Amerant Bancorp Reports Net Loss, Decline in Profitability Amid Increased Expenses and Credit Losses

Amerant Bancorp Inc. reported significant financial developments in its latest 10-Q filing for the quarter ending September 30, 2024. The company experienced a net loss attributable to shareholders of $48.2 million, a stark contrast to the net income of $22.1 million recorded in the same period of 2023. For the nine months ended September 30, 2024, the net loss was $32.6 million, compared to a net income of $49.6 million for the same period in the previous year. This decline in profitability was primarily driven by increased noninterest expenses, higher provisions for credit losses, and substantial losses from securities repositioning.

Total interest income for the third quarter of 2024 rose to $151.6 million, an increase of 8.8% from $139.4 million in the prior year, largely due to a 21 basis point increase in the yield on interest-earning assets. However, total interest expense also increased significantly, reaching $70.6 million, up 16.2% from $60.8 million in the same quarter of 2023. Consequently, net interest income for the quarter was $81.0 million, a modest increase of 3.1% from $78.6 million in the previous year.

The company’s total assets grew to $10.35 billion as of September 30, 2024, reflecting a 6.6% increase from $9.72 billion at the end of 2023. This growth was supported by a substantial increase in cash and cash equivalents, which more than doubled to $671.8 million. Total deposits also rose by 2.7% to $8.11 billion, driven by increases in savings and money market accounts.

Strategically, Amerant Bancorp completed a public offering of 8.68 million shares at $19.00 per share, generating approximately $155.8 million in net proceeds. These funds are earmarked for general corporate purposes, including investments in the bank and addressing non-performing loans. Additionally, the company is in the process of selling its Houston banking operations, with the transaction expected to close in November 2024.

The company’s allowance for credit losses decreased to $79.9 million, representing 1.15% of total loans held for investment, down from 1.39% at the end of 2023. However, non-performing assets surged to $129.4 million, a 137.1% increase from $54.6 million at the end of the previous year, indicating a deterioration in asset quality.

Overall, Amerant Bancorp's financial performance in the third quarter of 2024 reflects challenges in profitability and asset quality, alongside strategic initiatives aimed at enhancing its capital position and operational efficiency.