Executive Summary

Q1 2025 delivered solid core deposit growth (+$300.4M QoQ to $8.15B; core deposits +$372.9M QoQ to $5.99B) and strong PPNR ($33.9M, +21% QoQ), while elevated provision ($18.4M, +86% QoQ) and higher NPLs (to $123.2M) reduced GAAP diluted EPS to $0.28 .
Net interest margin held steady at 3.75% with lower deposit costs (2.60% vs 2.77% in Q4), aided by the full effect of Houston franchise sale and securities repositioning; management guided Q2 NIM to mid‑3.60% .
Strategic pivot: scaling mortgage operations from national to Florida-focused over ~120 days; expect ~$2.5M lower noninterest income and ~$2.5M lower noninterest expense per quarter starting Q3, improving efficiency ~100 bps .
Risk management intensified: ACL increased to $98.3M (1.37% of loans); specific reserves on five credits; classified loans up to $206.1M, NPLs up to $123.2M, with expected QSR participation charge‑off in Q2 (fully reserved in Q1) .
Growth catalyst: ongoing Florida expansion (new West Palm Beach regional HQ/banking center; Miami Beach and Tampa openings planned), treasury management build-out, and digital account opening expected to drive core deposits (~15% annualized growth targeted) .

What Went Well and What Went Wrong

What Went Well

“Our net interest income and net interest margin were stronger than projected, driving a robust PPNR” (PPNR $33.9M vs $27.9M in Q4; NIM 3.75%) .
Core deposit engine strengthened: average deposit cost fell to 2.60% (from 2.77%), total deposits +$300.4M QoQ, core deposits +$372.9M QoQ; management emphasized “deposit machine still cranking” .
Portfolio repositioning benefits flowed through: full-quarter of higher-yield AFS securities post Q3/Q4 actions supporting margin stability .

What Went Wrong

Asset quality pressure: non-performing assets rose to $140.8M (+15% QoQ), NPLs to $123.2M (+$19.1M), and special mention/classified loans increased (to $206.1M) on updated 2024 borrower financials and a NYC CRE tenant loss .
Provision spiked: provision for credit losses $18.4M (+$8.5M QoQ) with $13.9M specific reserves; gross charge-offs $5.3M (consumer and small retail/business) with an additional $4.8M charge-off on a QSR participation expected in Q2 (already reserved) .
Loans flat-to-down: gross loans fell $52.2M QoQ (prepayments offset production); management reduced near-term loan growth expectations amid borrower caution and macro/tariff uncertainty .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Net Interest Income ($MM)	$81.0	$87.6	$85.9
Noninterest Income ($MM)	$(47.7)	$23.7	$19.5
Total Revenue ($MM) (NII + Noninterest)	$33.3 (calc from NII+noninterest)	$111.3 (calc)	$105.4 (calc)
Provision for Credit Losses ($MM)	$19.0	$9.9	$18.4
Diluted EPS ($)	$(1.43)	$0.40	$0.28
NIM (%)	3.49%	3.75%	3.75%
ROA (%)	(1.92%)	0.67%	0.48%
Efficiency Ratio (%)	228.74%	74.91%	67.87%

Segment/KPI details:

Loan and deposit KPIs
| KPI | Q3 2024 | Q4 2024 | Q1 2025 | |-----|---------|---------|---------| | Total Gross Loans ($MM) | $7,562 | $7,267 | $7,219 | | Total Deposits ($MM) | $8,111 | $7,854 | $8,155 | | Core Deposits ($MM) | $5,707 | $5,620 | $5,993 | | Loan-to-Deposit Ratio (%) | 93.23% | 92.53% | 88.52% | | ACL ($MM) | $79.9 | $85.0 | $98.3 | | NPLs ($MM) | $114.9 | $104.1 | $123.2 | | NPAs ($MM) | $129.4 | $122.2 | $140.8 | | Avg Loan Yield (%) | 7.08% | 7.00% | 6.84% | | Avg Cost of Total Deposits (%) | 2.99% | 2.77% | 2.60% |
Loan mix (selected types, held for investment)
| Loan Type ($MM) | Q3 2024 | Q4 2024 | Q1 2025 | |-----------------|---------|---------|---------| | CRE Non-owner Occupied | $1,709.9 | $1,678.5 | $1,641.2 | | Single-family Residential | $1,485.3 | $1,516.1 | $1,549.4 | | Owner Occupied (RE) | $1,013.7 | $1,007.1 | $951.3 | | Commercial Loans | $1,630.3 | $1,747.9 | $1,714.6 |

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin	Q2 2025	Not quantified (prior commentary of improved margin post-repositioning)	Mid‑3.60%	Maintained/stable vs Q1, slightly lower than 3.75%
Core Deposits Growth	FY 2025	~15% annual growth target	Reiterated ~15%; achieved strong net growth despite $185M municipal runoff	Maintained
Loan Growth	FY 2025	Double-digit implied; 10–15% year-end range	10–15% by year end; near-term cautious given macro/tariffs	Maintained with cautious tone
Efficiency Ratio	2H 2025	~>60% given growth investment	Slightly >60% near term; expect ~100 bps improvement from mortgage scaling by Q3/Q4	Maintained with expected improvement
ROA	2H 2025	Target ~1%	Expect ~1% in 2H, subject to macro model updates	Maintained
Mortgage Business P&L	From Q3 2025	N/A	Noninterest income and noninterest expense each ~$(2.5)M per quarter vs prior plan; ~100 bps efficiency ratio improvement	New guidance (lower revenue/expense)
Dividend	Ongoing	$0.09/share	$0.09/share declared payable May 30, 2025	Maintained
Senior Notes	April 1, 2025	Redemption notice given Mar 3, 2025	Redeemed $60M 5.75% senior notes on Apr 1, 2025	Executed action

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024 and Q4 2024)	Current Period (Q1 2025)	Trend
Balance sheet optimization	Q3: $68.5M AFS losses from investment repositioning; Q4: completed with additional $8.1M losses	Full-quarter benefit to NIM from repositioned securities	Stabilization, margin support
Houston franchise sale	Q4: Sale completed; lower cost of funds benefit	Full-quarter Houston impact improved NIM	Positive tailwind to NIM
Asset quality vigilance	Q3/Q4: NPLs elevated; ACL up in Q4	ACL raised to $98.3M; specific reserves on 5 loans; classified/NPLs up; QSR charge-off expected	Heightened provisioning; proactive risk actions
Mortgage strategy	Prior: mortgage income contributions; operations national	Pivot to Florida-focused, scaling back national origination	Strategic refocus; cost reduction
Deposits/treasury tech	Prior: core conversion benefits emerging	New Head of Treasury Mgmt; digital account opening and platform driving ~15% core deposit growth target	Strengthening deposit franchise
Macro/tariffs	Limited mention in PRs	Management monitoring tariff-related uncertainty; cautious borrower tone	Elevated macro risk sensitivity
Capital actions	Q4: no buybacks; equity raise Q3	Active 10b5‑1 buybacks (~375k shares to date in Q2); aim to avoid dilution	Opportunistic repurchases below TBV

Management Commentary

“Despite the uncertainty in this environment we outperformed expectations in several key areas. Our net interest income and net interest margin were stronger than projected, driving a robust PPNR.”
“We made the prudent decision to reserve for 5 specific loans and also to adjust our generic reserves… Taking decisive action is essential.”
Mortgage pivot: “We’ve elected to transition from being a national… to a Florida focus… expect both noninterest income and noninterest expense to be lowered by approximately $2.5 million per quarter starting in 3Q.”
On risk leadership: “We’re delighted to welcome Jeff Tischler as our new Chief Credit Officer… leading a focused assessment… identifying key areas for optimization.”
Growth footprint: “We opened our new regional headquarters office and our new banking center in West Palm Beach… two planned openings in Miami Beach later this year and a second location in downtown Tampa.”

Q&A Highlights

Loan growth outlook: Management reduced near-term expectations due to borrower caution and prepayments, but still targets 10–15% by year-end as volatility abates; selective underwriting continues .
Asset quality and charge-offs: Q1 charge-offs ~22–25 bps; expect ~55 bps in Q2 due to a reserved QSR participation sale, then normalize; ROA still targeted at ~1% in 2H with mortgage expense cuts .
Buybacks: Operating under 10b5‑1; ~375k shares repurchased in Q2 to avoid dilution; remaining authorization mostly used .
Margin puts/takes: New loan production yields moving to ~6.25–6.50% vs ~7% in Q1; AFS purchases ~5.46–5.49%; deposit costs repricing down; emphasizing 6‑month time deposits to keep liabilities short .
Special mention increases: Driven by updated borrower financials across multiple industries and three NYC CRE credits with missed milestones but adequate mitigants; proactive risk grading .

Estimates Context

EPS: S&P Global Primary EPS consensus for Q1 2025 was $0.395; S&P “primary EPS” actual registered $0.24*, implying a miss versus consensus; GAAP diluted EPS of $0.28 reflects elevated provision (consensus/actual from S&P*).
Revenue: S&P Global Revenue consensus for Q1 2025 was $101.833M; S&P actual registered $86.983M*, a miss; company-reported “total revenue” (NII + noninterest income) was ~$105.4M (reflecting noninterest income contributions) (consensus/actual from S&P*).
Prior quarters for context (S&P):
| Metric | Q3 2024 | Q4 2024 | Q1 2025 | |--------|---------|---------|---------| | Primary EPS Consensus Mean ($) | 0.206* | 0.333* | 0.395* | | Primary EPS Actual ($) | 0.27* | 0.50* | 0.24* | | Revenue Consensus Mean ($MM) | 98.53* | 100.57* | 101.83* | | Revenue Actual ($MM) | 14.32* | 100.48* | 86.98* | Values retrieved from S&P Global.*

Interpretation: Using S&P’s “Primary EPS” and “Revenue” definitions, Q1 showed misses on both headline EPS and revenue; management highlighted stronger‑than‑projected NII/NIM and PPNR, but asset quality costs weighed on EPS .

Key Takeaways for Investors

Core earnings power improved: stable NIM at 3.75% and lower deposit costs underscore deposit franchise momentum; Q2 NIM guided to mid‑3.60% amid rate sensitivity .
Asset quality is the swing factor: higher ACL, rising NPLs/classified loans, and expected Q2 charge‑off suggest near-term credit costs remain elevated; proactive risk actions aim to normalize later in 2025 .
Mortgage pivot should lift efficiency: ~$5M quarterly P&L swing (lower noninterest income and expenses) from Q3 expected to improve operating efficiency ~100 bps and support ROA trajectory toward 1% in 2H .
Deposit growth catalysts: treasury management leadership, digital onboarding, and new branches flag continued core deposit growth (~15% annual target) even with municipal runoff headwinds .
Capital management: completed redemption of $60M senior notes; opportunistic buybacks under 10b5‑1 at prices below TBV reduce dilution risk .
Strategy execution in Florida: expanding in West Palm, Miami Beach, and Tampa should support loan pipelines and lower funding costs over time .
Near-term trading: Watch Q2 credit metrics/charge-offs and NIM trajectory vs guidance; medium-term thesis hinges on efficiency gains, core deposit growth, and asset quality stabilization .

Additional Relevant Q1 2025 Items

Dividend: $0.09 per share declared, payable May 30, 2025 .
Total assets: $10.17B (+$268M QoQ), cash and equivalents $648.4M (+$58M QoQ) .
FHLB advances: $715.0M (−$30M QoQ); borrowing capacity $3.0B as of Mar 31, 2025 .
AUM: $2.93B (+$42.6M QoQ) .

Appendix: Prior Two Quarters Snapshot (for trend)

Metric	Q3 2024	Q4 2024
Net (Loss)/Income ($MM)	$(48.2)	$16.9
Diluted EPS ($)	$(1.43)	$0.40
NIM (%)	3.49%	3.75%
PPNR ($MM)	$(42.9)	$27.9
Noninterest Income ($MM)	$(47.7)	$23.7
Provision ($MM)	$19.0	$9.9
NPAs ($MM)	$129.4	$122.2

Management explanations: Q3 loss driven by securities portfolio repositioning; Q4 improvement with lower provision and higher NII; momentum continued in Q1 on NIM/NII, offset by higher provision .

Amerant Bancorp Inc. (AMTB)·Q1 2025 Earnings Summary