Amerant Bancorp's Bold Bet: Can Strategic Restructuring Reverse Shareholder Losses?

Amerant Bancorp (NYSE: AMTB) has embarked on a high-stakes restructuring plan to stabilize its financial trajectory after shareholders endured a 35% decline in stock value from 2022 to mid-2025. The Miami-based bank's recent moves—selling $551 million in securities, raising $165 million in equity, and repositioning its portfolio—aim to address years of underperformance. But do these actions lay the groundwork for recovery, or are they merely masking deeper challenges? Let's dissect the strategy and its implications for investors.

The Pain of Underperformance

Amerant's stock has been a story of volatility and decline since hitting an all-time high of $33.96 in February 2022. By June 2025, shares traded at just $16.69, erasing nearly half its value (). The drop reflects broader banking sector pressures—rising interest rates, loan defaults, and regulatory scrutiny—but also Amerant's struggles to grow profitably. A -24.9% ROE in Q3 2024 (excluding one-time losses) underscored weak capital efficiency, while a 1.52% NPL ratio hinted at lingering credit quality issues.

The Strategic Pivot: Capital Raise and Portfolio Shake-Up

In a bold move, Amerant raised $165 million via a stock offering in September 2024, using proceeds to bolster liquidity and fund loan growth. Simultaneously, it sold $551 million in securities, including low-yielding corporate debt, to reposition its balance sheet. This “trim the fat” strategy aimed to:- Improve yield: Shedding low-yielding assets to boost net interest margins (NIM).- Reduce risk: Lightening exposure to volatile sectors like real estate and corporate debt.- Fuel growth: Redirecting capital to loans and deposits, which rose by $239 million and $295 million, respectively, in Q3 2024.

The restructuring came at a cost: a $68.5 million pre-tax loss from the securities sale and a $5.7 million OREO valuation write-down. Yet CEO Jerry Plush framed it as a “multi-year transformation” to become the “bank of choice” in its markets.

Post-Restructuring Results: Progress Amid Pain

The numbers paint a mixed picture. While core metrics show resilience, near-term pain persists:- Loan Growth: Gross loans hit $7.56 billion, a 3.2% annual increase, signaling demand for credit.- Deposit Strength: Deposits grew to $8.11 billion, reducing reliance on costlier borrowings.- Liquidity: Cash reserves surged to $672 million, providing a buffer against economic shocks.- Core Efficiency: Excluding restructuring costs, the efficiency ratio dipped to 69.3%, near pre-pandemic levels.

However, the NIM fell to 3.49% due to rising deposit costs and non-performing loans, while the NPL ratio rose to 1.52%, reflecting credit stresses. The -24.9% ROE (excluding losses) highlights that profitability remains fragile.

The Case for Caution—and Hope

Investors face a paradox: Amerant's restructuring is stabilizing its balance sheet but hasn't yet translated to sustained profitability. The dividend remains intact at $0.09 per share, a positive sign of cash flow, but core earnings face headwinds from:- Asset Quality: A 69.5% ACL coverage ratio leaves less cushion for loan losses.- Interest Rate Risks: Flattening yield curves could further squeeze NIM.- Market Competition: Regional banks face pricing pressure as customers seek better rates.

Yet there are reasons for optimism. The $155 million equity infusion strengthens capital ratios, and loan growth suggests demand for its services. If the bank can stabilize NPLs and improve NIM, a rebound in ROE to 8-10%—in line with peers—could drive stock recovery.

Investment Thesis: A Wait-and-See Approach

For shareholders, the verdict hinges on execution. The restructuring's benefits—lower risk, higher-quality assets, and liquidity—are long-term plays. Near-term metrics like Q4 2024's NIM trends and NPL resolution progress will be critical. Meanwhile, the stock's 1.55% dividend yield offers some income cushion.

Recommendation: Hold the stock for now, but maintain a cautious stance. A price target of $22.50 (implying a 34% upside from June 2025 levels) assumes stabilization in credit metrics and NIM recovery. Investors should monitor loan growth trends and core efficiency improvements. If Amerant can achieve a 70% ACL coverage ratio and NIM above 3.7%, the stock could regain momentum. Until then, this is a high-risk, long-term bet on a turnaround story.

Final Word

Amerant's restructuring is a necessary step to rebuild shareholder value, but success isn't guaranteed. The bank must navigate credit risks and interest rate pressures while proving it can grow loans profitably. For investors willing to endure short-term pain, the stock's valuation—0.8x tangible book value—offers some margin of safety. Yet patience will be the watchword: recovery hinges on execution in 2025 and beyond.