Executive Summary / Key Takeaways

• Strategic Florida Focus & Regional Transformation: Amerant Bancorp is executing a deliberate pivot from a diversified community bank to a high-performing regional institution, laser-focused on the lucrative Florida market, evidenced by strategic divestitures and targeted expansion.
• Robust Financial Rebound & Profitability Drive: The company demonstrated a strong financial rebound in Q2 2025, with significant improvements in net income, net interest margin (NIM), and core pre-provision net revenue (PPNR), signaling a clear path towards its 1% Return on Assets (ROA) target in the second half of 2025.
• Proactive Asset Quality Management: Despite macroeconomic uncertainties, Amerant is aggressively addressing credit quality through enhanced risk management teams and transparent provisioning, aiming for continued reduction in non-performing loans (NPLs) and a normalized charge-off rate.
• Digital & Talent-Led Growth Engine: Strategic investments in digital platforms (treasury management, online account opening) and key personnel across business development and risk management are foundational to driving robust organic loan and deposit growth, targeting double-digit expansion in 2026.
• Competitive Differentiation through Localized Expertise & Technology: Amerant leverages its deep regional roots and a growing suite of digital tools to offer a personalized banking experience, aiming to capture market share against larger, more generalized competitors while enhancing operational efficiency.

The Florida Blueprint: Amerant's Strategic Evolution

Amerant Bancorp Inc. (AMTB), incorporated in 1985 and operating since 1987, has undergone a significant transformation, shedding its former identity as Mercantil Bank Holding Corporation in 2019 to embrace a renewed focus. Headquartered in Coral Gables, Florida, the company has strategically streamlined its operations to become a premier regional bank, primarily serving individuals and businesses across Florida. This strategic pivot, initiated in 2023, involved divesting non-core assets and doubling down on its core Florida footprint.

The company's business model is comprehensive, offering deposit, credit, investment, wealth management, and fiduciary services through Amerant Bank, N.A., and its subsidiaries, Amerant Investments, Inc., and Amerant Mortgage, LLC. This integrated approach allows Amerant to cultivate deep, relationship-driven client engagements. The strategic divestiture of its Houston banking operations in November 2024 and the sale of certain third-party residential mortgage loans in December 2024 underscore a disciplined approach to capital allocation and geographic focus.

In the competitive landscape, Amerant operates in a dynamic regional banking environment. Larger, more established players like Regions Financial Corporation (RF), Fifth Third Bancorp (FITB), Truist Financial Corporation (TFC), and Comerica Incorporated (CMA) present formidable competition. These rivals often boast broader geographic footprints, greater scale, and more extensive digital infrastructure. For instance, FITB's emphasis on digital innovation provides a qualitative edge in efficiency and customer acquisition, while RF's larger scale supports higher operational efficiency.

Amerant's competitive strategy centers on leveraging its deep regional roots and personalized service model. Its localized expertise in Florida and a growing emphasis on international banking provide a qualitative advantage in fostering stronger customer loyalty and accessing diverse funding sources. While its smaller scale compared to industry giants might lead to higher operating costs and potentially lower overall efficiency, Amerant aims to offset this through targeted investments and a nimble approach to market opportunities.

Technological Edge: Powering Efficiency and Growth

Amerant's strategic transformation is deeply intertwined with its commitment to technological differentiation and innovation. The company is actively investing in digital transformation efforts, which are foundational to enhancing customer experience, improving operational efficiency, and driving core deposit growth. These initiatives are not merely incremental upgrades but are designed to provide tangible benefits that bolster its competitive standing.

A key technological differentiator is the implementation of a new treasury management platform and new digital account opening tools. These technologies are designed to streamline processes, making banking more accessible and efficient for commercial and retail clients. While specific quantitative metrics on their performance are not publicly detailed, the strategic intent is clear: to attract and retain customers by offering a superior, frictionless digital experience. Management anticipates these tools will be key drivers in achieving its ambitious deposit growth targets.

Furthermore, Amerant is exploring the adoption of artificial intelligence (AI) to enhance internal efficiencies. This forward-looking initiative aims to optimize various operational aspects, contributing to cost reductions and improved productivity. The company's recent partnership with SavvyMoney, announced in July 2025, further highlights its commitment to leveraging technology for comprehensive financial wellness solutions, aiming to deepen customer engagement and expand its digital offerings.

For investors, these technological advancements translate into a stronger competitive moat. By enhancing digital capabilities, Amerant aims to reduce its cost-to-serve, improve customer acquisition and retention, and ultimately drive better margins. This focus on technology allows the bank to compete effectively against larger, more digitally advanced rivals by offering a compelling blend of personalized service and modern banking convenience. The strategic intent is to build a scalable infrastructure that supports prudent growth and contributes to long-term profitability.

Strategic Initiatives and Operational Momentum

Amerant's strategic initiatives are a direct response to its Florida-first blueprint and its commitment to becoming a regional powerhouse. The company is actively expanding its physical footprint and bolstering its human capital. In April 2025, Amerant opened its new regional headquarters and banking center in West Palm Beach. Looking ahead, two new banking centers are planned for Miami Beach and a second location in downtown Tampa, all expected to open by the end of 2025. A new St. Petersburg, Florida, location is also slated for a Q2 2026 opening. These expansions are strategically chosen to increase market density and capture growth opportunities in high-demand areas.

A significant operational shift involves the Amerant Mortgage business. Recognizing the substantial capital required to scale a national mortgage origination platform, the company decided in April 2025 to transition to an in-footprint focus, primarily supporting its retail and private banking customer base in Florida. This strategic downsizing is expected to reduce the FTE count from 77 to approximately 20 by early Q4 2025 and is projected to lower both non-interest income and non-interest expense by approximately $2.5 million per quarter starting in Q3 2025, thereby improving operating efficiency by nearly 1%. This move frees up capital and resources for core banking growth initiatives.

Talent acquisition is another cornerstone of Amerant's strategy. The company has made significant additions to its leadership team, particularly in risk management and business development. Key hires include Jeff Tichler as Chief Credit Officer (March 2025), a new Head of Special Assets (Q2 2025), a Head of Credit for C&I (July 2025), and a Head of Loan Syndications and Sales (August 2025). On the business development front, new leadership includes a Chief Consumer Banking Officer (Braden Smith, November 2024) and a Head of Treasury Management (Steven Putnam, Q1 2025). These strategic hires are crucial for strengthening credit culture, enhancing risk management, and driving organic loan and deposit growth. The new Head of Loan Syndications and Sales, for instance, is expected to enable participation in larger, well-underwritten deals, allowing Amerant to grow with its customers while prudently managing risk by holding a smaller, diversified portion of the credit.

Financial Performance and Health: A Turnaround Story

Amerant's recent financial performance reflects the early successes of its strategic initiatives and a proactive approach to balance sheet management. In the second quarter of 2025, the company reported net income attributable to Amerant Bancorp Inc. of $23.0 million, a substantial increase from $4.96 million in Q2 2024. This improvement was primarily driven by higher net interest income and noninterest income, coupled with a lower provision for credit losses.

The Net Interest Margin (NIM) saw a notable increase, rising to 3.81% in Q2 2025 from 3.56% in Q2 2024. This expansion was largely due to a 45 basis point decrease in the cost of interest-bearing liabilities, particularly a 52 basis point drop in average rates paid on total deposits, and the redemption of Senior Notes. While average yields on total interest-earning assets saw a slight decrease, the company successfully repriced its interest-bearing deposits and strategically invested in higher-yielding, fixed-rate debt securities to mitigate this.

Pre-provision net revenue (PPNR), a key indicator of core profitability, was $35.9 million in Q2 2025, an increase of 40.8% year-over-year. Excluding non-routine items, core PPNR showed a robust 17.7% quarter-over-quarter increase. The core efficiency ratio improved to 66.35% in Q2 2025, down from 74.20% in Q2 2024, reflecting initial benefits from cost management and revenue growth. Return on average assets (ROA) significantly improved to 0.90% in Q2 2025, up from 0.21% in Q2 2024, and return on average equity (ROE) reached 10.06%, compared to 2.68% in the prior year.

Liquidity remains robust, with total assets reaching $10.33 billion at June 30, 2025. Total deposits grew by $451.9 million from December 31, 2024, reaching $8.31 billion, driven by strong core deposit growth. Core deposits constituted 74% of total deposits at June 30, 2025, reflecting the success of its relationship-driven strategy. The loan-to-deposit ratio stood at 86.5%, down from 92.6% at year-end 2024, providing ample liquidity for future loan growth. The company also maintains substantial borrowing capacity of $2.9 billion from the Federal Reserve and FHLB.

Asset Quality and Risk Management: A Top Priority

Asset quality has been a paramount focus for Amerant, especially amidst the current macroeconomic uncertainties stemming from tariff policies and mixed economic signals. The company has adopted a proactive and transparent approach to managing credit risk. This is evident in the provision for credit losses, which significantly decreased to $6.06 million in Q2 2025 from $19.15 million in Q2 2024. While gross charge-offs were $18.58 million in Q2 2025, a substantial portion ($12.2 million) of the commercial loan charge-offs had been previously reserved, mitigating the impact on current earnings. The net charge-off ratio improved to 0.86% in Q2 2025 from 1.13% in Q2 2024.

Despite the overall improvement in the net charge-off ratio, classified loans increased by $9.3 million to $215.4 million in Q2 2025. This was primarily due to downgrades of certain commercial real estate (CRE) and commercial loans based on updated financial information and specific operational challenges (e.g., loss of a tenant). However, nine of these classified loans, totaling $134 million, remain in accruing status. Non-performing loans (NPLs) saw a significant net decrease of $41 million in Q2 2025, driven by a combination of payoffs, loan sales, paydowns, and charge-offs. Management has explicitly stated that further NPL reductions are a top priority, with efforts underway to strengthen the bank's risk culture and asset management capabilities through new hires in special assets and credit.

The Allowance for Credit Losses (ACL) to total loans was 1.20% at June 30, 2025, slightly down from 1.37% in Q1 2025, reflecting the impact of specific reserves and charge-offs. However, the ACL coverage of non-performing loans is back over 100%, a critical indicator of prudent risk management. The company's CRE portfolio maintains a conservative weighted average loan-to-value of 58% and a debt service coverage of 1.5x, with strong sponsor profiles. Amerant's internal risk rating system and continuous monitoring of credit quality indicators are key to its proactive stance.

Outlook and Guidance: Poised for Growth

Amerant's outlook for the remainder of 2025 and into 2026 reflects confidence in its strategic direction and the anticipated benefits of its recent investments. The company projects annual deposit growth of 14% to 15% by year-end 2025, driven by strong core deposit generation and new digital tools. This growth is expected to be supported by a planned reduction of at least $100 million in brokered deposits, replaced by organic growth or FHLB advances.

On the lending side, Amerant anticipates loan production and growth of approximately 5% annualized by year-end 2025. While Q2 2025 saw flat loan balances due to asset quality focus, unfunded construction deals, and higher paydowns, management expects momentum to rebuild in the second half of 2025, aiming for double-digit loan growth in coming quarters and certainly in 2026. This will be boosted by recent talent additions in business development and loan syndications, enabling participation in larger, diversified deals. The optimal loan-to-deposit ratio target remains at 95%.

For profitability, the Net Interest Margin (NIM) is projected to be approximately 3.75% for Q3 2025. Noninterest income is projected at $17.5 million in Q3 and $18.5 million in Q4 2025. Noninterest expenses are expected to be in line with Q2 core noninterest expenses (around $73 million), with cost reductions from the Amerant Mortgage downsizing partially offsetting new investments. The efficiency ratio is targeted to be in the mid-60s by year-end, with a long-term goal of reaching 60% in the second half of 2025 and further improvement in 2026.

Amerant is prioritizing Return on Assets (ROA) and expects to reach 1% in the second half of 2025. This target is underpinned by expected loan growth, expense reductions from the mortgage business restructuring, and continued operational efficiencies. The company's capital management strategy remains prudent, balancing capital retention for growth with shareholder returns through dividends and buybacks. The Board recently approved a quarterly dividend of $0.09 per share, signaling confidence in future earnings.

Conclusion

Amerant Bancorp Inc. is in the midst of a profound strategic transformation, shedding its past complexities to emerge as a focused, high-potential regional bank in Florida. The company's "double down" strategy on its core market, coupled with aggressive investments in talent, digital infrastructure, and disciplined risk management, is clearly yielding tangible results. The significant improvements in profitability metrics, robust deposit growth, and proactive asset quality management in recent quarters underscore the effectiveness of this strategic pivot.

While macroeconomic uncertainties persist, Amerant's leadership is demonstrating a clear commitment to execution and transparency. The strategic downsizing of its mortgage business, the targeted expansion of its physical footprint, and the continuous strengthening of its credit and business development teams are all designed to drive sustainable, high-quality growth. By leveraging its localized expertise and enhancing its technological capabilities, Amerant is strategically positioning itself to capture market share and achieve its ambitious financial targets, making it a compelling investment story for discerning investors looking for a regional bank poised for a strong future.