds. In addition, our Chief Information
Security Officer and members of his team and of our Information Technology team regularly collaborate with
external parties, including regulatory agencies, other banks and industry groups to share cyberthreat information,
trends and issues and identify best practices.
We leverage knowledge, people, processes, and technology to develop, implement, manage, and maintain
cybersecurity controls. Our information security program employs several detective and defensive tools designed to
monitor, alert, and block suspicious activity, as well as to identify, report and address any suspected threats. Our
information security program is a continuous on-going periodically updated program that is supported by policies,
procedures, standards and guidelines; an Enterprise-wide Vendor Management Program; a Technology Project
Management Office (PMO) and an Enterprise-wide Business Continuity and Disaster Recovery Program. This
integration is aimed at ensuring that program is embedded into the organization’s lines of business, support
functions and third-party vendor management program.
We have implemented controls that align information security standards with the nature of our operations and
strategic direction. When possible, we implement layered control systems by deploying different controls at different
points of business processes and throughout an IT system so that the strength of one control can compensate for
weaknesses in or possible failure of another control. We have also developed an enterprise-wide vendor
management and third-party risk management program designed to identify, assess, and manage information
security, operational and technology risks associated with third-party vendors. Our Enterprise-wide Vendor
Management Program is in alignment with the FFIEC Guidelines for Third Party Service Providers and is designed
to identify, assess, and manage risks, including cybersecurity risks, associated with external service providers. Our
Information Security Program also continuously promotes cybersecurity awareness and culture across the
organization, including regular education and training, that requires team members to complete training and
certification on an annual basis and phishing simulations (attempts of attacks) monthly. New hires are also provided
with information security awareness training during the orientation process. A customer security awareness and
communication program has also been developed and implemented to keep customers abreast of security and fraud
risks.
While we believe that our business, financial condition, or results of operations have not been materially
adversely affected by any cybersecurity incidents, cybersecurity threats are common and pervasive and, we, as well
as our customers, regulators, and service providers, have experienced and will likely continue to experience a
significant increase in information security and cybersecurity threats and attacks, see “Our information systems are
55
exposed to cybersecurity threats and may experience interruptions and security breaches that could adversely affect
our business and reputation” in Item 1A. Risk Factors. We continuously assess the risks and changes in the cyber
environment and update our information security program to reflect the results of risk assessments and the key
controls necessary to safeguard customer information and ensure the proper disposal of customer information. The
program is updated considering changes in technology, the sensitivity of our customer information, internal or
external threats to information, and our own changing business environment which can include mergers and/or
acquisitions, outsourcing arrangements, and changes in customer information systems which may have material
impact on the program. We also leverage control testing of key controls, systems, and procedures of our information
security program performed by internal and external auditors and external partners, that is periodically completed to
assess their design and operating effectiveness and make recommendations to strengthen our risk management
program.
We have developed and maintain an incident response plan that provides a documented procedure to respond
and address cybersecurity incidents, including timely notification to the Executive Management Committee and the
Risk Committee of the Board of Directors. The incident response plan provides for the interaction and coordination
of executive, strategic and tactical teams, depending on the severity level of the incident, aimed at facilitating
coordination across multiple units and departments of the Company. Our incident response plan is tested at least
annually.
Governance
The Information Security Department, under the leadership of the Chief Information Security Officer, has the
responsibility for implementation and monitoring our information security program. The responsibilities of this
department include cybersecurity risk assessments, vulnerability management, access reviews for systems and
applications, incident response and management, gathering and sharing threat intelligence, monitoring of controls,
and overall responsibility for the development of the information security program including relevant policies,
procedures, standards and guidelines to enhance data security and mitigate risks. Members of this department
include individuals with varying degrees of education and experience, in particular, our Chief Information Security
Officer has over twenty seven years of experience in information technology and risk management, with emphasis
on information security and cyber security risk management; throughout his career he has served in different
positions including as Information Technology Auditor, Technology Risk Manager, Information Security Program
Manager and, since September 2018 as our CISO. He has a bachelor’s degree in computer systems analysis and has
obtained several relevant certifications, including having completed the EC-Council’s Certified Chief Information
Security Officer Program and obtaining the Information Systems Auditor and Risk and Information Systems Control
certifications from the Information Systems Audit and Control Association, ISACA. Several management
committees, including our Executive Management Committee, manage our information security program and meet
periodically to review and discuss information security matters. In general, summaries of key matters discussed are
reported to the Risk Committee.
Our Board, through the Risk Committee, is actively engaged in the oversight of our information security
program. The Risk Committee oversees our information security program, including management’s actions to
identify and evaluate, material cyber vulnerabilities, threats, and risks as well as the development and
implementation of mitigating and remediating actions. Our Chief Information Security Officer presents quarterly
reports to the Risk Committee regarding our information security program, including relevant information on key
risk and performance indicators related to cybersecurity matters as well as significant cybersecurity and privacy
events. In addition, our information security risk profile is presented to the Risk Committee on a semi-annual basis.
Item 2. PROPERTIES
We conduct our business from our approximately 177,000 square foot headquarters building in Coral Gables,
FL (the “Headquarters Building”), located at 220 Alhambra Circle, Coral Gables, FL 33134. In 2021, we sold the
Headquarters Building, and leased-back the property for an eighteen-year term. In January 2024, we leased to a
third-party approximately 19,000 square feet which we previously occupied. As a result, as of December 31, 2024
we occupied approximately 42,000 square feet, or approximately 23%, of the Headquarters Building, with the
remaining approximately 135,000 square feet, or approximately 77%, either leased to third-parties or available for
lease.
56
Additionally, a significant portion of our support service units operate out of our new operations center in the
Miramar Park of Commerce (the “Miramar Operations Center”), located at 10500 Marks Way, Miramar, FL 33025.
The Miramar Operations Center has a more efficient layout which allowed us to reduce our space to approximately
56,500 square feet from approximately 100,000 at the previous operations center.
As of December 31, 2024, we had 19 banking centers, all located in Florida. We occupy 15 banking centers
under lease agreements with renewal options, two banking centers with long term ground leases, and two banking
centers are owned. Our banking centers range from approximately 1,000 square feet to approximately 7,000 square
feet, average of 3,300 square feet and total approximately 64,000 square feet. We opened a new banking center in
Tampa, FL in 2024, which we also lease.
We lease approximately 6,000 square feet in New York City, which was used as an LPO for CRE loans. We
closed our New York CRE LPO in 2021, and subsequently subleased this property in January 2022. In February
2023, the Company executed a new lease for 14,416 square feet office space in Tampa, FL, which now houses our
recently opened banking center and where our new Tampa Regional Office is. In October 2023, the Company leased
12,702 square feet in Plantation, FL, for our Broward county regional office. In June 2024, we also leased 5,172
square feet in West Palm Beach, FL, which will have a new banking center and the West Palm Beach county
regional office.
Our various leases have periodic escalation clauses and may have options for extensions and other customary
terms.
Item 3. LEGAL PROCEEDINGS
From time to time, in the ordinary course of business, we are involved in litigation, regulatory matters and other
legal proceedings. These may include, but are not limited to, claims related to the ownership of funds in specific
accounts, disputes over credit relationships, challenges to security interests in collateral, and foreclosure
proceedings, employment-related claims and general tort matters. Such matters are incidental to our regular banking
and lending operations.
While the outcome of legal proceedings is inherently uncertain, based on management’s current assessment and
legal counsel’s advice, we do not believe that any pending litigation will have a material adverse effect on our
financial position, results of operations or cash flows. Where appropriate, we establish reserves for potential losses
in accordance with FASB ASC Topic 450, Contingencies, considering available information, management’s
judgment and legal counsel’s guidance.
At least quarterly, we evaluate legal contingencies using the most current information available. If a loss is
probable and reasonably estimable, we record a liability in our consolidated financial statements, adjusting reserves
as necessary to reflect new developments. If the likelihood of loss is not probable or cannot be reasonably estimated,
no reserve is recorded.
Based on current information, including insurance coverage, existing legal reserves, and ongoing legal
assessments, we do not believe that liabilities arising from pending legal proceedings will materially impact our
financial condition. However, due to the inherent uncertainty in litigation and regulatory matters, the final resolution
of one or more cases can have a material effect on our financial position, results of operations, or cash flows in a
particular reporting period.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
57
PART II
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market For Capital Stock
Our shares of Class A common stock, par value $0.10 per share, are listed and trade on the NYSE under the
symbol “AMTB”.
Holders of record
As of February 27, 2025, there were 382 shareholders of record of the Company’s Class A common stock. The
shareholders of record include Cede & Co., a nominee for The Depository Trust Company, or DTC, which holds
shares of our Class A common stock on behalf of an indeterminate number of beneficial owners. All of the
Company’s shares of Class A held by brokerage firms, banks and other financial institutions as nominees for
beneficial owners are deposited into participant accounts at DTC, and are considered to be held of record by Cede &
Co. as one shareholder. Because many of our Class A common stock are held by brokers and other institutions on
behalf of shareholders, we are unable to estimate the total number of shareholders represented by these holders.
Dividends
In January 2025 and each of the four quarters of 2024 and 2023, the Company’s Board of Directors declared a
cash dividend of $0.09 per share of the Company’s Class A common stock. Future dividends, if any, will be subject
to our Board of Directors’ discretion and will depend on a number of factors including, among other things, upon
our results of operations, financial condition, liquidity, capital adequacy, cash requirements, prospects, regulatory
capital limitations, and other factors that our Board of Directors may deem relevant as well as applicable federal and
state regulations. Under Florida law, the Company may only pay dividends if after giving effect to each dividend the
Company would be able to pay its debts as they become due and the Company’s total assets would exceed the sum
of its total liabilities plus the amount that would be needed, if the Company were to be dissolved at the time of each
dividend, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to
those entitled to receive the dividend. In addition, as a bank holding company, our ability to pay dividends is
affected by the policies and enforcement powers of the Federal Reserve. Also, because we are a bank holding
company, we are dependent upon the payment of dividends by the Bank to us as our principal source of funds to pay
dividends in the future, if any, and to make other payments. The Bank is also subject to various legal, regulatory
and other restrictions on its ability to pay dividends and make other distributions and payments to us. For further
information, see “Supervision and Regulation—Payment of Dividends and Repurchases.”
58
Stock Performance Graph
The following stock performance graph and related disclosures do not constitute soliciting material and should
not be deemed filed or incorporated by reference into any other filing by us under the Securities Act or the Exchange
Act, except to the extent we specifically incorporate them by reference therein.
The following graph compares the cumulative total return of the Class A common stock during the five years
ended December 31, 2024, as compared to the cumulative total return on stocks included in the NYSE Composite
Index, and the KBW Nasdaq Bank Index over such period. Our Class B common stock was converted into Class A
common stock on November 18, 2021 pursuant to the Clean-Up Merger and is no longer outstanding. November
17, 2021 was the last day of trading of the Company's shares of Class B common stock. Cumulative total return
expressed in Dollars assumes an investment of $100 on December 31, 2019 and reinvestment of dividends as paid.
Total Return Performance
AMTB
NYSE Composite Index
KBW Nasdaq Bank Index
12/31/2019
12/31/2020
12/31/2021
12/31/2022
12/31/2023
12/31/2024
$50
$100
$150
$200
59
Total Return Performance (in Dollars)
December 31,
2019
December 31,
2020
December 31,
2021
December 31,
2022
December 31,
2023
December 31,
2024
AMTB
$
100.00 $
69.76 $
158.56 $
123.18 $
112.76 $
102.85
NYSE Composite Index
100.00
104.40
123.37
109.14
121.13
137.26
KBW Nasdaq Bank Index
100.00
86.37
116.63
88.96
84.70
112.44
The above graph and table illustrate the performance of Company Class A from December 31, 2019 and reflect:
•
the Clean-up Merger, under which terms each outstanding share of Class B common stock was
automatically converted to 0.95 of a share of Class A common stock.
Item 6. RESERVED
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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in
conjunction with our audited consolidated financial statements and related notes included elsewhere in this Form
10-K. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and
assumptions. Certain risks, uncertainties and other factors, including but not limited to those set forth under
“Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors” and elsewhere in this Form 10-K, may
cause actual results to differ materially from those projected in the forward looking statements.
The emphasis of this discussion will be on changes in the year ended December 31, 2024 with respect to 2023.
See our Annual Report on Form 10-K for the year ended December 31, 2023 for additional details on the
Company’s financial condition and results of operations in 2023 and changes in the Company’s financial condition
and results of operations from 2022 to 2023.
Overview
Our Company
We are a bank holding company headquartered in Coral Gables, FL. We provide individuals and businesses a
comprehensive array of deposit, credit, investment, wealth management, retail banking, mortgage services, and
fiduciary services. We serve customers in our United States markets and select international customers. These
services are offered through the Bank, which is also headquartered in Coral Gables, FL, and its subsidiaries.
Fiduciary, investment, wealth management and mortgage lending services are provided by the Bank’s securities
broker-dealer, Amerant Investments, and the mortgage company, Amerant Mortgage. The Bank’s primary markets
are South Florida, where we are headquartered and operate 18 banking centers in Miami-Dade, Broward and Palm
Beach counties. The Bank also operates one banking center, as well as a regional headquarter, in Tampa, FL. See
“Item1-Business” for recent developments.
Primary Factors Used to Evaluate Our Business
Results of Operations. In addition to net income or loss, the primary factors we use to evaluate and manage our
results of operations include net interest income, noninterest income and expenses, and indicators of financial
performance including return on assets (“ROA”) and return on equity (“ROE”). We also use certain non-GAAP
financial measures in the internal evaluation and management of our businesses.
Net Interest Income. Net interest income represents interest income less interest expense. We generate interest
income from interest, dividends and fees received on interest-earning assets, including loans and investment
securities we own. We incur interest expense from interest paid on interest-bearing liabilities, including interest-
bearing deposits, and borrowings such as FHLB advances and other borrowings such as repurchase agreements,
notes, debentures and other funding sources we may have from time to time. Net interest income typically is the
most significant contributor to our revenues and net income. To evaluate net interest income, we measure and
monitor: (i) yields on our loans and other interest-earning assets; (ii) the costs of our deposits and other funding
sources; (iii) our net interest spread; (iv) our net interest margin, or NIM; and (v) our provisions for credit losses.
Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing
liabilities. NIM is calculated by dividing net interest income for the period by average interest-earning assets during
that same period. Because noninterest-bearing sources of funds, such as noninterest-bearing deposits and
stockholders’ equity, also fund interest-earning assets, NIM includes the benefit of these noninterest-bearing sources
of funds. Non-refundable loan origination fees, net of direct costs of originating loans, as well as premiums or
61
discounts paid on loan purchases, are deferred and recognized over the life of the related loan as an adjustment to
interest income in accordance with generally accepted accounting principles (“GAAP”).
Changes in market interest rates and the interest we earn on interest-earning assets, or which we pay on interest-
bearing liabilities, as well as the volumes and the types of interest-earning assets, interest-bearing and noninterest-
bearing liabilities and stockholders’ equity, usually have the largest impact on periodic changes in our net interest
spread, NIM and net interest income. We measure net interest income before and after the provision for credit
losses.
Noninterest Income. Noninterest income consists of, among other revenue streams: (i) service fees on deposit
accounts; (ii) income from brokerage, advisory and fiduciary activities; (iii) benefits from and changes in cash
surrender value of bank-owned life insurance, or BOLI, policies; (iv) card and trade finance servicing fees;
(v) securities gains or losses; (vi) net gains and losses on early extinguishment of FHLB advances which we may
execute from time to time as part of asset/liability management activities; (vii) income from derivative transaction
with customers; (viii) derivative gains or losses; (ix) gains or losses on the sale of properties ; and (x) other
noninterest income which includes mortgage banking revenue. See “Item 1- Business” for more details.
Our income from service fees on deposit accounts is affected primarily by the volume, growth and mix of
deposits we hold and volume of transactions initiated by customers (i.e. wire transfers). These are affected by
prevailing market pricing of deposit services, interest rates, our marketing efforts and other factors.
Our income from brokerage, advisory and fiduciary activities consists of brokerage commissions related to our
customers’ trading volume, fiduciary and investment advisory fees generally based on a percentage of the average
value of assets under management and custody (“AUM”), and account administrative services and ancillary fees
during the contractual period.
Income from changes in the cash surrender value of our BOLI policies represents the amounts that may be
realized under the contracts with the insurance carriers, which are nontaxable. In the fourth quarter of 2023, the
Company restructured certain of its BOLI contracts, by surrendering existing lower-yielding policies and reinvesting
the proceeds in higher-yielding policies. This transaction is expected to increase income from this source beginning
in 2024.
Interchange fees, other fees and revenue sharing are recognized when earned. Trade finance servicing fees,
which primarily include commissions on letters of credit, are generally recognized over the service period on a
straight line basis. Card servicing fees include credit and debit card interchange fees and other fees. We have also
entered into referral arrangements with recognized U.S.-based card issuers, which permit us to serve our customers
and earn referral fees and share interchange revenue without exposure to credit risk. In 2024, the Company
discontinued one of these arrangements which served international customers, primarily. This is expected to cause a
decrease in this revenue source prospectively.
Our gains and losses on sales of securities are derived from sales from our securities portfolio and are primarily
dependent on changes in U.S. Treasury interest rates and asset liability management activities. Generally, as U.S.
Treasury rates increase, our securities portfolio decreases in market value, and as U.S. Treasury rates decrease, our
securities portfolio increases in value. We also recognize unrealized gains or losses on changes in the valuation of
marketable equity securities not held for trading.
Our fee income generated on customer interest rate swaps and other loan level derivatives are primarily
dependent on volume of transactions completed with customers and are included in noninterest income.
Derivatives unrealized net gains and derivatives unrealized net losses are primarily derived from changes in
market value of uncovered interest rate caps with clients.
62
Other noninterest income includes mortgage banking income generated through our subsidiary Amerant
Mortgage, and consists of gain on sale of loans, gain on loans market valuation, other fees and smaller sources of
income. Mortgage banking income was $6.9 million and $4.5 million in 2024 and 2023, respectively. Other income
in 2024 also includes $0.5 million of proceeds from BOLI death benefits.
Noninterest Expense. Noninterest expenses generally increase as our business grows and whenever necessary
to implement or enhance policies and procedures for regulatory compliance, and other purposes.
Noninterest expense consists of: (i) salaries and employee benefits; (ii) occupancy and equipment expenses; (iii)
professional and other services fees; (iv) loan-level derivative expenses; (v) FDIC deposit and business insurance
assessments and premiums; (vi) telecommunication and data processing expenses; (vii) depreciation and
amortization; (viii) advertising and marketing expenses; (ix) other real estate and repossessed assets, net; (x)
contract termination costs, (xi) losses on sale of assets, and (xii) other operating expenses.
Salaries and employee benefits include compensation (including severance expenses which we generally
consider non-routine), employee benefits and employer tax expenses for our personnel. Salaries and employee
benefits are partially offset by costs directly related to the origination of loans, which are deferred and amortized
over the life of the related loans as adjustments to interest income in accordance with GAAP.
Occupancy expense consists of lease expense on our leased properties, including right-of-use or ROU asset
impairment charges, and other occupancy-related expenses. Equipment expense includes furniture, fixtures and
equipment related expenses. Rental income associated with subleasing portions of the Company’s headquarters
building and the subleasing of the New York office space, primarily, is included as a reduction to rent expense under
lease agreements under occupancy and equipment cost.
Professional and other services fees include the cost of outsourced services and other professional consulting
fees associated with our transition to a new core banking platform, legal, accounting and related consulting fees,
card processing fees, director’s fees, regulatory agency fees, such as OCC examination fees, and other fees related to
our business operations.
Loan-level derivative expenses are incurred in back-to-back derivative transactions with commercial loan
clients and with brokers. The Company pays a fee upon inception of the back-to-back derivative transactions,
corresponding to the spread between a wholesale rate and a retail rate.
Contract termination costs represent estimated expenses to terminate contracts before the end of their terms, and
are recognized when the Company terminates a contract in accordance with its terms, generally considered the time
when the Company gives written notice to the counterparty within the notification period contractually established,
or when Company determines that it no longer derives economic benefits from the contracts. Contract termination
costs also include expenses associated with the abandonment of existing capitalized projects which are no longer
expected to be completed as a result of a contract termination. Changes to initial estimated expenses to terminate
contracts resulting from revisions to timing or the amount of estimated cash flows are recognized in the period of the
changes.
Advertising expenses include the costs of promoting the Amerant brand, as well as the costs associated with
promoting the Company’s products and services to create positive awareness, or consideration to buy the
Company’s products and services. These costs include expenses to produce, deliver and communicate
advertisements using available media and technologies, primarily streaming and other digital advertising platforms.
Advertising expenses are expensed as incurred, except for media production costs which are expensed upon the first
airing of the advertisement.
63
FDIC deposit and business insurance assessments and premiums include deposit insurance, net of any credits
applied against these premiums, corporate liability and other business insurance premiums.
Telecommunication and data processing expenses include expenses paid to our third-party data processing
system providers and other telecommunication and data service providers, as well as expenses related to the
disposition of fixed assets due to the write off of in-development software in 2023.
Depreciation and amortization expense includes the value associated with the depletion of the value on our
owned properties and equipment, including leasehold improvements made to our leased properties.
OREO and repossessed assets expense includes expenses and revenue (rental income) from the operation of
foreclosed property/assets as well as fair value adjustments and gains/losses from the sale of OREO and repossessed
assets. In 2023, OREO and repossessed assets expense is presented separately in the Company’s consolidated
statement of operations and comprehensive income (loss). In 2022, while OREO valuation expense was presented
separately, all other OREO-related expenses were presented as part of other operating expenses in the Company’s
consolidated statement of operations and comprehensive (loss) income. We had no other repossessed assets (non-
real estate) in 2024 or 2022.
Other operating expenses include community engagement, business development and other operational
expenses. In addition, in 2023, other operating expense include an impairment charge of $2.0 million on an
investment carried at cost and included as part of other assets, as well as other non-routine items. Other operating
expenses are partially offset by other operating expenses directly related to the origination of loans, which are
deferred and amortized over the life of the related loans as adjustments to interest income in accordance with GAAP.
Noninterest expenses in 2024 and 2023 include salaries and employee benefits, mortgage lending costs and
professional and other service fees in connection with Amerant Mortgage’s ongoing business.
Non-routine noninterest expense items include restructuring expenses and other non-routine noninterest
expenses. Restructuring expenses are those incurred for actions designed to implement the Company’s business
strategy. These actions include, but are not limited to reductions in workforce, streamlining operational processes,
promoting the Amerant brand, decommissioning of legacy technologies, enhanced sales tools and training, expanded
product offerings and improved customer analytics to identify opportunities. There were no restructuring expenses
in 2024. Other non-routine noninterest expenses include the effect of non-routine items such as the valuation of
OREO and loans held for sale, the sale of repossessed assets, and impairment of investments, expenses in connection
with the Houston Sale Transaction, See “Non-GAAP Financial Measures” for more information on non-routine
noninterest expense items.
Primary Factors Used to Evaluate Our Financial Condition
The primary factors we use to evaluate and manage our financial condition include asset quality, capital and
liquidity.
Asset Quality. We manage the diversification and quality of our assets based upon factors that include the level,
distribution and risks in each category of assets. Problem assets may be categorized as classified, delinquent,
nonaccrual, nonperforming and restructured assets. We also manage the adequacy of our allowance for credit losses,
or the allowance, the diversification and quality of loan and investment portfolios, the extent of counterparty risks,
credit risk concentrations and other factors.
On January 1, 2022, the Company adopted ASC Topic 326 - Financial Instruments - Credit Losses, which
replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected
credit loss (“CECL”) methodology. See Note 1 to the audited consolidated financial statements in this Form 10-K
for more details on the adoption of CECL by the Company. We review and update our allowance for expected credit
losses periodically to calibrate loss estimation models based on our loan volumes, and credit and economic
64
conditions in our markets. The models may differ among our loan segments to reflect their different asset types, and
includes qualitative factors, which are updated periodically based on the type of loan and other factors.
Capital. Financial institution regulators have established minimum capital ratios for banks and bank holding
companies. We manage capital based upon factors that include: (i) the level and quality of capital and our overall
financial condition; (ii) the trend and volume of problem assets; (iii) the adequacy of reserves; (iv) the level and
quality of earnings; (v) the risk exposures in our balance sheet under various scenarios, including stressed
conditions; (vi) the Tier 1 capital ratio, the total capital ratio, the Tier 1 leverage ratio, and the CET1 capital ratio;
(vii) the tangible equity ratio, and (viii) other factors, including market conditions.
Liquidity. Our deposit base consists primarily of personal and commercial accounts maintained by individuals
and businesses in our primary markets and select international core depositors. The Company is focused on
relationship-driven core deposits. The Company may also use third party providers of domestic sources of deposits
as part of its balance sheet management strategies. We define core deposits as total deposits excluding all time
deposits. This definition of core deposits differs from the Federal Financial Institutions Examination Council’s (the
“FFIEC”) Uniform Bank Performance Report (the “UBPR”) definition of “core deposits,” which exclude brokered
time deposits and retail time deposits of more than $250,000. See “Core Deposits” discussion for more details.
We manage liquidity based upon factors that include the amount of core deposit relationships as a percentage of
total deposits, the level of diversification of our funding sources, the allocation and amount of our deposits among
deposit types, the short-term funding sources used to fund assets, the amount of non-deposit funding used to fund
assets, the availability of unused funding sources, off-balance sheet obligations, the amount of cash and liquid
securities we hold, the availability of assets readily convertible into cash without undue loss, the characteristics and
maturities of our assets when compared to the characteristics of our liabilities and other factors.
Seasonality. Our loan production, generally, is subject to seasonality, with the lowest volume typically in the
first quarter of each year.
65
Summary Results
Results for the year ended December 31, 2024 were as follows:
•
Total assets were $9.9 billion at December 31, 2024, up $185.4 million, or 1.9%, compared to $9.7 billion
at December 31, 2023.
•
Total gross loans, which include loans held for sale, were $7.3 billion at December 31, 2024, an increase of
$6.4 million since December 31, 2023.
•
Cash and cash equivalents were $590.4 million at December 31, 2024, up $268.5 million, or, 83.4%,
compared to $321.9 million at December 31, 2023.
•
Total deposits were $7.9 billion at December 31, 2024, down $40.3 million, or 0.5%, compared to
December 31, 2023.
•
Total advances from Federal Home Loan Bank (“FHLB”) were $745.0 million as of December 31, 2024,
up $100.0 million, or 15.5%, compared to $645.0 million as of December 31, 2023.
•
Average yield on loans in 2024 was 7.06%, up compared to 6.78% in 2023.
•
Total non-performing assets were $122.2 million as of December 31, 2024, up $67.6 million, or 124%,
compared to $54.6 million as of December 31, 2023.
•
Allowance for credit losses (“ACL”) was $85.0 million as of December 31, 2024 down $10.5 million, or
11.0%, compared to $95.5 million as of December 31, 2023.
•
Core deposits were $5.6 billion, at December 31, 2024, up $22.4 million, or 0.4%, compared to $5.6 billion
at December 31, 2023.
•
Average cost of total deposits in 2024 was 2.94% compared to 2.47% in 2023.
•
Loan to deposit ratio was 92.6% as of December 31, 2024 compared to 92.0% as of December 31, 2023.
•
Assets Under Management and custody (“AUM”) totaled $2.9 billion as of December 31, 2024 an increase
of $600.9 million, or 26.3%, compared to $2.3 billion as of December 31, 2023.
•
Pre-provision net revenue (“PPNR”)1 was $36.4 million in 2024, a decrease of $67.9 million, or 65.1%,
compared to $104.3 million in 2023. Core PPNR1 was $125.6 million in 2024, a decrease of $16.4 million,
or 11.6%, compared to $142.0 million in 2023.
•
Net interest margin was 3.58% in 2024, down 18 basis points from 3.76% in 2023.
•
Net interest income was $326.0 million in 2024, down $0.5 million, or 0.2%, from $326.5 million in 2023.
•
The Company recorded a provision for credit losses of $60.5 million in 2024, compared to $61.3 million in
2023.
•
Noninterest income was $9.9 million in 2024, down $77.6 million, or 88.7%, from $87.5 million in 2023.
•
Noninterest expense was $299.5 million in 2024, down $11.9 million, or 3.8%, from $311.4 million in
2023.
•
The efficiency ratio was 89.17% for the full-year 2024 compared to 75.21% for the full-year 2023.
•
Return on average assets (“ROA”) was negative 0.16% for the full-year 2024 compared to 0.34% for the
full-year 2023.
•
Return on average equity (“ROE”) was negative 1.99% for the full-year 2024 compared to 4.39% for the
full-year 2023.
1 Non-GAAP measure, see “Non-GAAP Financial Measures” for a reconciliation to GAAP.
66
Results of Operations - Comparison of Results of Operations for the Years Ended December 31, 2024 and
2023
Net (loss) income
The table below sets forth certain results of operations data for the years ended December 31, 2024, 2023 and
2022:
(in thousands, except per share amounts and
percentages)
Years Ended December 31,
Change
2024
2023
2022
2024 vs 2023
2023 vs 2022
Net interest income...................................................
$325,957
$326,464
$266,665
$
(507)
(0.2)%
$ 59,799
22.4 %
Provision for credit losses .......................................
60,460
61,277
13,945
(817)
(1.3)%
47,332
339.4 %
Net interest income after provision for credit losses
265,497
265,187
252,720
310
0.1 %
12,467
4.9 %
Noninterest income...................................................
9,909
87,496
67,277
(77,587)
(88.7)%
20,219
30.1 %
Noninterest expense .................................................
299,490
311,355
241,413
(11,865)
(3.8)%
69,942
29.0 %
Income before income tax expense ..........................
(24,084)
41,328
78,584
(65,412)
(158.3)%
(37,256)
(47.4)%
Income tax (benefit) expense ..................................
8,332
(10,539)
(16,621)
18,871
179.1 %
6,082
36.6 %
Net (loss) income before attribution of
noncontrolling interest..............................................
(15,752)
30,789
61,963
(46,541)
(151.2)%
(31,174)
(50.3)%
Less: noncontrolling interest .....................................
—
(1,701)
(1,347)
1,701
100.0 %
(354)
(26.3)%
Net (loss) income attributable to Amerant Bancorp
Inc.............................................................................
$ (15,752)
$ 32,490
$ 63,310
$ (48,242)
(148.5)%
$ (30,820)
(48.7)%
Basic (loss) earnings per common share..................
$
(0.44)
$
0.97
$
1.87
$
(1.41)
(145.4)%
$
(0.90)
(48.1)%
Diluted (loss) earnings per common share (1)...........
$
(0.44)
$
0.96
$
1.85
$
(1.40)
(145.8)%
$
(0.89)
(48.1)%
__________________
(1)
At December 31, 2024, 2023 and 2022, potential dilutive instruments consist of unvested shares of restricted stock, restricted stock units
and performance stock units. See Note 23 to our audited annual consolidated financial statements in this Form 10-K for details on the
dilutive and anti-dilutive effects of the issuance of restricted stock, restricted stock units and performance stock units on earnings per share
in 2024, 2023 and 2022. There were no dilutive shares included in earnings per share calculation in 2024 as the Company reported a net
loss from operations and their inclusion would have had an anti-dilutive effect.
2024 compared to 2023
In 2024, net loss attributable to the Company was $15.8 million, or $0.44 loss per diluted share, compared to
net income of $32.5 million, or $0.96 per diluted share, in 2023. The decrease of $48.2 million, or 148.5% , in 2024
compared to 2023 was primarily due to lower noninterest income and lower net interest income. The decrease was
partially offset by lower noninterest expense and lower provision for credit losses in the year compared to 2023.
Net interest income was $326.0 million in 2024, a decrease of $0.5 million, or 0.2%, from $326.5 million in
2023. This was primarily due to (i) higher average balances of total deposits, mainly in money market accounts and
time deposits, as well as, (ii) higher average rates on both total deposits and FHLB advances. These results were
partially offset by: (i) an increase of 22 basis points in the yield on total interest earning assets, which was partially
offset by the effect of higher non-performing assets during the period; (ii) increases of $238.9 million, or 22.7%,
$151.1 million, or 2.2%, and $100.3 million, or 31.1%, in the average balances of debt securities available for sale,
loans and deposits with banks, respectively, and (iii) lower average balances of FHLB advances. See “-Net interest
Income” for more details.
67
Noninterest income was $9.9 million in 2024, a decrease of $77.6 million, or 88.7%, compared to $87.5 million
in 2023. These results were mainly due to: (i) higher securities losses as a result of the Securities Repositioning in
2024; (ii) lower gains on the early extinguishment of advances from the FHLB in 2024 compared to 2023; and (iii)
having derivative losses in 2024 compared to having gains in 2023. These decreases were partially offset by: (i) the
gain on sale of the Houston Franchise; (ii) higher additional income stemming from BOLI policies following the
restructuring completed in the fourth quarter of 2023; (iii) higher other noninterest income; (iv) higher loan-level
derivative income; (v) higher cards and trade servicing fees; (vi) higher brokerage, advisory and fiduciary fees, and
(vii) higher deposits and service fees. See “-Noninterest Income” for more details.
Noninterest expense was $299.5 million in 2024, a decrease of $11.9 million, or 3.8%, from $311.4 million in
2023. These results were mainly due to: (i) lower losses on loans held for sale in 2024 compared to 2023; (ii) lower
telecommunications and data processing expenses; (iii) lower other operating expenses; (iv) lower contract
termination costs; and (v) lower occupancy and equipment expenses. These decreases were partially offset by: (i)
higher professional and other service fees; (ii) higher salary and employee benefits; (iii) an increase in OREO
expenses due to a $5.7 million valuation expense in 2024; (iv) higher advertising expenses; (v) higher FDIC
assessments and insurance expenses; and (vi) higher loan-level derivative expenses. See “-Noninterest Expense” for
more details.
In 2024, noninterest expense included non-routine items of $26.4 million, compared to $66.2 million in 2023.
Non-routine items in noninterest expense in 2024 include: (i) $13.9 million in losses in loans held for sale carried at
the lower cost or fair value; (ii) $5.7 million in other real estate owned valuation expense; and (iii) Houston Sale
Transaction expenses including: $3.4 million in fixed assets impairment as a result of market value adjustments;
$3.1 million in legal, broker fees and other costs, and $0.3 million in other intangible impairment charges. In 2023,
non-routine items in noninterest expense in 2023 included: (i) losses on loans held for sale which includes a
valuation expense of $35.5 million related to the transfer of the Houston CRE loan portfolio from loans held for
investment to loans held for sale and a total loss of $7.6 million, including a $5.6 million valuation expense and a
$2.0 million loss on sale, related to a New York-based CRE loan held for sale; (ii) a $2.6 million loss on sale of
repossessed assets in connection with our equipment-financing activities; (iii) a $2.0 million impairment charge on
an investment carried at cost and included as part of other assets; (iv) a $1.7 million goodwill and intangible
impairment charge in 2023; and (iv) $1.1 million in expenses related to the enhancement of BOLI during the fourth
quarter of 2023. There were no restructuring costs in 2024 while there were $15.6 million in 2023. See “Our
Company - Primary Factors Used to Evaluate Our Business” for detailed information on non-routine items in
noninterest expense.
In 2024 and 2023, we incurred $14.1 million and $14.4 million, respectively, in total noninterest expenses
related to Amerant Mortgage. These expenses included: (i) $10.7 million and $10.7 million in 2024 and 2023,
respectively, related to salaries and employee benefits expenses and (ii) $3.4 million and $3.7 million in 2024 and
2023, respectively, related to mortgage lending costs, professional fees and other noninterest expenses. As of
December 31, 2024, Amerant Mortgage had 80 FTEs compared to 67 FTEs at December 31, 2023.
68
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 years ended December 31, 2024, 2023 and 2022. 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 as well as the amortization of net premiums/discounts on loan purchases, accounted for as yield
adjustments. Average balances represent the daily average balances for the periods presented.
Interest-earning assets:
Loan portfolio, net (1) (2)
$ 7,157,991
$505,484
7.06 %
$7,006,919
$475,405
6.78 %
$5,963,190
$293,210
4.92 %
Debt securities available
for sale (3)(4)
1,291,974
57,631
4.46 %
1,053,034
43,096
4.09 %
1,112,590
33,187
2.98 %
Debt securities held to
maturity (5)
162,657
5,597
3.44 %
234,168
7,997
3.42 %
192,397
5,657
2.94 %
Debt securities held for
trading
—
—
— %
586
7
1.19 %
64
4
6.25 %
Equity securities with
readily determinable fair
value not held for trading
2,495
106
4.25 %
2,454
33
1.34 %
9,560
—
— %
Federal Reserve Bank
and FHLB stock
56,234
3,957
7.04 %
53,608
3,727
6.95 %
51,496
2,565
4.98 %
Deposits with banks
423,185
22,492
5.31 %
322,853
18,212
5.64 %
231,402
4,153
1.79 %
Other short-term
investments
6,348
322
5.07 %
2,115
102
4.80 %
—
—
— %
Total interest-earning
assets
9,100,884
595,589
6.54 %
8,675,737
548,579
6.32 %
7,560,699
338,776
4.48 %
Total non-interest-earning
assets (6)
790,919
776,484
626,989
Total assets
$ 9,891,803
$9,452,221
$8,187,688
Years Ended December 31,
2024
2023
2022
(in thousands, except
percentages)
Average
Balances
Income/
Expense
Yield/
Rates
Average
Balances
Income/
Expense
Yield/
Rates
Average
Balances
Income/
Expense
Yield/
Rates
69
Interest-bearing liabilities:
Checking and saving
accounts:
Interest bearing DDA
2,345,193
62,719
2.67 %
2,486,190
62,551
2.52 %
1,872,100
15,118
0.81 %
Money market
1,502,304
62,307
4.15 %
1,226,311
42,212
3.44 %
1,323,563
11,673
0.88 %
Savings
251,626
103
0.04 %
284,510
144
0.05 %
319,631
135
0.04 %
Total checking and saving
accounts
4,099,123
125,129
3.05 %
3,997,011
104,907
2.62 %
3,515,294
26,926
0.77 %
Time deposits
2,302,798
105,780
4.59 %
2,074,549
78,829
3.80 %
1,334,605
22,124
1.66 %
Total deposits
6,401,921
230,909
3.61 %
6,071,560
183,736
3.03 %
4,849,899
49,050
1.01 %
Securities sold under
agreements to repurchase
60
3
5.00 %
124
7
5.65 %
32
1
3.13 %
Advances from the FHLB
and other borrowings (7)
757,502
29,303
3.87 %
805,084
28,816
3.58 %
911,448
15,092
1.66 %
Senior notes
59,686
3,767
6.31 %
59,370
3,766
6.34 %
59,054
3,766
6.38 %
Subordinated notes
29,540
1,444
4.89 %
29,370
1,445
4.92 %
23,853
1,172
4.91 %
Junior subordinated
debentures
64,178
4,206
6.55 %
64,178
4,345
6.77 %
64,178
3,030
4.72 %
Total interest-bearing
liabilities
7,312,887
269,632
3.69 %
7,029,686
222,115
3.16 %
5,908,464
72,111
1.22 %
Non-interest-bearing
liabilities:
Non-interest bearing demand
deposits
1,461,940
1,356,538
1,286,570
Accounts payable, accrued
liabilities and other liabilities
324,932
325,367
243,105
Total non-interest-bearing
liabilities
1,786,872
1,681,905
1,529,675
Total liabilities
9,099,759
8,711,591
7,438,139
Stockholders' equity
792,044
740,630
749,549
Total liabilities and
stockholders' equity
$9,891,803
$9,452,221
$8,187,688
Excess of average interest-
earning assets over average
interest-bearing liabilities
$1,787,997
$1,646,051
$1,652,235
Net interest income
$325,957
$326,464
$266,665
Net interest rate spread
2.85 %
3.16 %
3.26 %
Net interest margin (8)
3.58 %
3.76 %
3.53 %
Cost of total deposits (9)
2.94 %
2.47 %
0.80 %
Ratio of average interest-
earning assets to average
interest-bearing liabilities
124.45 %
123.42 %
127.96 %
Average non-performing
loans/ average total loans
1.03 %
0.48 %
0.51 %
Years Ended December 31,
2024
2023
2022
(in thousands, except
percentages)
Average
Balances
Income/
Expense
Yield/
Rates
Average
Balances
Income/
Expense
Yield/
Rates
Average
Balances
Income/
Expense
Yield/
Rates
__________________
(1)
Includes loans held for investment net of the allowance for credit losses, and loans held for sale. The average balance of the allowance for
credit losses was $90.0 million, $90.0 million and $57.5 million in the years ended December 31, 2024, 2023 and 2022, respectively. The
average balance of total loans held for sale was $353.9 million, $77.8 million and $117.6 million in the years ended December 31, 2024,
2023 and 2022, respectively.
70
(2)
Includes average non-performing loans of $74.9 million, $34.3 million and $30.7 million for the years ended December 31, 2024, 2023 and
2022, respectively. Interest income that would have been recognized on outstanding non-performing loans at December 31, 2024, 2023 and
2022, was $3.9 million, $4.9 million and $0.8 million, respectively.
(3)
Includes the average balance of net unrealized gains and losses in the fair value of debt securities available for sale. The average balance
includes average net unrealized losses of $84.5 million, $118.5 million and $62.3 million in December 31, 2024, 2023, and 2022
respectively.
(4)
Includes nontaxable securities with average balances of $29.4 million, $17.8 million and $18.4 million for the years ended December 31,
2024, 2023 and 2022, respectively. The tax equivalent yield for these nontaxable securities was 4.45%, 4.83% and 3.00% for the years
ended December 31, 2024, 2023 and 2022, respectively. In 2024, 2023 and 2022, the tax equivalent yield was calculated by assuming a
21% tax rate and dividing the actual yield by 0.79.
(5)
Includes nontaxable securities with average balances of $35.2 million, $49.8 million and $43.6 million for the years ended December 31,
2024, 2023 and 2022, respectively. The tax equivalent yield for these nontaxable securities was 4.29%, 4.22% and 3.46% for the years
ended December 31, 2024, 2023 and 2022, respectively. In 2024, 2023 and 2022, the tax equivalent yield was calculated assuming a 21%
tax rate and dividing the actual yield by 0.79.
(6)
Excludes the allowance for credit losses.
(7)
The terms of the advance agreement require the Bank to maintain certain investment securities or loans as collateral for these advances.
(8)
Net interest margin 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.
(9)
Calculated based upon the average balance of total noninterest bearing and interest bearing deposits.
71
Interest Rates and Operating Interest Differential
Increases and decreases in interest income and interest expense result from changes in average balances
(volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest rates. In this
table, we present for the periods indicated, the changes in interest income and the changes in interest expense
attributable to the changes in interest rates and the changes in the volume of interest-earning assets and interest-
bearing liabilities. For each category of assets and liabilities, information is provided on changes attributable to:
(i) change in volume (change in volume multiplied by prior year rate); (ii) change in rate (change in rate multiplied
by prior year volume); and (iii) change in both volume and rate which is allocated to rate. See “Risk Factors— Our
profitability is subject to interest rate risk.”
Increase in Net Interest Income
2024 vs 2023
2023 vs 2022
Attributable to
Attributable to
(in thousands)
Volume
Rate
Total
Volume
Rate
Total
Interest income attributable to:
Loan portfolio, net
$
10,243
$
19,836
$
30,079
$
51,351
$
130,844
$
182,195
Debt securities available for sale
9,773
4,762
14,535
(1,775)
11,684
9,909
Debt securities held to maturity
(2,446)
46
(2,400)
1,228
1,112
2,340
Debt securities held for trading
(7)
—
(7)
33
(30)
3
Equity securities with readily determinable fair
value not held for trading
1
72
73
—
33
33
Federal Reserve Bank and FHLB stock
183
47
230
105
1,057
1,162
Deposits with banks
5,659
(1,379)
4,280
1,637
12,422
14,059
Other short-term investments
203
17
220
102
—
102
Total interest-earning assets
$
23,609
$
23,401
$
47,010
$
52,681
$
157,122
$
209,803
Interest expense attributable to:
Checking and saving accounts:
Interest bearing demand
$
(3,553)
$
3,721
$
168
$
4,974
$
42,459
$
47,433
Money market
9,494
10,601
20,095
(856)
31,395
30,539
Savings
(16)
(25)
(41)
(14)
23
9
Total checking and saving accounts
5,925
14,297
20,222
4,104
73,877
77,981
Time deposits
8,673
18,278
26,951
12,283
44,422
56,705
Total deposits
14,598
32,575
47,173
16,387
118,299
134,686
Securities sold under agreements to repurchase
(4)
—
(4)
3
3
6
Advances from the FHLB and other borrowings
(1,703)
2,190
487
(1,766)
15,490
13,724
Senior notes
20
(19)
1
20
(20)
—
Subordinated notes
8
(9)
(1)
271
2
273
Junior subordinated debentures
—
(139)
(139)
—
1,315
1,315
Total interest-bearing liabilities
$
12,919
$
34,598
$
47,517
$
14,915
$
135,089
$
150,004
Increase (Decrease) in net interest income
$
10,690
$
(11,197)
$
(507)
$
37,766
$
22,033
$
59,799
72
In March 2022, the Federal Reserve increased its benchmark interest rate by 25 basis points as a key tool to help
reduce inflationary pressures. This first increase was followed by six additional increases in the Federal Reserve’s
benchmark interest rate which resulted in a total increase of 425 basis in 2022. In 2023, there were four additional
increases in the Federal Reserve benchmark interest rate, which resulted in a total increase of 100 basis points in
2023. Meanwhile, in 2024, the Federal Reserve cut the benchmark interest rate three times during the year which
resulted in a decrease of 100 basis points in 2024.
In 2024 we had higher average balance of loans compared to the same period last year, which we attribute to
our relationship-driven culture. In addition, although we have an asset sensitive position, we partially offset the
decrease in rates via repricing of the deposits and the loan production during 2024. See discussions further below for
more details.
Net interest income
2024 compared to 2023
In 2024, net interest income was $326.0 million, a decrease of $0.5 million, or 0.2%, from $326.5 million in
2023. This was mainly driven by: (i) higher average balances of total deposits, mainly in money market accounts
and time deposits; and (ii) higher average rates on both total deposits and FHLB advances. These results were
partially offset by: (i) an increase of 22 basis points in the yield on total interest earning assets; (ii) increases of
$238.9 million, or 22.7%, $151.1 million, or 2.2%, and $100.3 million, or 31.1%, in the average balances of debt
securities available for sale, loans and deposits with banks, respectively, and (iii) lower average balances of FHLB
advances. Net interest margin was 3.58% in 2024, a decrease of 18 basis points from 3.76% in 2023. See
discussions further below for more details.
Interest Income. Total interest income was $595.6 million in 2024, an increase of $47.0 million, or 8.6%
compared to $548.6 million in 2023. This was primarily driven by a 22 basis points increase in the average yield on
total interest earning assets. In addition, there were increases of $238.9 million, or 22.7%, $151.1 million, or 2.2%
and $100.3 million, or 31.1% in the average balances of debt securities available for sale, loans and deposits with
banks, respectively. The increases were partially offset by a decrease in the average balance of debt securities held
to maturity. See “—Average Balance Sheet, Interest and Yield/Rate Analysis” for detailed information.
Interest income on loans in 2024 was $505.5 million, an increase of $30.1 million, or 6.3%, compared to $475.4
million in 2023. This result was primarily due to (i) a 28 basis points increase in average yields, mainly attributable
to higher market rates, partially offset by higher non-performing loans in the period, and (ii) an increase of $151.1
million, or 2.2%, in the average balance of loans compared to 2023. The increase in the average balance of loans
includes: (i) originations of and purchases of single-family residential and construction loans through Amerant
Mortgage and (ii) origination of commercial loans. The increase in average balance of loans was partially offset by
the decrease in higher yielding indirect consumer loans. See “-Average Balance Sheet, Interest and Yield/Rate
Analysis” for detailed information.
Interest income on debt securities available for sale was $57.6 million in 2024, an increase of $14.5 million, or
33.7%, compared to $43.1 million in 2023. This was mainly due to: (i) an increase of 37 basis points in average
yields, primarily driven by higher market rates obtained through new purchases during the year and (ii) an increase
of $238.9 million, or 22.7%, in the average balance of these securities. In 2024, the average balance of accumulated
net unrealized loss included in the carrying value of these securities was $84.5 million compared to $118.5 million
in 2023. As of December 31, 2024, we no longer have corporate debt securities as part of the available-for-sale
portfolio, compared to 26.5% at December 31, 2023. We continue with our strategy to insulate the investment
portfolio from prepayment risk. As of December 31, 2024, floating rate investments represent 16.8% of our total
investment portfolio compared to 13.3% at December 31, 2023. In addition, the overall duration slightly increased to
5.2 years at December 31, 2024 from 5.0 years at December 31, 2023, which was primarily due to our model
anticipating slower mortgage-backed securities prepayments due to higher market rates. See “Average Balance
Sheet, Interest and Yield/Rate Analysis” for detailed information.
73
Interest income on debt securities held to maturity was $5.6 million in 2024, a decrease of $2.4 million, or
30.0%, compared to $8.0 million in 2023. This was mainly due to a decrease of $71.5 million, or 30.5% in the
average balance of these securities in 2024 compared to 2023, as the Company no longer carried these types of debt
securities following the Securities Repositioning in 2024. The decrease was partially offset by an increase of 2 basis
points in average yields, primarily driven by higher market rates.
Interest Expense. Interest expense was $269.6 million in 2024, an increase of $47.5 million, or 21.4%,
compared to $222.1 million in 2023. This was primarily due to: (i) higher cost of total deposits and FHLB advances.
In addition, there was an increase of $283.2 million, or 4.0% in the average balance of total interest bearing
liabilities, mainly money market accounts and time deposits.
Interest expense on interest-bearing deposits was $230.9 million in 2024, an increase of $47.2 million or 25.7%,
compared to $183.7 million in 2023. This increase was mainly driven by an increase of 58 basis points in the
average rates paid on total interest-bearing deposits, and an increase of $330.4 million, or 5.4%, in their average
balance. See below for a detailed explanation of changes by major deposit category:
•
Time deposits. Interest expense on total time deposits increased $27.0 million, or 34.2%, in 2024 compared
to 2023. This was mainly driven by an increase of 79 basis points in the average cost of total time deposits.
In addition, there was an increase of $228.2 million, or 11.0%, in the average balance of these deposits,
which includes an increase of $210.1 million in customer certificates of deposits (“CDs”) and $18.1 million
in brokered time deposits.
•
Interest bearing checking and savings accounts. Interest expense on total interest bearing checking and
savings accounts increased $20.2 million, or 19.3%, in 2024 compared to 2023, mainly due to an increase
of 43 basis points in the average costs of these deposits. In addition, there was an increase of $102.1
million, or 2.6% in the average balance of total interest bearing checking and savings accounts in 2024
compared to 2023, mainly driven by higher average domestic personal accounts. These increases in average
balances were partially offset by a net decrease of $27.1 million, or 1.4%, in the average balance of
international core deposit accounts, including a decrease of $138.9 million or 9.1% in international personal
accounts, partially offset by an increase of $111.8 million, or 24.5%, in international commercial accounts.
Interest expense on FHLB advances increased $0.5 million, or 1.7%, in 2024 compared to 2023, mainly due to
an increase of 29 basis points in the average rate paid on these borrowings. The increase was offset by $47.6 million
or 5.9%, lower average balance on this funding source. In 2024, the Company borrowed $1.5 billion and repaid
$1.4 billion of advances from the FHLB, including early repayments. See "Capital Resources and Liquidity
Management” for more details on the early repayment of advances from the FHLB.
74
Analysis of the Allowance for Credit Losses
Set forth in the table below are the changes in the allowance for loan losses for each of the periods presented.
Balance at the beginning of the period...................................... $
95,504
$
83,500
$
69,899
$
110,902
$
52,223
Cumulative effect of adoption of accounting principle (1) ......
—
—
18,674
—
—
Charge-offs
Real estate loans
Commercial real estate (CRE)
Nonowner occupied..................................................... $
—
$
(90)
$
(3,852)
$
(11,062)
$
—
Multi-family residential...............................................
(599)
(10,328)
—
—
—
(599)
(10,418)
(3,852)
(11,062)
—
Single-family residential ......................................................
—
(39)
(14)
(218)
(27)
Owner occupied....................................................................
—
—
—
—
(75)
(599)
(10,457)
(3,866)
(11,280)
(102)
Commercial ...................................................................................
(51,326)
(21,395)
(9,114)
(13,227)
(29,917)
Consumer and others.....................................................................
(24,430)
(28,013)
(9,126)
(3,273)
(842)
Total Charge-offs (2)................................................................... $
(76,355)
$
(59,865)
$
(22,106)
$
(27,780)
$
(30,861)
Recoveries
Real estate loans
Commercial real estate (CRE)
Nonowner occupied..................................................... $
—
$
119
$
—
$
—
$
—
Multi-family residential...............................................
112
—
—
—
—
Land development and construction loans..................
62
177
47
125
—
174
296
47
125
—
Single-family residential ......................................................
46
95
199
131
120
Owner occupied....................................................................
17
—
—
—
—
237
391
246
256
120
Commercial ...................................................................................
5,092
9,904
2,685
2,613
443
Consumer and others.....................................................................
2,865
1,397
157
408
357
Total Recoveries (3)..................................................................... $
8,194
$
11,692
$
3,088
$
3,277
$
920
Net charge-offs .............................................................................
(68,161)
(48,173)
(19,018)
(24,503)
(29,941)
Provision for (reversal of) credit losses - loans.............................
57,620
60,177
13,945
(16,500)
88,620
Balance at the end of the period................................................. $
84,963
$
95,504
$
83,500
$
69,899
$
110,902
Years Ended December 31,
(in thousands)
2024
2023
2022
2021
2020
______________
(1) Amounts reflect impact of the adoption of CECL effective January 1, 2022. See Note 1 to our audited annual consolidated financial
statements in the 2023 Form 10-K for details on the adoption of the new accounting standard on estimating expected credit losses on
financial instruments (CECL).
(2)
In the year ended December 31, 2020, includes total charge-offs of $0.3 million related to international loans. There were no significant
charge-offs related to international loans in all of the other periods shown.
(3)
Total recoveries related to international loans in the years ended December 31, 2023, 2022, 2021, 2020 were $5.1 million, $1.0 million, $0.9
million, $0.4 million, respectively. There were no recoveries related to international loans in the year ended December 31, 2024.
75
2024 compared to 2023
The Company recorded a provision for credit losses on loans of $57.6 million in 2024, compared to $60.2
million in 2023. The $57.6 million provision for credit losses on loans includes $41.1 million to cover charge-offs,
$16.7 million in new specific reserves for non-performing loans and $8.1 million due to loan composition and
volume changes. These provision requirements were partially offset by a release of $3.9 million due to credit quality
and macroeconomic factor updates and a $4.4 million release due to the Houston loan portfolio classification as
held-for-sale.
In 2024, total charge-offs totaled $76.4 million, an increase of $16.5 million, or 27.5% compared to $59.9
million in 2023. Charge-offs in 2024 included: (i) $39.6 million related to seven commercial loans; (ii) $24.4 million
related to multiple consumer and overdraft loans, primarily purchased indirect consumer loans, and (iii) $12.4
million in connection with multiple smaller commercial and real estate loans. Charge-offs in 2024 were partially
offset by $8.2 million in recoveries, which include $4.2 million related to three commercial loans, $2.6 million
related to purchased indirect consumer loans, and $1.4 million related to multiple commercial and consumer loan
recoveries.
In 2023, charge-offs included: (i) $28.1 million related to multiple consumer loans, primarily purchased indirect
consumer loans; (ii) $10.3 million related to one CRE New York-based multifamily loan; (iii) $7.0 million related to
a transportation industry commercial loan relationship that was transferred to other repossessed assets in the first
quarter of 2023 and subsequently sold in the second quarter of 2023; (iv) $8.0 million related to four commercial
loans ranging between $1 million to $3 million; and (v) $6.5 million in connection with multiple smaller commercial
and real estate loans. Charge-offs in 2023 were partially offset primarily by: (i) $5.1 million recovery from a
commodity trader charged-off in 2017; (ii) a $3.1 million recovery from a Miami-based U.S. coffee trader (“the
Coffee Trader”) charged-off in the previous year; (iii) $1.4 million recovery from purchased consumer loans; and
(iv) the remaining $2.1 million is due to smaller multiple recoveries. The ratio of net charge-offs over the average
total loan portfolio held for investment was 0.99% in 2024 compared to 0.69% in 2023.
We proactively and carefully monitor the Company’s credit quality practices, including examining and
responding to patterns or trends that may arise across certain industries or regions.
76
Noninterest Income
The table below sets forth a comparison for each of the categories of noninterest income for the periods presented.
Years Ended December 31,
Change
(in thousands, except
percentages)
2024
2023
2022
2024 vs 2023
2023 vs 2022
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Deposits and service fees
$ 20,156
203.4 %
$ 19,376
22.1 %
$ 18,592
27.6 %
$
780
4.0 %
$
784
4.2 %
Brokerage, advisory and
fiduciary activities
17,984
181.5 %
17,057
19.5 %
17,708
26.3 %
927
5.4 %
(651)
(3.7)%
Loan-level derivative income (1)
7,044
71.1 %
4,580
5.2 %
10,360
15.4 %
2,464
53.8 %
(5,780)
(55.8)%
Change in cash surrender value
of bank owned life insurance
(BOLI)(2)
9,280
93.7 %
5,173
5.9 %
5,406
8.0 %
4,107
79.4 %
(233)
(4.3)%
Cards and trade finance
servicing fees
5,514
55.6 %
3,067
3.5 %
2,276
3.4 %
2,447
79.8 %
791
34.8 %
Securities (losses) gains, net (3)
(76,855)
(775.6)%
(10,989)
(12.6)%
(3,689)
(5.5)%
(65,866)
599.4 %
(7,300)
197.9 %
Gain (loss) on early
extinguishment of FHLB
advances, net
1,617
16.3 %
40,084
45.8 %
10,678
15.9 %
(38,467)
(96.0)%
29,406
275.4 %
Derivatives gains (losses,) net (4)
(196)
(2.0)%
28
— %
455
0.7 %
(224)
(800.0)%
(427)
(93.8)%
Gain on sale of Houston
Franchise
12,636
127.5 %
—
— %
—
— %
12,636
— %
—
— %
Other noninterest income (5)
12,729
128.5 %
9,120
10.6 %
5,491
8.2 %
3,609
39.6 %
3,629
66.1 %
Total noninterest income
$
9,909
100.0 %
$ 87,496
100.0 %
$ 67,277
100.0 %
$(77,587)
(88.7)%
$ 20,219
30.1 %
__________________
(1)
Income from interest rate swaps and other derivative transactions with customers. The Company incurred expenses related to derivative
transactions with customers which are included as part of noninterest expenses under loan-level derivative expense. See Noninterest
Expense section for more details.
(2)
Changes in cash surrender value of BOLI are not taxable.
(3)
Amounts are primarily in connection with net losses and gains on the sale of debt securities available for sale. In 2024, includes a total net
loss of $76.7 million as a result of the Securities Repositioning.
(4)
Net unrealized gains and losses related to uncovered interest rate caps with clients.
(5)
Includes: (i) mortgage banking income of $6.9 million, $4.5 million and $3.4 million in 2024, 2023 and 2022, respectively, primarily
consisting of net gains on sale, valuation and derivative transactions associated with mortgage loans held for sale activity, and other smaller
sources of income related to the operations of Amerant Mortgage and (ii) $0.5 million in BOLI death benefits received in 2024. Other
sources of income in the periods shown include income from foreign currency exchange transactions with customers and valuation income
on the investment balances held in the non-qualified deferred compensation plan.
2024 compared to 2023
Total noninterest income decreased $77.6 million, or 88.7%, in 2024 compared to 2023. These results were
mainly due to: (i) higher securities losses as a result of the Securities Repositioning in 2024; (ii) lower gains on
the early extinguishment of advances from the FHLB in 2024 compared to 2023; and (iii) having derivative
losses in 2024 compared to having gains in 2023. These decreases were partially offset by: (i) gain on sale of
the Houston Franchise; (ii) higher additional income stemming from BOLI policies following the restructuring
completed in the fourth quarter of 2023; (iii) higher other noninterest income; (iv) higher loan-level derivative
income; (v) higher cards and trade servicing fees; (vi) higher brokerage, advisory and fiduciary fee; and (vii)
higher deposits and service fees.
In 2024, the Company recorded total net gains of $1.6 million on the early extinguishment of approximately
$814 million of FHLB advances. In 2023, the Company recorded total net gains of $40.1 million on the early
extinguishment of approximately $1.7 billion of FHLB advances.
Other noninterest income increased $3.6 million, or 39.6%, in 2024 compared to 2023, primarily driven by: (i)
an increase of $2.3 million or 50.8% in mortgage banking income compared to 2023, and (ii) other combined
77
smaller sources of income of approximately $1.7 million. These increases were offset by lower foreign currency
valuation of approximately $0.4 million.
Cards and trade finance servicing fees increased $2.4 million, or 79.8%, in 2024 compared to 2023, mainly
driven by higher debit cards interchange fee income.
Deposits and service fees increased $0.8 million, or 4.0%, in 2024 compared to 2023, mainly driven by higher
service charge fee income and higher wire transfer fees.
In the third quarter of 2024, the Company initiated a repositioning of the Company’s securities portfolio (the
“Securities Repositioning”), which resulted in the Company recording a total pre-tax loss of approximately
$68.5 million in the third quarter of 2024. The Company then completed the Securities Repositioning in October
2024, which resulted in an additional pre-tax loss on sale of approximately $8.1 million. See Note 3 - Securities for
additional information on the Company’s securities portfolio. In May 2023, the Company sold a portion of its
investment in a corporate debt security held for sale issued by a financial institution, to reduce single point exposure.
The Company received proceeds of $0.8 million and realized a pre-tax loss of $1.2 million in connection with this
transaction. Additionally, on March 27, 2023, the Company sold one corporate debt security held for sale issued by
Signature Bank, N.A in an open market transaction, and realized a pretax loss on sale of approximately $9.5 million
in connection with this transaction. See “Securities” for additional information.
Loan-level derivative income increased $2.5 million, or 53.8%, in 2024 compared to 2023, mainly driven by
higher volume of derivative transactions with clients in 2024 compared to 2023.
Brokerage, advisory and fiduciary activity fees increased $0.9 million, or 5.4%, in 2024 compared to 2023,
primarily driven by: (i) higher brokerage fees as a result higher trading volumes and (ii) higher advisory income
driven by higher market valuations.
Our AUM totaled $2.9 billion at December 31, 2024, an increase of $600.9 million, or 26.3%, from $2.3 billion
at December 31, 2023, primarily driven by net new assets as we added a large trust relationship, as well as to
increased market valuations, though to a lesser extent.
78
Noninterest Expense
The table below presents a comparison for each of the categories of noninterest expense for the periods
presented.
Years Ended December 31,
Change
(in thousands, except
percentages)
2024
2023
2022
2024 vs 2023
2023 vs 2022
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Salaries and employee benefits (1)
$ 137,082
45.8 %
$ 133,506
42.9 %
$ 123,510
51.2 %
$ 3,576
2.7 %
$
9,996
8.1 %
Occupancy and equipment (2)(3)
27,127
9.1 %
27,843
8.9 %
27,393
11.3 %
(716)
(2.6)%
450
1.6 %
Professional and other services
fees (4)
51,088
17.1 %
34,569
11.1 %
22,142
9.2 %
16,519
47.8 %
12,427
56.1 %
Telecommunications and data
processing
12,223
4.1 %
15,485
5.0 %
14,735
6.1 %
(3,262)
(21.1)%
750
5.1 %
Loan-level derivative expense(5)
2,420
0.8 %
1,910
0.6 %
8,146
3.4 %
510
26.7 %
(6,236)
(76.6)%
Depreciation and amortization(6)
6,600
2.2 %
6,842
2.2 %
5,883
2.4 %
(242)
(3.5)%
959
16.3 %
FDIC assessments and insurance
11,575
3.9 %
10,601
3.4 %
6,598
2.7 %
974
9.2 %
4,003
60.7 %
Losses on loans held for sale
carried at the lower cost or fair
value(7)
13,900
4.6 %
43,057
13.8 %
159
0.1 %
(29,157)
(67.7)%
42,898
N/M
Other real estate owned and
repossessed assets (income)
expense, net (8)(9)
4,837
1.6 %
2,092
0.7 %
3,408
1.4 %
2,745
131.2 %
(1,316)
(38.6)%
Contract termination costs (10)
—
— %
1,550
0.5 %
7,103
2.9 %
(1,550)
(100.0)%
(5,553)
(78.2)%
Advertising expenses
14,492
4.8 %
12,811
4.1 %
11,620
4.8 %
1,681
13.1 %
1,191
10.2 %
Other operating expenses (11)
18,146
6.0 %
21,089
6.8 %
10,716
4.5 %
(2,943)
(14.0)%
10,373
96.8 %
Total noninterest expenses (12)
$ 299,490
100.0 %
$ 311,355
100.0 %
$ 241,413
100.0 %
$(11,865)
(3.8)%
$ 69,942
29.0 %
____________
(1)
In 2024, includes additional compensation in connection with the Houston Sale Transaction. Includes severance expense of $4.0 million and
$3.0 million in 2023 and 2022, respectively, in connection with staff reduction costs primarily related to organizational rationalization.
(2)
In 2024, includes fixed assets impairment charge of $3.4 million in connection with the Houston Sale Transaction. In 2023, includes a rent
termination fee of $0.3 million in connection with the closure of a branch in Houston, Texas, as well as an aggregate of $1.1 million related
to ROU asset impairments in connection with the closure of two branches in 2023 (one branch in Miami, FL and another branch in Houston,
Texas). In 2022, includes ROU asset impairment charges of $1.6 million, in connection with the closure of a branch in Pembroke Pines, FL
in 2022. In addition, in 2022, includes lease termination expenses associated with the closure of a branch in Fort Lauderdale, FL in 2021.
(3)
Beginning in 2022, rental income associated with the subleasing of portions of the Company’s headquarters building is presented as a
reduction to rent expense under lease agreements under occupancy and equipment cost. In addition, in 2022 we had additional rental income
in connection with the sublease of the NYC office space. Total rental income from subleases was $3.3 million in 2022.
(4)
Includes $0.4 million in legal expenses in connection with the Houston Sale Transaction in 2024. In 2023, includes additional, nonrecurrent
expenses of $5.8 million related to the engagement of FIS. Also in 2022, includes $0.2 million in connection with certain search and
recruitment expenses and $0.1 million of costs associated with the subleasing of the New York office space and an aggregate of $0.4 million
in other non-routine expenses in 2022. Lastly, includes recurring service fees in connection with the engagement of FIS in 2024 and 2023.
(5)
Includes service fees in connection with our loan-level derivative income generation activities.
(6)
In 2023, includes a charge of $0.9 million for the accelerated depreciation of leasehold improvements in connection with the closure of a
branch in Miami, FL in 2023.
(7)
In 2024 and 2023, consists of losses on loans held for sale carried at the lower of cost or fair value, including valuation allowance as a result
of changes in their fair value and losses on the sale of these loans.
(8)
In 2023, includes a loss on sale of repossessed assets in connection with our equipment-financing activities of $2.6 million. In 2022,
includes $3.4 million related to the fair value adjustments of one other real estate owned (“OREO”) property in New York. In addition,
includes OREO rental income of $1.8 million and $1.3 million in 2024 and 2023, respectively.. We had no OREO rental income in 2022.
(9)
Beginning in 2023, OREO and repossessed assets expense is presented separately in the Company’s consolidated statement of operations
and comprehensive (loss) income. In 2022, while OREO valuation expense was presented separately, all other OREO-related expenses were
presented as part of other operating expenses in the Company’s consolidated statement of operations and comprehensive (loss) income. We
had no other repossessed assets in 2022.
(10) Contract terminations and related costs associated with third party vendors resulting from the Company’s transition to our new technology
provider.
(11) In 2024, includes broker fees of $1.3 million in connection with the Houston Sale Transaction. In 2023, includes goodwill and intangible
assets impairments totaling $1.7 million related to two of our subsidiaries (Amerant Mortgage and the Cayman Bank). Also in 2023,
79
includes additional costs of $1.1 million in connection with the restructuring of the Company’s BOLI as well as an impairment charge of
$2.0 million related to an investment carried at cost and included in other assets. In all of the periods shown, includes mortgage loan
origination and servicing expenses, charitable contributions, community engagement, postage and courier expenses, debits which mirror the
valuation income on the investment balances held in the non-qualified deferred compensation plan in order to adjust our liability to
participants of the deferred compensation plan and other smaller expenses.
(12) Includes $14.1 million, $14.4 million and $12.5 million in 2024, 2023 and 2022, respectively, related to mortgage banking activities,
primarily consisting of salaries and employee benefits, mortgage lending costs and professional and other services fees.
NM Means not meaningful
2024 compared to 2023
Noninterest expense decreased $11.9 million, or 3.8%, in 2024 compared to 2023, mainly due to: (i) lower
losses on loans held for sale in 2024 compared to 2023; (ii) lower telecommunications and data processing expenses;
(iii) lower other operating expenses; (iv) lower contract termination costs; and (v) lower occupancy and equipment
expenses. These decreases were partially offset by: (i) higher professional and other service fees; (ii) higher salary
and employee benefits; (iii) an increase in OREO expenses due to a $5.7 million valuation expense in 2024; (iv)
higher advertising expenses; (v) higher FDIC assessments and insurance expenses; and (vi) higher loan-level
derivative expenses.
Professional and other services fees increased $16.5 million, or 47.8%, in 2024 compared to 2023, primarily
driven by recurring fees in connection with the current technology provider (FIS), as well as higher legal fees across
various projects. This was partially offset by lower consulting and other professional fees that were nonrecurrent
related to FIS.
Other operating expenses decreased $2.9 million, or 14.0%, in 2024 compared to 2023 , mainly driven by: (i)
lower business development expenses and the absence in 2024 of investments and goodwill impairments that were
recorded in 2023. The decrease was partially offset by broker fees of $1.3 million recorded in 2024 related to the
Houston Sale Transaction.
Salaries and employee benefits increased $3.6 million, or 2.7%, in 2024 compared to 2023 mainly driven by:
(i) salary increases mainly in connection with new hires in 2024; (ii) higher compensation expense in connection
with the Houston Sale Transaction, and (iii) higher insurance and benefit plans. These were partially offset by: (i)
lower severance expenses in 2024 compared to last year, and (ii) a decrease in long-term incentive compensation.
FDIC assessments and insurance increased $1.0 million, or 9.2%, in 2024 compared to 2023, primarily driven
by higher FDIC assessment rates and higher average assets.
Advertising expenses increased $1.7 million, or 13.1%, in 2024 compared to 2023, mainly due to higher
expenses resulting from advertising campaigns based on promotional agreements with professional sports teams.
Depreciation and amortization expense decreased $0.2 million, or 3.5%, in 2024 compared to 2023. This was
mainly due to 2023 having higher computer hardware, signage and building depreciation expenses.
Telecommunication and data processing expenses decreased $3.3 million, or 21.1%, in 2024 compared to 2023,
primarily due to (i) 2023 having additional expenses related to the write off of in-development software, (ii) less
long distance usage in 2024 vs 2023, and (iii) lower ATM processing fees.
Loan-level derivative expense increased $0.5 million, or 26.7%, in 2024 compared to 2023, mainly driven by
expenses in connection with the unwinding of the swap on a non-performing loan sold.
Other real estate owned and repossessed assets expense increased $2.7 million, or 131.2%, in 2024 compared to
2023. In 2024, we recorded a valuation allowance on an OREO property of approximately $5.7 million, partially
offset by $1.8 million in OREO rental income. In 2023, we had $2.6 million in loss on sale of repossessed assets and
other real estate valuation expenses which was offset by $1.3 million in OREO rental income in 2023. .
80
Income Taxes
The table below sets forth information related to our income taxes for the periods presented.
(in thousands, except percentages)
Years Ended December 31,
Change
2024
2023
2022
2024 vs 2023
2023 vs 2022
(Loss) Income before income tax
(benefit) expense
$ (24,084)
$ 41,328
$ 78,584
$ (65,412)
(158.3)%
$
(37,256)
(47.4)%
Current tax expense (benefit):
Federal
(755)
19,768
15,609
(20,523)
(103.8)%
4,159
26.6 %
State
726
1,313
1,116
(587)
(44.7)%
197
17.7 %
(29)
21,081
16,725
(21,110)
(100.1)%
4,356
26.0 %
Deferred tax benefit
(8,303)
(10,542)
(104)
2,239
(21.2)%
(10,438)
NM
Income tax (benefit) expense
$
(8,332)
$ 10,539
$ 16,621
$ (18,871)
(179.1)%
$
(6,082)
(36.6)%
Effective income tax rate
34.60 %
25.50 %
21.15 %
9.10 %
35.7 %
4.35 %
20.6 %
______________
NM - means not meaningful
2024 compared to 2023
We recorded an income tax benefit of $8.3 million in 2024 compared to a $10.5 million expense in 2023. The
income tax benefit in 2024 resulted from the net loss reported in 2024, while the expense in 2023 was mainly driven
by the net income before income taxes in 2023. However, there was a higher effective tax rate in 2024 compared to
2023, primarily driven by higher state and federal income tax benefit in 2024 as a result of net operating losses in
2024 which are carried forward to future years, as well as higher non-taxable BOLI income in 2024 vs 2023. Income
tax expense in 2023 included an additional tax expense of $2.8 million in connection with the BOLI restructuring
completed in 2023.
As of December 31, 2024, the Company’s net deferred tax asset was $53.5 million, a decrease of $2.1 million,
or 3.8% compared to $55.6 million as of December 31, 2023. This decrease was mainly driven by the tax effects of:
(i) a decrease in net unrealized holding losses on debt securities available for sale in 2024 primarily in connection
with the Securities Repositioning, and (ii) a decrease of $35.5 million in the valuation allowance of loans held for
sale carried at the lower of cost or fair value as loans were sold in 2024. These changes were partially offset
primarily by the tax effect of federal and state net operating losses in 2024 which can be carried forward indefinitely
and the Company believes it is more likely than not that the tax benefit will be realized.
81
Non-GAAP Financial Measures
The Company supplements its financial results that are determined in accordance with Generally Accepted
Accounting Principles (GAAP) with non-GAAP financial measures, such as “pre-provision net revenue (PPNR)”,
“core pre-provision net revenue (Core PPNR)”, “core noninterest income” and “core noninterest expenses”,
“tangible stockholders’ equity (book value) per common share”, “tangible common equity ratio, adjusted for net
unrealized accumulated losses on debt securities held to maturity”, and “tangible stockholders' equity (book value)
per common share, adjusted for net unrealized accumulated losses on debt securities held to maturity”. This
supplemental information is not required by or is not presented in accordance with GAAP. The Company refers to
these financial measures and ratios as “non-GAAP financial measures” and they should not be considered in
isolation or as a substitute for the GAAP measures presented herein.
We use certain non-GAAP financial measures, including those mentioned above, both to explain our results to
shareholders and the investment community and in the internal evaluation and management of our businesses. Our
management believes that these non-GAAP financial measures and the information they provide are useful to
investors since these measures permit investors to view our performance using the same tools that our management
uses to evaluate our past performance and prospects for future performance, especially in light of the additional costs
we have incurred in connection with the Company’s restructuring activities that began in 2018 and continued in
2024, and including the effect of non-core banking activities such as the sale of loans and securities (including the
Securities Repositioning in 2024) and other repossessed assets, the valuation of securities, derivatives, loans held for
sale and other real estate owned and repossessed assets, the early repayment of FHLB advances, impairment of
investments, Bank-owned life insurance restructure, and other non-routine actions intended to improve customer
service and operating performance, as well as certain non-routine items recorded in 2024 in connection with the
Houston Sale Transaction. 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.
82
The following table is a reconciliation of the Company’s PPNR and Core PPNR, non GAAP financial measures,
as of the dates presented:
December 31,
(in thousands)
2024
2023
2022
Net (loss) income attributable to Amerant Bancorp Inc.
$
(15,752) $
32,490 $
63,310
Plus: provision for credit losses (1)
60,460
61,277
13,945
Plus: provision for income tax (benefit) expense
(8,332)
10,539
16,621
Pre-provision net revenue (PPNR)
$
36,376
$
104,306 $
93,876
Plus: non-routine noninterest expense items
26,382
66,152
18,970
Plus (less): non-routine noninterest income items
62,798
(28,468)
(7,367)
Core pre-provision net revenue (Core PPNR)
$
125,556
$
141,990 $
105,479
Non-routine noninterest income items:
Derivative (losses) gains, net
(196)
28
455
Securities losses, net (2)
(76,855)
(10,989)
(3,689)
Bank owned life insurance charge (3)
—
(655)
—
Gain on sale of Houston Franchise (11)
12,636
—
—
Gain on early extinguishment of FHLB advances, net
1,617
40,084
10,678
Loss on sale of loans
$
—
$
— $
(77)
Total non-routine noninterest income items
$
(62,798) $
28,468 $
7,367
Non-routine noninterest expense items:
Restructuring costs (4)
Staff reduction costs (5)
$
—
$
4,006 $
3,018
Contract termination costs (6)
—
1,550
7,103
Consulting and other professional fees and software expenses (7)
—
6,379
3,625
Digital transformation expenses
—
—
45
Disposition of fixed assets (8)
—
1,419
—
Branch closure and related charges (9)
—
2,279
1,612
Total restructuring costs
$
—
$
15,633 $
15,403
Other non-routine noninterest expense items:
Losses on loans held for sale carried at the lower cost or fair value (10)(11)
$
13,900
$
43,057 $
159
Other real estate owned valuation expense (12)
5,672
2,649
3,408
Goodwill and intangible assets impairment (11)
300
1,713
—
Fixed assets impairment (11)(13)
3,443
—
—
Legal, broker fees, and other costs (11)
3,067
—
—
Bank owned life insurance enhancement costs (3)
—
1,137
—
Impairment charge on investment carried at cost
—
1,963
—
Total non-routine noninterest expense items
$
26,382
$
66,152 $
18,970
(1)
In 2024, includes $57.6 million of provision for credit losses on loans and $2.8 million on unfunded commitments (contingencies). In 2023,
provision for credit losses on loans was $60.2 million and $1.1 million on unfunded commitments (contingencies). In 2022, provision for
credit losses on loans was $13.9 million, while there was no provision on unfunded commitments (contingencies).
(2)
In the third quarter of 2024, the Company executed an investment portfolio repositioning which resulted in a total pre-tax net loss of
$68.5 million during the same period. The investment portfolio repositioning was completed in early October 2024 resulting in an additional
$8.1 million in losses in the fourth quarter of 2024.
(3)
In 2023, the Company completed a restructuring of its bank-owned life insurance (“BOLI”) program. This was executed through a
combination of a 1035 exchange and a surrender and reinvestment into higher-yielding general account with a new investment grade
insurance carrier. This transaction allowed for higher team member participation through an enhanced split-dollar plan. Estimated improved
yields resulting from the enhancement have an earn-back period of approximately 2 years. Also in 2023, the Company recorded total
additional expenses and charges of $4.6 million in connection with this transaction, including: (i) a reduction of $0.7 million to the cash
surrender value of BOLI; (ii) transaction costs of $1.1 million, and (iii) income tax expense of $2.8 million.
(4)
Expenses incurred for actions designed to implement the Company’s strategy. These actions include, but are not limited to, reductions in
workforce, streamlining operational processes, rolling out the Amerant brand, implementation of new technology system applications,
enhanced sales tools and training, expanded product offerings and improved customer analytics to identify opportunities.
(5)
Staff reduction costs consist of severance expenses related to organizational rationalization.
(6)
Contract termination and related costs associated with third party vendors resulting from the Company’s engagement of FIS.
83
(7)
In 2023, includes an aggregate of $6.4 million of nonrecurrent expenses in connection with the engagement of FIS and, to a lesser extent,
software expenses related to legacy applications running in parallel to new core banking applications. The transition to FIS was completed
in 2023, therefore, there were no significant nonrecurrent expenses in connection with the engagement of FIS in 2024. In 2022, includes: (i)
$2.9 million in connection with the engagement of FIS, (ii) $0.2 million in connection with certain search and recruitment expenses, (iii)
$0.1 million of costs associated with the subleasing of the New York office space, and (iv) an aggregate of $0.4 million in other non-routine
expenses.
(8)
In 2023, includes expenses in connection with the disposition of fixed assets due to the write-off of in-development software.
(9)
In 2023, includes expenses of $0.3 million in connection with the closure of a branch in Houston, Texas in 2023. In addition, in 2023,
includes $0.9 million of accelerated amortization of leasehold improvements and $0.6 million of right-of-use or “ROU” asset impairment
associated with the closure of a branch in Miami, FL. Also in 2023, includes $0.5 million of ROU asset impairment associated with the
closure of a branch in Houston, Texas in 2023. In 2022, includes $1.6 million of ROU asset impairment associated with the closure of a
branch in Pembroke Pines, Florida in 2022.
(10) In 2024, includes loss on sale of $12.6 million, including transaction costs, related to the sale of a portfolio of 323 business-purpose,
investment property, residential mortgage loans with a balance of approximately $71.4 million. In 2023, includes: (i) a fair value adjustment
of $35.5 million related to an aggregate of $401 million in Houston-based CRE loans held for sale which are carried at the lower of cost or
fair value, and (ii) a loss on sale of $2.0 million related to a New York-based CRE loan previously carried at the lower of fair value or cost.
In addition, in 2023, includes a fair value adjustment of $5.6 million related to a New York-based CRE loan held for sale carried at the
lower of cost or fair value. Lastly, in 2022, amount represents the fair value adjustment related to the New York loan portfolio held for sale
carried at the lower of cost or fair value.
(11) In 2024, amounts shown are in connection with the Houston Sale Transaction.
(12) In 2023, amount represents the loss on sale of repossessed assets in connection with our equipment-financing activities. In 2022, amount
represents the fair value adjustment related to one OREO property in New York.
(13) In 2024, related to Houston branches and included as part of occupancy and equipment expenses. See “Noninterest Expenses” for additional
information.
84
The following table is a reconciliation of the Company’s tangible common equity and tangible assets, non
GAAP financial measures, to total equity and total assets, respectively, as of the dates presented:
(in thousands, except percentages and per share amounts)
December 31, 2024
December 31, 2023
Stockholders' equity
$
890,467
$
736,068
Less: goodwill and other intangibles (1)
(24,314)
(25,029)
Tangible common stockholders' equity
$
866,153
$
711,039
Total assets
$
9,901,734
$
9,716,327
Less: goodwill and other intangibles (1)
(24,314)
(25,029)
Tangible assets
$
9,877,420
$
9,691,298
Common shares outstanding
42,127,316
33,603,242
Tangible common equity ratio
8.77 %
7.34 %
Stockholders' book value per common share
$
21.14
$
21.90
Tangible stockholders' book value per common share
$
20.56
$
21.16
Tangible common stockholders' equity
$
866,153
$
711,039
Less: Net unrealized accumulated losses on debt securities held to maturity, net of tax
(2)
—
(16,197)
Tangible common stockholders' equity, adjusted for net unrealized accumulated losses
on debt securities held to maturity
$
866,153
$
694,842
Tangible assets
$
9,877,420
$
9,691,298
Less: Net unrealized accumulated losses on debt securities held to maturity, net of tax
(2)
—
(16,197)
Tangible assets, adjusted for net unrealized accumulated losses on debt securities held
to maturity
$
9,877,420
$
9,675,101
Common shares outstanding
42,127,316
33,603,242
Tangible common equity ratio, adjusted for net unrealized accumulated losses on
debt securities held to maturity
8.77 %
7.18 %
Tangible stockholders' book value per common share, adjusted for net unrealized
accumulated losses on debt securities held to maturity
$
20.56
$
20.68
(1)
At December 31, 2024 and 2023, other intangible assets primarily consist of naming rights of $2.0 million and $2.5 million, respectively,
and mortgage servicing rights (“MSRs”) of $1.5 million and $1.4 million, respectively. Other intangible assets are included in other assets
in the Company’s consolidated balance sheets.
(2)
There were no debt securities held to maturity at December 31, 2024. As of December 31, 2023, amounts were calculated based upon the
fair value of debt securities held to maturity, and assuming a tax rate of 25.36%.
85
Financial Condition - Comparison of Financial Condition as of December 31, 2024 and December 31,
2023
Assets. Total assets were $9.9 billion as of December 31, 2024, an increase of $185.4 million, or 1.9%,
compared to $9.7 billion at December 31, 2023. This result was primarily driven by: (i) an increase of $268.5
million, or 83.4%, in cash and cash equivalents; (ii) an increase of $219.7 million, or 18.0%, in debt securities
available for sale mainly as a result of the Company’s Securities Repositioning; (iii) a net increase of $17.0 million,
or 0.2%, in total loans held for investment, net of the allowance for credit losses, and loans held for sale at the lower
of cost or fair value and mortgage loans held for sale; and (iv) an increase in BOLI of $8.6 million mainly due to net
increase in cash surrender value of the policies during 2024. These increases were partially offset by: (i) decrease of
$226.6 million, or 100.0%, in debt securities held for maturity as a result of the Company’s Securities
Repositioning; (ii) a decrease of $77.2 million, or 30.1%, in accrued interest receivable and other assets which
includes $62.5 million from the collection of a receivable from an insurance carrier in connection with the
restructuring of BOLI in 2023 and $7.5 million related to the sale of the Houston Franchise; (iii) a decrease of $18.5
million, or 15.6%, in operating lease right-of-use assets, which includes $15.3 million related to the sale of Houston
franchise; and (iv) a decrease of $11.8 million, or 27.0% , in premises and equipment, net, which includes $11.4
million related to the sale of the Houston Franchise . See “Note 1. Business, Basis of Presentation and Summary of
Significant Accounting Policies”, Note 6. Premises and Equipment, Net and Note 13. Leases, for detailed
information about assets sold as part of the Houston Sale Transaction. See “-Average Balance Sheet, Interest and
Yield/Rate Analysis” for detailed information, including changes in the composition of our interest-earning assets.
Cash and Cash Equivalents
2024 compared to 2023
Cash and cash equivalents totaled $590.4 million at December 31, 2024, an increase of $268.5 million, or
83.4%, from $321.9 million at December 31, 2023, primarily as a result of an increase in interest earning cash
balances. At December 31, 2024 and December 31, 2023, interest earning deposits with banks, mainly cash balances
held at the Federal Reserve, were $519.9 million and $242.7 million, respectively. In addition, at December 31,
2024 and December 31, 2023, the Company’s cash and cash equivalents included restricted cash of $24.4 million
and $25.8 million, respectively, which were held primarily to cover margin calls on derivative transactions with
certain brokers. Furthermore, at December 31, 2024 and 2023, the Company’s cash and cash equivalents included
other short-term investments of $6.9 million and $6.1 million, respectively, which consists of U.S. Treasury Bills
that mature in 90 days or less.
Cash flows provided by operating activities was $82.2 million in the year ended December 31, 2024, primarily
driven by: (i) a non-cash adjustment of $76.9 million in connection with losses on securities; (ii) a non-cash
adjustment of $60.5 million for the provision for credit losses; and (iii) a net increase in operating assets and
liabilities of $0.2 million. This was partially offset by net originations of mortgage loans held for sale at fair value
of $38.3 million, the net loss of $15.8 million and other non-cash adjustments totaling $1.2 million,
Net cash used in investing activities was $576.7 million during the year ended December 31, 2024, mainly
driven by: (i) a net increase in loans of $1.1 billion; (ii) purchases of investment securities totaling $786.6 million;
(iii) net cash transferred on the sale of the Houston Franchise of $73.9 million, and (iv) net purchases of premises
and equipment of $7.2 million. These disbursements were partially offset by: (i) maturities, sales, calls and
paydowns of investment securities totaling $746.8 million, (ii) proceeds from sale of loans held for investment and
loans held for sale at the lower of cost or fair value totaling $543.1 million; (iii) $62.7 million collected from
insurance carriers in 2024 in connection with the restructuring of BOLI completed in 2023, and (iv) BOLI death
benefits received of $1.2 million. See Note 1 to our audited annual consolidated financial statements in this Form 10-
K for more information on the sale of the Houston Franchise.
86
In the year ended December 31, 2024, net cash provided by financing activities was $763.0 million. These
activities included: (i) a net increase of $270.6 million in time deposits; (ii) a net increase in total demand, savings
and money market deposit balances of $256.9 million; (iii) net proceeds from our common stock issuance of $155.8
million, and (iv) net proceeds from FHLB advances of $101.6 million. These proceeds were partially offset by: (i)
$12.8 million of dividends declared and paid by the Company in 2024, and (ii) an aggregate of $8 million in
connection with the repurchase of shares of Class A common stock in 2024. See “-Capital Resources and Liquidity
Management” for more details on changes in FHLB advances in 2024 and the stock repurchase programs.
87
Loans
Loans are our largest component of interest-earning assets. The table below depicts the trend of loans as a
percentage of total assets and the allowance for loan losses as a percentage of total loans held for investment for the
periods presented.
December 31,
(in thousands, except percentages)
2024
2023
2022
Total loans, gross (1)
$
7,271,322
$ 7,264,912
$
6,919,632
Total loans, gross (1) / Total assets
73.4%
74.8%
75.8%
Allowance for credit losses (2)
$
84,963
$
95,504
$
83,500
Allowance for credit losses / Total loans held for investment,
gross (1) (2)
1.18%
1.39%
1.22%
Total loans, net (3)
$
7,186,359
$ 7,169,408
$
6,836,132
Total loans, net (3) / Total assets
72.6%
73.8%
74.9%
_______________
(1)
Total loans, gross is the principal balance of outstanding loans, including loans held for investment, loans held for sale at the lower of cost
or fair value, and mortgage loans held for sale, net of unamortized deferred nonrefundable loan origination fees and loan origination costs,
and unamortized premiums paid on purchased loans, excluding the allowance credit loan losses. At December 31, 2024 and 2023, there
were $42.9 million and $26.2 million, respectively, in loans held for sale carried at fair value in connection with the Company’s mortgage
banking activities.
(2)
In 2022, the Company adopted a new accounting standard on estimating expected credit losses, or CECL. See Note 1 to our audited
consolidated financial statements on this Form 10-K for more details on the adoption of this new accounting standard.
(3)
Total loans, net is the principal balance of outstanding loans, including loans held for investment, loans held for sale carried at the lower of
cost or fair value, and mortgage loans held for sale, net of unamortized deferred nonrefundable loan origination fees and loan origination
costs, and unamortized premiums paid on purchased loans, adjusted by the allowance for credit losses.
88
The table below summarizes the composition of loans held for investment by type of loan as of the end of each
period presented. International loans include transactions in which the debtor or customer is domiciled outside the
U.S., even when the collateral is U.S. property. All international loans are denominated and payable in U.S. Dollars.
Domestic Loans:
Real estate loans
Commercial real estate (CRE)
Nonowner occupied ................................. $ 1,678,473
$ 1,616,200
$ 1,615,716
$ 1,540,590
$ 1,749,839
Multi-family residential............................
336,229
407,214
820,023
514,679
737,696
Land development and construction
loans .........................................................
483,210
300,378
273,174
327,246
349,800
2,497,912
2,323,792
2,708,913
2,382,515
2,837,335
Single-family residential .................................
1,489,121
1,422,113
1,048,396
586,783
543,076
Owner occupied...............................................
1,007,074
1,175,331
1,046,450
962,538
947,127
4,994,107
4,921,236
4,803,759
3,931,836
4,327,538
Commercial loans (1) ..........................................
1,751,602
1,461,269
1,338,157
942,781
1,103,501
Loans to financial institutions and acceptances
(2).........................................................................
170,435
13,375
13,292
13,710
16,629
Consumer loans and overdrafts (3)(4)...................
271,586
389,991
602,793
421,471
241,771
Total Domestic Loans ......................................
7,187,730
6,785,871
6,758,001
5,309,798
5,689,439
International Loans:
Real estate loans
Single-family residential (5) .............................
38,959
44,495
54,449
74,556
96,493
Commercial loans...............................................
300
41,918
43,077
22,892
51,049
Loans to institutions and acceptances ................
—
—
—
—
7
Consumer loans and overdrafts (6) .....................
1,422
1,209
1,667
2,194
5,349
Total International Loans ...............................
40,681
87,622
99,193
99,642
152,898
Total Loans Held For Investment................... $ 7,228,411
$ 6,873,493
$ 6,857,194
$ 5,409,440
$ 5,842,337
December 31,
(in thousands)
2024
2023
2022
2021
2020
__________________
(1)
As of December 31, 2024 and 2023, includes approximately $46.4 million and $56.5 million, respectively, in commercial loans and leases
originated under a white-label equipment financing solution launched in the second quarter of 2022.
(2)
In 2024, this portfolio includes $157.0 million in loans to non-depository financial institutions, such as mortgage companies and other
financial intermediaries. In addition, includes $13.5 million in other loan facilities secured by cash or U.S. Government securities.
(3)
Includes customers’ overdraft balances totaling $4.4 million, $2.6 million, $4.7 million, $0.6 million and $0.7 million at each of the dates
presented.
(4)
Includes indirect consumer lending loans purchased with an outstanding balance of $82.9 million and $210.9 million as of December 31,
2024 and 2023, respectively. In addition, as of December 31, 2024, includes $35.6 million ($52.9 million in 2023) in consumer loans
originated under a white-label program launched in the third quarter of 2022.
(5)
Secured by real estate properties located in the U.S.
(6)
International customers’ overdraft balances were de minimis at each of the dates presented.
89
The composition of our CRE loan portfolio held for investment by industry segment at December 31, 2024,
2023 and 2022, 2021 and 2020 is depicted in the following table:
December 31,
(in thousands)
2024
2023
2022
2021
2020
Retail (1)
$ 718,869
$ 728,349
$ 731,229
$ 751,202
$1,062,119
Multifamily
336,229
407,214
820,023
514,679
737,696
Office space
446,747
347,649
342,248
361,921
390,295
Specialty(2)
145,290
152,277
84,791
86,130
35,210
Land and construction
483,210
300,378
273,174
327,246
349,800
Hospitality
288,788
282,085
324,881
241,336
191,750
Industrial and warehouse
78,779
105,840
132,567
100,001
70,465
Total CRE Loans Held For Investment (3)
$2,497,912
$2,323,792
$2,708,913
$2,382,515
$2,837,335
_______________
(1)
Includes loans generally granted to finance the acquisition or operation of non-owner occupied properties such as retail shopping centers,
free-standing single-tenant properties, and mixed-use properties primarily dedicated to retail, where the primary source of repayment is
derived from the rental income generated from the use of the property by its tenants. As of December 31, 2021 and 2020, these balances
were revised to exclude the Specialty industry segment which is now disclosed separately.
(2)
Includes marinas, nursing and residential care facilities, and other specialty type CRE properties.
(3)
Includes loans held for investment in the NY loan portfolio, which were $221.8 million at December 31, 2024 and $217 million at
December 31, 2023.
At December 31, 2024, our commercial real estate loans held for investment based in South Florida, Tampa
and Central Florida, New York, Houston and other regions were $1.8 billion, $189.2 million, $221.8 million,
$191.0 million and $121.1 million, respectively.
90
The table below summarizes the composition of our loans held for sale by type of loan as of the end of each
period presented
(in thousands)
December 31,
2024
December 31,
2023
December 31,
2022
December 31,
2021
December 31,
2020
Loans held for sale at the lower of
cost or fair value
Real estate loans
Commercial real estate
Non-owner occupied...................... $
—
$
—
$
—
$
110,271
$
—
Multi-family residential .................
—
309,612
—
31,606
—
Land development and
construction loans ..........................
—
55,607
—
—
—
—
365,219
—
141,877
—
Owner occupied...............................
—
—
—
1,318
—
Total loans held for sale at the lower
of cost or fair value (1).......................
—
365,219
—
143,195
—
Mortgage loans held for sale at fair
value ..................................................
Land development and construction
loans (1)
10,768
12,778
9,424
—
—
Single family residential (2) .............
32,143
13,422
53,014
14,905
—
Total mortgage loans held for sale, at
fair value (3) .......................................
42,911
26,200
62,438
14,905
—
Total loans held for sale (4)............. $
42,911
$
391,419
$
62,438
$
158,100
$
—
______________
(1)
In 2024 and 2023, the Company transferred approximately $22.2 million and $13 million, respectively, in land development and
construction loans held for sale to the loans held for investment category.
(2)
In 2024 and 2023, the Company transferred approximately $7.7 million and $98.9 million, respectively, in single-family residential loans
held for sale to the loans held for investment category.
(3)
Mortgage loans held for sale in connection with Amerant Mortgage’s ongoing business.
(4)
Remained current and in accrual status at each of the periods shown.
91
As of December 31, 2024, total loans held for investment were $7.2 billion, up $354.9 million, or 5.2%,
compared to $6.9 billion at December 31, 2023. Domestic loans held for investment increased $401.9 million, or
5.9%, as of December 31, 2024, compared to December 31, 2023. The increase in total domestic loans held for
investment includes net increases of: (i) $290.3 million, or, 19.9%, in domestic commercial loans; (ii) $174.1
million, or, 7.5%, in domestic CRE loans; (iii) $157.1 million in loans to financial institutions, as we had new
lending activity in connection with non-depository financial institutions in 2024; and (iv) $67.0 million, or, 4.7%, in
domestic single-family residential loans. These increases were partially offset by decreases of: (i) $168.3 million, or
14.3%, in domestic owner occupied loans, and (ii) $118.4 million, or 30.4%, in domestic consumer loans, as the
Company discontinued the purchases of indirect consumer loans in 2023 and such indirect lending portfolio is set to
runoff over time.
Loans to international customers, primarily from Latin America, declined $46.9 million, or 53.6%, as of
December 31, 2024, compared to December 31, 2023, mainly driven by $41.7 million in connection with a
commercial loan relationship now domiciled in the U.S., and paydowns totaling $5.6 million to existing single-
family residential loans, partially offset by a $0.2 million increase in consumer loans.
At December 31, 2024 and 2023, there were $42.9 million and $26.2 million, respectively, of mortgage loans
held for sale carried at their estimated fair value. In 2024, in connection with mortgage loans held for sale, we
originated and purchased approximately $419.1 million, and had proceeds of approximately $380.8 million, mainly
from the sale of these loans.
In 2024, the Company added approximately $418.4 million in single-family residential and construction loans
through Amerant Mortgage which includes loans originated and purchased from different channels.
As of December 31, 2024, the Company had no loans held for sale carried at the lower of cost or fair value. In
2024, the Company transferred an aggregate of $497.3 million in connection with the Houston Sale Transaction. The
Company recorded a valuation allowance of $1.3 million as a result of the transfer in the same period. In the fourth
quarter of 2024, the Houston Sale Transaction closed and as a result, the Company sold, at par, all loans held for sale
carried at the lower of cost or fair value at the time of sale. The carrying value of the loans at the time of sale was
approximately $473.9 million. In addition, on December 27, 2024, we transferred to held for sale and sold business-
purpose, investment property, residential mortgage loans with a carrying value of $71.1 million. These loans had
collateral across several states and average interest rate of 7.13%. We recorded a loss on sale of $12.6 million
including estimated transaction costs.
As of December 31, 2023, the Company had $365.2 million in loans held for sale carried at the lower of cost or
fair value, which were previously recorded as loans held for investment. In the fourth quarter of 2023, the Company
transferred an aggregate of $401.0 million in Houston-based CRE loans held for investment to the loans held for sale
category, and recognized a valuation allowance of $35.5 million as a result of the fair value adjustment of these
loans. The Company sold these loans in the first quarter of 2024 and there was no material impact to the Company’s
results of operations as a result of this transaction in 2024. In the third quarter of 2023, the Company transferred a
New York-based CRE loan held for investment to the loans held for sale category, with an amortized cost of $48.8
million at the time of transfer and recognized a valuation allowance of $5.6 million as a result of the fair value
adjustment of this loan. The Company subsequently sold this loan and there was no material impact to the
Company’s results of operations as result of this transaction.
As of December 31, 2024, loans under syndication facilities were $393.7 million, an increase of $121.9 million,
or 44.9%, compared to $271.8 million at December 31, 2023. This was mainly driven by a net increase of $127.1
million in club deals partially offset by a net decrease of $5.2 million of Shared National Credit Facilities (“SNC”).
As of December 31, 2024, there were no SNC loans that financed highly leveraged transactions, compared to $5.5
million, or 0.1% of total loans, as of December 31, 2023. At December 31, 2024 and December 31, 2023, loans
under syndication facilities held for investment include Shared National Credit facilities of $81.5 million and
$86.7 million, respectively.
92
The following is a brief description of the composition of our loan classes:
Commercial Real Estate (CRE) loans. We provide a mix of variable and fixed rate CRE loans. These are loans
secured by non-owner occupied real estate properties and land development and construction loans.
Loans secured by non-owner occupied real estate properties are generally granted to finance the acquisition or
operation of CRE properties. The main source of repayment of these real estate loans is derived from cash flows or
conversion of productive assets and not from the income generated by the disposition of the property held as
collateral. These mainly include rental apartment (multifamily) properties, office, retail, warehouses and industrial
facilities, and hospitality (hotels and motels) properties mainly in South and Central Florida, Tampa, the greater
Houston, Texas area and the greater New York City area, especially the five New York City boroughs.
Concentrations in these non-owner occupied CRE loans are subject to heightened regulatory scrutiny. See “Risk
Factors— Our concentration of CRE loans could result in further increased loan losses, and adversely affect our
business, earnings, and financial condition.”
Land development and construction loans includes loans for land acquisition, land development, and
construction (single or multiple-phase development) of single residential or commercial buildings, loans to
reposition or rehabilitate commercial properties, and bridge loans mainly in the South Florida, the greater Houston,
Texas area and the greater New York City area, especially the five New York City boroughs. Typically, construction
lines of credit are funded based on construction progress and generally have a maturity of three years or less.
Owner-occupied. Loans secured by owner-occupied properties are typically working capital loans made to
businesses in the South Florida and the greater Houston, Texas markets. The source of repayment of these
commercial owner-occupied loans primarily comes from the cash flow generated by the occupying business and the
real estate collateral serves as an additional source of repayment. These loans are assessed, analyzed, and structured
essentially in the same manner as commercial loans.
Single-Family Residential. These loans include loans to domestic and foreign individuals and businesses
primarily secured by single-family residences in the U.S., including first mortgages on properties mainly located in
Florida, home equity and home improvement loans, mainly in South Florida and the greater Houston, Texas
markets. These loans have terms common in the industry. However, loans to foreign clients have more conservative
underwriting criteria and terms.
Commercial loans. We provide a mix of variable and fixed rate C&I loans. These loans are made to a diverse
range of business sizes, from the small-to-medium-sized to middle market and large companies. These businesses
cover a diverse range of economic sectors, including manufacturing, wholesale, retail, primary products and
services. We provide loans and lines of credit for working capital needs, business expansions and for international
trade financing. These loans include working capital loans, asset-based lending, participations in Shared National
Credit facilities, or SNCs (loans of $100 million or more that are shared by two or more institutions), purchased
receivables and SBA loans, among others. The tenors may be either short term (one year or less) or long term, and
they may be secured, unsecured, or partially secured. Typically, lines of credit have a maturity of one year or less,
and term loans have maturities of five years or less. In addition, the Company originates equipment loan and leases
through a white-label equipment financing solution launched in the second quarter of 2022.
93
Commercial loans to borrowers in similar businesses or products with similar characteristics or specific credit
requirements are generally evaluated under a standardized commercial credit program. Commercial loans outside the
scope of those programs are evaluated on a case-by-case basis, with consideration of any exposure under an existing
commercial credit program. The Bank maintains several commercial credit programs designed to standardize
underwriting guidelines, and risk acceptance criteria, in order to streamline the granting of credits to businesses with
similar characteristics and common needs. Some programs also allow loans that deviate from credit policy
underwriting requirements and allocate maximum exposure buckets to those loans. Loans originated through a
program are monitored regularly for performance over time and to address any necessary modifications.
Loans to financial institutions and acceptances. These loans primarily include loans to financial institutions
and acceptances which are granted mainly to non-depository financial institutions such as mortgage companies and
other financial intermediaries. In addition, it includes a cash collateral loan to a depository institution. Loans in this
portfolio segment are generally granted for terms not exceeding three years and on a secured basis under the terms
of each credit agreement.
Consumer loans and overdrafts. These loans include open and closed-end loans extended to domestic and
foreign individuals for household, family and other personal expenditures. These loans include automobile loans,
personal loans, or loans secured by cash or securities and revolving credit card agreements. These loans have terms
common in the industry for these types of loans, except that loans to foreign clients have more conservative
underwriting criteria and terms. Beginning in 2020, consumer loans include indirect unsecured personal loans to
well qualified individuals we purchased from recognized third parties personal loan originators. However, we are
focusing on organic growth and have not been purchasing any new indirect consumer loan production since the end
of 2022. All consumer loans are denominated and payable in U.S. Dollars.
94
The tables below set forth the unpaid principal balance of loans held for investment by type, by interest rate
type (fixed-rate and variable-rate) and by original contractual loan maturities as of December 31, 2024:
Fixed-Rate
Real estate loans
Commercial real estate (CRE)
Nonowner occupied
$
227,678
$
521,328
$
29,539
$
778,545
Multi-family residential
11,192
158,900
4,572
174,664
Land development and construction loans
65,814
45,397
29,008
140,219
304,684
725,625
63,119
1,093,428
Single-family residential
31,286
51,596
624,721
707,603
Owner occupied
41,895
189,711
172,440
404,046
377,865
966,932
860,280
2,205,077
Commercial loans
66,434
376,310
59,164
501,908
Loans to financial institutions and acceptances
—
—
—
—
Consumer loans and overdrafts
24,469
98,368
17,517
140,354
$
468,768
$
1,441,610
$
936,961
$
2,847,339
Variable-Rate
Real estate loans
Commercial real estate (CRE)
Nonowner occupied
$
101,846
$
631,081
$
167,001
$
899,928
Multi-family residential
46,387
107,594
7,584
161,565
Land development and construction loans
143,920
195,733
3,338
342,991
292,153
934,408
177,923
1,404,484
Single-family residential
37,830
72,399
710,248
820,477
Owner occupied
69,809
207,769
325,450
603,028
399,792
1,214,576
1,213,621
2,827,989
Commercial loans
490,534
635,388
124,072
1,249,994
Loans to financial institutions and acceptances
147,695
22,740
—
170,435
Consumer loans and overdrafts
131,673
535
446
132,654
$
1,169,694
$
1,873,239
$ 1,338,139
$
4,381,072
Total Loans Held For Investment
Real estate loans
Commercial real estate (CRE)
Nonowner occupied
$
329,524
$
1,152,409
$
196,540
$
1,678,473
Multi-family residential
57,579
266,494
12,156
336,229
Land development and construction loans
209,734
241,130
32,346
483,210
596,837
1,660,033
241,042
2,497,912
Single-family residential
69,116
123,995
1,334,969
1,528,080
Owner occupied
111,704
397,480
497,890
1,007,074
777,657
2,181,508
2,073,901
5,033,066
Commercial loans
556,968
1,011,698
183,236
1,751,902
Loans to financial institutions and acceptances
147,695
22,740
—
170,435
Consumer loans and overdrafts
156,142
98,903
17,963
273,008
$
1,638,462
$
3,314,849
$ 2,275,100
$
7,228,411
(in thousands)
Due in
one year
or less
Due after
one year
through five
Due after
five
years (1)
Total
__________________
(1)
Includes a total of $683.9 million of fixed-rate loans (mainly comprised of 89% single-family residential and 6% owner occupied), and
$705.2 million of variable-rate loans (mainly comprised of 99% single-family residential and 1% owner occupied), maturing in 10 years or
more. Fixed-rate and variable-rate loans maturing in 15 years or more represent 96% of total fixed-rate and 95% of total variable-rate loans
maturing in 10 years or more, respectively, and correspond primarily to single-family residential loans.
95
The tables below set forth the unpaid principal balance of total loans held for sale by type, by interest rate type
(fixed-rate and variable-rate) and by original contractual loan maturities as of December 31, 2024:
(in thousands)
Due in
one year
or less
Due after
one year
through five
Due after
five
years
Total
Fixed-Rate
Real estate loans
Commercial real estate (CRE)
Nonowner occupied
$
—
$
—
$
—
$
—
Multi-family residential
—
—
—
—
Land development and construction loans
635
—
9,514
10,149
635
—
9,514
10,149
Single-family residential (1)
1,519
—
29,133
30,652
Owner occupied
—
—
—
—
$
2,154
$
—
$
38,647
$
40,801
Variable-Rate
Real estate loans
Commercial real estate (CRE)
Multi-family residential
—
—
—
—
Land development and construction loans
—
—
619
619
—
—
619
619
Single-family residential
—
—
1,491
1,491
Owner occupied
—
—
—
—
—
—
2,110
2,110
Commercial loans
—
—
—
—
Loans to financial institutions and acceptances
—
—
—
—
Consumer loans and overdrafts
—
—
—
—
$
—
$
—
$
2,110
$
2,110
Total Loans Held For Sale
Real estate loans
Commercial real estate (CRE)
Nonowner occupied
$
—
$
—
$
—
$
—
Multi-family residential
—
—
—
—
Land development and construction loans
635
—
10,133
10,768
635
—
10,133
10,768
Single-family residential (1)
1,519
—
30,624
32,143
Owner occupied
—
—
—
—
Total loans held for sale (2)
$
2,154
$
—
$
40,757
$
42,911
__________________
(1)
Loans held for sale carried at their estimated fair value.
(2)
Remained current and in accrual status as of December 31, 2024.
96
Foreign Outstanding
The table below summarizes the composition of our international loan portfolio by country of risk for the
periods presented. All of our foreign loans are denominated in U.S. dollars, and bear fixed or variable rates of
interest based upon different market benchmarks plus a spread.
December 31,
2024
2023
2022
(in thousands, except percentages)
Net
Exposure (1)
%
Total Assets
Net
Exposure (1)
%
Total Assets
Net
Exposure (1)
%
Total Assets
Venezuela (2)............................................. $
32,300
0.3 % $
37,699
0.4 % $
47,037
0.5 %
Other (1)(3)..................................................
8,381
0.1 %
49,923
0.5 %
52,156
0.6 %
Total......................................................... $
40,681
0.4 % $
87,622
0.9 % $
99,193
1.1 %
_________________
(1)
Collateralized with cash, cash equivalents or other financial instruments totaling $7.8 million, $7.2 million and $6.3 million as of
December 31, 2024, 2023 and 2022 respectively.
(2)
Includes mortgage loans for single-family residential properties located in the U.S. totaling $32.0 million, $37.7 million and $47.0 million
as of December 31, 2024, 2023 and 2022, respectively.
(3)
Includes loans to borrowers in other countries which do not individually exceed one percent of total assets in 2024, 2023 and 2022.
As of December 31, 2024, the maturities of our outstanding international loans were as follows:
As of December 31, 2024
(in thousands)
Less than 1 year
1-3 Years
More than 3 years
Total
Venezuela.................................... $
17
$
—
$
32,283
$
32,300
Other............................................
—
375
8,006
8,381
Total ............................................ $
17
$
375
$
40,289
$
40,681
97
Loans by Economic Sector
The table below summarizes the concentration in our loans held for investment by economic sector as of the end
of the periods presented.
Financial Sector (1)
$
599,458
8.3 % $
255,179
3.7 % $
190,934
2.8 %
Construction and real estate (2)
2,794,453
38.7 %
2,613,060
38.0 %
2,378,081
34.7 %
Manufacturing:
Foodstuffs, apparel
101,216
1.5 %
108,729
1.6 %
87,198
1.3 %
Metals, computer, transportation and
other
87,873
1.2 %
73,687
1.1 %
52,160
0.8 %
Chemicals, oil, plastics, cement and
wood/paper
10,122
0.1 %
68,897
1.0 %
22,929
0.3 %
Total manufacturing
$
199,211
2.8 % $
251,313
3.7 % $
162,287
2.4 %
Wholesale
210,122
2.9 %
400,983
5.8 %
614,971
8.9 %
Retail trade (3)
414,806
5.7 %
420,907
6.1 %
424,894
6.2 %
Services:
Non-financial public sector
13,946
0.2 %
—
— %
1,300
— %
Communication, transportation,
health and other
616,354
8.5 %
652,926
9.5 %
487,842
7.1 %
Accommodation, restaurants,
entertainment
432,528
6.0 %
323,347
4.7 %
602,877
8.8 %
Electricity, gas, water, supply and
sewage
61,088
0.8 %
40,228
0.6 %
24,908
0.4 %
Total services
$ 1,123,916
15.5 % $ 1,016,501
14.8 % $ 1,116,927
16.3 %
Primary Products:
Agriculture, Livestock, Fishing, and
forestry
6,596
0.1 %
8,699
0.1 %
—
— %
Mining
—
— %
12,312
0.2 %
—
— %
6,596
0.1 %
21,011
0.3 %
—
— %
Other loans (4)
1,879,849
26.0 %
1,894,539
27.6 %
1,969,100
28.7 %
$ 7,228,411
100.0 % $ 6,873,493
100.0 % $ 6,857,194
100.0 %
December 31,
(in thousands, except percentages)
2024
2023
2022
Amount
% of Total
Amount
% of Total
Amount
% of Total
_________________
(1)
Consists mainly of domestic non-bank financial services companies.
(2)
Comprised mostly of CRE loans throughout South and Central Florida, Tampa, the greater Houston, Texas area, and New York.
(3)
Gasoline stations represented approximately 37%, 57% and 57% of the retail trade sector at year-end 2024, 2023 and 2022, respectively.
(4)
Primarily loans belonging to industrial sectors not included in the above sectors, which do not individually represent more than 1 percent of
the total loan portfolio, and consumer loans which represented approximately 23.2%, 20.6% and 28.6% of the total in 2024, 2023 and 2022,
respectively.
As of December 31, 2024, the Company had $10.8 million of loans held for sale in the construction and real
estate economic sector and $32.1 million of loans held for sale in other sectors. At December 31, 2023, the
Company had $378.0 million of loans held for sale in the construction and real estate economic sector and
$13.4 million of loans held for sale in other sectors. There were no loans held for sale at December 31, 2022.
98
Loan Quality
We use what we believe is a comprehensive methodology to monitor credit quality and manage credit
concentrations within our loan portfolio. Our underwriting policies and practices govern the risk profile and credit
and geographic concentrations of our loan portfolio. We also believe we employ a comprehensive methodology to
monitor our intrinsic credit quality metrics, including a risk classification system that identifies possible problem
loans based on risk characteristics by loan type, as well as the early identification of deterioration at the individual
loan level. We also consider the evaluation of loan quality by the OCC, our primary regulator.
Analysis of the Allowance for Credit Losses
In 2022, the Company adopted Accounting Standards Codification Topic 326 - Financial Instruments - Credit
Losses (ASC Topic 326), which replaced the incurred loss methodology for estimated probable loan losses with an
expected credit loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. See
“Critical Accounting Policies and Estimates” later in this document for more details on the methodology for
measuring credit losses under the CECL guidance.
The allowance for credit losses, or ACL, is a valuation account that is deducted from the amortized cost basis of
loans held for investment to present the net that is expected to be collected throughout the life of the loan. The
estimated ACL is recorded through a provision for credit losses charged against income. Management periodically
evaluates the adequacy of the ACL to maintain it at a level it believes to be reasonable.
The Company develops and documents its methodology to determine the ACL at the portfolio segment level.
The Company determines its loan portfolio segments based on the type of loans it carries and their associated risk
characteristics. The measurement of expected credit losses considers information about historical events, current
conditions, reasonable and supportable forecasts and other relevant information. Determining the amount of the
ACL is complex and requires extensive judgment by management about matters that are inherently uncertain. Re-
evaluation of the ACL estimate in future periods, in light of changes in composition and characteristics of the loan
portfolio, changes in the reasonable and supportable forecast and other factors then prevailing may result in material
changes in the amount of the ACL and credit loss expense in those future periods.
Expected credit losses are estimated on a collective basis for groups of loans that share similar risk
characteristics. Factors that may be considered in aggregating loans for this purpose include but are not necessarily
limited to, product or collateral type, industry, geography, internal risk rating, credit characteristics such as credit
scores or collateral values, and historical or expected credit loss patterns. For loans that do not share similar risk
characteristics with other loans such as collateral dependent loans and modifications to borrowers experiencing
financial difficulties, expected credit losses are estimated on an individual basis.
With respect to modifications made to borrowers experiencing financial difficulty, a change to the ACL is
generally not recorded upon modification since the effect of these modifications is already included in the ACL
given the measurement methodologies used to estimate the ACL. From time to time, the Company may modify
loans related to borrowers experiencing financial difficulties by providing multiple types of concessions. Typically,
one type of concession, such as a term extension, may be granted initially. If the borrower continues to experience
financial difficulty, another concession, such as principal forgiveness, may be granted. When and if principal
forgiveness is provided, the amortized cost basis of the asset is written off against the ACL. The amount of the
principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a
reduction of the amortized cost basis and a corresponding adjustment to the ACL.
99
Problem Loans. Loans are considered delinquent when principal or interest payments are past due 30 days or
more. Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. Once a loan
to a single borrower has been placed in nonaccrual status, management reviews all loans to the same borrower to
determine their appropriate accrual status. When a loan is placed in nonaccrual status, accrual of interest and
amortization of net deferred loan fees or costs are discontinued, and any accrued interest receivable is reversed
against interest income. Typically, the accrual of interest on loans is discontinued when principal or interest
payments are past due 90 days or when, in the opinion of management, there is a reasonable doubt as to
collectability in the normal course of business. When loans are placed on nonaccrual status, all interest previously
accrued but not collected is reversed against current period interest income. Payments received on a loan in
nonaccrual status are generally applied to its outstanding principal amount, unless there are no doubts on the full
collection of the remaining recorded investment in the loan. When there are no doubts on the full collection of the
remaining recorded investment in the loan, and there is sufficient documentation to support the collectability of that
amount, payments of interest received may be recorded as interest income. A loan in nonaccrual status is returned to
accrual status when none of the conditions noted when first placed in nonaccrual status are currently present, none of
its principal and interest is past due, and management believes there are reasonable prospects of the loan performing
in accordance with its terms. For this purpose, management generally considers there are reasonable prospects of
performance in accordance with the loan terms when at least six months of principal and interest payments or
principal curtailments have been received, and current financial information of the borrower demonstrates that the
borrower has the capacity to continue to perform into the near future.
Allocation of Allowance for Credit Losses
In the following table, we present the allocation of the ACL by loan segment at the end of the periods presented.
The amounts shown in this table should not be interpreted as an indication that charge-offs in future periods will
occur in these amounts or percentages. These amounts represent our best estimates of expected credit losses to be
collected throughout the life of the loans, at the reported dates, derived from historical events, current conditions and
reasonable and supportable forecasts at the dates reported. Our allowance for credit losses is established using
estimates and judgments, which also consider the views of our regulators in their periodic examinations. Re-
evaluation of the ACL estimate in future periods, in light of changes in composition and characteristics of the loan
portfolio, changes in the reasonable and supportable forecast and other factors then prevailing may result in material
changes in the amount of the ACL and credit loss expense in those future periods. We also show the percentage of
each loan class, which includes loans in nonaccrual status.
Total Loans
Real estate........... $16,668
38.2 %
$25,876
35.8 %
$25,237
42.1 %
$17,952
43.5 %
$50,227
48.2 %
Commercial ........
44,732
38.3 %
41,809
39.0 %
25,888
35.4 %
38,979
39.1 %
48,130
38.9 %
Financial
institutions ..........
—
0.2 %
—
0.2 %
—
0.2 %
42
0.3 %
1
0.3 %
Consumer and
others (1) ..............
23,563
23.3 %
27,819
25.0 %
32,375
22.3 %
12,926
17.1 %
12,544
12.6 %
Total Allowance
for Credit
Losses................. $ 84,963
100.0%
$ 95,504
100.0%
$ 83,500
100.0%
$ 69,899
100.0%
$110,902
100.0%
% Total Loans
held for
investment .........
1.18 %
1.39 %
1.22 %
1.29 %
1.90 %
December 31,
2024
2023
2022
2021
2020
(in thousands,
except percentages)
Allowance
% of
Loans in
Each
Category
to Total
Loans
Allowance
% of
Loans in
Each
Category
to Total
Loans
Allowance
% of
Loans in
Each
Category
to Total
Loans
Allowance
% of
Loans in
Each
Category
to Total
Loans
Allowance
% of
Loans in
Each
Category
to Total
Loans
100
__________________
(1)
Includes (i) indirect consumer loans purchased, and (ii) mortgage loans secured by single-family residential properties located in the U.S in
all years presented.
In 2024, the changes in the allocation of the ACL were primarily attributed to reserve requirements for loan
charge-offs, loan composition and credit quality changes as well as updated macroeconomic factors.
The ratio of ACL to total loans held for investment decreased in 2024 primarily due to lower reserve
requirements on non-performing loans as of December 31, 2024 compared to December 31, 2023, and changes in
loan composition and macroeconomic factors on performing loans.
101
Non-Performing Assets
In the following table, we present a summary of our non-performing assets by loan class, which includes non-
performing loans by portfolio segment, both domestic and international, and OREO, at the dates presented. Non-
performing loans consist of (1) nonaccrual loans where the accrual of interest has been discontinued; (2) accruing
loans ninety days or more contractually past due as to interest or principal; and (3) restructured loans that are
considered Troubled Debt Restructurings, or TDR.
December 31,
(in thousands)
2024
2023
2022
2021
2020
Non-Accrual Loans(1)
Real estate loans
Commercial real estate (CRE)
Nonowner occupied ................................. $
—
$
—
$
20,057
$
7,285
$
8,219
Multifamily residential.............................
—
8
—
—
11,340
Land development and construction
loans .........................................................
4,119
—
—
—
—
4,119
8
20,057
7,285
19,559
Single-family residential .................................
8,140
2,459
1,526
5,126
10,667
Owner occupied
23,191
3,822
6,270
8,665
12,815
35,450
6,289
27,853
21,076
43,041
Commercial loans ................................................
64,572
21,949
9,271
28,440
44,205
Consumer loans and overdrafts............................
—
38
4
257
233
Total Non-Accrual Loans
100,022
28,276
37,128
49,773
87,479
Past Due Accruing Loans
Real estate loans...................................................
Single-family residential............................... $
1,201
$
5,218
$
253
$
—
$
—
Owner occupied
837
—
—
—
220
Commercial loans ................................................
2,033
857
183
—
—
Consumer loans and overdrafts
8
49
35
8
1
Total Past Due Accruing Loans (1)
4,079
6,124
471
8
221
Total Non-Performing Loans (2)......................
104,101
34,400
37,599
49,781
87,700
Other real estate owned.....................................
18,074
20,181
—
9,720
427
Total Non-Performing Assets............................ $ 122,175
$
54,581
$
37,599
$
59,501
$
88,127
________________
(1)
Loans past due 90 days or more but still accruing.
(2)
Prior to 2023 and before adoption of guidance related to CECL, included loan modifications that met the definition of TDRs, which may be
performing in accordance with their modified loan terms. As of December 31, 2021 and 2020, non-performing TDRs include $9.1 million
and $8.4 million, respectively, in a multiple loan relationship to a South Florida borrower. In the third quarter of 2022, this loan relationship
was upgraded and placed back in accrual status.
102
The following table presents the activity of non-performing assets in 2024:
Balance at beginning of period $
8 $
7,677 $
3,822 $
22,806 $
— $
87 $
20,181 $ 54,581
Plus: loans placed in nonaccrual
status
9,707
15,093
59,135
118,209
—
24,424
—
226,568
Less: nonaccrual loan charge-
offs
(599)
—
—
(51,326)
—
(24,430)
—
(76,355)
Less: nonaccrual loans sold, net
of charge offs
(4,996)
(5,377)
(28,656)
(3,342)
—
—
—
(42,371)
(Less) Plus: nonaccrual loan
collections and others
(1)
(3,734)
(8,470)
(20,450)
—
(32)
156
(32,531)
Plus: increase in past-due
accruing loans (1)
—
(4,017)
837
1,176
—
(41)
—
(2,045)
Less: loans returned to accrual
status
—
—
—
—
—
—
—
—
Transferred from Loans to
OREO
—
(301)
(2,640)
(468)
—
—
3,409
—
OREO valuation expense
—
—
—
—
—
—
(5,672)
(5,672)
Balances at end of period
$
4,119 $
9,341 $
24,028 $
66,605 $
— $
8 $
18,074 $ 122,175
Year Ended December 31, 2024
(in thousands)
Commercial
Real Estate
Single-
family
Residential
Owner-
occupied
Commercial
Financial
Institutions
Consumer
and Others
OREO
Total
__________________
(1)
Loans past due 90 days or more but still accruing.
The increase in nonperforming loans during 2024 was primarily due to certain loans that were downgraded
based on updated borrowers’ financial statements received in 2024. See discussion on Classified and Special
Mention Loans below for more details.
We recognized no interest income on nonaccrual loans during 2024, 2023 and 2022.
We utilize an asset risk classification system in compliance with guidelines established by the U.S. federal
banking regulators as part of our efforts to monitor and improve asset quality. In connection with examinations of
insured institutions, examiners have the authority to identify problem assets and, if appropriate, classify them or
require a change to the rating assigned by our risk classification system. There are four classifications for problem
assets: “special mention,” “substandard,” “doubtful,” and “loss.” Special mention loans are loans identified as
having potential weakness that deserve management’s close attention. If left uncorrected, these potential weaknesses
may, at some future date, result in the deterioration of the repayment prospects of the loan. Substandard assets have
one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will
sustain some loss if the deficiencies are not corrected. Doubtful assets have the weaknesses of substandard assets
with the additional characteristic that the weaknesses make collection or liquidation in full questionable and there is
a high probability of loss based on currently existing facts, conditions and values. An asset classified as loss is not
considered collectable and is of such little value that the continuance of carrying a value on the books is not
warranted.
103
We use the term “classified loans” to describe loans that are substandard and doubtful, and we use the term
“criticized loans” to describe loans that are special mention and classified loans.
The Company’s loans by credit quality indicators at December 31, 2024, 2023 and 2022 are summarized in the
following table. We have no purchased credit-impaired loans.
2024
2023
2022
(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)
Nonowner
occupied............
$
361
$
21,430
$
—
$ 21,791
$
—
$
—
$
—
$
—
$
8,378
$
20,113
$
—
$ 28,491
Multi-family
residential..........
—
—
—
—
—
8
—
8
—
—
—
—
Land
development
and construction
loans..................
—
4,119
—
4,119
—
—
—
—
—
—
—
—
361
25,549
—
25,910
—
8
—
8
8,378
20,113
—
28,491
Single-family
residential .............
—
9,438
—
9,438
—
2,800
—
2,800
—
1,930
—
1,930
Owner occupied....
5,047
64,876
—
69,923
15,723
3,890
—
19,613
—
6,356
—
6,356
5,408
99,863
—
105,271
15,723
6,698
—
22,421
8,378
28,399
—
36,777
Commercial loans ....
—
66,605
—
66,605
30,261
22,971
—
53,232
1,749
10,446
3
12,198
Consumer loans and
overdrafts..................
—
8
—
8
—
41
—
41
—
230
—
230
$
5,408
$
166,476
$
—
$171,884
$
45,984
$
29,710
$
—
$ 75,694
$
10,127
$
39,075
$
3
$ 49,205
_________
(1)
There were no loans categorized as “Loss” as of the dates presented.
For more information on the activity of Classified loans in 2024, please refer to non-performing assets
discussions above. All nonaccrual loans are classified as Substandard.
104
Classified Loans. Classified loans includes substandard and doubtful loans. The following table presents the
activity of classified loans in 2024:
Balance at beginning of period
$
8 $
2,800 $
3,890 $
22,971 $
— $
41 $
29,710
Plus: loans downgraded to substandard
and doubtful
31,142
15,956
102,344
120,500
—
24,399
294,341
Less: classified loan charge-offs
(599)
—
—
(51,326)
—
(24,430)
(76,355)
Less: classified loans sold, net of charge
offs
(4,996)
(5,377)
(28,656)
(3,342)
—
—
(42,371)
Plus: classified loan collections and
others
(6)
(3,464)
(10,062)
(21,007)
—
(2)
(34,541)
Less: loans upgraded
—
(176)
—
(723)
—
—
(899)
Transferred from Loans to OREO
—
(301)
(2,640)
(468)
—
—
(3,409)
Balances at end of period
$
25,549 $
9,438 $
64,876 $
66,605 $
— $
8 $
166,476
(in thousands)
Year Ended December 31, 2024
Commercial
Real Estate
Single-family
Residential
Owner-
occupied
Commercial
Financial
Institutions
Consumer
and Others
Total
CRE and owner-occupied classified loans include a total of $62.3 million in loans that are current and accruing,
including: (i) a $40.8 million owner-occupied loan to a customer in the restaurant service sector in Florida, and (ii) a
$21.5 million CRE loan to customer in the accommodation service sector in Florida with an additional $5 million
with cash collateral kept in ‘pass’.
In February 2025, the Company decided to sell the $40.8 million substandard owner-occupied loan to a
customer in the restaurant service sector in Florida. The Company transferred the loan from loans held for
investment to loans held for sale, at the lower of cost or fair value, and determined no valuation allowance was
required at the time of the transfer.
105
Special Mention Loans. The following table presents the activity of special mention loans by type of loan in
2024:
Balance at beginning of period
$
— $
— $
15,723 $
30,261 $
— $
— $ 45,984
Downgrades to Special Mention
34,438
—
32,961
48,174
—
—
115,573
Upgrades to Pass
(12,565)
—
(10,140)
(3,056)
—
—
(25,761)
Downgrades to Substandard
(21,430)
—
(9,395)
(75,069)
—
—
(105,894)
Special Mention loans sold
—
—
(5,038)
—
—
—
(5,038)
Payoffs/Paydowns
(82)
—
(19,064)
(310)
—
—
(19,456)
Balances at end of period
$
361 $
— $
5,047 $
— $
— $
— $
5,408
Year Ended December 31, 2024
(in thousands)
Commercial
Real Estate
Single-
family
Residential
Owner-
occupied
Commercial
Financial
Institutions
Consumer
and Others
Total
As of December 31, 2024, Special Mention loans include $4.6 million loan balances which were past due
between 30 to 59 days. The remainder Special Mention loan balance of $0.8 million was current.
106
Potential problem loans, which are accruing loans classified as substandard and are less than 90 days past due,
at December 31, 2024, 2023 and 2022 included:
(in thousands)
2024
2023
2022
Real estate loans
Commercial real estate (CRE)
Nonowner occupied
$
21,430
$
—
$
—
Multi-family residential
—
—
—
Land development and construction loans
—
—
—
21,430
—
—
Single-family residential
227
221
150
Owner occupied
40,847
78
86
62,504
299
236
Commercial loans
—
967
1,178
Loans to depository institutions and acceptances
—
—
—
Consumer loans and overdrafts (1)
—
—
226
$
62,504
$
1,266
$
1,640
________
(1) Corresponds to international consumer loans.
At December 31, 2024, total potential problem loans increased $61.2 million compared to 2023. This was
mainly due to the downgrade to substandard accrual of a $40.8 million loan to a customer in the restaurant service
sector in Florida and a downgrade to accrual of a $21.4 million loan to a customer in the accommodations service
sector in Florida, and the addition of two residential loans totaling $0.3 million. These increases were offset by the
upgrade of a $1.0 million commercial relationship and a $0.3 million residential loan that became current.
107
Securities
Our investment decision process is based on an approved investment policy and several investment programs.
We seek a consistent risk adjusted return through consideration of the following four principles:
•
investment quality;
•
liquidity requirements;
•
interest-rate risk sensitivity; and
•
potential returns on investment
The Bank’s Board of Directors approves the Bank’s and related companies ALCO investment policy and
programs which govern the investment process. The ALCO oversees the investment process monitoring compliance
to approved limits and targets. The Company’s investment decisions are based on the above-mentioned four
principles, other factors considered relevant to particular investments and strategies, market conditions and the
Company’s overall balance sheet position. ALCO regularly evaluates the investments’ performance within the
approved limits and targets. The Company proactively manages its investment securities portfolio as a source of
liquidity and as an economic hedge against declining interest rates whenever appropriate.
108
In 2024, the Company changed the presentation of its debt securities by type to provide more granular
information on the nature of the investments. This includes, among other things, new tabular information on
mortgage-backed securities (“MBS”). Debt securities by type as of December 31, 2023 and 2022 have been
reclassified for comparative purposes.
The following table sets forth the book value and percentage of each category of securities at December 31,
2024, 2023 and 2022. The book value for debt securities classified as available for sale and equity securities with
readily determinable fair value not held for trading represents fair value. The book value for debt securities classified
as held to maturity represents amortized cost less allowance for credit losses (“ACL”), if any. The Company adopted
CECL in 2022 and determined that an ACL on its debt securities held to maturity as of December 31, 2023 and 2022
was not required. The Company held no securities as held to maturity as of December 31, 2024.
2024
2023
2022
Amount
%
Amount
%
Amount
%
(in thousands, except percentages)
Debt securities available for
sale:
U.S. Treasury Securities............. $
1,933
0.1 % $
1,991
0.1 % $
1,996
0.1 %
U.S. Government Agency and
Sponsored Enterprise
Residential MBS ........................
1,262,640
84.3 %
842,870
56.4 %
664,852
48.7 %
U.S. Government Agency and
Sponsored Enterprise
Commercial MBS.......................
142,538
9.5 %
80,626
5.4 %
69,985
5.1 %
U.S. Government Agency and
Sponsored Enterprise
Obligations.................................
16,682
1.1 %
24,588
1.6 %
33,658
2.5 %
Non-Agency Commercial MBS
(1).................................................
11,792
0.8 %
11,220
0.7 %
10,949
0.8 %
Collateralized Loan Obligations
—
— %
4,957
0.3 %
4,774
0.3 %
Corporate Bonds (2) (3).................
—
— %
249,582
16.7 %
269,751
19.8 %
Municipal Bonds........................
1,585
0.1 %
1,668
0.1 %
1,656
0.1 %
1,437,170
95.9 %
1,217,502
81.3 %
1,057,621
77.4 %
Debt securities held to
maturity (4)
—
— %
226,645
15.1 %
242,101
17.7 %
Equity securities with readily
determinable fair value not
held for trading(5)......................
2,477
0.2 %
2,534
0.2 %
11,383
0.8 %
Other securities (6):
58,278
3.9 %
50,294
3.4 %
55,575
4.1 %
$ 1,497,925
100.0 % $ 1,496,975
100.0 % $ 1,366,680
100.0 %
_________________
(1)
Issued by a financial institution.
(2)
In 2024, as a result of the Company’s Securities Repositioning strategy, the Company sold its corporate bonds including subordinated debt
securities issued by financial institutions. As of December 31, 2023 and 2022, corporate bonds in the financial services sector represent
1.9% and 2.3% of our total assets, respectively..
(3)
As of December 31, 2023 and 2022 corporate bonds include $10.5 million and $9.7 million, respectively, in “investment-grade” quality
securities issued by foreign corporate entities. The securities issuers were from Canada in two different sectors in 2023 and 2022. The
109
Company limits exposure to foreign investments based on cross border exposure by country, risk appetite and policy. All foreign
investments are denominated in U.S. Dollars.
(4)
Includes securities issued by U.S. government and U.S. government sponsored agencies. In 2024, the Company executed the Securities
Repositioning and transferred all its debt securities held to maturity to the available for sale category.
(5)
In 2023, the Company sold its marketable equity securities with a total fair value of $11.2 million at the time of sale, and recognized a net
loss of $0.2 million in connection with this transaction. Also in 2023, the Company purchased an investment in an open-end fund
incorporated in the U.S with an original cost of $2.5 million. The Fund's objective is to provide a high level of current income consistent
with the preservation of capital and investments deemed to be qualified under the Community Reinvestment Act.
(6)
Includes investments in FHLB and Federal Reserve Bank stock. Amounts correspond to original cost at the date presented. Original cost
approximates fair value because of the nature of these investments.
As of December 31, 2024, total securities slightly increased $1.0 million, or 0.1%, to $1.5 billion compared to
$1.5 billion as of December 31, 2023. The increase in 2024 was mainly driven by purchases of: (i) debt securities
available for sale and FHLB stock totaling $786.6 million and (ii) net pre-tax unrealized holding gains on debt
securities available for sale of $42.2 million primarily attributable to the reclassification into net loss of net
accumulated unrealized losses previously included in AOCL on debt securities available for sale as a result of the
Securities Repositioning. The increase was partially offset by maturities, sales, calls and pay downs totaling $746.8
million.
Upon successfully completing the Public Offering, the Company initiated the Securities Repositioning aimed at
improving yields, increasing liquidity and de-risking the securities portfolio. As part of this strategy, in the third
quarter of 2024, the Company: (i) transferred at their fair value (which was below their amortized cost basis) all of
the debt securities previously classified as held to maturity and carried at amortized cost to the debt securities
available for sale category; (ii) sold all of the Company’s investments in subordinated debt securities, included in
corporate debt securities, which resulted in a pre-tax loss on sale of approximately $6.7 million in the third quarter
of 2024; and (iii) decided to sell all other corporate debt securities. In addition, as a result of its decision to sell all
debt securities available for sale (including those previously classified as held to maturity) which had accumulated
unrealized losses and met the criteria for inclusion in the Securities Repositioning, the Company recorded a pre-tax
impairment loss totaling approximately $61.8 million on debt securities available for sale which resulted in a write
down of their previous amortized cost to their estimated fair value as of September 30, 2024. The Company
completed the Securities Repositioning in October 2024, which resulted in an additional pre-tax loss on sale of
approximately $8.1 million as a result of the subsequent decline in fair market value of the securities.
Debt securities available for sale had net unrealized holding losses of $55.7 million and net unrealized holding
gains of $0.9 million at December 31, 2024, compared to net unrealized holding losses of $100.3 million and net
unrealized holding gains of $3.2 million at December 31, 2023. In 2024, the Company recorded pre-tax net
unrealized holding gains of $42.2 million which are included in accumulated other comprehensive (loss) income for
the period. The improvement in unrealized holding losses was mainly attributed to the reclassification into net loss
of net accumulated unrealized losses previously included in AOCL on debt securities available for sale as a result of
the Securities Repositioning. The Company does not intend to sell these debt securities and it is more likely than not
that it will not be required to sell the securities before their anticipated recovery. The Company believes these
securities are not credit-impaired because the change in fair value is attributable to changes in interest rates and
investment securities markets, generally, and not credit quality. As a result, the Company did not record an
allowance for credit losses on these securities as of December 31, 2024 and 2023.
The Company considers that all debt securities held to maturity issued or sponsored by the U.S. government are
considered to be risk-free as they have the backing of the U.S. government. The Company considers there are not
current expected credit losses on these securities and, therefore, did not record an ACL on any of its debt securities
held to maturity as of December 31, 2024 and 2023. The Company monitors the credit quality of held to maturity
securities through the use of credit ratings. Credit ratings are monitored by the Company on at least a quarterly basis.
As of December 31, 2024 and 2023, all held to maturity securities held by the Company were rated investment
grade.
110
The following table sets forth the book value, scheduled maturities and weighted average yields for our
securities portfolio at December 31, 2024. Similar to the table above, the book value for debt securities classified as
available for sale and equity securities with readily determinable fair value not held for trading is equal to fair
market value. The book value for debt securities classified as held to maturity is equal to amortized cost.
December 31, 2024
(in thousands,
except percentages)
Total
Less than a year
One to five years
Five to ten years
Over ten years
No maturity
Amount
Yield
Amount
Yield
Amount
Yield
Amount
Yield
Amount
Yield
Amount
Yield
Debt securities
available for
sale
Non-Agency
Commercial
MBS
$
11,792
3.51 %
$
—
— %
$
—
— %
$
—
— %
$
11,792
3.51 %
$
—
— %
U.S. Government
Agency and
Sponsored
Enterprise
Obligations
16,682
5.45 %
11
— %
2,146
5.53 %
2,346
5.59 %
12,179
5.41 %
—
— %
Municipal Bonds
1,585
2.38 %
—
— %
—
— %
343
1.79 %
1,242
2.54 %
—
— %
U.S. Treasury
Securities
1,933
4.22 %
1,933
4.22 %
—
— %
—
— %
—
— %
—
— %
U.S. Government
Agency and
Sponsored
Enterprise
Commercial
MBS
142,538
4.17 %
206
2.87 %
37,972
3.70 %
43,051
3.72 %
61,309
4.77 %
—
— %
U.S. Government
Agency and
Sponsored
Enterprise
Residential MBS
1,262,640
4.86 %
42
3.10 %
1,154
5.42 %
6,844
4.61 %
1,254,600
4.86 %
—
— %
$1,437,170
4.78 %
$
2,192
4.05 %
$ 41,272
3.84 %
$ 52,584
3.91 %
$1,341,122
4.85 %
$
—
— %
Equity
securities with
readily
determinable
fair value not
held for trading
2,477
3.03 %
—
—
—
—
—
—
—
—
2,477
3.03 %
Other securities
$
58,278
6.95 %
$
—
— %
$
—
— %
$
—
— %
$
—
— %
$58,278
6.95 %
$1,497,925
4.87 %
$
2,192
4.05 %
$ 41,272
3.84 %
$ 52,584
3.91 %
$1,341,122
4.85 %
$60,755
6.79 %
111
The investment portfolio’s average effective duration in years was 5.2, 5.0 and 4.9 as of December 31, 2024,
2023 and 2022, respectively. The increase in effective duration in 2024 compared to 2023 was primarily due to
lower than expected mortgage-backed securities prepayments. These estimates are computed using multiple inputs
that are subject, among other things, to changes in interest rates and other factors that may affect prepayment speeds.
Contractual maturities of investment securities are adjusted for anticipated prepayments of amortizing U.S.
government sponsored agency debt and enterprise debt securities, which shorten the average lives of these
investments.
Goodwill. Goodwill was $19.2 million as of December 31, 2024 and 2023. Goodwill mainly represents the excess of
consideration paid over the fair value of the net assets of a savings bank acquired in 2006.
Liabilities
Total liabilities were $9.0 billion at December 31, 2024, an increase of $31.0 million, or 0.3%, compared to
$9.0 billion at December 31, 2023. This was primarily driven by an increase of $100.0 million, or 15.5%, in
advances from the FHLB, which included the addition of $1.5 billion of these borrowings, and was partially offset
by the $1.4 billion repayment of these borrowings in 2024. The increase was partially offset by: (i) $40.3 million, or
0.5%, in total deposits, mainly due to a decrease in interest bearing demand deposits, as well as time deposits which
included deposits that were sold in connection with the sale of the Houston Franchise; (ii) a decrease of $17.1
million, or 13.9%, in operating lease liabilities which includes operating liabilities that were sold in connection with
the sale of the Houston Franchise; and (iii) a net decrease of $12.1 million, or 7.4% in accounts payable and accrued
and other liabilities which includes other liabilities that were sold in connection with the sale of the Houston
Franchise. See “Business Development” for more details on liabilities sold in connection with the sale of the
Houston Franchise, “Capital Resources and Liquidity Management” for more details on the changes of FHLB
advances and subordinated notes and “Deposits” for more details on the changes of total deposits.
Deposits
We continue with our efforts in growing our deposits. Our efforts include the additions of retail, private and
commercial banking team members, which contributed to increasing deposit levels in 2024. See “Our Company-
Business Developments” for additional information.
Total deposits were $7.9 billion at December 31, 2024, a decrease of $40.3 million, or 0.5%, compared to
December 31, 2023. The decrease in deposits was mainly due to: (i) a decrease of $331.2 million, or 12.9%, in
interest-bearing deposits, which were due to decreases in higher cost municipalities and institutional deposits; (ii) net
decrease of $62.7 million or 2.7%, in time deposits in 2024 compared to 2023, which includes decreases of $45.0
million, or 2.9%, in customer CDs and $17.7 million, or 2.5%, in brokered time deposits. These decreases were
partially offset by increases of: (i) $275.7 million, or 17%, in savings and money market accounts and (ii) $77.8
million, or 5%, in noninterest bearing accounts.
Domestic deposits decreased $151.8 million, or 2.8%, to $5.3 billion at December 31, 2024 from $5.4 billion at
December 31, 2023, while foreign deposits increased $111.5 million, or 4.5%, in 2024 from $2.5 billion at
December 31, 2023. See discussions further below.
112
Deposits by Country of Domicile
The following table sets forth the deposits by country of domicile of the depositor as of the dates presented.
December 31,
(in thousands)
2024
2023
2022
2021
2020
Domestic (1)
$
5,278,289
$
5,430,059
$
4,620,906
$
3,137,258
$
3,202,936
Foreign:
Venezuela (2)
1,889,331
1,870,979
1,911,551
2,019,480
2,119,412
Others
686,975
593,825
511,742
474,133
409,295
Total foreign (3)
2,576,306
2,464,804
2,423,293
2,493,613
2,528,707
Total deposits
$
7,854,595
$
7,894,863
$
7,044,199
$
5,630,871
$
5,731,643
___________
(1)
Includes brokered deposits of $701.9 million, $736.9 million, $629.3 million, $387.3 million and $634.5 million at December 31, 2024,
2023, 2022, 2021, and 2020, respectively.
(2)
Based upon the diligence we customarily perform to "know our customers" for anti-money laundering, OFAC and sanctions purposes, we
believe that the current U.S. economic embargo on certain Venezuelan persons will not adversely affect our Venezuelan customer
relationships, generally.
(3)
Our other foreign deposits do not include deposits from Venezuelan resident customers.
The following table shows the increase or (decrease), during the year of our domestic and foreign deposits,
including Venezuelan resident customer deposits:
Years Ended December 31,
2024
2023
2022
2021
(in thousands,
except percentages)
Amount
%
Amount
%
Amount
%
Amount
%
Domestic (1)
$(151,770)
(2.8)%
$ 809,153
17.5 %
$1,483,648
47.3 % $ (65,678)
(2.1)%
Foreign:
Venezuela
18,352
1.0 %
(40,572)
(2.1)%
(107,929)
(5.3)%
(99,932)
(4.7)%
Others
93,150
15.7 %
82,083
16.0 %
37,609
7.9 %
64,838
15.8 %
Total foreign
111,502
4.5 %
41,511
1.7 %
(70,320)
(2.8)%
(35,094)
(1.4)%
Total deposits
$ (40,268)
(0.5)%
$ 850,664
12.1 %
$1,413,328
25.1 % $(100,772)
(1.8)%
___________
(1)
Domestic deposits, excluding brokered deposits, decreased $116.8 million in 2024 and increased $701.5 million, $1.2 billion and $181.5
million in 2023, 2022, and 2021, respectively.
113
Domestic deposits decreased $151.8 million, or 2.8%, in 2024 to $5.3 billion at December 31, 2024 from $5.4
billion at December 31, 2023. This was primarily driven by decreases of: (i) $307.5 million in domestic interest-
bearing accounts, (ii) $138.7 million in domestic time deposit accounts and (iii) $7.6 million in domestic brokered
time deposits. These decreases were partially offset by increases of: (i) $285.4 million in domestic savings and
money market deposits and (ii) $16.6 million in domestic noninterest bearing deposits.
In addition, domestic deposits were impacted by the sale of the Houston Franchise as the sale included $333.2
million in time deposits, $113.3 million in savings and money market deposits, $66.6 million in noninterest bearing
demand deposits and $54.6 million in interest-bearing demand deposits.
Foreign deposits increased $111.5 million, or 4.5%, in 2024 to $2.6 billion at December 31, 2024 from $2.5
billion at December 31, 2023, primarily driven by an increase of $93.2 million, or 15.7%, in deposits from countries
other than Venezuela, due to our efforts to grow deposits from customers in those other markets as well as an
increase of $18.4 million, or 1.0%, in deposits from customers domiciled in Venezuela.
Core deposits
Core deposits were $5.6 billion, $5.6 billion and $5.3 billion as of December 31, 2024, 2023 and 2022,
respectively. Core deposits represented 71.6%, 70.9% and 75.5% of our total deposits at those dates, respectively.
The increase of $22.4 million, or 0.4%, in core deposits in 2024 was mainly driven by the previously mentioned
increase in savings and money market deposits as well as an increase in non-interest bearing deposits. Core deposits
consist of total deposits excluding all time deposits. The Company remains focused on relationship-driven deposit
gathering activities.
As mentioned above, core deposits were impacted by the sale of the Houston Franchise as the sale included
$113.3 million in savings and money market deposits, $66.6 million in noninterest bearing demand deposits and
$54.6 million in interest-bearing demand deposits.
Brokered deposits
We utilize brokered deposits primarily as an Asset/Liability Management tool. As of December 31, 2024 and
2023, we had $701.9 million and $736.9 million in brokered deposits, which represented 8.9% and 9.3%,
respectively, of our total deposits. Brokered deposits decreased $35.0 million, or 4.7%, in 2024 compared to
December 31, 2023, mainly due to a decrease in brokered time and non-time deposits.
As of December 31, 2024 and 2023, brokered deposits only included time deposits of $701.9 million, while as
of December 31, 2023, brokered deposits included time deposits of $719.5 million and interest bearing demand and
money market deposits totaling $17.4 million. The Company has not historically sold brokered CDs in
denominations over $100,000.
114
Deposits by Type: Average Balances and Average Rates Paid
The following table sets forth the average daily balance amounts and the average rates paid on our deposits for
the periods presented.
Years Ended December 31,
2024
2023
2022
(in thousands, except
percentages)
Amount
Rates
Amount
Rates
Amount
Rates
Non-interest bearing
demand deposits
$
1,461,940
— % $
1,356,538
— % $
1,286,570
— %
Interest bearing deposits:
Checking and saving
accounts:
Interest bearing demand (1)
2,345,193
2.67 %
2,486,190
2.52 %
1,872,100
0.81 %
Money market (2)
1,502,304
4.15 %
1,226,311
3.44 %
1,323,563
0.88 %
Savings
251,626
0.04 %
284,510
0.05 %
319,631
0.04 %
Time Deposits (3)
2,302,798
4.59 %
2,074,549
3.80 %
1,334,605
1.66 %
6,401,921
3.61 %
6,071,560
3.03 %
4,849,899
1.01 %
$
7,863,861
2.94 % $
7,428,098
2.47 % $
6,136,469
0.80 %
___________
(1)
In the years ended December 31, 2024, 2023 and 2022 includes reciprocal deposits with a total average balance of $684.3 million (average
rate - 5.05%) , $584.0 million (average rate - 5.23%), and $253.8 million (average rate - 1.35%), respectively.
(2)
In the years ended December 31, 2024, 2023 and 2022, includes brokered deposits with a total average balance of $2.9 million (average rate
- 5.40%), $13.3 million (average rate - 5.07%), and $43.3 million (average rate - 1.47%), respectively.
(3)
In the years ended December 31, 2024, 2023 and 2022, includes brokered deposits with average balances of $691.3 million, $673.2 million,
and $359.7 million, respectively, with average rates of 5.05%, 4.36%, and 2.51%, respectively.
115
Large Fund Providers
Large fund providers consists of third party relationships with balances over $20 million. At December 31,
2024 and 2023, our large fund providers, included 20 and 19 deposit relationships, respectively, with total balances
of $942.3 million and $1.1 billion, respectively. The decrease in large fund providers in December 31, 2024 was
mainly driven by a decrease in higher-cost municipal deposits as the Company continues to focus on depository
relationships.
Large Time Deposits by Maturity
The following table sets forth the maturities of our time deposits with individual balances equal to or greater
than $100,000 as of the dates presented.
December 31,
(in thousands, except percentages)
2024
2023
2022
Less than 3 months......................... $
386,857
30.4 % $
178,102
13.7 % $ 140,292
15.1 %
3 to 6 months..................................
349,673
27.5 %
239,843
18.4 %
148,137
16.0 %
6 to 12 months................................
464,812
36.6 %
698,897
53.6 %
497,436
53.6 %
1 to 3 years .....................................
53,745
4.2 %
174,792
13.4 %
135,663
14.6 %
Over 3 years ...................................
15,386
1.3 %
12,974
0.9 %
6,889
0.7 %
Total ............................................... $ 1,270,473
100.0 % $ 1,304,608
100.0 % $ 928,417
100.0 %
116
Short-Term Borrowings. In addition to deposits, we use short-term borrowings, such as FHLB advances, and
less frequently, advances from other banks, as a source of funds to meet the daily liquidity needs of our customers
and fund growth in earning assets. Short-term borrowings have maturities of 12 months or less as of the reported
period-end.
Short-term borrowings outstanding at December 31, 2024 and 2023, matured in January 2025 and 2024,
respectively. All of our outstanding short-term borrowings at December 31, 2024, 2023 and 2022 corresponded to
FHLB advances. There were no other borrowings or repurchase agreements outstanding as of December 31, 2024,
2023 and 2022.
The following table sets forth information about the outstanding amounts of our short-term borrowings at the
close of and for years ended December 31, 2024, 2023 and 2022.
Years Ended December 31,
(in thousands, except percentages)
2024
2023
2022
Outstanding at period-end................................................................. $
30,000
$
40,000
$ 304,821
Average amount ...............................................................................
2,500
49,572
111,448
Maximum amount outstanding at any month-end............................
30,000
204,863
304,821
Weighted average interest rate:
During period ............................................................................
4.44 %
4.27 %
1.98 %
End of period .............................................................................
4.44 %
5.46 %
3.17 %
117
Return on Equity and Assets
The following table shows return on average assets, return on average equity, and average equity to average
assets ratio for the periods presented:
Years Ended December 31,
(in thousands, except percentages and per share data)
2024
2023
2022
Net (loss) income attributable to the Company
$
(15,752)
$
32,490
$
63,310
Basic (loss) earnings per common share
(0.44)
0.97
1.87
Diluted (loss) earnings per common share (1)
(0.44)
0.96
1.85
Average total assets
$ 9,891,803
$ 9,452,221
$ 8,187,688
Average stockholders' equity
792,044
740,630
749,549
Net (loss) income attributable to the Company/ Average total assets
(ROA)
(0.16)%
0.34 %
0.77 %
Net (loss) income attributable to the Company / Average stockholders'
equity (ROE)
(1.99)%
4.39 %
8.45 %
Average stockholders' equity / Average total assets ratio
8.01 %
7.84 %
9.15 %
__________________
(1)
As of December 31, 2024, 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 anti-dilutive effect in per share earnings in that period. At December 31,
2023 and 2022, potential dilutive instruments consisted of unvested shares of restricted stock, restricted stock units and performance stock
units. See Note 14 to our audited consolidated financial statements in this Form 10-K for details on the dilutive effects of the issuance of
restricted stock, restricted stock units and performance share units on earnings per share in 2024, 2023 and 2022.
In 2024, the Company had a net loss, compared to net income in 2023. As a result, the Company had basic and
diluted losses per share in 2024, compared to earnings per share in 2023. Additionally, in 2024 average common
shares increased compared to 2023 primarily as a result of the Public Offering in 2024.
Capital Resources and Liquidity Management
Capital Resources
Stockholders’ equity is influenced primarily by earnings, dividends, if any, and changes in Accumulated Other
Comprehensive Income or Loss (“AOCI” or “AOCL”) caused primarily by fluctuations in unrealized holding gains
or losses, net of taxes, on debt securities available for sale and derivative instruments. AOCI or AOCL are not
included for purposes of determining our capital for holding and bank regulatory purposes.
Stockholders’ equity was $890.5 million as of December 31, 2024, an increase of $154.4 million, or 21.0%,
compared to $736.1 million as of December 31, 2023. This increase was primarily driven by: (i) net proceeds of
$155.8 million from the issuance of common stock in the Public Offering completed in 2024, (ii) a decrease in
accumulated other comprehensive losses (“AOCL”) of $31.0 million due to the reclassification into net loss of net
accumulated unrealized losses previously included in AOCL on debt securities available for sale as a result of the
Securities Repositioning completed in 2024, and (iii) a net aggregate of $5.0 million in stock-based incentive
compensation programs. The increase was offset by: (i) net loss of $15.8 million in 2024; (ii) $12.8 million of
dividends declared and paid by the Company in 2024 and (iii) an aggregate of $7.6 million of Class A common
stock repurchased in 2024. See more details on the stock repurchase program launched in 2023 further below.
118
Non-controlling Interest
The Company records net loss attributable to Non-controlling interests in its condensed consolidated statement
of operations and comprehensive income (loss) equal to the percentage of the economic or ownership interest
retained in the interest of Amerant Mortgage, and presents non-controlling interests as a component of stockholders’
equity on the consolidated balance sheets. At December 31, 2024 and 2023, the Company had an ownership interest
of 100% in Amerant Mortgage. On December 31, 2023, Amerant Mortgage became a wholly-owned subsidiary of
the Company as it increased its ownership interest to 100% effective as of December 31, 2023. Therefore, the
Company did not record any loss or gain attributable to non-controlling interest in 2024 and had no equity
attributable to the non-controlling interest at December 31, 2024 and 2023. See Note 1 to our audited annual
consolidated financial statements in this Form 10-K for detailed information on changes in ownership interest in
Amerant Mortgage.
Common Stock Transactions
Public Offering
On September 27, 2024, the Company completed a public offering of 8,684,210 shares of its Class A voting
common stock, at a price to the public of $19.00 per share, which included 784,210 shares issued upon the exercise
in full by the underwriters of their option to purchase additional shares of common stock (the “Public Offering”).
The total gross proceeds from the offering were approximately $165.0 million, with net proceeds of approximately
$155.8 million after deducting underwriting discounts and commissions and estimated offering expenses payable by
the Company. The intended use of the net proceeds of the Public Offering is general corporate purposes to support
its continued organic growth, which may include, among other things, working capital, investments in the Bank,
resolution of non-performing loans, and balance sheet optimization strategies.
Common Stock Repurchases and cancellation of Treasury Shares.
Repurchase Plans Details
On December 19, 2022, the Company announced that the Board of Directors authorized a new repurchase
program pursuant to which the Company may purchase, from time to time, up to an aggregate amount of $25 million
of its shares of Class A common stock (the “2023 Class A Common Stock Repurchase Program”). The 2023 Class A
Common Stock Repurchase Program was set to expire on December 31, 2023 and on December 15, 2023, the
Company announced that the Board approved to extend the expiration date to December 31, 2024. On December
11, 2024, the Company announced that the Board approved to extend the expiration date to December 31, 2025.
In 2024 and 2023, the Company repurchased an aggregate of 344,326 and 259,853 shares, respectively, of Class
A common stock at a weighted average price of $21.94 and $18.98 per share, under the 2023 Class A Common
Stock Repurchase Program. The aggregate purchase price for these transactions was $7.6 million and $4.9 million,
respectively, in the years ended December 31, 2024 and 2023, including transaction costs. At December 31, 2024
and 2023, the Company had $12.4 million and $20 million, respectively, available for repurchase under this
repurchase program.
On January 31, 2022, the Company announced that the Board of Directors authorized 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 2022, the
Company repurchased an aggregate of 1,602,887 shares of Class A common stock at a weighted average price of
$31.14 per share, under the New Class A Common Stock Repurchase Program. The aggregate purchase price for
these transactions was approximately $49.9 million, including transaction costs. On May 19, 2022, the Company
announced the completion of the New Class A Common Stock Repurchase Program.
119
In 2024, 2023 and 2022, the Company’s Board of Directors authorized the cancellation of all shares of Class A
common stock and Class B common stock previously held as treasury stock, including all shares repurchased in
2024, 2023 and 2022. Therefore, the Company had no shares of common stock held in treasury stock at
December 31, 2024, 2023 and 2022.
Stock-Based Compensation Awards
The Company grants, from time to time, stock-based compensation awards which are reflected as changes in the
Company’s Stockholders’ equity. See Note 14 “Incentive Compensation and Benefit Plan” for additional
information about common stock transactions under the Company’s 2018 Equity Plan.
Dividends
Set forth below are the details of dividends declared and paid by the Company for the periods ended
December 31, 2024, 2023 and 2022, and subsequent to December 31, 2024:
Declaration Date
Record Date
Payment Date
Dividend Per Share
Dividend Amount
01/22/2025
02/14/2025
02/28/2025
$0.09
$3.8 million
10/23/2024
11/14/2024
11/29/2024
$0.09
$3.8 million
07/24/2024
08/15/2024
08/30/2024
$0.09
$3.0 million
04/24/2024
05/15/2024
05/30/2024
$0.09
$3.0 million
01/17/2024
02/14/2024
02/29/2024
$0.09
$3.0 million
10/18/2023
11/14/2023
11/30/2023
$0.09
$3.0 million
07/19/2023
08/15/2023
08/31/2023
$0.09
$3.0 million
04/19/2023
05/15/2023
05/31/2023
$0.09
$3.0 million
01/18/2023
02/13/2023
02/28/2023
$0.09
$3.0 million
10/19/2022
11/15/2022
11/30/2022
$0.09
$3.0 million
07/20/2022
08/17/2022
08/31/2022
$0.09
$3.0 million
04/13/2022
05/13/2022
05/31/2022
$0.09
$3.0 million
01/19/2022
02/11/2022
02/28/2022
$0.09
$3.2 million
On January 22, 2025, the Company’s Board of Directors declared a cash dividend of $0.09 per-share of the
Company’s Class A common stock. The dividend was paid on February 28, 2025, to shareholders of record at the
close of business on February 14, 2025.
Liquidity Management
Advances from the FHLB, other borrowings and borrowing capacity
At December 31, 2024 and 2023, the Company had $0.7 billion and $0.6 billion, respectively, of outstanding
advances from the FHLB. During the year ended December 31, 2024, the Company repaid $1.4 billion of
outstanding FHLB advances, and borrowed $1.5 billion from this source.
At December 31, 2024 and 2023 advances from the FHLB had maturities through 2029 and 2028, respectively.
At December 31, 2024, advances from the FHLB had fixed interest rates ranging from 3.45% to 5.46% and, a
weighted average rate of 4.10% (fixed interest rates ranging from 0.61% to 4.90%, and a weighted average rate of
3.65% at December 31, 2023).
120
We had $1.6 billion and $1.9 billion of additional borrowing capacity with the FHLB as of December 31, 2024
and 2023, respectively. This additional borrowing capacity is determined by the FHLB. We also maintain borrowing
capacity with the Federal Reserve, and relationships in the capital markets with brokers and dealers to issue FDIC-
insured interest-bearing deposits, including certificates of deposits. We also have available uncommitted federal
funds credit lines with several banks. At December 31, 2024 and 2023, we had no outstanding obligations on
uncommitted federal funds lines with banks.
There were no other borrowings as of December 31, 2024 and 2023.
Based on our current outlook, we believe that net income, deposits, advances from the FHLB and available
other funding sources will be sufficient to fund liquidity requirements for the next twelve months.
Holding Company
We are a corporation separate and apart from the Bank and, therefore, must provide for our own liquidity.
Historically, our main source of funding has been dividends declared and paid to us by the Bank. The Company is
the obligor and guarantor on our junior subordinated debt, the Senior Notes and Subordinated Notes. As previously
discussed, on September 27, 2024, the Company completed a public offering of its common stock, which resulted in
net proceeds to the Company of $155.8 million recorded in 2024. Following the completion of this offering in 2024,
the Company contributed cash totaling $90 million to its Bank subsidiary.The Company held cash and cash
equivalents of $99.5 million as of December 31, 2024 and $46.8 million as of December 31, 2023, in funds available
to service its Senior Notes, Subordinated Notes and junior subordinated debt and for general corporate purposes, as a
separate stand-alone entity.
Based on our current outlook, we believe that available funding sources, including any dividends from the
Bank, will be sufficient to fund liquidity requirements for the next twelve months.
Subsidiary Dividends
There are statutory and regulatory limitations that affect the ability of the Bank to pay dividends to the
Company. These limitations exclude the effects of AOCI. Management believes that these limitations will not affect
the Company’s ability to meet its ongoing short-term cash obligations. See “Supervision and Regulation” in this
Form 10-K.
In December 2023, the Boards of Directors of the Bank approved the payment of a cash dividend of $20 million
by the Bank to Amerant Bancorp. The Company received this dividend in the first quarter of 2024. The Bank did not
declare any dividends payable to Amerant Bancorp in 2024.
Regulatory Capital Requirements
We are subject to various regulatory capital requirements administered by the Federal Reserve and OCC.
Failure to meet regulatory capital requirements may result in certain discretionary, and possible mandatory actions
by regulators that, if taken, could have a direct material effect on our business, financial condition and results of
operation. Under the federal capital adequacy rules and the regulatory framework for “prompt corrective action”, we
must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-
balance sheet items as calculated for regulatory capital purposes. Our capital amounts and classification are also
subject to qualitative judgments by the regulators, including anticipated capital needs. Supervisory assessments of
capital adequacy may differ significantly from conclusions based solely upon the regulations’ risk-based capital
ratios. Quantitative measures established by regulation to ensure capital adequacy require us to maintain minimum
CET1, Tier 1 leverage, Tier 1 risk-based capital and total risk-based capital ratios.
121
The Basel III rules became effective for the Company and the Bank on January 1, 2015 with full compliance
with all of the requirements being phased in by January 1, 2019. The Company and the Bank opted to not include
the AOCI in computing regulatory capital. As of December 31, 2024, management believes that the Company and
the Bank meet all capital adequacy requirements to which they are subject, and are well-capitalized. In addition,
Basel III rules required the Company and the Bank to hold a minimum capital conservation buffer of 2.50%. The
Company’s capital conservation buffer at year end 2024 and 2023 was 5.4% and 4.1%, respectively, and therefore
no regulatory restrictions exist under the applicable capital rules on dividends or discretionary bonuses or other
payments. See —“Supervision and Regulation— Capital” for more information regarding regulatory capital.
Our Company’s consolidated regulatory capital amounts and ratios are presented in the following table:
December 31, 2024
Total capital ratio................ $ 1,096,882
13.43 % $
653,446
8.00 % $
816,807
10.00 %
Tier 1 capital ratio...............
976,360
11.95 %
490,084
6.00 %
653,446
8.00 %
Tier 1 leverage ratio............
976,360
9.66 %
404,480
4.00 %
505,600
5.00 %
CET1 capital ratio...............
915,658
11.21 %
367,563
4.50 %
530,925
6.50 %
December 31, 2023
Total capital ratio................ $
979,777
12.12 % $
646,481
8.00 % $
808,101
10.00 %
Tier 1 capital ratio...............
851,787
10.54 %
484,860
6.00 %
646,481
8.00 %
Tier 1 leverage ratio............
851,787
8.84 %
385,598
4.00 %
481,998
5.00 %
CET1 capital ratio...............
790,959
9.79 %
363,645
4.50 %
525,266
6.50 %
December 31, 2022
Total capital ratio................ $
947,505
12.39 % $
611,733
8.00 % $
764,666
10.00 %
Tier 1 capital ratio...............
833,078
10.89 %
458,799
6.00 %
611,733
8.00 %
Tier 1 leverage ratio............
833,078
9.18 %
363,130
4.00 %
453,913
5.00 %
CET1 capital ratio...............
772,105
10.10 %
344,100
4.50 %
497,033
6.50 %
Actual
Required for Capital Adequacy
Purposes
Regulatory Minimums To be
Well Capitalized
(in thousands, except percentages)
Amount
Ratio
Amount
Ratio
Amount
Ratio
122
The Bank’s consolidated regulatory capital amounts and ratios are presented in the following table:
Actual
Required for Capital Adequacy
Purposes
Regulatory Minimums to be
Well Capitalized
(in thousands, except
percentages)
Amount
Ratio
Amount
Ratio
Amount
Ratio
December 31, 2024
Total capital ratio.............. $ 1,047,759
12.84 % $
652,644
8.00 % $
815,805
10.00 %
Tier 1 capital ratio ............
956,861
11.73 %
489,483
6.00 %
652,644
8.00 %
Tier 1 leverage ratio..........
956,861
9.50 %
402,892
4.00 %
503,615
5.00 %
CET1 capital ratio.............
956,861
11.73 %
367,112
4.50 %
530,273
6.50 %
December 31, 2023
Total capital ratio.............. $
964,678
11.95 % $
645,662
8.00 % $
807,077
10.00 %
Tier 1 capital ratio ............
866,141
10.73 %
484,246
6.00 %
645,662
8.00 %
Tier 1 leverage ratio..........
866,141
9.03 %
383,864
4.00 %
479,830
5.00 %
CET1 capital ratio.............
866,141
10.73 %
363,185
4.50 %
524,600
6.50 %
December 31, 2022
Total capital ratio.............. $
923,113
12.10 % $
610,149
8.00 % $
762,686
10.00 %
Tier 1 capital ratio ............
837,970
10.99 %
457,612
6.00 %
610,149
8.00 %
Tier 1 leverage ratio..........
837,970
9.27 %
361,655
4.00 %
452,069
5.00 %
CET1 capital ratio.............
837,970
10.99 %
343,209
4.50 %
495,746
6.50 %
The Basel III Capital Rules revised the definition of capital and describe the capital components and eligibility
criteria for CET1 capital, additional Tier 1 capital and Tier 2 capital. See “Item 1. Business — Supervision and
Regulation” for detailed information.
In the fourth quarter of 2022, the Company adopted CECL. 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. See
Note 1 to our audited annual consolidated financial statements in this Form 10-K for details on the adoption of
CECL.
123
Effects of Inflation and Changing Prices
The consolidated financial statements and related consolidated financial data presented herein have been
prepared in accordance with GAAP and practices within the banking industry, which require the measurement of
financial position and operating results in terms of historical Dollars without considering the changes in the relative
purchasing power of money over time due to inflation.
Unlike most industrial companies, virtually all the assets and liabilities of a financial institution are monetary in
nature. As a result, interest rates have a more significant impact on a financial institution’s performance than the
effects of general levels of inflation. However, inflation also affects a financial institution by increasing its cost of
goods and services purchased, as well as the cost of salaries and benefits, occupancy expense, and similar items.
Inflation and related increases in interest rates generally decrease the market value of investments and loans held and
may adversely affect liquidity, earnings, and shareholders’ equity. Loan originations and re-financings also tend to
slow as interest rates increase, and higher interest rates may reduce a financial institution’s earnings from such
origination activities. Similarly, lower inflation and rate decreases increase the fair value of securities and loan
origination and refinancing tend to accelerate.
Off-Balance Sheet Arrangements
We may engage in a variety of financial transactions in the ordinary course of business that, under GAAP, may
not be recorded on the balance sheet. Those transactions may include contractual commitments to extend credit in
the ordinary course of our business activities to meet the financing needs of customers. Such commitments involve,
to varying degrees, elements of credit, market and interest rate risk in excess of the amount recognized in the balance
sheets. These commitments are legally binding agreements to lend money at predetermined interest rates for a
specified period of time and generally have fixed expiration dates or other termination clauses. We use the same
credit and collateral policies in making these credit commitments as we do for on-balance sheet instruments.
We evaluate each customer’s creditworthiness on a case-by-case basis and obtain collateral, if necessary, based
on our credit evaluation of the borrower. In addition to commitments to extend credit, we also issue standby letters
of credit that are commitments to a third-party in specified amounts of payment or performance, if our customer fails
to meet its contractual obligation to the third-party. The credit risk involved in the underwriting of letters of credit is
essentially the same as that involved in extending credit to customers.
The following table shows the outstanding balance of our off-balance sheet arrangements as of the end of the
periods presented. Except as disclosed below, we are not involved in any other off-balance sheet contractual
relationships that are reasonably likely to have a current or future material effect on our financial condition, a change
in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources.
December 31,
(in thousands)
2024
2023
2022
Commitments to extend credit....................................................................... $1,389,894
$1,305,816
$1,165,701
Letters of credit..............................................................................................
149,029
29,605
20,726
$1,538,923
$1,335,421
$1,186,427
Commitments to extend credit increased $84.1 million, or 6.4%, as of December 31, 2024 compared to
December 31, 2023. This was mainly driven by an increase in commercial real estate and construction loan
commitments.
The Company uses interest rate swaps and other derivative instruments as part of its normal business operations.
See Note 12- Derivative Instruments to our consolidated financial statements for details.
124
Contractual Obligations
In the normal course of business, we and our subsidiaries enter into various contractual obligations that may
require future cash payments. Significant commitments for future cash obligations include capital expenditures
related to operating leases, certain binding agreements we have entered into for services including outsourcing of
technology services, advertising and other services, and other borrowing arrangements which are not material to our
liquidity needs. We currently anticipate that our available funds, credit facilities, and cash flows from operations will
be sufficient to meet our operational cash needs for the foreseeable future. Other than the changes discussed herein,
there have been no material changes to the contractual obligations previously disclosed in the 2023 Form 10-K.
The table below summarizes, by remaining maturity, our significant contractual cash obligations as of
December 31, 2024. Amounts in this table reflect the minimum contractual obligation under legally enforceable
contracts with terms that are both fixed and determinable. All other contractual cash obligations on this table are
reflected in our consolidated balance sheet.
As of December 31, 2024 we had the following contractual cash obligations:
Payments Due Date
(in thousands)
Total
Less than one
year
One to three
years
Over three to
five years
More than
five years
Operating lease obligations ........................ $
224,246
$
14,232
$
29,321
$
28,777
$
151,916
Time deposits
2,234,445
1,729,785
375,805
127,891
964
Borrowings:
FHLB advances .......................................
745,000
30,000
210,000
505,000
—
Senior notes..............................................
60,000
60,000
—
—
—
Subordinated notes...................................
30,000
—
—
—
30,000
Junior subordinated debentures................
64,178
—
—
—
64,178
Contractual interest payments (1)..............
231,832
94,070
67,290
38,593
31,879
$ 3,589,701
$ 1,928,087
$
682,416
$
700,261
$
278,937
__________________
(1)
Calculated assuming a constant interest rate as of December 31, 2024.
We believe that we will be able to meet our contractual obligations as they come due through the maintenance
of adequate liquidity. We expect to maintain adequate liquidity through the results of operations, loan and securities
repayments and maturities and continued deposit gathering activities. We also have various borrowing facilities at
the Bank to satisfy both short-term and long-term liquidity needs.
In December 2021, the Company became a strategic lead investor in the JAM FINTOP Blockchain fund (the
“Fund”). The Company is currently committed to making future contributions to the Fund for a total of $7.5 million
at December 31, 2024.
125
Critical Accounting Policies and Estimates
The preparation of our consolidated financial statements in accordance with GAAP requires us to make
estimates and judgments that affect our reported amounts of assets, liabilities, revenues and expenses and related
disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other
assumptions that are believed to be reasonable under current circumstances, results of which form the basis for
making judgments about the carrying value of certain assets and liabilities that are not readily available from other
sources. We evaluate our estimates on an ongoing basis. Actual results may differ from these estimates under
different assumptions or conditions.
Accounting policies, as described in detail in the notes to our consolidated financial statements, are an integral
part of our financial statements. A thorough understanding of these accounting policies is essential when reviewing
our reported results of operations and our financial position. We believe that the critical accounting policies and
estimates discussed below require us to make difficult, subjective or complex judgments about matters that are
inherently uncertain. Changes in these estimates, that are likely to occur from period to period, or using different
estimates that we could have reasonably used in the current period, would have a material impact on our financial
position, results of operations or liquidity.
Securities. Securities generally must be classified as held to maturity, or HTM, debt securities available-for-
sale, or AFS, trading or, equity securities with readily available fair values. Securities classified as HTM are
securities we have both the ability and intent to hold until maturity and are carried at amortized cost, less any
allowance for credit losses. Trading securities, if we had any, would be held primarily for sale in the near term to
generate income. Debt securities that do not meet the definition of trading or HTM are classified as AFS.
The classification of investment securities is significant since it directly impacts the accounting for unrealized
gains and losses on these securities. Unrealized gains and losses on trading securities, if we had any, and equity
securities with readily available fair values, would flow directly through earnings during the periods in which they
arise. AFS securities are measured at fair value each reporting period. Unrealized gains and losses on AFS securities
are recorded as a separate component of shareholders’ equity (accumulated other comprehensive income or loss) and
do not affect earnings until realized or deemed to be credit-impaired. Investment securities that are classified as
HTM are recorded at amortized cost, and reduced by an estimated amount of expected credit loss during the life of
the investment, if any.
For debt securities available for sale, the Company evaluates whether: (i) the fair value of the securities is less
than the amortized costs basis; (ii) it intends to sell, or it is more likely than not that it will be required to sell, the
security before recovery of its amortized cost basis, and (iii) the decline in fair value has resulted from credit losses
or other factors. The Company estimates credit losses on debt securities available for sale using a discounted cash
flow model. The present value of an impaired debt security results from estimating future cash flows that are
expected to be collected, discounted at the debt security’s effective interest rate. The Company develops its
estimates about cash flows expected to be collected and determines whether a credit loss exists, generally using
information about past events, current conditions, reasonable and supportable forecasts and other qualitative factors
including the extent to which fair value is less than amortized cost basis, adverse conditions specifically related to
the security, industry or geographic area, changes in conditions of any collateral underlying the securities, changes
in credit ratings, failure of the issuer to make scheduled payments, among other qualitative factors specific to the
applicable security. If a credit loss exists, the Company records an allowance for the credit losses, limited to the
amount by which the fair value is less than the amortized cost basis. The Company recognizes in AOCI/AOCL a
decline in fair value over the carrying amount of AFS securities that has not been recorded through an allowance for
credit losses.
Debt securities available for sale are charged off to the extent that there is no reasonable expectation of recovery
of amortized cost basis. Debt securities available for sale are placed on non-accrual status if the Company does not
reasonably expect to receive interest payments in the future and interest accrued is reversed against interest income.
Securities are returned to accrual status only when collection of interest is reasonably assured.
126
Fair Value of Financial Instruments. We are, under applicable accounting guidance, required to maximize the
use of observable inputs and minimize the use of unobservable inputs in measuring fair value. We classify fair value
measurements of financial instruments based on the three-level fair value hierarchy in the guidance. We carry
mortgage loans, AFS debt and other securities, BOLI policies and derivative assets and liabilities at fair value. From
time to time, we also have loans held for sale carried at the lower of cost or fair value.
The fair values of assets and liabilities may include adjustments for various factors, such as market liquidity and
credit quality, where appropriate. Valuations of products using models or other techniques are sensitive to
assumptions used for the significant inputs. Where market data is available, the inputs used for valuation reflect that
information as of our valuation date. Inputs to valuation models are considered unobservable if they are supported
by little or no market activity. In periods of extreme volatility, lessened liquidity or in illiquid markets, there may be
more variability in market pricing or a lack of market data to use in the valuation process. In keeping with the
prudent application of estimates and management judgment in determining the fair value of assets and liabilities, we
have in place various processes and controls including validation controls, for which we utilize both broker and
pricing service inputs. Data from these services may include both market-observable and internally-modeled values
and/or valuation inputs. Our reliance on this information is affected by our understanding of how the broker and/or
pricing service develops its data with a higher degree of reliance applied to those that are more directly observable
and lesser reliance applied to those developed through their own internal modeling. Similarly, broker quotes that are
executable are given a higher level of reliance than indicative broker quotes, which are not executable. These
processes and controls are performed independently of the business. For additional information, see Note 18 of our
audited consolidated financial statements.
Allowance for Credit Losses
In 2022, the Company adopted Accounting Standards Codification Topic 326 - Financial Instruments - Credit
Losses (ASC Topic 326), which replaced the incurred loss methodology for estimated probable loan losses with an
expected credit loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The
Company adopted the CECL guidance as of the beginning of the reporting period of adoption, January 1, 2022,
using a modified retrospective approach for all its financial assets measured at amortized cost and off-balance sheet
credit exposures.
Under the CECL accounting guidance, the Allowance for Credit Losses, or ACL, is a valuation account that is
deducted from the amortized cost basis of financial assets, including loans held for investments and debt securities
held to maturity, to present the net amount that is expected to be collected throughout the life of those financial
assets. The estimated ACL is recorded through a provision for credit losses charged against income. Management
periodically evaluates the adequacy of the ACL to maintain it at a level it believes to be reasonable. The Company
uses the same methods used to determine the ACL to assess any reserves needed for off-balance sheet credit risks
such as unfunded loan commitments and contingent obligations on letters of credit. These reserves for off-balance
sheet credit risks are presented in the liabilities section in the consolidated balance sheets.
The Company develops and documents its methodology to determine the ACL at the portfolio segment level.
The Company determines its loan portfolio segments based on the type of loans it carries and their associated risk
characteristics. The measurement of expected credit losses considers information about historical events, current
conditions, reasonable and supportable forecasts and other relevant information. Determining the amount of the
ACL is complex and requires extensive judgment by management about matters that are inherently uncertain. Re-
evaluation of the ACL estimate in future periods, in light of changes in composition and characteristics of the loan
portfolio, changes in the reasonable and supportable forecast and other factors then prevailing may result in material
changes in the amount of the ACL and credit loss expense in those future periods.
127
Expected credit losses are estimated on a collective basis for groups of loans that share similar risk
characteristics. Factors that may be considered in aggregating loans for this purpose include but are not necessarily
limited to, product or collateral type, industry, geography, internal risk rating, credit characteristics such as credit
scores or collateral values, and historical or expected credit loss patterns. For loans that do not share similar risk
characteristics with other loans such as collateral dependent loans and modifications to borrowers experiencing
financial difficulties, expected credit losses are estimated on an individual basis.
Expected credit losses are estimated over the contractual terms of the loans, adjusted for expected prepayments.
Expected prepayments for commercial and commercial real estate loans are generally estimated based on the
Company's historical experience. For residential loans, expected prepayments are estimated using a model that
incorporates industry prepayment data, calibrated to reflect the Company's experience. The contractual term
excludes expected extensions, renewals, and modifications unless either of the following applies: management has a
reasonable expectation at the reporting date a modification related to a borrower experiencing financial difficulty
will be executed, or the extension or renewal options are included in the original or modified contract at the
reporting date and are not unconditionally cancellable by the Company.
With respect to modifications made to borrowers experiencing financial difficulty, a change to the ACL is
generally not recorded upon modification since the effect of these modifications is already included in the ACL
given the measurement methodologies used to estimate the ACL. From time to time, the Company modifies loans by
providing principal forgiveness on certain of its real estate loans. When principal forgiveness is provided, the
amortized cost basis of the asset is written off against the ACL. The amount of the principal forgiveness is deemed
to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost
basis and a corresponding adjustment to the ACL.
For the largest portfolio segments, including commercial and commercial real estate loans, expected credit
losses are estimated using probability of default (“PD”) and loss given default (“LGD”) bottom-up approach, which
derives the expected losses from borrower's and market or industry specific risk characteristics. For smaller-balance
homogeneous loans with similar risk characteristics, including residential, consumer and small business loans, the
models estimate lifetime loan losses based on the portfolio’s historical behavior. In order to incorporate forward-
looking expectations, the ACL for these portfolios is adjusted based on macroeconomic factors proven to have
effects on the performance of the credit quality of each respective portfolio. The models incorporate a probability-
weighted blend of macroeconomic scenarios by ingesting numerous national, regional and metropolitan statistical
area (“MSA”) level variables and data points. Some of the more impactful include both current and forecasted
unemployment rates, home price index, CRE property forecasts, stock market and market volatility indices, real
gross domestic product growth, and a variety of interest rates and spreads. The macroeconomic forecast process is
complex and varies from period to period and therefore may results in increased volatility in the ACL and earnings.
All loss estimates are conditioned as applicable on changes in current conditions and the reasonable and
supportable economic forecast. Additionally, the Company makes qualitative adjustments to the ACL when, based
on management’s judgment, there are factors impacting expected credit losses not taken into account by the
quantitative calculations. Potential qualitative adjustments include economic factors, including material trends and
developments that, in management's judgment, may not have been considered in the reasonable and supportable
economic forecast, credit policy and staffing, including the nature and level of policy and procedural exceptions or
changes in credit policy not reflected in quantitative results, changes in the quality of underwriting and portfolio
management and staff and issues identified by credit review, internal audit or regulators that may not be reflected in
quantitative results, concentrations, considering whether the quantitative estimate adequately accounts for
concentration risk in the portfolio, model imprecision and model validation findings; and other factors not
adequately considered in the quantitative estimate or other qualitative categories identified by management that may
materially impact the amount of expected credit losses.
The Company expects to collect the amortized cost basis of government insured residential loans due to the
nature of the government guarantee and, therefore generally have no expected credit losses.
128
Expected credit losses on loans to borrowers that are domiciled in foreign countries, primarily loans in the
Consumer and Financial Institutions portfolios are generally estimated by assessing the any available cash or other
types of collateral, and the probability of losses arising from the Company’s exposure to those collateral assets.
Loans in this portfolio are generally fully collateralized with cash, securities and other assets and, therefore,
generally have no expected credit losses.
Commercial real estate, commercial and financial institution loans are charged off against the ACL when they
are considered uncollectable. These loans are considered uncollectable when a loss becomes evident to management,
which generally occurs when the following conditions are present, among others: (1) a loan or portions of a loan are
classified as “loss” in accordance with the internal risk grading system; (2) a collection attorney has provided a
written statement indicating that a loan or portions of a loan are considered uncollectible; and (3) the carrying value
of a collateral-dependent loan exceeds the appraised value of the asset held as collateral. Consumer and other retail
loans are charged off against the ACL at the earlier of (1) when management becomes aware that a loss has
occurred, or (2) when closed-end retail loans become past due 90 days or open-end retail loans become past due 180
days from the contractual due date. For open and closed-end retail loans secured by residential real estate, any
outstanding loan balance in excess of the fair value of the property, less cost to sell, is charged off no later than when
the loan is 180 days past due from the contractual due date. Consumer and other retail loans may not be charged off
when management can clearly document that a past due loan is well secured and in the process of collection such
that collection will occur regardless of delinquency status in accordance with regulatory guidelines applicable to
these types of loans.
Recoveries on loans represent collections received on amounts that were previously charged off against the
ACL. Recoveries are credited to the ACL when received, to the extent of the amount previously charged off against
the ACL on the related loan. Any amounts collected in excess of this limit are first recognized as interest income,
then as a reduction of collection costs, and then as other income.
Goodwill. Goodwill is evaluated for impairment at least annually and on an interim basis if an event or
circumstance indicates that it is likely an impairment has occurred. We have applied significant judgment for annual
goodwill impairment testing purposes. The Company recorded goodwill impairment of $1.3 million in 2023 as a
result of this evaluation. Future negative changes may result in potential impairments in future periods.
Determining the fair value of the reporting unit to which goodwill is allocated to (the Company as a whole since
we report using a single-segment concept) is considered a critical accounting estimate because it requires significant
management judgment and the use of subjective measurements. Variability in the market and changes in
assumptions or subjective measurements used to determine fair value are reasonably possible and may have a
material impact on our financial position, liquidity or results of operations.
Deferred Income Taxes. We use the balance sheet method of accounting for income taxes as prescribed by
GAAP. Under this method, DTAs and deferred tax liabilities, or DTLs, are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. If current available information raises doubt as to the realization of the
DTAs a valuation allowance is established. DTAs and DTLs are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Accounting for deferred income taxes is a critical accounting estimate because we exercise significant judgment in
evaluating the amount and timing of recognition of the resulting tax assets and liabilities. Management’s
determination of the realization of DTAs is based upon management’s judgment of various future events and
uncertainties, including the timing and amount of future income, reversing temporary differences which may offset,
and the implementation of various tax plans to maximize realization of the DTAs. These judgments and estimates
are inherently subjective and reviewed on a continual basis as regulatory and business factors change. Any reduction
in estimated future taxable income may require us to record a valuation allowance against our DTAs. A DTA
valuation allowance would result in additional income tax expense in such period, which would negatively affect
earnings. Conversely, the reversal of a valuation allowance previously recorded against a DTA would result in lower
tax expense.
129
Recently Issued Accounting Pronouncements. We have evaluated new accounting pronouncements that have
recently been issued and have determined that certain of these new accounting pronouncements should be described
in this section because, upon their adoption, there could be a significant impact to our operations, financial condition
or liquidity in future periods. In the fourth quarter of 2022, the Company adopted new accounting guidance on
current expected credit losses, or CECL with retroactive application as of January 1, 2022, the beginning of the
adoption period. Please refer to Note 1 of our audited consolidated financial statements in this Form 10-K for a
detailed discussion of CECL and other recently issued accounting pronouncements that have been adopted by us that
will require enhanced disclosures in our financial statements in future periods.
130
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We believe interest rate and price risks are the most significant market risks impacting us. We monitor and
evaluate these risks using sensitivity analyses to measure the effects of changes in market interest rates on
earnings, equity and the available for sale portfolio mark-to-market exposure. Exposures are managed to a set
of limits previously approved by our Board of Directors and monitored by management.
Our market risk is jointly monitored by the Treasury unit, which reports to our Chief Financial Officer, and
the Market Risk and Analytics unit, which reports to our Chief Risk Officer. Their primary responsibilities are
identifying, measuring, monitoring and controlling interest rate and liquidity risks and balance sheet asset/
liability management, or ALM. It also assesses and monitors the price risk of the Bank’s investment activities,
which represents the risk to earnings and capital arising from changes in the fair market value of our investment
portfolio.
Among its duties, the Treasury and Market Risk and Analytics units performs the following functions:
•
maintains a comprehensive market risk and ALM framework;
•
measures and monitors market risk and ALM across the organization to ensure that they are within
approved risk limits and reports to ALCO and to the Board of Directors; and
•
recommends changes to risk limits to the Board of Directors.
We manage and implement our ALM strategies through monthly ALCO meetings. In the ALCO, we
discuss, analyze, and decide on the best course of action to implement strategies designed as part of the ALM
process.
Market risks taken by the Company are managed using an appropriate mix of marketable securities,
wholesale funding and derivative contracts.
Market Risk Measurement
ALM
We use sensitivity analyses as the primary tool to monitor and evaluate market risk, which is comprised of
interest rate risk and price risk. Exposures are managed to a set of limits previously approved by our Board of
Directors and monitored by ALCO.
Sensitivity analyses are based on changes in interest rates (both parallel yield curve changes as well as
non-parallel), and are performed for several different metrics. They include three types of analyses consistent
with industry practices:
•
earnings sensitivity;
•
economic value of equity, or EVE; and
•
investment portfolio mark-to-market exposure (debt and equity securities available for sale and held to
maturity securities).
The Company continues to be asset sensitive, therefore income is expected to increase when interest rates
move higher, and to decrease when interest rates move lower.
The high duration of our balance sheet has led to more sensitivity in the market values of financial
instruments (assets and liabilities, including off balance sheet exposures). This sensitivity is captured in the
131
EVE and investment portfolio mark-to-market exposure analyses. In the earnings sensitivity analysis, the
opposite occurs. The higher duration will produce higher income today and less income variability during the
next 12 months.
We monitor these exposures, and contrast them against limits established by our Board of Directors. Those
limits correspond to the capital levels and the capital leverage ratio that we would report taking into
consideration the interest rate increase scenarios modeled. Although we model the market price risk of the
available for sale securities portfolio, and its projected effects on AOCI or AOCL (a component of
stockholders’ equity), the Bank and the Company made an irrevocable election in 2015 to exclude the effects of
AOCI or AOCL in the calculation of its regulatory capital ratios, in connection with the adoption of Basel III
Capital Rules in the U.S.
Earnings Sensitivity
In this method, the financial instruments (assets, liabilities, and off-balance sheet positions) generate
interest rate risk exposure from mismatches in maturity and/or repricing given the financial instruments’
characteristics or cash flow behaviors such as pre-payment speeds. This method measures the potential change
in our net interest income over the next 12 months, which corresponds to our short term interest rate risk. This
analysis subjects a static balance sheet to instantaneous and parallel interest rate shocks to the yield curves for
the various interest rates and indices that affect our net interest income. We compare on a monthly basis the
effect of the analysis on our net interest income over a one-year period against limits established by our Board
of Directors.
The following table shows the sensitivity of our net interest income as a function of modeled interest rate
changes:
Change in earnings (1)
December 31,
(in thousands, except percentages)
2024
2023
Change in Interest Rates (Basis points)
Increase of 200
$ 24,427
6.8 % $
20,487
6.1 %
Increase of 100
19,262
5.3 %
15,618
4.7 %
Decrease of 50
(6,931)
(1.9)%
(3,923)
(1.2)%
Decrease of 100
(13,550)
(3.8)%
(10,273)
(3.1)%
Decrease of 200
(30,120)
(8.3)%
(21,290)
(6.3)%
__________________
(1)
Represents the change in net interest income, and the percentage that change represents of the base scenario net interest income. The
base scenario assumes (i) flat interest rates over the next 12 months, (ii) that total financial instrument balances are kept constant over
time and (iii) that interest rate shocks are instant and parallel to the yield curve, for the various interest rates and indices that affect
our net interest income.
Net interest income in the base scenario, increased to approximately $361.0 million in December 31, 2024
compared to $336.0 million in December 31, 2023. This increase is mainly due to: (i) higher interest income of
the investment portfolio as a result of the investment portfolio repositioning; (ii) the growth in the size of the
balance sheet as total assets increased $185.4 million or 1.9% in 2024 compared to 2023; and (iii) reduction of
high cost interest-bearing deposits.
The Company periodically reviews the scenarios used for earnings sensitivity to reflect market conditions.
Economic Value of Equity Analysis
We use economic value of equity, or EVE, to measure the potential change in the fair value of the
Company’s asset and liability positions, and the subsequent potential effects on our economic capital. In the
132
EVE analysis, we calculate the fair value of all assets and liabilities, including off-balance sheet instruments,
based on different rate environments (i.e. fair value at current rates against the fair value based on parallel shifts
of the yield curves for the various interest rates and indices that affect our net interest income). This analysis
measures the long term interest rate risk of the balance sheet.
The following table shows the sensitivity of our EVE as a function of interest rate changes as of the
periods presented:
Change in equity (1)
December 31,
2024
2023
Change in Interest Rates (Basis points)
Increase of 200
(13.61)%
(4.66)%
Increase of 100
(4.86)%
(0.38)%
Decrease of 50
2.24 %
3.61 %
Decrease of 100
3.82 %
1.83 %
Decrease of 200
4.50 %
2.73 %
__________________
(1)
Represents the percentage of equity change in a static balance sheet analysis assuming interest rate shocks are instant and parallel to
the yield curves for the various interest rates and indices that affect our net interest income.
The increase in sensitivity of EVE from changes in interest rates as of December 31, 2024 for the 200 and
100 basis point increase buckets are principally attributed to the changes in the composition of the balance
sheet becoming more asset sensitive compared to December 31, 2023. During the periods reported, the
modeled effects on the EVE remained within established Company risk limits.
Available for Sale Portfolio mark-to-market exposure
The Company measures the potential change in the market price of its investment portfolio, and the
resulting potential change on its equity for different interest rate scenarios. This table shows the result of this
test as of December 31, 2024 and 2023:
Change in market value (1)
December 31,
(in thousands)
2024
2023
Change in Interest Rates (Basis points)
Increase of 200
$
(150,674) $
(112,010)
Increase of 100
(72,777)
(54,182)
Decrease of 50
34,716
34,956
Decrease of 100
68,177
55,312
Decrease of 200
122,109
112,809
__________________
(1)
Represents the amounts by which the investment portfolio mark-to-market would change assuming rate shocks that are instant and
parallel to the yield curves for the various interest rates and indices that affect our net interest income.
The average duration of our investment portfolio slightly increased to 5.2 years at December 31, 2024
compared to 5.0 years at December 31, 2023. The slight increase in duration was mainly due to lower
mortgage-backed securities prepayments.
We monitor our interest rate exposures monthly through the ALCO, and seek to manage these exposures
within limits established by our Board of Directors. Those limits correspond to the capital ratios that we would
report taking into consideration the interest increase scenarios modeled. Notwithstanding that our model
133
includes the available for sale securities portfolio, and its projected effect on AOCI or AOCL (a component of
shareholders’ equity), we made an irrevocable election in 2015 to exclude the effects of AOCI or AOCL in the
calculation of our regulatory capital ratios, in connection with the adoption of Basel III capital rules in the U.S
Limits Approval Process
The ALCO is responsible for the management of market risk exposures and meets monthly. The ALCO
monitors all the Company’s exposures, compares them against specific limits, and takes actions to modify any
exposure that the ALCO considers inappropriate based on market expectations or new business strategies,
among other factors. The ALCO reviews and recommends market risk limits to our Board of Directors. These
limits are reviewed annually or more frequently as believed appropriate, based on various factors, including
capital levels and earnings.
The following table sets forth information regarding our interest rate sensitivity due to the maturities of our
interest bearing assets and liabilities as of December 31, 2024. This information may not be indicative of our
interest rate sensitivity position at other points in time.
December 31, 2024
(in thousands except percentages)
Total
Less than one
year
One to
three years
Four to
Five
Years
More than
five years
Non-rate
Earning Assets
Cash and cash equivalents
$ 590,359
$ 520,863
$
—
$
—
$
—
$
69,496
Securities:
Debt available for sale
1,437,170
344,207
215,748
181,064
696,151
—
Debt held to maturity
—
—
—
—
—
—
Marketable equity securities
2,477
2,477
—
—
—
—
Federal Reserve and FHLB stock
58,278
42,285
—
—
—
15,993
Loans held for sale
42,911
42,911
—
—
—
—
Loans held for investment -
performing (1)
7,124,310
4,700,832
1,081,723
591,335
750,420
—
Earning Assets
$9,255,505
$5,653,575
$1,297,471
$772,399
$1,446,571
$
85,489
Liabilities
Interest bearing demand deposits
2,229,467
2,229,467
—
—
—
—
Saving and money market
1,885,928
1,885,928
—
—
—
—
Time deposits
2,234,445
1,769,554
378,096
86,159
636
—
FHLB advances (2)
745,000
30,000
210,000
505,000
—
—
Senior Notes
59,843
59,843
—
—
—
—
Subordinated Notes
29,624
—
—
—
29,624
—
Junior subordinated debentures
64,178
64,178
—
—
—
—
Interest bearing liabilities
$7,248,485
$6,038,970
$588,096
$591,159
$30,260
$
—
Interest rate sensitivity gap
(385,395)
709,375
181,240
1,416,311
85,489
Cumulative interest rate
sensitivity gap
(385,395)
323,980
505,220
1,921,531
2,007,020
Earnings assets to interest
bearing liabilities (%)
93.6 %
220.6 %
130.7 %
4,780.5 %
N/M
__________________
(1)
“Loans held for investment - performing” excludes $104.1 million of non-performing loans (non-accrual loans and loans 90 days or
more past-due and still accruing).
(2)
Includes FHLB advances in the amount of $435.0 million set to mature in 2027 or later, which come with quarterly callable features.
N/M
Not meaningful.
134
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements Information
The financial statements information required by this item is contained under the section titled “Index to
Financial Statements” (and the financial statements and related notes referenced therein) included in Item 15.1
Consolidated Financial Statements beginning on page F-1 of this Form 10-K.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
Item 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company maintains a set of disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act) designed to ensure that information required to be disclosed by the Company in
reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the
time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to
management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate,
to allow timely decisions regarding required disclosures. The CEO and the CFO, with assistance from other
members of management, have evaluated the effectiveness of our disclosure controls and procedures as of December
31, 2024 and, based on their evaluation, have concluded that the disclosure controls and procedures were effective as
of such date.
Changes in Internal Control over Financial Reporting
Other than the changes in 2024 in connection with the transition of our core data processing platform and other
applications that was completed in the fourth quarter of 2023, there were no changes in the Company's internal
control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and
15d-15(d) of the Exchange Act, that occurred during the period covered by this Form 10-K that materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
On November 4, 2021, we announced a new multi-year outsourcing agreement with Fidelity National
Information Services (FIS) which included the transition of our core data processing platform and other applications
to FIS. This transition to FIS was completed on November 6, 2023. Upon completion of the transition, we updated
our internal controls to include business cycle review controls, controls over data migration to the new core system,
and controls over reliability of balances and transactional activity as of and in the post-conversion period ended
December 31, 2023. In 2024, we continued to monitor the impact of this transition on our processes and procedures,
as well as the impact on our internal controls over financial reporting and we further updated our internal controls, as
necessary, to accommodate modifications to our business processes and accounting procedures.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining effective internal control over financial reporting
(as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) for the Company. Internal control over
financial reporting is a process designed to provide reasonable assurance regarding the reliability of the preparations
135
of financial statements for external purposes in accordance with accounting principles generally accepted in the
United States of America. In designing and evaluating disclosure controls and procedures, as defined in SEC Rule
13a-15 under the Exchange Act, management recognized that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the Company’s assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with accounting principles generally accepted in the United States
of America, and that receipts and expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding
prevention, or timely detection and correction of unauthorized acquisition, use, or disposition of the Company’s
assets that could have a material effect on the financial statements. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements.
In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Under the supervision and with the participation of Management, including the Company’s Chief Executive
Officer and Chief Financial Officer, the Company has completed an assessment of the effectiveness of the
Company’s internal control over financial reporting as of December 31, 2024. In making the assessment,
management used the framework in Internal Control - Integrated Framework 2013 promulgated by the Committee of
Sponsoring Organizations of the Treadway Commission (“the COSO criteria”). Based upon that assessment,
management concluded that, as of December 31, 2024, the Company’s internal control over financial reporting was
effective based upon the COSO criteria.
The Company’s internal control over financial reporting as of December 31, 2024, has been audited by RSM
US LLP, the Company’s independent registered public accounting firm, as stated in their accompanying report
which is included in Item 15.1 Consolidated Financial Statements of this Form 10-K.
Item 9B. OTHER INFORMATION
Securities Trading Plans of Directors and Executive Officers
During the quarter ended December 31, 2024, none of our directors or executive officers adopted or terminated
a Rule 10b5-1 trading plan or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).
Updates to Certain Financial Data Set Forth in Earning Release Documents dated January 22 and 23,
2025
In connection with the filing of this Annual Report on Form 10-K for the period ended December 31, 2024 (the
Form 10-K”), the Company’s consolidated financial statements included herein (the “Financial Statements”) were
finalized, and certain financial data included in the Form 10-K and the Financial Statements differ from and
supersede certain financial data included in the press release and the earnings slide presentation of Amerant Bancorp
Inc. dated January 22 and 23, 2025 , respectively. These corrections had no effect on the consolidated statements of
operations or earnings per share for the three-months and twelve-months periods ended December 31, 2024.
136
The following table reconciles the financial data:
Financial Data
(in thousands, except %)
Total assets........................................................................................... $
9,897,691
$
9,901,734
$
4,043
— %
Noninterest bearing deposits...............................................................
1,504,229
1,504,755
526
— %
Total deposits.......................................................................................
7,854,069
7,854,595
526
— %
Accounts payable, accrued liabilities and other liabilities...................
148,439
151,956
3,517
2.4 %
Total liabilities ......................................................................................
9,007,224
9,011,267
4,043
— %
Total liabilities and stockholders' equity..............................................
9,897,691
9,901,734
4,043
— %
Total tangible assets.............................................................................
9,873,377
9,877,420
4,043
— %
Land development and construction loans..........................................
495,208
483,210
(11,998)
(2.4)%
Total commercial real estate ...............................................................
2,509,910
2,497,912
(11,998)
(0.5)%
Single-family residential.......................................................................
1,516,082
1,528,080
11,998
0.8 %
Commercial loans.................................................................................
1,747,859
1,751,902
4,043
0.2 %
Loans held for investment, gross .........................................................
7,224,368
7,228,411
4,043
0.1 %
Owner occupied Substandard Loans (1) ..............................................
24,097
64,876
40,779
169.2 %
Total Owner occupied Criticized Loans (1).........................................
29,144
69,923
40,779
139.9 %
Total real estate Substandard Loans (1)...............................................
59,084
99,863
40,779
69.0 %
Total real estate Criticized Loans (1)...................................................
64,492
105,271
40,779
63.2 %
Total Substandard loans (1) .................................................................
125,697
166,476
40,779
32.4 %
Total Classified Loans (1)....................................................................
131,105
171,884
40,779
31.1 %
Domestic Deposits ...............................................................................
5,277,763
5,278,289
526
— %
Quarter-over-Quarter (4Q24 vs 3Q24)
(in millions, except %)
Change in Total assets ......................................................................... $
(455.4)
$
(451.4)
4.0
(0.9)%
Change in Total loans, gross
(294.7)
(290.7)
4.0
(1.4)%
Year-over-Year (4Q24 vs 4Q23)
(in millions, except %)
Change in Total assets ......................................................................... $
181.4
$
185.4
4.0
2.2 %
Change in Total loans, gross
2.4
6.4
4.0
166.7 %
December 31, 2024
Before
After
Increase (decrease)
Amount
%
-------------------
(1) In February 2025, upon receipt of updated financial information from the borrower, the Company concluded
to downgrade effective December 31, 2024 an owner-occupied loan of $40.8 million in the restaurant
industry from 'Pass' to 'Substandard'. In February 2025, the Company transferred the loan from loans held
for investment to loans held for sale.
Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
137
PART III
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Certain information relating to the Executive Officers of the Company appears in Part I of this Form 10-K under
the heading “Information about our Executive Officers” and is incorporated by reference in this section.
The information required under this Item will be contained in the Company’s Proxy Statement for the 2025
Annual Meeting of Stockholders to be filed with the SEC within 120 days after the year ended December 31, 2024
(the “Proxy Statement”) under the captions “Directors and Nominees,” “Corporate Governance” and “Section 16(a)
Beneficial Ownership Reporting Compliance,” which information is incorporated by reference herein.
We have adopted a Code of Conduct and Ethics applicable to all officers, directors and employees. In addition,
our Code of Conduct and Ethics contains additional provisions that are applicable to our principal executive officer,
principal financial officer, and other principal financial and accounting officers. The Code of Conduct and Ethics is
available under the “Documents & Charters” link under the “Corporate Governance” dropdown menu in the
“Investor Relations” tab on our website at https://www.amerantbank.com. In the event that we amend or waive any
of the provisions of the Code of Conduct and Ethics for Senior Officers that relate to any element of the code of
ethics definition enumerated in Item 406(b) of Regulation S-K, we intend to disclose such amendment or waiver at
the same location on our website.
We have insider trading policies and procedures that govern the purchase, sale and other disposition of our
securities by our directors, officers and employees that we believe are reasonably designed to promote compliance
with insider trading laws, rules and regulations and listing standards of the New York Stock Exchange. A copy of
our Insider Trading Policy is filed with this Annual Report on Form 10-K as Exhibit 19.1.
Item 11. EXECUTIVE COMPENSATION
The information required under this Item will be contained in the Company’s Proxy Statement under the caption
“Executive Compensation,” “Compensation Discussion & Analysis,” “Compensation and Human Capital
Committee Report,” “Director Compensation,” and “Compensation and Human Capital Committee Interlocks and
Insider Participation,” which information is incorporated by reference herein.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required under this Item will be contained in the Company’s Proxy Statement under the
captions “Security Ownership of Certain Beneficial Owners” and “Equity Compensation Plan Information,” which
information is incorporated by reference herein.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information required under this Item will be contained in the Company’s Proxy Statement under the
captions “Corporate Governance,” and “Certain Relationships and Related Party Transactions,” which information is
incorporated by reference herein.
138
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required under this Item will be contained in the Company’s Proxy Statement under the caption
“Ratification of the Appointment of Independent Registered Public Accounting Firm,” which information is
incorporated by reference herein.
139
PART IV
Item 15. EXHIBIT and FINANCIAL STATEMENT SCHEDULES
(a) List of documents filed as part of this report
1) Financial Statements and 2) Financial Statements Schedules:
The financial statements information required by this item is contained under the section entitled “Consolidated
Financial Statements” (and the financial statements and related notes referenced therein) included beginning on page
F-1 of this Form 10-K.
3) List of Exhibits
The exhibit list in the Exhibit Index is incorporated herein by reference as the list of exhibits required as part of
this report.
EXHIBIT INDEX
2.1
Articles of Merger, dated November 18, 2021 (incorporated by reference to Exhibit 3.1 to Form 8-K
filed on November 19, 2021)
2.2
Agreement and Plan of Merger, dated November 17, 2021, between the Company and Amerant
Merger SPV Inc. (incorporated by reference to Exhibit 10.1 to Form 8-K filed on November 19, 2021)
3.1
Second Amended and Restated Articles of Incorporation of Amerant Bancorp Inc., dated November
18, 2021 (incorporated by reference to Exhibit 3.2 to Form 8-K filed on November 19, 2021)
3.3
Amended and Restated Bylaws of Amerant Bancorp Inc., dated October 18, 2023 (incorporated by
reference to Exhibit 3.1 to Form 8-K filed on October 24, 2023)
4.1
Declaration of Trust, made as of December 6, 2002, by and between Commercebank Holding
Corporation and Wilmington Trust Company *
4.2
Indenture, dated as of December 19, 2002, between Commercebank Holding Corporation and
Wilmington Trust Company *
4.3
Guarantee Agreement, dated as of December 19, 2002, executed and delivered by Commercebank
Holding Corporation and Wilmington Trust Company *
4.4
Declaration of Trust, made as of March 26, 2003, by and between Commercebank Holding
Corporation and Wilmington Trust Company *
4.5
Indenture, dated as of April 10, 2003, between Commercebank Holding Corporation and Wilmington
Trust Company *
4.6
Guarantee Agreement, dated as of April 10, 2003, executed and delivered by Commercebank Holding
Corporation and Wilmington Trust Company *
4.7
Declaration of Trust, made as of March 17, 2004, by and between Commercebank Holding
Corporation and Wilmington Trust Company *
4.8
Indenture, dated as of March 31, 2004, between Commercebank Holding Corporation and Wilmington
Trust Company *
4.9
Guarantee Agreement, dated as of March 31, 2004, executed and delivered by Commercebank
Holding Corporation and Wilmington Trust Company *
4.10
Declaration of Trust, made on September 8, 2006, by and among Commercebank Holding
Corporation, Wilmington Trust Company, Alberto Peraza and Ricardo Alvarez *
Exhibit
Number
Description
140
4.11
Indenture, dated as of September 21, 2006, between Commercebank Holding Corporation and
Wilmington Trust Company *
4.12
Guarantee Agreement, dated as of September 21, 2006, executed and delivered by Commercebank
Holding Corporation and Wilmington Trust Company *
4.13
Declaration of Trust, made on November 28, 2006, by and among Commercebank Holding
Corporation, Wilmington Trust Company, Alberto Peraza and Ricardo Alvarez *
4.14
Indenture, dated as of December 14, 2006, between Commercebank Holding Corporation and
Wilmington Trust Company *
4.15
Guarantee Agreement, dated as of December 14, 2006, executed and delivered by Commercebank
Holding Corporation and Wilmington Trust Company *
4.16
Form of Indenture between the Company and the Bank of New York Mellon, as trustee (incorporated
by reference to Exhibit 4.1 to Form S-3 filed on June 5, 2020 SEC File No. 333-238958)
4.17
Indenture, dated as of June 23, 2020, among the Company, Amerant Florida Bancorp Inc., and The
Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.1 to the Form 8-K filed
on June 23, 2020).
4.18
First Supplemental Indenture, dated as of June 23, 2020, among the Company, Amerant Florida
Bancorp Inc., and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.2
to the Form 8-K filed on June 23, 2020).
4.19
Form of Global Note (included in Exhibit 4.18).
4.20
Form of Notes Guarantee (included in Exhibit 4.18).
4.21
Indenture, dated as of March 9, 2022, among the Company, Amerant Florida Bancorp Inc., and UMB
Bank, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the Form 8-K filed on March 9,
2022)
4.22
Form of Guarantee (included in Exhibit 4.21)
4.23
Description of Registrant’s Securities (incorporated by reference to Exhibit 4.23 to the Form 10-K
filed on March 7, 2024)
10.1
Form of Restricted Stock Agreement (incorporated by reference to Exhibit 10.2 to Form 8-K filed on
December 28, 2018, SEC File No. 001-38534)**
10.2
Form of Restricted Stock Unit Agreement for Non-Employee Directors (Stock Settled) (incorporated
by reference to Exhibit 10.3 to Form 8-K filed on December 28, 2018, SEC File No. 001-38534)**
10.3
Form of Restricted Stock Unit Agreement for Non-Employee Directors (Cash Settled) (incorporated
by reference to Exhibit 10.4 to Form 8-K filed on December 28, 2018, SEC File No. 001-38534)**
10.4
2018 Equity and Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to Form 10-
Q for the quarter ended June 30, 2019, filed on August 12, 2019, SEC File No. 001-38534)**
10.5
Amendment to the Amerant Bank, N.A Executive Deferred Compensation Plan dated December 10,
2018 (incorporated by reference to Exhibit 10.11 to Form 10-K for the year ended December 31, 2018,
filed on April 1, 2019, SEC File No. 001-38534)**
10.6
Employment Agreement, dated January 14, 2021, between Amerant Bank, N.A., Amerant Bancorp
Inc. and Gerald P. Plush (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on January
21, 2021).**
10.7
Employment Agreement, dated May 18, 2020, between Amerant Bank, N.A. and Carlos Iafigliola
(incorporated by reference to Exhibit 10.1 to the Form 8-K filed on May 18, 2020).**
10.8
Form of Change in Control Severance Agreement between Amerant Bank, N.A, Amerant Bancorp Inc.
and Executive (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on March 23, 2022).**
10.9
Amerant Bancorp Inc. 2021 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.1
to the Company’s Current Report on Form 8-K filed with the SEC on June 8, 2022).
Exhibit
Number
Description
141
10.10
Form of Performance Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit
10.1 to the Form 8-K filed on February 14, 2023).**
10.11
Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.2 to the Form 8-K
filed on February 14, 2023).**
10.12
Form of Restrictive Covenant Agreement (incorporated by reference to Exhibit 10.3 to the Form 8-K
filed on February 14, 2023).**
10.13
Purchase and Sale Agreement, effective as of November 24, 2021, by and between 220 Alhambra
Properties LLC. and FNLI Audax LLC (incorporated by reference to Exhibit 10.12 to the Form 10-K
filed on March 4, 2022).
10.14
Lease, dated as of December 15, 2021, between FNLI Audax LLC and 220 Alhambra Properties LLC.
(incorporated by reference to Exhibit 10.13 to the Form 10-K filed on March 4, 2022).
10.15
Separation Agreement and General Release dated March 8, 2023 (portions of this exhibit have been
omitted)(incorporated by reference to Exhibit 10.1 to the Form 8-K filed on March 10, 2023) **
10.16
Change in Control Agreement between Amerant Bank, N.A, Amerant Bancorp Inc. and Mr. Iafigliola,
dated April 3, 2023 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on April 3,
2023)**
10.17
Offer Letter, dated May 5, 2023, between Amerant Bank, N.A, Amerant Bancorp Inc. and Sharymar
Calderón (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on May 9, 2023) **
10.18
Form of Change in Control Agreement between Amerant Bank, N.A, Amerant Bancorp Inc. and
executive (incorporated by reference to Exhibit 10.2 to the Form 8-K filed on May 9, 2023) **
10.19
Amended and Restated Employment Agreement, effective January 1, 2024, between Amerant Bank,
N.A, Amerant Bancorp Inc. and Gerald P. Plush (incorporated by reference to Exhibit 10.1 to the
Form 8-K filed on January 3, 2024) **
10.20
Asset Sale Agreement by and between Amerant Bank, N.A. and PFSS 2 SUB III (C), LLC dated
January 12, 2024 portions of this exhibit have been omitted (incorporated by reference to Exhibit 10.1
to the Form 8-K filed on January 16, 2024)*
10.21
Purchase and Assumption Agreement between Amerant Bank, N.A. and MidFirst Bank dated April
16, 2024 (incorporated by reference to Exhibit 10.1 to the Form 10-Q filed on August 2, 2024)*
10.22
Master Loan Sale Agreement by and between Amerant Bank N.A., Temple View Capital Funding, LP
and TVC Funding VII, LLC dated December 27, 2024. Portions of this exhibit have been omitted
(incorporated by reference to Exhibit 10.1 to the Form 8-K filed on January 2, 2025).
10.23
Form of Performance Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit
10.1 from the Form 8-K filed on February 18, 2025).
10.24
Separation Agreement and General Release, dated February 14, 2025 (incorporated by reference to
Exhibit 10.1 from the Form 8-K/A filed on February 18, 2025.**
19.1
Insider Trading Policy***
21.1
List of Subsidiaries of Amerant Bancorp Inc.
23.1
Consent of RSM US LLP.***
31.1
Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, As Adopted Pursuant
To Section 302 of the Sarbanes-Oxley Act of 2002, by Gerald P. Plush, Chairman, President and Chief
Executive Officer***
31.2
Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, As Adopted Pursuant
To Section 302 of the Sarbanes-Oxley Act of 2002, by Sharymar Calderon, Executive Vice-President
and Chief Financial Officer***
32.1
Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of the
Sarbanes-Oxley Act of 2002, by Gerald P. Plush, Chairman, President and Chief Executive Officer
***
32.2
Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of the
Sarbanes-Oxley Act of 2002, by Sharymar Calderon, Executive Vice-President and Chief Financial
Officer ***
Exhibit
Number
Description
142
97.1
Amerant Bancorp Inc. Clawback Policy (incorporated by reference to Exhibit 97.1 to the Form 10-K
filed on March 7, 2024)
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
104
Cover Page Interactive Data (embedded within the XBRL documents)
Exhibit
Number
Description
143
* The Company hereby agrees pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K to furnish a copy of this
instrument to the U.S. Securities and Exchange Commission upon request.
** Management contract or compensatory plan, contract or agreement.
*** Furnished hereby.
Item 16. FORM 10-K SUMMARY
None.
144
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly
caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
AMERANT BANCORP INC.
March 4, 2025
By:
/s/ Gerald P. Plush
Date
Name:
Gerald P. Plush
Title:
Chairman, President and Chief Executive
Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Gerald P. Plush
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
March 4, 2025
Gerald P. Plush
/s/ Sharymar Calderon
Senior Executive Vice-President and Chief Financial Officer
(Principal Financial Officer)
March 4, 2025
Sharymar Calderon
/s/ Armando D. Fleitas
Executive Vice-President and Chief Accounting Officer
(Principal Accounting Officer)
March 4, 2025
Armando D. Fleitas
/s/ Miguel A. Capriles L.
Director
March 4, 2025
Miguel A. Capriles L.
/s/ Pamella J. Dana
Lead Independent Director
March 4, 2025
Pamella J. Dana
/s/ Odilon Almeida Júnior
Director
March 4, 2025
Odilon Almeida Júnior
/s/ Erin Knight
Director
March 4, 2025
Erin Knight
/s/ Lisa Lutoff-Perlo
Director
March 4, 2025
Lisa Lutoff-Perlo
/s/ Gustavo Marturet M.
Director
March 4, 2025
Gustavo Marturet M.
/s/ John W. Quill
Director
March 4, 2025
John W. Quill
/s/ Ashaki Rucker
Director
March 4, 2025
Ashaki Rucker
/s/ Oscar Suarez
Director
March 4, 2025
Oscar Suarez
/s/ Millar Wilson
Director
March 4, 2025
Millar Wilson
145
Item 15.1 CONSOLIDATED FINANCIAL STATEMENTS.
AMERANT BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
INDEX
Page
Reports of Independent Registered Public Accounting Firm (RSM US LLP) (PCAOB ID 49)
F-2
Consolidated Balance Sheets as of December 31, 2024 and 2023
F-7
Consolidated Statements of Operations and Comprehensive Income (Loss) for each of the three years in
the period ended December 31, 2024
F-8
Consolidated Statements of Changes in Stockholders’ Equity for each of the three years in the period
ended December 31, 2024
F-10
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2024
F-11
Notes to Consolidated Financial Statements
F-13
Note 1. Business, Basis of Presentation and Summary of Significant Accounting Policies
F-13
Note 2. Interest Earning Deposits with Banks, Other Short-Term Investments and Restricted Cash
F-34
Note 3. Securities
F-35
Note 4. Loans
F-42
Note 5. Allowance for Credit Losses
F-49
Note 6. Premises and Equipment, Net
F-64
Note 7. Time Deposits
F-65
Note 8. Advances from the Federal Home Loan Bank and Other Borrowings
F-65
Note 9. Senior Notes
F-66
Note 10. Subordinated Notes
F-67
Note 11. Junior Subordinated Debentures Held by Trust Subsidiaries
F-68
Note 12. Derivative Instruments
F-69
Note 13. Leases
F-74
Note 14. Incentive Compensation and Benefit Plans
F-77
Note 15. Income Taxes
F-81
Note 16. Accumulated Other Comprehensive Income (Loss)
F-84
Note 17. Related Party Transactions
F-86
Note 18. Stockholders’ Equity
F-87
Note 19. Commitments and Contingencies
F-90
Note 20. Fair Value Measurements
F-92
Note 21. Fair Value of Financial Instruments
F-98
Note 22. Regulatory Matters
F-99
Note 23. Earnings per Share
F-102
Note 24. Condensed Unconsolidated Holding Companies’ Financial Statements
F-103
Note 25. Segment Information
F-107
F-1
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Amerant Bancorp Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Amerant Bancorp Inc. and its subsidiaries (the
Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive
income (loss), changes in stockholders' equity and cash flows for each of the three years in the period ended
December 31, 2024, and the related notes to the consolidated financial statements (collectively, the financial
statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of
the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in
the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on
criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission in 2013, and our report dated March 4, 2025 expressed an unqualified
opinion on the effectiveness of the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective or complex judgments. The communication of a critical audit matter does not alter in any way our opinion
on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which they relate.
F-2
Allowance for Credit Losses – Loans Held for Investment
As described in Notes 1 and 5 to the financial statements, the Company’s allowance for credit losses for loans held
for investment (allowance or allowance for credit losses) totaled $85 million as of December 31, 2024. The
allowance for credit losses is an estimate of life-of-loan losses for the Company’s loans held for investment. The
allowance is a valuation account that is deducted from the carrying amount of loans held for investment.
The allowance consists of two components: an asset-specific component for estimating credit losses for individual
loans that do not share similar risk characteristics with other loans; and a pooled component for estimating credit
losses for pools of loans that share similar risk characteristics. The allowance for the pooled component is derived
from an estimate of expected credit losses primarily using an expected loss methodology that incorporates risk
parameters such as probability of default (“PD”) and loss given default (“LGD”) which are derived from various
vendor models and/or internally developed model estimation approaches for smaller homogenous loans.
The determination of the allowance involves a high degree of subjectivity from management and requires significant
estimation of future economic scenarios, which management weights based on the Company’s economic outlook
and relevant information about past events, current conditions, and reasonable and supportable forecasts. For
commercial loans held for investment above $3 million, management estimates the LGD based on the Company’s
own loss experience based on specific risk characteristics. Management estimates the LGD for commercial real
estate loans based on vendor models using property and loan risk characteristics.
For smaller-balance homogeneous pooled loans with similar risk characteristics, management estimates the
allowance based on models using observable inputs such as historical or average loss rates by year of loan
origination (i.e., vintage) and prepayment considerations for future expected contractual loan outstanding balances.
Management then adjusts the quantitative estimates of expected credit losses to incorporate considerations of current
trends and conditions that are not captured in the quantitative credit loss estimates using qualitative or environmental
factors.
The estimation of the allowance for pools of loans that share similar risk characteristics involves inputs and
assumptions, many of which are derived from vendor and internally developed models. These inputs and
assumptions include, among others, the selection, evaluation and measurement of the reasonable and supportable
economic forecast scenarios, PD, LGD and prepayment rates. These specified inputs and assumptions require
management to apply a significant amount of judgment and involves a high degree of estimation.
We identified the determination and evaluation of the PD, LGD and prepayment speed assumptions as a critical
audit matter because auditing the underlying assumptions in the allowance model involves a high degree of
complexity and auditor judgment given the high degree of subjectivity exercised by management in developing the
allowance for credit losses in the loan portfolio held for investment.
F-3
Our audit procedures related to management’s evaluation and establishment of the PD, LGD and prepayment speed
assumptions of the allowance included the following, among others:
•
We obtained an understanding of the relevant controls related to the model and the evaluation and
establishment of the PD, LGD and prepayment speed assumptions of the allowance and tested such controls
for design and operating effectiveness.
•
We tested management’s process and significant judgments in the evaluation and establishment of the PD,
LGD and prepayment speed assumptions of the allowance, which included:
–
Evaluating management’s considerations and data utilized as a basis for the PD, LGD and prepayment
speed assumptions (e.g., loan to value, debt service coverage ratio, historical loss experience, selected
borrowers’ financial information and prepayment considerations) and tested the completeness and
accuracy of the underlying data that was used by management by tracing on a sample basis inputs into
the model to source documentation.
–
Evaluated the reasonableness of management’s judgements and support around significant input
assumptions used with current economic trends and conditions.
–
Evaluating the scope, sufficiency of procedures performed by the model validator and results driven
from the process used by management in validating the model’s performance, including model output-
outcome testing.
/s/ RSM US LLP
We have served as the Company's auditor since 2020.
Fort Lauderdale, Florida
March 4, 2025
F-4
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Amerant Bancorp Inc.
Opinion on the Internal Control Over Financial Reporting
We have audited Amerant Bancorp Inc. and its subsidiaries’ (the Company) internal control over financial reporting
as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024,
based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission in 2013.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related
consolidated statements of operations and comprehensive income (loss), changes in stockholder’s equity and cash
flows for each of the three years in the period ended December 31, 2024, and the related notes to the consolidated
financial statements of the Company and our report dated March 4, 2025, expressed an unqualified opinion.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting in the accompanying
Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on
the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis
for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company's internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's
assets that could have a material effect on the financial statements.
F-5
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
/s/ RSM US LLP
Fort Lauderdale, Florida
March 4, 2025
F-6
(in thousands, except per share data)
December 31,
2024
December 31,
2023
Assets
Cash and due from banks......................................................................................................... $
39,197
$
47,234
Interest earning deposits with banks........................................................................................
519,853
242,709
Restricted cash .........................................................................................................................
24,365
25,849
Other short-term investments...................................................................................................
6,944
6,080
Cash and cash equivalents .......................................................................................
590,359
321,872
Securities..................................................................................................................................
Debt securities available for sale ..........................................................................................
1,437,170
1,217,502
Debt securities held to maturity, at amortized cost (estimated fair value of $204,945 in
2023)......................................................................................................................................
—
226,645
Equity securities with readily determinable fair value not held for trading .........................
2,477
2,534
Federal Reserve Bank and Federal Home Loan Bank stock.................................................
58,278
50,294
Securities..................................................................................................................
1,497,925
1,496,975
Loans held for sale, at lower of cost or fair value....................................................................
—
365,219
Mortgage loans held for sale, at fair value...............................................................................
42,911
26,200
Loans held for investment, gross .............................................................................................
7,228,411
6,873,493
Less: allowance for credit losses..............................................................................................
84,963
95,504
Loans held for investment, net.................................................................................
7,143,448
6,777,989
Bank owned life insurance.......................................................................................................
243,547
234,972
Premises and equipment, net....................................................................................................
31,814
43,603
Deferred tax assets, net ............................................................................................................
53,543
55,635
Operating lease right-of-use assets ..........................................................................................
100,028
118,484
Goodwill ..................................................................................................................................
19,193
19,193
Accrued interest receivable and other assets ...........................................................................
178,966
256,185
Total assets............................................................................................................... $
9,901,734
$
9,716,327
Liabilities and Stockholders' Equity
Deposits
Demand
Noninterest bearing............................................................................................................. $
1,504,755
$
1,426,919
Interest bearing....................................................................................................................
2,229,467
2,560,629
Savings and money market...................................................................................................
1,885,928
1,610,218
Time......................................................................................................................................
2,234,445
2,297,097
Total deposits...........................................................................................................
7,854,595
7,894,863
Advances from the Federal Home Loan Bank.........................................................................
745,000
645,000
Senior notes..............................................................................................................................
59,843
59,526
Subordinated notes...................................................................................................................
29,624
29,454
Junior subordinated debentures held by trust subsidiaries.......................................................
64,178
64,178
Operating lease liabilities.........................................................................................................
106,071
123,167
Accounts payable, accrued liabilities and other liabilities.......................................................
151,956
164,071
Total liabilities.........................................................................................................
9,011,267
8,980,259
Commitments and contingencies (Note 19)
Stockholders’ equity
Class A common stock, $0.10 par value, 250 million shares authorized; 42,127,316
shares issued and outstanding (2023- 33,603,242 shares issued and outstanding)..............
4,214
3,361
Additional paid in capital......................................................................................................
343,828
192,701
Retained earnings..................................................................................................................
582,231
610,802
Accumulated other comprehensive loss................................................................................
(39,806)
(70,796)
Total stockholders' equity........................................................................................
890,467
736,068
Total liabilities and stockholders' equity ................................................................. $
9,901,734
$
9,716,327
The accompanying notes are an integral part of these consolidated financial statements.
Amerant Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets
F-7
Interest income
Loans .................................................................................................................................... $
505,484
$
475,405
$
293,210
Investment securities............................................................................................................
67,291
54,860
41,413
Interest earning deposits with banks and other interest income...........................................
22,814
18,314
4,153
Total interest income...................................................................................................
595,589
548,579
338,776
Interest expense
Interest bearing demand deposits .........................................................................................
62,719
62,551
15,118
Savings and money market deposits ....................................................................................
62,410
42,356
11,808
Time deposits .......................................................................................................................
105,780
78,829
22,124
Advances from the Federal Home Loan Bank.....................................................................
29,303
28,816
15,092
Senior notes..........................................................................................................................
3,767
3,766
3,766
Subordinated notes ...............................................................................................................
1,444
1,445
1,172
Junior subordinated debentures............................................................................................
4,206
4,345
3,030
Securities sold under agreements to repurchase...................................................................
3
7
1
Total interest expense..................................................................................................
269,632
222,115
72,111
Net interest income......................................................................................................
325,957
326,464
266,665
Provision for credit losses ....................................................................................................
60,460
61,277
13,945
Net interest income after provision for credit losses...................................................
265,497
265,187
252,720
Noninterest income
Deposits and service fees .....................................................................................................
20,156
19,376
18,592
Brokerage, advisory and fiduciary activities........................................................................
17,984
17,057
17,708
Gain on early extinguishment of advances from the Federal Home Loan Bank, net...........
1,617
40,084
10,678
Loan level derivative income ...............................................................................................
7,044
4,580
10,360
Change in cash surrender value of bank owned life insurance ............................................
9,280
5,173
5,406
Cards and trade finance servicing fees.................................................................................
5,514
3,067
2,276
Derivative (losses) gains, net................................................................................................
(196)
28
455
Securities losses, net.............................................................................................................
(76,855)
(10,989)
(3,689)
Gain on sale of Houston Franchise.......................................................................................
12,636
—
—
Other noninterest income .....................................................................................................
12,729
9,120
5,491
Total noninterest income.............................................................................................
9,909
87,496
67,277
Noninterest expense
Salaries and employee benefits ............................................................................................
137,082
133,506
123,510
Occupancy and equipment ...................................................................................................
27,127
27,843
27,393
Professional and other services fees.....................................................................................
51,088
34,569
22,142
Telecommunication and data processing .............................................................................
12,223
15,485
14,735
Advertising expenses............................................................................................................
14,492
12,811
11,620
Loan level derivative expense..............................................................................................
2,420
1,910
8,146
Contract termination costs....................................................................................................
—
1,550
7,103
FDIC assessments and insurance .........................................................................................
11,575
10,601
6,598
Depreciation and amortization .............................................................................................
6,600
6,842
5,883
Other real estate owned and repossessed assets expense, net ..............................................
4,837
2,092
3,408
Losses on loans held for sale carried at the lower of cost or fair value ...............................
13,900
43,057
159
Other operating expenses .....................................................................................................
18,146
21,089
10,716
Total noninterest expenses ..........................................................................................
299,490
311,355
241,413
(Loss) income before income tax benefit (expense)....................................................
(24,084)
41,328
78,584
Income tax benefit (expense) ...............................................................................................
8,332
(10,539)
(16,621)
Net (loss) income before attribution of noncontrolling interest..................................
(15,752)
30,789
61,963
Noncontrolling interest
—
(1,701)
(1,347)
Net (loss) income attributable to Amerant Bancorp Inc.............................................. $
(15,752)
$
32,490
$
63,310
Years Ended December 31,
(in thousands)
2024
2023
2022
The accompanying notes are an integral part of these consolidated financial statements.
Amerant Bancorp Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Loss)
F-8
Years Ended December 31,
(in thousands, except per share data)
2024
2023
2022
Other comprehensive income (loss), net of tax
Net unrealized holding (losses) gains on debt securities available
for sale arising during the period ...................................................... $
(19,531)
$
9,357
$
(97,151)
Net unrealized holding gains (losses) on cash flow hedges arising
during the period ...............................................................................
230
(15)
220
Reclassification adjustment for items included in net income..........
50,291
497
1,079
Other comprehensive income (loss).........................................
30,990
9,839
(95,852)
Comprehensive income (loss).................................................. $
15,238
$
42,329
$
(32,542)
(Loss) Earnings Per Share (Note 23) ................................................
Basic (Loss) earnings per common share.......................................... $
(0.44)
$
0.97
$
1.87
Diluted (Loss) earnings per common share
$
(0.44)
$
0.96
$
1.85
The accompanying notes are an integral part of these consolidated financial statements.
Amerant Bancorp Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Loss)
F-9
Common Stock
Additional
Paid
in Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders'
Equity Before
Noncontrolling
Interest
Noncontrolling
Interest
Total
Stockholders'
Equity
Shares
Outstanding
Shares
Par
Value
(in thousands, except share data)
Class A
Class A
Treasury
Stock
Balance at December 31, 2021 .............
35,883,320
$3,589
$262,510
$
—
$553,167
$
15,217
$
834,483
$
(2,610)
$
831,873
Cumulative effect of adoption of
accounting principle, net of tax...............
—
—
—
—
(13,872)
—
(13,872)
—
(13,872)
Repurchase of Class A common stock....
(2,255,005)
—
—
(72,060)
—
—
(72,060)
—
(72,060)
Transfer of subsidiary shares from
noncontrolling interest ............................
—
—
(1,867)
—
—
—
(1,867)
1,867
—
Treasury stock retired .............................
—
(226)
(71,834)
72,060
—
—
—
—
—
Restricted stock issued............................
175,601
18
(18)
—
—
—
—
—
—
Issuance of common shares for
restricted stock unit vesting ....................
33,349
3
(3)
—
—
—
—
—
—
Restricted stock surrendered...................
(17,768)
(2)
(1,061)
—
—
—
(1,063)
—
(1,063)
Restricted stock forfeited........................
(39,673)
(4)
4
—
—
—
—
—
—
Stock issued for employee stock
purchase plan ..........................................
35,337
4
1,175
1,179
1,179
Stock-based compensation expense........
—
—
5,788
—
—
—
5,788
—
5,788
Dividends Paid........................................
—
—
—
—
(12,230)
—
(12,230)
—
(12,230)
Net income attributable to Amerant
Bancorp Inc.............................................
—
—
—
—
63,310
—
63,310
—
63,310
Net loss attributable to noncontrolling-
interest shareholders................................
—
—
—
—
—
—
—
(1,347)
(1,347)
Other comprehensive loss.......................
—
—
—
—
—
(95,852)
(95,852)
—
(95,852)
Balance at December 31, 2022 .............
33,815,161
$3,382
$194,694
$
—
$590,375
$
(80,635)
$
707,816
$
(2,090)
$
705,726
Repurchase of Class A common stock....
(259,853)
—
—
(4,933)
—
—
(4,933)
—
(4,933)
Treasury stock retired .............................
—
(26)
(4,907)
4,933
—
—
—
—
—
Restricted stock issued............................
10,440
1
(1)
—
—
—
—
—
—
Issuance of common shares for
restricted stock unit vesting ....................
65,526
7
(7)
—
—
—
—
—
—
Issuance of common shares for
performance shares unit vesting..............
10,621
1
(1)
—
—
—
—
—
—
Restricted stock, restricted stock units
and performance stock units
surrendered..............................................
(53,607)
(5)
(1,422)
—
—
—
(1,427)
—
(1,427)
Restricted stock forfeited........................
(41,973)
(4)
4
—
—
—
—
—
—
Stock issued for employee stock
purchase plan ..........................................
56,927
5
1,357
—
—
—
1,362
—
1,362
Stock-based compensation expense........
—
—
6,775
—
—
—
6,775
—
6,775
Dividends Paid........................................
—
—
—
—
(12,063)
—
(12,063)
—
(12,063)
Net income attributable to Amerant
Bancorp Inc.............................................
—
—
—
—
32,490
—
32,490
—
32,490
Net loss attributable to noncontrolling-
interest shareholders................................
—
—
—
—
—
—
—
(1,701)
(1,701)
Transfer of subsidiary shares from
noncontrolling interest ............................
—
—
(3,791)
—
—
—
(3,791)
3,791
—
Other comprehensive income .................
—
—
—
—
—
9,839
9,839
—
9,839
Balance at December 31, 2023 .............
33,603,242
$3,361
$192,701
$
—
$610,802
$
(70,796)
$
736,068
$
—
$
736,068
Repurchase of Class A common stock....
(344,326)
—
—
(7,556)
—
—
(7,556)
—
(7,556)
Common stock issuance..........................
8,684,210
868
154,882
—
—
—
155,750
—
155,750
Treasury stock retired .............................
—
(34)
(7,522)
7,556
—
—
—
—
—
Issuance of common shares for
restricted stock unit vesting ....................
138,027
14
(14)
—
—
—
—
—
—
Issuance of common shares for
performance shares unit vesting..............
125,271
13
(13)
—
—
—
—
—
—
Restricted stock, restricted stock units
and performance stock units
surrendered..............................................
(105,173)
(11)
(2,376)
—
—
—
(2,387)
—
(2,387)
Restricted Stock forfeited .......................
(29,342)
(3)
3
—
—
—
—
—
—
Stock issued for employee stock
purchase plan ..........................................
55,407
6
1,120
—
—
—
1,126
—
1,126
Stock-based compensation expense........
—
—
5,047
—
—
—
5,047
—
5,047
Dividends Paid........................................
—
—
—
—
(12,819)
—
(12,819)
—
(12,819)
Net loss attributable to Amerant
Bancorp Inc.............................................
—
—
—
—
(15,752)
—
(15,752)
—
(15,752)
Other comprehensive income .................
—
—
—
—
—
30,990
30,990
—
30,990
Balance at December 31, 2024 .............
42,127,316
$4,214
$343,828
$
—
$582,231
$
(39,806)
$
890,467
$
—
$
890,467
The accompanying notes are an integral part of these consolidated financial statements.
Amerant Bancorp Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity
Each of the Three Years Ended December 31, 2024
F-10
Cash flows from operating activities
Net (loss) income before attribution of noncontrolling interest
$
(15,752)
$
30,789
$
61,963
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities
Provision for credit losses
60,460
61,277
13,945
Net premium amortization on securities
4,563
4,850
8,537
Depreciation and amortization
6,600
6,842
5,883
Stock-based compensation expense
5,047
6,775
5,788
Losses on loans held for sale carried at the lower of cost or fair value
13,900
43,057
159
Loans on sale of repossessed assets
—
2,649
—
Impairment on investment carried at cost
—
1,963
—
Change in cash surrender value of bank owned life insurance
(9,280)
(5,173)
(5,406)
Securities losses, net
76,855
10,989
3,689
Derivative losses (gains), net
196
(28)
(455)
(Gain) loss on sale of loans, net
(8,140)
(4,355)
320
Gain on sale of Houston Franchise
(12,636)
—
—
Losses on loans held for sale carried at the lower of cost or fair value
—
—
—
Deferred taxes and others
165
(5,508)
4,998
Gain on early extinguishment of advances from the FHLB, net
(1,617)
(40,084)
(10,678)
Proceeds from sales and repayments of mortgage loans originated for sale (at fair value)
380,810
286,504
143,082
Originations and purchases of mortgage loans originated for sale (at fair value)
(419,145)
(343,524)
(286,715)
Net changes in operating assets and liabilities
Accrued interest receivable and other assets
3,776
(34,449)
(15,348)
Account payable, accrued liabilities and other liabilities
(3,608)
4,147
21,078
Net cash provided by (used in) operating activities
82,194
26,721
(49,160)
Cash flows from investing activities
Purchases of investment securities:
Available for sale
(735,610)
(264,094)
(266,667)
Held to maturity
—
—
(140,028)
Federal Home Loan Bank and Federal Reserve Bank stock
(51,034)
(83,119)
(38,044)
Equity securities with readily determinable fair value not held for trading
—
(2,500)
(12,656)
(786,644)
(349,713)
(457,395)
Maturities, sales, calls, paydowns and redemptions of investment securities:
Available for sale
694,080
104,191
246,394
Held to maturity
9,622
14,718
15,354
Federal Home Loan Bank and Federal Reserve Bank stock
43,050
88,400
29,964
Equity securities with readily determinable fair value not held for trading
—
11,168
252
746,752
218,477
291,964
Proceeds from surrender of bank owned life insurance
62,741
—
—
Net increase in loans
(1,062,783)
(509,687)
(1,311,608)
Proceeds from loan portfolio sales
543,146
109,224
84,029
Purchase of bank owned life insurance
—
(65,015)
—
Net cash transferred on sale of Houston Franchise
(73,912)
—
—
Purchases of premises and equipment and others
(7,401)
(10,933)
(10,629)
Proceeds from sales of premises and equipment
205
535
—
Proceeds from sales of repossessed assets and other real estate owned
—
2,464
6,393
Cash paid in business acquisition, net
—
(1,970)
—
Proceeds from bank owned life insurance death benefit
1,232
—
—
Net cash used in investing activities
(576,664)
(606,618)
(1,397,246)
Cash flows from financing activities
Net increase in demand, savings and money market accounts
256,946
281,822
1,022,913
Net increase in time deposits
270,595
568,842
390,415
Proceeds from advances from the Federal Home Loan Bank
1,462,500
1,955,000
1,130,000
Repayments of advances from the Federal Home Loan Bank
(1,360,883)
(2,176,977)
(1,024,322)
Proceeds from issuance of subordinated notes, net of issuance costs
—
—
29,146
Repurchase of common stock - Class A
(7,556)
(4,933)
(72,060)
Dividends paid
(12,819)
(12,063)
(12,230)
Net proceeds from issuance of common stock
155,750
—
—
Disbursements arising from stock based compensation, net
(1,576)
(523)
(1,063)
Net cash provided by financing activities
762,957
611,168
1,462,799
Net increase in cash and cash equivalents and restricted cash
268,487
31,271
16,393
Cash and cash equivalents and restricted cash
Beginning of period
321,872
290,601
274,208
End of period
$
590,359
$
321,872
$
290,601
The accompanying notes are an integral part of these consolidated financial statements.
Years Ended December 31,
(in thousands)
2024
2023
2022
Amerant Bancorp Inc. and Subsidiaries
Consolidated Statements of Cash Flows
F-11
Years Ended December 31,
(in thousands)
2024
2023
2022
Supplemental disclosures of cash flow information
Cash paid:
Interest
$
272,308
$
211,769
$
67,295
Income taxes
4,861
24,966
27,537
Right-of-use assets obtained in exchange for new lease obligations
2,790
12,001
8,887
Noncash investing activities:
Surrender of bank owned life insurance receivable from former insurance carrier
—
63,628
—
Mortgage loans held for sale (at fair value) transferred to loans held for investment
29,866
98,918
96,233
Loans held for sale (at lower cost or fair value) transferred to loans held for investment
—
—
65,802
Loans held for investment transferred to loans held for sale (at lower of fair value or cost)
568,328
449,563
—
Transfer from debt securities held to maturity to debt securities available for sale
216,560
—
—
Premises and equipment transferred to other assets
11,405
—
—
Right-of-use assets transferred to other assets
15,368
Operating lease liability transferred to other liabilities
15,520
Loans transferred to other assets
3,409
26,534
—
The accompanying notes are an integral part of these consolidated financial statements.
Amerant Bancorp Inc. and Subsidiaries
Consolidated Statements of Cash Flows
F-12
1.
Business, Basis of Presentation and Summary of Significant Accounting Policies
a) Business
Amerant Bancorp Inc (the “Company”) is a Florida corporation incorporated in 1985, which has operated
since January 1987. The Company is a bank holding company registered under the Bank Holding Company Act of
1956 (“BHC Act”), as a result of its 100% ownership of Amerant Bank, N.A. (the “Bank”). The Company’s
principal office is in the City of Coral Gables, FL. The Bank is a member of the Federal Deposit Insurance
Corporation (“FDIC”), the Federal Reserve Bank of Atlanta (“Federal Reserve ”) and the Federal Home Loan Bank
of Atlanta (“FHLB”). The Bank is a national bank subject to regulation and regular examinations by the Office of
the Comptroller of the Currency (“OCC”). The Bank has two operating subsidiaries: Amerant Investments, Inc., a
securities broker-dealer (“Amerant Investments”) and Amerant Mortgage, LLC (“Amerant Mortgage”), a mortgage
lending company domiciled in Florida (“Amerant Mortgage”).
Elant Bank & Trust Ltd., a Grand-Cayman based trust company (the “Cayman Bank”) is a subsidiary of the
Bank. The Company is executing a plan for the dissolution of the Cayman Bank and, as of the end of the fourth
quarter of 2024, the Cayman Bank no longer had any trust relationships, many of which were transferred to the
Bank. The dissolution of the Cayman Bank is expected to be completed in 2025, once regulatory approval from the
applicable regulatory agency is received.
The Bank has been serving the communities in which it operates for over 40 years. The Bank has 19 Banking
Centers, including 18 located in South Florida, and one in Tampa, FL. As the main operating subsidiary of the
Company, the Bank offers a wide variety of domestic, international, personal and commercial banking services.
Investment, trust, fiduciary and wealth management services are provided through the Bank’s operating subsidiary
Amerant Investments. Amerant Mortgage offers a full complement of residential lending solutions including
conventional, government, construction, Jumbo loans, and other residential lending product offerings. The
Company’s main activities are concentrated in its primary markets, with domestic customers located within those
markets, and with international customers mainly located in Latin America. The Company does not have any
significant concentrations to any one customer.
In May 2021, the Company incorporated a new wholly owned subsidiary, Amerant SPV, LLC, or Amerant
SPV. From time to time, the Company may evaluate select opportunities to invest and acquire non-controlling
interests, through Amerant SPV, in companies it partners with, or may acquire non-controlling interests of fintech
and specialty finance companies that the Company believes will be strategic or accretive. In addition, through
Amerant SPV, we may also invest in companies and funds that invest in technology companies that are developing
solutions aimed at allowing financial institutions and community banks to more effectively compete and serve their
customers.
The Company’s Class A common stock, par value $0.10 per common share (the “Common Stock”) was listed
and traded on The Nasdaq Stock Market LLC (“Nasdaq”) Global Select Market under the symbol “AMTB” until
August 28, 2023. On August 3, 2023, the Company provided written notice to Nasdaq of its determination to
voluntarily withdraw the principal listing of the Company’s Common Stock from Nasdaq and transfer the listing of
the Common Stock to the New York Stock Exchange (“NYSE”). The Company’s Common Stock listing and trading
on Nasdaq ended at market close on August 28, 2023, and trading commenced on the NYSE at market open on
August 29, 2023 where it continues to trade under the stock symbol “AMTB”.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-13
Public Offering and Securities Repositioning
On September 27, 2024, the Company completed a public offering of 8,684,210 shares of its Class A voting
common stock, at a price to the public of $19.00 per share, which included 784,210 shares issued upon the exercise
in full by the underwriters of their option to purchase additional shares of common stock (the “Public Offering”).
The total gross proceeds from the offering were approximately $165 million, with net proceeds of approximately
$155.8 million after deducting underwriting discounts and commissions and estimated offering expenses payable by
the Company. The Company intends to use the net proceeds of the Public Offering for general corporate purposes
and to support its continued organic growth, which may include, among other things, working capital, investments in
the Bank, resolution of non-performing loans, and potential balance sheet optimization strategies.
Upon successfully completing the Public Offering, the Company initiated a repositioning of the Company’s
securities portfolio (the “Securities Repositioning”). The Securities Repositioning consisted of the following actions:
(i) transfer at their fair value (which was below their amortized cost) of all of the Company’s debt securities
previously classified as held to maturity and carried at amortized cost to the available for sale category; (ii) sale of
all corporate notes and subordinated debt; and (iii) sale of all other debt securities classified as available for sale
(including those previously classified as held to maturity) with a book yield of less than 2.75%. As a result of the
Securities Repositioning, the Company recorded a total pre-tax loss of approximately $68.5 million in the three and
nine months ended September 30, 2024. The Company completed the Securities Repositioning in October 2024,
which resulted in an additional pre-tax loss on sale of approximately $8.1 million. See Note 3 - Securities for
additional information on the Company’s securities portfolio.
Sale of Houston Banking Operations
On April 16, 2024, the Bank entered into a Purchase and Assumption Agreement (the “Purchase Agreement”)
with MidFirst Bank (“MidFirst”) pursuant to which MidFirst purchased certain assets and assumed certain liabilities
(the “Houston Sale Transaction”) of the banking operations and six branches in the Houston, Texas metropolitan
statistical area (collectively, the “Branches”). Pursuant to the terms of the Purchase Agreement, MidFirst agreed to
assume certain deposit liabilities and to acquire certain loans, as well as cash, real property, personal property and
other fixed assets associated with the Branches, as well as 45 team members. On July 30, 2024, regulatory approval
for the Houston Sale Transaction was received. The Houston Sale Transaction closed on November 8, 2024.
The purchase price for the purchased assets was computed as the sum of: (a) $13.0 million (the “Deposit
Premium”), provided that, if the balance of non-interest checking deposits included in deposits or the total balance
of deposits (excluding insured cash sweep deposits) decreased by more than 15% between March 13, 2024 and the
closing date, then the Deposit Premium should be equal to the sum of (i) 9.50% of the average daily balance of non-
interest checking deposits included in deposits, (ii) 1.85% of the average daily balance of deposits other than non-
interest checking deposits, insured cash sweep deposits and time deposits included in deposits, (iii) 0.25% of the
average daily balance of insured cash sweep deposits included in Deposits, and (iv) 0.50% of the average daily
balance of time deposits included in deposits, with the average daily balance in each case being for the 30-day
period ending on the fifth business day prior to closing, provided further, that the Deposit Premium should in no
event be lower than $9.25 million, (b) the aggregate amount of cash on hand as of the closing date, (c) the aggregate
net book value of all assets being assumed (excluding cash on hand, real property and accrued interest with respect
to the loans to be acquired), (d) the appraised value of the real property to be acquired, and (e) accrued interest with
respect to the loans to be acquired. The purchase price was subject to a customary post-closing adjustment based on
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-14
the delivery within 30 calendar days following the closing date of a final closing statement setting forth the purchase
price and any necessary adjustment payment amount. The final Deposit Premium was $12.5 million.
The below table shows detailed information about assets and liabilities sold as part of the Houston Sale
Transaction:
(in thousands)
Assets sold
Cash ............................................................................................................................................. $
994
Loans ..........................................................................................................................................
473,901
Accrued interest receivable and other assets (1)..........................................................................
21,679
Total assets sold............................................................................................................. $
496,574
Liabilities sold
Noninterest bearing demand deposits (2)..................................................................................... $
66,631
Interest bearing demand deposits.................................................................................................
54,627
Savings and money market ..........................................................................................................
113,305
Time deposits ...............................................................................................................................
333,247
Total deposits.................................................................................................................
567,810
Total other liabilities (3)...............................................................................................................
12,749
Total liabilities sold ....................................................................................................... $
580,559
Net liabilities sold
(83,985)
Deposit premium received
12,500
Less: receivable from Midfirst.....................................................................................................
(1,873)
Less: other payments to Midfirst..................................................................................................
(554)
Net cash transferred to Midfirst...............................................................................................
(73,912)
__________________
(1)
Includes premises and equipment for $7.8 million, operating lease right-of-use assets for $6.4 million, $5.1 million in derivative assets and
other assets for $2.3 million.
(2)
Includes $6.8 million in escrow accounts.
(3)
Includes operating lease liabilities for $7.1 million, $5.1 million in derivative liabilities and 0.5 million in accrued interest payable.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-15
The Company recorded non-routine expense items in 2024 in connection with the Houston Sale Transaction
totaling approximately $8.1 million as follows: (i) $3.4 million in market value adjustments based on third party
appraisals for two banking centers that were owned; (ii) $3.1 million in legal, broker fees and other costs, including
a loan valuation allowance; and (iii) $0.3 million in intangible asset write-off. These charges were partially offset by
a $4.4 million release in credit reserves after transferring the loans to held for sale.
Restructuring Activities
In 2021, the Bank entered into a new multi-year outsourcing agreement with a recognized third party financial
technology services provider (the “Financial Technology Services Agreement”). Under the terms of this agreement,
we transitioned our core data processing platform and other applications from previous software vendors to those
offered by this third party financial technology service provider in the fourth quarter of 2023. This agreement is
expected to allow the Bank to achieve greater operational efficiencies and deliver more advanced solutions and
services to our customers. Effective January 1, 2022, there were 80 employees who are no longer working for the
Company as a result of this new agreement.
Contract termination Costs
There were no contract termination costs in 2024. In connection with the implementation of the Financial
Technology Services Agreement, the Company recorded estimated contract termination and related costs of
approximately of $1.6 million and $7.1 million in 2023 and 2022, respectively. The Company does not expect to
incur significant contract termination costs in the future in connection with the implementation of this agreement.
Other Restructuring Costs
There were no other restructuring costs in 2024.
In 2023, the Company recorded severance costs of approximately $4.0 million, branch closure expenses and
related charges of $2.3 million, consulting and other professional fees and software expenses totaling of $6.4 million
and a charge of $1.4 million related to the disposition of fixed assets due to the write off of in-development software.
In 2022, the Company recorded severance costs of approximately $3.0 million, consulting and other
professional fees of $3.6 million and branch closure expenses and related charges of $1.6 million.
Severance costs are included in “salaries and employees benefits expense” in the Company’s consolidated
statement of operations and comprehensive income (loss).
Optimizing Capital Structure
Subordinated Notes. 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 on March 15, 2032 (the “Subordinated Notes”). See Note 10-
Subordinated Notes, for details.
Stock Repurchases. In January 2022, the Company’s Board of Directors authorized a new repurchase program
to repurchase up to $50 million of its shares of Class A common stock (the “New Common Stock Repurchase
Program”). In May 2022, the Company announced the completion of the New Common Stock Repurchase Program,
previously authorized in January 2022.
On December 19, 2022, the Company announced that the Board of Directors authorized a new repurchase
program pursuant to which the Company may purchase, from time to time, up to an aggregate amount of $25 million
of its shares of Class A common stock (the “2023 Class A Common Stock Repurchase Program”).
In 2024, 2023 and 2022 the Company’s Board of Directors authorized the cancellation of all shares of Class A
common stock repurchased in 2024, 2023 and 2022.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-16
See Note 18-Stockholders’ Equity for details on all stock repurchases.
Dividends. In January 2025, and each of the four quarters of 2024, 2023 and 2022, the Company’s Board of
Directors declared a cash dividend of $0.09 per share of the Company’s Class A common stock. See Note 18-
Stockholders’ Equity for details on all dividends declared.
Wholly-owned Subsidiaries Mergers
On August 2, 2022, the Company completed an intercompany transaction of entities under common control,
pursuant to which the Company’s wholly owned subsidiary, Amerant Florida Bancorp Inc. (“Amerant Florida”),
merged with and into the Company, with the Company as sole survivor (the “Amerant Florida Merger”). In
connection with the Amerant Florida Merger, the Company assumed all assets and liabilities of Amerant Florida,
including its direct ownership of the Bank, the common capital securities issued by the five trust subsidiaries, and
the junior subordinated debentures issued by Amerant Florida and related agreements. The Amerant Florida Merger
had no impact to the Company’s consolidated financial condition and results of operations. See Note 11- Junior
Subordinated Debentures Held By Trust Subsidiaries for additional information on the common capital securities
issued by the five trust subsidiaries, and the junior subordinated debentures.
Changes in Ownership Interest in Amerant Mortgage
At December 31, 2024 and 2023, the Company had an ownership interest of 100% in Amerant Mortgage,
respectively. On December 31, 2023, Amerant Mortgage became a wholly-owned subsidiary of the Company as it
increased its ownership interest to 100% effective as of December 31, 2023. This transaction had no material impact
to the Company’s results of operations in the year ended December 31, 2023. In connection with the change in
ownership interest, which brought the noncontrolling interest share of equity to zero, the Company derecognized the
equity attributable to noncontrolling interest of $3.8 million at December 31, 2023, with a corresponding reduction
to additional paid-in capital as of that date.
On March 31, 2022, the Company contributed $1.5 million in cash to Amerant Mortgage, increasing its
ownership interest to 57.4% as of March 31, 2022 from 51% as of December 31, 2021. In addition, in the three
months ended June 30, 2022, the Company increased its ownership interest in Amerant Mortgage to 80% from
57.4% at March 31, 2022. This change was the result of: (i) two former principals of Amerant Mortgage
surrendering their interest in Amerant Mortgage to the Company, when they became full time employees of the
Bank (the “Transfer of Subsidiary Shares From Noncontrolling Interest”), and (ii) an additional contribution made
by the Company of $1 million, in cash, to Amerant Mortgage in the three months ended June 30, 2022. As a result of
the Transfer of Subsidiary Shares From Noncontrolling Interest, in the year ended December 31, 2022, the Company
reduced its Additional Paid-in Capital by a total of $1.9 million with a corresponding increase to the equity
attributable to Noncontrolling Interest.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-17
Business Acquisition
On January 13, 2023 (the “ 2023 Acquisition Date”), Amerant Mortgage completed the acquisition of certain
assets and the assumption of certain liabilities of F&B Acquisition Group LLC (“F&B”), including access to an
assembled workforce and other identifiable intangibles which collectively constituted a business (the “F&B
Acquisition.”) The F&B Acquisition was recorded as a business acquisition using the acquisition method of
accounting. The purchase price of approximately $2.0 million was paid in cash and included the fair value of certain
loans held for sale of $1.0 million. Upon completion of the purchase price allocation in the fourth quarter of 2023,
the Company determined there was no contingent consideration required to be included as part of purchase price.
The Company recorded goodwill of $1.0 million, which represented the excess of the initial purchase price over the
estimated fair value of tangible and intangible assets acquired, net of the liabilities assumed.
Naming Rights
In September 2023, the Company acquired exclusive naming rights to an arena in Broward County, Florida. The
naming rights have been recorded as an intangible asset with an offsetting liability for related payments to be made
in the future. The naming rights intangible asset is included in other assets in the Company’s consolidated balance
sheets. The naming rights liability is included as part of other liabilities in the Company’s consolidated balance
sheets.
Amerant SPV Investments
The Company, through Amerant SPV, has invested in equity and non-equity instruments issued by Marstone,
Inc (“Marstone”), a digital wealth management fintech it has partnered with to provide digital wealth management
and financial planning capabilities to new and existing customers. In connection with the equity investment, in
November 2021, Gerald P. Plush, our Company’s Chairman, President & CEO, was appointed to Marstone’s Board
of Directors as one of its seven individual members. In July 2023, the Company’s Chief Operating Officer replaced
Mr. Plush in the role, and does not have individual power to control or direct the operations of Marstone. The
Company’s equity investment in Marstone represents less than 5% of its voting power. In addition, the Company
considers it does not have a variable interest in Marstone. At December 31, 2024 and 2023, the Company’s
investments in Marstone include equity investments of $2.6 million and $0.5 million, respectively. At December 31,
2023, the Company had non-equity investments of $1.6 million. The Company had no non-equity investments in
Marstone at December 31, 2024. In 2023, the Company recorded an impairment charge of $2.0 million related to its
equity investments in Marstone.
In October 2021, the Company invested $2.5 million in an equity instrument issued by Raistone Financial Corp
(“Raistone”), a financial technology solutions provider launched in 2017 that offers working capital financing
solutions. This equity investment represents less than 5% of Raistone’s voting power. In addition, the Company
considers it does not have a variable interest in Raistone. There were no additional investments in Raistone in 2024,
2023 and 2022.
In December 2021, the Company became a strategic lead investor in the JAM FINTOP Blockchain fund (the
“JAM FINTOP Fund”), with an initial commitment of approximately $5.4 million that may be expanded to
$9.8 million should the JAM FINTOP Fund increase to its maximum target size of $200 million. Initially, the JAM
FINTOP Fund will focus its investments on the blockchain “infrastructure layer” that will help regulated financial
institutions compliantly operate blockchain-powered applications in areas such as lending, payments, and
exchanges. As a strategic lead investor in the JAM FINTOP Fund, the Company expects to have access and become
an early adopter of this transformational technology. At December 31, 2024 and 2023 the investment in the JAM
FINTOP Fund amounted to $2.6 million and $1.4 million, respectively.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-18
In May 2023, the Company became an investor in the Black Dragon Fund (“Black Dragon”). At December 31,
2024 and 2023, the investment in Black Dragon amounted to $1.0 million.
These investments in Marstone, Raistone, Black Dragon and the JAM FINTOP Fund are recorded at their
original cost and are included in the Company’s consolidated balance sheet in other assets. The Company reviews
these investments periodically for deterioration. At December 31, 2024, 2023 and 2022, other than the impairment
charge discussed above in connection with the Company's investments in Marstone, the Company considers these
investments are not deteriorated and did not record an impairment charge as a result.
Bank Owned Life Insurance
In the fourth quarter of 2023, the Company completed a restructuring of its bank-owned life insurance
(“BOLI”) program. This was executed through a combination of a 1035 exchange and a surrender and reinvestment
into a higher-yielding general account with a new investment grade insurance carrier. This transaction allowed for
higher team member participation through an enhanced split-dollar plan. Estimated improved yields resulting from
the enhancement have an earn-back period of approximately 2 years. In the fourth quarter of 2023, the Company
recorded total additional expenses and charges of $4.6 million in connection with this transaction, including: (i) a
reduction of $0.7 million to the cash surrender value of BOLI; (ii) transaction costs of $1.1 million, included as part
of other operating expenses, and (iii) income tax expense of $2.8 million. In addition, as of December 31, 2023, the
Company had a receivable from the prior insurance carrier for $62.5 million in connection with the restructuring of
the Company’s BOLI in the fourth quarter of 2023, which was included as part of other assets in the Company’s
consolidated balance sheet. The Company collected in full this receivable from the prior insurance carrier in
February 2024.
Employee Stock Purchase Plan
On June 8, 2022, the shareholders of the Company approved the Amerant Bancorp Inc. 2021 Employee Stock
Purchase Plan (the “ESPP” or the “Plan”). The purpose of the Plan is to provide eligible employees of the Company
and its designated subsidiaries with the opportunity to acquire a stock ownership interest in the Company on
favorable terms and to pay for such acquisitions through payroll deductions. All named executive officers, and all
other executive officers of the Company who were eligible as of the enrollment deadline for the first offering period
elected to participate in the Plan. See Note 14-Incentive Compensation and Benefit Plans for more details on the
ESPP.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-19
b) Basis of Presentation and Summary of Significant Accounting Policies
Significant Accounting Policies
The following is a description of the significant accounting policies and practices followed by the Company in
the preparation of the accompanying consolidated financial statements. These policies conform with generally
accepted accounting principles in the United States (GAAP).
Segment Reporting
The Company is managed using a single segment concept, on a consolidated basis, as one reportable business
segment. See Note 25- Segment Reporting for more information.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries.
All significant intercompany balances and transactions have been eliminated in consolidation. The Company
evaluates whether it has a controlling financial interest in an entity in the form of a variable-interest entity, or a
voting interest entity.
Non-Controlling Interest
Prior to December 31, 2023, the Company records net loss attributable to noncontrolling interests in its
consolidated statement of operations and comprehensive income (loss) equal to the percentage of the economic or
ownership interest retained in the interest of Amerant Mortgage and presents non-controlling interests as a
component of stockholders’ equity on the consolidated balance sheets and separately as net loss attributable to non-
controlling interests on the consolidated statement of operations and comprehensive income (loss). Effective as of
December 31, 2023, Amerant Mortgage became a wholly-owned subsidiary and, as result, the Company recorded no
noncontrolling interest in its consolidated financial statements as of December 31, 2024 and 2023, and the year
ended December 31, 2024. In the years ended December 31, 2023 and 2022, the Company recorded noncontrolling
interests in its consolidated statement of operations equal to the percentages of the economic or ownership interest
retained during those periods. In connection with the change in ownership interest as of December 31, 2023, which
brought the minority interest share to zero at that date, the Company derecognized the equity attributable to
noncontrolling interest of $3.8 million at December 31, 2023, with a corresponding reduction to additional paid-in
capital.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-20
Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Significant estimates made by management include: (i) the determination of the allowance for
credit losses; (ii) the fair values of loans, securities and derivative contracts; (iii) the cash surrender value of bank
owned life insurance; (iv) the determination of whether the amount of deferred tax assets will more likely than not
be realized; and (v) the determination of estimated contract termination costs. Management believes that these
estimates are appropriate. Actual results could differ from these estimates.
In 2023 and 2022, noninterest expenses include $1.6 million and $7.1 million, respectively, of estimated
contract termination costs associated with third party vendors resulting from the Company’s transition to our new
technology provider. Contract termination costs represent estimated expenses to terminate contracts before the end
of their terms, and are recognized when the Company terminates a contract in accordance with its terms, generally
considered the time when the Company gives written notice to the counterparty within the notification period
contractually established, or when the Company determines that it no longer derives economic benefits from the
contracts. Contract termination costs also include expenses associated with the abandonment of existing capitalized
projects which are no longer expected to be completed as a result of a contract termination. Changes to initial
estimated expenses to terminate contracts resulting from revisions to timing or the amount of estimated cash flows
are recognized in the period of the changes. There were no contract termination costs in the year ended December
31, 2024.
Earnings per Share
Basic earnings per share is computed by dividing net income available to common stockholders by the
weighted-average number of common shares outstanding during each period. Unvested shares of restricted stock,
restricted stock units and performance stock units outstanding during the period are excluded from the basic
earnings per share computation.
Diluted net income per common share reflects the number of additional common stock that would have been
outstanding if the dilutive potential common stock had been issued. Dilutive potential common stock consist of
unvested shares of restricted stock, restricted stock units and performance stock units outstanding during the period.
The dilutive effect of potential common stock is calculated by applying the treasury stock method. The latter
assumes dilutive potential common stock are issued and outstanding and the proceeds from the exercise, are used to
purchase common stock at the average market price during the period. The difference between the numbers of
dilutive potential common stock issued and the number of shares purchased is included as incremental shares in the
denominator to compute diluted net income per common stock. Dilutive potential common stock are excluded from
the diluted earnings per share computation in the period in which the effect is anti-dilutive, such as when there are
net losses from operations.
Changes in the number of shares outstanding as a result of stock dividends, stock splits, stock exchanges or
reverse stock splits are given effect retroactively for all periods presented to reflect those changes in capital
structure.
Income Recognition
Interest income is generally recognized on the accrual basis using the interest method. Non-refundable loan
origination fees, net of direct costs of originating or acquiring loans, as well as loan purchase premiums and
discounts, are deferred and amortized over the term of the related loans as adjustments to interest income using the
level yield method. Purchase premiums and discounts on debt securities are amortized as adjustments to interest
income over the estimated lives of the securities using the level yield method.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-21
Brokerage and advisory activities include brokerage commissions and advisory fees. Brokerage commissions
earned are related to the dollar amount of trading volume of customers’ transactions. Commissions and related
clearing expenses are recorded on a trade-date basis as securities transactions occur. The Company believes that the
performance obligation is satisfied on the trade date because that is when the underlying financial instrument has
been transferred to/from the customer. Advisory fees are derived from investment advisory fees and account
administrative services. Investment advisory fees are recorded as earned on a pro rata basis over the term of the
contracts, based on a percentage of the average value of assets managed during the period. The Company believes
the performance obligation for providing advisory services is satisfied over time because the customer is receiving
and consuming benefits as they are provided by the Company. These fees are assessed and collected at least
quarterly. Account administrative fees are charged to customers for the maintenance of their accounts and are earned
and collected on a quarterly basis. Fiduciary activities fee income is recognized as earned on a pro rata basis over the
term of contracts.
Card servicing fees include credit and debit card interchange fees and other fees. Interchange fees are
recognized when earned. Trade finance servicing fees, which primarily include commissions on letters of credit, are
generally recognized over the service period on a straight line basis.
Deposits and services fees include service charges on deposit accounts, fees for banking services provided to
customers including wire transfers, overdrafts and non-sufficient funds. Revenue from these sources is generally
recognized in accordance with published deposit account agreements for customer accounts or when fixed and
determinable per contractual agreements.
Loan-level derivative income is generated from back-to-back derivative transactions with commercial loan
clients and with brokers. The Company earns a fee upon inception of the back-to-back derivative transactions,
corresponding to the spread between a wholesale rate and a retail rate.
Stock-based Compensation
The Company may grant share-based compensation and other related awards to its non-employee directors,
officers, employees and certain consultants. Compensation cost is measured based on the estimated fair value of the
award at the grant date and recognized in earnings as an increase in additional paid in capital on a straight-line basis
over the requisite service period or vesting period for each separately vesting portion of each award when awards
have graded vesting features. The fair value of the unvested shares of restricted stock and restricted stock units is
based on the market price of the Company’s Class A common stock at the date of the grant. The fair value of
performance stock units at the grant date is based on estimated fair values using an option pricing model.
The Company maintains an ESPP. The ESPP allows eligible employees to purchase common stock at a 15%
discount applied to the stock price at the beginning or end of the offering period, whichever is lower. Each offering
period is six months in length with a purchase limit of 5,000 shares per eligible employee per offering period and a
$25,000 per eligible employee contribution limit per year. Each offering period will begin the first trading day on or
after June 1 and December 1 of each year. The fair value of the ESPP at the beginning of the offering period is based
on an estimated fair value using an option pricing model. The Company recognizes compensation expense in an
amount equal to the estimated fair value of the 15% discount plus the fair value of the look-back option, over the
offering period.
Advertising Expenses
Advertising expenses are expensed as incurred, and includes amortization of naming rights intangible, except
for media production costs which are expensed upon the first airing of the advertisement, and are included in other
noninterest expenses.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-22
Voluntary and Involuntary Early Retirement Plan Expenses and other Staff Reduction Costs
The Company accounts for voluntary and involuntary early retirement plan expenses and other staff reduction
costs by establishing a liability for costs associated with the exit or disposal activity, including severance and other
related costs, when the liability is incurred, rather than when we commit to an exit plan.
In 2023 and 2022, salaries and employment benefits include $4.0 million and $3.0 million, respectively, of
severance expenses mainly in connection with the Company’s restructuring activities. In 2024, there was no
significant severance expense in connection with these activities.
Offering Expenses
Specific, non-reimbursable, incremental costs directly attributable to a proposed or actual securities offerings
are deferred and charged against the gross proceeds of the offering.
Loan-level derivative expenses
Loan-level derivative expenses are incurred in back-to-back derivative transactions with commercial loan
clients and with brokers. The Company pays a fee upon inception of the back-to-back derivative transactions,
corresponding to the spread between a wholesale rate and a retail rate.
Cash and Cash Equivalents
The Company has defined as cash equivalents those highly liquid instruments purchased with an original
maturity of three months or less and include cash and cash due from banks, federal funds sold and deposits with
banks and other short-term investments.
The Company must comply with federal regulations requiring the maintenance of minimum reserve balances
against its deposits. Effective March 26, 2020, the Board of Governors of the Federal Reserve System reduced
reserve requirements ratios to zero percent. Therefore, there were no minimum reserve balances required at
December 31, 2024 and 2023.
The Company maintains some of its cash deposited with third-party depository institutions for amounts that, at
times, may be in excess of federally-insured limits mandated by the FDIC.
Securities
The Company classifies its investments in securities as debt securities available for sale, debt securities held to
maturity and equity securities with readily determinable fair value not held for trading. Securities classified as debt
securities available for sale are carried at fair value with unrealized gains and losses included in accumulated other
comprehensive income (“AOCI”) or accumulated other comprehensive loss (“AOCL”) in stockholders’ equity on an
after-tax basis. Equity securities with readily determinable fair value not held for trading primarily consists of
mutual funds carried at fair value with unrealized gains and losses included in earnings. Securities classified as debt
securities held to maturity are securities the Company has both the ability and intent to hold until maturity and are
carried at amortized cost. Investments in stock issued by the Federal Reserve and Federal Home Loan Bank of
Atlanta (“FHLB”) are stated at their original cost, which approximates their realizable value. Realized gains and
losses from sales of securities are recorded on the trade date and are determined using the specific identification
method. Securities purchased or sold are recorded on the consolidated balance sheets as of the trade date.
Receivables and payables to and from clearing organizations relating to outstanding transactions are included in
other assets or other liabilities. At December 31, 2024 and 2023, securities receivables included in other assets
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-23
amounted to $0.9 million and $0.8 million, respectively. At December 31, 2024 and 2023, securities payable related
to purchases pending settlement and included in other liabilities amounted to $0.3 million.
For debt securities available for sale, the Company evaluates whether: (i) the fair value of the securities is less
than the amortized costs basis; (ii) it intends to sell, or it is more likely than not that it will be required to sell, the
security before recovery of its amortized cost basis, and (iii) the decline in fair value has resulted from credit losses
or other factors. The Company estimates credit losses on debt securities available for sale using a discounted cash
flow model. The present value of an impaired debt security results from estimating future cash flows that are
expected to be collected, discounted at the debt security’s effective interest rate. The Company develops its
estimates about cash flows expected to be collected and determines whether a credit loss exists, generally using
information about past events, current conditions, reasonable and supportable forecasts and other qualitative factors
including the extent to which fair value is less than amortized cost basis, adverse conditions specifically related to
the security, industry or geographic area, changes in conditions of any collateral underlying the securities, changes
in credit ratings, failure of the issuer to make scheduled payments, among other qualitative factors specific to the
applicable security. If a credit loss exists, the Company records an allowance for the credit losses, limited to the
amount by which the fair value is less than the amortized cost basis. The Company recognizes in AOCI/AOCL any
decline in the fair value below amortized cost on debt securities available for sale that has not been recorded through
an allowance for credit losses.
Loans Held for Sale, at Lower of Cost or Fair Value
Loans originated for investment are transferred into the held for sale classification at the lower of carrying
amount or fair value, when they are specifically identified for sale and a formal plan exists to sell them. When the
Company determines that a formal plan to sell loans in this category no longer exists, the Company reclassifies these
loans to loans held for investment at their carrying value at the date of the transfer, with the loans’ carrying value
becoming their new basis. Any resulting difference between the loans unpaid principal amount and their carrying
value is amortized through earning for the remainder lives of the loans.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-24
Mortgage Loans Held for Sale, at Fair Value
Mortgage loans originated for sale are carried at fair value under the fair value option, with changes in fair value
recognized in current period earnings presented in other income. The fair value is measured on an individual loan
basis using quoted market prices and when not available, comparable market value or discounted cash flow analysis
may be utilized. Gains and losses on loan sales are recognized in other noninterest income in the consolidated
statements of operations and comprehensive (loss) income.
Loans Held for Investment
Loans represent extensions of credit which the Company has the intent and ability to hold for the foreseeable
future or until maturity or payoff. These extensions of credit consist of commercial real estate loans, or CRE loans,
(including land acquisition, development and construction loans), owner occupied real estate loans, single-family
residential loans, commercial loans, loans to financial institutions and acceptances, and consumer loans. Amounts
included in the loan portfolio are stated at the loans unamortized costs reduced by an allowance for credit losses if
any. The unamortized cost of a loan consists of its unpaid principal balance, unamortized premiums, discounts and
deferred loan origination fees and costs, net of amounts previously charged off. Unamortized premiums, discounts
and deferred loan origination costs, including premiums or discounts paid on loan purchases, amounted to
$0.9 million and $11.2 million at December 31, 2024 and 2023, respectively.
A loan is placed in nonaccrual status when management believes that collection in full of the principal amount
of the loan or related interest is in doubt. Management considers that collectability is in doubt when any of the
following factors are present, among others: (1) there is a reasonable probability of inability to collect principal,
interest or both, on a loan for which payments are current or delinquent for less than ninety days; or (2) when a
required payment of principal, interest or both, is delinquent for ninety days or longer, unless the loan is considered
well secured and in the process of collection in accordance with regulatory guidelines. Once a loan to a single
borrower has been placed in nonaccrual status, management reviews all loans to the same borrower to determine
their appropriate accrual status. When a loan is placed in nonaccrual status, accrual of interest and amortization of
net deferred loan fees or costs are discontinued, and any accrued interest receivable is reversed against interest
income.
Payments received on a loan in nonaccrual status are generally applied to its outstanding principal amount,
unless there are no doubts on the full collection of the remaining recorded investment in the loan. When there are no
doubts on the full collection of the remaining recorded investment in the loan, and there is sufficient documentation
to support the collectability of that amount, payments of interest received may be recorded as interest income.
A loan in nonaccrual status is returned to accrual status when none of the conditions noted when first placed in
nonaccrual status are currently present, none of its principal and interest is past due, and management believes there
are reasonable prospects of the loan performing in accordance with its terms. For this purpose, management
generally considers there are reasonable prospects of performance in accordance with the loan terms when at least
six months of principal and interest payments or principal curtailments have been received, and current financial
information of the borrower demonstrates that the borrower has the capacity to continue to perform into the near
future.
The total outstanding principal amount of a loan is reported as past due thirty days following the date of a
missed scheduled payment, based on the contractual terms of the loan.
The Company modifies loans related to borrowers experiencing financial difficulties by providing multiple
types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower
continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-25
Allowance for Credit Losses (ACL)
The ACL is a valuation account that is deducted from the amortized cost basis of financial assets carried at their
amortized cost, including loans held for investment and debt securities held to maturity, to present the net amount
that is expected to be collected throughout the life of the financial asset. The estimated ACL is recorded through a
provision for credit losses charged against operations. Management periodically evaluates the adequacy of the ACL
to maintain it at a level it believes to be reasonable. The Company uses the same methods used to determine the
ACL to assess any reserves needed for off-balance sheet credit risks such as unfunded loan commitments and
contingent obligations on letters of credit. These reserves for off-balance sheet credit risks are presented in the
liabilities section in the consolidated balance sheets.
The ACL consists of two components: an asset-specific component for estimating credit losses for individual
loans that do not share similar risk characteristics with other loans; and a pooled component for estimating credit
losses for pools of loans that share similar risk characteristics. The ACL for the pooled component is derived from
an estimate of expected credit losses primarily using an expected loss methodology that incorporates risk parameters
such as probability of default (“PD”) and loss given default (“LGD”) which are derived from various vendor models
and/or internally developed model estimation approaches for smaller homogenous loans.
PD is projected in these models or estimation approaches using economic scenarios, whose outcomes are
weighted based on the Company’s economic outlook and are developed to incorporate relevant information about
past events, current conditions, and reasonable and supportable forecasts. For commercial loans above $3 million,
LGD is typically derived from the Company’s own loss experience based on specific risk characteristics. For
commercial real estate loans, the LGD is derived from vendor models using property and loan risk characteristics.
The estimation of the ACL for pools of loans that share similar risk characteristics involves inputs and assumptions,
many of which are derived from vendor and internally-developed models. These inputs and assumptions include,
among others, the selection, evaluation and measurement of the reasonable and supportable forecast scenarios, PD
and LGD which requires management to apply a significant amount of judgment and involves a high degree of
estimation uncertainty. The ACL estimation process applies an economic forecast scenario or a composite of
scenarios based on management's judgment and expectations around the current and future macroeconomic outlook.
Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when
appropriate. The contractual term of a loan excludes expected extensions, renewals, and modification under certain
conditions.
For smaller-balance homogeneous pooled loans with similar risk characteristics such as collateral type and loan
purpose (e.g., residential, small business lending under $3 million, consumer and land loans), other modeling
techniques are used. These include modeling that relies upon observable inputs such as historical or average loss
rates by year of loan origination (i.e.,vintage) and prepayment considerations for future expected contractual loan
outstanding balances.
For the smaller-balance homogenous pooled loan segments, the quantitative estimates of expected credit losses
are then adjusted to incorporate considerations of current trends and conditions that are not captured in the
quantitative credit loss estimates through the use of qualitative or environmental factors. The measurement of
expected credit losses on these loan segments is influenced by macro-economic conditions.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-26
Expected credit losses on loans to borrowers that are domiciled in foreign countries, primarily loans in the
Consumer and Financial Institutions portfolios are generally estimated by assessing available cash or other types of
collateral, and the probability of losses arising from the Company’s exposure to those collateral assets. Loans in
these portfolio are generally fully collateralized with cash, securities and other assets and, therefore, generally have
no expected credit losses.
Commercial real estate, commercial and financial institution loans are charged off against the ACL when they
are considered uncollectible. These loans are considered uncollectible when a loss becomes evident to management,
which generally occurs when the following conditions are present, among others: (1) a loan or portions of a loan are
classified as “loss” in accordance with the internal risk and credit monitoring grading system; (2) a collection
attorney has provided a written statement indicating that a loan or portions of a loan are considered uncollectible;
and (3) when loans are evaluated individually and the carrying value of a collateral-dependent loan exceeds the
appraised value of the asset held as collateral. Consumer and other retail loans are charged off against the ACL at the
earlier of (1) when management becomes aware that a loss has occurred, or (2) when closed-end retail loans become
past due 90 days (120 days previously) or open-end retail loans become past due 180 days from the contractual due
date. For open and closed-end retail loans secured by residential real estate, any outstanding loan balance in excess
of the fair value of the property, less cost to sell, is charged off no later than when the loan is 180 days past due from
the contractual due date. Consumer and other retail loans may not be charged off when management can clearly
document that a past due loan is well secured and in the process of collection such that collection will occur
regardless of delinquency status in accordance with regulatory guidelines applicable to these types of loans.
The Company modifies loans related to borrowers experiencing financial difficulties by providing multiple
types of concessions. When the Company modifies loans by providing principal forgiveness, the amount of the
principal forgiveness is deemed to be uncollectible and, therefore, that portion of the loan is written off resulting in a
reduction of the amortized cost basis and a corresponding adjustment to the ACL.
Recoveries on loans represent collections received on amounts that were previously charged off against the
ACL. Recoveries are credited to the ACL when received, to the extent of the amount previously charged off against
the ACL on the related loan. Any amounts collected in excess of this limit are first recognized as interest income,
then as a reduction of collection costs, and then as other income.
Accrued Interest Receivable
The Company has elected to present accrued interest receivable related to loans, debt securities available for
sale and held to maturity as part of other assets in the Company’s consolidated balance sheets. Therefore, accrued
interest receivable is excluded from the amortized cost basis of loans, debt securities available for sale and held to
maturity. The Company generally does not estimate an ACL on accrued interest receivable balances since
uncollectible accrued interest is timely written off in accordance with the Company's accounting policies for non-
accrual loans. Accrued interest receivable on nonaccrual loans is written off by reversing interest income.
Transfers of Financial Assets
Transfers of financial assets are accounted for as sales or purchases when control over the assets has been
surrendered by the transferor. Control over transferred assets is deemed to be surrendered when the assets have been
isolated from the transferor, the transferee obtains the right (free of conditions that constrain it from taking
advantage of that right) to pledge or exchange the transferred assets, and the transferor does not maintain effective
control over the transferred assets.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-27
Debt Modifications
Debt modifications or restructures are accounted for as modifications if the terms of the new debt and original
instrument are not considered substantially different. The debt is not considered substantially different when the
present value of cash flows under the terms of the new debt instrument are less than 10% different from the present
value of remaining cash flows under the terms of the original instrument. If the new debt is considered substantially
different, the original debt is derecognized and the new debt is recorded at fair value, with any prepayment penalty
being amortized over the life of the new borrowing. If the new debt is considered substantially different, the original
debt is derecognized with any prepayment penalty recorded as a loss on debt extinguishment as a component of
noninterest income.
Premises and Equipment, Net
Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is
computed on the straight-line basis over the estimated useful lives of the related assets. Repairs and maintenance are
charged to operations as incurred; renewals, betterments and interest during construction are capitalized. Gains or
losses on sales of premises and equipment are recorded as noninterest income at the date of sale.
The Company leases various premises for bank branches under operating leases. The leases have varying terms,
with most containing renewal options and annual increases in base rents. Leasehold improvements are amortized
over the remaining term of the lease.
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. For purposes of recognition and measurement of an impairment
loss, when the independent and identifiable cash flow of a single asset may not be determinable, the long-lived asset
may be grouped with other assets of like cash flows. Recoverability of an asset or group of assets to be held and
used is measured by comparing the carrying amount with future undiscounted net cash flows expected to be
generated by the asset or group of assets. If an asset is considered impaired, the impairment recognized is generally
measured by the amount by which the carrying amount of the asset or group exceeds its fair value.
Leases
The Company determines whether a contract is or contains a lease at inception. For leases with terms greater
than twelve months under which the Company is lessee, right-of-use assets and lease liabilities are recorded at the
commencement date. Lease liabilities are initially recorded based on the present value of future lease payments over
the lease term. Right-of-use assets are initially recorded at the amount of the associated lease liabilities plus prepaid
lease payments and initial direct costs, less any lease incentives received. The cost of short term leases is recognized
on a straight line basis over the lease term. The lease term includes options to extend if the exercise of those options
is reasonably certain and includes termination options if there is reasonable certainty the options will not be
exercised. The Company uses its incremental borrowing rate based on the appropriate term and information
available at commencement date in determining the present value of lease payments, unless an implicit rate is
defined in the contract or is determinable, which is generally not the case. Leases are classified as financing or
operating leases at commencement; generally, leases are classified as finance leases when effective control of the
underlying asset is transferred. All the leases under which the Company is lessee are classified as operating leases.
For operating leases, lease cost is recognized in earnings on a straight line basis over the lease terms. Variable lease
costs are recognized in the period in which the obligation for those costs is incurred. Sublease income is recognized
as a reduction to lease cost over a straight line basis over the lease terms.
The Company provides equipment financing through a variety of loan and lease structures, including direct or
sale type finance leases and operating leases. Direct or sale type finance leases are carried at the aggregate of lease
payments receivable and estimated residual value of the leased property, if applicable, less unearned income. Interest
income is recognized over the term of the direct or sale type finance leases to achieve a constant periodic rate of
return on the outstanding investment. Operating leases are stated at cost, less accumulated depreciation. Rental
income in connection with operating leases are included as part of other noninterest income in the Company’s
consolidated statement of operations and comprehensive income (loss).
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-28
Mortgage Servicing Rights
The Company recognizes as an asset the rights to service mortgage loans (“MSRs”), either when the mortgage
loans are sold to third parties and the associated servicing rights are retained or when servicing rights are obtained
from acquisitions. These MSRs are initially recorded at fair value. The Company has elected to subsequently
measure all MSRs at fair value. MSRs are reported on the consolidated balance sheets in the “Other assets” section,
with changes to the fair value recorded as other noninterest income in the consolidated statements of operations and
comprehensive (loss) income. At December 31, 2024 and 2023, MSRs totaled $1.5 million and $1.4 million,
respectively.
Bank Owned Life Insurance
BOLI policies are recorded at the cash surrender value of the insurance contracts, which represent the amount
that may be realizable under the contracts, at the consolidated balance sheet dates. Changes to the cash surrender
value are recorded as other noninterest income in the consolidated statements of operations.
Other Real Estate Owned and Repossessed Assets
The Company, from time to time, receives other real estate property, or OREO, and non-real estate repossessed
assets, in full or partial satisfaction of its loans. OREO and non-real estate repossessed assets are recorded at the fair
value of the asset less the estimated cost to sell, and the loan amount reduced for the remaining balance of the loan.
The amount by which the cost basis in the loan exceeds the fair value (net of estimated cost to sell) of the asset is
charged to the ACL. Upon transfer to OREO and repossessed assets, the fair value less cost to sell becomes the new
cost basis for the asset. Subsequent declines in the fair value of the assets below the new cost basis are recorded
through the use of a valuation allowance. The fair value of OREO is generally based upon recent appraisal values of
the property, less cost to sell. The fair value of non-real estate repossessed assets is generally provided by third
parties based on their assumptions and quoted market prices for similar assets, when available. At December 31,
2024 and 2023, the Company had OREO totaling $18.1 million and $20.2 million, respectively, and is reported on
the consolidated balance sheet in other assets. In 2023, the Company repossessed and sold non-real estate assets with
a carrying value of $6.4 million and realized a loss on sale of approximately $2.6 million.
Income Taxes
Deferred income tax assets and liabilities are determined using the balance sheet method. Under this method,
the resulting net deferred tax asset is determined based on the future tax consequences attributable to differences
between the financial statement carrying amount of existing assets and liabilities and their respective tax basis. The
effect of changes in tax laws or rates is recognized in results in the period that includes the legislation enactment
date. A valuation allowance is established against the deferred tax asset to the extent that management believes that
it is more likely than not that any tax benefit will not be realized. Income tax expense is recognized on the periodic
change in deferred tax assets and liabilities at the current statutory rates.
The results of operations of the Company and the majority of its wholly owned subsidiaries are included in the
consolidated federal income tax return of the Company and its subsidiaries as members of the same consolidated tax
group.
Under the intercompany income tax allocation policy, the Company and the subsidiaries included in the
consolidated federal tax group are allocated current and deferred taxes as if they were separate taxpayers. As a
result, the subsidiaries included in the consolidated group pay their allocation of income taxes to the Company, or
receive payments from the Company to the extent that tax benefits are realized.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-29
Goodwill
Goodwill primarily represents the excess of consideration paid over the fair value of the net assets acquired in
transactions recorded as business combinations. Goodwill is not amortized but is reviewed for potential impairment
at the reporting unit level on an annual basis in the fourth quarter, or on an interim basis if events or circumstances
indicate a potential impairment. As part of its testing, the Company may elect to first assess qualitative factors to
determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount
which includes goodwill (“Step 0”). If the results of Step 0 indicate that more likely than not the reporting unit’s fair
value is less than its carrying amount, the Company determines the fair value of the reporting unit relative to its
carrying amount, including goodwill (“Step 1”). The Company may also elect to bypass Step 0 and begin with Step
1. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not
impaired. However, if the carrying amount of the reporting unit exceeds its fair value, then an impairment loss exists
and is recognized in an amount equal to that excess, limited to the total amount of goodwill. At December 31, 2024,
goodwill was considered not impaired and, therefore, no impairment charges were recorded in 2024. In 2023, the
Company determined that goodwill related to its subsidiaries Amerant Mortgage and the Cayman Bank was
impaired and, therefore, recorded a goodwill impairment charge of $1.3 million in 2023.
Securities Sold Under Agreements to Repurchase
Securities sold under agreements to repurchase are classified as secured borrowings and are reflected at the
amount of cash received in connection with the transaction.
Derivative Instruments
Derivative instruments are recognized on the consolidated balance sheets as other assets or other liabilities, at
their respective fair values. The accounting for changes in the fair value of a derivative instrument is dependent upon
whether the derivative has been designated and qualifies as part of a hedging relationship. For derivative instruments
that have not been designated and qualified as hedging relationships, the change in their fair value is recognized in
current period earnings. For derivative instruments that are designated and qualify as cash flow hedges, the effective
portion of the gain or loss on the derivative instruments is initially recognized as a component of AOCI or AOCL,
and subsequently reclassified into earnings in the same period during which the hedged transactions affect earnings.
The ineffective portion of the gain or loss, if any, is recognized immediately in earnings. The Company has
designated certain derivatives as cash flow hedges. Management periodically evaluates the effectiveness of these
hedges in offsetting the fluctuations in cash flows due to changes in benchmark interest rates.
The Company also enters into interest rate swaps to provide commercial loan clients the ability to swap from a
variable interest rate to a fixed rate. The Company enters into a floating-rate loan with a customer with a separately
issued swap agreement allowing the customer to convert floating payments of the loan into a fixed interest rate. To
mitigate risk, the Company will generally enter into a matching agreement with a third party to offset the exposure
on the customer agreement. These swaps are not considered to be qualified hedging relationships and therefore, all
unrealized gain or loss is recorded as part of other noninterest income.
The Company enters into certain contracts involving the risk of dealing with financial institutional derivative
counterparties to manage the credit risk exposure on certain interest rate swaps with customers. These contracts are
carried at fair value and recorded in the consolidated balance sheet within other assets or other liabilities.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-30
Fair Value Measurement
Financial instruments are classified based on a three-level valuation hierarchy required by GAAP. The valuation
hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement
date. The three levels are defined as follows:
Level 1
Inputs to the valuation methodology are quoted prices in active markets for identical assets or
liabilities. Level 1 assets and liabilities may include debt and equity securities that are traded in
an active exchange market, as well as certain U.S. securities that are highly liquid and are
actively traded in over-the-counter markets.
Level 2
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities,
quoted prices in markets that are not active, or other inputs that are observable or can be corroborated
by observable market data for substantially the full term of the assets and liabilities. Level 2 assets and
liabilities include debt securities with quoted prices that are traded less frequently than exchange traded
instruments which value is determined by using a pricing model with inputs that are observable in the
market or can be derived principally from, or corroborated by, observable market data. This category
generally may include U.S. government and U.S. Government Sponsored Enterprise mortgage backed
debt securities and corporate debt securities.
Level 3
Unobservable inputs that are supported by little or no market activity and that are significant to the fair
value of the assets or liabilities. Level 3 assets and liabilities may include financial instruments whose
value is determined using pricing models, discounted cash flow methodologies, or similar techniques,
as well as instruments for which the determination of fair value requires significant management
judgment or estimation.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input
that is significant to the fair value measurement.
Reclassifications
In 2024 and 2023, OREO and repossessed assets, net expense is presented separately in the Company’s
consolidated statement of operations and comprehensive income (loss). OREO and repossessed assets expense
includes expenses and revenue (rental income) from the operation of foreclosed property/assets as well as fair value
adjustments and gains/losses from the sale of OREO and repossessed assets. In 2022, while OREO valuation
expense was presented separately, all other OREO-related expenses were presented as part of other operating
expenses in the Company’s consolidated statement of operations and comprehensive income (loss).
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-31
c) Recently Issued Accounting Pronouncements
Issued and Adopted
Guidance on Accounting for Credit Losses on Financial Instruments
In 2022, the Company adopted ASC Topic 326 on CECL. The Company adopted the CECL guidance as of the
beginning of the reporting period of adoption, January 1, 2022, using a modified retrospective approach for all its
financial assets measured at amortized cost and off-balance sheet credit exposures. The following table reflects the
impact of adopting CECL on the Company’s consolidated balance sheets:
January 1, 2022
(in thousands)
As Reported Under
ASC 326
Pre-ASC 326 Adoption
Impact of ASC 326
Adoption
Assets
Allowance for credit losses
$
88,573
$
69,899
$
18,674
Deferred tax assets, net
16,103
11,301
4,802
Liabilities
Reserve for unfunded credit commitments
1,702
1,702
—
Stockholder’s Equity
Retained earnings .................................................
539,295
553,167
(13,872)
Upon CECL adoption, the Company did not record a change to the allowance for credit losses for off-balance
sheet credit exposures, and the Company did not record an allowance for credit losses for debt securities available
for sale and held to maturity. See Note 3-Securities for more details on the determination of expected credit losses on
debt securities available for sale and held to maturity.
Guidance on Troubled Debt Restructurings
In March 2022, the Financial Accounting Standards Board (“FASB”) issued guidance that eliminates the
recognition and measurement guidance on troubled debt restructurings, or TDR, for creditors, and aligns it with
existing guidance to determine whether a loan modification results in a new loan or a continuation of an existing
loan. The guidance also requires enhanced disclosures about certain loan modifications by creditors when a
borrower is experiencing financial difficulty. The amended guidance is effective in periods beginning after
December 15, 2022 using either a prospective or modified retrospective transition approach. Early adoption was
permitted if an entity had already adopted the guidance on accounting for credit losses on financial instruments
(“CECL”). The Company adopted this guidance on TDR as of January 1, 2023, and determined that its adoption had
no material impact to the Company’s consolidated financial statements.
Guidance on Fair Value Hedges
In March 2022, the FASB issued amended guidance to expand and clarify existing guidance on fair value hedge
accounting of interest rate risk for portfolios of financial assets. The amendments clarify, among others, the “last-of-
layer” method for making the fair value hedge accounting for these portfolios more accessible. The amendment also
improves the last-of-layer concepts and expands them to non-prepayable financial assets, allowing more flexibility
in the structure of derivatives used to hedge interest rate risk. The amended guidance is effective for public business
entities for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. For all
other entities, the amended guidance is effective for fiscal years beginning after December 15, 2023. The amended
guidance is available for early adoption. The Company adopted this guidance as of January 1, 2023, and determined
that its adoption had no impact to its consolidated financial statements.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-32
Facilitation of the Effects of Reference Rate Reform on Financial Reporting
On March 12, 2020, the FASB issued amendments to guidance applicable to contracts, hedging relationships,
and other transactions affected by that reference LIBOR or another reference rate expected to be discontinued
because of reference rate reform. These amendments provide optional guidance for a limited period of time to ease
the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.
The expedients and exceptions provided by the amendments do not apply to contract modifications made and
hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as
of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end
of the hedging relationship. The amendments also allow entities to make a one-time election to sell, transfer, or both
sell and transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform
and that are classified as held to maturity before January 1, 2020. In December 2022, the FASB issued new
guidance to extend the sunset date of this guidance from December 31, 2022 to December 31, 2024, after which
entities will no longer be permitted to apply the relief under this guidance. Prior to this new guidance, these
amendments were effective for all entities as of March 12, 2020 through December 31, 2022.
During 2021, the Company completed its assessment of all third-party-provided products, services, and systems
that would be affected by any changes to references to LIBOR, including changes to all relevant systems. Beginning
in January 2022, the Company started referencing new loans and other products, including loan-level derivatives to
the Secured Overnight Financing Rate (“SOFR”). In 2023, the Company completed the migration of all variable
rate loans, derivative contracts and other financial instruments from LIBOR to SOFR.
New Guidance for Segment Reporting
In November 2023, the FASB issued new guidance to improve disclosure requirements for reportable segments,
primarily through enhanced disclosures about significant segment expenses. In addition, the amendments require
entities to provide all annual disclosures about a reportable segment’s profit or loss and assets currently required
under FASB ASC Topic 280 in interim periods. Also, this guidance clarifies circumstances in which an entity can
disclose multiple segment measures of profit or loss and provides new segment disclosure requirements for entities
with a single reportable segment. For public business entities, the amendments are effective for fiscal years
beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The
Company adopted this guidance as of December 31, 2024 which resulted in additional disclosures about the
Company operating as a single segment; there were no other impacts to the Company's consolidated financial
statements upon adoption of this new guidance as of December 31, 2024. See Note 25- Segment Information for
more details.
Issued and Not Yet Adopted
New Guidance on Income Taxes
In December 2023, the FASB issued amended guidance that requires entities to provide additional income tax
disclosures for annual and interim periods. This includes the disclosure of more detailed information on income tax
reconciliations and income tax paid. In addition, the amendments remove certain existing disclosure requirements
related to uncertain tax positions and unrecognized deferred tax liabilities. For public business entities, the
amendments are effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years
beginning after December 15, 2025. The Company is in the process of evaluating the impact of this guidance on its
consolidated financial statements when adopted.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-33
New Guidance for Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions
On June 30, 2022, the FASB issued new guidance to improve fair value guidance for equity securities subject to
contractual sale restrictions. These amendments clarify that a contractual restriction on the sale of an equity security
is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair
value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a
contractual sale restriction. The amendments also require additional disclosures for equity securities subject to
contractual sale restrictions. For public business entities, the amendments are effective for fiscal years beginning
after December 15, 2023, and interim periods within those fiscal years. The Company is in the process of evaluating
the impact of this guidance on its consolidated financial statements when adopted.
d) Subsequent Events
The effects of significant subsequent events, if any, have been recognized or disclosed in these consolidated
financial statements.
2.
Interest Earning Deposits with Banks, Other Short-Term Investments and Restricted Cash
At December 31, 2024 and 2023 interest earning deposits with banks are mainly comprised of deposits with the
Federal Reserve of approximately $520 million and $243 million, respectively. At December 31, 2024 and 2023 the
average interest rate on these deposits was approximately 5.31% and 5.64%, respectively. These deposits have no
stated maturity dates.
As of December 31, 2024 and 2023, the Company held US Treasury Bills classified as part of other short-term
investments in the Company’s consolidated balance sheets. As of December 31, 2024 and 2023, the Company held
$6.9 million and $6.1 million, respectively with an average yield of 5.07% and 4.80% related to these investments.
These other short-term investments have a stated maturity of 90 days or less and as such are deemed cash and cash
equivalents.
At December 31, 2024 and 2023, the Company had restricted cash balances of $24.4 million and $25.8 million,
respectively. These balances include cash pledged as collateral, by other banks to us, to secure derivatives’ margin
calls. This cash pledged as collateral also represents an obligation, by the bank, to repay according to margin
requirements. At December 31, 2024 and 2023, this obligation was $23.5 million and $25.0 million, respectively,
which is included as part of other liabilities in the Company’s consolidated balance sheets. In addition, we have cash
balances pledged as collateral to secure the issuance of letters of credit by other banks on behalf of our customers.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-34
3.
Securities
a) Debt Securities
In 2024, the Company changed the presentation of its debt securities by type to provide more granular
information on the nature of its investments in debt securities. This includes, among other things, new tabular
information on mortgage-backed securities (“MBS”). Investments in debt securities by type as of December 31,
2023 have been reclassified for comparative purposes.
Debt securities available for sale
Amortized cost, allowance for credit losses and approximate fair values of debt securities available for sale at
December 31, 2024 and 2023 are summarized as follows:
December 31, 2024
Amortized
Cost
Gross Unrealized
Allowance for
Credit Losses
Estimated
Fair Value
(in thousands)
Gains
Losses
U.S. Treasury Securities
$
1,932
$
1
$
—
$
—
$
1,933
U.S. Government agency and
sponsored enterprise
residential MBS
1,310,419
758
(48,537)
—
1,262,640
U.S. Government agency and
sponsored enterprise
commercial MBS
148,338
137
(5,937)
—
142,538
U.S. Government agency and
sponsored enterprise
obligations
17,060
10
(388)
—
16,682
Non-agency commercial
MBS(1)
12,517
—
(725)
—
11,792
Municipal Bonds (2)
1,732
—
(147)
—
1,585
Total debt securities
available for sale (3)
$
1,491,998
$
906
$
(55,734) $
—
$
1,437,170
__________________
(1)
Issued by a financial institution.
(2)
Includes MBS securities with a fair value of $1.6 million and amortized cost of $1.7 million.
(3)
Excludes accrued interest receivable of $5.7 million as of December 31, 2024, which is included as part of other assets in the Company’s
consolidated balance sheet. The Company did not record any write offs on accrued interest receivable related to these securities in 2024.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-35
December 31, 2023
Amortized
Cost
Gross Unrealized
Allowance for
Credit Losses
Estimated
Fair Value
(in thousands)
Gains
Losses
U.S. Government agency and sponsored
enterprise residential MBS .............................. $ 908,358
$
2,672
$ (68,160) $
—
$
842,870
Corporate bonds (1).........................................
272,664
—
(23,082)
—
249,582
U.S. Government agency and sponsored
enterprise commercial MBS ...........................
87,111
545
(7,030)
—
80,626
U.S. Government agency and sponsored
agency obligations ...........................................
25,129
13
(554)
—
24,588
Non-agency commercial MBS (2)...................
12,553
—
(1,333)
—
11,220
U.S. treasury securities ....................................
1,998
—
(7)
—
1,991
Municipal bonds (3).........................................
1,731
—
(63)
—
1,668
Collateralized loan obligations ........................
5,000
—
(43)
—
4,957
Total debt securities available for sale (4)
$1,314,544 $
3,230
$(100,272) $
—
$ 1,217,502
________________
(1)
Includes securities issued by financial institutions with a total fair value of $186.9 million and amortized cost of $206.3 million.
(2)
Issued by a financial institution.
(3)
Includes MBS securities with a fair value and amortized cost of $1.7 million.
(4)
Excludes accrued interest receivable of $6.7 million as of December 31, 2023, which is included as part of other assets in the Company’s
consolidated balance sheet. The Company did not record any write offs on accrued interest receivable related to these securities in 2023.
There were no investments in foreign corporate bonds available for sale as of December 31, 2024. The
Company had investments in foreign corporate bonds available for sale, primarily in Canada, of $10.5 million at
December 31, 2023. At December 31, 2024 and 2023, the Company had no foreign sovereign or foreign government
agency debt securities available for sale. Investments in foreign corporate bonds available for sale are denominated
in U.S. Dollars.
In the years ended December 31, 2024, 2023 and 2022, proceeds from sales, redemptions and calls, gross
realized gains, gross realized losses of debt securities available for sale were as follows:
Years Ended December 31
(in thousands)
2024
2023
2022
Proceeds from sales, redemptions and calls of debt securities available for
sale
$
560,872
$
4,069
$
61,399
Gross realized gains
—
—
73
Gross realized losses
(14,988)
(10,823)
(2,522)
Realized (loss) gain, net
$
(14,988) $ (10,823) $
(2,449)
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-36
The Company’s investment in debt securities available for sale with unrealized losses aggregated by the length
of time that individual securities have been in a continuous unrealized loss position, are summarized below:
December 31, 2024
Less Than 12 Months
12 Months or More
Total
(in thousands)
Number of
Securities
Estimated
Fair Value
Unrealized
Loss
Number of
Securities
Estimated
Fair Value
Unrealized
Loss
Estimated
Fair Value
Unrealized
Loss
U.S. Government
agency and
sponsored
enterprise
residential MBS ..
133 $717,487
$ (13,555)
324 $407,841
$ (34,982) $1,125,328
$ (48,537)
Non-agency
commercial MBS.
—
—
—
1
11,792
(725)
11,792
(725)
U.S. Government
agency and
sponsored
enterprise
commercial MBS
13
63,468
(1,261)
30
64,606
(4,676)
128,074
(5,937)
U.S. Government
agency and
sponsored
enterprise
obligations ...........
2
228
(1)
47
15,982
(387)
16,210
(388)
Municipal Bonds..
—
—
—
3
1,585
(147)
1,585
(147)
148 $781,183
$ (14,817)
405 $501,806
$ (40,917) $1,282,989
$ (55,734)
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-37
December 31, 2023
Less Than 12 Months
12 Months or More
Total
(in thousands)
Number
of
Securities
Estimated
Fair Value
Unrealized
Loss
Number
of
Securities
Estimated
Fair Value
Unrealized
Loss
Estimated
Fair Value
Unrealized
Loss
U.S. Government
agency and
sponsored
enterprise
residential MBS .....
18 $
82,893
$
(276)
406 $566,140
$ (67,884) $ 649,033
$ (68,160)
Non-agency
commercial MBS....
—
—
—
1
11,220
(1,333)
11,220
(1,333)
Corporate bonds .....
2
3,992
(13)
58
245,590
(23,069)
249,582
(23,082)
U.S. Government
agency and
sponsored
enterprise
commercial MBS ...
1
5,505
(48)
27
54,154
(6,982)
59,659
(7,030)
Municipal bonds.....
—
—
—
3
1,668
(63)
1,668
(63)
U.S. Government
agency and
sponsored agency
obligations..............
—
—
—
53
23,970
(554)
23,970
(554)
U.S. treasury
securities.................
1
1,991
(7)
—
—
—
1,991
(7)
Collateralized Loan
Obligations
1
4,957
(43)
—
—
—
4,957
(43)
23 $
99,338
$
(387)
548 $902,742
$ (99,885) $1,002,080
$ (100,272)
Upon successfully completing the Public Offering, the Company initiated the Securities Repositioning aimed at
improving yields, increasing liquidity and de-risking the securities portfolio. As part of this strategy, in the third
quarter of 2024, the Company: (i) transferred at their fair value (which was below their amortized cost basis) all of
the debt securities previously classified as held to maturity and carried at amortized cost to the debt securities
available for sale category; (ii) sold all of the Company’s investments in subordinated debt securities, included in
corporate bonds, which resulted in a pre-tax loss on sale of approximately $6.7 million in the third quarter of 2024;
and (iii) decided to sell all other corporate bonds. In addition, as a result of its decision to sell all debt securities
available for sale (including those previously classified as held to maturity) which had accumulated unrealized
losses and met the criteria for inclusion in the Securities Repositioning, the Company recorded a pre-tax impairment
loss totaling approximately $61.8 million on debt securities available for sale, and resulted in a write down of their
previous amortized cost to their estimated fair value as of September 30, 2024. The Company completed the
Securities Repositioning in October 2024, which resulted in an additional pre-tax loss on sale of approximately
$8.1 million as a result of the subsequent decline in fair market value of the securities.
There were no debt securities available for sale held by the Company considered delinquent on contractual
payments as of December 31, 2024 and 2023, nor were there any securities placed on non-accrual status during the
year ended December 31, 2024 and 2023.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-38
U.S. Government Sponsored Enterprise Debt Securities and U.S. Government Agency Debt Securities
At December 31, 2024 and 2023, the Company held certain debt securities issued or guaranteed by the U.S.
government and U.S. government-sponsored entities and agencies. The Company does not intend to sell these debt
securities and it is more likely than not that it will not be required to sell the securities before their anticipated
recovery. The Company evaluates these securities for credit losses by reviewing current market conditions, the
extent and nature of changes in fair value, credit ratings, default and delinquency rates and current analysts’
evaluations. The Company believes the decline in fair value on these debt securities is attributable to changes in
interest rates and securities markets, generally, and not credit quality. As a result, the Company did not record an
ACL on these securities as of December 31, 2024 and 2023.
Corporate Bonds
At December 31, 2022, the Bank had one corporate debt security held for sale (the “Signature Bond”) issued by
Signature Bank, N.A. (“Signature”), with a fair value of $9.1 million and unrealized loss of $0.9 million. At
December 31, 2022, the Signature Bond was in an unrealized loss position for less than one year. On March 12,
2023, Signature was closed by the New York State Department of Financial Services, which appointed the FDIC as
receiver. The FDIC, as receiver, announced that shareholders and certain unsecured debt holders will not be
protected. On March 27, 2023, the Bank sold the Signature Bond in an open market transaction and realized a pretax
loss on sale of approximately $9.5 million which is recorded in the consolidated statement of operations and
comprehensive income (loss) for the year ended December 31, 2023.
In May 2023, the Company sold a portion of its investment in a corporate bond held for sale issued by a
financial institution, to reduce single point exposure. The Company had proceeds of $0.8 million and realized a pre-
tax loss of $1.2 million in connection with this transaction. This loss was recorded in the consolidated statement of
operations and comprehensive income (loss) for the year ended December 31, 2023.
At December 31, 2023, the Company had no intent to sell its investments in corporate bonds available for sale
and it was more likely than not that it would not be required to sell these investments before their anticipated
recovery. The Company evaluates corporate bonds for credit losses, when required, by reviewing various qualitative
and quantitative factors such as current market conditions, the extent and nature of changes in fair value, credit
ratings, default and delinquency rates, and current analysts’ evaluations. The Company believes the decline in fair
value on these debt securities had been attributable to changes in interest rates and investment securities markets,
generally, and not credit quality. As a result, the Company did not record an ACL on these securities as of December
31, 2023. The Company had no corporate bonds available for sale at December 31, 2024.
Debt securities held to maturity
As a result of the Securities Repositioning, the Company did not have debt securities held to maturity as
December 31, 2024.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-39
Amortized cost and approximate fair values of debt securities held to maturity as of December 31, 2023 are
summarized as follows:
December 31, 2023
Amortized
Cost
Gross Unrealized
Estimated
Fair Value
Allowance for
Credit Losses
(in thousands)
Gains
Losses
U.S. Government agency and sponsored
enterprise residential MBS
$ 199,164
$
387
$
(20,352) $ 179,199
$
—
U.S. Government agency and sponsored
enterprise commercial MBS
27,481
—
(1,735)
25,746
—
Total debt securities held to maturity (1)
$ 226,645
$
387
$
(22,087) $ 204,945
$
—
_______________
(1)
Excludes accrued interest receivable of $0.7 million as of December 31, 2023 which is included as part of other assets in the Company’s
consolidated balance sheet. The Company did not record any write offs on accrued interest receivable related to these securities in 2023.
The Company’s investment in debt securities held to maturity with unrealized losses aggregated by length of
time that individual securities have been in a continuous unrealized loss position, as of December 31, 2023 are
summarized below:
December 31, 2023
Less Than 12 Months
12 Months or More
Total
(in thousands)
Number of
Securities
Estimated
Fair Value
Unrealized
Loss
Number of
Securities
Estimated
Fair Value
Unrealized
Loss
Estimated
Fair Value
Unrealized
Loss
U.S. Government
agency and sponsored
enterprise residential
MBS
— $
—
$
—
38 $169,214
$ (20,352) $169,214
$ (20,352)
U.S. Government
agency and sponsored
enterprise commercial
MBS
—
—
—
8
25,746
(1,735)
25,746
(1,735)
— $
—
$
—
46 $194,960
$ (22,087) $194,960
$ (22,087)
The Company evaluates all debt securities held to maturity quarterly to determine if any securities in an
unrealized loss position require an ACL. The Company considers that all debt securities held to maturity issued or
sponsored by the U.S. government are considered to be risk-free as they have the backing of the government. The
Company did not have debt securities held to maturity as of December 31, 2024. As of December 31, 2023, the
Company believed there were no current expected credit losses on these securities and, therefore, did not record an
ACL on any of its debt securities held to maturity as of that date. The Company monitors the credit quality of held to
maturity securities through the use of credit ratings. Credit ratings are monitored by the Company on at least a
quarterly basis. As of December 31, 2023, all debt securities held to maturity held by the Company were rated
investment grade or higher.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-40
Contractual maturities
Contractual maturities of debt securities at December 31, 2024 are as follows:
Available for Sale
(in thousands)
Amortized
Cost
Estimated
Fair Value
Within 1 year.................................................................. $
2,193
$
2,192
After 1 year through 5 years...........................................
42,287
41,272
After 5 years through 10 years.......................................
55,040
52,584
After 10 years.................................................................
1,392,478
1,341,122
$
1,491,998
$
1,437,170
Actual maturities of debt securities available for sale may differ from contractual maturities because issuers
may have the right to call or prepay obligations with or without prepayment penalties.
b) Equity securities with readily available fair value not held for trading
As of December 31, 2024 and 2023, the Company had an equity security with readily available fair value not
held for trading with an original cost of $2.5 million and fair value of $2.5 million, which was purchased in the
second quarter of 2023. These equity securities have no stated maturities. There were no significant unrealized gains
and losses related to these equity securities in 2024 and 2023.
In February 2023, the Company sold its equity securities with readily available fair value not held for trading,
with a total fair value of $11.2 million at the time of sale, and recognized a net loss of $0.2 million in connection
with this transaction.
c) Securities Pledged
As of December 31, 2024 and 2023, the Company had $135.7 million and $206.4 million, respectively, in
securities pledged as collateral. These securities were pledged to secure public funds, advances from the Federal
Home Loan Bank and for other purposes as permitted by law.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-41
4.
Loans
a) Loans held for investment
Loans held for investment consist of the following loan classes:
(in thousands)
December 31,
2024
December 31,
2023
Real estate loans
Commercial real estate
Nonowner occupied............................................................................................ $
1,678,473
$
1,616,200
Multi-family residential......................................................................................
336,229
407,214
Land development and construction loans .........................................................
483,210
300,378
2,497,912
2,323,792
Single-family residential.........................................................................................
1,528,080
1,466,608
Owner occupied......................................................................................................
1,007,074
1,175,331
5,033,066
4,965,731
Commercial loans......................................................................................................
1,751,902
1,503,187
Loans to financial institutions and acceptances ........................................................
170,435
13,375
Consumer loans and overdrafts.................................................................................
273,008
391,200
Total loans held for investment, gross (1).......................................................... $
7,228,411
$
6,873,493
_________________
(1)
Excludes accrued interest receivable.
Real estate loans include commercial loans secured by real estate properties. Commercial loans secured by non-
owner occupied real estate properties are generally granted to finance the acquisition or operation of commercial real
estate properties, with terms similar to the properties’ useful lives or the operating cycle of the businesses. The main
source of repayment of these real estate loans is derived from cash flows or conversion of productive assets and not
from the income generated by the disposition of the property held as collateral. The main repayment source of loans
granted to finance land acquisition, development and construction projects is generally derived from the disposition
of the properties held as collateral, with the repayment capacity of the borrowers and any guarantors considered as
alternative sources of repayment. Commercial loans secured by owner-occupied real estate properties are generally
granted to finance the acquisition or operation of commercial real estate properties, with terms similar to the
properties’ useful lives or the operating cycle of the businesses. The main source of repayment of these commercial
real estate loans is derived from cash flows and not from the income generated by the disposition of the property
held as collateral.
Commercial loans correspond to facilities established for specific business purposes such as financing working
capital and capital improvements projects and asset-based lending, among others. These may be loan commitments,
uncommitted lines of credit to qualifying customers, short term (one year or less) or longer term credit facilities, and
may be secured, unsecured or partially secured. Terms on commercial loans generally do not exceed five years, and
exceptions are documented. The Company provides equipment financing using a variety of loan and lease structures,
as part of its commercial lending activities. These equipment loans and leases are originated under a white-label
equipment financing solution launched in the second quarter of 2022.
Commercial loans to borrowers in similar businesses or products with similar characteristics or specific credit
requirements are generally evaluated under a standardized commercial credit program. Commercial loans outside the
scope of those programs are evaluated on a case by case basis, with consideration of any exposure under an existing
commercial credit program.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-42
Loans to financial institutions and acceptances are granted mainly to non-depository financial institutions such
as mortgage companies and other financial intermediaries. In addition, it includes a cash collateral loan to a
depository institution. Loans in this portfolio segment are generally granted for terms not exceeding three years and
on a secured basis under the terms of each credit agreement. Prior to approval, management also considers portfolio
limits set forth in its programs and credit policies.
Single-family residential and consumer and other loans are retail open-end and closed-end credits extended to
individuals and businesses secured by single-family residences in the U.S for business, household, family and other
personal expenditures. Single-family and consumer loans include loans to individuals and businesses secured by
personal residence, including first mortgage, home equity and home improvement loans as well as revolving credit
card agreements. In addition, consumer and other loans, include purchased indirect lending loans we have purchased
from time to time from third parties. Because these loans generally consist of a large number of relatively small-
balance, homogeneous loans for each type, their risks are generally evaluated collectively. As of December 31, 2024
and 2023, the Company purchased $41.5 million and $26.5 million, respectively, in single-family residential loans.
There were no purchases of indirect consumer loans in 2024 or 2023.
At December 31, 2024 and 2023, loans with an outstanding principal balance of $2.0 billion and $2.5 billion,
respectively, were pledged as collateral to secure advances from the FHLB.
The amounts in the table above include loans held for investment under syndication facilities for approximately
$393.7 million and $271.8 million at December 31, 2024 and 2023, respectively, which include Shared National
Credit facilities, or SNCs, and agreements to enter into credit agreements among other lenders (club deals), and
other agreements. These loans are primarily designed for providing working capital to certain qualified domestic and
international commercial entities meeting our credit quality criteria and concentration limits, and approved in
accordance with credit policies. In addition, consumer loans and overdrafts in the table above include indirect
consumer loans purchased totaling $82.9 million and $210.9 million at December 31, 2024 and 2023, respectively.
International loans included above were $40.7 million and $87.6 million at December 31, 2024 and 2023,
respectively, mainly single-family residential loans. These loans are generally fully collateralized with cash, cash
equivalents or other financial instruments.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-43
The age analysis of the loan portfolio by class as of December 31, 2024 and 2023 is summarized in the
following table:
December 31, 2024
Total Loans,
Net of
Unearned
Income
Loans Past Due
(in thousands)
Current Loans
30-59
Days
60-89
Days
Greater
than
90 Days
Total Past
Due
Real estate loans
Commercial real estate
Nonowner occupied...................................... $
1,678,473
$
1,676,816
$
361
$
1,296
$
—
$
1,657
Multi-family residential................................
336,229
335,984
245
—
—
245
Land development and construction loans .
483,210
479,091
4,119
—
—
4,119
2,497,912
2,491,891
4,725
1,296
—
6,021
Single-family residential ....................................
1,528,080
1,512,536
2,816
4,668
8,060
15,544
Owner occupied..................................................
1,007,074
995,443
6,196
336
5,099
11,631
5,033,066
4,999,870
13,737
6,300
13,159
33,196
Commercial loans..................................................
1,751,902
1,732,409
12,608
1,362
5,523
$ 19,493
Loans to financial institutions and acceptances ....
170,435
170,435
—
—
—
—
Consumer loans and overdrafts.............................
273,008
269,761
1,984
1,255
8
3,247
$
7,228,411
$
7,172,475
$ 28,329
$
8,917
$ 18,690
$ 55,936
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-44
December 31, 2023
Total Loans,
Net of
Unearned
Income
Loans Past Due
(in thousands)
Current Loans
30-59
Days
60-89
Days
Greater
than
90 Days
Total Past
Due
Real estate loans
Commercial real estate
Nonowner occupied...................................... $ 1,616,200
$
1,615,772
$
428
$
—
$
—
$
428
Multi-family residential................................
407,214
403,288
2,360
1,558
8
3,926
Land development and construction loans .
300,378
300,378
—
—
—
—
2,323,792
2,319,438
2,788
1,558
8
4,354
Single-family residential ....................................
1,466,608
1,453,073
4,196
3,511
5,828
13,535
Owner occupied..................................................
1,175,331
1,164,059
9,642
185
1,445
11,272
4,965,731
4,936,570
16,626
5,254
7,281
29,161
Commercial loans..................................................
1,503,187
1,472,531
23,128
1,626
5,902
30,656
Loans to financial institutions and acceptances ....
13,375
13,375
—
—
—
—
Consumer loans and overdrafts.............................
391,200
383,689
3,142
4,277
92
7,511
$ 6,873,493
$
6,806,165
$42,896 $11,157 $13,275 $67,328
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-45
Nonaccrual status
The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90
days and still accruing as of December 31, 2024 and 2023:
December 31, 2024
(in thousands)
Nonaccrual
Loans With No
Related
Allowance
Nonaccrual
Loans With
Related
Allowance
Total Nonaccrual
Loans (1)
Loans Past Due
Over 90 Days
and Still
Accruing
Real estate loans
Commercial real estate
Land development and construction loans...
4,119
—
4,119
—
4,119
—
4,119
—
Single-family residential..................................
73
8,067
8,140
1,201
Owner occupied ...............................................
21,710
1,481
23,191
837
25,902
9,548
35,450
2,038
Commercial loans...............................................
46,822
17,750
64,572
2,033
Consumer loans and overdrafts ..........................
—
—
—
8
Total (1)....................................................... $
72,724
$
27,298
$
100,022
$
4,079
_____________
(1)
The Company did not recognize any interest income on nonaccrual loans during the year ended December 31, 2024.
December 31, 2023
(in thousands)
Nonaccrual
Loans With No
Related
Allowance
Nonaccrual
Loans With
Related
Allowance
Total Nonaccrual
Loans (1)
Loans Past Due
Over 90 Days
and Still
Accruing
Real estate loans
Commercial real estate
Nonowner occupied..................................... $
—
$
—
$
—
$
—
Multi-family residential...............................
8
—
8
—
Single-family residential..................................
773
1,686
2,459
5,218
Owner occupied ...............................................
3,693
129
3,822
—
4,474
1,815
6,289
5,218
Commercial loans...............................................
3,669
18,280
21,949
857
Consumer loans and overdrafts ..........................
—
38
38
49
Total (1)....................................................... $
8,143
$
20,133
$
28,276
$
6,124
_____________
(1)
The Company did not recognize any interest income on nonaccrual loans during the year ended December 31, 2023.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-46
b) Loans held for sale
(in thousands)
December 31,
2024
December 31,
2023
Loans held for sale at the lower of cost or fair value ...........................................
Real estate loans........................................................................................................
Commercial real estate............................................................................................
Multi-family residential.........................................................................................
—
309,612
Land development and construction loans............................................................
—
55,607
Total loans held for sale at the lower of fair value or cost........................................ $
—
$
365,219
Mortgage loans held for sale at fair value.............................................................
Land development and construction loans.............................................................
10,768
12,778
Single-family residential ........................................................................................
32,143
13,422
Total Mortgage loans held for sale, at fair value (1)................................................. $
42,911
$
26,200
Total loans held for sale (2)....................................................................................... $
42,911
$
391,419
__________________
(1)
Loans held for sale in connection with Amerant Mortgage’s ongoing business
(2)
Excludes accrued interest receivable.
In 2024, the Company transferred an aggregate of $497.3 million in loans held from investment to the loans
held for sale category, in connection with the Houston Sale Transaction. The Company recorded a valuation
allowance of $1.3 million as a result of the transfer in the same period. In the fourth quarter of 2024, the Houston
Sale Transaction closed and as result, the Company sold, at par, all loans held for sale carried at the lower of cost or
fair value at the time of sale. The carrying value of the loans at the time of sale was approximately $473.9 million. In
addition, in the fourth quarter of 2024, the Company decided to sell and sold business-purpose, investment property,
residential mortgage loans with carrying value of $71.1 million . We recorded a loss on sale of $12.6 million
including estimated transaction costs.
In the fourth quarter of 2023, the Company transferred an aggregate of $401 million in Houston-based CRE
loans held for investment to the loans held for sale category, and recognized a valuation allowance of $35.5 million
as a result of the fair value adjustment of these loans. In January 2024, the Company completed the sale of these
loans for approximately $365.2 million. There was no material impact to the Company’s results of operations in
2024 as result of this transaction.
In 2023, the Company transferred one New York-based CRE loan held for investment to the loans held for sale
category, and recognized a valuation allowance of $5.6 million as result of the fair value adjustment of this loan.
Also in 2023, the Company sold this loan at the lower of fair value or cost of approximately $43.3 million, and
recognized a loss on sale of $2.0 million in connection with this transaction. In 2022, the Company completed the
sale of approximately $57.3 million in loans held for sale carried at the lower of fair value or cost related to the New
York portfolio, at their par value.
c) Concentration of risk
While seeking diversification of our loan portfolio held for investment and held for sale, the Company is
dependent mostly on the economic conditions that affect South and Central Florida, Tampa, and the greater Houston
and New York City areas, especially the five New York City boroughs. At December 31, 2024, our commercial real
estate loans held for investment based in South Florida, Tampa and Central Florida, New York, Houston and other
regions were $1.8 billion, $189.2 million, $221.8 million, $191.0 million and $121.1 million, respectively.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-47
Diversification is managed through policies with limitations for exposure to individual or related debtors and for
country risk exposure.
d) Accrued interest receivable on loans
Accrued interest receivable on total loans, including loans held for investment and held for sale, was
$40.4 million and $44.2 million as of December 31, 2024 and 2023, respectively. In 2024 and 2023, the Company
reversed approximately $2.1 million and $0.9 million, respectively, of accrued interest receivable against interest
income in connection with real estate and commercial loans placed in non-accrual status during the period. In 2022,
the Company reversed accrued interest receivable on loans placed in non-accrual status during the year against
interest income of approximately $0.9 million related to consumer loans and overdrafts and a total of $0.1 million
related to real estate loans and commercial loans.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-48
5. Allowance for Credit Losses
The analyses by loan segment of the changes in the ACL for the years ended December 31, 2024 and 2023 are
summarized in the following tables:
Balances at beginning of the
year......................................... $
25,876
$
41,809
$
—
$
27,819
$
95,504
(Reversal of) provision for
credit losses - loans.................
(8,783)
49,140
—
17,263
57,620
Loans charged-off...................
(599)
(51,326)
—
(24,430)
(76,355)
Recoveries ..............................
174
5,109
—
2,911
8,194
Balances at end of the year .. $
16,668
$
44,732
$
—
$
23,563
$
84,963
December 31, 2024
(in thousands)
Real Estate
Commercial
Financial
Institutions
Consumer
and Others
Total
Balances at beginning of the
year......................................... $
25,237
$
25,888
$
—
$
32,375
$
83,500
Provision for credit losses -
loans........................................
10,761
27,412
—
22,004
60,177
Loans charged-off...................
(10,418)
(21,395)
—
(28,052)
(59,865)
Recoveries ..............................
296
9,904
—
1,492
11,692
Balances at end of the year .. $
25,876
$
41,809
$
—
$
27,819
$
95,504
December 31, 2023
(in thousands)
Real Estate
Commercial
Financial
Institutions
Consumer
and Others
Total
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-49
Balances at beginning of the
year......................................... $
17,952
$
38,979
$
42
$
12,926
$
69,899
Cumulative effect of adoption
of accounting principle (1)
17,418
(8,281)
(42)
9,579
18,674
Provision for (reversal of)
credit losses - loans.................
(6,328)
1,619
—
18,654
13,945
Loans charged-off...................
(3,852)
(9,114)
—
(9,140)
(22,106)
Recoveries ..............................
47
2,685
—
356
3,088
Balances at end of the year .. $
25,237
$
25,888
$
—
$
32,375
$
83,500
December 31, 2022
(in thousands)
Real Estate
Commercial
Financial
Institutions
Consumer
and Others
Total
______________
(1) The Company adopted CECL effective as of January 1, 2022. See Note 1 to our audited annual consolidated financial statements in this Form
10-K for details on the adoption of CECL.
The ACL decreased by $10.5 million, or 11.0% at December 31, 2024, compared to December 31, 2023. The
ACL as a percentage of total loans held for investment was 1.18% at December 31, 2024 compared to 1.39% at
December 31, 2023. The provision for credit losses on loans in 2024 was offset by net charge-offs. The
$57.6 million provision for credit losses on loans includes $41.1 million to cover charge-offs, $16.7 million in new
specific reserves for non-performing loans and $8.1 million due to loan composition and volume changes. These
provision requirements were partially offset by a release of $3.9 million due to credit quality and macroeconomic
factor updates and a $4.4 million release due to the Houston loan portfolio classification as held-for-sale.
The following is a summary of net proceeds from sales of loans held for investment by portfolio segment in the
three years ended December 31, 2024:
(in thousands)
Real Estate
Commercial
Financial
Institutions
Consumer
and others
Total
2024........................................ $
4,997
$
106,907
$
—
$
5,377
$
117,281
2023........................................ $
34,409
$
33,307
$
—
$
—
$
67,716
2022........................................ $
11,566
$
13,897
$
—
$
1,313
$
26,776
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-50
Loan Modifications to Borrowers Experiencing Financial Difficulty
The Company modifies loans related to borrowers experiencing financial difficulties by providing multiple
types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower
continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.
The following table shows information about a new loan modification to a borrower experiencing financial
difficultly in the year ended December 31, 2024.
Year Ended December 31, 2024
Term extension (1)
(dollars in thousands)
Amortized Cost Basis
% of Total Class of Financing Receivable
Commercial Loans (2)
$9,437
0.34%
_____________
(1)
This modification had the effect of extending the life of the loan by approximately 0.5 years (weighted average).
(2)
Remained current and in nonaccrual status as of December 31, 2024.
The Company had no new loan modifications to borrowers experiencing financial difficulty during the year
ended December 31, 2023. There were no modified loans that defaulted in the years ended December 31, 2024 and
2023 and had been modified within 12 months preceding the payment default.
Troubled Debt Restructurings
As result of adoption of guidance related to CECL in 2022, the Company had no reportable balances related to
TDRs as of and for the years ended December 31, 2024 and 2023. See Note 1 “Business, Basis of Presentation and
Summary of Significant Accounting Policies” for additional information.
During the year ended December 31, 2022, there were no loans that were modified and met the definition of a
TDR. There were no charge-offs against the ACL as a result of these TDRs during 2022.
During the year ended December 31, 2022, there were no TDR loans that subsequently defaulted within the 12
months of restructuring.
Credit Risk Quality
The sufficiency of the ACL is reviewed at least quarterly by the Chief Risk Officer and the Chief Financial
Officer. The Board of Directors considers the ACL as part of its review of the Company’s consolidated financial
statements. As of December 31, 2024 and 2023, the Company believes the ACL to be sufficient to absorb expected
credit losses in the loans portfolio in accordance with GAAP.
Loans may be classified but not considered collateral dependent due to one of the following reasons: (1) the
Company has established minimum dollar amount thresholds for individual assessment of expected credit losses,
which results in loans under those thresholds being excluded from individual assessment of expected credit losses;
and (2) classified loans may be considered in the assessment because the Company expects to collect all amounts
due.
As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks
certain credit quality indicators including trends related primarily to (i) the risk rating of loans, (ii) the loan payment
status, (iii) net charge-offs, (iv) nonperforming loans and (v) the general economic conditions in the main
geographies where the Company’s borrowers conduct their businesses. The Company considers the views of its
regulators as to loan classification and in the process of estimating expected credit losses.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-51
The Company utilizes an internal risk rating system to identify the risk characteristics of each of its loans, or
group of homogeneous loans such as consumer loans. Internal risk ratings are updated on a continuous basis on a
scale from 1 (worst credit quality) to 10 (best credit quality). Loans are then grouped in five master risk categories
for purposes of monitoring rising levels of potential loss risks and to enable the activation of collection or recovery
processes as defined in the Company’s Credit Risk Policy. Internal risk ratings are considered the most meaningful
indicator of credit quality for commercial loans. Generally, internal risk ratings for commercial real estate loans and
commercial loans with balances over $3 million are updated at least annually and more frequently if circumstances
indicate that a change in risk rating may be warranted. For consumer loans, single-family residential loans and
smaller commercial loans under $3 million, risk ratings are updated based on the loans past due status. The
following is a summary of the master risk categories and their associated loan risk ratings, as well as a description of
the general characteristics of the master risk category:
Loan Risk
Rating
Master risk category
Nonclassified
4 to 10
Classified
1 to 3
Substandard
3
Doubtful
2
Loss
1
Nonclassified
This category includes loans considered as Pass (5-10) and Special Mention (4). A loan classified as Pass is
considered of sufficient quality to preclude a lower adverse rating. These loans are generally well protected by the
current net worth and paying capacity of the borrower or by the value of any collateral received. Special Mention
loans are defined as having potential weaknesses that deserve management’s close attention which, if left
uncorrected, could potentially result in further credit deterioration. Special Mention loans may include loans
originated with certain credit weaknesses or that developed those weaknesses since their origination.
Classified
This classification indicates the presence of credit weaknesses which could make loan repayment unlikely, such
as partial or total late payments and other contractual defaults.
Substandard
A loan classified substandard is inadequately protected by the sound worth and paying capacity of the borrower
or the collateral pledged. They are characterized by the distinct possibility that the Company will sustain some loss
if the credit weaknesses are not corrected. Loss potential, while existing in the aggregate amount of substandard
loans, does not have to exist in individual assets.
Doubtful
These loans have all the weaknesses inherent in a loan classified as substandard with the added characteristic
that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and
values, highly questionable and improbable. These are poor quality loans in which neither the collateral, if any, nor
the financial condition of the borrower presently ensure collection in full in a reasonable period of time. As a result,
the possibility of loss is extremely high.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-52
Loss
Loans classified as loss are considered uncollectible and of such little value that the continuance as bankable
assets is not warranted. This classification does not mean that the assets have absolutely no recovery or salvage
value, but not to the point where a write-off should be deferred even though partial recoveries may occur in the
future. This classification is based upon current facts, not probabilities. As a result, loans in this category should be
promptly charged off in the period in which they are determined to be uncollectible.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-53
Loans held for investment by Credit Quality Indicators
The following tables present Loans held for investment by credit quality indicators and year of origination as of
December 31, 2024 and 2023:
December 31, 2024
Term Loans
Amortized Cost Basis by Origination Year
(in thousands)
2024
2023
2022
2021
2020
Prior
Revolving Loans
Amortized Cost
Basis
Total
Real estate loans
Commercial real estate
Nonowner occupied.........................
Credit Risk Rating: ......................
Nonclassified............................
Pass........................................ $
372,893
$
145,462
$
183,099
$
373,673
$
31,878
$
448,365
$
101,312
$ 1,656,682
Special Mention ....................
—
—
—
—
—
361
—
361
Classified..................................
Substandard...........................
—
—
—
21,430
—
—
—
21,430
Doubtful ................................
—
—
—
—
—
—
—
—
Loss.......................................
—
—
—
—
—
—
—
—
Total Nonowner occupied
372,893
145,462
183,099
395,103
31,878
448,726
101,312
1,678,473
Multi-family residential...................
Credit Risk Rating: ......................
Nonclassified............................
Pass........................................
45,528
1,832
69,729
83,120
5,804
129,559
657
336,229
Special Mention ....................
—
—
—
—
—
—
—
—
Classified..................................
Substandard...........................
—
—
—
—
—
—
—
—
Doubtful ................................
—
—
—
—
—
—
—
—
Loss.......................................
—
—
—
—
—
—
—
—
Total Multi-family residential
45,528
1,832
69,729
83,120
5,804
129,559
657
336,229
Land development and construction
loans ................................................
Credit Risk Rating: ......................
Nonclassified............................
Pass........................................
177,239
86,527
4,288
37,596
9,469
26,974
136,998
479,091
Special Mention ....................
—
—
—
—
—
—
—
—
Classified..................................
Substandard...........................
—
—
—
—
—
—
4,119
4,119
Doubtful ................................
—
—
—
—
—
—
—
—
Loss.......................................
—
—
—
—
—
—
—
—
Total land development and
construction loans
177,239
86,527
4,288
37,596
9,469
26,974
141,117
483,210
Single-family residential.....................
Credit Risk Rating: ......................
Nonclassified............................
Pass........................................
375,340
268,959
394,786
126,639
49,853
74,404
228,661
1,518,642
Special Mention ....................
—
—
—
—
—
—
—
—
Classified..................................
Substandard...........................
—
742
4,575
—
43
1,287
2,791
9,438
Doubtful ................................
—
—
—
—
—
—
—
—
Loss.......................................
—
—
—
—
—
—
—
—
Total Single-family residential
375,340
269,701
399,361
126,639
49,896
75,691
231,452
1,528,080
Owner occupied..................................
Credit Risk Rating: ......................
Nonclassified............................
Pass........................................
214,385
123,111
165,681
228,801
24,751
165,873
14,549
937,151
Special Mention ....................
—
—
—
—
—
5,047
—
5,047
Classified..................................
Substandard...........................
—
49,449
9,951
992
—
1,874
2,610
64,876
Doubtful ................................
—
—
—
—
—
—
—
—
Loss.......................................
—
—
—
—
—
—
—
—
Total owner occupied
214,385
172,560
175,632
229,793
24,751
172,794
17,159
1,007,074
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-54
December 31, 2024
Term Loans Amortized Cost Basis by Origination Year
(in thousands)
2024
2023
2022
2021
2020
Prior
Revolving
Loans
Amortized Cost
Basis
Total
Non-real estate loans
Commercial Loans
Credit Risk Rating:................
Nonclassified .....................
Pass.................................
565,879
322,047
144,910
43,603
2,117
34,807
571,934
1,685,297
Special Mention .............
—
—
—
—
—
—
—
—
Classified ...........................
Substandard....................
—
7,561
16,566
91
94
9,463
32,830
66,605
Doubtful .........................
—
—
—
—
—
—
—
—
Loss ................................
—
—
—
—
—
—
—
—
Total commercial loans
565,879
329,608
161,476
43,694
2,211
44,270
604,764
1,751,902
Loans to financial institutions
and acceptances............................
Credit Risk Rating:................
Nonclassified .....................
Pass.................................
156,935
—
—
—
—
13,500
—
170,435
Special Mention .............
—
—
—
—
—
—
—
—
Classified ...........................
Substandard....................
—
—
—
—
—
—
—
—
Doubtful .........................
—
—
—
—
—
—
—
—
Loss ................................
—
—
—
—
—
—
—
—
Total loans to financial
institutions and acceptances
156,935
—
—
—
—
13,500
—
170,435
Consumer loans............................
Credit Risk Rating:................
Nonclassified .....................
Pass.................................
68,289
16,371
88,501
17,557
2,604
—
79,678
273,000
Special Mention .............
—
—
—
—
—
—
—
—
Classified ...........................
Substandard....................
8
—
—
—
—
—
—
8
Doubtful .........................
—
—
—
—
—
—
—
—
Loss ................................
—
—
—
—
—
—
—
—
Total consumer loans and
overdrafts
68,297
16,371
88,501
17,557
2,604
—
79,678
273,008
Total loans held for investment,
gross
$1,976,496
$1,022,061
$1,082,086
$ 933,502
$ 126,613
$ 911,514
$
1,176,139
$7,228,411
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-55
December 31, 2023
Term Loans
Amortized Cost Basis by Origination Year
(in thousands)
2023
2022
2021
2020
2019
Prior
Revolving Loans
Amortized Cost
Basis
Total
Real estate loans
Commercial real estate
Nonowner occupied.........................
Credit Risk Rating: ......................
Nonclassified............................
Pass........................................ $
163,018
$
189,356
$
564,003
$
35,615
$
89,920
$
401,140
$
173,148
$ 1,616,200
Special Mention ....................
—
—
—
—
—
—
—
—
Classified..................................
Substandard...........................
—
—
—
—
—
—
—
—
Doubtful ................................
—
—
—
—
—
—
—
—
Loss.......................................
—
—
—
—
—
—
—
—
Total Nonowner occupied
163,018
189,356
564,003
35,615
89,920
401,140
173,148
1,616,200
Multi-family residential...................
Credit Risk Rating: ......................
Nonclassified............................
Pass........................................
1,860
69,875
96,028
5,930
72,389
119,550
41,574
407,206
Special Mention ....................
—
—
—
—
—
—
—
—
Classified..................................
Substandard...........................
—
—
—
—
—
8
—
8
Doubtful ................................
—
—
—
—
—
—
—
—
Loss.......................................
—
—
—
—
—
—
—
—
Total Multi-family residential
1,860
69,875
96,028
5,930
72,389
119,558
41,574
407,214
Land development and construction
loans ................................................
Credit Risk Rating: ......................
Nonclassified............................
Pass........................................
71,157
9,920
28,934
21,959
—
26,942
141,466
300,378
Special Mention ....................
—
—
—
—
—
—
—
—
Classified..................................
Substandard...........................
—
—
—
—
—
—
—
—
Doubtful ................................
—
—
—
—
—
—
—
—
Loss.......................................
—
—
—
—
—
—
—
—
Total land development and
construction loans
71,157
9,920
28,934
21,959
—
26,942
141,466
300,378
Single-family residential.....................
Credit Risk Rating: ......................
Nonclassified............................
Pass........................................
410,185
454,011
166,997
64,228
20,571
69,479
278,337
1,463,808
Special Mention ....................
—
—
—
—
—
—
—
—
Classified..................................
Substandard...........................
—
—
—
—
—
384
2,416
2,800
Doubtful ................................
—
—
—
—
—
—
—
—
Loss.......................................
—
—
—
—
—
—
—
—
Total Single-family residential
410,185
454,011
166,997
64,228
20,571
69,863
280,753
1,466,608
Owner occupied..................................
Credit Risk Rating: ......................
Nonclassified............................
Pass........................................
221,137
245,680
414,263
20,741
57,681
158,678
37,538
1,155,718
Special Mention ....................
—
4,186
7,926
—
—
—
3,611
15,723
Classified..................................
Substandard...........................
—
—
2,530
—
—
825
535
3,890
Doubtful ................................
—
—
—
—
—
—
—
—
Loss.......................................
—
—
—
—
—
—
—
—
Total owner occupied
221,137
249,866
424,719
20,741
57,681
159,503
41,684
1,175,331
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-56
December 31, 2023
Term Loans Amortized Cost Basis by Origination Year
(in thousands)
2023
2022
2021
2020
2019
Prior
Revolving
Loans
Amortized Cost
Basis
Total
Non-real estate loans
Commercial Loans
Credit Risk Rating:................
Nonclassified .....................
Pass.................................
414,882
280,911
13,432
9,738
34,209
34,804
661,979
1,449,955
Special Mention .............
—
—
—
—
—
2,056
28,205
30,261
Classified ...........................
Substandard....................
563
500
—
91
1,775
794
19,248
22,971
Doubtful .........................
—
—
—
—
—
—
—
—
Loss ................................
—
—
—
—
—
—
—
—
Total commercial Loans
415,445
281,411
13,432
9,829
35,984
37,654
709,432
1,503,187
Loans to financial institutions
and acceptances............................
Credit Risk Rating:................
Nonclassified .....................
Pass.................................
—
—
—
—
—
13,375
—
13,375
Special Mention .............
—
—
—
—
—
—
—
—
Classified ...........................
Substandard....................
—
—
—
—
—
—
—
—
Doubtful .........................
—
—
—
—
—
—
—
—
Loss ................................
—
—
—
—
—
—
—
—
Total loans to financial
institutions and acceptances
—
—
—
—
—
13,375
—
13,375
Consumer loans............................
Credit Risk Rating:................
Nonclassified .....................
Pass.................................
27,977
183,235
51,278
12,833
26
—
115,810
391,159
Special Mention .............
—
—
—
—
—
—
—
—
Classified ...........................
Substandard....................
—
—
—
—
—
—
41
41
Doubtful .........................
—
—
—
—
—
—
—
—
Loss ................................
—
—
—
—
—
—
—
—
Total consumer loans
27,977
183,235
51,278
12,833
26
—
115,851
391,200
Total loans held for investment,
gross
$1,310,779
$1,437,674
$1,345,391
$ 171,135
$ 276,571
$ 828,035
$
1,503,908
$6,873,493
In February 2025, the Company decided to sell a $40.8 million substandard owner-occupied loan to a customer
in the restaurant service sector in Florida. The Company transferred the loan from loans held for investment to loans
held for sale, at the lower of cost or fair value, and determined no valuation allowance was required at the time of
the transfer.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-57
The following tables present gross charge-offs by year of origination for the years ended December 31, 2024
and 2023:
December 31, 2024
Term Loans Charge-offs by Origination Year
(in thousands)
2024
2023
2022
2021
2020
Prior
Revolving
Loans
Charge-Offs
Total
Year-To-Date Gross Charge-offs
Real estate loans
Commercial real estate
Nonowner occupied ............................ $
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Multi-family residential ......................
—
—
—
—
—
599
—
599
Land development and construction
loans ....................................................
—
—
—
—
—
—
—
—
—
—
—
—
—
599
—
599
Single-family residential...........................
—
—
—
—
—
—
—
—
Owner occupied........................................
—
—
—
—
—
—
—
—
—
—
—
—
—
599
—
599
Commercial loans.........................................
174
7,801
30,629
438
157
12,127
—
51,326
Loans to financial institutions and
acceptances...................................................
—
—
—
—
—
—
—
—
Consumer loans and overdrafts....................
432
1,249
16,564
5,249
591
345
—
24,430
Total Year-To-Date Gross Charge-
Offs ..................................................... $
606
$ 9,050
$
47,193
$
5,687
$
748
$
13,071
$
—
$ 76,355
December 31, 2023
Term Loans Charge-offs by Origination Year
(in thousands)
2023
2022
2021
2020
2019
Prior
Revolving
Loans
Charge-Offs
Total
Year-To-Date Gross Charge-offs
Real estate loans
Commercial real estate
Nonowner occupied ............................ $
—
$
—
$
—
$
—
$
—
$
90
$
—
$
90
Multi-family residential ......................
—
—
—
—
—
10,328
—
10,328
Land development and construction
loans ....................................................
—
—
—
—
—
—
—
—
—
—
—
—
—
10,418
—
10,418
Single-family residential...........................
—
—
—
—
—
39
—
39
Owner occupied........................................
—
—
—
—
—
—
—
—
—
—
—
—
—
10,457
—
10,457
Commercial loans.........................................
183
11,846
468
6,608
1,901
389
—
21,395
Loans to financial institutions and
acceptances...................................................
—
—
—
—
—
—
—
Consumer loans and overdrafts....................
1,002
13,700
11,415
1,260
24
612
—
28,013
Total Year-To-Date Gross Charge-
Offs ..................................................... $
1,185
$ 25,546
$
11,883
$
7,868
$
1,925
$
11,458
$
—
$ 59,865
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-58
December 31, 2022
Term Loans Charge-offs by Origination Year
(in thousands)
2022
2021
2020
2019
2018
Prior
Revolving
Loans
Charge-Offs
Total
Year-To-Date Gross Charge-offs
Real estate loans
Commercial real estate
Nonowner occupied ............................ $
—
$
—
$
—
$
3,852
$
—
$
—
$
—
$ 3,852
Multi-family residential ......................
—
—
—
—
—
—
—
—
Land development and construction
loans ....................................................
—
—
—
—
—
—
—
—
—
—
—
3,852
—
—
—
3,852
Single-family residential...........................
—
—
—
—
—
14
—
14
Owner occupied........................................
—
—
—
—
—
—
—
—
—
—
—
3,852
—
14
—
3,866
Commercial loans.........................................
2,524
527
4,545
1,033
—
485
—
9,114
Loans to financial institutions and
acceptances...................................................
—
—
—
—
—
—
—
Consumer loans and overdrafts....................
3,120
4,604
1,395
2
—
5
—
9,126
Total Year-To-Date Gross Charge-
Offs ..................................................... $
5,644
$ 5,131
$
5,940
$
4,887
$
—
$
504
$
—
$ 22,106
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-59
Credit Risk Quality Indicators - Consumer Loan Classes
The credit risk quality of the Company’s residential real estate and consumer loan portfolios is evaluated by
considering the repayment performance of individual borrowers, and then classified on an aggregate or pool basis.
Loan secured by real estate in these classes which have been past due 90 days or more, and 120 days or 180 days or
more, are classified as Substandard and Loss, respectively. Unsecured consumer loans which become past due 90
days are charged- off. When the Company has documented that past due loans in these classes are well-secured and
in the process of collection, then the loans may remain in accrual status. Loan-To-Value and FICO scores are also an
important indicator of credit quality for single-family residential loans and consumer loans. When loans are
classified, loan-to-value is updated at least annually. FICO scores are typically at origination, except for a significant
portion of indirect consumer loans which are updated at least quarterly.
Single-family residential loans:
December 31,
(in thousands, except percentages)
2024
2023
2022
Loan Balance
%
Loan Balance
%
Loan Balance
%
Accrual Loans
Current
$ 1,511,589
98.92 % $ 1,451,346
98.95 % $ 1,097,952
99.56 %
30-59 Days Past Due
2,707
0.18 %
4,046
0.28 %
2,965
0.27 %
60-89 Days Past Due
4,443
0.29 %
3,511
0.24 %
149
0.01 %
90+ Days Past Due
1,201
0.08 %
5,246
0.36 %
253
0.02 %
8,351
0.55 %
12,803
0.88 %
3,367
0.30 %
Total Accrual Loans
$ 1,519,940
99.47 % $ 1,464,149
99.83 % $ 1,101,319
99.86 %
Non-Accrual Loans
Current
$
947
0.06 % $
1,727
0.12 % $
358
0.03 %
30-59 Days Past Due
109
0.01 %
150
0.01 %
175
0.02 %
60-89 Days Past Due
225
0.01 %
—
— %
1
— %
90+ Days Past Due
6,859
0.45 %
582
0.04 %
992
0.09 %
7,193
0.47 %
732
0.05 %
1,168
0.11 %
Total Non-Accrual Loans
8,140
0.53 %
2,459
0.17 %
1,526
0.14 %
Total single-family residential
loans
$ 1,528,080
100.00 % $ 1,466,608
100.00 % $ 1,102,845
100.00 %
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-60
Consumer loans and overdrafts:
December 31,
(in thousands, except percentages)
2024
2023
2022
Loan Balance
%
Loan Balance
%
Loan Balance
%
Accrual Loans
Current
$
269,761
98.81 % $
383,689
98.09 % $
601,920
99.58 %
30-59 Days Past Due
1,984
0.73 %
3,142
0.80 %
2,439
0.40 %
60-89 Days Past Due
1,255
0.46 %
4,277
1.09 %
62
0.01 %
90+ Days Past Due
8
— %
54
0.01 %
35
0.01 %
3,247
1.19 %
7,473
1.90 %
2,536
0.42 %
Total Accrual Loans
$
273,008
100.00 % $
391,162
99.99 % $
604,456
100.00 %
Non-Accrual Loans
Current
$
—
— % $
—
— % $
1
— %
30-59 Days Past Due
—
— %
—
— %
—
— %
60-89 Days Past Due
—
— %
—
— %
—
— %
90+ Days Past Due
—
— %
38
0.01 %
3
— %
—
— %
38
0.01 %
3
— %
Total Non-Accrual Loans
—
— %
38
0.01 %
4
— %
Total consumer loans and
overdrafts
$
273,008
100.00 % $
391,200
100.00 % $
604,460
100.00 %
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-61
Collateral -Dependent Loans
Loans are considered collateral-dependent when the repayment of the loan is expected to be provided by the
sale or operation of the underlying collateral. The Company performs an individual evaluation as part of the process
of calculating the allowance for credit losses related to these loans. The following tables present the amortized cost
basis of collateral dependent loans related to borrowers experiencing financial difficulty by type of collateral as of
December 31, 2024 and 2023:
As of December 31, 2024
Collateral Type
(in thousands)
Commercial Real
Estate
Residential Real
Estate
Other
Total
Specific
Reserves
Real estate loans
Commercial real estate
Nonowner occupied (1)
$
21,430
$
—
$
4,992
$
26,422
$
—
Land development and
construction loans (2)
4,121
—
—
4,121
25,551
—
4,992
30,543
—
Single-family residential (3)
—
67
—
67
—
Owner occupied (4)
63,111
—
—
63,111
—
88,662
67
4,992
93,721
—
Commercial loans
—
—
62,572
62,572
2,105
Total (5)
$
88,662
$
67
$
67,564
$ 156,293
$
2,105
_________________
(1)
Weighted-average loan-to-value was approximately 68.4% at December 31, 2024.
(2)
Weighted-average loan-to-value was approximately 67.0% at December 31, 2024.
(3)
Weighted-average loan-to-value was approximately 22.3% at December 31, 2024.
(4)
Weighted-average loan-to-value was approximately 67.5% at December 31, 2024.
(5)
As part of the process of calculating the allowance for credit losses, the Company evaluated individually a $7.2 million loan in the
restaurant industry, in addition to collateral dependent loans.
As of December 31, 2023
Collateral Type
(in thousands)
Commercial Real
Estate
Residential Real
Estate
Other
Total
Specific
Reserves
Real estate loans
Commercial real estate
Multi-family residential
$
8
$
—
$
—
$
8
$
—
8
—
—
8
—
Single-family residential (1)
—
773
—
773
—
Owner occupied (2)
3,684
—
—
3,684
—
3,692
773
—
4,465
—
Commercial loans
—
—
21,250
21,250
8,073
Consumer loans and overdrafts
—
—
36
36
34
Total
$
3,692
$
773
$
21,286
$
25,751
$
8,107
_________________
(1)
Weighted-average loan-to-value was approximately 64.8% at December 31, 2023.
(2)
Weighted-average loan-to-value was approximately 73.0% at December 31, 2023.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-62
Collateral dependent loans are evaluated on an individual basis for purposes for determining expected credit losses. For
collateral-dependent loans where the borrower is experiencing financial difficulty and the Company expects repayment of the
financial asset to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the
difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. When
repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which
the amortized cost basis of the loan exceeds the present value of expected cash flows from the operation of the collateral.
When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by
which the amortized cost basis of the loan exceeds the fair value of the underlying collateral less estimated costs to sell. The
ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the loan. None
of the collateral-dependent commercial real estate and owner occupied loans at December 31, 2024 were deemed collateral
dependent loans as of December 31, 2023.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-63
6. Premises and Equipment, Net
Premises and equipment, net include the following:
December 31,
Estimated
Useful
Lives
(in thousands)
2024
2023
(in years)
Land
$
3,780
$
6,307
NA
Buildings and improvements
4,232
9,773
10–30
Furniture and equipment
18,378
18,684
3–10
Computer equipment and software
26,261
26,831
3
Leasehold improvements
27,495
29,724
3–30
Work in progress
1,909
5,315
NA
$
82,055
$
96,634
Less: Accumulated depreciation and amortization
(50,241)
(53,031)
$
31,814
$
43,603
Depreciation and amortization expense was approximately $6.6 million, $6.8 million and $5.9 million in the
years ended December 31, 2024, 2023 and 2022, respectively. In 2024, 2023 and 2022 fully-depreciated equipment
with an original cost of approximately $2.7 million, $6.7 million and $12.2 million, respectively, were written-off
and charged against their respective accumulated depreciation. Depreciation expense in 2023 and 2022 includes
approximately $0.9 million and $0.6 million of accelerated depreciation of leasehold improvements resulting from
branch closures (none in 2024).
In 2024, in connection with the Houston Sale Transaction, the Company transferred premises and equipment
totaling $11.4 million related to two branches to other assets, and recognized a $3.4 million expense as a result of
market value adjustments. See Note 1 for complete details surrounding the Houston Sale Transaction.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-64
7.
Time Deposits
Time deposits in denominations of $100,000 or more amounted to approximately $1.3 billion at December 31,
2024 and 2023. Time deposits in denominations of more than $250,000 amounted to approximately $731 million
and $693 million at December 31, 2024 and 2023, respectively. The average interest rate paid on time deposits was
approximately 4.59% in 2024 and 3.80% in 2023. As of December 31, 2024 and 2023 brokered time deposits
amounted to $702 million and $720 million, respectively. At December 31, 2024 and 2023 the maturity of time
deposits were as follows:
(in thousands, except percentages)
2024
2023
Year of Maturity....................................................................
Amount
%
Amount
%
2024 ..................................................................... $
—
— % $
1,494,035
65.0 %
2025 .....................................................................
1,729,785
77.4 %
517,694
22.5 %
2026 .....................................................................
207,621
9.3 %
166,783
7.3 %
2027 .....................................................................
168,184
7.5 %
64,668
2.8 %
2028 .....................................................................
74,670
3.3 %
52,535
2.3 %
2029 and thereafter
54,185
2.5 %
1,382
0.1 %
Total..................................................................... $
2,234,445
100.0 % $
2,297,097
100.0 %
8. Advances From the Federal Home Loan Bank and Other Borrowings
At December 31, 2024 and 2023, the Company had outstanding advances from the FHLB and other borrowings
as follows:
Outstanding Balance at December 31,
Year of Maturity
Interest
Rate
Interest
Rate Type
2024
2023
(in thousands)
2024
5.46%
Fixed
$
—
$
40,000
2025
4.44%
Fixed
30,000
—
2026....................................................
4.90%
Fixed
10,000
10,000
2027....................................................
4.67% to 4.89%
Fixed
200,000
—
2028....................................................
3.45% to 3.58%
Fixed
—
595,000
2029 and after.....................................
3.54% to 4.45%
Fixed
505,000
—
Total (1)..............................................
$
745,000
$
645,000
_________________
(1)
As of December 31, 2024 and 2023, includes advances from the FHLB with quarterly callable features totaling $435.0 million and
$595.0 million, respectively, with fixed interest rates ranging from 3.54% to 3.76% and 3.44% to 3.58%, respectively, and maturing in
2029 and 2028, respectively.
At December 31, 2024 and 2023, the Company held stock of the FHLB for approximately $42 million and $37
million, respectively. The terms of the Company’s advance agreement with the FHLB require the Company to
maintain certain investment securities and loans as collateral for these advances. At December 31, 2024 and 2023
the Company was in compliance with this requirement.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-65
There were no other borrowings at December 31, 2024 and 2023.
In 2024, The Company recorded net gains of $1.6 million on the early repayment of approximately $814 million
of advances from the FHLB. In 2023, the Company realized total pretax gains of $40.1 million on the early
repayment of $1.7 billion in advances from the FHLB. In 2022, the Company realized a net gain of $11.4 million
on the early termination of $175 million of advances from the FHLB. In addition, in 2022, the Company incurred a
loss of $0.7 million on the early repayment of $530 million in callable advances from the FHLB.
In 2021, the Company restructured $285 million of its fixed-rate FHLB advances, which were subsequently
terminated in 2023 and are included among the $1.7 billion of early repayments mentioned above. This restructuring
consisted of changing the original maturity at lower interest rates. The new maturities of these FHLB advances
ranged from 2 to 4 years compared to original maturities ranging from 2 to 8 years. The Company incurred an early
termination and modification penalty of $6.6 million which was deferred and being amortized over the term of the
new advances, as an adjustment to the yields. In 2023 and 2022, the Company recognized $0.6 million and
$1.9 million, respectively, included as part of interest expense, as a result of this amortization. At December 31,
2024 and 2023, there was no remaining unamortized penalty fee. The modifications were not considered a
substantial modification in accordance with GAAP.
9. Senior Notes
On June 23, 2020, the Company completed a $60.0 million offering of senior notes with a coupon rate of 5.75%
and a maturity date of June 30, 2025 (the “Senior Notes”). The net proceeds, after direct issuance costs of
$1.6 million, totaled $58.4 million. As of December 31, 2024 and 2023, these Senior Notes amounted to $59.8
million and $59.5 million, respectively, net of direct unamortized issuance costs of $0.2 million and $0.5 million,
respectively. The Senior Notes are presented net of direct issuance costs in the consolidated financial statements.
These costs have been deferred and are being amortized over the term of the Senior Notes of 5 years as an
adjustment to yield. These Senior Notes are unsecured and unsubordinated, rank equally with all of our existing and
future unsecured, and unsubordinated indebtedness.
In February 2025, the Company elected to redeem and satisfy in full the Senior Notes at a redemption price of
100% of the principal amount of the Senior Notes plus accrued and unpaid interest on April 1, 2025.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-66
10. Subordinated Notes
On March 9, 2022, the Company entered into a Subordinated Note Purchase Agreement (the “Purchase
Agreement”) with Amerant Florida (the “Guarantor”), and qualified institutional buyers pursuant to which the
Company sold and issued $30.0 million aggregate principal amount of its 4.25% Fixed-to-Floating Rate
Subordinated Notes due March 15, 2032 (the “Subordinated Notes”). Net proceeds were $29.1 million, after
estimated direct issuance costs of approximately $0.9 million. Unamortized direct issuance costs are deferred and
amortized over the term of the Subordinated Notes of 10 years. As of December 31, 2024 and 2023, these
Subordinated Notes amounted to $29.6 million and $29.5 million, respectively, net of direct unamortized issuance
costs of $0.4 million and $0.5 million, respectively.
The Subordinated Notes will initially 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
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.
These Subordinated Notes are unsecured, subordinated obligations of the Company and rank junior in right of
payment to all of the Company’s current and future senior indebtedness. Prior to March 15, 2027, the Company may
redeem the Subordinated Notes, in whole but not in part, only under certain limited circumstances. On or after
March 15, 2027, the Company may, at its option, redeem the Subordinated Notes, in whole or in part, on any interest
payment date, subject to the receipt of any required regulatory approvals. 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.
The Subordinated Notes were offered and sold by the Company in a private placement offering in reliance on
exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”),
pursuant to Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D under the Securities Act. In
connection with the sale and issuance of the Subordinated Notes, the Company entered into a registration rights
agreement, pursuant to which the Company agreed to take certain actions to provide for the exchange of the
Subordinated Notes for subordinated notes that are registered under the Securities Act and will have substantially the
same terms.
On June 21, 2022, the Company successfully completed the exchange of all of its outstanding Subordinated
Notes for an equal principal amount of its registered 4.25% Fixed-to-Floating Rate Subordinated Notes due 2032
(the “Registered Subordinated Notes”). The terms of the Registered Subordinated Notes are substantially identical to
the terms of the Subordinated Notes, except that the Registered Subordinated Notes are not subject to the transfer
restrictions, registration rights and additional interest provisions (under the circumstances described in the
registration rights agreement relating to our fulfillment of our registration obligations) applicable to the
Subordinated Notes.
On August 2, 2022, the Company completed an intercompany transaction of entities under common control,
pursuant to which the Guarantor, merged with and into the Company, with the Company as sole survivor . See Note
1- Business, Basis of Presentation and Summary of Significant Accounting Policies, for more details on the Amerant
Florida Merger.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-67
11. Junior Subordinated Debentures Held by Trust Subsidiaries
At December 31, 2024 and 2023, the Company owns all of the common capital securities issued by five
statutory trust subsidiaries (the “Trust Subsidiaries”), respectively. These Trust Subsidiaries were first formed by the
Company for the purpose of issuing trust preferred securities (the “Trust Preferred Securities”) and investing the
proceeds in junior subordinated debentures issued by the Company (the “Debentures”). The Debentures are
guaranteed by the Company. The Company records the common capital securities issued by the Trust Subsidiaries in
other assets in its consolidated balance sheets using the equity method. The Debentures issued to the Trust
Subsidiaries, less the common securities of the Trust Subsidiaries, qualify as Tier 1 regulatory capital.
The following tables provide information on the outstanding Trust Preferred Securities issued by, and the
Debentures issued to, each of the Trust Subsidiaries as of December 31, 2024 and 2023:
December 31, 2024
December 31, 2023
(in thousands)
Amount of
Trust
Preferred
Securities
Issued by
Trust
Principal
Amount of
Debenture
Issued to
Trust
Amount of
Trust
Preferred
Securities
Issued by
Trust
Principal
Amount
of
Debenture
Issued to
Trust
Year of
Issuance
Annual Rate of Trust
Preferred Securities
and Debentures
Year of
Maturity
Commercebank Capital Trust VI
9,250
9,537
9,250
9,537
2002
3-M SOFR + 3.61%
2033
Commercebank Capital Trust VII
8,000
8,248
8,000
8,248
2003
3-M SOFR + 3.51%
2033
Commercebank Capital Trust VIII
5,000
5,155
5,000
5,155
2004
3-M SOFR + 3.11%
2034
Commercebank Capital Trust IX
25,000
25,774
25,000
25,774
2006
3-M SOFR + 2.01%
2038
Commercebank Capital Trust X
15,000
15,464
15,000
15,464
2006
3-M SOFR + 2.04%
2036
$62,250 $ 64,178 $ 62,250
$64,178
The Company and the Trust Subsidiaries have the option to defer payment of interest on the obligations for up
to 10 semi-annual periods. In 2024 and 2023, no payments of interest have been deferred on these obligations. The
Trust Preferred Securities are subject to mandatory redemption, in whole or in part, upon the maturity or early
redemption of the debentures. Early redemption premiums may be payable.
LIBOR Cessation and Replacement Rate
In 2023, the Trust Preferred Securities and the Debentures issued by the Company included calculations that
were based on 3-month LIBOR. On March 15, 2022, the Adjustable Interest Rate (LIBOR) Act (the ‘LIBOR Act”)
was signed into law. Under the LIBOR Act, on the first London banking day after June 30, 2023 (the “LIBOR
Replacement Date”), a benchmark replacement recommended by the Federal Reserve replaced LIBOR in certain
contracts, including those that contain no fallback provisions and other related aspects. The Federal Reserve issued
its final regulations under the LIBOR Act. The final regulations: (i) address the applicability of the LIBOR Act to
various LIBOR contracts, which include the Trust Preferred Securities and the Debentures, (ii) identify the
benchmark replacements, (iii) include certain benchmark replacement conforming changes, (iv) address the issue of
preemption and (v) provide other clarifications, definitions and information.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-68
Based on a review of the Trust Preferred Securities and the Debentures documents, these documents do not
provide a replacement rate for 3-month LIBOR or include other fallback provisions which would apply on the
LIBOR Replacement Date. Based on the U.K. Financial Conduct Authority’s current statements, it does not appear
that a synthetic LIBOR benchmark will be applicable to the Trust Preferred Securities and Debentures. Accordingly,
absent an amendment to the Trust Preferred Securities and Debenture documents, some other change in applicable
law, rule, regulation, or some other development, on and after the LIBOR Replacement Date, 3-month CME term
SOFR or 6-month CME Term SOFR (as defined in the regulations) as adjusted by the relevant spread adjustment of
0.26161%, shall be the benchmark replacement for 3-month LIBOR in the Trust Preferred Securities and Debentures
documents, and all applicable benchmark replacement conforming changes as specified in the regulations will
become an integral part of the Trust Preferred Securities and Debenture documents, without any action by any party.
The Company did not seek to amend the Trust Preferred Securities and Debentures documents to reflect any other
LIBOR benchmark replacement. Accordingly, after the LIBOR Replacement Date, the 3-month CME term SOFR as
adjusted by the relevant spread adjustment of 0.26161%, became the benchmark replacement for 3-month LIBOR in
the Trust Preferred Securities and Debentures documents, and all applicable benchmark replacement conforming
changes as specified in the regulations became an integral part of the Trust Preferred Securities and Debenture
documents.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-69
12. Derivative Instruments
From time to time, the Company enters into derivative financial instruments as part of its interest rate
management activities and to facilitate customer transactions. Those instruments may or may not be designated and
qualify as part of a hedging relationship. The customer derivatives we use for the Company’s account are generally
matched against derivatives from third parties, but are not designated as hedging instruments.
At December 31, 2024 and 2023 the fair value of the Company’s derivative instruments was as follows:
December 31, 2024
December 31, 2023
Fair value
Fair value
(in thousands)
Number of
contracts
Notional
Amounts
Other
Assets
Other
Liabilities
Number of
contracts
Notional
Amounts
Other
Assets
Other
Liabilities
Derivatives designated
hedging instruments..........
Interest rate swaps
designated as cash flow
hedges ...............................
6
$
114,178
$
137
$
81
6
$ 114,178
$
296
$
366
Derivatives not designated
as hedging instruments:
Interest rate swaps:
Customers....................
131
1,309,781
4,300
42,194
146
1,037,773
6,767
47,221
Third party broker .......
131
1,309,781
42,194
4,300
146
1,037,773
47,221
6,767
262
2,619,562
46,494
46,494
292
2,075,546
53,988
53,988
Credit risk
participation
agreements
11
112,010
—
—
7
92,654
—
—
Interest rate caps:
Customers....................
7
131,251
—
932
13
325,995
—
4,983
Third party broker .......
7
131,251
932
—
14
360,995
5,195
—
14
262,502
932
932
27
686,990
5,195
4,983
Mortgage derivatives:
Forward To Be
Announced MBS ........
1
25,000
—
59
—
—
—
—
Interest rate lock
commitments...............
60
30,081
301
46
93
43,087
447
2
Mortgage loan forward
contracts ......................
16
29,000
147
3
11
16,000
6
94
77
84,081
448
108
104
59,087
453
96
Total derivatives not
designated as hedging
instruments
364
3,078,155
47,874
47,534
430
2,914,277
59,636
59,067
Total
370
$ 3,192,333
$48,011
$ 47,615
436
$3,028,455
$59,932
$ 59,433
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-70
Derivatives Designated as Hedging Instruments
Interest Rate Swaps On Debt Instruments
The Company enters into interest rate swap contracts on debt instruments which the Company designates and
qualifies as cash flow hedges. These interest rate swaps are designed as cash flow hedges to manage the exposure
that arises from differences in the amount of the Company’s known or expected cash receipts and the known or
expected cash payments on designated debt instruments. These interest rate swap contracts involve the Company’s
payment of fixed-rate amounts in exchange for the Company receiving variable-rate payments over the life of the
contracts without exchange of the underlying notional amount.
At December 31, 2024 and 2023, the Company had five interest rate swap contracts with notional amounts
totaling $64.2 million, maturing in the third and fourth quarters of 2025. These contracts were designated as cash
flow hedges to manage the exposure of variable rate interest payments on all of the Company’s outstanding variable-
rate junior subordinated debentures with principal amounts at December 31, 2024 and 2023 totaling $64.2 million.
The Company expects these interest rate swaps to be highly effective in offsetting the effects of changes in interest
rates on cash flows associated with the Company’s variable-rate junior subordinated debentures. In 2024 and 2023,
the Company recognized unrealized gains of $0.8 million and $0.6 million, respectively, in connection with these
interest rate swap contracts, which were included as part of interest expense on junior subordinated debentures in
the Company’s consolidated statement of operations and comprehensive income (loss). As of December 31, 2024,
the estimated net unrealized gains in accumulated other comprehensive expected to be reclassified into expense in
the next twelve months amounted to $0.2 million.
In 2019, the Company terminated 16 interest rate swaps that had been designated as cash flow hedges of
variable rate interest payments on the outstanding and expected rollover of variable-rate advances from the FHLB.
The Company is recognizing the contracts’ cumulative net unrealized gains of $8.9 million in earnings over the
remaining original life of the terminated interest rate swaps ranging between one month and seven years. In 2024
and 2023, the Company recognized approximately $1.0 million and $1.3 million, respectively, as a reduction of
interest expense on FHLB advances as a result of this amortization. As of December 31, 2024, the remaining
cumulative net unrealized gains related to these interest rate swaps was $1.3 million.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-71
Interest Rate Swaps On Loans
In the second quarter of 2023, the Company entered into an interest rate swap contract with a notional amount
of $50.0 million, and maturity in the second quarter of 2025. The Company designated this interest rate swap as a
cash flow hedge to manage interest rate risk exposure on variable rate interest receipts on the first $50 million
principal balance of a pool of loans. This interest rate swap contract involves the Company’s payment of variable-
rate amounts in exchange for the Company receiving fixed-rate payments over the life of the contract without
exchange of the underlying notional amount. In 2024 and 2023, the Company recognized unrealized losses of $0.7
million and $0.4 million, respectively, related to this interest rate swap contract. These unrealized losses were
included as part of interest income on loans in the Company’s consolidated statement of operations and
comprehensive (loss) income. As of December 31, 2024, the estimated net unrealized losses in accumulated other
comprehensive (loss) income expected to be reclassified into interest income in the next twelve months amounted to
$0.1 million.
Derivatives Not Designated as Hedging Instruments
a) Customer related positions
The Company offers certain derivatives products, including interest rate swaps and caps, directly to qualified
commercial banking customers to facilitate their risk management strategies. The Company partially offsets its
exposure to interest rate swaps and caps by entering similar derivative contracts with various third-party brokers.
Interest Rate Swaps
Interest rate swap contracts involve the Company’s payment of variable-rate amounts to customers in exchange
for the Company receiving fixed-rate payments from customers over the life of the contracts without exchange of
the underlying notional amount. These instruments have maturities ranging from less than 1 to 12 years in 2024 (1 to
13 years in 2023).
The Company enters into swap participation agreements with other financial institutions to manage the credit
risk exposure on certain interest rate swaps with customers. Under these agreements, the Company, as the
beneficiary or guarantor, will receive or make payments from/to the counterparty if the borrower defaults on the
related interest rate swap contract. The notional amount of these agreements is based on the Company’s pro-rata
share of the related interest rate swap contracts.
Interest Rate Caps
Interest rate cap contracts involve the Company making payments if an interest rate exceeds the agreed strike
price. These instruments have maturities ranging from less than 1 to 10 years in 2024 (less than 1 to 11 years in
2023).
In April 2022, the Company entered into 4 interest rate cap contracts with various third-party brokers with total
notional amounts of $140.0 million. These interest rate caps initially served to partially offset changes in the
estimated fair value of interest rate cap contracts with customers. At December 31, 2023, there was one interest rate
cap contract, respectively, with total notional amount of $35.0 million in connection with this transaction. At
December 31, 2024, there were no interest rate cap contracts in connection with this transaction.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-72
b) Mortgage Derivatives
The Company enters into interest rate lock commitments and forward sale contracts to manage the risk
exposure in the mortgage banking area. Interest rate lock commitments guarantee the funding of residential
mortgage loans originated for sale, at specified interest rates and times in the future. Mortgage loan forward sale
contracts consist of commitments to deliver mortgage loans, originated and/or purchased, in the secondary market at
a future date. A separate type of forward sale contracts are the commitment to sell To-Be-Announced (“TBA”)
mortgage-backed securities on a specific future date. In 2024 and 2023, the change in the fair value of these
instruments was an unrealized gain and loss of $43 thousand and $0.4 million, respectively. These amounts were
recorded as part of other noninterest income in the consolidated statements of operations and comprehensive
income.
Credit Risk-Related Contingent Features
Some agreements may require the Company to pledge securities as collateral when the valuation of the interest
rate swap derivative contracts fall below a certain amount. There were $0.4 million in securities pledged as collateral
for interest rate swaps in a liability position at December 31, 2024. At December 31, 2023, there were no securities
pledged as collateral for interest rate swaps in a liability position. Additionally, most of our derivative arrangements
with counterparties require the posting of collateral upon meeting certain net exposure threshold. At December 31,
2024 and 2023, the Company had cash held as collateral for derivatives margin calls of $23.5 million and
$25.0 million, respectively. See Note 2 “Interest Earning Deposits with Banks, Other Short-Term Investments and
Restricted Cash” for additional information about cash held as collateral. As of December 31, 2024 and 2023, there
were no collateral requirements related to interest rate swaps with third-party brokers not designated as hedging
instruments.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-73
13.
Leases
The Company leases certain premises and equipment under operating leases. The operating leases have
remaining lease terms ranging from two years to 41 years, some of which have renewal options reasonably certain to
be exercised and, therefore, have been reflected in the total lease term and used for the calculation of minimum
payments required.
Certain operating leases contain variable lease payments which include mostly common area maintenance and
taxes, included in occupancy and equipment on the consolidated statements of income. The Company had
$2.1 million, $2.2 million and $1.7 million in variable lease payments during the years ended December 31, 2024,
2023 and 2022, respectively.
The following table presents lease costs for the years ended December 31, 2024, 2023 and 2022:
(in thousands)
December 31, 2024
December 31, 2023
December 31, 2022
Lease cost
Operating lease cost
$
19,143
$
18,390
$
17,568
Short-term lease cost
123
49
62
Variable lease cost
2,108
2,238
1,746
Sublease income
(5,027)
(3,171)
(3,312)
Total lease cost
$
16,347
$
17,506
$
16,064
As of December 31, 2024 and 2023, the Company had a right-of-use (“ROU”) asset of $100.0 million and
$118.5 million, respectively, and total operating lease liability of $109.9 million and $126.9 million, respectively. As
of December 31, 2024 and 2023, the Company had a short-term lease liability of $3.8 million which was included
as part of other liabilities in the consolidated balance sheet.
The following table provides supplemental information to leases as of and for the years ended December 31,
2024, 2023 and 2022:
December 31, 2024
December 31, 2023
December 31, 2022
(in thousands, except weighted average data)
Cash paid for amounts included in the measurement
of operating lease liabilities
$
15,276
$
15,544
$
14,492
Weighted average remaining lease term for
operating leases
15.3 years
16.6 years
18.1 years
Weighted average discount rate for operating leases
10.33 %
9.85 %
5.94 %
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-74
The following table presents a maturity analysis and reconciliation of the undiscounted cash flows to the total
operating lease liabilities as of December 31, 2024:
(in thousands)
Twelve Months Ended December 31,
2025
$
14,232
2026
14,512
2027
14,809
2028
14,627
Thereafter
166,066
Total minimum payments required
224,246
Less: implied interest
(114,386)
Total lease obligations
$
109,860
In 2024, as part of the Houston Sale Transaction, the Company transferred operating lease liability of
$15.5 million to other liabilities and ROU asset of $15.3 million to other assets. In addition, in 2024, in connection
with the Houston Sale Transaction, the Company’s reassessment of Houston leases resulted in a remeasurement of
the lease liability for $8.8 million, with a corresponding adjustment to the ROU asset. See Note 1- “Business, Basis
of Presentation and Summary of Significant Accounting Policies” for additional information on the Houston Sale
Transaction.
Actual rental expenses may include deferred rents that are recognized as rent expense on a straight line basis.
Rent expense under these leases, net of sublease income, was approximately $16.3 million, $17.5 million and $16.1
million for the years ended December 31, 2024, 2023 and 2022, respectively.
Rental income from subleases is presented as a reduction to rent expense under lease agreements under
occupancy and equipment cost. Rental income from subleases was $5.0 million, $3.2 million and $3.3 million in the
years ended December 31, 2024, 2023 and 2022, respectively. In 2024, 2023 and 2022, rental income includes
$4.5 million, $2.6 million and $2.9 million, respectively, related to the subleasing of portions of the Company’s
headquarters building, and $0.6 million, $0.6 million and $0.4 million, respectively, mainly associated with the
sublease of NY office space. In 2023, rent expense includes an additional expense of $0.3 million related to the
closing of one branch in the third quarter of 2023.
In the years ended December 31, 2023 and 2022, the Company recorded ROU asset impairment charges of
$1.1 million and $1.6 million, respectively. There were no ROU asset impairment charges in the year ended
December 31, 2024. ROU asset impairment charges in 2023 were in connection with the closure of a branch in
Houston, Texas in 2023, and with the closure of another branch in Miami, FL in 2023. In 2022, ROU asset
impairment charges were associated with the closure of a branch in Pembroke Pines, FL in 2022, respectively. These
impairments were recorded as occupancy and equipment expense on the consolidated statements of operations and
comprehensive income (loss).
The Company provides equipment financing through a variety of loan and lease structures, including direct or
sale type finance leases and operating leases. As of December 31, 2024 and 2023, there were $2.8 million and
$3.2 million, respectively, in direct or sale type finance leases included as part of loans held for investment, gross in
the Company’s consolidated balance sheet, and included as part of commercial loans in our loan portfolio held for
investment. As of December 31, 2024 and 2023, there were $2.3 million and $2.9 million in operating leases
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-75
included as part of premises and equipment, net of accumulated depreciation, in the Company’s consolidated
balance sheet.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-76
14.
Incentive Compensation and Benefit Plans
a) Stock-based Incentive Compensation Plan
The Company has reserved up to 3,333,333 shares of Class A common stock for issuance pursuant to the grant
of options, rights, appreciation rights, restricted stock, restricted stock units and other awards under the Amerant
Bancorp Inc. 2018 Equity and Incentive Compensation Plan (the “2018 Equity Plan”).
On February 11, 2021, the Company adopted a new form of performance based restricted stock unit agreement
(“PSU Agreement”), and a new form of restricted stock unit agreement (the “RSU Agreement”) that is used in
connection with a Long-Term Incentive Plan (the “LTI Plan”), a sub-plan under the 2018 Equity Plan.
Restricted Stock Awards
The following table shows the activity of restricted stock awards in 2024:
Number of
restricted shares
Weighted-average
grant date fair
value
Non-vested shares, beginning of year
151,280 $
27.49
Granted
—
—
Vested
(85,855)
24.32
Forfeited
(29,342)
28.18
Non-vested shares, end of year
36,083 $
31.05
In 2023, the Company granted 10,440 shares of restricted Class A common stock (“RSAs”) to various
employees, under the LTI plan. These RSAs will vest in three substantially equal amounts on the first three
anniversaries of the date of grant. The average fair value of the RSAs granted was based on the market price of the
shares of the Company’s Class A common stock at the grant date which averaged $27.42 per share.
In 2022, the Company granted 175,601 RSAs to various executive officers and certain employees, under the
LTI plan. These shares of restricted stock will vest in three substantially equal amounts on the first three
anniversaries of the date of grant. The average fair value of the RSAs granted was based on the market price of the
shares of the Company’s Class A common stock at the grant date which averaged $31.83 per share.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-77
In 2024, 2023 and 2022, the Company recorded $0.1 million, $2.3 million and $3.7 million of compensation
expense, respectively, related to RSAs. The total unearned deferred compensation expense of $0.1 million for all
unvested RSAs outstanding at December 31, 2024 will be recognized over a weighted average period of 0.6 years.
Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”)
The following table shows the activity of RSUs and PSUs in 2024:
Stock-settled RSUs
Stock-settled PSUs
Number of
RSUs
Weighted-
average grant
date fair value
Number of
PSUs
Weighted-
average grant
date fair value
Nonvested, beginning of year
288,945
23.75
177,131
19.39
Granted
247,481
22.45
68,473
20.91
Vested
(138,027)
22.93
(101,596)
13.31
Forfeited
(34,012)
22.75
—
—
Non-vested, end of year
364,387
23.32
144,008
24.42
The tables below show detailed information about RSUs and PSUs granted to various Company executives and
employees for the years ended December 31, 2024, 2023, and 2022:
December 31, 2024
Award
Type
Number
of Units
Vesting Period
Awardee
Weighted-
Average Grant
Date Fair Value
RSUs
141,219 1/3 Each Year Equally for Three Years
Various Executive(s) and
Employees
RSUs
80,576
20% Vesting Equally In Each of First Two
Years, and 60% Vesting in Third Year
Various Executive(s) and
Employees
Total RSUs
221,795
20.09
Total PSUs
68,473 Three Year Performance Target
Various Executive(s) and
Employees
20.91
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-78
December 31, 2023
Award
Type
Number
of Units
Vesting Period
Awardee
Weighted-Average
Grant Date Fair
Value
RSUs
195,547 1/3 Each Year Equally for Three Years
Various Executive(s) and
Employees
RSUs
22,498
20% Vesting Equally In Each of First
Two Years, and 60% Vesting in Third
Year
Various Executive(s) and
Employees
218,045
24.46
Total PSUs
53,420 Three Year Performance Target
Various Executive(s) and
Employees
25.09
December 31, 2022
Award
Type
Number
of Units
Vesting Period
Awardee
Weighted-Average
Grant Date Fair
Value
Total RSUs
34,589 1/3 Each Year Equally for Three Years
Various Executive(s) and
Employees
33.23
Total PSUs
26,415 Three Year Performance Target
Various Executive(s) and
Employees
33.63
For each of the years where PSUs were granted, the PSUs generally vest at the end of a three-year performance
period, but only results in the issuance of shares of Class A common stock if the Company achieves a performance
target. The actual amount of PSUs, if earned, varies on the percentage of the performance target achieved and could
result in more or less shares issued than the number of units granted in each of the precedent years outlined in the
tables above.
The table below shows detailed information about RSUs granted to the Company’s independent directors for the
years ended December 31, 2024, 2023, and 2022:
Year
Total RSUs (1)
Vesting Period
Awardee
Weighted-
average grant
date fair value
2024
25,686
1 Year
Independent Directors
22.77
2023
28,920
1 Year
Independent Directors
20.74
2022
17,250
1 Year
Independent Directors
28.98
_________________
(1)
For all periods presented, RSUs for Independent Directors were all stock-settled RSUs.
In 2024, 2023 and 2022, the Company recorded compensation expense related to RSUs and PSUs of
$5.2 million, $4.5 million and $2.1 million, respectively. The total unearned compensation of $5.4 million for all
unvested stock-settled RSUs and PSUs at December 31, 2024 will be recognized over a weighted average period of
1.7 years.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-79
b) Employee Stock Purchase Plan
The Company offers an ESPP. The ESPP became effective on February 14, 2022, subject to obtaining
shareholder approval. On June 8, 2022, the shareholders of the Company approved the ESPP. An aggregate of one
million (1,000,000) shares of Common Stock have been reserved for issuance under the ESPP. The purpose of the
ESPP is to provide eligible employees of the Company and its designated subsidiaries with the opportunity to
acquire a stock ownership interest in the Company on favorable terms and to pay for such acquisitions through
payroll deductions. The number of shares of Class A common stock issued in 2024, 2023 and 2022 under the ESPP
was 55,407, 56,927 and 35,337, respectively. For the years ended December 31, 2024, 2023 and 2022, the Company
recognized compensation expense of $0.3 million, $0.5 million, $0.3 million respectively, in connection with the
ESPP.
c) Employee Benefit Plan
The Amerant Bank, N.A. Retirement Benefits Plan (the “401(k) Plan”) is a 401(k) defined contribution
employee benefit plan covering substantially all employees of the Company.
The Company matches 100% of each participant’s contribution up to a maximum of 5% of their annual salary.
Contributions by the Company to the Plan are based upon a fixed percentage of participants’ salaries as defined by
the Plan. The Plan enables Highly Compensated employees to contribute up to the maximum allowed without
further restrictions. All contributions made by the Company to the participants’ accounts are vested immediately. In
addition, employees with at least three months of service and who have reached a certain age may contribute a
percentage of their salaries to the Plan as elected by each participant. The Company contributed to the Plan
approximately $3.8 million and $3.6 million in 2024 and 2023 respectively, in matching contributions.
The Company maintains the Amerant Bank, N.A. Executive Deferred Compensation Plan as a non-qualified
plan for eligible highly compensated employees (the “Deferred Compensation Plan”). The Deferred Compensation
Plan permits deferrals of compensation above the amounts that can be contributed for retirement under the 401(k)
Plan. Under the Deferred Compensation Plan, eligible employees may elect to defer all or a portion of their annual
salary and cash incentive awards. Effective January 1, 2022, there were no matching contributions from the
Company under the Deferred Compensation Plan. Prior to 2022, eligible employees were allowed to receive
matching contributions up to 5% of their annual salary if the maximum amount allowed in the 401k had been
reached. All deferrals, employer contributions, earnings, and gains on each participant’s account in the Deferred
Compensation Plan are vested immediately.
d) Subsequent Events
In February 2025, the Company adopted a new form of performance based restricted stock unit agreement (the
"New PSU Agreement") that will be used, starting in February 2025, in connection with the LTI Plan, a sub-plan
under the 2018 Equity Plan.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-80
15. Income Taxes
The components of the income tax (benefit) expense for the years ended December 31, 2024, 2023 and 2022 are
as follows:
(in thousands)
2024
2023
2022
Current tax (benefit) expense:
Federal
$
(755) $
19,768
$
15,609
State
726
1,313
1,116
Deferred tax benefit
(8,303)
(10,542)
(104)
Total income tax (benefit) expense
$
(8,332) $
10,539
$
16,621
The following table shows a reconciliation of the income tax (benefit) expense at the statutory federal income
tax rate to the Company’s effective income tax rate for each of the three years ended December 31, 2024:
2024
2023
2022
(in thousands, except percentages)
Amount
%
Amount
%
Amount
%
Tax (benefit) expense calculated at the
statutory federal income tax rate
$ (5,057)
21.00 % $
8,679
21.00 % $ 16,503
21.00 %
Increases (decreases) resulting from:
Non-taxable interest income
(468)
1.94 %
(491)
(1.19)%
(342)
(0.44)%
(Non-taxable) taxable BOLI income
(2,058)
8.55 %
1,302
3.15 %
(1,135)
(1.44)%
State and city taxes (benefit) expense,
net of federal tax effect
(3,670)
15.24 %
1,037
2.51 %
882
1.12 %
Disallowed interest expense and other
expenses
1,445
(6.00)%
1,547
3.74 %
891
1.13 %
Rate differential on deferred items
1,152
(4.78)%
(2,159)
(5.22)%
(245)
(0.31)%
Noncontrolling interest
—
— %
357
0.87 %
283
0.36 %
Other, net
324
(1.35)%
267
0.64 %
(216)
(0.27)%
Total income tax (benefit) expense
$ (8,332)
34.60 % $ 10,539
25.50 % $ 16,621
21.15 %
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-81
The composition of the net deferred tax asset is as follows:
December 31,
(in thousands)
2024
2023
Tax effect of temporary differences
Lease liability
$
28,065
$
32,449
Allowance for credit losses
20,447
23,177
Net operating loss carryover
14,660
—
Net unrealized losses in other comprehensive income
13,658
24,053
Deferred compensation
5,227
5,026
Stock-based compensation expense
1,585
1,761
OREO write downs
1,449
—
Provision for loan contingencies
1,420
696
Dividend Income
126
(1,221)
Valuation allowance on loans held for sale
—
9,130
Depreciation and amortization
(4,689)
(4,625)
Goodwill amortization
(4,696)
(4,926)
Right-of-use asset
(25,553)
(30,284)
Other
1,844
399
Net deferred tax assets
$
53,543
$
55,635
The Company evaluates the deferred tax asset for recoverability using a consistent approach which considers
the relative impact of negative and positive evidence, including its own historical financial performance and that of
its operating subsidiaries and projections of future taxable income. This evaluation involves significant judgment by
management about assumptions that are subject to change from period to period. Management believes that the
weight of all the positive evidence currently available exceeds the negative evidence in support of the realization of
the future tax benefits associated with the federal net deferred tax asset. As a result, management has concluded that
the federal net deferred tax asset in its entirety will more likely than not be realized. Therefore, a valuation
allowance is not considered necessary. If future results differ significantly from the Company’s current projections,
a valuation allowance against the net deferred tax asset may be required.
At December 31, 2024, the Company had approximately $49.6 million of federal net operating losses ("NOLs"),
which can be carried forward indefinitely. The deferred tax asset related to the federal NOLs is approximately
$10.4 million.
At December 31, 2024, Amerant Bank, N.A. standalone had approximately $97.7 million of NOLs in the state
of Florida, which can be carried forward indefinitely. The deferred tax asset related to these state NOLs is
approximately $4.3 million. A valuation allowance has not been recorded against the state deferred tax asset related
to these NOLs as management believes it is more likely than not that the tax benefit will be realized.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-82
At December 31, 2024 and 2023, Amerant Bancorp Inc. standalone had accumulated NOLs in the State of
Florida of approximately $159.2 million and $160.2 million, respectively. These NOLs are carried forward for a
maximum of 20 years or indefinitely, depending on the year generated, based on applicable Florida law. The
deferred tax asset related to these NOLs at December 31, 2024 and 2023 is approximately $6.9 million and $7.0
million, respectively. A valuation allowance has been recorded against the state deferred tax asset as management
believes it is more likely than not that the tax benefit will not be realized.
At December 31, 2024 and 2023, the Company had no unrecognized tax benefits or associated interest or
penalties that needed to be accrued.
The Company and its subsidiaries file a consolidated federal income tax return as well as combined state
income tax returns where combined filings are required. The federal and state tax returns for years 2021 through
2024 remain subject to examination by the corresponding tax jurisdictions.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-83
16. Accumulated Other Comprehensive Income (Loss) (“AOCL/AOCI”):
The components of AOCL/AOCI are summarized as follows using applicable blended average federal and state
tax rates for each period:
December 31, 2024
December 31, 2023
(in thousands)
Before Tax
Amount
Tax
Effect
Net of Tax
Amount
Before Tax
Amount
Tax
Effect
Net of Tax
Amount
Net unrealized holding losses on
debt securities available for sale
$ (54,828) $
14,006
$ (40,822) $ (97,042) $
24,614
$ (72,428)
Net unrealized holding gains on
interest rate swaps designated as
cash flow hedges.........................
1,364
(348)
1,016
2,193
(561)
1,632
Total (AOCL) AOCI ..................... $ (53,464) $
13,658
$ (39,806) $ (94,849) $
24,053
$ (70,796)
The components of other comprehensive income (loss) for the three-year period ended December 31, 2024 is
summarized as follows:
December 31, 2024
(in thousands)
Before Tax
Amount
Tax
Effect
Net of Tax
Amount
Net unrealized holding gains on debt securities
available for sale:
Change in fair value arising during the period.......... $
(26,470) $
6,939
$
(19,531)
Reclassification adjustment for net losses included
in net income.............................................................
68,684
(17,547)
51,137
42,214
(10,608)
31,606
Net unrealized holding losses on interest rate swaps
designated as cash flow hedges:
Change in fair value arising during the period..........
308
(78)
230
Reclassification adjustment for net interest income
included in net income .............................................
(1,137)
291
(846)
(829)
213
(616)
Total other comprehensive income.............................. $
41,385
$
(10,395) $
30,990
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-84
December 31, 2023
(in thousands)
Before Tax
Amount
Tax
Effect
Net of Tax
Amount
Net unrealized holding gains on debt securities
available for sale:
Change in fair value arising during the period.......... $
12,817
$
(3,460) $
9,357
Reclassification adjustment for net losses included
in net income.............................................................
2,098
(531)
1,567
14,915
(3,991)
10,924
Net unrealized holding losses on interest rate swaps
designated as cash flow hedges:
Change in fair value arising during the period..........
(20)
5
(15)
Reclassification adjustment for net interest income
included in net income ..............................................
(1,446)
376
(1,070)
(1,466)
381
(1,085)
Total other comprehensive income.............................. $
13,449
$
(3,610) $
9,839
December 31, 2022
(in thousands)
Before Tax
Amount
Tax
Effect
Net of Tax
Amount
Net unrealized holding losses on debt securities available
for sale:............................................................................
Change in fair value arising during the period................ $
(130,165) $
33,014
$
(97,151)
Reclassification adjustment for net gains included in
net income
2,433
(621)
1,812
(127,732)
32,393
(95,339)
Net unrealized holding losses on interest rate swaps
designated as cash flow hedges:
Change in fair value arising during the period
369
(149)
220
Reclassification adjustment for net interest income
included in net income
(985)
252
(733)
(616)
103
(513)
Total other comprehensive loss
$
(128,348) $
32,496
$
(95,852)
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-85
17. Related Party Transactions
The Company’s related parties include directors, executive officers, holders of 5% or more of the Company’s
common stock, or any member of the immediate family of these persons. Transactions with related parties were
entered into pursuant to the Company’s policies and procedures and applicable law, including Federal Reserve
Regulation W, on substantially the same terms and conditions as transactions with unaffiliated third parties.
In addition to loans to related parties and associated interest income, which are described further below,
consolidated balance sheets and the consolidated statements of operations include the following amounts with
related parties:
December 31,
(in thousands)
2024
2023
Liabilities
Demand deposits, noninterest bearing
$
1,339
$
1,228
Demand deposits, interest bearing
2,104
11,119
Savings and money market
3,768
3,981
Time deposits and accounts payable
3,828
4,089
Total due to related parties
$
11,039
$
20,417
Years Ended December 31,
(in thousands)
2024
2023
2022
Expenses
Interest expense
$
218
$
103
$
46
Fees and other expenses
94
56
58
312
159
104
Loan transactions
The Company originates loans in the normal course of business to certain related parties. At December 31, 2024
and 2023, these loans amounted to $5.2 million and $4.2 million, respectively. These loans are generally made to
persons who participate or have authority to participate (other than in the capacity of a director) in major
policymaking functions of the Company or its affiliates, such as principal owners and management of the Company
and their immediate families. Interest income on these loans was approximately $0.1 million in the years ended
December 31, 2024 and 2023, respectively.
Other assets and liabilities
The Company had approximately $1.6 million and $1.4 million, respectively, due to its Trust Subsidiaries as of
December 31, 2024 and 2023. This amount is included in accounts payable in the precedent table.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-86
18. Stockholders’ Equity
(a) Amended and Restated Articles of Incorporation
On November, 17, 2021, the Company filed amended and restated articles of incorporation with the Secretary of
State of Florida. Pursuant to the amended and restated articles, the total number of authorized shares of stock of all
classes is 300,000,000, consisting of the following classes:
Class
Number of
Shares
Par Value
per Share
Common Stock:
Class A - voting common stock
225,000,000
$
0.10
Class A - non-voting common stock
25,000,000
0.10
250,000,000
Preferred Stock
50,000,000
0.10
300,000,000
Common Stock
The Class A voting common stock and the Class A non-voting common stock are identical in all respects except
that the Class A non-voting common stock are not entitled to vote on any matter (unless such a vote is required by
applicable laws or NYSE regulations in a particular case).
On August 3, 2023, the Company provided written notice to Nasdaq of its determination to voluntarily
withdraw the principal listing of the Company’s Class A common stock from Nasdaq and transfer the listing of the
Common Stock to the NYSE. The Company’s Common Stock listing and trading on Nasdaq ended at market close
on August 28, 2023, and trading commenced on the NYSE at market open on August 29, 2023 where it continues to
trade under the stock symbol “AMTB”.
Preferred Stock
The Board of Directors is authorized to provide for and designate, out of the authorized but unissued shares of
Preferred Stock, one or more series of Preferred Stock and, with respect to each such series, to fix the number of
shares, the price, dividend rates, rights, preferences, privileges and restrictions, including voting rights, of one or
more series of preferred stock from time to time, without any vote or further action by the shareholders. There are
currently no outstanding shares of preferred stock.
Dividends
Dividends shall be payable only when, as and if declared by the Board of Directors from lawful available funds,
and may be paid in cash, property, or shares of any class or series or other securities or evidences of indebtedness of
the Company or any other issuer, as may be determined by resolution or resolutions of the Board of Directors.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-87
b) Common Stock
Shares of the Company’s Class A common stock issued and outstanding as of December 31, 2024 and
December 31, 2023 were 42,127,316 and 33,603,242, respectively.
Public Offering
On September 27, 2024, the Company completed a public offering of 8,684,210 shares of its Class A voting
common stock, at a price to the public of $19.00 per share, which included 784,210 shares issued upon the exercise
in full by the underwriters of their option to purchase additional shares of common stock (the “Public Offering”).
The total gross proceeds from the offering were approximately $165.0 million, with net proceeds of approximately
$155.8 million after deducting underwriting discounts and commissions and estimated offering expenses payable by
the Company. The intended use of the net proceeds of the Public Offering is general corporate purposes to support
its continued organic growth, which may include, among other things, working capital, investments in the Bank,
resolution of non-performing loans, and balance sheet optimization strategies.
Repurchase Plans Details
On December 19, 2022, the Company announced that the Board of Directors authorized a new repurchase
program pursuant to which the Company may purchase, from time to time, up to an aggregate amount of $25 million
of its shares of Class A common stock (the “2023 Class A Common Stock Repurchase Program”). The 2023 Class A
Common Stock Repurchase Program was set to expire on December 31, 2023 and on December 15, 2023, the
Company announced that the Board approved to extend the expiration date to December 31, 2024. On December 11,
2024, the Company announced that the Board approved to extend the expiration date to December 31, 2025.
In 2024 and 2023, the Company repurchased an aggregate of 344,326 and 259,853 shares, respectively, of Class
A common stock at a weighted average price of $21.94 and $18.98 per share, under the 2023 Class A Common
Stock Repurchase Program. The aggregate purchase price for these transactions was $7.6 million and $4.9 million,
respectively, in the years ended December 31, 2024 and 2023, including transaction costs. At December 31, 2024
and 2023, the Company had $12.4 million and $20 million available, respectively, for repurchase under this
repurchase program.
On January 31, 2022, the Company announced that the Board of Directors authorized 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”). Under the New
Class A Common Stock Repurchase Program, the Company was able to repurchase shares of Class A common stock
through open market purchases, by block purchase, in privately negotiated transactions or otherwise in compliance
with Rule 10b-18 under the Exchange Act. The extent to which the Company was able to repurchase its shares of
Class A common stock and the timing of such purchases depended upon market conditions, regulatory requirements,
other corporate liquidity requirements and priorities and other factors as may have been considered in the
Company’s sole discretion. Repurchases may also have been made pursuant to a trading plan under Rule 10b5-1
under the Exchange Act, which would permit shares to be repurchased when the Company might otherwise be
precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions. The New
Class A Common Stock Repurchase Program did not obligate the Company to repurchase any particular amount of
shares of Class A common stock, and may have been suspended or discontinued at any time without notice. In 2022,
the Company repurchased an aggregate of 1,602,887 shares of Class A common stock at a weighted average price of
$31.14 per share, under the New Class A Common Stock Repurchase Program. The aggregate purchase price for
these transactions was approximately $49.9 million, including transaction costs. On May 19, 2022, the Company
announced the completion of the New Class A Common Stock Repurchase Program.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-88
In 2024, 2023 and 2022, the Company’s Board of Directors authorized the cancellation of all shares of Class A
common stock previously held as treasury stock, including all shares repurchased in 2024, 2023 and 2022.
Therefore, the Company had no shares of common stock held in treasury stock at December 31, 2024, 2023 and
2022.
Stock-Based Compensation Awards
The Company grants, from time to time, stock-based compensation awards which are reflected as changes in the
Company’s Stockholders’ equity. See Note 14 “Incentive Compensation and Benefit Plan” for additional
information about common stock transactions under the Company’s 2018 Equity Plan.
c) Dividends
Set forth below are the details of dividends by the Company for the periods ended December 31, 2024 and 2023
and 2022, and subsequent to December 31, 2024:
Declaration Date
Record Date
Payment Date
Dividend Per Share
Dividend Amount
01/22/2025
02/14/2025
02/28/2025
$0.09
$3.8 million
10/23/2024
11/14/2024
11/29/2024
$0.09
$3.8 million
07/24/2024
8/15/2024
08/30/2024
$0.09
$3.0 million
04/24/2024
5/15/2024
05/30/2024
$0.09
$3.0 million
01/17/2024
02/14/2024
02/29/2024
$0.09
$3.0 million
10/18/2023
11/14/2023
11/30/2023
$0.09
$3.0 million
07/19/2023
08/15/2023
08/31/2023
$0.09
$3.0 million
04/19/2023
05/15/2023
05/31/2023
$0.09
$3.0 million
01/18/2023
02/13/2023
02/28/2023
$0.09
$3.0 million
10/19/2022
11/15/2022
11/30/2022
$0.09
$3.0 million
07/20/2022
08/17/2022
08/31/2022
$0.09
$3.0 million
04/13/2022
05/13/2022
05/31/2022
$0.09
$3.0 million
01/19/2022
02/11/2022
02/28/2022
$0.09
$3.2 million
On January 22, 2025, the Company’s Board of Directors declared a cash dividend of $0.09 per-share of the
Company’s Class A common stock. The dividend was paid on February 28, 2025, to shareholders of record at the
close of business on February 14, 2025.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-89
19. Commitments and Contingencies
From time to time the Company and its subsidiaries may be exposed to loss contingencies. In the ordinary,
course of business, those contingencies may include, known but unasserted claims, and legal / regulatory inquiries or
examinations. The Company records these loss contingencies as a liability when the likelihood of loss is probable
and an amount or range of loss can be reasonably estimated. In the opinion of management, the Company maintains
a liability that is in an estimated amount sufficient to cover said loss contingencies, if any, at the reporting dates.
There was no material liability on legal claims outstanding as of December 31, 2024.
The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to
meet the financing needs of its customers. These financial instruments include commitments to extend credit,
derivative contracts, and letters of credit. Most of our derivative arrangements with counterparties require the
posting of collateral upon meeting certain net exposure threshold.
The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial
instrument for loan commitments and letters of credit is represented by the contractual amount of those instruments.
The Company uses the same credit policies in making loan commitments and letters of credit as it does for on-
balance sheet instruments. The Company controls the credit risk of loan commitments and letters of credit through
credit approvals, customer limits, and monitoring procedures.
Loan commitments are agreements to lend to a customer as long as there is no violation of any condition
established in the contract. Loan commitments generally have fixed expiration dates or other termination clauses and
may require payment of a fee. The Company evaluates each customer’s credit-worthiness on a case-by-case basis.
The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on
management’s credit evaluation. Collateral held varies but may include cash, accounts receivable, inventory,
property and equipment, real estate in varying stages of development and occupancy, and income-producing
commercial properties.
Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a
customer to a third party. Those guarantees are primarily issued to support borrowing arrangements. They generally
have one year terms and are renewable annually, if agreed. The credit risk involved in issuing standby letters of
credit is generally the same as that involved in extending loan facilities to customers. The Company generally holds
deposits, investments and real estate as collateral supporting those commitments. The extent of collateral held for
those commitments at December 31, 2024 ranges from unsecured commitments to commitments fully collateralized
by cash and securities.
Commercial letters of credit are conditional commitments issued by the Company to guarantee payment by a
customer to a third party, and are used primarily for importing or exporting goods and are terminated when proper
payment is made by the customer.
Financial instruments whose contract amount represents off-balance sheet credit risk at December 31, 2024 are
generally short-term and are as follows:
(in thousands)
Approximate
Contract
Amount
Commitments to extend credit.............................................................................................................. $
1,389,894
Standby letters of credit ........................................................................................................................
149,029
$
1,538,923
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-90
The following table summarizes the changes in the allowance for credit losses for off-balance sheet credit risk
exposures for the years ended December 31, 2024, 2023 and 2022:
Balances at beginning of the period..............................
$
3,102
$
1,702
$
1,702
Provision for (reversal of) credit losses - off balance
sheet exposures ................................................................
2,840
1,400
—
Balances at end of period...............................................
$
5,942
$
3,102
$
1,702
(in thousands)
Years Ended December 31,
2024
2023
2022
Beginning in the third quarter of 2023, the provision for credit losses for off-balance sheet exposures is included
as part of provision for (reversal of) credit losses in the Company’s consolidated statements of operations and
comprehensive income (loss). Prior to that period, the provision for credit losses for off-balance sheet exposures was
included as part of other operating expenses in the Company’s consolidated statements of operations and
comprehensive income (loss). In 2023, the provision for credit losses for off-balance sheet exposures includes: (i)
$0.3 million recorded in the first half of 2023 and included within other operating expenses in the Company’s
consolidated statements of operations and comprehensive income (loss), and (ii) $1.1 million recorded in the second
half of 2023 and included within provision for (reversal of) credit losses in the Company’s consolidated statements
of operations and comprehensive income (loss).
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-91
20. Fair Value Measurements
Assets and liabilities measured at fair value on a recurring basis are summarized below:
December 31, 2024
(in thousands)
Markets
for Identical
Assets
(Level 1)
Observable
Market
Inputs
(Level 2)
Unobservable
Market
Inputs
(Level 3)
Value in the
Consolidated
Balance
Sheet
Assets
Cash and Cash equivalents
Other short-term investments
$
—
$
6,944
$
—
$
6,944
Securities
Debt Securities available for sale
U.S. Treasury Securities.....................................
—
1,933
—
1,933
U.S. Government agency and sponsored
enterprise residential MBS...................................
—
1,262,640
—
1,262,640
U.S. Government agency and sponsored
enterprise commercial MBS...............................
—
142,538
—
142,538
U.S. Government agency and sponsored
enterprise obligations...........................................
—
16,682
—
16,682
Non-agency commercial MBS.............................
—
11,792
—
11,792
Municipal Bonds..................................................
—
1,585
—
1,585
—
1,437,170
—
1,437,170
Equity securities with readily determinable fair
values not held for trading .......................................
2,477
—
—
2,477
2,477
1,437,170
—
1,439,647
Mortgage loans held for sale (at fair value)................
—
42,911
—
42,911
Bank owned life insurance .........................................
—
243,547
—
243,547
Other assets
Mortgage servicing rights (MSRs)...........................
—
—
1,491
1,491
Derivative instruments.............................................
—
48,011
—
48,011
$
2,477
$
1,778,583
$
1,491
$
1,782,551
Liabilities
Other liabilities
Derivative instruments............................................. $
—
$
47,615
$
—
$
47,615
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-92
December 31, 2023
(in thousands)
Quoted
Prices in
Active
Markets
for Identical
Assets
(Level 1)
Third-Party
Models with
Observable
Market
Inputs
(Level 2)
Internal
Models
with
Unobservable
Market
Inputs
(Level 3)
Total
Carrying
Value in the
Consolidated
Balance
Sheet
Assets
Cash and Cash equivalents
Other short-term investments
$
—
$
6,080
$
—
$
6,080
Securities
Debt Securities available for sale
U.S. Government agency and sponsored
enterprise residential MBS.................................... $
—
$
842,870
$
—
$
842,870
Corporate bonds ....................................................
—
249,582
—
249,582
U.S. Government agency and sponsored
enterprise commercial MBS..................................
—
80,626
—
80,626
U.S. Government agency and sponsored agency
obligations.............................................................
24,588
24,588
Non-agency commercial MBS..............................
11,220
11,220
U.S. treasury securities..........................................
—
1,991
—
1,991
Municipal bonds....................................................
—
1,668
—
1,668
Collateralized loan obligations..............................
—
4,957
—
4,957
—
1,217,502
—
1,217,502
Equity securities with readily determinable fair
values not held for trading..........................................
2,534
—
—
2,534
2,534
1,217,502
—
1,220,036
Mortgage loans held for sale (at fair value)................
—
26,200
—
26,200
Bank owned life insurance .........................................
—
234,972
—
234,972
Other assets
Mortgage servicing rights (MSRs)
—
—
1,372
1,372
Derivative instruments
—
59,932
—
59,932
$
2,534
$
1,544,686
$
1,372
$
1,548,592
Liabilities
Other liabilities...........................................................
Derivative instruments............................................. $
—
$
59,433
$
—
$
59,433
Level 2 Valuation Techniques
The valuation of short-term securities, debt securities available for sale, equity securities not held for trading,
and derivative instruments is performed through a monthly pricing process using data provided by generally
recognized providers of independent data pricing services (the “Pricing Providers”). These Pricing Providers
collect, use and incorporate descriptive market data from various sources, quotes and indicators from leading broker
dealers to generate independent and objective valuations. The fair value of mortgage loans held for sale is generally
determined using observable market information including pricing from actual market transactions, investor
commitment prices or broker quotations on similar loans. The fair value of bank-owned life insurance policies is
based on the cash surrender values of the policies as reported by the insurance companies.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-93
The valuation techniques and the inputs used in our consolidated financial statements to measure the fair value
of our recurring Level 2 financial instruments consider, among other factors, the following:
•
Similar securities actively traded which are selected from recent market transactions;
•
Observable market data which includes spreads in relationship to SOFR and other relevant interest rate
benchmarks that may become available from time to time, such as swap curve, and prepayment speed rates,
as applicable.
•
The captured spread and prepayment speed is used to obtain the fair value for each related security.
On a quarterly basis, the Company evaluates the reasonableness of the monthly pricing process for the valuation
of short-term securities, debt securities available for sale and equity securities not held for trading and derivative
instruments. When appropriate, this evaluation includes challenging a random sample of the different types of
securities in the investment portfolio as of the end of the quarter selected. This challenge consists of obtaining from
the Pricing Providers a document explaining the methodology applied to obtain their fair value assessments for each
type of investment included in the sample selection. The Company then analyzes in detail the various inputs used in
the fair value calculation, both observable and unobservable (e.g., prepayment speeds, yield curve benchmarks,
spreads, delinquency rates). Management considers that the consistent application of this methodology allows the
Company to understand and evaluate the categorization of its investment portfolio.
The methods described above may produce a fair value calculation that may differ from the net realizable value
or may not be reflective of future fair values. Furthermore, while the Company believes its valuation methods are
appropriate and consistent with other market participants, the use of different methodologies or assumptions to
determine the fair value of its financial instruments could result in different estimates of fair value at the reporting
date.
Level 3 Valuation Techniques
Mortgage Servicing Rights
MSRs are initially and subsequently measured at fair value, with changes in fair value recorded as part of
noninterest income. The Company estimates the fair value of MSRs through the use of prevailing market
participants assumptions and market participant valuation processes. This valuation is periodically tested and
validated against other third-party firm valuations.
There were no transfers in or out of level 3 in the years ended December 31, 2024, 2023 and 2022.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-94
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
The following tables present the major categories of assets measured at fair value on a non-recurring basis at
December 31, 2024 and 2023:
December 31, 2024
(in thousands)
Carrying
Amount
Quoted
Prices in
Active
Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total Write
Downs
Description
Loans held for investment measured for
credit deterioration using the fair value
of the collateral (1) (2).............................. $
23,265
$
—
$
—
$
—
$
11,889
Other Real Estate Owned (3)....................
18,074
—
—
18,074
5,672
$
41,339
$
—
$
—
$
18,074
$
17,561
_______________
(1)
Includes commercial and owner-occupied loans with a carrying amount of $23.0 million and $0.1 million, respectively, at December
31,2024.
(2)
Include loans with specific reserves of $2.5 million and total write downs of $5.1 million at December 31, 2024.
(3)
Includes $17.7 million and $0.4 million in commercial and residential real estate property, respectively.
December 31, 2023
(in thousands)
Carrying
Amount
Quoted
Prices in
Active
Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total Write
Downs
Description
Loans held for sale, at lower of cost or fair
value ............................................................. $ 365,219
$
—
$
—
$
365,219
$
35,525
Loans held for investment measured for
credit deterioration using the fair value of
the collateral (1) (2)......................................
18,439
—
—
18,439
4,371
Other Real Estate Owned (3) .......................
20,181
—
—
20,181
—
$ 403,839
$
—
$
—
$
403,839
$
39,896
_______________
(1) Includes primarily commercial loans with a carrying amount of $18.4 million, at December 31,2023.
(2) Include loans with specific reserves of $8.1 million and total write downs of $4.4 million at December 31, 2023.
(3) Consists of commercial real estate property.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-95
The following table presents the significant unobservable inputs (Level 3) used in the valuation of assets measured
at fair value on a nonrecurring basis.
Financial Instrument
Unobservable Inputs
Valuation Methods
Discount
Range
Typical Discount
Collateral dependent loans
Discount to fair value
Appraisal value, as adjusted
0-30%
6-7%
Inventory
0-100%
30-50%
Accounts receivables
0-100%
20-30%
Equipment
0-100%
20-30%
Other Real Estate Owned
Discount to fair value
Appraisal value, as adjusted
N/A
6-7%
There were no other significant assets or liabilities measured at fair value on a nonrecurring basis at
December 31, 2024 and 2023.
Loans Held for Sale, at Lower of Fair Value or Cost
The fair value used for loans held for sale that are carried at the lower of cost or fair value is generally based on
quoted market prices of similar loans less estimated cost to sell and is considered to be Level 3.
Collateral Dependent Loans Measured For Expected Credit Losses
The carrying amount of collateral dependent loans is typically based on the fair value of the underlying
collateral. The Company primarily uses third party appraisals to assist in measuring expected credit losses on
collateral dependent loans. The Company also uses third party appraisal reviewers for loans with an outstanding
balance of $1 million and above. These appraisals generally use the market or income approach valuation technique
and use market observable data to formulate an opinion of the fair value of the loan’s collateral. However, the
appraiser uses professional judgment in determining the fair value of the collateral or properties and may also adjust
these values for changes in market conditions subsequent to the appraisal date. When current appraisals are not
available for certain loans, the Company uses judgment on market conditions to adjust the most current appraisal.
The sales prices may reflect prices of sales contracts not closed and the amount of time required to sell out the real
estate project may be derived from current appraisals of similar projects. As a consequence, the fair value of the
collateral is considered a Level 3 valuation.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-96
Other Real Estate Owned
The Company values OREO at the lower of cost or fair value of the property, less cost to sell. The fair value of
the property is generally based upon recent appraisal values of the property, less cost to sell. The Company primarily
uses third party appraisals to assist in measuring the valuation of OREO. Period revaluations are classified as level 3
as the assumptions used may not be observable. The fair value of non-real estate repossessed assets is provided by a
third party based on their assumptions and quoted market prices for similar assets, when available. In 2024, the
Company recorded valuation expense of $5.7 million on this OREO property, as result of the fair value adjustment.
The Company had OREO balances of $18.1 million and $20.2 million as of December 31, 2024 and 2023,
respectively.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-97
21. Fair Value of Financial Instruments
The fair value of a financial instrument represents the price that would be received from its sale in an orderly
transaction between market participants at the measurement date. The best indication of the fair value of a financial
instrument is determined based upon quoted market prices. However, in many cases, there are no quoted market
prices for the Company’s various financial instruments. As a result, the Company derives the fair value of the
financial instruments held at the reporting period-end, in part, using present value or other valuation techniques.
Those techniques are significantly affected by management’s assumptions, the estimated amount and timing of
future cash flows and estimated discount rates included in present value and other techniques. The use of different
assumptions could significantly affect the estimated fair values of the Company’s financial instruments.
Accordingly, the net realized values could be materially different from the estimates presented below.
The following methods and assumptions were used to estimate the fair value of each class of financial
instruments for which it is practicable to estimate that value:
•
Because of their nature and short-term maturities, the carrying values of the following financial instruments
were used as a reasonable estimate of their fair value: cash and cash equivalents, interest earning deposits
with banks, variable-rate loans with re-pricing terms shorter than twelve months, demand and savings
deposits, short-term time deposits and other borrowings.
•
The fair value of mortgage loans held for sale at fair value and loans held for sale carried at the lower of
cost or fair value, debt and equity securities, bank owned life insurance and derivative instruments, are
based on quoted market prices, when available. If quoted market prices are unavailable, fair value is
estimated using the pricing process described in Note 20.
•
The fair value of commitments and letters of credit is based on the assumption that the Company will be
required to perform on all such instruments. The commitment amount approximates estimated fair value.
•
The fair value of fixed-rate loans, advances from the FHLB, senior notes, subordinated notes and junior
subordinated debentures are estimated using a present value technique by discounting the future expected
contractual cash flows using the current rates at which similar instruments would be issued with
comparable credit ratings and terms at the measurement date.
•
The fair value of long-term time deposits, including certificates of deposit, is determined using a present
value technique by discounting the future expected contractual cash flows using current rates at which
similar instruments would be issued at the measurement date.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-98
The estimated fair value of financial instruments where fair value differs from carrying value are as follows:
December 31, 2024
December 31, 2023
(in thousands)
Carrying
Value
Estimated
Fair
Value
Carrying
Value
Estimated
Fair
Value
Financial assets
Debt securities held to maturity ..................... $
—
$
—
$
226,645
$
204,945
Loans ..............................................................
3,187,223
3,113,807
3,514,114
3,321,308
Financial liabilities
Time deposits...................................................
1,532,563
1,532,002
1,577,579
1,575,569
Advances from the FHLB................................
745,000
743,910
645,000
644,572
Senior notes .....................................................
59,843
59,714
59,526
58,337
Subordinated notes...........................................
29,624
28,481
29,454
28,481
Junior subordinated debentures .......................
64,178
63,255
64,178
63,285
22. Regulatory Matters
The Company and the Bank are subject to various regulatory requirements administered by federal banking
agencies. Amerant Mortgage is an approved Fannie Mae seller and servicer and is subject to certain Lender Adjusted
Net Worth requirements. Amerant Investments is subject to the Uniform Capital Rule 15x3-1 under the Securities
Act of 1934, which requires the maintenance of minimum net capital as defined under such rule. At December 31,
2024 and 2023 Amerant Investments was in compliance with those rules.
The following is a summary of restrictions related to dividend payments, and capital adequacy as well as Lender
Adjusted Net Worth requirement.
Dividend Restrictions
Dividends payable by the Bank as a national bank subsidiary of the Company, are limited by law and OCC
regulations. A dividend may not be paid if the total of all dividends declared by a bank in any calendar year is in
excess of the current year’s net income combined with the retained net income of the two preceding years, unless the
national bank obtains the approval of the OCC. At December 31, 2024 and 2023, the Bank could have paid
dividends of $9.3 million and $117.3 million, respectively, without prior OCC approval. In December 2023, the
Board of Directors of the Bank approved the payment of cash dividend of $20 million by the Bank to the Company.
The Company received this dividend in the first quarter of 2024. The Bank did not declare any dividends payable to
the Company in 2024.
In addition, the Company and the Bank are subject to various general regulatory policies and requirements
relating to the payment of dividends, including requirements to maintain capital above regulatory minimums and the
maintenance of capital in excess of capital conservation buffers required by the Federal Reserve and OCC capital
regulations.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-99
Capital Adequacy
Under the Basel III capital and prompt corrective action rules, the Company and the Bank must meet specific
capital guidelines that involve quantitative measures and qualitative judgments about capital components, risk
weightings, and other factors.
The Basel III rules became effective for the Company and the Bank on January 1, 2015 with full compliance
with all of the requirements being phased in by January 1, 2019. The Company and the Bank opted to not include
the AOCI in computing regulatory capital. As of December 31, 2024, management believes that the Company and
the Bank meet all capital adequacy requirements to which they are subject, and are well capitalized. In addition,
Basel III rules required the Company and the Bank to hold a minimum capital conservation buffer of 2.50%. The
Company’s capital conservation buffer at year end 2024 and 2023 was 5.4% and 4.1%, respectively, and therefore
no regulatory restrictions exist under the applicable capital rules on dividends or discretionary bonuses or other
payments.
The Bank’s actual capital amounts and ratios are presented in the following table:
Actual
Minimums Required for
Capital Adequacy Purposes
Regulatory Minimums to
be Well Capitalized
(in thousands, except percentages)
Amount
Ratio
Amount
Ratio
Amount
Ratio
December 31, 2024
Total capital ratio............................ $ 1,047,759
12.84 % $
652,644
8.00 % $
815,805
10.00 %
Tier 1 capital ratio ..........................
956,861
11.73 %
489,483
6.00 %
652,644
8.00 %
Tier 1 leverage ratio .......................
956,861
9.50 %
402,892
4.00 %
503,615
5.00 %
Common equity tier 1 (CET1)
capital ratio.....................................
956,861
11.73 %
367,112
4.50 %
530,273
6.50 %
December 31, 2023
Total capital ratio............................ $
964,678
11.95 % $
645,662
8.00 % $
807,077
10.00 %
Tier 1 capital ratio ..........................
866,141
10.73 %
484,246
6.00 %
645,662
8.00 %
Tier 1 leverage ratio .......................
866,141
9.03 %
383,864
4.00 %
479,830
5.00 %
Common equity tier 1 (CET1)
capital ratio.....................................
866,141
10.73 %
363,185
4.50 %
524,600
6.50 %
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-100
The Company’s actual capital amounts and ratios are presented in the following table:
Actual
Minimums Required for
Capital Adequacy Purposes
Regulatory Minimums To
be Well Capitalized
(in thousands, except percentages)
Amount
Ratio
Amount
Ratio
Amount
Ratio
December 31, 2024
Total capital ratio............................ $ 1,096,882
13.43 % $
653,446
8.00 % $
816,807
10.00 %
Tier 1 capital ratio...........................
976,360
11.95 %
490,084
6.00 %
653,446
8.00 %
Tier 1 leverage ratio........................
976,360
9.66 %
404,480
4.00 %
505,600
5.00 %
CET1 capital ratio...........................
915,658
11.21 %
367,563
4.50 %
530,925
6.50 %
December 31, 2023
Total capital ratio............................ $
979,777
12.12 % $
646,481
8.00 % $
808,101
10.00 %
Tier 1 capital ratio...........................
851,787
10.54 %
484,860
6.00 %
646,481
8.00 %
Tier 1 leverage ratio........................
851,787
8.84 %
385,598
4.00 %
481,998
5.00 %
CET1 capital ratio...........................
790,959
9.79 %
363,645
4.50 %
525,266
6.50 %
The Company adopted CECL effective as of January 1, 2022. The Company did not elect to apply an available
three-year transition provision to its regulatory capital computations as a result of its adoption of CECL in 2022.
Mortgage Banking Lender Net Worth Adjusted Requirements
Amerant Mortgage is currently an approved seller and servicer with Fannie Mae for the purpose of selling
Fannie Mae eligible loan production and retaining the MSRs of those same loans. As an approved Fannie Mae seller
and servicer, Amerant Mortgage must meet certain net worth covenants outlined in Maintaining Seller/Servicer
Eligibility section of the Fannie Mae Selling Guide, the “Selling Guide”.
Under the Selling Guide, Amerant Mortgage must meet a minimum net worth requirement of $2.5 million plus
0.25% of the outstanding unpaid principal balance of the portfolio of loans Amerant Mortgage is contractually
obligated to service for Fannie Mae and other investors (the “Lender Adjusted Net Worth”). As of December 31,
2024 and 2023, Amerant Mortgage had a Lender Adjusted Net Worth of approximately $15.9 million and
$11.0 million and was in compliance with the requirement. In addition, Amerant Mortgage is subject to net worth
decline tolerance requirements that shall not exceed 25% over one quarter or 40% over two consecutive quarters.
Amerant Mortgage has demonstrated compliance with all financial eligibility requirements as of December 31,
2024.
Failure to meet the minimum net worth or net worth decline tolerance outlined above, may prompt the
suspension of Amerant Mortgage as an approved seller and/or servicer, which would prevent Amerant Mortgage
from taking down new commitments to deliver loans to Fannie Mae and adding loans to any portfolio that Amerant
Mortgage services for Fannie Mae. While Amerant Mortgage is not required to operate as an approved Fannie Mae
seller and servicer, failure to operate as such may impact Amerant Mortgage’s overall margins, profitability and
financial flexibility.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-101
23. Earnings Per Share
The following table shows the calculation of basic and diluted earnings per share:
(in thousands, except per share data)
2024
2023
2022
Numerator:
Net (loss) income before attribution of noncontrolling interest
$
(15,752) $
30,789
$
61,963
Noncontrolling interest
—
(1,701)
(1,347)
Net (loss) income attributable to Amerant Bancorp Inc.
$
(15,752) $
32,490
$
63,310
Net (loss) income available to common stockholders
$
(15,752) $
32,490
$
63,310
Denominator:
Basic weighted averages shares outstanding
35,755,375
33,511,321
33,862,410
Dilutive effect of shared-based compensation awards
—
164,067
280,153
Diluted weighted average shares outstanding
35,755,375
33,675,388
34,142,563
Basic (loss) earnings per common share
$
(0.44) $
0.97
$
1.87
Diluted (loss) earnings per common share
$
(0.44) $
0.96
$
1.85
As of December 31, 2024, potential dilutive instruments consisted of unvested shares of restricted stock and
restricted stock units totaling 400,470. As of December 31, 2023 and 2022, potential dilutive instruments consisted
of unvested shares of restricted stock, restricted stock units and performance stock units totaling 595,420 and
529,830, respectively.
In 2024, 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 anti-dilutive effect in per share earnings in that
period. In 2023 and 2022, 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.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-102
24. Condensed Unconsolidated Holding Companies’ Financial Statements
The separate condensed unconsolidated financial statements of the Company has been prepared using the same
basis of accounting that the Company used to prepare its consolidated financial statements described in Note 1,
except for its investment in subsidiaries which is accounted for using the equity method. Under the equity method,
investments in subsidiaries are initially recorded at cost, and they are periodically adjusted due to changes in the
interest of the parent company over the net assets of the subsidiaries. The Company records in the results for the
period, its participation in the profit or loss of the subsidiaries, and in AOCI/AOCL its participation in the “Other
comprehensive (loss) income account” of the subsidiary. In applying the equity method, the Company uses the
subsidiaries consolidated financial statements at the end of the period prepared under GAAP.
Condensed financial statements of Amerant Bancorp Inc. are presented below:
Condensed Balance Sheets:
December 31,
(in thousands)
2024
2023
Assets
Cash and due from banks
$
99,534
$
46,789
Investments in subsidiaries
941,348
818,815
U.S. treasury securities
1,933
1,991
Dividends from subsidiary bank receivable
—
20,000
Equipment, net
349
—
Other assets
5,241
6,668
$
1,048,405
$
894,263
Liabilities and Stockholders' Equity
Senior notes
$
59,843
$
59,526
Subordinated notes
29,624
29,454
Junior Subordinated Debentures
64,178
64,178
Other liabilities
4,293
5,037
Stockholders' equity
890,467
736,068
$
1,048,405
$
894,263
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-103
Condensed Statements of Income:
Years ended December 31
(in thousands)
2024
2023
2022
Income:
Interest
$
264
$
247
$
182
Equity in earnings of subsidiaries
(3,635)
43,795
73,986
Total income
(3,371)
44,042
74,168
Expenses:
Interest expense
9,417
9,556
7,968
Other expenses (1)
6,139
5,726
5,656
Total expense
15,556
15,282
13,624
(Loss) income before income tax benefit
(18,927)
28,760
60,544
Income tax benefit
3,175
3,730
2,766
Net (loss) income
$
(15,752) $
32,490
$
63,310
__________________
(1)
Other expenses mainly consist of professional and other service fees.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-104
Condensed Statements of Cash Flows:
Cash flows from operating activities
Net (loss) income
$
(15,752)
$
32,490
$
63,310
Adjustments to reconcile net (loss) income to net cash provided by (used in)
operating activities - Equity in earnings of subsidiaries
3,635
(43,795)
(73,986)
Stock-based compensation expense
578
537
341
Net change in other assets and liabilities
18,405
(2,318)
(13,098)
Net cash provided by (used in) operating activities
6,866
(13,086)
(23,433)
Cash flows from investing activities
Cash received from Amerant Florida Merger
—
—
6,663
Purchases of equipment
(388)
—
—
Dividends from subsidiary
—
—
114,000
Capital contribution to subsidiary
(90,000)
—
—
Return of equity from investment in subsidiary
—
11,068
—
Purchases of available for sale securities
(1,919)
—
(1,997)
Maturities of available for sale securities
2,000
—
1,000
Net cash (used in) provided by investment activities
(90,307)
11,068
119,666
Cash flows from financing activities
Repurchase of common stock - Class A
(7,556)
(4,933)
(72,060)
Proceeds from issuance of common stock
155,750
—
—
Proceeds from issuance of common stock under Employee Stock Purchase
Plan
811
904
—
Proceeds from issuance of Subordinated Notes, net of issuance costs
—
—
29,146
Dividends Paid
(12,819)
(12,063)
(12,230)
Net cash provided by (used in) financing activities
136,186
(16,092)
(55,144)
Net increase (decrease) in cash and cash equivalents
52,745
(18,110)
41,089
Cash and cash equivalents
Beginning of year
46,789
64,899
23,810
End of year
$
99,534
$
46,789
$
64,899
Years ended December 31,
(in thousands)
2024
2023
2022
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-105
On August 2, 2022, the Company completed an intercompany transaction of entities under common control,
pursuant to which the Company’s wholly owned subsidiary, Amerant Florida Bancorp Inc. (“Amerant Florida”),
merged with and into the Company, with the Company as sole survivor (the “Amerant Florida Merger”). In
connection with the Amerant Florida Merger, the Company assumed all assets and liabilities of Amerant Florida,
including its direct ownership of the Bank, the common capital securities issued by the five trust subsidiaries, and
the junior subordinated debentures issued by Amerant Florida and related agreements. The Amerant Florida Merger
had no impact to the Company’s consolidated financial condition and results of operations.
There were no reportable balances as of and for the years ended December 31, 2024, 2023 or 2022 related to
Amerant Florida as of result of the Amerant Florida Merger.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-106
25 . Segment Information
Determination of the CODM
The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer (CEO). The CEO
makes the overall decisions about the Company’s resource allocation and assesses the performance of the
Company.
Determination and Identification of operating segments
The CODM manages the Company as one operating segment: the consolidated Company as one entity. We
made that determination based upon an evaluation of the products and services provided, the functions the
Company performed, and the type and location of customers served. Substantially, all of our revenues, assets,
and liabilities are derived from deposits, loans, and wealth management services primarily offered in the United
States to customers located in the United States and abroad. All decisions regarding the allocation of financial,
operational, and other resources are managed under this one segment. As part of the determination for the
allocation of resources, the CODM regularly reviews net income as the measure of profit or loss. The accounting
policies used to measure the profit and loss are the same as those described in the summary of significant
accounting policies in Note 1. In addition, as part of assessment of the performance of the consolidated entity,
the CODM also reviews the consolidated financial statements for significant expenses which include both cash
and noncash items, such as amortization and depreciation and stock-based compensation. For more information
on the significant components of net (loss) income or any significant cash or noncash items, refer to our
accompanying consolidated financial statements or the Notes to Consolidated Financial Statements contained
within. The measure of assets is reported on the consolidated balance sheet as total consolidated assets.
Segment results
As the Company’s consolidated financial information as of and for the years ended December 31, 2024, 2023
and 2022 conform with generally accepted accounting principles in the United States (GAAP) and the Company
is managed on a single operating business segment, we collectively refer to the accompanying consolidated
financial statements for the Segment Results for the measures of consolidated profit or loss, as well as
consolidated total assets.
Amerant Bancorp Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
F-107