Amerant Bancorp Earnings Call Highlights Turnaround Push

Amerant Bancorp Inc. Class A ((AMTB)) has held its Q1 earnings call. Read on for the main highlights of the call.

Amerant Bancorp’s latest earnings call struck a cautiously optimistic tone, as management showcased sharp cost cuts, better profitability and solid deposit momentum, even while acknowledging pressure from lower net interest income and elevated credit costs. Executives framed ongoing credit cleanup and balance sheet rebalancing as short-term drags that should position the bank for healthier, more stable returns ahead.

Substantial Expense Cuts Sharpen Cost Base

Amerant reported noninterest expenses of $66.9 million, a steep 37.3% drop from $106.8 million in the prior quarter, reflecting aggressive cost management. Management highlighted roughly $30 million of annualized savings identified for 2026, including $3.3 million from vendor renegotiations, and signaled a sustainable quarterly expense run-rate near $68 million.

Profitability Metrics Rebound Strongly

Pretax pre-provision net revenue surged to $30.7 million from $5.4 million, a roughly 469% jump that underscored the earnings power unlocked by lower expenses. Diluted EPS improved to $0.44 from $0.07, while ROA rose to 0.73% and ROE to 7.63%, and the efficiency ratio improved sharply to 68.52% from 95.19%.

Deposit Growth and International Momentum

Total deposits reached $7.9 billion, rising $152.2 million, or 2% quarter over quarter, with management citing total first-quarter deposit growth of $188 million. A key contributor was Venezuela, where deposits added $95 million, including $66 million in March alone, and came at a relatively low funding cost, with international deposits averaging roughly 1.15% to 1.30% and Venezuelan inflows sub-1%.

Deploying Excess Cash into Higher-Yielding Securities

Amerant continued to reallocate its balance sheet by moving excess liquidity into securities, reducing cash and equivalents to $188.7 million, down $281.5 million. Investment securities climbed to $2.4 billion, up $346.3 million quarter over quarter, as management sought to lock in higher yields and improve long-term earning asset mix.

Capital Strength and Ongoing Shareholder Returns

The bank’s capital position remained solid, with CET1 at 11.84% versus 11.80% previously, giving room to support growth and capital returns. Amerant repurchased 859,493 shares at an average price of $21.77, totaling about $18.7 million, while maintaining a $0.09 per-share quarterly dividend and leaving around $21 million of buyback capacity slated for completion by the end of the second quarter.

Loan Growth Modest but Poised to Accelerate

Gross loans increased to $6.8 billion, a 0.8% quarter-over-quarter rise of $56.5 million, reflecting still-muted but positive growth. Management expects loans to reach roughly $7.0 billion in the second quarter and is targeting annualized loan growth of about 7% for 2026, supported by anticipated deposit expansion.

Tighter Portfolio Oversight and Credit Controls

Amerant outlined a more rigorous credit governance framework led by a new portfolio management team, lowering the threshold for detailed review from $5 million to $3 million, with plans to include all exposures above $1 million. The bank also instituted quarterly reviews of its top 20 borrowers and aligned banker incentives more closely with asset quality, aiming to speed up problem loan identification and resolution.

Reducing Special Mention and Criticized Balances

The bank reported meaningful progress in trimming criticized credits, with payoffs of $59.5 million and loan sales of $65.7 million during the quarter. Special mention loans fell to $117.3 million, aided by a $30.9 million commercial real estate sale, and are projected to decline further to $88.3 million following an additional $29 million exit anticipated in the near term.

Net Interest Income and Margin Under Pressure

Despite structural improvements, revenue faced headwinds as net interest income slipped to $80.3 million, down $9.9 million, or about 11% from the prior quarter. Net interest margin compressed to 3.55% from 3.78%, a 23-basis-point decline tied to the full-quarter impact of earlier rate cuts and the near-term drag from shifting the balance sheet toward different asset classes.

Provisioning Rises as Credit Costs Normalize

Provision for credit losses climbed to $7.8 million from $3.5 million, reflecting management’s more conservative stance as it works through legacy credits. The increase was driven by $6.3 million of additional reserves for charge-offs, a $1.7 million net rise in specific reserves and $2.6 million tied to credit quality and macroeconomic factors, partially offset by a $2.9 million reserve release linked to loan volume changes.

Nonperforming Loans and Charge-offs Edge Higher

Nonperforming loans increased by $4.7 million, or 2.7%, to $176.1 million, representing 1.78% of total assets, underscoring the ongoing credit clean-up. Gross charge-offs totaled $9.1 million, including a $4.4 million hit related to a commercial loan participation, though recoveries of $1.9 million provided some offset.

Noninterest Income Falls Without One-Time Gains

Noninterest income declined to $17.4 million, a 20.9% drop from $22.0 million, as the company lapped prior-quarter sale-and-leaseback gains and realized fewer securities gains. This quarter’s securities gains were just $516,000, highlighting a more normalized, less one-time-driven contribution from fee and other noninterest sources.

Portfolio Rebalancing and Lower Yields on New Production

Management acknowledged that exiting criticized loans, elevated prepayments and tightening risk appetite have weighed on near-term earnings by reducing yields on new originations. New loans often arrive at spreads around 200 basis points over SOFR, contributing to softer net interest income and margin as the bank reshapes its book toward safer, albeit lower-yielding, assets.

Allowance Slightly Higher Amid Ongoing De-risking

The allowance for credit losses ratio ticked up modestly to 1.21% from 1.20%, signaling a cautious but controlled approach to reserve building. Management noted that about $130 million of available-for-sale loans remain to be addressed, and further exits and portfolio adjustments could keep credit metrics volatile in the near term as the de-risking effort continues.

Guidance Points to Steady Growth and Margin Stabilization

Looking ahead, Amerant expects second-quarter loan balances around $7.0 billion and full-year 2026 annualized loan growth of about 7%, with deposits projected to hit about $8.0 billion in the second quarter and grow 8% to 10% over the year, aided by continued Venezuelan inflows. Management is targeting a net interest margin of 3.4% to 3.5% in the second quarter, stabilizing near 3.4% by year-end, noninterest expenses of roughly $68 to $69 million with a sustainable $68 million run-rate, an efficiency ratio around 60%, charge-offs of 30 to 35 basis points and ongoing capital returns via the existing quarterly dividend and completion of the remaining share repurchase authorization.

Amerant’s earnings call painted a picture of a bank in active transition, trading some near-term revenue and credit volatility for a leaner cost base and cleaner balance sheet. For investors, the combination of improving profitability metrics, robust capital levels and continued shareholder payouts suggests a constructive outlook, provided management executes on loan growth plans and keeps credit issues contained as the de-risking cycle matures.