Amerant Bancorp's Strategic Turnaround and Growth Momentum in 2025

Amerant Bancorp (AMTB) has emerged as a standout performer in the regional banking sector in 2025, driven by a strategic pivot toward deposit growth, disciplined loan management, and robust asset quality improvements. With its second-quarter 2025 results underscoring a 91% year-over-year increase in net income and a sharp reduction in non-performing assets, the bank is positioning itself as a compelling investment opportunity for those seeking exposure to a well-managed financial institution with clear growth levers.

Deposit Growth Dynamics: A Shift to Sustainable Momentum

Amerant's deposit strategy has evolved significantly in 2025, prioritizing organic growth over reliance on brokered deposits. Total deposits surged to $8.3 billion in Q2 2025, with core deposits rising by $150.6 million to $6.1 billion. The bank's management has explicitly targeted a reduction of brokered deposits by at least $100 million by year-end, a move that not only lowers funding costs but also enhances deposit stability. This shift is reflected in the net interest margin (NIM), which expanded to 3.81% in Q2, up from 3.75% in Q1, as lower-cost core deposits offset higher borrowing costs.

The bank's expansion into Florida—via new branches in Miami Beach, Downtown Tampa, and Bay Harbor Islands—further amplifies its deposit-growth potential. These strategic openings are expected to deepen customer relationships, a critical factor in sustaining deposit growth. By year-end, Amerant anticipates 14%-15% annualized organic deposit growth, a trajectory that could further bolster its NIM and reduce reliance on volatile funding sources.

Loan Growth and Asset Quality: Balancing Caution with Opportunity

While deposit growth is a cornerstone of Amerant's strategy, the bank has adopted a measured approach to loan expansion. Total gross loans stood at $7.2 billion in Q2 2025, with a 0.4% quarter-over-quarter decline. However, management expects 5% annualized loan growth by year-end, driven by a diversified portfolio that includes 37.4% commercial real estate (CRE) loans. Notably, the CRE segment is weighted toward retail (26.1%), office (17.8%), and multifamily (17.5%) properties, reflecting a balanced risk profile.

Asset quality has improved markedly, with non-performing assets declining by 30.5% to $97.9 million in Q2. The allowance for credit losses (ACL) also decreased to $86.5 million, signaling confidence in the bank's underwriting standards. While classified loans rose slightly to $215.4 million, this was attributed to downgrades in select commercial and CRE loans rather than systemic risk. Amerant's proactive approach—selling non-performing assets and accelerating charge-offs—has stabilized its credit profile, reducing the risk of future provision spikes.

ROA/ROE Trajectory: A Profitability Powerhouse

Amerant's financial metrics have transformed dramatically in 2025. Return on average assets (ROA) surged from 0.48% in Q1 to 0.90% in Q2, while return on average equity (ROE) more than doubled to 10.06%. These figures outperform the industry average for regional banks and reflect the bank's ability to convert improved asset quality and higher NIM into shareholder value.

The catalysts for this outperformance include:
1. Lower credit loss provisions: A $12.4 million decline in the provision for credit losses directly boosted net income.
2. Efficiency gains: The efficiency ratio stabilized at 67.5%, down slightly from 67.9% in Q1, as non-interest income rose 1.3% to $19.8 million.
3. Capital management: Share repurchases (275,666 shares at $18.14 each) and a consistent $0.09 dividend per share have enhanced tangible book value, which now stands at $21.56 per share.

Investment Case: A Compelling Mix of Momentum and Discipline

Amerant's 2025 turnaround is underpinned by a clear strategy: grow deposits organically, manage loan growth conservatively, and leverage asset quality improvements to drive profitability. The bank's guidance for 14%-15% deposit growth and 5% loan growth, combined with its strong ROA/ROE trajectory, positions it to outperform peers in a high-interest-rate environment.

However, risks remain. A potential slowdown in CRE markets—particularly office and retail properties—could pressure asset quality. Additionally, the efficiency ratio may rise in Q3 2025 due to expansion costs and team additions. Investors should monitor the bank's credit metrics and capital ratios for signs of stress.

For those with a medium-term horizon, Amerant offers an attractive entry point. Its current valuation (trading at a 15% discount to tangible book value) and robust earnings momentum suggest potential for both capital appreciation and dividend income. The recent share repurchases and dividend consistency further enhance its appeal as a capital-efficient play.

Conclusion

Amerant Bancorp's strategic focus on deposit growth, disciplined credit management, and capital preservation has created a virtuous cycle of profitability and risk mitigation. As the bank executes its Florida expansion and continues to reduce reliance on brokered deposits, its ROA/ROE trajectory and asset quality improvements will likely cement its position as a top-tier regional bank. For investors seeking a balance of growth and safety in the financial sector, AMTB presents a compelling case—provided they remain attentive to the nuances of its CRE exposure and operational execution.