Amerant Bancorp Inc. Reports First Quarter Results and Provides Business Update Impact From COVID-19 Pandemic
CORAL GABLES, Fla., April 28, 2020 (GLOBE NEWSWIRE) -- Amerant Bancorp Inc. (NASDAQ: AMTB and AMTBB) (the “Company” or “Amerant”) today reported first quarter 2020 net income of
Annualized return on assets (“ROA”) and return on equity (“ROE”) were
Millar Wilson, Vice Chairman and Chief Executive Officer, commented, “Amerant began the year benefiting from strong macro-economic trends while navigating a low interest rate environment. Despite the challenges and uncertainties caused by the COVID-19 pandemic, we finished the quarter in a strong financial position demonstrating the resilience of our operations and the entire Amerant community, underscored by solid operating income growth.”
Mr. Wilson continued, “During these unprecedented times, Amerant quickly rose to the challenge. We successfully activated our Business Continuity Plan to ensure seamless and uninterrupted operations and services, while keeping our employees, customers and communities safe. This remains our top priority. We have now transitioned over
Summary Results
The summary results of the first quarter ended March 31, 2020 include:
- Net income of
$3.4 million , down74.9% from$13.5 million in the fourth quarter of 2019; down74.1% from$13.1 million in the same period of 2019. This decrease was primarily due to a meaningful increase in Amerant’s provision for loan losses in the first quarter of 2020. Operating income, which excludes provision for income tax, provisions for loan losses or reversals and net gains on securities, was$16.7 million , up12.5% from$14.8 million in the fourth quarter of 2019, and flat from$16.6 million in the same period of 2019.
- Net interest income (“NII”) was
$49.2 million , down4.0% from$51.3 million in the fourth quarter of 2019, and down11.2% from$55.4 million in the same period of 2019. Lower NII versus the fourth quarter of 2019 is mainly due to lower prepayment penalties in the current quarter as the pace of early loan payoffs slowed, higher average time deposit volume, and lower average loan balances. Amerant’s proactive management of funding costs largely muted the NII impact of emergency rate cuts implemented by the Federal Reserve during the first quarter of 2020. Compared to first quarter 2019, this quarter’s lower NII is attributed to a decline in average yields on interest-earning assets, lower average loan balances, and the replacement of lower-cost international deposits with higher-cost domestic time deposits, partially offset by lower professional funding costs, primarily Federal Home Loan Bank (“FHLB”) advances, Trust Preferred expenses as well as transactional deposit costs. Net interest margin (“NIM”) was2.65% in the first quarter of 2020, down from2.74% and2.96% in the fourth quarter 2019 and the first quarter 2019, respectively. - Credit quality indicators remained strong despite market dislocations associated with the COVID-19 pandemic. As a result of these dislocations, the Company increased its allowance for loan losses (“ALL”) by
$22.0 million , compared to a release of$0.3 million in the fourth quarter of 2019, and no provision recorded in the first quarter of 2019, mainly due to the estimated deterioration of our loan portfolio caused by COVID-19. The ratio of the ALL to total loans was1.29% as of March 31, 2020, up from0.91% in the fourth quarter of 2019 and up from1.05% in the same period last year. The ratio of loan charge-offs to average total loans in first quarter 2020 was0.09% , up from0.08% and down from the0.10% in the fourth quarter of 2019 and the first quarter of 2019, respectively. The Company did not experience any unanticipated losses in the first quarter of 2020 from exiting its former credit card programs.
- Noninterest income was
$21.9 million , up37.2% from$16.0 million in the fourth quarter of 2019, and up66.5% from$13.2 million in the same period last year. The increase was primarily driven by$9.2 million of net gains on the sale of securities recognized in the first quarter of 2020.
- Noninterest expense was
$44.9 million , down13.3% from$51.7 million in the fourth quarter of 2019, and down13.6% from$51.9 million in the first quarter of 2019. The quarter-over-quarter decline in noninterest expense was mainly driven by lower salaries and employee benefit expenses as well as lower professional and other services fees in the first quarter of 2020. The year-over-year decline also resulted mainly from lower salaries and employee benefit expenses, and the absence of rebranding costs incurred last year related to Amerant’s transformation efforts. Adjusted noninterest expense was$44.5 million in the first quarter of 2020, down13.8% from$51.6 million in the fourth quarter of 2019, and down12.7% from$51.0 million in the first quarter of 2019. Adjusted noninterest expense in the first quarter of 2020 excludes$0.4 million in restructuring expenses.
- The efficiency ratio was
63.1% (62.6% adjusted for staff reduction and digital transformation expenses), compared to76.9% (80.1% adjusted for staff reduction costs and a one-time gain on sale of land) during the fourth quarter of 2019, and75.7% (74.4% adjusted for rebranding costs) for the corresponding period of 2019.
- Stockholders’ book value per common share increased to
$19.95 , up3.1% from$19.35 at December 31, 2019, and up10.7% from$18.02 a year ago. Tangible book value per common share rose to$19.43 , up3.1% from$18.84 at December 31, 2019, and up10.8% from$17.54 a year ago.
Business Update Related to COVID-19
The health and well-being of the Company’s employees, customers, and local communities remains paramount, while Amerant continues to provide the necessary services and products to customers with minimal disruption. Amerant continues to monitor and respond accordingly to the ever-changing COVID-19 environment.
Business Continuity Plan (“BCP”) Activated
Amerant activated the Company's well-established BCP Plan on March 16, 2020. The Plan has effectively driven Amerant's resiliency during these extraordinary times and allowed the Company to continue to provide the quality of products and services its customers have come to expect. It is supported and complemented by a robust business continuity governance framework, life safety program, and annual enterprise-wide exercise and training program. The BCP Plan is framed within industry best practices and regulatory guidelines, and subject to periodic testing and independent audits.
As a result of the COVID-19 pandemic, Amerant has taken the following measures:
| Operations, Technology & Facilities | Implemented remote-work arrangements and reduced banking center hours | |
| Focused on minimizing impact on operations or customers | ||
| Surveyed critical vendor/supplier readiness | ||
| Ensured systems stability and bandwidth capacity to accommodate (i) any increase in volume of digital banking transactions; and (ii) remote work connectivity | ||
| Continuous monitoring to detect and prevent suspicious activity, including any potential COVID-19 related incidents | ||
| Human Resources & Communications | Communicated with customers regarding electronic banking channels, branch information, and assistance programs | |
| Communicated with employees regarding health and safety, technology, remote working tools and practices, and security guidelines | ||
| Refined business travel, vendor on-site visits, remote work, and employee benefits policies |
Executive Management Committee Involvement
In light of the unprecedented nature of events and circumstances surrounding the COVID-19 pandemic, the Company’s Executive Management Committee (“EMC”) implemented periodic briefings with subject-matter experts across the Company’s Business, Operations, Technology, Human Resources, Finance and Legal practices. These briefings focus on protecting the health of Amerant’s employees, customers, and communities, while continuing to provide customers with the services they need and expect during these challenging times. The EMC also increased its oversight and monitoring of credit and liquidity risks and engaged with other market participants to enhance its understanding of the potential magnitude, reach, and ramifications of the pandemic. The EMC has reported on a regular basis to the Board of Directors on the COVID-19 pandemic and the measures Amerant has implemented to address the evolving situation.
Credit Risk Monitoring and Mitigation Measures
The Company performed a comprehensive review of its loan exposures by industry to identify those most susceptible to increased credit risk as a result of the COVID-19 pandemic. The review estimated that approximately
The loan portfolio is well diversified with no industry concentration, except for real estate, representing
At the close of March 31, 2020, the Company had a
CRE loans to top tier customers, which are those considered to have the greatest strength and credit quality, represent approximately
In the CRE retail loan portfolio, the Company determined that there is no significant tenant concentration as the top 15 tenants combined represent
At the close of March 31, 2020, the hotels portfolio consists of 27 properties mainly located in popular travel destinations such as Miami Beach (
Amerant has increased the provision for loan losses for estimated portfolio deterioration due to the COVID-19 pandemic. The Company is closely monitoring its loan portfolio for any potential deterioration and proactively working with customers to address any potential impact.
Credit Approval Process and Monitoring
Amerant consistently reviews its existing credit approval practices to ensure that sound and prudent underwriting standards continue to drive the Company’s business relationships. As a result, the Company enhanced the monitoring of its entire loan portfolio and has proactively increased the frequency of periodic reviews and conversations with loan customers in anticipation of their future needs, which aligns with Amerant’s relationship-centric banking model.
Participation in the U.S. Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”)
On March 27, 2020, Congress passed the CARES Act (“Coronavirus Aid, Relief, and Economic Security Act”), an approximately
Supporting Amerant’s Customers and Communities
Amerant continues to demonstrate its unwavering commitment to customers and the community by providing an array of tangible and meaningful support measures during these unprecedented times.
Beginning on March 26th, these measures include waiving Amerant’s ATM fees for customers and non-customers, late payment fees on all consumer and business loans, and deposit account fees on a case-by-case basis. Amerant is also refraining from reporting negative information such as past due balances to credit bureaus, and, importantly, offering individualized loan payment assistance such as interest payment deferral and forbearance options. Additionally, in April 2020, the Company increased its mobile check deposit limits. All of these efforts align with regulatory guidance aimed at helping customers and communities, while remaining prudent and manageable, and will continue until further notice.
In April 2020, the Company granted loan payment relief options to customers impacted by the COVID-19 pandemic, including interest-only and/or forbearance options. In accordance with accounting and regulatory guidance, loans benefiting from these measures are not considered Troubled Debt Restructurings (“TDR”). As of April 24 2020, loans under these programs totaled
Loans and Deposits
In the first quarter of 2020, the Company remained focused on building stronger customer relationships, enhancing customer service capabilities, and protecting the profitability of the loan portfolio given the challenging market environment. As the COVID-19 situation progressed and evolved throughout the quarter, Amerant began focusing on deploying resources aimed at providing adequate funding to customers and actively working under the CARES Act, while mitigating the potential negative impact on borrowers and depositors.
Total loans on March 31, 2020 were
Online deposits increased
Amerant remains dedicated to improving the Company’s core products and services, as well as enhancing the customer experience by leveraging new digital channels and technologies. The Company’s digital transformation efforts, including the adoption of the best-in-class Salesforce® Customer Relationship Management (“CRM”) platform and industry-leading nCino® loan origination platform, along with other strategic initiatives aimed at improving Amerant’s customer service experience and operational efficiency, are well underway. Finally, Amerant opened a new state-of-the-art banking center of the future in the affluent coastal city of Delray Beach in South Florida and enhanced the Company’s online account opening platform for domestic customers in the first quarter of 2020.
Net Interest Income and Net Interest Margin
First quarter 2020 NII was
The decline in NII compared to the first quarter of 2019 was primarily due to (i) the strategic run-off of foreign financial institutions and non-relationship Syndicated National Credit loans throughout the first three quarters of 2019; (ii) the decline in yields of interest-earning assets resulting from the Federal Reserve decreasing the benchmark interest rate three times in 2019 plus the previously mentioned emergency cuts in March 2020; and (iii) higher rates on CDs. This decline was partially offset by lower costs of transactional deposits and borrowings as well as lower interest expense due to redemptions of trust preferred securities. NIM for the first quarter of 2020 was
NII and NIM are expected to remain pressured as Amerant's interest-earning assets price lower in a depressed interest rate environment due to the COVID-19 pandemic and as the Company’s low-cost international deposits continue to run off. Against this backdrop, Amerant is proactively repricing deposits, leveraging opportunities for higher-yield investments and lower-cost wholesale funding, and seeking to reduce asset sensitivity, while working diligently to meet the banking needs of the Company’s domestic and international clients. In early April, the Company modified maturities on
Noninterest income
In the first quarter of 2020, noninterest income was
The year-over-year increase in noninterest income of
The Company’s assets under management and custody totaled
Noninterest expense
First quarter 2020 noninterest expense was
Partially offsetting these decreases were: (i) an increase in marketing expenses as the Company resumed promotional activities after a break in the fourth quarter following the completion of the Company’s rebranding activities; and (ii) higher depreciation and amortization due to the absence of a
Noninterest expense for the quarter ended March 31, 2020, decreased
Restructuring expenses in the quarter ended March 31, 2020 consisted of
Credit Quality
The ratio of non-performing assets to total assets remained unchanged at
The Company recorded a provision of
As discussed during previous quarters, at the end of October, Amerant curtailed charge privileges to the remaining credit cardholders in its international credit card products and required repayment of all outstanding balances by January 2020. Due to the sunset of this product, credit card charge-offs this quarter totaled
On March 26, 2020, the Company began offering customized loan payment relief options as a result of the impact of COVID-19, including interest-only payments and forbearance options. Consistent with accounting and regulatory guidance, temporary modifications granted under these programs are not considered TDRs. Amerant is actively monitoring these loans in order to proactively identify negative patterns by industry and/or region and pursue remediation efforts in a timely manner. While the economic disruption caused by the COVID-19 pandemic is expected to impact the Company's credit quality, it is difficult to estimate the potential outcome due to the uncertain duration and magnitude of the slowdown in U.S. and global economic activity. The Company will continue to closely monitor the performance of loans to borrowers in impacted sectors, and will reassess its provisions as conditions evolve.
Capital
Stockholders’ equity was
As previously reported, the Company redeemed its remaining fixed-rate, high-cost, Trust Preferred Securities and related subordinated debentures with available cash in the first quarter of 2020. Following this redemption, the Company’s capital continued to be strong and well in excess of the minimum regulatory requirements to be considered “well-capitalized” at March 31, 2020. As of March 31, 2020, the Company has determined to opt out of adopting the new “community bank leverage ratio” given that the perceived benefits provided by the new regulation did not exceed the potential costs considering the Company’s current and projected size and operations.
First Quarter 2020 Earnings Conference Call
As previously announced, the Company will hold an earnings conference call on Tuesday, April 28th, 2020 at 9:30 a.m. (Eastern Time) to discuss its first quarter 2020 results. The conference call and presentation materials can be accessed via webcast by logging on from the Investor Relations section of the company’s website at https://investor.amerantbank.com. The online replay will remain available for approximately one month following the call through the above link.
About Amerant Bancorp Inc.
The Company is a bank holding company headquartered in Coral Gables, Florida. The Company operates through its subsidiaries, Amerant Bank, N.A. (the “Bank”), Amerant Investments, Inc., Amerant Trust, N.A. and Elant Bank and Trust Ltd. The Company provides individuals and businesses in the U.S., as well as select international clients, with deposit, credit and wealth management services. The Bank, which has operated for over 40 years, is the largest community bank headquartered in Florida. The Bank operates 27 banking centers—19 in South Florida and 8 in the Houston, Texas area—and loan production offices in Dallas, Texas and New York, New York.
Zelle®, Salesforce® and nCino® are registered trademarks of Early Warning Services LLC, Salesforce.com, inc., and nCino, Inc, respectively, used in accordance with contractual terms.
Visit our investor relations page at https://investor.amerantbank.com for additional information.
Cautionary Notice Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, including, without limitation, future financial and operating results; costs and revenues; economic conditions generally and in our markets and among our customer base; the challenges and uncertainties caused by the COVID-19 pandemic; the measures we have taken in response to the COVID-19 pandemic; our participation in the PPP Loan program; loan demand; changes in the mix of our earning assets and our deposit and wholesale liabilities; net interest margin; yields on earning assets; interest rates and yield curves (generally and those applicable to our assets and liabilities); credit quality, including loan performance, non-performing assets, provisions for loan losses, charge-offs, other-than-temporary impairments and collateral values; market trends; rebranding and staff realignment costs and expected savings; and customer preferences, as well as statements with respect to our objectives, expectations and intentions and other statements that are not historical facts. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “point to,” “project,” “could,” “intend,” “target,” “goals,” “outlooks,” “modeled,” and other similar words and expressions of the future.
Forward-looking statements, including those as to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the Company’s actual results, performance, achievements, or financial condition to be materially different from future results, performance, achievements, or financial condition expressed or implied by such forward-looking statements. You should not rely on any forward-looking statements as predictions of future events. You should not expect us to update any forward-looking statements. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, together with those risks and uncertainties described in “Risk factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2019 and in our other filings with the U.S. Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website www.sec.gov.
Interim Financial Information
Unaudited financial information as of and for interim periods, including as of and for the three month periods ended March 31, 2020 and 2019, may not reflect our results of operations for our fiscal year ending, or financial condition as of December 31, 2020, or any other period of time or date.
Explanation of Certain Non-GAAP Financial Measures
Certain financial measures and ratios contained in this press release including “adjusted noninterest income”, “adjusted noninterest expense”, “adjusted net income”, “operating income”, “adjusted net income per share (basic and diluted)”, “adjusted return on assets (ROA)”, “adjusted return on equity (ROE)”, and other ratios appearing in Exhibits 1 and 2 are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (“GAAP”). The Company refers to these financial measures and ratios as “non-GAAP financial measures.”
We use certain non-GAAP financial measures, including those mentioned above, both to explain our results to shareholders and the investment community and in the internal evaluation and management of our businesses. Our management believes that these non-GAAP financial measures and the information they provide are useful to investors since these measures permit investors to view our performance using the same tools that our management uses to evaluate our past performance and prospects for future performance, especially in light of the additional costs we have incurred in connection with the Company’s restructuring activities that began in 2018 and continued into 2020, the one-time gain on sale of the vacant Beacon land in the fourth quarter of 2019, and the Company’s increase of its allowance for loan losses in 2020. While we believe that these non-GAAP financial measures are useful in evaluating our performance, this information should be considered as supplemental and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ from similar measures presented by other companies.
Exhibit 2 reconciles these non-GAAP financial measures to reported results.
Exhibit 1- Selected Financial Information
The following table sets forth selected financial information derived from our unaudited and audited consolidated financial statements.
| (in thousands) | March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | ||||||||||||||
| Consolidated Balance Sheets | |||||||||||||||||||
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| Total investments | 1,769,987 | 1,739,410 | 1,632,985 | 1,650,632 | 1,701,328 | ||||||||||||||
| Total gross loans (1) | 5,668,327 | 5,744,339 | 5,753,709 | 5,812,755 | 5,744,406 | ||||||||||||||
| Allowance for loan losses | 72,948 | 52,223 | 53,640 | 57,404 | 60,322 | ||||||||||||||
| Total deposits | 5,842,212 | 5,757,143 | 5,692,848 | 5,819,381 | 5,888,188 | ||||||||||||||
| Junior subordinated debentures (2) | 64,178 | 92,246 | 92,246 | 118,110 | 118,110 | ||||||||||||||
| Advances from the FHLB and other borrowings | 1,265,000 | 1,235,000 | 1,170,000 | 1,125,000 | 1,070,000 | ||||||||||||||
| Stockholders' equity | 841,117 | 834,701 | 825,751 | 806,368 | 778,749 | ||||||||||||||
| Assets under management and custody (3) | 1,572,322 | 1,815,848 | 1,713,012 | 1,787,257 | 1,693,895 |
| Three Months Ended | |||||||||||||||||||
| (in thousands, except percentages and per share amounts) | March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | ||||||||||||||
| Consolidated Results of Operations | |||||||||||||||||||
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| Provision for (reversal of) loan losses | 22,000 | (300 | ) | (1,500 | ) | (1,350 | ) | — | |||||||||||
| Noninterest income | 21,910 | 15,971 | 13,836 | 14,147 | 13,156 | ||||||||||||||
| Noninterest expense | 44,867 | 51,730 | 52,737 | 52,905 | 51,945 | ||||||||||||||
| Net income | 3,382 | 13,475 | 11,931 | 12,857 | 13,071 | ||||||||||||||
| Effective income tax rate | 20.83 | % | 14.73 | % | 21.50 | % | 21.51 | % | 21.49 | % | |||||||||
| Common Share Data | |||||||||||||||||||
| Stockholders' book value per common share | $ | 19.95 | $ | 19.35 | $ | 19.11 | $ | 18.66 | $ | 18.02 | |||||||||
| Tangible stockholders' equity (book value) per common share (4) | $ | 19.43 | $ | 18.84 | $ | 18.63 | $ | 18.18 | $ | 17.54 | |||||||||
| Basic earnings per common share | $ | 0.08 | $ | 0.32 | $ | 0.28 | $ | 0.30 | $ | 0.31 | |||||||||
| Diluted earnings per common share | $ | 0.08 | $ | 0.31 | $ | 0.28 | $ | 0.30 | $ | 0.30 | |||||||||
| Basic weighted average shares outstanding | 42,185 | 42,489 | 42,466 | 42,466 | 42,755 | ||||||||||||||
| Diluted weighted average shares outstanding (5) | 42,533 | 43,050 | 42,915 | 42,819 | 42,914 |
| Three Months Ended | ||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | ||||||||||
| Other Financial and Operating Data (6) | ||||||||||||||
| Profitability Indicators (%) | ||||||||||||||
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| Net income / Average total assets (ROA) (8) | 0.17 | % | 0.68 | % | 0.60 | % | 0.66 | % | 0.65 | % | ||||
| Net income / Average stockholders' equity (ROE) (9) | 1.61 | % | 6.44 | % | 5.81 | % | 6.56 | % | 6.87 | % | ||||
| Capital Indicators (%) | ||||||||||||||
| Total capital ratio (10) | 14.54 | % | 14.78 | % | 14.77 | % | 14.70 | % | 14.35 | % | ||||
| Tier 1 capital ratio (11) | 13.38 | % | 13.94 | % | 13.93 | % | 13.85 | % | 13.48 | % | ||||
| Tier 1 leverage ratio (12) | 10.82 | % | 11.32 | % | 11.15 | % | 11.32 | % | 10.83 | % | ||||
| Common equity tier 1 capital ratio (CET1) (13) | 12.42 | % | 12.60 | % | 12.57 | % | 12.14 | % | 11.79 | % | ||||
| Tangible common equity ratio (14) | 10.14 | % | 10.21 | % | 10.26 | % | 9.93 | % | 9.61 | % | ||||
| Asset Quality Indicators (%) | ||||||||||||||
| Non-performing assets / Total assets (15) | 0.41 | % | 0.41 | % | 0.42 | % | 0.41 | % | 0.26 | % | ||||
| Non-performing loans / Total loans (1) (16) | 0.59 | % | 0.57 | % | 0.57 | % | 0.56 | % | 0.36 | % | ||||
| Allowance for loan losses / Total non-performing loans (17) | 218.49 | % | 158.60 | % | 163.42 | % | 175.28 | % | 294.01 | % | ||||
| Allowance for loan losses / Total loans (1) (17) | 1.29 | % | 0.91 | % | 0.93 | % | 0.99 | % | 1.05 | % | ||||
| Net charge-offs / Average total loans (18) | 0.09 | % | 0.08 | % | 0.16 | % | 0.11 | % | 0.10 | % | ||||
| Efficiency Indicators (% except FTE) | ||||||||||||||
| Noninterest expense / Average total assets | 2.27 | % | 2.60 | % | 2.64 | % | 2.70 | % | 2.58 | % | ||||
| Salaries and employee benefits / Average total assets | 1.48 | % | 1.81 | % | 1.70 | % | 1.74 | % | 1.66 | % | ||||
| Other operating expenses/ Average total assets (19) | 0.79 | % | 0.79 | % | 0.95 | % | 0.96 | % | 0.92 | % | ||||
| Efficiency ratio (20) | 63.07 | % | 76.94 | % | 79.38 | % | 77.87 | % | 75.73 | % | ||||
| Full-Time-Equivalent Employees (FTEs) | 825 | 829 | 838 | 839 | 889 |
| Three Months Ended | |||||||||||||||||||
| (in thousands, except per share amounts and percentages) | March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | ||||||||||||||
| Adjusted Selected Consolidated Results of Operations and Other Data (4) | |||||||||||||||||||
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| Adjusted noninterest expense | 44,513 | 51,616 | 51,474 | 50,169 | 51,012 | ||||||||||||||
| Adjusted net income | 3,662 | 11,407 | 12,923 | 15,005 | 13,803 | ||||||||||||||
| Operating income | 16,652 | 14,800 | 12,793 | 14,039 | 16,644 | ||||||||||||||
| Adjusted earnings per common share | 0.09 | 0.27 | 0.30 | 0.35 | 0.33 | ||||||||||||||
| Adjusted earnings per diluted common share (5) | 0.09 | 0.26 | 0.30 | 0.35 | 0.32 | ||||||||||||||
| Adjusted net income / Average total assets (Adjusted ROA) (8) | 0.19 | % | 0.57 | % | 0.65 | % | 0.77 | % | 0.69 | % | |||||||||
| Adjusted net income / Average stockholders' equity (Adjusted ROE) (9) | 1.74 | % | 5.45 | % | 6.30 | % | 7.66 | % | 7.25 | % | |||||||||
| Adjusted noninterest expense / Average total assets | 2.25 | % | 2.59 | % | 2.58 | % | 2.56 | % | 2.53 | % | |||||||||
| Adjusted salaries and employee benefits / Average total assets | 1.48 | % | 1.80 | % | 1.67 | % | 1.69 | % | 1.66 | % | |||||||||
| Adjusted other operating expenses/ Average total assets (19) | 0.77 | % | 0.79 | % | 0.91 | % | 0.87 | % | 0.87 | % | |||||||||
| Adjusted efficiency ratio (21) | 62.57 | % | 80.1 | % | 77.48 | % | 73.84 | % | 74.37 | % |
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| (2) | During the three months ended March 31, 2020 and September 30, 2019, the Company redeemed |
| (3) | Assets held for clients in an agency or fiduciary capacity which are not assets of the Company and therefore are not included in the consolidated financial statements. |
| (4) | This presentation contains adjusted financial information determined by methods other than GAAP. This adjusted financial information is reconciled to GAAP in Exhibit 2 - Non-GAAP Financial Measures Reconciliation. |
| (5) | As of March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019 potential dilutive instruments consisted of unvested shares of restricted stock and restricted stock units mainly related to the Company’s IPO in 2018 totaling 482,316, 530,620, 789,652, 789,652, and 786,213, respectively. These potential dilutive instruments were included in the diluted earnings per share computation because, when the unamortized deferred compensation cost related to these shares was divided by the average market price per share at those dates, fewer shares would have been purchased than restricted shares assumed issued. Therefore, at those dates, such awards resulted in higher diluted weighted average shares outstanding than basic weighted average shares outstanding, and had a dilutive effect in per share earnings. |
| (6) | Operating data for the periods presented have been annualized. |
| (7) | NIM is defined as NII divided by average interest-earning assets, which are loans, securities, deposits with banks and other financial assets which yield interest or similar income. |
| (8) | Calculated based upon the average daily balance of total assets. |
| (9) | Calculated based upon the average daily balance of stockholders’ equity. |
| (10) | Total stockholders’ equity divided by total risk-weighted assets, calculated according to the standardized regulatory capital ratio calculations. |
| (11) | Tier 1 capital divided by total risk-weighted assets. |
| (12) | Tier 1 capital divided by quarter to date average assets. Tier 1 capital is composed of Common Equity Tier 1 (CET 1) capital plus outstanding qualifying trust preferred securities of |
| (13) | Common Equity Tier 1 (CET 1) capital divided by total risk-weighted assets. |
| (14) | Tangible common equity is calculated as the ratio of common equity less goodwill and other intangibles divided by total assets less goodwill and other intangible assets. Other intangibles assets are included in other assets in the Company’s consolidated balance sheets. |
| (15) | Non-performing assets include all accruing loans past due by 90 days or more, all nonaccrual loans, restructured loans that are considered “troubled debt restructurings” or “TDRs”, and OREO properties acquired through or in lieu of foreclosure. Non-performing assets were |
| (16) | Non-performing loans include all accruing loans past due by 90 days or more, all nonaccrual loans and restructured loans that are considered TDRs. Non-performing loans were |
| (17) | Allowance for loan losses was |
| (18) | Calculated based upon the average daily balance of outstanding loan principal balance net of deferred loan fees and costs, excluding the allowance for loan losses. |
| (19) | Other operating expenses is the result of total noninterest expense less salary and employee benefits. |
| (20) | Efficiency ratio is the result of noninterest expense divided by the sum of noninterest income and NII. |
| (21) | Adjusted efficiency ratio is the efficiency ratio less the effect of restructuring costs, described in Exhibit 2 - Non-GAAP Financial Measures Reconciliation. |
Exhibit 2- Non-GAAP Financial Measures Reconciliation
The following table sets forth selected financial information derived from the Company’s interim unaudited and annual audited consolidated financial statements, adjusted for certain costs incurred by the Company in the periods presented related to tax deductible restructuring costs, the after-tax gain of
| Three Months Ended, | |||||||||||||||
| (in thousands) | March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | ||||||||||
| 35%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: |
| Less: gain on sale of vacant Beacon land | — | (2,795 | ) | — | — | — | |||||||||
| Adjusted noninterest income | $ | 21,910 | $ | 13,176 | $ | 13,836 | $ | 14,147 | $ | 13,156 | |||||
| Total noninterest expenses | $ | 44,867 | $ | 51,730 | $ | 52,737 | $ | 52,905 | $ | 51,945 | |||||
| Less: restructuring costs (1): | |||||||||||||||
| Staff reduction costs | 54 | 114 | 450 | 907 | — | ||||||||||
| Digital transformation expenses | 300 | — | — | — | — | ||||||||||
| Rebranding costs | — | — | 813 | 1,829 | 933 | ||||||||||
| Other costs | — | — | — | — | — | ||||||||||
| Total restructuring costs | $ | 354 | $ | 114 | $ | 1,263 | $ | 2,736 | $ | 933 | |||||
| Adjusted noninterest expenses | $ | 44,513 | $ | 51,616 | $ | 51,474 | $ | 50,169 | $ | 51,012 | |||||
| Net income | $ | 3,382 | $ | 13,475 | $ | 11,931 | $ | 12,857 | $ | 13,071 | |||||
| Plus after-tax restructuring costs: | |||||||||||||||
| Restructuring costs before income tax effect | 354 | 114 | 1,263 | 2,736 | 933 | ||||||||||
| Income tax effect | (74 | ) | 59 | (271 | ) | (588 | ) | (201 | ) | ||||||
| Total after-tax restructuring costs | 280 | 173 | 992 | 2,148 | 732 | ||||||||||
| Less after-tax gain on sale of vacant Beacon land: | |||||||||||||||
| Gain on sale of vacant Beacon land before income tax effect | — | (2,795 | ) | — | — | — | |||||||||
| Income tax effect | — | 554 | — | — | — | ||||||||||
| Total after-tax gain on sale of vacant Beacon land | — | (2,241 | ) | — | — | — | |||||||||
| Adjusted net income | $ | 3,662 | $ | 11,407 | $ | 12,923 | $ | 15,005 | $ | 13,803 | |||||
| Net Income | $ | 3,382 | $ | 13,475 | $ | 11,931 | $ | 12,857 | $ | 13,071 | |||||
| Plus: provision for income tax expense | 890 | 2,328 | 3,268 | 3,524 | 3,577 | ||||||||||
| Plus: provision for (reversal of) loan losses | 22,000 | (300 | ) | (1,500 | ) | (1,350 | ) | — | |||||||
| Less: securities gains, net | 9,620 | 703 | 906 | 992 | 4 | ||||||||||
| Operating income | $ | 16,652 | $ | 14,800 | $ | 12,793 | $ | 14,039 | $ | 16,644 | |||||
| Three Months Ended, | |||||||||||||||
| (in thousands, except percentages and per share amounts) | March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | ||||||||||
| 35%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: |
| 35%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: |
| Plus: after tax impact of restructuring costs | 0.01 | — | 0.02 | 0.05 | 0.02 | ||||||||||
| Less: after tax gain on sale of vacant Beacon land | — | (0.05 | ) | — | — | — | |||||||||
| Total adjusted basic earnings per common share | $ | 0.09 | $ | 0.27 | $ | 0.30 | $ | 0.35 | $ | 0.33 | |||||
| Diluted earnings per share (2) | $ | 0.08 | $ | 0.31 | $ | 0.28 | $ | 0.30 | $ | 0.30 | |||||
| Plus: after tax impact of restructuring costs | 0.01 | — | 0.02 | 0.05 | 0.02 | ||||||||||
| Less: after tax gain on sale of vacant Beacon land | — | (0.05 | ) | — | — | — | |||||||||
| Total adjusted diluted earnings per common share | $ | 0.09 | $ | 0.26 | $ | 0.30 | $ | 0.35 | $ | 0.32 | |||||
| Net income / Average total assets (ROA) | 0.17 | % | 0.68 | % | 0.60 | % | 0.66 | % | 0.65 | % | |||||
| Plus: after tax impact of restructuring costs | 0.02 | % | 0.01 | % | 0.05 | % | 0.11 | % | 0.04 | % | |||||
| Less: after tax gain on sale of vacant Beacon land | — | % | (0.12 | )% | — | % | — | % | — | % | |||||
| Adjusted net income / Average total assets (Adjusted ROA) | 0.19 | % | 0.57 | % | 0.65 | % | 0.77 | % | 0.69 | % | |||||
| Net income / Average stockholders' equity (ROE) | 1.61 | % | 6.44 | % | 5.81 | % | 6.56 | % | 6.87 | % | |||||
| Plus: after tax impact of restructuring costs | 0.13 | % | 0.08 | % | 0.49 | % | 1.10 | % | 0.38 | % | |||||
| Less: after tax gain on sale of vacant Beacon land | — | % | (1.07 | )% | — | % | — | % | — | % | |||||
| Adjusted net income / Average stockholders' equity (Adjusted ROE) | 1.74 | % | 5.45 | % | 6.30 | % | 7.66 | % | 7.25 | % | |||||
| Noninterest expense / Average total assets | 2.27 | % | 2.60 | % | 2.64 | % | 2.70 | % | 2.58 | % | |||||
| Less: impact of restructuring costs | (0.02 | )% | (0.01 | )% | (0.06 | )% | (0.14 | )% | (0.05 | )% | |||||
| Adjusted Noninterest expense / Average total assets | 2.25 | % | 2.59 | % | 2.58 | % | 2.56 | % | 2.53 | % | |||||
| Salaries and employee benefits / Average total assets | 1.48 | % | 1.81 | % | 1.70 | % | 1.74 | % | 1.66 | % | |||||
| Less: impact of restructuring costs | — | % | (0.01 | )% | (0.03 | )% | (0.05 | )% | — | % | |||||
| Adjusted salaries and employee benefits / Average total assets | 1.48 | % | 1.80 | % | 1.67 | % | 1.69 | % | 1.66 | % | |||||
| Other operating expenses / Average total assets | 0.79 | % | 0.79 | % | 0.95 | % | 0.96 | % | 0.92 | % | |||||
| Less: impact of restructuring costs | (0.02 | )% | — | % | (0.04 | )% | (0.09 | )% | (0.05 | )% | |||||
| Adjusted other operating expenses / Average total assets | 0.77 | % | 0.79 | % | 0.91 | % | 0.87 | % | 0.87 | % | |||||
| Efficiency ratio | 63.07 | % | 76.94 | % | 79.38 | % | 77.87 | % | 75.73 | % | |||||
| Less: impact of restructuring costs | (0.50 | )% | (0.17 | )% | (1.90 | )% | (4.03 | )% | (1.36 | )% | |||||
| Adjusted efficiency ratio | 62.57 | % | 80.10 | % | 77.48 | % | 73.84 | % | 74.37 | % | |||||
| Three Months Ended, | |||||||||||||||
| (in thousands, except per share amounts and percentages) | March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | ||||||||||
| Stockholders' equity | $ | 841,117 | $ | 834,701 | $ | 825,751 | $ | 806,368 | $ | 778,749 | |||||
| Less: goodwill and other intangibles | (21,698 | ) | (21,744 | ) | (20,933 | ) | (20,969 | ) | (21,005 | ) | |||||
| Tangible common stockholders' equity | $ | 819,419 | $ | 812,957 | $ | 804,818 | $ | 785,399 | $ | 757,744 | |||||
| Total assets | 8,098,810 | 7,985,399 | 7,864,260 | 7,926,826 | 7,902,355 | ||||||||||
| Less: goodwill and other intangibles | (21,698 | ) | (21,744 | ) | (20,933 | ) | (20,969 | ) | (21,005 | ) | |||||
| Tangible assets | $ | 8,077,112 | $ | 7,963,655 | $ | 7,843,327 | $ | 7,905,857 | $ | 7,881,350 | |||||
| Common shares outstanding | 42,166 | 43,146 | 43,205 | 43,205 | 43,205 | ||||||||||
| Tangible common equity ratio | 10.14 | % | 10.21 | % | 10.26 | % | 9.93 | % | 9.61 | % | |||||
| Stockholders' book value per common share | $ | 19.95 | $ | 19.35 | $ | 19.11 | $ | 18.66 | $ | 18.02 | |||||
| Tangible stockholders' book value per common share | $ | 19.43 | $ | 18.84 | $ | 18.63 | $ | 18.18 | $ | 17.54 |
| 2%; width: | 98%; width: |
| (2) | As of March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019 potential dilutive instruments consisted of unvested shares of restricted stock and restricted stock units mainly related to the Company’s IPO in 2018 totaling 482,316, 530,620, 789,652, 789,652 and 786,213, respectively. These potential dilutive instruments were included in the diluted earnings per share computation because, when the unamortized deferred compensation cost related to these shares was divided by the average market price per share at those dates, fewer shares would have been purchased than restricted shares assumed issued. Therefore, at those dates, such awards resulted in higher diluted weighted average shares outstanding than basic weighted average shares outstanding, and had a dilutive effect in per share earnings. |
Exhibit 3 - Average Balance Sheet, Interest and Yield/Rate Analysis
The following tables present average balance sheet information, interest income, interest expense and the corresponding average yields earned and rates paid for the periods presented. The average balances for loans include both performing and nonperforming balances. Interest income on loans includes the effects of discount accretion and the amortization of net deferred loan origination costs accounted for as yield adjustments. Average balances represent the daily average balances for the periods presented.
| Three Months Ended | ||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||||||||||||||||||||
| (in thousands, except percentages) | Average Balances | Income/ Expense | Yield/ Rates | Average Balances | Income/ Expense | Yield/ Rates | Average Balances | Income/ Expense | Yield/ Rates | |||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||
| 29%; width: | 1%; width: | 8%; width: | 1%; width: | 1%; width: | 6%; width: | 1%; width: | 4%; width: | 1%; width: | 1%; width: | 1%; width: | 8%; width: | 1%; width: | 1%; width: | 6%; width: | 1%; width: | 4%; width: | 1%; width: | 1%; width: | 1%; width: | 8%; width: | 1%; width: | 1%; width: | 6%; width: | 1%; width: | 4%; width: | 1%; width: |
| Debt securities available for sale (2) | 1,549,502 | 9,497 | 2.47 | % | 1,528,916 | 9,814 | 2.55 | % | 1,532,649 | 10,750 | 2.84 | % | ||||||||||||||
| Debt securities held to maturity (3) | 72,472 | 400 | 2.22 | % | 75,989 | 419 | 2.19 | % | 84,613 | 586 | 2.81 | % | ||||||||||||||
| Equity securities with readily determinable fair value not held for trading | 24,052 | 131 | 2.19 | % | 23,912 | 141 | 2.34 | % | 23,179 | 139 | 2.43 | % | ||||||||||||||
| Federal Reserve Bank and FHLB stock | 71,192 | 1,037 | 5.86 | % | 71,902 | 1,044 | 5.76 | % | 67,461 | 1,106 | 6.65 | % | ||||||||||||||
| Deposits with banks | 171,848 | 462 | 1.08 | % | 105,060 | 449 | 1.70 | % | 169,811 | 1,004 | 2.40 | % | ||||||||||||||
| Total interest-earning assets | 7,462,693 | 71,315 | 3.84 | % | 7,433,420 | 75,237 | 4.02 | % | 7,585,604 | 80,307 | 4.29 | % | ||||||||||||||
| Total non-interest-earning assets less allowance for loan losses | 488,651 | 472,556 | 477,714 | |||||||||||||||||||||||
| Total assets | $ | 7,951,344 | $ | 7,905,976 | $ | 8,063,318 |
| Interest-bearing liabilities: | ||||||||||||||||||||||||||
| Checking and saving accounts - | ||||||||||||||||||||||||||
| 29%; width: | 1%; width: | 8%; width: | 1%; width: | 1%; width: | 6%; width: | 1%; width: | 4%; width: | 1%; width: | 1%; width: | 1%; width: | 8%; width: | 1%; width: | 1%; width: | 6%; width: | 1%; width: | 4%; width: | 1%; width: | 1%; width: | 1%; width: | 8%; width: | 1%; width: | 1%; width: | 6%; width: | 1%; width: | 4%; width: | 1%; width: |
| Money market | 1,136,501 | 3,249 | 1.15 | % | 1,147,539 | 3,802 | 1.31 | % | 1,158,623 | 3,717 | 1.30 | % | ||||||||||||||
| Savings | 322,682 | 17 | 0.02 | % | 337,338 | 16 | 0.02 | % | 383,425 | 16 | 0.02 | % | ||||||||||||||
| Total checking and saving accounts | 2,530,741 | 3,401 | 0.54 | % | 2,583,409 | 3,977 | 0.61 | % | 2,804,651 | 4,007 | 0.58 | % | ||||||||||||||
| Time deposits | 2,461,073 | 13,484 | 2.20 | % | 2,317,052 | 13,180 | 2.26 | % | 2,422,351 | 12,553 | 2.10 | % | ||||||||||||||
| Total deposits | 4,991,814 | 16,885 | 1.36 | % | 4,900,461 | 17,157 | 1.39 | % | 5,227,002 | 16,560 | 1.28 | % | ||||||||||||||
| Securities sold under agreements to repurchase | — | — | — | % | 497 | 2 | 1.60 | % | — | — | — | % | ||||||||||||||
| Advances from the FHLB and other borrowings (4) | 1,195,714 | 4,412 | 1.48 | % | 1,214,728 | 5,575 | 1.82 | % | 1,101,356 | 6,205 | 2.28 | % | ||||||||||||||
| Junior subordinated debentures | 73,123 | 789 | 4.34 | % | 92,246 | 1,241 | 5.34 | % | 118,110 | 2,105 | 7.23 | % | ||||||||||||||
| Total interest-bearing liabilities | 6,260,651 | 22,086 | 1.42 | % | 6,207,932 | 23,975 | 1.53 | % | 6,446,468 | 24,870 | 1.56 | % | ||||||||||||||
| Total non-interest-bearing liabilities | 846,493 | 868,470 | 856,211 | |||||||||||||||||||||||
| Total liabilities | 7,107,144 | 7,076,402 | 7,302,679 | |||||||||||||||||||||||
| Stockholders’ equity | 844,200 | 829,574 | 760,639 | |||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 7,951,344 | $ | 7,905,976 | $ | 8,063,318 | ||||||||||||||||||||
| Excess of average interest-earning assets over average interest-bearing liabilities | $ | 1,202,042 | $ | 1,225,488 | $ | 1,139,136 | ||||||||||||||||||||
| Net interest income | $ | 49,229 | $ | 51,262 | $ | 55,437 | ||||||||||||||||||||
| Net interest rate spread | 2.42 | % | 2.49 | % | 2.73 | % | ||||||||||||||||||||
| Net interest margin (5) | 2.65 | % | 2.74 | % | 2.96 | % | ||||||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 119.20 | % | 119.74 | % | 117.67 | % |
| 2%; width: | 98%; width: |
| (2) | Includes nontaxable securities with average balances of |
| (3) | Includes nontaxable securities with average balances of |
| (4) | The terms of the FHLB advance agreements require the Bank to maintain certain investment securities or loans as collateral for these advances. |
| (5) | NIM is defined as NII divided by average interest-earning assets, which are loans, securities available for sale and held to maturity, deposits with banks and other financial assets which yield interest or similar income. |
Exhibit 4 - Noninterest Income
This table shows the amounts of each of the categories of noninterest income for the periods presented.
| Three Months Ended | |||||||||||||||||
| March 31, 2020 | December 31, 2019 | March 31, 2019 | |||||||||||||||
| (in thousands, except percentages) | Amount | % | Amount | % | Amount | % | |||||||||||
| 41%; width: | 1%; width: | 8%; width: | 1%; width: | 8%; width: | 1%; width: | 1%; width: | 1%; width: | 8%; width: | 1%; width: | 8%; width: | 1%; width: | 1%; width: | 1%; width: | 8%; width: | 1%; width: | 8%; width: | 1%; width: |
| Brokerage, advisory and fiduciary activities | 4,133 | 18.9 | % | 3,865 | 24.2 | % | 3,688 | 28.0 | % | ||||||||
| Change in cash surrender value of bank owned life insurance (“BOLI”)(1) | 1,414 | 6.5 | % | 1,438 | 9.0 | % | 1,404 | 10.7 | % | ||||||||
| Cards and trade finance servicing fees | 395 | 1.8 | % | 557 | 3.5 | % | 915 | 7.0 | % | ||||||||
| Gain on early extinguishment of FHLB advances | (7 | ) | — | % | (1,443 | ) | (9.0 | )% | 557 | 4.2 | % | ||||||
| Data processing and fees for other services | — | — | % | — | — | % | 520 | 4.0 | % | ||||||||
| Securities gains, net (2) | 9,620 | 43.9 | % | 703 | 4.4 | % | 4 | — | % | ||||||||
| Other noninterest income (3) | 2,065 | 9.3 | % | 6,577 | 41.1 | % | 1,982 | 15.0 | % | ||||||||
| Total noninterest income | $ | 21,910 | 100.0 | % | $ | 15,971 | 100.0 | % | $ | 13,156 | 100.0 | % |
| 2%; width: | 98%; width: |
| (2) | Includes net gain on sale of securities of |
| (3) | Includes rental income, income from derivative and foreign currency exchange transactions with customers, and valuation income on the investment balances held in the non-qualified deferred compensation plan. |
Exhibit 5 - Noninterest Expense
This table shows the amounts of each of the categories of noninterest expense for the periods presented.
| Three Months Ended | |||||||||||||||||
| March 31, 2020 | December 31, 2019 | March 31, 2019 | |||||||||||||||
| (in thousands, except percentages) | Amount | % | Amount | % | Amount | % | |||||||||||
| 41%; width: | 1%; width: | 8%; width: | 1%; width: | 8%; width: | 1%; width: | 1%; width: | 1%; width: | 8%; width: | 1%; width: | 8%; width: | 1%; width: | 1%; width: | 1%; width: | 8%; width: | 1%; width: | 8%; width: | 1%; width: |
| Occupancy and equipment | 3,803 | 8.5 | % | 4,042 | 7.8 | % | 4,042 | 7.8 | % | ||||||||
| Professional and other services fees | 2,954 | 6.6 | % | 4,430 | 8.6 | % | 3,444 | 6.6 | % | ||||||||
| Telecommunications and data processing | 3,464 | 7.7 | % | 3,396 | 6.6 | % | 3,026 | 5.8 | % | ||||||||
| Depreciation and amortization | 1,959 | 4.4 | % | 1,214 | 2.3 | % | 1,942 | 3.7 | % | ||||||||
| FDIC assessments and insurance | 1,118 | 2.5 | % | 876 | 1.7 | % | 1,393 | 2.7 | % | ||||||||
| Other operating expenses (1) | 2,243 | 4.9 | % | 1,748 | 3.4 | % | 4,661 | 9.0 | % | ||||||||
| Total noninterest expense | $ | 44,867 | 100.0 | % | $ | 51,730 | 100.0 | % | $ | 51,945 | 100.0 | % |
| 2%; width: | 98%; width: |
Exhibit 6 - Loans
Loans by Type
The loan portfolio consists of the following loan classes:
| (in thousands) | March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | ||||||||||||||
| Real estate loans | |||||||||||||||||||
| Commercial real estate | |||||||||||||||||||
| 31%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: |
| Multi-family residential | 834,016 | 801,626 | 942,851 | 968,080 | 878,239 | ||||||||||||||
| Land development and construction loans | 225,179 | 278,688 | 268,312 | 291,304 | 291,416 | ||||||||||||||
| 2,934,488 | 2,972,116 | 3,144,825 | 3,131,877 | 3,022,558 | |||||||||||||||
| Single-family residential | 569,340 | 539,102 | 527,468 | 535,563 | 535,306 | ||||||||||||||
| Owner occupied | 923,260 | 894,060 | 825,601 | 836,334 | 801,856 | ||||||||||||||
| 4,427,088 | 4,405,278 | 4,497,894 | 4,503,774 | 4,359,720 | |||||||||||||||
| Commercial loans | 1,084,751 | 1,234,043 | 1,127,484 | 1,180,736 | 1,239,525 | ||||||||||||||
| Loans to financial institutions and acceptances | 16,576 | 16,552 | 24,815 | 25,006 | 27,985 | ||||||||||||||
| Consumer loans and overdrafts | 139,912 | 88,466 | 101,598 | 103,239 | 107,208 | ||||||||||||||
| Total loans | $ | 5,668,327 | $ | 5,744,339 | $ | 5,751,791 | $ | 5,812,755 | $ | 5,734,438 |
Non-Performing Assets
This table shows a summary of our non-performing assets by loan class, which includes non-performing loans and other real estate owned, or OREO, at the dates presented. Non-performing loans consist of (i) nonaccrual loans; (ii) accruing loans 90 days or more contractually past due as to interest or principal; and (iii) restructured loans that are considered TDRs.
| (in thousands) | March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | ||||||||||||||
| Non-Accrual Loans(1) | |||||||||||||||||||
| Real Estate Loans | |||||||||||||||||||
| Commercial real estate (CRE) | |||||||||||||||||||
| 31%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: |
| Multi-family residential | — | — | — | 657 | 665 | ||||||||||||||
| 1,936 | 1,936 | 1,936 | 2,621 | 665 | |||||||||||||||
| Single-family residential | 7,077 | 7,291 | 9,033 | 9,432 | 6,514 | ||||||||||||||
| Owner occupied | 13,897 | 14,130 | 11,921 | 10,528 | 5,192 | ||||||||||||||
| 22,910 | 23,357 | 22,890 | 22,581 | 12,371 | |||||||||||||||
| Commercial loans | 9,993 | 9,149 | 9,605 | 10,032 | 7,361 | ||||||||||||||
| Consumer loans and overdrafts | 467 | 416 | 116 | 114 | 37 | ||||||||||||||
| Total Non-Accrual Loans | $ | 33,370 | $ | 32,922 | $ | 32,611 | $ | 32,727 | $ | 19,769 | |||||||||
| Past Due Accruing Loans(2) | |||||||||||||||||||
| Real Estate Loans | |||||||||||||||||||
| Single-family residential | $ | 5 | $ | — | $ | — | $ | — | $ | — | |||||||||
| Commercial | — | — | — | — | — | ||||||||||||||
| Consumer loans and overdrafts | 12 | 5 | 213 | 23 | 749 | ||||||||||||||
| Total Past Due Accruing Loans | 17 | 5 | 213 | 23 | 749 | ||||||||||||||
| Total Non-Performing Loans | 33,387 | 32,927 | 32,824 | 32,750 | 20,518 | ||||||||||||||
| Other Real Estate Owned | 42 | 42 | — | — | — | ||||||||||||||
| Total Non-Performing Assets | $ | 33,429 | $ | 32,969 | $ | 32,824 | $ | 32,750 | $ | 20,518 |
| 2%; width: | 98%; width: |
| (2) | Loans past due 90 days or more but still accruing. |
Loans by Credit Quality Indicators
This tables shows the Company’s loans by credit quality indicators. We have no purchased credit-impaired loans.
| March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||||||||||||||||||||||||||||||||||
| (in thousands) | Special Mention | Substandard | Doubtful | Total (1) | Special Mention | Substandard | Doubtful | Total (1) | Special Mention | Substandard | Doubtful | Total (1) | ||||||||||||||||||||||||||
| Real Estate Loans | ||||||||||||||||||||||||||||||||||||||
| Commercial Real Estate (CRE) | ||||||||||||||||||||||||||||||||||||||
| 14%; width: | 1%; width: | 5%; width: | 1%; width: | 1%; width: | 5%; width: | 1%; width: | 1%; width: | 5%; width: | 1%; width: | 1%; width: | 5%; width: | 1%; width: | 1%; width: | 1%; width: | 5%; width: | 1%; width: | 1%; width: | 5%; width: | 1%; width: | 1%; width: | 5%; width: | 1%; width: | 1%; width: | 5%; width: | 1%; width: | 1%; width: | 1%; width: | 5%; width: | 1%; width: | 1%; width: | 5%; width: | 1%; width: | 1%; width: | 5%; width: | 1%; width: | 1%; width: | 5%; width: | 1%; width: |
| Multi-family residential | — | — | — | — | — | — | — | — | — | 665 | — | 665 | ||||||||||||||||||||||||||
| Land development and construction loans | 9,852 | — | — | 9,852 | 9,955 | — | — | 9,955 | — | — | — | — | ||||||||||||||||||||||||||
| 9,852 | 757 | 1,936 | 12,545 | 19,279 | 762 | 1,936 | 21,977 | 8,285 | 665 | — | 8,950 | |||||||||||||||||||||||||||
| Single-family residential | — | 7,082 | — | 7,082 | — | 7,291 | — | 7,291 | — | 6,514 | — | 6,514 | ||||||||||||||||||||||||||
| Owner occupied | 7,190 | 14,005 | — | 21,195 | 8,138 | 14,240 | — | 22,378 | 12,767 | 8,632 | — | 21,399 | ||||||||||||||||||||||||||
| 17,042 | 21,844 | 1,936 | 40,822 | 27,417 | 22,293 | 1,936 | 51,646 | 21,052 | 15,811 | — | 36,863 | |||||||||||||||||||||||||||
| Commercial loans | 2,587 | 9,459 | 2,643 | 14,689 | 5,569 | 8,406 | 2,669 | 16,644 | 3,992 | 9,073 | 559 | 13,624 | ||||||||||||||||||||||||||
| Consumer loans and overdrafts | — | 41 | 434 | 475 | — | 67 | 357 | 424 | — | 5,944 | — | 5,944 | ||||||||||||||||||||||||||
| $ | 19,629 | $ | 31,344 | $ | 5,013 | $ | 55,986 | $ | 32,986 | $ | 30,766 | $ | 4,962 | $ | 68,714 | $ | 25,044 | $ | 30,828 | $ | 559 | $ | 56,431 |
| 2%; width: | 98%; width: |
Exhibit 7 - Deposits by Country of Domicile
This table shows the Company’s deposits by country of domicile of the depositor as of the dates presented.
| (in thousands) | March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | ||||||||||||||
| 31%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: | 1%; width: | 1%; width: | 11%; width: | 1%; width: |
| Foreign: | |||||||||||||||||||
| Venezuela | 2,224,353 | 2,270,970 | 2,345,938 | 2,465,718 | 2,587,879 | ||||||||||||||
| Others | 363,887 | 364,346 | 347,223 | 339,394 | 337,211 | ||||||||||||||
| Total foreign | 2,588,240 | 2,635,316 | 2,693,161 | 2,805,112 | 2,925,090 | ||||||||||||||
| Total deposits | $ | 5,842,212 | $ | 5,757,143 | $ | 5,692,848 | $ | 5,819,381 | $ | 5,888,188 |
| CONTACTS: |
| Investors |
| InvestorRelations@amerantbank.com |
| (305) 460-8728 |
| Media |
| media@amerantbank.com |
| (305) 441-8414 |
