Amerant Slashes Costs, Repurchases Shares Amid Shrinking Deposits

Date of Call: Jan 23, 2026

Financials Results

• Revenue: $90.2M Net Interest Income, down $4M YOY
• EPS: $0.07 per diluted share, compared to $0.35 in the third quarter
• Gross Margin: 3.78% Net Interest Margin, down from 3.92% in the prior quarter
• Operating Margin: 0.10% ROA and 1.12% ROE, compared to 0.57% and 6.21% in the prior quarter respectively

Guidance:

• Loan balances projected at similar levels to Q4 2025 in Q1 2026, with full-year growth of 7% to 9%.
• Deposit growth expected to match loan growth.
• Net Interest Margin projected in the 3.65% to 3.70% range.
• Expenses projected at $70M-$71M in first half and $67M-$68M by end of 2026.
• Focus on improving noninterest-bearing deposit ratio and cost of funds.

Business Commentary:

Strategic Focus and Share Repurchase:

• Amerant Bancorp's total assets decreased to $9.8 billion from $10.4 billion in the previous quarter, primarily due to a reduction in wholesale funding and higher cost deposits.
• The company approved a share repurchase program, buying back 737,334 shares at a weighted average price of $17.63 per share, representing 78% of the tangible book value.
• The strategic focus on stabilization and optimization is reflected in the reduction of non-core funding and the repurchase of shares to enhance shareholder value.

Credit Quality and Asset Management:

• Nonperforming assets increased to $187 million, or 1.9% of total assets, compared to $140 million, or 1.3%, in the prior quarter.
• The increase in nonperforming assets resulted from rigorous credit reviews and proactive measures to identify deteriorating conditions.
• Efforts to exit non-core markets and large exposures are part of the strategy to improve credit quality and asset management.

Expense Management and Efficiency:

• Noninterest expense increased by $28.9 million to $106.8 million, primarily due to valuation expenses, contract termination costs, and staff separation costs.
• Core noninterest expense was $77.6 million, reflecting the impact of restructuring efforts aimed at improving the company's cost structure.
• The initiatives included terminating certain advertising contracts and a third-party loan origination agreement, driving down marketing expenses by over $6 million.

Deposit Composition and Balance Sheet Optimization:

• Total deposits decreased by $514 million to $7.8 billion, with a focus on reducing higher cost deposits and broker deposits.
• Broker deposits decreased from $550.2 million to $435.7 million, as the bank aimed to optimize its deposit mix.
• The reduction in deposits was part of a broader strategy to rightsize the balance sheet and improve key metrics, including the ratio of noninterest bearing to total deposits.

Sentiment Analysis:

Overall Tone: Positive

• Confidence is expressed in the strategic plan to stabilize, optimize, and grow the organization. Management emphasizes 'disciplined execution,' 'significant progress,' and being 'well positioned' for opportunities, particularly in Venezuela. They state they are 'aligned, committed, and executing with discipline' and 'confident in where we are headed.'

Q&A:

• Question from Michael Rose (Raymond James & Associates, Inc., Research Division): What metrics can investors use to measure progress of the 3-year strategic plan?
  Response: Key success metrics are improvements in credit quality metrics and a disciplined approach to loan origination to regain predictability.

• Question from Michael Rose (Raymond James & Associates, Inc., Research Division): Are there specific financial targets for ROA and efficiency ratio outlined for the plan?
  Response: Aspirational goals include reaching 1% ROA and an efficiency ratio close to 60% by year-end 2026, with longer-term targets of breaking 60% for the efficiency ratio.

• Question from Russell Elliott Gunther (Stephens Inc., Research Division): What are the specific drivers for the expense reduction glide path and what is the normalized expense expectation?
  Response: Cost reductions are driven by optimizing higher cost deposits, reducing marketing/advertising spend, and strategic hiring. A normalized expense level is projected around $67M-$68M per quarter by late 2026.

• Question from Russell Elliott Gunther (Stephens Inc., Research Division): How do you expect NPL and classified levels to progress in Q1 and through 2026, and what provisioning is needed?
  Response: Outflows are expected to outweigh inflows into criticized buckets, leading to improvement. Provision for credit losses is expected to be around 40-45 bps of P&L to cover growth, composition, and loss content.

• Question from Russell Elliott Gunther (Stephens Inc., Research Division): How are recent events in Venezuela impacting international deposit gathering, and what is the outlook?
  Response: Events are viewed as a potential tailwind; opportunities are seen in increased oil production and wealth regain, which may positively impact international deposits and AUM, though it's too early to size the impact.

• Question from Wood Lay (Keefe, Bruyette, & Woods, Inc., Research Division): Were the deposit reductions intentional, and do you plan to bring them back above $10B?
  Response: The reduction was intentional to optimize the balance sheet and exit inorganic deposits; the goal is to organically surpass $10B with the right fundamentals, not just for the sake of size.

• Question from Wood Lay (Keefe, Bruyette, & Woods, Inc., Research Division): Is the intention to continue remixing brokered deposits and remain around $10B?
  Response: Brokered deposits will be used opportunistically as an ALM tool but not as a primary source for balance sheet growth; low levels are expected going forward.

• Question from Wood Lay (Keefe, Bruyette, & Woods, Inc., Research Division): Do you expect any elevated restructuring charges in 2026?
  Response: Management aims to move away from excessive non-GAAP metrics; Q4 actions were to set a clean baseline for 2026, so no major restructuring charges are expected.

Contradiction Point 1

Normalized Expense Level for 2026

Contradiction on projected quarterly expense levels for late 2026.

What are the drivers of the 2026 expense reduction plan and the expected normalized expense level in 2027? - Russell Elliott Gunther (Stephens Inc.)

2025Q4: The projected normalized expense for late 2026 is $67–$68 million per quarter. - [Sharymar Yepez](CFO) and [Carlos Iafigliola](CEO)

Are the $2 million to $3 million quarterly expenses annualized, and what is the target expense base for 2026—flat or net reductions? - Stephen Scouten (Piper Sandler & Co.)

2025Q3: Q4 expenses are expected to normalize to ~$74 million, excluding non-recurring Q3 costs. - [Sharymar Yepez](CFO)

Contradiction Point 2

Credit Cost Provisioning Outlook

Contradiction in the expected range for full-year loan loss provisioning.

How do you expect asset quality (NPLs, classified loans) to progress in Q1 and for the full year, and what provisioning level is necessary? - Russell Elliott Gunther (Stephens Inc.)

2025Q4: The full-year provision is expected to be in the range of 40–45 basis points of P&L. - [Sharymar Yepez](CFO) and [Carlos Iafigliola](CEO)

What is the outlook for realized loss content in the next few quarters, given Q3's inflow? - Russell Elliott Gunther (Stephens Inc.)

2025Q3: Losses are expected to be in the 30–35 bps range... The outlook is close to 30–35 bps, factoring in remaining indirect exposure... - [Gerald Plush](CEO) and [Sharymar Yepez](CFO)

Contradiction Point 3

Strategy for Deposit Growth and Brokered Deposits

Contradiction regarding the future use of brokered deposits as a funding source.

How much of the deposit decline was intentional runoff, do you plan to bring those deposits back, and what is the intention for brokered deposits in 2026? - Wood Lay (Keefe, Bruyette, & Woods, Inc.)

2025Q4: Brokered deposits will be used opportunistically... but not as a primary source for balance sheet growth. Levels are expected to remain low. - [Carlos Iafigliola](CEO)

How sustainable is the $125 million to $175 million net loan growth guidance, and how should we interpret the fluctuations between participating in and out of syndication activity? - Russell Elliott Gunther (Stephens Inc.)

2025Q3: In 2026, participation in syndications will increase... Starting in 2026, efforts will shift to the 'sell' side to participate in deals as opportunities arise. - [Gerald Plush](CEO) and [Sharymar Yepez](CFO)

Contradiction Point 4

Loan Growth and Asset Size Target

Inconsistent guidance on loan growth pace and ultimate asset size.

How do you expect asset quality (NPL, classified loans) to progress in Q1 and for the full year? What provisioning level is necessary? - Russell Elliott Gunther (Stephens Inc.)

2025Q4: Outflows from criticized loans are expected to outweigh inflows in 2026, leading to an improvement. - [Sharymar Yepez](CFO) and [Carlos Iafigliola](CEO)

Will 2026 loan growth be mid-single-digit, and is it driven by strategy or market conditions? - Russell Elliott Gunther (Stephens Inc.)

2025Q2: The company expects to return to double-digit loan growth. ... significant growth opportunities are anticipated in their markets. - [Gerald Plush](CEO)

Contradiction Point 5

Timeline for Achieving 1% ROA

Contradiction on when the 1% ROA target is expected to be reached.

What metrics and financial targets (e.g., ROA, efficiency ratio) are outlined for the 3-year strategic plan? - Michael Rose (Raymond James & Associates, Inc.)

2025Q4: The aspirational goal for 2026 is to achieve a Return on Assets (ROA) close to 1%... - [Carlos Iafigliola](CEO) and [Sharymar Yepez](CFO)

What visibility do you have regarding the migration of these problem assets and potential realized losses, and what are the main drivers? - Russell Elliott Gunther (Stephens Inc.)

2025Q1: The expectation to reach 1% ROA in the second half includes the benefit of reduced expenses from the mortgage business cost-cutting... - [Sharymar Yepez](CFO)