Amerant Bancorp Inc. Class A ((AMTB)) has held its Q2 earnings call. Read on for the main highlights of the call.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Amerant Bancorp Inc. recently held its earnings call, revealing a generally positive outlook for the company. The call highlighted improved net interest margins, significant deposit growth, and a reduction in nonperforming loans. However, challenges such as loan growth difficulties, increased classified and special mention loans, and higher non-core expenses were also discussed.
Improved Net Interest Margin and Revenue
Amerant Bancorp reported a net interest margin (NIM) of 3.81%, surpassing projections, largely due to the recovery of interest on commercial loans. The net interest income stood at $90.5 million, marking an increase of $4.6 million, showcasing the company’s effective interest management strategies.
Deposit Growth
The company experienced a robust growth in customer deposits, which increased by $202.3 million. Total deposits rose by $151.6 million to reach $8.3 billion, driven primarily by the growth in core deposits, indicating strong customer confidence and engagement.
Nonperforming Loans Decrease
There was a significant net decrease of $41 million in nonperforming loans, attributed to payoffs, loans sold, paydowns, and charge-offs. This reduction reflects Amerant’s effective loan management and risk mitigation strategies.
Asset Under Management Growth
Assets under management saw an increase of $132.42 million, reaching $3.1 billion. This growth demonstrates the company’s expanding influence and capability in managing client assets.
Pre-provision Net Revenue Increase
Pre-provision net revenue rose to $35.9 million in the second quarter of 2025, compared to $33.9 million in the first quarter. Core pre-provision net revenue was up by 17.7%, underscoring the company’s strong operational performance.
Loan Growth Challenges
The company faced challenges with loan growth as gross loans decreased by $30 million to $7.2 billion. This decline was primarily due to increased prepayments and some loans that have been originated but are yet to fund.
Increased Classified Loans
Classified loans increased by $9.3 million or 4.5%, reaching $215.4 million. This rise was due to downgrades of commercial real estate (CRE) and commercial loans, highlighting areas needing attention.
Higher Non-core Expenses
Noninterest expenses were reported at $74.4 million, influenced by non-core expenses of $1.2 million and $1.1 million in expenses related to customer derivatives, indicating areas where cost management could be improved.
Special Mention Loans Increase
Special mention loans rose by $33 million, driven primarily by CRE loans that missed certain milestones and re-ratings based on financials, pointing to potential risks in loan performance.
Forward-looking Guidance
Looking ahead, Amerant Bancorp projects a net interest margin of 3.75% for the third quarter, with a continued focus on achieving a 1% return on assets by the end of the year. The company aims to maintain its growth trajectory in deposits and improve its capital metrics, despite the slight decline in gross loans.
In summary, Amerant Bancorp’s earnings call reflected a positive sentiment with notable improvements in net interest margins and deposit growth. While challenges such as loan growth and increased expenses persist, the company is optimistic about its future performance, focusing on strategic growth and improved financial metrics.