Amerant Reports Second Quarter 2023 Results

 CORAL GABLES, Fla., July 20, 2023 (GLOBE NEWSWIRE) -- Amerant Bancorp Inc. (NASDAQ: AMTB) (the “Company” or “Amerant”) today reported net income attributable to the Company of $7.3 million in the second quarter of 2023, or $0.22 per diluted share, compared to net income attributable to the Company of $20.2 million, or $0.60 per diluted share, in the first quarter of 2023.

“Achieving strong organic deposit growth was a significant accomplishment this quarter” stated Jerry Plush, Chairman and CEO. “While elevated reserve coverage levels were needed related to a legacy NY based commercial real estate loan along with updated economic forecasts, we continued to show solid growth in pre-provision net revenue, driven primarily by a strong net interest margin. We remain keenly focused on driving profitable growth and achieving our goal of becoming the bank of choice in the markets we serve.”

  • Total assets increased $24.2 million, or 0.3%, to $9.5 billion compared to 1Q23.

  • Total gross loans increased $101.9 million, or 1.4%, to $7.22 billion compared to $7.12 billion in 1Q23.

  • Cash and cash equivalents were $445.1 million, down $40.7 million, or 8.4%, compared to $485.8 million in 1Q23.

  • Total deposits were $7.58 billion, up $292.8 million, or 4.0%, compared to $7.29 billion in 1Q23. Organic deposit growth in commercial, consumer and international banking was $432 million, which enabled reductions in brokered deposits and institutional deposits of $52 million and $136 million, respectively.

  • Total advances from Federal Home Loan Bank (“FHLB”) were $770.0 million, down $282.0 million, or 26.8%, compared to $1.1 billion in 1Q23, the result of early repayments of $355 million in the quarter in connection with asset/liability management strategies. An additional $2.1 billion remained available from FHLB as of June 30, 2023.

  • Average yield on loans increased to 6.79% in 2Q23, compared to 6.38% in 1Q23.

  • Total non-performing assets increased to $67.4 million, up $18.7 million, or 38.3%, compared to $48.7 million as of 1Q23.

  • The allowance for credit losses ("ACL") was $106.0 million, an increase of $21.6 million, or 25.6%, compared to $84.4 million as of 1Q23.

  • Core deposits were $5.50 billion, up $140.6 million, or 2.6%, compared to $5.36 billion in 1Q23.

  • Average cost of total deposits increased to 2.40% in 2Q23 compared to 1.91% in 1Q23.

  • Loan to deposit ratio improved to 95.22% in 2Q23 compared to 97.64% in 1Q23.

  • Assets Under Management and custody (“AUM”) totaled $2.15 billion, slightly up $39.9 million, or 1.9%, from $2.11 billion in 1Q23.

  • Pre-provision net revenue (“PPNR”)(1) was $38.3 million in 2Q23, an increase of $1.1 million or 2.9%, compared to $37.2 million in 1Q23.

  • Core Pre-Provision Net Revenue (“Core PPNR”)(1) was $39.2 million in 2Q23, up $2.1 million, or 5.6%, from $37.1 million in 1Q23.

  • Net Interest Margin (“NIM”) was 3.83% in 2Q23 compared to 3.90% in 1Q23.

  • Net Interest Income (“NII”) was $83.9 million, up $1.5 million, or 1.9%, from $82.3 million in 1Q23.

  • Provision for credit losses was $29.1 million in 2Q23, up $17.4 million, or 148.5%, compared to $11.7 million in 1Q23. The provision for credit losses in 2Q23 was comprised of $15.7 million in connection with charge-offs and credit quality, $1.4 million related to loan growth and $12.0 million to reflect updated economic factors.

  • Non-interest income was $26.6 million in 2Q23, up $7.3 million, or 37.6%, from $19.3 million in 1Q23. 2Q23 included $12.4 million in non-routine net gains.

  • Non-interest expense was $72.5 million, up $7.8 million, or 12.0%, from $64.7 million in 1Q23. 2Q23 included $13.4 million in non-routine noninterest expenses.

  • The efficiency ratio was 65.6% in 2Q23 compared to 63.7% in 1Q23.

  • Return on average assets (“ROA”) was 0.31% in 2Q23 compared to 0.88% in 1Q23.

  • Return on average equity (“ROE”) was 3.92% in 2Q23 compared to 11.15% in 1Q23.

Additional details on second quarter 2023 results can be found in Exhibits to this earnings release, and the earnings presentation available under the Investor Relations section of the Company’s website at https://investor.amerantbank.com.

On July 19, 2023, the Company’s board of directors declared a quarterly cash dividend of $0.09 per common share. The dividend is payable on August 31, 2023 to shareholders of record on August 15, 2023.

1 Non-GAAP measure, see “Non-GAAP Financial Measures” for more information and Exhibit 2 for a reconciliation to GAAP.

Second Quarter 2023 Earnings Conference Call

The Company will hold an earnings conference call on Friday, July 21, 2023 at 9:00 a.m. (Eastern Time) to discuss its second quarter 2023 results. The conference call and presentation materials can be accessed via webcast by logging on from the Investor Relations section of the Company’s website at https://investor.amerantbank.com. The online replay will remain available for approximately one month following the call through the above link.

About Amerant Bancorp Inc. (NASDAQ: AMTB)

Amerant Bancorp Inc. is a bank holding company headquartered in Coral Gables, Florida since 1979. The Company operates through its main subsidiary, Amerant Bank, N.A. (the “Bank”), as well as its other subsidiaries: Amerant Investments, Inc., Elant Bank and Trust Ltd., and Amerant Mortgage, LLC. The Company provides individuals and businesses in the U.S. with deposit, credit and wealth management services. The Bank, which has operated for over 40 years, is the largest community bank headquartered in Florida. The Bank operates 23 banking centers – 17 in South Florida and 6 in the Houston, Texas area, as well as an LPO in Tampa, Florida. For more information, visit investor.amerantbank.com.

FIS® and any associated brand names/logos are the trademarks of FIS and/or its affiliates.

Cautionary Notice Regarding Forward-Looking Statements

This press release contains “forward-looking statements” including statements with respect to the Company’s objectives, expectations and intentions and other statements that are not historical facts. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “point to,” “project,” “could,” “intend,” “target,” “goals,” “outlooks,” “modeled,” “dedicated,” “create,” and other similar words and expressions of the future.

Forward-looking statements, including those relating to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the Company’s actual results, performance, achievements, or financial condition to be materially different from future results, performance, achievements, or financial condition expressed or implied by such forward-looking statements. You should not rely on any forward-looking statements as predictions of future events. You should not expect us to update any forward-looking statements, except as required by law. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, together with those risks and uncertainties described in “Risk factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2022 filed on March 1, 2023 (the “Form 10-K”), our quarterly report on Form 10-Q for the quarter ended March 31, 2023 filed on May 2, 2023, and in our other filings with the U.S. Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website www.sec.gov.

Interim Financial Information

Unaudited financial information as of and for interim periods, including the three and six month periods ended June 30, 2023 and 2022 and the three months ended March 31, 2023 and December 31, 2022, may not reflect our results of operations for our fiscal year ending, or financial condition, as of December 31, 2023, or any other period of time or date.

As previously disclosed in the Form 10-K, the Company adopted the new guidance on accounting for current expected credit losses on financial instruments (“CECL”) effective as of January 1, 2022. Quarterly amounts previously reported on our quarterly reports on Form 10-Q for the periods ended March 31, 2022, June 30, 2022 and September 30, 2022 do not reflect the adoption of CECL. In the fourth quarter of 2022, the Company recorded a provision for credit losses totaling $20.9 million, including $11.1 million related to the retroactive effect of adopting CECL for all previous quarterly periods in the year ended December 31, 2022, including loan growth and changes to macro-economic conditions during the period. Quarterly amounts included in the Form 10-K and this earnings release and accompanying presentation reflect the impacts of the adoption of CECL on each interim period of 2022. See the Form 10-K for more details on the adoption of CECL.

The following table shows changes to previously-reported amounts for the quarter ended December 31, 2022 versus the corresponding amounts reflecting the adoption of CECL in 2022:

(in thousands, except per share amounts)As Reported As Recast Changes
Total interest income$113,374  $113,374  $ 
Total interest expense 31,196   31,196    
Net interest income 82,178   82,178    
Provision for credit losses 20,945   16,857   (4,088)
Net interest income after provision for credit losses 61,233   65,321   4,088 
Total noninterest income 24,365   24,365    
Total noninterest expense 62,241   62,241    
Income before income taxes 23,357   27,445   4,088 
Income tax expense (4,746)  (5,627)  (881)
Net income before attribution of noncontrolling interest 18,611   21,818   3,207 
Noncontrolling interest (155)  (155)   
Net income attributable to Amerant Bancorp Inc.$18,766  $21,973  $3,207 
Basic earnings per common share$0.56  $0.66  $0.10 
Diluted earnings per common share$0.55  $0.65  $0.10 
Cash dividends declared per common share$0.09  $0.09  $ 
            

Non-GAAP Financial Measures

The Company supplements its financial results that are determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”) with non-GAAP financial measures, such as “pre-provision net revenue (PPNR)”, “core pre-provision net revenue (Core PPNR)”, “core noninterest income”, “core noninterest expenses”, “core net income”, “core earnings per share (basic and diluted)”, “core return on assets (Core ROA)”, “core return on equity (Core ROE)”, “core efficiency ratio”, “tangible stockholders’ equity (book value) per common share”, “tangible common equity ratio, adjusted for unrealized losses on debt securities held to maturity”, and “tangible stockholders' equity (book value) per common share, adjusted for unrealized 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 2023, including the effect of non-core banking activities such as the sale of loans and securities 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, and other non-routine actions intended to improve customer service and operating performance. While we believe that these non-GAAP financial measures are useful in evaluating our performance, this information should be considered as supplemental and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ from similar measures presented by other companies.

Exhibit 2 reconciles these non-GAAP financial measures to reported results.

Exhibit 1- Selected Financial Information

The following table sets forth selected financial information derived from our interim unaudited and annual audited consolidated financial statements.

(in thousands)June 30,
2023
 March 31,
2023
 December 31,
2022
Consolidated Balance Sheets    (audited)
Total assets$9,519,526  $9,495,302  $9,127,804 
Total investments 1,315,303   1,347,697   1,366,680 
Total gross loans (1) 7,216,958   7,115,035   6,919,632 
Allowance for credit losses 105,956   84,361   83,500 
Total deposits 7,579,571   7,286,726   7,044,199 
Core deposits (2) 5,498,017   5,357,386   5,315,944 
Advances from the Federal Home Loan Bank 770,000   1,052,012   906,486 
Senior notes 59,368   59,289   59,210 
Subordinated notes 29,369   29,326   29,284 
Junior subordinated debentures 64,178   64,178   64,178 
Stockholders' equity (3)(4) 720,956   729,056   705,726 
Assets under management and custody (5) 2,147,465   2,107,603   1,995,666 


 Three Months Ended
(in thousands, except percentages, share data and per share amounts)June 30,
2023
 March 31,
2023
 December 31,
2022
Consolidated Results of Operations     
Net interest income$83,877  $82,333  $82,178 
Provision for credit losses (6) 29,077   11,700   16,857 
Noninterest income 26,619   19,343   24,365 
Noninterest expense 72,500   64,733   62,241 
Net income attributable to Amerant Bancorp Inc. (6) (7) 7,308   20,186   21,973 
Effective income tax rate (6) 21.00%   21.00%   20.50% 
      
Common Share Data      
Stockholders' book value per common share$21.37  $21.56  $20.87 
Tangible stockholders' equity (book value) per common share (8)$20.66  $20.84  $20.19 
Tangible stockholders' equity (book value) per common share, adjusted for unrealized losses on debt securities held to maturity (8)$20.11  $20.38  $19.65 
Basic earnings per common share (6)$0.22  $0.60  $0.66 
Diluted earnings per common share (6)(9)$0.22  $0.60  $0.65 
Basic weighted average shares outstanding 33,564,770   33,559,718   33,496,096 
Diluted weighted average shares outstanding (9) 33,717,702   33,855,994   33,813,593 
Cash dividend declared per common share (4)$0.09  $0.09  $0.09 


 Three Months Ended
 June 30,
2023
 March 31,
2023
 December 31,
2022
Other Financial and Operating Data (10)     
      
Profitability Indicators (%)     
Net interest income / Average total interest earning assets (NIM) (11)3.83%  3.90%  3.96% 
Net income / Average total assets (ROA) (6) (12)0.31%  0.88%  0.97% 
Net income / Average stockholders' equity (ROE) (6)(13)3.92%  11.15%  12.10% 
Noninterest income / Total revenue (14)24.09%  19.02%  22.87% 
      
Capital Indicators (%)     
Total capital ratio (15)12.41%  12.36%  12.39% 
Tier 1 capital ratio (16)10.79%  10.88%  10.89% 
Tier 1 leverage ratio (17)8.91%  9.04%  9.18% 
Common equity tier 1 capital ratio (CET1) (18)10.02%  10.10%  10.10% 
Tangible common equity ratio (19)7.34%  7.44%  7.50% 
Tangible common equity ratio, adjusted for unrealized losses on debt securities held to maturity (20)7.16%  7.29%  7.31% 
      
Liquidity Ratios (%)     
Loans to Deposits (21)95.22%  97.64%  98.23% 
      
Asset Quality Indicators (%)     
Non-performing assets / Total assets (22)0.71%  0.51%  0.41% 
Non-performing loans / Total gross loans (1) (23)0.65%  0.31%  0.54% 
Allowance for credit losses / Total non-performing loans (23)224.51%  380.31%  222.08% 
Allowance for credit losses / Total loans held for investment1.48%  1.20%  1.22% 
Net charge-offs / Average total loans held for investment (24)0.42%  0.64%  0.59% 
      
Efficiency Indicators (% except FTE)     
Noninterest expense / Average total assets3.06%  2.82%  2.75% 
Salaries and employee benefits / Average total assets1.45%  1.52%  1.45% 
Other operating expenses/ Average total assets (25)1.62%  1.30%  1.30% 
Efficiency ratio (26)65.61%  63.67%  58.42% 
Full-Time-Equivalent Employees (FTEs) (27)710  722  692 


 Three Months Ended
(in thousands, except percentages and per share amounts)June 30,
2023
 March 31,
2023
 December 31,
2022
Core Selected Consolidated Results of Operations and Other Data (8)      
      
Pre-provision net revenue (PPNR)$38,258  $37,187  $44,457 
Core pre-provision net revenue (Core PPNR)$39,196  $37,103  $37,838 
Core net income (6)$8,048  $20,120  $16,817 
Core basic earnings per common share (6) 0.24   0.60   0.50 
Core earnings per diluted common share (6) (9) 0.24   0.59   0.50 
Core net income / Average total assets (Core ROA) (6) (12) 0.34%   0.88%   0.74% 
Core net income / Average stockholders' equity (Core ROE) (6) (13) 4.32%   11.11%   9.26% 
Core efficiency ratio (28) 60.29%   62.47%   61.34% 

__________________
(1)   Total gross loans include loans held for investment net of unamortized deferred loan origination fees and costs, as well as mortgage loans held for sale carried at fair value. As of June 30, 2023, March 31, 2023 and December 31, 2022, mortgage loans held for sale carried at fair value totaled $49.9 million, $65.3 million and $62.4 million, respectively.
(2)   Core deposits consist of total deposits excluding all time deposits.
(3)   In the fourth quarter of 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 the second and first quarters of 2023, the Company repurchased an aggregate of 95,262 shares of Class A common stock and 22,403 shares of Class A common stock, respectively, at a weighted average price of $17.42 per share and $25.25 per share, respectively, under the 2023 Class A Common Stock Repurchase Program. In the second and first quarters of 2023, the aggregate purchase price for these transactions was approximately $1.7 million and $0.6 million, respectively, including transaction costs.        
(4)   For each of the second and first quarters of 2023 and the fourth quarter of 2022, the Company’s Board of Directors declared cash dividends of $0.09 per share of the Company’s common stock. The dividend declared in the second quarter of 2023 was paid on May 31, 2023 to shareholders of record at the close of business on May 15, 2023. The dividend declared in the first quarter of 2023 was paid on February 28, 2023 to shareholders of record at the close of business on February 13, 2023. The dividend declared in the fourth quarter of 2022 was paid on November 30, 2022 to shareholders of record at the close of business on November 15, 2022. For each of the second and first quarters of 2023 and the fourth quarter of 2022, the aggregate amount paid in connection with these dividends was $3.0 million.
(5)   Assets held for clients in an agency or fiduciary capacity which are not assets of the Company and therefore are not included in the consolidated financial statements.
(6)   As previously disclosed, the Company adopted CECL in the fourth quarter of 2022, effective as of January 1, 2022. See Form 10-K for more details on the CECL adoption and related effects to quarterly results for each quarter in the year ended December 31, 2022.
(7)   In the three months ended June 30, 2023, March 31, 2023, and December 31, 2022, net income exclude losses of $0.3 million, $0.2 million and $0.2 million, respectively, attributable to a 20% minority interest of Amerant Mortgage LLC.
(8)   This presentation contains adjusted financial information determined by methods other than GAAP. This adjusted financial information is reconciled to GAAP in Exhibit 2 - Non-GAAP Financial Measures Reconciliation.
(9)   In all the periods shown, potential dilutive instruments consisted of unvested shares of restricted stock, restricted stock units and performance stock units. 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 all the periods shown, 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.
(10)    Operating data for the periods presented have been annualized.
(11)    NIM is defined as NII divided by average interest-earning assets, which are loans, securities, deposits with banks and other financial assets which yield interest or similar income.
(12)   Calculated based upon the average daily balance of total assets.
(13)   Calculated based upon the average daily balance of stockholders’ equity.
(14)   Total revenue is the result of net interest income before provision for credit losses plus noninterest income.
(15)   Total stockholders’ equity divided by total risk-weighted assets, calculated according to the standardized regulatory capital ratio
calculations.
(16)   Tier 1 capital divided by total risk-weighted assets. Tier 1 capital is composed of Common Equity Tier 1 (CET1) capital plus outstanding qualifying trust preferred securities of $62.3 million at each of all the dates presented.
(17)   Tier 1 capital divided by quarter to date average assets.
(18)   CET1 capital divided by total risk-weighted assets.
(19)   Tangible common equity is calculated as the ratio of common equity less goodwill and other intangibles divided by total assets
less goodwill and other intangible assets. Other intangible assets primarily consist of mortgage servicing rights and are included in other assets in the Company’s consolidated balance sheets.
(20)   Calculated in the same manner described in footnote 19 but also includes unrealized losses on debt securities held to maturity in the balance of common equity and total assets.
(21)   Calculated as the ratio of total loans gross divided by total deposits.
(22)   Non-performing assets include all accruing loans past due by 90 days or more, all nonaccrual loans and other real estate owned (“OREO”) properties acquired through or in lieu of foreclosure, and other repossessed assets.
(23)   Non-performing loans include all accruing loans past due by 90 days or more and all nonaccrual loans
(24)   Calculated based upon the average daily balance of outstanding loan principal balance net of unamortized deferred loan origination fees and costs, excluding the allowance for credit losses. During the second and first quarters of 2023, and in the fourth quarter of 2022, there were net charge offs of $7.5 million, $10.8 million, and $9.8 million, respectively. During the second quarter of 2023, the Company charged-off $7.6 million related to multiple purchased indirect consumer loans and $1.5 million related to multiple commercial loans. During the first quarter of 2023, the Company charged-off $6.5 million in connection with a commercial loan relationship, $6.3 million related to multiple consumer loans and $1.5 million related to multiple commercial and real estate loans. During the fourth quarter of 2022, the Company charged-off $3.9 million related to a CRE loan, $5.5 million related to multiple consumer loans and $1.1 million related to multiple commercial loans.
(25)   Other operating expenses is the result of total noninterest expense less salary and employee benefits.
(26)   Efficiency ratio is the result of noninterest expense divided by the sum of noninterest income and NII.
(27)   As of June 30, 2023, March 31, 2023 and December 31, 2022, includes 93, 94 and 68 FTEs for Amerant Mortgage LLC, respectively.
(28)   Core efficiency ratio is the efficiency ratio less the effect of restructuring costs and other non-routine items, described in Exhibit 2 - Non-GAAP Financial Measures Reconciliation.


Exhibit 2- Non-GAAP Financial Measures Reconciliation

The following table sets forth selected financial information derived from the Company’s interim unaudited and annual audited consolidated financial statements, adjusted for certain costs incurred by the Company in the periods presented related to tax deductible restructuring costs, provision for (reversal of) credit losses, provision for income tax expense (benefit), the effect of non-core banking activities such as the sale of loans and securities 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 and other non-routine actions intended to improve customer service and operating performance. The Company believes these adjusted numbers are useful to understand the Company’s performance absent these transactions and events.

 Three Months Ended,
(in thousands)June 30, 2023 March 31, 2023 December 31, 2022
      
Net income attributable to Amerant Bancorp Inc. (1)$7,308  $20,186  $21,973 
Plus: provision for credit losses (1) 29,077   11,700   16,857 
Plus: provision for income tax expense (1) 1,873   5,301   5,627 
Pre-provision net revenue (PPNR) 38,258   37,187   44,457 
Plus: non-routine noninterest expense items 13,383   3,372   2,447 
Less: non-routine noninterest income items (12,445)  (3,456)  (9,066)
Core pre-provision net revenue (Core PPNR)$39,196  $37,103  $37,838 
      
Total noninterest income$26,619  $19,343  $24,365 
Less: Non-routine noninterest income items:     
Derivatives gains, net 242   14   1,040 
Securities losses, net (1,237)  (9,731)  (3,364)
Gains on early extinguishment of FHLB advances, net 13,440   13,173   11,390 
Total non-routine noninterest income items$12,445  $3,456  $9,066 
Core noninterest income$14,174  $15,887  $15,299 
      
Total noninterest expenses$72,500  $64,733  $62,241 
Less: non-routine noninterest expense items     
Restructuring costs (2):     
Staff reduction costs (3) 2,184   213   1,221 
Contract termination costs (4) 1,550       
Consulting and other professional fees (5) 2,060   2,690   1,226 
Disposition of fixed assets (6) 1,419       
Branch closure expenses and related charges (7) 1,558   469    
Total restructuring costs$8,771  $3,372  $2,447 
Other non-routine noninterest expense items:     
Loss on sale of repossessed assets (8) 2,649       
Impairment charge on investment carried at cost 1,963       
Total non-routine noninterest expense items$13,383  $3,372  $2,447 
Core noninterest expenses $59,117  $61,361  $59,794 
      
      
      
(in thousands, except percentages and per share amounts)June 30, 2023 March 31, 2023 December 31, 2022
    
Net income attributable to Amerant Bancorp Inc. (1)$7,308  $20,186  $21,973 
Plus after-tax non-routine items in noninterest expense:     
Non-routine items in noninterest expense before income tax effect 13,383   3,372   2,447 
Income tax effect (9) (2,811)  (708)  (460)
Total after-tax non-routine items in noninterest expense 10,572   2,664   1,987 
Less after-tax non-routine items in noninterest income:     
Non-routine items in noninterest income before income tax effect (12,445)  (3,456)  (9,066)
Income tax effect (9) 2,613   726   1,923 
Total after-tax non-routine items in noninterest income (9,832)  (2,730)  (7,143)
Core net income (1)$8,048  $20,120  $16,817 
      
Basic earnings per share (1)$0.22  $0.60  $0.66 
Plus: after tax impact of non-routine items in noninterest expense 0.31   0.08   0.06 
Less: after tax impact of non-routine items in noninterest income (0.29)  (0.08)  (0.22)
Total core basic earnings per common share (1)$0.24  $0.60  $0.50 
      
Diluted earnings per share (1) (10)$0.22  $0.60  $0.65 
Plus: after tax impact of non-routine items in noninterest expense 0.31   0.08   0.06 
Less: after tax impact of non-routine items in noninterest income (0.29)  (0.09)  (0.21)
Total core diluted earnings per common share (1)$0.24  $0.59  $0.50 
      
Net income / Average total assets (ROA) (1) 0.31%  0.88%  0.97%
Plus: after tax impact of non-routine items in noninterest expense 0.45%  0.12%  0.09%
Less: after tax impact of non-routine items in noninterest income(0.42)% (0.12)% (0.32)%
Core net income / Average total assets (Core ROA) (1) 0.34%  0.88%  0.74%
      
Net income / Average stockholders' equity (ROE) (1) 3.92%  11.15%  12.10%
Plus: after tax impact of non-routine items in noninterest expense 5.68%  1.47%  1.09%
Less: after tax impact of non-routine items in noninterest income(5.28)% (1.51)% (3.93)%
Core net income / Average stockholders' equity (Core ROE) (1) 4.32%  11.11%  9.26%
      
Efficiency ratio 65.61%  63.67%  58.42%
Less: impact of non-routine items in noninterest expense(12.11)% (3.32)% (2.30)%
Plus: impact of non-routine items in noninterest income 6.79%  2.12%  5.22%
Core efficiency ratio 60.29%  62.47%  61.34%


 Three Months Ended,
(in thousands, except percentages, share data and per share amounts)June 30, 2023 March 31, 2023 December 31, 2022
      
Stockholders' equity$720,956  $729,056  $705,726 
Less: goodwill and other intangibles (11) (24,124)  (24,292)  (23,161)
Tangible common stockholders' equity$696,832  $704,764  $682,565 
Total assets 9,519,526   9,495,302   9,127,804 
Less: goodwill and other intangibles (11) (24,124)  (24,292)  (23,161)
Tangible assets$9,495,402  $9,471,010  $9,104,643 
Common shares outstanding 33,736,159   33,814,260   33,815,161 
Tangible common equity ratio 7.34%  7.44%  7.50%
Stockholders' book value per common share$21.37  $21.56  $20.87 
Tangible stockholders' equity book value per common share$20.66  $20.84  $20.19 
      
      
Tangible common stockholders' equity$696,832  $704,764  $682,565 
Less: Net unrealized accumulated losses on debt securities held to maturity, net of tax (12) (18,503)  (15,542)  (18,234)
Tangible common stockholders' equity, adjusted for net unrealized accumulated losses on debt securities held to maturity$678,329  $689,222  $664,331 
Tangible assets$9,495,402  $9,471,010  $9,104,643 
Less: Net unrealized accumulated losses on debt securities held to maturity, net of tax (12) (18,503)  (15,542)  (18,234)
Tangible assets, adjusted for net unrealized accumulated losses on debt securities held to maturity$9,476,899  $9,455,468  $9,086,409 
Common shares outstanding 33,736,159   33,814,260   33,815,161 
      
Tangible common equity ratio, adjusted for net unrealized accumulated losses on debt securities held to maturity 7.16%  7.29%  7.31%
Tangible stockholders' book value per common share, adjusted for net unrealized accumulated losses on debt securities held to maturity$20.11  $20.38  $19.65 

____________
(1)   As previously disclosed, the Company adopted CECL in the fourth quarter of 2022, effective as of January 1, 2022. See Form 10-K for more details of the CECL adoption and related effects to quarterly results for each quarter in the year ended December 31, 2022.
(2)   Expenses 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, rolling out the Amerant brand, implementation of new technology system applications, decommissioning of legacy technologies, enhanced sales tools and training, expanded product offerings and improved customer analytics to identify opportunities.
(3)   Staff reduction costs in the three months ended June 30, 2023, March 31, 2023 and December 31, 2022 consist of severance expenses related to organizational rationalization.
(4)   Contract termination and related costs associated with third party vendors resulting from the Company’s engagement of FIS.
(5)   Includes expenses in connection with the engagement of FIS of $2.0 million, $2.6 million and $1.1 million in the three months ended June 30, 2023, March 31, 2023 and December 31, 2022, respectively.
(6)   Include expenses in connection with the disposition of fixed assets due to the write off of in-development software in the three months ended June 30, 2023.
(7)   In the three months ended June 30, 2023, consists of expenses associated with the decision to close a branch in Miami, Florida in 2023, including $0.9 million of accelerated amortization of leasehold improvements and $0.6 million of right-of-use, or ROU asset impairment. In the three months ended March 31, 2023, includes $0.5 million of ROU asset impairment associated with the closure of a branch in Houston, Texas in 2023.
(8)   In the three months ended June 30, 2023, amount represents the loss on sale of repossessed assets in connection with our equipment-financing activities.
(9)   In the three months ended March 31, 2023, amounts were calculated based upon the effective tax rate for the period of 21.00%. For all of the other periods shown, amounts represent the difference between the prior and current period year-to-date tax effect.

(10)   In the three months ended June 30, 2023, March 31, 2023 and December 31, 2022, potential dilutive instruments consisted of unvested shares of restricted stock, restricted stock units and performance stock units. In all the periods presented, potential dilutive instruments were included in the diluted earnings per share computation because, when the unamortized deferred compensation cost related to these shares was divided by the average market price per share in those periods, fewer shares would have been purchased than restricted shares assumed issued. Therefore, in those periods, such awards resulted in higher diluted weighted average shares outstanding than basic weighted average shares outstanding, and had a dilutive effect on per share earnings.
(11)   Other intangible assets primarily consist of mortgage servicing rights (“MSRs”) of $1.3 million, $1.4 million and $1.3 million at June 30, 2023, March 31, 2023 and December 31, 2022, respectively, and are included in other assets in the Company’s consolidated balance sheets.
(12)   In the three months ended June 30, 2023, March 31, 2023 and December 31, 2022, amounts were calculated based upon the fair value on debt securities held to maturity, and assuming a tax rate of 25.46%, 25.53% and 25.55%, respectively.


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

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

 Three Months Ended
 June 30, 2023 March 31, 2023 June 30, 2022
(in thousands, except percentages) Average
Balances
Income/
Expense
Yield/
Rates
 Average
Balances
Income/
Expense
Yield/
Rates
 Average
Balances
Income/
Expense
Yield/
Rates
Interest-earning assets:           
Loan portfolio, net (1)(2)$7,068,034 $119,5706.79% $6,901,352 $108,5016.38% $5,635,147 $61,5144.38%
Debt securities available for sale (3) (4) 1,041,039  10,3974.01%  1,058,831  10,1733.90%  1,113,994  7,6142.74%
Debt securities held to maturity (5) 236,297  1,9763.35%  240,627  2,1123.56%  177,483  9812.22%
Debt securities held for trading 262  34.59%  18  %  101  13.97%
Equity securities with readily determinable fair value not held for trading 27  %  4,886  %  12,407  %
Federal Reserve Bank and FHLB stock 52,917  8576.50%  57,803  1,0147.11%  49,476  5394.37%
Deposits with banks 379,123  5,6946.02%  302,791  3,3304.46%  224,751  5180.92%
Total interest-earning assets 8,777,699  138,4976.33%  8,566,308  125,1305.92%  7,213,359  71,1673.96%
Total non-interest-earning assets (6) 710,404     739,522     635,871   
Total assets$9,488,103    $9,305,830    $7,849,230   
            


 Three Months Ended
 June 30, 2023 March 31, 2023 June 30, 2022
(in thousands, except percentages) Average
Balances
Income/
Expense
Yield/
Rates
 Average
Balances
Income/
Expense
Yield/
Rates
 Average
Balances
Income/
Expense
Yield/
Rates
Interest-bearing liabilities:           
Checking and saving accounts           
Interest bearing DDA$2,641,746 $16,6782.53% $2,342,620 $12,8552.23% $1,654,232 $1,0340.25%
Money market 1,169,047  9,4013.23%  1,333,465  7,8812.40%  1,262,566  1,3510.43%
Savings 287,493  360.05%  299,501  460.06%  318,967  140.02%
Total checking and saving accounts 4,098,286  26,1152.56%  3,975,586  20,7822.12%  3,235,765  2,3990.30%
Time deposits 2,045,747  18,5283.63%  1,767,603  12,8342.94%  1,256,112  4,5031.44%
Total deposits 6,144,033  44,6432.91%  5,743,189  33,6162.37%  4,491,877  6,9020.62%
Securities sold under agreements to repurchase 60  16.68%    %  60  %
Advances from the FHLB (7) 828,301  7,6213.69%  959,392  6,7632.86%  867,573  3,3411.54%
Senior notes 59,330  9416.36%  59,250  9426.45%  59,013  9426.40%
Subordinated notes 29,348  3624.95%  29,306  3615.00%  29,178  3614.96%
Junior subordinated debentures 64,178  1,0526.57%  64,178  1,1157.05%  64,178  6764.22%
Total interest-bearing liabilities 7,125,250  54,6203.07%  6,855,315  42,7972.53%  5,511,879  12,2220.89%
Non-interest-bearing liabilities:           
Non-interest bearing demand deposits 1,332,189     1,377,966     1,309,520   
Accounts payable, accrued liabilities and other liabilities 283,653     338,351     283,721   
Total non-interest-bearing liabilities 1,615,842     1,716,317     1,593,241   
Total liabilities 8,741,092     8,571,632     7,105,120   
Stockholders’ equity 747,011     734,198     744,110   
Total liabilities and stockholders' equity$9,488,103    $9,305,830    $7,849,230   
Excess of average interest-earning assets over average interest-bearing liabilities$1,652,449    $1,710,993    $1,701,480   
Net interest income $83,877   $82,333   $58,945 
Net interest rate spread  3.26%   3.39%   3.07%
Net interest margin (8)  3.83%   3.90%   3.28%
Cost of total deposits (9)  2.40%   1.91%   0.48%
Ratio of average interest-earning assets to average interest-bearing liabilities 123.19%    124.96%    130.87%  
Average non-performing loans/ Average total loans 0.54%    0.46%    0.56%  


 Six Months Ended
 June 30, 2023 June 30, 2022
(in thousands, except percentages) Average
Balances
Income/
Expense
Yield/
Rates
 Average
Balances
Income/
Expense
Yield/
Rates
Interest-earning assets:       
Loan portfolio, net (1)(2)$6,985,153 $228,0716.58% $5,564,362 $117,8524.27%
Debt securities available for sale (3)(4) 1,049,886  20,5683.95%  1,142,087  14,9922.65%
Debt securities held to maturity (5) 238,450  4,0883.46%  146,243  1,6842.32%
Debt securities held for trading 141  45.72%  68  25.93%
Equity securities with readily determinable fair value not held for trading 2,443  %  6,885  %
Federal Reserve Bank and FHLB stock 55,346  1,8726.82%  50,485  1,0854.33%
Deposits with banks 341,168  9,0245.33%  241,893  6500.54%
Total interest-earning assets (6) 8,672,587  263,6276.13%  7,152,023  136,2653.84%
Total non-interest-earning assets less allowance for loan losses 725,675     626,501   
Total assets$9,398,262    $7,778,524   
        
Interest-bearing liabilities:       
Checking and saving accounts -       
Interest bearing DDA$2,493,009 $29,5332.39% $1,605,626 $1,3240.17%
Money market 1,250,801  17,2812.79%  1,257,955  2,0840.33%
Savings 293,464  830.06%  322,027  260.02%
Total checking and saving accounts 4,037,274  46,8972.34%  3,185,608  3,4340.22%
Time deposits 1,907,443  31,3623.32%  1,275,587  8,7841.39%
Total deposits 5,944,717  78,2592.65%  4,461,195  12,2180.55%
Securities sold under agreements to repurchase 30  16.72%  30  %
Advances from the FHLB (7) 893,484  14,3843.25%  892,170  5,8221.32%
Senior notes 59,290  1,8836.40%  58,974  1,8846.44%
Subordinated notes 29,327  7234.97%  18,375  4494.93%
Junior subordinated debentures 64,178  2,1676.81%  64,178  1,3024.09%
Total interest-bearing liabilities 6,991,026  97,4172.81%  5,494,922  21,6750.80%
Non-interest-bearing liabilities:       
Non-interest bearing demand deposits 1,354,951     1,254,948   
Accounts payable, accrued liabilities and other liabilities 310,716     257,559   
Total non-interest-bearing liabilities 1,665,667     1,512,507   
Total liabilities 8,656,693     7,007,429   
Stockholders’ equity 741,569     771,095   
Total liabilities and stockholders' equity$9,398,262    $7,778,524   
Excess of average interest-earning assets over average interest-bearing liabilities$1,681,561    $1,657,101   
Net interest income $166,210   $114,590 
Net interest rate spread  3.32%   3.04%
Net interest margin (8)  3.86%   3.23%
Cost of total deposits (9)  2.16%   0.43%
Ratio of average interest-earning assets to average interest-bearing liabilities 124.05%    130.16%  
Average non-performing loans/ Average total loans 0.50%    0.63%  

___________
(1)   Includes loans held for investment net of the allowance for credit losses, and mortgage loans held for sale carried at fair value. The average balance of the allowance for credit losses was $84.6 million, $81.4 million and $55.9 million in the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and $83.0 million and $61.7 million in the six months ended June 30, 2023 and June 30, 2022, respectively. The average balance of mortgage loans held for sale carried at fair value was $85.1 million, $66.4 million and $112.2 million in the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and $75.8 million and $123.6 million in the six months ended June 30, 2023 and June 30, 2022, respectively.
(2)   Includes average non-performing loans of $38.5 million, $31.8 million and $32.7 million for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, $35.2 million and $36.0 million in the six months ended June 30, 2023 and June 30, 2022, 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 unrealized net losses of $106.7 million, $104.9 million and $58.0 million in the three months ended June 30, 2023, March 31, 2023, and June 30, 2022, respectively, and average unrealized net losses of $105.8 million and $28.0 million in the six months ended June 30, 2023 and 2022, respectively.
(4)   Includes nontaxable securities with average balances of $19.5 million, $19.7 million and $14.8 million for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and $19.4 million and $15.7 million in the six months ended June 30, 2023 and June 30, 2022, respectively. The tax equivalent yield for these nontaxable securities was 4.53%, 4.56% and 2.97% for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and 4.59% and 2.85% in the six months ended June 30, 2023 and June 30, 2022. In 2023 and 2022, the tax equivalent yields were calculated assuming a 21% tax rate and dividing the actual yield by 0.79.
(5)   Includes nontaxable securities with average balances of $50.1 million, $50.7 million and $42.7 million for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and $50.4 million and $43.4 million in the six months ended June 30, 2023 and June 30, 2022, respectively. The tax equivalent yield for these nontaxable securities was 4.16%, 4.20% and 3.31% for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and 4.18% and 3.22% in the six months ended June 30, 2023 and June 30, 2022. In 2023 and 2022, the tax equivalent yields were 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 FHLB advance agreements require the Bank to maintain certain investment securities or loans as collateral for these advances.
(8)   NIM is defined as net interest income divided by average interest-earning assets, which are loans, securities, deposits with banks and other financial assets which yield interest or similar income.
(9)   Calculated based upon the average balance of total noninterest bearing and interest bearing deposits.


Exhibit 4 - Noninterest Income

This table shows the amounts of each of the categories of noninterest income for the periods presented.

 Three Months Ended  Six Months Ended June 30,
 June 30, 2023 March 31, 2023 June 30, 2022  2023   2022 
(in thousands, except percentages)Amount %  Amount %  Amount% Amount% Amount%
        
Deposits and service fees$4,944 18.6% $4,955 25.6% $4,577 35.4%  9,899 21.5% $9,197 34.1%
Brokerage, advisory and fiduciary activities 4,256 16.0%  4,182 21.6%  4,439 34.3%  8,438 18.4%  9,035 33.5%
Change in cash surrender value of bank owned life insurance (“BOLI”)(1) 1,429 5.4%  1,412 7.3%  1,334 10.3%  2,841 6.2%  2,676 9.9%
Cards and trade finance servicing fees 562 2.1%  533 2.8%  508 3.9%  1,095 2.4%  1,098 4.1%
Gain (loss) on early extinguishment of FHLB advances, net 13,440 50.5%  13,173 68.1%  2 %  26,613 57.9%  (712)(2.6)%
Securities losses, net (2) (1,237)(4.7)%  (9,731)(50.3)%  (2,602)(20.1)%  (10,968)(23.9)%  (1,833)(6.8)%
Loan-level derivative income (3) 476 1.8%  2,071 10.7%  1,009 7.8%  2,547 5.5%  4,161 15.4%
Derivative gains (losses), net (4) 242 0.9%  14 0.1%  855 6.6%  256 0.6%  (490)(1.8)%
Other noninterest income (5) 2,507 9.4%  2,734 14.1%  2,809 21.8%  5,241 11.4%  3,824 14.2%
Total noninterest income$26,619 100.0% $19,343 100.0% $12,931 100.0% $45,962 100.0% $26,956 100.0%

__________________
(1)   Changes in cash surrender value of BOLI are not taxable.
(2)   Includes net loss on sale of debt securities available for sale of $1.2 million and $9.5 million in the three months ended June 30, 2023 and March 31, 2023, respectively, and net loss and gain on the sale of debt securities available for sale of $10.8 million and $49 thousand in the six months ended June 30, 2023 and 2022, respectively. There were no gains or losses on the sale of debt securities available for sale in the three months ended June 30, 2022. In addition, includes unrealized losses of $2.6 million and $1.9 million in the three and six month periods ended June 30, 2022, respectively, related to the change in fair value of equity securities with readily available fair value not held for trading which are recorded in results of the period. There were no significant unrealized losses related to equity securities with readily available fair value not held for trading in the three and six month periods ended June 30, 2023. Also, in the three months ended March 31, 2023, the Company sold all of 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.
(3)   Income from interest rate swaps and other derivative transactions with customers. The Company incurred expenses related to derivative transactions with customers of $0.1 million, $1.6 million and $2.0 million in the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and $1.7 million and $3.1 million in the six months ended June 30, 2023 and 2022, respectively, which are included as part of noninterest expenses under loan-level derivative expense.
(4)   Net unrealized gains and losses related to uncovered interest rate caps with clients.
(5)   Includes mortgage banking income of $1.6 million, $1.8 million and $2.4 million in the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and $3.4 million and $3.1 million in the six months ended June 30, 2023 and 2022, respectively, related to Amerant Mortgage. Other sources of income in the periods shown include foreign currency exchange transactions with customers and valuation income on the investment balances held in the non-qualified deferred compensation plan.


Exhibit 5 - Noninterest Expense

This table shows the amounts of each of the categories of noninterest expense for the periods presented.

 Three Months Ended Six Months Ended June 30,
 June 30, 2023 March 31, 2023 June 30, 2022  2023   2022 
(in thousands, except percentages)Amount %  Amount %  Amount %  Amount% Amount%
        
Salaries and employee benefits (1)$34,247 47.2% $34,876 53.9% $30,212 48.5% $69,123 50.4% $60,615 49.3%
Occupancy and equipment (2) 6,737 9.3%  6,798 10.5%  7,760 12.5%  13,535 9.9%  14,485 11.8%
Professional and other services fees (3) 7,415 10.2%  7,628 11.8%  4,734 7.6%  15,043 11.0%  10,873 8.8%
Loan-level derivative expense (4) 110 0.2%  1,600 2.5%  2,012 3.2%  1,710 1.3%  3,055 2.5%
Telecommunications and data processing (5) 5,027 6.9%  3,064 4.7%  3,214 5.2%  8,091 5.9%  7,252 5.9%
Depreciation and amortization (6) 2,275 3.1%  1,292 2.0%  1,294 2.1%  3,567 2.6%  2,446 2.0%
FDIC assessments and insurance 2,739 3.8%  2,737 4.2%  1,526 2.5%  5,476 4.0%  2,922 2.4%
Loans held for sale valuation expense (reversal) (7)  %   %  (300)(0.5)%   %  159 0.1%
Advertising expenses 4,332 6.0%  2,586 4.0%  3,253 5.2%  6,918 5.0%  6,225 5.1%
Other real estate owned and repossessed assets expense, net (8)(9) 2,431 3.4%   %  3,174 5.1%  2,431 1.8%  3,174 2.6%
Contract termination costs (10) 1,550 2.1%   %  2,802 4.5%  1,550 1.1%  6,814 5.5%
Other operating expenses (11) 5,637 7.8%  4,152 6.4%  2,560 4.1%  9,789 7.0%  5,039 4.0%
Total noninterest expense (12)$72,500 100.0% $64,733 100.0% $62,241 100.0% $137,233 100.0% $123,059 100.0%

___
(1)   Includes staff reduction costs of $2.2 million, $0.2 million and $0.7 million in the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and $2.4 million and $1.4 million in the six months ended June 30, 2023 and 2022, respectively, which consist of severance expenses primarily related to organizational rationalization.
(2)   In the three months ended June 30, 2023, includes $0.6 million related to ROU asset impairment in connection with the decision to close a branch in Miami, Florida in 2023. In the three months ended March 31, 2023, includes $0.5 million related to ROU asset impairment in connection with the closure of a branch in Houston, Texas in 2023. In each of the three and six month periods ended June 30, 2022, includes ROU asset impairment changes of $1.6 million in connection with the closure of a branch in Pembroke Pines, Florida in 2022.
(3)   Includes additional expenses of $2.0 million and $2.6 million in the three months ended June 30, 2023 and March 31, 2023, respectively, and $4.6 million and $0.8 million in the six months ended June 30, 2023 and 2022, respectively, related to the engagement of FIS. There were no additional expenses related to the engagement of FIS in the three months ended June 30, 2022.
(4)   Includes services fees in connection with our loan-level derivative income generation activities.
(5)   Includes a charge of $1.4 million in each of the three and six month periods ended June 30, 2023 related to the disposition of fixed assets due to the write off of in-development software.
(6)   Includes a charge of $0.9 million in each of the three and six month periods ended June 30, 2023 for the accelerated depreciation of leasehold improvements in connection with decision to close a branch in Miami, Florida in 2023.
(7)   Valuation allowance as a result of changes in the fair value of loans held for sale carried at the lower of cost or fair value.
(8)   In each of the three and six month periods ended June 30, 2023, includes a loss on sale of repossessed assets in connection with our equipment-financing activities of $2.6 million. In each of the the three and six month periods ended June 30, 2022, includes $3.2 million related to the fair value adjustment of one OREO property in New York. In addition, in each of the three and six month periods ended June 30, 2023, includes OREO rental income of $0.4 million. We had no OREO rental income in the three months ended March 31, 2023 and June 30, 2022 and in the six months ended June 30, 2022.
(9)   In the three months ended June 30, 2023, other real estate owned (“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 termination and related costs associated with third party vendors resulting from the Company’s transition to our new technology provider.
(11)   In each of the three and six month periods ended June 30, 2023, includes an impairment charge of $2.0 million related to an investment carried at cost and included in other assets. In addition, in all of the periods shown, includes charitable contributions, community engagement, postage and courier expenses and debits which mirror the valuation income on the investment balances held in the non-qualified deferred compensation plan in order to adjust the liability to participants of the deferred compensation plan.
(12)   Includes $4.0 million, $3.9 million and $3.7 million in the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and $7.9 million and $7.1 million in the six months ended June 30, 2023 and 2022, respectively, related to Amerant Mortgage, primarily consisting of salaries and employee benefits, mortgage lending costs and professional and other services fees.


Exhibit 6 - Consolidated Balance Sheets

(in thousands, except share data)June 30, 2023 March 31, 2023 December 31, 2022
Assets    (audited)
Cash and due from banks$45,184  $41,489  $19,486 
Interest earning deposits with banks 365,673   411,747   228,955 
Restricted cash 34,204   32,541   42,160 
Cash and cash equivalents 445,061   485,777   290,601 
Securities     
Debt securities available for sale, at fair value 1,027,676   1,045,883   1,057,621 
Debt securities held to maturity, at amortized cost (estimated fair value of 209,546, 218,388 and 217,609 at June 30, 2023, March 31, 2023 and December 31, 2022, respectively) 234,369   239,258   242,101 
Trading securities 298       
Equity securities with readily determinable fair value not held for trading 2,500      11,383 
Federal Reserve Bank and Federal Home Loan Bank stock 50,460   62,556   55,575 
Securities 1,315,303   1,347,697   1,366,680 
Mortgage loans held for sale, at fair value 49,942   65,289   62,438 
Loans held for investment, gross 7,167,016   7,049,746   6,857,194 
Less: Allowance for credit losses 105,956   84,361   83,500 
Loans held for investment, net 7,061,060   6,965,385   6,773,694 
Bank owned life insurance 231,253   229,824   228,412 
Premises and equipment, net 43,714   42,380   41,772 
Deferred tax assets, net 56,779   46,112   48,703 
Operating lease right-of-use assets 116,161   119,503   139,987 
Goodwill 20,525   20,525   19,506 
Accrued interest receivable and other assets (1) 179,728   172,810   156,011 
Total assets$9,519,526  $9,495,302  $9,127,804 
Liabilities and Stockholders' Equity     
Deposits     
Demand     
Noninterest bearing$1,293,522  $1,360,626  $1,367,664 
Interest bearing 2,773,120   2,489,565   2,300,469 
Savings and money market 1,431,375   1,507,195   1,647,811 
Time 2,081,554   1,929,340   1,728,255 
Total deposits 7,579,571   7,286,726   7,044,199 
Advances from the Federal Home Loan Bank 770,000   1,052,012   906,486 
Senior notes 59,368   59,289   59,210 
Subordinated notes 29,369   29,326   29,284 
Junior subordinated debentures held by trust subsidiaries 64,178   64,178   64,178 
Operating lease liabilities (2) 119,921   122,214   140,147 
Accounts payable, accrued liabilities and other liabilities (3) 176,163   152,501   178,574 
Total liabilities 8,798,570   8,766,246   8,422,078 
      
Stockholders’ equity     
Class A common stock 3,374   3,383   3,382 
Additional paid in capital 195,275   194,782   194,694 
Retained earnings 611,829   607,544   590,375 
Accumulated other comprehensive loss (86,926)  (74,319)  (80,635)
Total stockholders' equity before noncontrolling interest 723,552   731,390   707,816 
Noncontrolling interest (2,596)  (2,334)  (2,090)
Total stockholders' equity 720,956   729,056   705,726 
Total liabilities and stockholders' equity$9,519,526  $9,495,302  $9,127,804 

__________
(1)   As of June 30, 2023, March 31, 2023 and December 31, 2022, include derivative assets with a total fair value of $75.8 million, $60.8 million and $78.3 million, respectively.
(2)   Consists of total long-term lease liabilities. Total short-term lease liabilities are included in other liabilities.
(3)   As of June 30, 2023, March 31, 2023 and December 31, 2022, include derivatives liabilities with a total fair value of $74.5 million, $59.5 million and $77.2 million, respectively.


Exhibit 7 - Loans
Loans by Type - Held For Investment

The loan portfolio held for investment consists of the following loan classes:

(in thousands)June 30,
2023
 March 31,
2023
 December 31,
2022
Real estate loans     
Commercial real estate     
Non-owner occupied$1,645,224  $1,630,451  $1,615,716 
Multi-family residential 764,712   796,125   820,023 
Land development and construction loans 314,010   303,268   273,174 
  2,723,946   2,729,844   2,708,913 
Single-family residential 1,285,857   1,189,045   1,102,845 
Owner occupied 1,063,240   1,069,491   1,046,450 
  5,073,043   4,988,380   4,858,208 
Commercial loans (1) 1,577,209   1,497,649   1,381,234 
Loans to financial institutions and acceptances 13,332   13,312   13,292 
Consumer loans and overdrafts (2) 503,432   550,405   604,460 
Total loans$7,167,016  $7,049,746  $6,857,194 

__________________
(1)   As of June 30, 2023, March 31, 2023 and December 31, 2022, includes approximately $47.7 million, $46.7 million and $45.3 million, respectively, in commercial loans and leases originated under a white-label equipment financing solution launched in the second quarter of 2022.
(2)   As of June 30, 2023, March 31, 2023 and December 31, 2022, includes $312.3 million, $372.2 million and $433.3 million, respectively, in consumer loans purchased under indirect lending programs. In addition, as of June 30, 2023, March 31, 2023 and December 31, 2022, includes $61.8 million, $62.1 million and $43.8 million, respectively, in consumer loans originated under a white-label program.


Loans by Type - Held For Sale

The loan portfolio held for sale consists of the following loan classes:

(in thousands)June 30,
2023
 March 31,
2023
 December 31,
2023
     (audited)
Loans held for sale at fair value     
Land development and construction loans (1) 3,726   15,527   9,424 
Single-family residential (2) 46,216   49,762   53,014 
Total loans held for sale at fair value (3)(4)$49,942  $65,289  $62,438 

__________________
(1)   In the second quarter of 2023, the Company transferred approximately $13 million in land development and construction loans held for sale to the loans held for investment category.
(2)   In the second quarter of 2023, the Company transferred approximately $28 million in single-family residential loans held for sale to the loans held for investment category.
(3)   Loans held for sale in connection with Amerant Mortgage ongoing business.
(4)   Remained current and in accrual status at each of the periods shown.


Non-Performing Assets

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

(in thousands)June 30,
2023
 March 31,
2023
 December 31,
2022
Non-Accrual Loans(1)    (audited)
Real Estate Loans     
Commercial real estate (CRE)     
Non-owner occupied$1,696  $  $20,057 
Multi-family residential 24,306       
  26,002      20,057 
Single-family residential 1,681   1,367   1,526 
Owner occupied 6,890   7,118   6,270 
  34,573   8,485   27,853 
Commercial loans (2) 12,241   13,643   9,271 
Consumer loans and overdrafts (3) 1   1   4 
Total Non-Accrual Loans$46,815  $22,129  $37,128 
      
Past Due Accruing Loans(4)     
Real Estate Loans     
Commercial real estate (CRE)     
Single-family residential 302      253 
Commercial       183 
Consumer loans and overdrafts 78   53   35 
Total Past Due Accruing Loans$380  $53  $471 
Total Non-Performing Loans 47,195   22,182   37,599 
OREO and other repossessed assets 20,181   26,534    
Total Non-Performing Assets$67,376  $48,716  $37,599 

__________________
(1)   Prior to the first quarter of 2023, included loan modifications that met the definition of troubled debt restructurings, or TDR, which may be performing in accordance with their modified loan terms.
(2)   In the second quarter of 2023, we collected $2.8 million in full satisfaction of a commercial loan relationship in nonaccrual status and classified as Substandard at March 31, 2023.
(3)   In the fourth quarter of 2022, the Company changed its charge-off policy for unsecured consumer loans from 120 to 90 days past due. This change resulted in an additional $3.4 million in charge-offs for unsecured consumer loans in the fourth quarter of 2022.
(4)   Loans past due 90 days or more but still accruing.


Loans by Credit Quality Indicators

This table shows the Company’s loans by credit quality indicators. The Company has not purchased credit-impaired loans.

 June 30, 2023 March 31, 2023 December 31, 2022
        (audited)
(in thousands)Special
Mention
Sub-
standard
DoubtfulTotal (1) Special
Mention
Sub-
standard
DoubtfulTotal (1) Special
Mention
Sub-
standard
DoubtfulTotal (1)
Real Estate Loans              
Commercial Real
Estate (CRE)
              
Non-owner
occupied
$8,301$1,753$$10,054 $8,335$$$8,335 $8,378$20,113$$28,491
Multi-family residential  24,306  24,306  24,348   24,348     
Land development
and
construction
loans
 6,497   6,497          
  14,798 26,059  40,857  32,683   32,683  8,378 20,113  28,491
Single-family residential  2,154  2,154   1,514  1,514   1,930  1,930
Owner occupied 2,236 6,972  9,208   7,202  7,202   6,356  6,356
  17,034 35,185  52,219  32,683 8,716  41,399  8,378 28,399  36,777
Commercial loans (2) 13,029 13,312 3 26,344  3,240 14,891 3 18,134  1,749 10,446 3 12,198
Consumer loans and
overdrafts
  70  70   1  1   230  230
Totals$30,063$48,567$3$78,633 $35,923$23,608$3$59,534 $10,127$39,075$3$49,205

__________
(1)   There were no loans categorized as “loss” as of the dates presented.
(2)   In the second quarter of 2023, we collected $2.8 million in full satisfaction of a commercial loan relationship in nonaccrual status and classified as Substandard at March 31, 2023.


Exhibit 8 - Deposits by Country of Domicile

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

(in thousands)June 30, 2023 March 31, 2023 December 31, 2022
     (audited)
Domestic$5,113,604  $4,891,873  $4,620,906 
Foreign:     
Venezuela 1,912,994   1,897,199   1,911,551 
Others 552,973   497,654   511,742 
Total foreign 2,465,967   2,394,853   2,423,293 
Total deposits$7,579,571  $7,286,726  $7,044,199 


CONTACTS:
Investors
Laura Rossi
InvestorRelations@amerantbank.com
(305) 460-8728
 
Media
Victoria Verdeja
MediaRelations@amerantbank.com
(305) 441-5541

 


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