Amerant Bancorp Inc. (the “Company”) is a Florida corporation incorporated in 1985, which has operated since January 1987. The Company is a bank holding company registered under the Bank Holding Company Act of 1956 (“BHC Act”), as a result of its 100% ownership of Amerant Bank, N.A. (the “Bank”). The Company’s principal office is in the City of Coral Gables, Florida. The Bank is a member of the Federal Deposit Insurance Corporation (“FDIC”), the Federal Reserve Bank of Atlanta (“Federal Reserve”) and the Federal Home Loan Bank of Atlanta (“FHLB”). The Bank has three main operating subsidiaries, Amerant Investments, Inc., a securities broker-dealer (“Amerant Investments”), Amerant Mortgage, LLC (“Amerant Mortgage”), a majority-owned mortgage lending company domiciled in Florida, and Elant Bank & Trust, a Grand-Cayman based trust company (the “Cayman Bank”).

The Company continues to work at optimizing its operating structure to best support its business activities. In the three and six month periods ended June 30, 2023, the Company recorded estimated contract termination and related costs of approximately $1.6 million in connection with the implementation of the multi-year outsourcing agreement with a recognized third party financial technology services provider entered into in 2021 ($2.8 million and $6.8 million in the three and six month periods ended June 30, 2022, respectively). The Company currently does not expect to incur additional significant contract termination costs in connection with the implementation of this agreement.

During the three and six month periods ended June 30, 2023, the Company recorded severance costs of approximately $2.2 million and $2.4 million, respectively, consulting and other professional fees of $2.1 million and $4.8 million, respectively, and branch closure expenses and related charges of $1.6 million and $2.0 million, respectively. In addition, in each of the three and six month periods ended June 30, 2023, the Company recorded a charge of $1.4 million related to the disposition of fixed assets due to the write off of in-development software.

During the three and six month periods ended June 30, 2022, the Company recorded severance costs of approximately $0.7 million and $1.4 million, respectively, and consulting and other professional fees of $0.1 million and $1.3 million, respectively. In addition, in each of the three and six month periods ended June 30, 2022, the Company recorded a lease impairment charge of $1.6 million mainly related to the closing of a branch in Pembroke Pines, Florida in 2022.

On December 19, 2022, the Company announced that the Board of Directors authorized a new repurchase program pursuant to which the Company may purchase, from time to time, up to an aggregate amount of $25 million of its shares of Class A common stock (the “2023 Class A Common Stock Repurchase Program”). The 2023 Class A Common Stock Repurchase Program is effective from January 1, 2023 until December 31, 2023. In the three and six month periods ended June 30, 2023, the Company repurchased an aggregate of 95,262 shares of Class A common stock at a weighted average price of $17.42 per share, and 117,665 shares of Class A common stock at a weighted average price of $18.91 per share, respectively, under the 2023 Class A Common Stock Repurchase Program. The aggregate purchase price for these transactions was $1.7 million and $2.2 million in the three and six month periods ended June 30, 2023, respectively, including transaction costs.

In January 2022, the Company repurchased an aggregate of 652,118 shares of Class A common stock under a stock repurchase program to repurchase up to $50 million of the Company’s Class A common stock authorized by the Board of Directors in September 2021 (the “2021 Class A Common Stock Repurchase Program”). The aggregate purchase price for these transactions was approximately $22.1 million, including transaction costs. On January 31, 2022, the Company announced the completion of the 2021 Class A Common Stock Repurchase Program. See the 2022 Form 10-K for more details.

On January 31, 2022, the Company announced that the Board of Directors authorized a new repurchase program pursuant to which the Company may purchase, from time to time, up to an aggregate amount of $50 million of its shares of Class A common stock (the “2022 Common Stock Repurchase Program”). In the three and six month periods ended June 30, 2022, the Company repurchased an aggregate of 611,525 shares of Class A common stock at a weighted average price of $28.19 per share, and 1,602,887 shares of Class A common stock at a weighted average price of $31.14, respectively, under the 2022 Common Stock Repurchase Program. The aggregate purchase price for these transactions was approximately $17.2 million and $49.9 million in the three and six months ended June 30, 2023, respectively, including transaction costs. On May 19, 2022, the Company announced the completion of the 2022 Common Stock Repurchase Program.

For more information about repurchase programs, see Note 17 to the Company’s consolidated financial statements in the Company’s annual report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”), on March 1, 2023 (the “2022 Form 10-K”).

The Company offers an Employee Stock Purchase Plan (“ESPP”). The number of shares of Class A common stock issued in the three and six months ended June 30, 2023 under the ESPP was 30,557. In the three and six months ended June 30, 2023, the Company recognized compensation expense of $0.1 million and $0.2 million, respectively, in connection with the ESPP. See the 2022 Form 10-K for more details on the ESPP.

On January 13, 2023 (the “Acquisition Date”), Amerant Mortgage completed the acquisition of certain assets and the assumption of certain liabilities of F&B Acquisition Group LLC (“F&B”), including access to an assembled workforce and other identifiable intangibles which collectively constitute a business (the “F&B Acquisition.”) The F&B Acquisition was recorded as a business acquisition using the acquisition method of accounting. The initial purchase price of approximately $2.0 million was paid in cash and included the fair value of certain loans held for sale of $1.0 million. The initial purchase price excludes any contingent consideration. The Company recorded preliminary goodwill of $1.0 million, which represents the excess of the initial purchase price over the estimated fair value of tangible and intangible assets acquired, net of the liabilities assumed. As of June 30, 2023, the Company has not completed its determination of the final allocation of the purchase price to the assets and liabilities of the F&B Acquisition, including any identifiable intangible assets and any contingent consideration. Any adjustment to the assets purchased and liabilities assumed with the F&B Acquisition, including adjustments from any identifiable intangible asset and contingent consideration, will result in an adjustment of goodwill. The final allocation of purchase price is expected to be finalized by December 31, 2023.

In the three and six months ended June 30, 2023, the Company recorded an impairment charge of $2.0 million related to an investment carried at cost and included in other assets in the consolidated balance sheets. See the 2022 Form 10-K for more details on our investments carried at cost.

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required for a fair statement of financial position, results of operations and cash flows in conformity with GAAP. These unaudited interim consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. These adjustments are of a normal, recurring nature. Interim period operating results may not be indicative of the operating results for a full year or any other period. These unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of December 31, 2022 and 2021 and for each of the three years in the period ended December 31, 2022 and the accompanying footnote disclosures for the Company, which are included in the 2022 Form 10-K.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include: (i) the determination of the allowance for credit losses; (ii) the fair values of securities, the value assigned to goodwill during periodic goodwill impairment tests, and the fair value of other real estate owned (“OREO”); (iii) the cash surrender value of bank owned life insurance; and (iv) the determination of whether the amount of deferred tax assets will more likely than not be realized. Management believes that these estimates are appropriate. Actual results could differ from these estimates.

In the three and six month periods ended June 30, 2023, loan-level derivative expenses are presented separately in the Company’s consolidated statement of operations and comprehensive (loss) income. Previously, these expenses were presented as a component of professional and other services fees in the Company’s consolidated statement of operations and comprehensive (loss) income.

In the three and six months ended June 30, 2023, other real estate owned (“OREO”) and repossessed assets, net expense is presented separately in the Company’s consolidated statement of operations and comprehensive (loss) income. OREO and repossessed assets expense includes expenses and revenue (rental income) from the operation of foreclosed property/assets as well as fair value adjustments and gains/losses from the sale of OREO and repossessed assets. In 2022, while OREO valuation expense was presented separately, all other OREO-related expenses were presented as part of other operating expenses in the Company’s consolidated statement of operations and comprehensive (loss) income. We had no other repossessed assets in 2022.

In March 2022, the Financial Accounting Standards Board (“FASB”) issued guidance that eliminates the recognition and measurement guidance on troubled debt restructurings, or TDR, for creditors, and aligns it with existing guidance to determine whether a loan modification results in a new loan or a continuation of an existing loan. The guidance also requires enhanced disclosures about certain loan modifications by creditors when a borrower is experiencing financial difficulty. The amended guidance is effective in periods beginning after December 15, 2022 using either a prospective or modified retrospective transition approach. Early adoption was permitted if an entity had already adopted the guidance on accounting for credit losses on financial instruments (“CECL”). The Company adopted this guidance on TDR as of January 1, 2023, and determined that its adoption had no material impact to the Company’s consolidated financial statements.

In 2022, the Company adopted ASC Topic 326 on CECL. The Company adopted the CECL guidance as of the beginning of the reporting period of adoption, January 1, 2022, using a modified retrospective approach for all its financial assets measured at amortized cost and off-balance sheet credit exposures. For more details on the adoption of CECL, see the 2022 Form 10-K.



	As of June 30, 2022
(in thousands)	As Reported		As Recast (1)		Changes








Assets
Allowance for credit losses	$	52,027	$	70,475	$	18,448
Deferred tax assets, net	33,265		38,009		4,744
Liabilities
Accounts payable, accrued liabilities and other liabilities	116,177		116,166		(11)
Stockholders’ Equity
Retained earnings	570,588		556,895		(13,693)



	Three Months Ended June 30, 2022						Six Months Ended June 30, 2022
(in thousands, except per share amounts)	As Reported		As Recast (1)		Changes		As Reported		As Recast (1)		Changes

Total interest income	$	71,167	$	71,167	$	—	$	136,265	$	136,265	$	—
Total interest expense	12,222		12,222		—		21,675		21,675		—
Net interest income	58,945		58,945		—		114,590		114,590		—
Reversal of credit losses	—		(951)		(951)		(10,000)		(10,226)		(226)
Net interest income after reversal of credit losses	58,945		59,896		951		124,590		124,816		226
Total noninterest income	12,931		12,931		—		26,956		26,956		—
Total noninterest expense	62,241		62,241		—		123,059		123,059		—
Income before income taxes	9,635		10,586		951		28,487		28,713		226
Income tax expense	(2,033)		(2,234)		(201)		(6,011)		(6,058)		(47)
Net income before attribution of noncontrolling interest	7,602		8,352		750		22,476		22,655		179
Noncontrolling interest	(72)		(72)		—		(1,148)		(1,148)		—
Net income attributable to Amerant Bancorp Inc.	$	7,674	$	8,424	$	750	$	23,624	$	23,803	$	179
Basic earnings per common share	$	0.23	$	0.25	$	0.02	$	0.69	$	0.70	$	0.01
Diluted earnings per common share	$	0.23	$	0.25	$	0.02	$	0.68	$	0.69	$	0.01
Cash dividends declared per common share	$	0.09	$	0.09	$	—	$	0.18	$	0.18	$	—

(1)Quarterly amounts previously reported on our quarterly reports on Form 10-Q for the periods ended March 31, 2022 and June 30, 2022 do not reflect the adoption of CECL. In the fourth quarter of 2022, the Company recorded a provision for credit losses totaling $20.9 million, including $11.1 million related to the retroactive effect of adopting CECL for all previous quarterly periods in the year ended December 31, 2022, including loan growth and changes to macro-economic conditions during the period. Quarterly amounts included in the 2022 Form 10-K and in this Form 10-Q reflect the impacts of the adoption of CECL on each interim period of 2022. See the 2022 Form 10-K for more details on the adoption of CECL.

In March 2022, the FASB issued amended guidance to expand and clarify existing guidance on fair value hedge accounting of interest rate risk for portfolios of financial assets. The amendments clarify, among others, the “last-of-layer” method for making the fair value hedge accounting for these portfolios more accessible. The amendment also improves the last-of-layer concepts and expands them to non-prepayable financial assets, allowing more flexibility in the structure of derivatives used to hedge interest rate risk. The amended guidance is effective for public business entities for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. For all other entities, the amended guidance is effective for fiscal years beginning after December 15, 2023. The amended guidance is available for early adoption. The Company adopted this guidance as of January 1, 2023, and determined that its adoption had no material impact to its consolidated financial statements.