Amerant Bancorp Inc
For the period ended Dec 31, 2024. Filed Mar 5, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 5, 2025
AMTB$29.60+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-07.
0001734342-24-000019
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-05.
0001734342-25-000023
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 442 previous paragraphs and 418 current paragraphs.
202 unchanged; 168 reworded; 45 added; 61 removed; 11 previous and 3 current paragraphs rearranged.
Tables are not compared: 39 previous and 39 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (45)
Current report
•Net interest income was $326.0 million in 2024, down $0.5 million, or 0.2%, from $326.5 million in 2023.
Current report
Net (loss) income
Current report
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.
Current report
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.
Current report
(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.
Current report
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.
Current report
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.
Current report
(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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
(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.
Current report
(11) In 2024, amounts shown are in connection with the Houston Sale Transaction.
Current report
(13) In 2024, related to Houston branches and included as part of occupancy and equipment expenses. See“Noninterest Expenses” for additional information.
Current report
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,
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
We recognized no interest income on nonaccrual loans during 2024, 2023 and 2022.
Current report
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’.
Current report
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.
Current report
Special Mention Loans. The following table presents the activity of special mention loans by type of loan in 2024:
Current report
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.
Current report
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.
Current report
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.
Current report
(1) Issued by a financial institution.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
Public Offering
Current report
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.
Current report
Repurchase Plans Details
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Removed paragraphs (61)
Previous report
The table below shows a detail of non-routine noninterest expenses for the periods presented.
Previous report
•Net interest income was $326.5 million in 2023, up $59.8 million, or 22.4%, from $266.7 million in 2022.
Previous report
•Accumulated Other Comprehensive Loss (“AOCL) was $70.8 million as of December 31, 2023, an improvement of$9.8 million, or 12.2%, compared to $80.6 million as of December 31, 2022.
Previous report
Net income
Previous report
In 2023 and 2022, net income attributable to the Company excludes a net loss of $1.7 million and $1.3 million, respectively, attributable to the non-controlling interest of Amerant Mortgage. At December 31, 2022, the Company had an ownership interest of 80% in Amerant Mortgage which then increased to 100% in the fourth quarter of 2023. This increase in ownership 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 noncontrollling interest in the equity of Amerant Mortgage 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. See “Item 1 - Business Developments” in this Form 10-K for more details on these changes with respect to our subsidiary Amerant Mortgage.
Previous report
Net interest income was $326.5 million in 2023, an increase of $59.8 million, or 22.4%, from $266.7 million in 2022. This was primarily due to higher yields and higher average balances of earnings assets. These results were partially offset by higher cost and average balances of deposits and other interest-bearing liabilities. See “-Net interest Income”for more details.
Previous report
Noninterest income was $87.5 million in 2023, an increase of $20.2 million, or 30.1%, compared to $67.3 million in 2022. These results were mainly due to: (i) higher net gains on the early extinguishment of advances from the FHLB; (ii) higher other noninterest income; (iii) higher cards and trade finance servicing fees; and (iv) higher deposits and services fees. These increases were partially offset by: (i) net losses on securities totaling $11.0 million in 2023, mainly driven by losses on the sale of certain debt securities available for sale and marketable equity securities not held for trading, compared to $3.7 million in 2022 (ii) lower loan-level derivative income, and (iii) lower brokerage, advisory and fiduciary fees. See “-Noninterest Income”for more details.
Previous report
Interest expense on junior subordinated debentures increased $1.3 million, or 43.4%, in 2023 compared to 2022, mainly driven by an increase of 205 basis points in the average rate paid on these instruments.
Previous report
The Company recorded a provision for credit losses of $60.2 million in 2023, compared to $13.9 million in 2022. The $60.2 million provision for credit losses on loans includes $48.4 million in additional reserve requirements for loan charge-offs and credit quality, $4.1 million to account for loan growth and composition changes during the period, and $12.2 million to reflect macroeconomic conditions and loss factor updates. This provisions were offset by a release of $4.5 million related to the classification of the Houston CRE multifamily portfolio as held-for-sale as of December 31, 2023.
Previous report
(3) The Company sold its Coral Gables headquarters for $135.0 million, with an approximate carrying value of $69.9 million at the time of sale and transaction costs of $2.6 million. The Company leased-back the property for an 18-year term.
Previous report
(4) Includes: (i) net loss of $10.8 million and $2.4 million in 2023 and 2022, respectively, and net gains of $4.3 million in 2021, in connection with the sale of debt securities available for sale; (ii) unrealized gains of $33 thousand in 2023 and unrealized losses of $1.3 million and $0.6 million in 2022 and 2021, respectively, related to the change in fair value of marketable equity securities not held for trading which are recorded in results of the period. Also, in 2023, the Company sold 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. Lastly, includes realized losses of $42 thousand on the sale of a mutual fund with a fair value of $23.4 million at the time of the sale in 2021.
Previous report
N/M Means not meaningful
Previous report
Total noninterest income increased $20.2 million, or 30.1%, in 2023 compared to 2022. These results were mainly due to: (i) higher net gains on the early extinguishment of advances from the FHLB; (ii) higher other noninterest income; (iii) higher cards and trade finance servicing fees, and (iv) higher deposits and services fees. These increases were partially offset by: (i) net losses on securities totaling $11.0 million in 2023, mainly driven by losses on the sale of certain debt securities available for sale and marketable equity securities not held for trading compared to $3.7 million in 2022 ; (ii) lower loan-level derivative income, and (iii) lower brokerage, advisory and fiduciary fees.
Previous report
Loan-level derivative income decreased $5.8 million, or 55.8%, in 2023 compared to 2022, mainly driven by a lower volume of interest rate swap transactions with clients.
Previous report
In 2023, the Company completed a restructuring of its 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. In the fourth quarter of 2023, we 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.
Previous report
Professional and other services fees increased $12.4 million, or 56.1%, in 2023 compared to 2022, primarily driven by higher consulting and other professional fees in connection with the Company’s transition to our new technology provider, as well as other smaller consulting projects. In 2023, we incurred higher professional service fees in connection with the new outsourced technology services received from FIS. The Company completed the transition of its core data processing platform and other applications in the fourth quarter of 2023.
Previous report
Depreciation and amortization expense increased $1.0 million, or 16.3%, in 2023 compared to 2022. This was mainly driven by $1.0 million related to several branch closures that resulted in additional depreciation expenses.
Previous report
Telecommunication and data processing expenses increased $0.8 million, or 5.1%, in 2023 compared to 2022, primarily driven by a charge of $1.4 million in connection with the disposition of fixed assets due to the write off of in-development software in 2023. This increase was partially offset by lower computer software and technology support services.
Previous report
(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 in 2022.
Previous report
Cash flows provided by operating activities was $26.7 million in the year ended December 31, 2023, primarily driven by the net income before attribution of non-controlling interest of $30.8 million recorded during the period
Previous report
(1) As of December 31, 2023 and 2022, includes approximately $251.8 million and $230.3 million, respectively, in single-family residential loans purchased by the Company through Amerant Mortgage.
Previous report
(6) There were no outstanding credit card balances as of December 31, 2023, 2022, 2021 and 2020. At December 31, 2019, balances are mostly comprised of credit card extensions of credit to customers with deposits with the Bank. The Company phased out its legacy credit card products in the first quarter of 2020 to further strengthen its credit quality.
Previous report
The increase in our domestic loan portfolio held for investment in 2023 includes the effect of: (i) originations of commercial loans, including $29 million of loans originated through a new white label equipment financing solution launched in the second quarter of 2022 as well as other specialty finance loans; (ii) originations of single-family residential loans; (iii) originations of CRE and owner-occupied loans; (iv) approximately $26.5 million of single-family residential loans purchased by the Company through its subsidiary Amerant Mortgage, and (v) originations of consumer loans of approximately $27 million through a new white-label program launched in the third quarter of 2022. These results were partially offset primarily by loan pay downs and payoffs during the period.
Previous report
As of December 31, 2023, substantially all CRE loans held for sale carried at the lower of cost or estimated fair value include loans in the multifamily segment.
Previous report
Loans to financial institutions and acceptances. These loans primarily include trade financing facilities through letters of credits, bankers’ acceptances, pre and post-export financing, and working capital loans, among others. These loans are generally granted for terms not exceeding one year. Since 2019, we have substantially reduced this activity.
Previous report
As of December 31, 2022, total loans held for investment include approximately $1.1 billion, or 15.5% of total loans held for investment, of loans that were priced based on variable interest rates tied to the LIBOR. In December of 2019, the Company appointed a management team charged with the responsibility of monitoring developments related to the proposed alternative reference interest rates to replace LIBOR, and guide the Company through the potential discontinuation of LIBOR. In 2020, the Company launched the LIBOR cessation project to identify and quantify LIBOR exposure in all product categories and lines of business, both on- and off-balance-sheet. 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 and derivative contracts from LIBOR to SOFR.
Previous report
(3) There were no outstanding credit card balances as of December 31, 2023, 2022 and 2021.
Previous report
(2) In 2023, the Company sold a loan relationship in nonaccrual status and classified as Substandard with a total carrying value of $8.6 million at the time of sale. This loan relationship included a commercial loan of $4.6 million and multiple owner occupied loans totaling $4.0 million. The Company charged-off $2.1 million against the ACL in the third quarter of 2023 in connection with this sale, which had already been reserved in a prior period. Therefore, this transaction had no impact to the Company’s results of operations in the third quarter of 2023.
Previous report
(3) In 2023, the Company collected $2.8 million in full satisfaction of a commercial loan relationship in nonaccrual status and was previously classified as Substandard. As of December 31, 2021 and 2020, includes $9.1 million and $19.6 million, respectively, in a commercial relationship placed in nonaccrual status during the second quarter of 2020. During the third quarters of 2021 and 2020, the Company charged off $5.7 million and $19.3 million, respectively, against the allowance for credit losses as result of the deterioration of this commercial relationship. In addition, in connection with this loan relationship, the Company collected a partial principal payment of $4.8 million in the fourth quarter of 2021. Furthermore, in the second quarter of 2022, the Company collected an additional partial principal payment of $5.5 million and charged off the remaining balance of $3.6 million against the ACL. Therefore, as of December 31, 2022, there were no outstanding balances associated with this loan relationship.
Previous report
(4) In the first quarter of 2022, the Company collected a partial payment of approximately $9.8 million on one commercial nonaccrual loan of $12.4 million. Also, in the first quarter of 2022, the Company charged-off the remaining balance of this loan of $2.5 million.
Previous report
(5) 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-off for unsecured consumer loans in 2022.
Previous report
In the fourth quarter of 2023, the Company had two commercial loans totaling $17.0 million that were further downgraded to nonaccrual status.
Previous report
In the third quarter of 2023, the Company sold a loan relationship in nonaccrual status and classified as Substandard with a total carrying value of $8.6 million at the time of sale. This loan relationship included a commercial loan of $4.6 million and multiple owner occupied loans totaling $4.0 million. The Company charged-off $2.1 million against the ACL in the third quarter of 2023 in connection with this sale, which had already been reserved in a prior period. Therefore, this transaction had no impact to the Company’s results of operations in the third quarter of 2023.
Previous report
In the second quarter of 2023, the Company placed in nonaccrual status and further downgraded to Substandard a New York-based CRE multi-family residential loan of $23.3 million. In the fourth quarter of 2023, the Company collected a partial payment of $13 million on this loan and charged off the remaining portion of $10.3 million against the ACL.
Previous report
In the first quarter of 2023, the Company received one CRE property guaranteeing a New York based non-owner-occupied loan with a carrying amount of $20.1 million, and transferred it to OREO at the net of its fair value less cost to sell of approximately $20.2 million. This loan was among the loans placed in non-accrual status in 2022. There was no impact on the consolidated results of operations in 2023 as a result of this transaction.
Previous report
In the first quarter of 2023, the Company placed in nonaccrual status a $12.9 million equipment-financing commercial loan relationship, charged-off $6.5 million related to the portion of the balance deemed uncollectible, and transferred the remaining balance of $6.4 million to other repossessed assets. In the second quarter of 2023, the Company sold these repossessed assets and recognized a loss on the sale of $2.6 million which is included in the result of operations for the period.
Previous report
Special Mention Loans. Special mention loans as of December 31, 2023 totaled $46.0 million, an increase of $35.9 million, or 354.1%, from $10.1 million as of December 31, 2022. The increase was primarily due to an aggregate of $105.6 million in downgrades to Special Mention, which are primarily related to: (i) two commercial loans totaling $39.3 million; (ii) $43.9 million that were subsequently downgraded to Substandard as detailed in the nonaccrual loans discussion above, and (iii) other smaller loans. The increase was partially offset by: (i) payoffs totaling $15.9 million related to two loans, and (ii) $10 million in upgrades of two loans. All Special mention loans remained current at December 31, 2023.
Previous report
At December 31, 2023, total potential problem loans decreased $0.4 million, or 22.8%, compared to 2022. This was mainly due to $0.4 million in paydowns and $0.2 million in charge-offs, partially offset by the addition of a new residential loan of $0.2 million.
Previous report
(3) As of December 31, 2023 and 2022 , includes $127.2 million and $143.0 million, respectively, in subordinated debt securities issued by financial institutions. Additionally, as of December 31, 2023 and 2022, there were $59.6 million and $63.3 million in unsecured senior notes issued by financial institutions.
Previous report
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.
Showing the first 40 of 61 passages. Open the source sections for the rest.
Reworded paragraphs (168)
Previous wording
We are a bank holding company headquartered in Coral Gables, Florida. 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, Florida, and its subsidiaries. Fiduciary, investment, wealth management and mortgage lending services are provided by the Bank’s securities broker-dealer, Amerant Investments, the Bank’s Grand-Cayman based trust company, the Cayman Bank, and the mortgage company, Amerant Mortgage. The Bank’s primary markets are South Florida, where we are headquartered and operate sixteen banking centers in Miami-Dade, Broward and Palm Beach counties; Houston, Texas, where we operate six banking centers that serve the nearby areas of Harris, Montgomery, Fort Bend and Waller counties and; Tampa, Florida where we operate one banking center. See “Item1-Business” for recent developments.
Current wording
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.
Previous wording
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 prospectively.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
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 $4.5 million and $3.4 million in 2023 and 2022, respectively. Amerant Mortgage commenced operations in May 2021.
Current wording
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.
Previous wording
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, (ix) losses on sale of assets, and (x) other operating expenses.
Current wording
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.
Previous wording
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 expensesin the Company’s consolidated statement of operations and comprehensive (loss) income. We had no other repossessed assets in 2022.
Current wording
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 expensesin the Company’s consolidated statement of operations and comprehensive (loss) income. We had no other repossessed assets (non-real estate) in 2024 or 2022.
Previous wording
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. 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.
Current wording
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.
Previous wording
•Total assets were $9.7 billion at December 31, 2023, up $588.5 million, or 6.4%, compared to $9.1 billion at December 31, 2022.
Current wording
•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.
Previous wording
•Total gross loans, which include loans held for sale, were $7.3 billion at December 31, 2023, up $345.3 million, or 5.0%, compared to $6.9 billion at December 31, 2022.
Current wording
•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.
Previous wording
•Cash and cash equivalents were $321.9 million at December 31, 2023, up $31.3 million, or, 10.8%, compared to $290.6 million at December 31, 2022.
Current wording
•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.
Previous wording
•Total deposits were $7.9 billion at December 31, 2023, up $850.7 million, or 12.1%, compared to December 31, 2022.
Current wording
•Total deposits were $7.9 billion at December 31, 2024, down $40.3 million, or 0.5%, compared to December 31, 2023.
Previous wording
•Total advances from Federal Home Loan Bank (“FHLB”) were $645.0 million as of December 31, 2023, down $261.5 million, or 28.8%, compared to $906.5 million as of December 31, 2022.
Current wording
•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.
Previous wording
•Average yield on loans in 2023 was 6.78%, up compared to 4.92% in 2022.
Current wording
•Average yield on loans in 2024 was 7.06%, up compared to 6.78% in 2023.
Previous wording
•Total non-performing assets were $54.6 million as of December 31, 2023, up $17.0 million, or 45%, compared to $37.6 million as of December 31, 2022.
Current wording
•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.
Previous wording
•Allowance for credit losses (“ACL”) was $95.5 million as of December 31, 2023 up $12.0 million, or 14.4%, compared to $83.5 million as of December 31, 2022.
Current wording
•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.
Previous wording
•Core deposits were $5.6 billion, at December 31, 2023, up $281.8 million, or 5.3%, compared to $5.3 billion at December 31, 2022.
Current wording
•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.
Previous wording
•Average cost of total deposits in 2023 was 2.47% compared to 0.80% in 2022.
Current wording
•Average cost of total deposits in 2024 was 2.94% compared to 2.47% in 2023.
Previous wording
•Loan to deposit ratio was 92.0% as of December 31, 2023 compared to 98.2% as of December 31, 2022.
Current wording
•Loan to deposit ratio was 92.6% as of December 31, 2024 compared to 92.0% as of December 31, 2023.
Previous wording
•Assets Under Management and custody (“AUM”) totaled $2.3 billion as of December 31, 2023 an increase of $293.5 million, or 14.7%, compared to $2.0 billion as of December 31, 2022.
Current wording
•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.
Previous wording
•Pre-provision net revenue (“PPNR”)1 was $104.3 million in 2023, an increase of $10.4 million, or 11.1%, compared to $93.9 million in 2022. Core PPNR 1 was $142.0 million in 2023, an increase of $36.5 million, or 34.6%, compared to $105.5 million in 2022.
Current wording
•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 PPNR 1 was $125.6 million in 2024, a decrease of $16.4 million, or 11.6%, compared to $142.0 million in 2023.
Previous wording
•Net interest margin was 3.76% in 2023, up 23 basis points from 3.53% in 2022.
Current wording
•Net interest margin was 3.58% in 2024, down 18 basis points from 3.76% in 2023.
Previous wording
•The Company recorded a provision for credit losses of $61.3 million in 2023, compared to $13.9 million in 2022.
Current wording
•The Company recorded a provision for credit losses of $60.5 million in 2024, compared to $61.3 million in 2023.
Previous wording
•Noninterest income was $87.5 million in 2023, up $20.2 million, or 30.1%, from $67.3 million in 2022.
Current wording
•Noninterest income was $9.9 million in 2024, down $77.6 million, or 88.7%, from $87.5 million in 2023.
Previous wording
•Noninterest expense was $311.4 million in 2023, up $69.9 million, or 29.0%, from $241.4 million in 2022.
Current wording
•Noninterest expense was $299.5 million in 2024, down $11.9 million, or 3.8%, from $311.4 million in 2023.
Previous wording
•The efficiency ratio was 75.21% for the full-year 2023 compared to 72.29% for the full-year 2022.
Current wording
•The efficiency ratio was 89.17% for the full-year 2024 compared to 75.21% for the full-year 2023.
Previous wording
•Return on average assets (“ROA”) was 0.34% for the full-year 2023 compared to 0.77% for the full-year 2022.
Current wording
•Return on average assets (“ROA”) was negative 0.16% for the full-year 2024 compared to 0.34% for the full-year 2023.
Previous wording
•Return on average equity (“ROE”) was 4.39% for the full-year 2023 compared to 8.45% for the full-year 2022.
Current wording
•Return on average equity (“ROE”) was negative 1.99% for the full-year 2024 compared to 4.39% for the full-year 2023.
Previous wording
(1) At December 31, 2023, 2022 and 2021, 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 effects of the issuance of restricted stock, restricted stock units and performance stock units on earnings per share in 2023, 2022 and 2021.
Current wording
(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.
Previous wording
In 2023, net income attributable to the Company was $32.5 million, or $0.96 per diluted share, compared to net income of $63.3 million, or $1.85 per diluted share, in 2022. The decrease of $30.8 million, or 48.7% , in 2023 compared to 2022 was primarily due to higher non-interest expense and higher provision for credit losses. The decrease was partially offset by higher net interest income and higher noninterest income.
Current wording
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.
Previous wording
Noninterest expense was $311.4 million in 2023, an increase of $69.9 million, or 29.0%, from $241.4 million in 2022. These results were mainly due to: (i) higher losses on loans held for sale which include 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) higher professional and other service fees; (iii) higher other operating expenses; (iv) higher salary and employee benefits; (v) higher FDIC assessments and insurance expenses; (vi) higher advertising expenses; (vii) higher depreciation and amortization expense, and (viii) higher telecommunication and data processing expenses. These increases were partially offset by: (i) lower loan-level derivative expenses; (ii) lower contract termination costs; and (iii) other real estate owned and repossessed assets expense. See “-Noninterest Expense” for more details.
Current wording
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.
Previous wording
In 2023, noninterest expense included non-routine items of $66.2 million, compared to $19.0 million in 2022. Non-routine items in noninterest expense include restructuring costs of $15.6 million and $15.4 million in 2023 and 2022, respectively. Other 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. In 2022, other non-routine items in noninterest expense include: (i) $3.4 million valuation expense related to the fair value adjustment of an OREO property in New York, and (ii) $0.2 million valuation expense related to the change in fair value of New York loans held for sale. See “Our Company - Primary Factors Used to Evaluate Our Business” for detailed information on non-routine items in noninterest expense.
Current wording
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.
Previous wording
In 2023 and 2022, we incurred $14.4 million and $12.5 million, respectively, in total noninterest expenses related to Amerant Mortgage. These expenses included: (i) $10.7 million and $8.9 million in 2023 and 2022, respectively, related to salaries and employee benefits expenses and (ii) $3.7 million and $3.6 million in 2023 and 2022, respectively, related to mortgage lending costs, professional fees and other noninterest expenses. In addition, we had a goodwill impairment charge of $1.0 million related to Amerant Mortgage. As of December 31, 2023, Amerant Mortgage had 67 FTEs compared to 68 FTEs at December 31, 2022.
Current wording
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.
Previous wording
(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, $57.5 million and $101.1 million in the years ended December 31, 2023, 2022 and 2021, respectively. The average balance of total loans held for sale was $77.8 million, $117.6 million and $72.7 million in the years ended December 31, 2023, 2022 and 2021, respectively.
Current wording
(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.
Previous wording
(2) Includes average non-performing loans of $34.3 million, $30.7 million and $90.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. Interest income that would have been recognized on outstanding non-performing loans at December 31, 2023, 2022 and 2021, was $4.9 million, $0.8 million and $6.2 million, respectively.
Current wording
(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.
Previous wording
(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 $118.5 million and $62.3 million in 2023 and 2022, respectively, and average net unrealized gains of $26.6 million in 2021.
Current wording
(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.
Previous wording
(4) Includes nontaxable securities with average balances of $17.8 million, $18.4 million and $46.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. The tax equivalent yield for these nontaxable securities was 4.83%, 3.00% and 1.76% for the years ended December 31, 2023, 2022 and 2021, respectively. In 2023, 2022 and 2021, the tax equivalent yield was calculated by assuming a 21% tax rate and dividing the actual yield by 0.79.
Current wording
(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.
Previous wording
(5) Includes nontaxable securities with average balances of $49.8 million, $43.6 million and $50.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. The tax equivalent yield for these nontaxable securities was 4.22%, 3.46% and 2.58% for the years ended December 31, 2023, 2022 and 2021, respectively. In 2023, 2022 and 2021, the tax equivalent yield was calculated assuming a 21% tax rate and dividing the actual yield by 0.79.
Current wording
(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.
Previous wording
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 rates in 2022 (50 basis points in May 2022, 75 basis points in each June 2022, July 2022, September 2022 and November 2022, and 50 basis points in December 2022) which resulted in a total increase of 425 basis in 2022. In 2023, there were 4 additional increases in the Federal Reserve benchmark interest rate of 25 basis points each in February 2023, March 2023, May 2023 and July 2023, which resulted in a total increase of 100 basis points in 2023.The accumulated increase of 525 basis points in the Federal Reserve’s benchmark interest rates since the first quarter of 2022 contributed to the increase in net interest income the Company experienced in 2023.
Current wording
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.
Previous wording
In 2023, we had higher average balance of loans compared to the same period last year, which we attribute to our relationship-driven culture. In addition, our asset sensitive position enabled us to partially offset, via repricing of variable-rate loans, the incremental cost of deposits and other interest-bearing liabilities we recorded during 2023. See discussions further below for more details.
Current wording
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.
Previous wording
In 2023, net interest income was $326.5 million, an increase of $59.8 million, or 22.4%, from $266.7 million in 2022. This was mainly driven by: (i) an increase of 184 basis points in the yield on total interest earning assets; (ii) increases of $1.0 billion, or 17.5%, $91.5 million, or 39.5% and $41.8 million, or 21.7% in the average balance of loans, interest earnings deposit with banks, and debt securities held to maturity, respectively, and (iii) lower average balances of FHLB advances. The increase in net interest income was partially offset by: (i) higher cost of total deposits, FHLB advances and junior subordinated debentures; (ii) higher average balance of total deposits, primarily time and interest bearing demand deposits and; (iii) lower average balance of debt securities available for sale. The increase in average yields on interest earning assets includes the effect of the Federal Reserve’s actions to manage inflation in 2023, which consisted of raising its benchmark rate by a total of 100 basis points in 2023. Net interest margin was 3.76% in 2023, an increase of 23 basis points from 3.53% in 2022. See discussions further below for more details.
Current wording
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.
Showing the first 40 of 168 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
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.
Rearranged previous paragraphs (11)
Previous report — wording carried elsewhere
(3) 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. In 2022, includes: (i) $2.9 million resulting from the Company’s transition to our new technology provider; (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. In 2021, includes additional expenses of $1.5 million, including: (i) $0.8 million of expenses in connection with the “Clean-up Merger” and related transactions (See-Capital Resources for more information on the ‘Clean-up Merger”), and (ii) $0.7 million resulting from the Company’s transition to our new technology provider.
Previous report — wording carried elsewhere
(8) 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 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 2023, we 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.
Previous report — wording carried elsewhere
Other operating expenses increased $10.4 million, or 96.80%, in 2023 compared to 2022 , mainly driven by: (i) an impairment charge of $2.0 million related to an investment carried at cost in 2023; (ii) a $1.7 million goodwill and intangible impairment charge in 2023; (iii) $1.1 million in expenses related to the enhancement of BOLI during the fourth quarter of 2023 and; (iv) higher mortgage banking lending and servicing costs.
Previous report — wording carried elsewhere
(5) Staff reduction costs consist of severance expenses related to organizational rationalization.
Previous report — wording carried elsewhere
(6) Contract termination and related costs associated with third party vendors resulting from the Company’s engagement of FIS.
Previous report — wording carried elsewhere
(8) In 2023, includes expenses in connection with the disposition of fixed assets due to the write-off of in-development software.
Previous report — wording carried elsewhere
(9) In 2023, includes expenses of $0.3 million and $0.5 million ROUA impairment in connection with the closure of a branch in Houston, Texas and $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, Florida. In 2022, includes $1.6 million of ROU asset impairment associated with the closure of a banking center in Pembroke Pines, Florida in 2022.
Previous report — wording carried elsewhere
(10) 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 fair value or cost. 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.
Previous report — wording carried elsewhere
(11) 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.
Previous report — wording carried elsewhere
(1)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 the third quarter of 2023, the Company transferred a 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 a result of the fair value adjustment of this loan. In the fourth quarter of 2023, the Company sold this loan and there was no material impact to the Company’s results of operations as result of this transaction.
Previous report — wording carried elsewhere
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 realized 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.