UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period __________ to __________
Commission File Number: 001-38534
Amerant Bancorp Inc.
(Exact Name of Registrant as Specified in Its Charter)
|
| |
Florida (State or other jurisdiction of incorporation or organization) | 65-0032379 (I.R.S. Employer Identification No.) |
220 Alhambra Circle Coral Gables, Florida | 33134 |
(Address of principal executive offices) | (Zip Code) |
(305) 460-4038 |
Registrant’s telephone number, including area code |
|
Former name, former address and former fiscal year, if changed since last report: N/A |
Securities registered pursuant to Section 12(b) of the Act:
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| | |
Title of each class | Trading Symbols | Name of exchange on which registered |
Class A Common Stock | AMTB | NASDAQ |
Class B Common Stock | AMTBB | NASDAQ |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ý No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| | | | | | |
Large accelerated filer ¨ | | Accelerated filer ý | | Smaller reporting company ¨ | | Emerging growth company ý |
Non-accelerated filer ¨ |
If an emerging growth company, indicate by check mark if the company has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
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| | |
Class | | Outstanding as of May 6, 2020 |
Class A Common Stock, $0.10 par value per share | | 28,879,576 shares of Class A Common Stock |
Class B Common Stock, $0.10 par value per share | | 13,286,137 shares of Class B Common Stock |
AMERANT BANCORP INC. AND SUBSIDIARIES
FORM 10-Q
March 31, 2020
Part 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Amerant Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets
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| | | | | | | |
(in thousands, except share data) | (Unaudited) March 31, 2020 | | December 31, 2019 |
Assets | | | |
Cash and due from banks | $ | 22,303 |
| | $ | 28,035 |
|
Interest earning deposits with banks | 248,750 |
| | 93,289 |
|
Cash and cash equivalents | 271,053 |
| | 121,324 |
|
Securities | | | |
Debt securities available for sale | 1,601,303 |
| | 1,568,752 |
|
Debt securities held to maturity | 70,336 |
| | 73,876 |
|
Equity securities with readily determinable fair value not held for trading | 24,225 |
| | 23,848 |
|
Federal Reserve Bank and Federal Home Loan Bank stock | 74,123 |
| | 72,934 |
|
Securities | 1,769,987 |
| | 1,739,410 |
|
Loans held for investment, gross | 5,668,327 |
| | 5,744,339 |
|
Less: Allowance for loan losses | 72,948 |
| | 52,223 |
|
Loans held for investment, net | 5,595,379 |
| | 5,692,116 |
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Bank owned life insurance | 213,266 |
| | 211,852 |
|
Premises and equipment, net | 128,232 |
| | 128,824 |
|
Deferred tax assets, net | 4,933 |
| | 5,480 |
|
Goodwill | 19,506 |
| | 19,506 |
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Accrued interest receivable and other assets | 96,454 |
| | 66,887 |
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Total assets | $ | 8,098,810 |
| | $ | 7,985,399 |
|
Liabilities and Stockholders' Equity | | | |
Deposits | | | |
Demand | | | |
Noninterest bearing | $ | 779,842 |
| | $ | 763,224 |
|
Interest bearing | 1,088,033 |
| | 1,098,323 |
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Savings and money market | 1,432,891 |
| | 1,475,257 |
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Time | 2,541,446 |
| | 2,420,339 |
|
Total deposits | 5,842,212 |
| | 5,757,143 |
|
Advances from the Federal Home Loan Bank and other borrowings | 1,265,000 |
| | 1,235,000 |
|
Junior subordinated debentures held by trust subsidiaries | 64,178 |
| | 92,246 |
|
Accounts payable, accrued liabilities and other liabilities | 86,303 |
| | 66,309 |
|
Total liabilities | 7,257,693 |
| | 7,150,698 |
|
Commitments and contingencies (Note 14) |
| |
|
| | | |
Stockholders’ equity | | | |
Class A common stock, $0.10 par value, 400 million shares authorized; 28,879,576 shares issued and outstanding (2019 - 28,927,576 shares issued and outstanding) | 2,888 |
| | 2,893 |
|
Class B common stock, $0.10 par value, 100 million shares authorized; 13,286,137 shares issued and outstanding (2019: 17,751,053 shares issued; 14,218,596 shares outstanding) | 1,329 |
| | 1,775 |
|
Additional paid in capital | 358,277 |
| | 419,048 |
|
Treasury stock, at cost; 3,532,457 shares of Class B common stock in 2019. | — |
| | (46,373 | ) |
Retained earnings | 447,506 |
| | 444,124 |
|
Accumulated other comprehensive income | 31,117 |
| | 13,234 |
|
Total stockholders' equity | 841,117 |
| | 834,701 |
|
Total liabilities and stockholders' equity | $ | 8,098,810 |
| | $ | 7,985,399 |
|
The accompanying notes are an integral part of these consolidated financial statements (unaudited).
3
Amerant Bancorp Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Unaudited)
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| | | | | | | |
| Three Months Ended March 31, |
(in thousands) | 2020 | | 2019 |
Interest income | | | |
Loans | $ | 59,788 |
| | $ | 66,722 |
|
Investment securities | 11,065 |
| | 12,581 |
|
Interest earning deposits with banks | 462 |
| | 1,004 |
|
Total interest income | 71,315 |
| | 80,307 |
|
| | | |
Interest expense | | | |
Interest bearing demand deposits | 135 |
| | 274 |
|
Savings and money market deposits | 3,266 |
| | 3,733 |
|
Time deposits | 13,484 |
| | 12,553 |
|
Advances from the Federal Home Loan Bank | 4,412 |
| | 6,205 |
|
Junior subordinated debentures | 789 |
| | 2,105 |
|
Total interest expense | 22,086 |
| | 24,870 |
|
Net interest income | 49,229 |
| | 55,437 |
|
Provision for loan losses | 22,000 |
| | — |
|
Net interest income after provision for loan losses | 27,229 |
| | 55,437 |
|
| | | |
Noninterest income | | | |
Deposits and service fees | 4,290 |
| | 4,086 |
|
Brokerage, advisory and fiduciary activities | 4,133 |
| | 3,688 |
|
Change in cash surrender value of bank owned life insurance | 1,414 |
| | 1,404 |
|
Securities gains, net | 9,620 |
| | 4 |
|
Cards and trade finance servicing fees | 395 |
| | 915 |
|
(Loss) gain on early extinguishment of advances from the Federal Home Loan Bank, net | (7 | ) | | 557 |
|
Data processing and fees for other services | — |
| | 520 |
|
Other noninterest income | 2,065 |
| | 1,982 |
|
Total noninterest income | 21,910 |
| | 13,156 |
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| | | |
Noninterest expense | | | |
Salaries and employee benefits | 29,326 |
| | 33,437 |
|
Occupancy and equipment | 3,803 |
| | 4,042 |
|
Telecommunication and data processing | 3,464 |
| | 3,026 |
|
Professional and other services fees | 2,954 |
| | 3,444 |
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Depreciation and amortization | 1,959 |
| | 1,942 |
|
FDIC assessments and insurance | 1,118 |
| | 1,393 |
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Other operating expenses | 2,243 |
| | 4,661 |
|
Total noninterest expenses | 44,867 |
| | 51,945 |
|
Income before income tax | 4,272 |
| | 16,648 |
|
Income tax expense | (890 | ) | | (3,577 | ) |
Net income | $ | 3,382 |
| | $ | 13,071 |
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| | | |
| | | |
| | | |
The accompanying notes are an integral part of these consolidated financial statements (unaudited).
4
Amerant Bancorp Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Unaudited)
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| | | | | | | |
| Three Months Ended March 31, |
(in thousands, except per share data) | 2020 | | 2019 |
| | | |
Other comprehensive income, net of tax | | | |
Net unrealized holding gains on debt securities available for sale arising during the period | $ | 26,702 |
| | $ | 16,278 |
|
Net unrealized holding losses on cash flow hedges arising during the period | (1,514 | ) | | (11 | ) |
Reclassification adjustment for items included in net income | (7,305 | ) | | (252 | ) |
Other comprehensive income | 17,883 |
| | 16,015 |
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Comprehensive income | $ | 21,265 |
| | $ | 29,086 |
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| | | |
Earnings Per Share (Note 16): | | | |
Basic earnings per common share | $ | 0.08 |
| | $ | 0.31 |
|
Diluted earnings per common share | $ | 0.08 |
| | $ | 0.30 |
|
The accompanying notes are an integral part of these consolidated financial statements (unaudited).
5
Amerant Bancorp Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
Three Months Ended March 31, 2020 and 2019
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock | | Additional Paid in Capital | | Treasury Stock | | Retained Earnings | | Accumulated Other Comprehensive Income (Loss) | | Total Stockholders' Equity |
(in thousands, except share data) | Shares Outstanding | | Issued Shares - Par Value | | | | | |
Class A | | Class B | | Class A | | Class B | | | | | |
Balance at December 31, 2018 | 26,851,832 |
| | 16,330,917 |
| | $ | 2,686 |
| | $ | 1,775 |
| | $ | 385,367 |
| | $ | (17,908 | ) | | $ | 393,662 |
| | $ | (18,164 | ) | | $ | 747,418 |
|
Common stock issued | 2,132,865 |
| | — |
| | 213 |
| | — |
| | 29,005 |
| | — |
| | — |
| | — |
| | 29,218 |
|
Repurchase of Class B common stock | — |
| | (2,112,321 | ) | | — |
| | — |
| | — |
| | (28,465 | ) | | — |
| | — |
| | (28,465 | ) |
Restricted stock issued | 1,299 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
Stock-based compensation expense | — |
| | — |
| | — |
| | — |
| | 1,492 |
| | — |
| | — |
| | — |
| | 1,492 |
|
Net income | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 13,071 |
| | — |
| | 13,071 |
|
Other comprehensive income | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 16,015 |
| | 16,015 |
|
Balance at March 31, 2019 | 28,985,996 |
| | 14,218,596 |
| | $ | 2,899 |
| | $ | 1,775 |
| | $ | 415,864 |
| | $ | (46,373 | ) | | $ | 406,733 |
| | $ | (2,149 | ) | | $ | 778,749 |
|
| | | | | | | | | | | | | | | | | |
Balance at December 31, 2019 | 28,927,576 |
| | 14,218,596 |
| | $ | 2,893 |
| | $ | 1,775 |
| | $ | 419,048 |
| | $ | (46,373 | ) | | $ | 444,124 |
| | $ | 13,234 |
| | $ | 834,701 |
|
Repurchase of Class B common stock | — |
| | (932,459 | ) | | — |
| | — |
| | — |
| | (15,239 | ) | | — |
| | — |
| | (15,239 | ) |
Treasury stock retired | — |
| | — |
| | — |
| | (446 | ) | | (61,166 | ) | | 61,612 |
| | — |
| | — |
| | — |
|
Restricted stock issued | 6,591 |
| | — |
| | 1 |
| | — |
| | (1 | ) | | — |
| | — |
| | — |
| | — |
|
Restricted stock surrendered | (129 | ) | | — |
| | — |
| | — |
| | (2 | ) | | — |
| | — |
| | — |
| | (2 | ) |
Restricted stock forfeited | (54,462 | ) | | — |
| | (6 | ) | | — |
| | 6 |
| | — |
| | — |
| | — |
| | — |
|
Stock-based compensation expense | — |
| | — |
| | — |
| | — |
| | 392 |
| | — |
| | — |
| | — |
| | 392 |
|
Net income | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 3,382 |
| | — |
| | 3,382 |
|
Other comprehensive income | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 17,883 |
| | 17,883 |
|
Balance at March 31, 2020 | 28,879,576 |
| | 13,286,137 |
| | $ | 2,888 |
| | $ | 1,329 |
| | $ | 358,277 |
| | $ | — |
| | $ | 447,506 |
| | $ | 31,117 |
| | $ | 841,117 |
|
The accompanying notes are an integral part of these consolidated financial statements (unaudited).
6
Amerant Bancorp Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
|
| | | | | | | |
| Three Months Ended March 31, |
(in thousands) | 2020 | | 2019 |
Cash flows from operating activities | | | |
Net income | $ | 3,382 |
| | $ | 13,071 |
|
Adjustments to reconcile net income to net cash provided by operating activities | | | |
Provision for loan losses | 22,000 |
| | — |
|
Net premium amortization on securities | 3,775 |
| | 3,453 |
|
Depreciation and amortization | 1,959 |
| | 1,942 |
|
Stock-based compensation expense | 392 |
| | 1,492 |
|
Change in cash surrender value of bank owned life insurance | (1,414 | ) | | (1,404 | ) |
Deferred taxes, securities net gains or losses and others | (14,875 | ) | | 1,238 |
|
Loss (gain) on early extinguishment of advances from the FHLB | 7 |
| | (557 | ) |
Net changes in operating assets and liabilities: | | | |
Accrued interest receivable and other assets | (1,539 | ) | | 8,777 |
|
Accounts payable, accrued liabilities and other liabilities | (10,509 | ) | | (15,431 | ) |
Net cash provided by operating activities | 3,178 |
| | 12,581 |
|
| | | |
Cash flows from investing activities | | | |
Purchases of investment securities: | | | |
Available for sale | (197,522 | ) | | (110,170 | ) |
Federal Home Loan Bank stock | (8,538 | ) | | (4,888 | ) |
| (206,060 | ) | | (115,058 | ) |
Maturities, sales and calls of investment securities: | | | |
Available for sale | 196,698 |
| | 162,796 |
|
Held to maturity | 3,382 |
| | 1,205 |
|
Federal Home Loan Bank stock | 7,349 |
| | 9,248 |
|
| 207,429 |
| | 173,249 |
|
Net decrease in loans | 61,641 |
| | 22,173 |
|
Proceeds from loan portfolio sales | 13,109 |
| | 152,177 |
|
Net purchases of premises and equipment and others | (1,321 | ) | | (1,951 | ) |
Net cash provided by investing activities | 74,798 |
| | 230,590 |
|
| | | |
Cash flows from financing activities | | | |
Net decrease in demand, savings and money market accounts | (36,038 | ) | | (116,499 | ) |
Net increase (decrease) in time deposits | 121,107 |
| | (27,999 | ) |
Proceeds from Advances from the Federal Home Loan Bank and other borrowings | 280,000 |
| | 170,000 |
|
Repayments of Advances from the Federal Home Loan Bank and other borrowings | (250,007 | ) | | (265,447 | ) |
Redemption of junior subordinated debentures | (28,068 | ) | | — |
|
Proceeds from common stock issued - Class A | — |
| | 29,218 |
|
Repurchase of common stock - Class B | (15,239 | ) | | (28,465 | ) |
Common stock retired to cover tax withholding | (2 | ) | | — |
|
Net cash provided by (used in) financing activities | 71,753 |
| | (239,192 | ) |
Net increase in cash and cash equivalents | 149,729 |
| | 3,979 |
|
| | | |
Cash and cash equivalents | | | |
Beginning of period | 121,324 |
| | 85,710 |
|
End of period | $ | 271,053 |
| | $ | 89,689 |
|
| | | |
| | | |
The accompanying notes are an integral part of these consolidated financial statements (unaudited).
7
Amerant Bancorp Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited) (continued)
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| | | | | | | |
| | | |
| Three Months Ended March 31, |
(in thousands) | 2020 | | 2019 |
Supplemental disclosures of cash flow information | | | |
Cash paid: | | | |
Interest | $ | 21,890 |
| | $ | 24,086 |
|
Income taxes | 295 |
| | 385 |
|
The accompanying notes are an integral part of these consolidated financial statements (unaudited).
8
Amerant Bancorp Inc. and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)
| |
1. | Business, Basis of Presentation and Summary of Significant Accounting Policies |
a) Business
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, as a result of its 100% indirect 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 Reserve Bank of Atlanta (“Federal Reserve Bank”) and the Federal Home Loan Bank of Atlanta (“FHLB”). The Bank has three principal subsidiaries, Amerant Investments, Inc., a securities broker-dealer (“Amerant Investments”), Amerant Trust, N.A, a non-depository trust company (“Amerant Trust”), and Elant Bank & Trust (the “Cayman Bank”), a bank and trust company domiciled in the Cayman Islands acquired in November 2019.
The Company’s Class A common stock, par value $0.10 per common share, and Class B common stock, par value $0.10 per common share, are listed and trade on the Nasdaq Global Select Market under the symbols “AMTB” and “AMTBB,” respectively.
The Company is managed using a single segment concept, on a consolidated basis, and management determined that no separate current or historical reportable segment disclosures are required under generally accepted accounting principles in the United States of America (“U.S. GAAP”).
Initial Public Offering and Shares Repurchase
On December 21, 2018, the Company completed an initial public offering (the “IPO”). In March 2019, the Company repurchased the remaining shares of its Class B common stock held by Mercantil Servicios Financieros, C.A., the Company’s former parent company (“the Former Parent”). For more information about the IPO and the repurchase of Class B common stock previously held by the Former Parent, see Note 15 to our audited consolidated financial statements included in the Company’s annual report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 16, 2020 (the “Form 10-K”).
COVID-19 Pandemic
On March 11, 2020, the World Health Organization recognized an outbreak of a novel strain of the coronavirus, COVID-19, as a pandemic.
On March 13, 2020, the President of the Unites States of America (U.S.) declared a national state of emergency. In response to this outbreak, the governments of many states, cities and municipalities in the U.S., including the States of Florida, New York and Texas, have taken preventative or protective actions, such as imposing restrictions on business operations and advising or requiring individuals to limit or forego their time outside of their homes.
On March 16, 2020, the Company activated its Business Continuity Plan (“BCP”) to continue to provide its products and services during the COVID-19 pandemic. The Company’s BCP plan is framed within regulatory guidelines and subject to periodic testing and independent audits. All banking centers are open to the public by drive-thru and by appointment-only, under a reduced schedule (except banking centers in Texas which are operating under regular business hours), and with limited staffing. All electronic channels remain fully operational. In addition, the BCP enabled employees to work remotely.
Amerant Bancorp Inc. and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), an approximately $2.0 trillion COVID-19 response bill, to provide emergency economic relief to individuals, small businesses, mid-size companies, large corporations, hospitals and other public health facilities, and state and local governments, was enacted. The CARES Act allocated the Small Business Administration, or SBA, $350.0 billion to provide loans of up to $10.0 million per small business as defined in the CARES Act. On April 2, 2020, the Bank began participating in the SBA’s Paycheck Protection Program, or “PPP”, by providing loans to these businesses to cover payroll, rent, mortgage, healthcare, and utilities costs, among other essential expenses. On April 24, 2020, the Paycheck Protection Program and Health Care Enhancement Act, adding funding to the PPP, was enacted. As of May 1, 2020, the Company had received approval for 1,493 loan applications under the PPP totaling $197.8 million, and had funded $137.9 million.
On March 26, 2020, the Company began offering loan payment relief options to customers impacted by the COVID-19 pandemic, including interest-only and/or forbearance options. As of May 1, 2020, loans under these programs totaled $1,119 million. In accordance with accounting and regulatory guidance, loans to borrowers benefiting from these measures are not considered Troubled Debt Restructurings (“TDRs”). The Company is closely monitoring the performance of these loans under the terms of the temporary relief granted.
b) Basis of Presentation and Summary of Significant Accounting Policies
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of SEC 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 U.S. 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, 2019 and 2018 and for each of the three years in the period ended December 31, 2019 and the accompanying footnote disclosures for the Company, which are included in the Form 10-K.
For a complete summary of our significant accounting policies, please see Note 1 to the Company’s audited consolidated financial statements in the Form 10-K.
Estimates
The preparation of financial statements in conformity with U.S. 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 loan losses; (ii) the fair values of securities and the value assigned to goodwill during periodic goodwill impairment tests; (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.
Amerant Bancorp Inc. and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)
The COVID-19 outbreak has severely restricted the level of economic activity in the U.S. and around the world since March 2020. In the U.S and several other countries, temporary closures of businesses have been ordered and numerous other businesses have temporarily closed voluntarily. These actions have expanded significantly since March 31, 2020 and may continue to expand. The Company considered the impact of COVID-19 on the significant estimates management used. The Company recorded a provision for loan losses of $22.0 million during the three months ended March 31, 2020 primarily as a result of the estimated impact of the COVID-19 pandemic. Given the uncertainty regarding the spread and severity of COVID-19 and its adverse effects on the U.S. and global economies, the extent to which the COVID-19 pandemic may impact the Company’s financial condition or results of operations is uncertain and cannot be accurately predicted at this time.
c) Recently Issued Accounting Pronouncements
Issued and Not Yet Adopted
New Guidance on Leases
In December 2018, the Financial Accounting Standards Board (“FASB”) issued amendments to new guidance issued in February 2016 for the recognition and measurement of all leases which has not yet been adopted by the Company. The amendments address certain lessor’s issues associated with: (i) sales taxes and other similar taxes collected from lessees, (ii) certain lessor costs and (iii) recognition of variable payments for contracts with lease and nonlease components. The new guidance on leases issued in February 2016 requires lessees to recognize a right-of-use asset and a lease liability for most leases within the scope of the guidance. There were no significant changes to the guidance for lessors. These amendments, and the related pending new guidance, can be adopted using a modified retrospective transition at the beginning of the earliest comparative period presented, and provides for certain practical expedients.
In November 2019, the FASB again amended the effective date of the new guidance on leases. Previously, the amendments and related new guidance on leases were effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020, for private companies. The new guidance on leases is now effective for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021. Early adoption is still permitted.
The Company has completed the process of gathering a complete inventory of its lease contracts, migrating identified lease data onto a new system, and is in the final stages of testing and evaluation of results. Based on these results, we currently expect to recognize an asset and a corresponding lease liability for an amount to be less than 1% of the Company’s total consolidated assets at adoption. The Company plans to adopt the new guidance in its consolidated financial statements for the year ending December 31, 2021.
Amerant Bancorp Inc. and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)
Facilitation of the Effects of Reference Rate Reform on Financial Reporting
On March 12, 2020, the FASB issued amendments to guidance applicable to contracts, hedging relationships, and other transactions affected that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. These amendments provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments also allow entities to make a one-time election to sell, transfer, or both sell and transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform and that are classified as held to maturity before January 1, 2020. These amendments are effective for all entities as of March 12, 2020 through December 31, 2022. An entity may elect to apply these amendments to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. An entity may elect to apply the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected, these amendments must be applied prospectively for all eligible contract modifications and hedging relationships. The Company is in the process of evaluating the implications of these amendments to its current efforts for reference rate reform implementation.
New Guidance on Accounting for Credit Losses on Financial Instruments
In June 2016, the FASB issued the new guidance on accounting for current expected credit losses on financial instruments (“CECL.”) The new guidance introduces an approach based on expected losses to estimate credit losses on various financial instruments, including loans. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination.
In November 2018, the FASB issued amendments to pending new guidance on CECL to, among other things, align the implementation date for private companies’ annual financial statements with the implementation date for their interim financial statements. Prior to the issuance of these amendments, the guidance on accounting for CECL was effective for private companies for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. These amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, for private companies.
In November 2019, the FASB amended the effective date of the new guidance on CECL. Previously, the amendments and related new guidance on CECL was effective for fiscal years beginning after December 15, 2021, and interim periods within those years, for private companies. The new guidance on CECL is now effective for fiscal years beginning after December 15, 2022 and interim periods within those years. Early adoption is still permitted. The new guidance on CECL is effective for fiscal years beginning after December 15, 2019, and interim periods within those years, for public companies.
The Company is currently assessing the impact that these changes will have on its consolidated financial statements, when adopted. As an Emerging Growth Company, or EGC, the Company currently plans to adopt the new guidance on CECL in its consolidated financial statements for the year ending December 31, 2023, or earlier in the event the Company ceases to be an EGC.
Amerant Bancorp Inc. and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)
d) Subsequent Events
The effects of significant subsequent events, if any, have been recognized or disclosed in these unaudited interim consolidated financial statements.
2. Interest Earning Deposits with Banks
At March 31, 2020 and December 31, 2019 interest earning deposits with banks are mainly comprised of deposits with the Federal Reserve of approximately $248.8 million and $93 million, respectively. At March 31, 2020 and December 31, 2019, the average interest rate on these deposits was approximately 1.08% and 2.19%, respectively. These deposits mature within one year.
Amortized cost and approximate fair values of debt securities available for sale are summarized as follows: |
| | | | | | | | | | | | | | | |
| March 31, 2020 |
| Amortized Cost | | Gross Unrealized | | Estimated Fair Value |
(in thousands) | | Gains | | Losses | |
U.S. government-sponsored enterprise debt securities | $ | 844,712 |
| | $ | 31,188 |
| | $ | (719 | ) | | $ | 875,181 |
|
Corporate debt securities | 333,359 |
| | 2,990 |
| | (6,155 | ) | | 330,194 |
|
U.S. government agency debt securities | 251,731 |
| | 3,828 |
| | (2,377 | ) | | 253,182 |
|
U.S. treasury securities | 73,636 |
| | 3,689 |
| | — |
| | 77,325 |
|
Municipal bonds | 62,203 |
| | 3,218 |
| | — |
| | 65,421 |
|
| $ | 1,565,641 |
| | $ | 44,913 |
| | $ | (9,251 | ) | | $ | 1,601,303 |
|
|
| | | | | | | | | | | | | | | |
| December 31, 2019 |
| Amortized Cost | | Gross Unrealized | | Estimated Fair Value |
(in thousands) | | Gains | | Losses | |
U.S. government sponsored enterprise debt securities | $ | 927,205 |
| | $ | 9,702 |
| | $ | (3,795 | ) | | $ | 933,112 |
|
Corporate debt securities | 247,836 |
| | 5,002 |
| | (2 | ) | | 252,836 |
|
U.S. government agency debt securities | 230,384 |
| | 895 |
| | (2,882 | ) | | 228,397 |
|
U.S. treasury securities | 106,112 |
| | 1 |
| | (1,877 | ) | | 104,236 |
|
Municipal bonds | 47,652 |
| | 2,519 |
| | — |
| | 50,171 |
|
| $ | 1,559,189 |
| | $ | 18,119 |
| | $ | (8,556 | ) | | $ | 1,568,752 |
|
At March 31, 2020 and December 31, 2019, the Company had no foreign sovereign or foreign government agency debt securities. The Company had investments in foreign corporate debt securities of $13.4 million and $5.2 million at March 31, 2020 and December 31, 2019, respectively.
Amerant Bancorp Inc. and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)
In the three months ended March 31, 2020 and 2019, proceeds from sales, gross realized gains, gross realized losses of debt securities available for sale were as follows:
|
| | | | | | | |
| Three Months Ended March 31, |
(in thousands) | 2020 | | 2019 |
Proceeds from sales of debt securities available for sale | $ | 139,072 |
| | $ | 112,529 |
|
Gross realized gains | 9,266 |
| | 448 |
|
Gross realized losses | (23 | ) | | (444 | ) |
Realized gains, net | $ | 9,243 |
| | $ | 4 |
|
The Company’s investment in debt securities available for sale with unrealized losses that are deemed temporary, aggregated by the length of time that individual securities have been in a continuous unrealized loss position, are summarized below: |
| | | | | | | | | | | | | | | | | | | | | | | |
| March 31, 2020 |
| Less Than 12 Months | | 12 Months or More | | Total |
(in thousands) | Estimated Fair Value | | Unrealized Loss | | Estimated Fair Value | | Unrealized Loss | | Estimated Fair Value | | Unrealized Loss |
U.S. government-sponsored enterprise debt securities | $ | 24,695 |
| | $ | (132 | ) | | $ | 24,553 |
| | $ | (587 | ) | | $ | 49,248 |
| | $ | (719 | ) |
Corporate debt securities | 127,093 |
| | (6,155 | ) | | — |
| | — |
| | 127,093 |
| | (6,155 | ) |
U.S. government agency debt securities | 18,602 |
| | (117 | ) | | 98,645 |
| | (2,260 | ) | | 117,247 |
| | (2,377 | ) |
| $ | 170,390 |
| | $ | (6,404 | ) | | $ | 123,198 |
| | $ | (2,847 | ) | | $ | 293,588 |
| | $ | (9,251 | ) |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2019 |
| Less Than 12 Months | | 12 Months or More | | Total |
(in thousands) | Estimated Fair Value | | Unrealized Loss | | Estimated Fair Value | | Unrealized Loss | | Estimated Fair Value | | Unrealized Loss |
U.S. government sponsored enterprise debt securities | $ | 239,446 |
| | $ | (1,740 | ) | | $ | 180,274 |
| | $ | (2,055 | ) | | $ | 419,720 |
| | $ | (3,795 | ) |
Corporate debt securities | 8,359 |
| | (1 | ) | | 300 |
| | (1 | ) | | 8,659 |
| | (2 | ) |
U.S. government agency debt securities | 41,300 |
| | (251 | ) | | 117,040 |
| | (2,631 | ) | | 158,340 |
| | (2,882 | ) |
U.S. treasury securities | 97,471 |
| | (1,877 | ) | | — |
| | — |
| | 97,471 |
| | (1,877 | ) |
| $ | 386,576 |
| | $ | (3,869 | ) | | $ | 297,614 |
| | $ | (4,687 | ) | | $ | 684,190 |
| | $ | (8,556 | ) |
At March 31, 2020 and December 31, 2019, the Company held certain debt securities issued or guaranteed by the U.S. government and U.S. government-sponsored entities and agencies. The Company believes these issuers to present little credit risk. The Company considers these securities are not other-than-temporarily impaired because the decline in fair value is attributable to changes in interest rates and investment securities markets, generally, and not credit quality. The Company does not intend to sell these debt securities and it is more likely than not that it will not be required to sell the securities before their anticipated recovery.
Amerant Bancorp Inc. and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)
Unrealized losses on municipal and corporate debt securities are attributable to changes in interest rates and investment securities markets, generally, and as a result, temporary in nature. The Company considers these securities are not other-than-temporarily impaired because the issuers of these debt securities are considered to be high quality, and generally present little credit risk. The Company does not intend to sell these investments and it is more likely than not that it will not be required to sell these investments before their anticipated recovery.
Contractual maturities of debt securities at March 31, 2020 are as follows:
|
| | | | | | | | | | | | | | | |
| Available for Sale | | Held to Maturity |
(in thousands) | Amortized Cost | | Estimated Fair Value | | Amortized Cost | | Estimated Fair Value |
Within 1 year | $ | 103,743 |
| | $ | 103,995 |
| | $ | — |
| | $ | — |
|
After 1 year through 5 years | 167,055 |
| | 166,952 |
| | — |
| | — |
|
After 5 years through 10 years | 280,460 |
| | 285,762 |
| | 11,567 |
| | 11,793 |
|
After 10 years | 1,014,383 |
| | 1,044,594 |
| | 58,769 |
| | 59,561 |
|
| $ | 1,565,641 |
| | $ | 1,601,303 |
| | $ | 70,336 |
| | $ | 71,354 |
|
Equity securities with readily available fair value not held for trading consist of mutual funds with an original cost of $24.0 million, and fair value of $24.2 million and $23.8 million as of March 31, 2020 and December 31, 2019, respectively. These equity securities have no stated maturities. During the three months ended March 31, 2020, we recognized an unrealized gain of $0.4 million related to the change in market value of these mutual funds. No gain was recognized during the three months ended March 31, 2019.
The loan portfolio consists of the following loan classes:
|
| | | | | | | |
(in thousands) | March 31, 2020 | | December 31, 2019 |
Real estate loans | | | |
Commercial real estate | | | |
Non-owner occupied | $ | 1,875,293 |
| | $ | 1,891,802 |
|
Multi-family residential | 834,016 |
| | 801,626 |
|
Land development and construction loans | 225,179 |
| | 278,688 |
|
| 2,934,488 |
| | 2,972,116 |
|
Single-family residential | 569,340 |
| | 539,102 |
|
Owner occupied | 923,260 |
| | 894,060 |
|
| 4,427,088 |
| | 4,405,278 |
|
Commercial loans | 1,084,751 |
| | 1,234,043 |
|
Loans to financial institutions and acceptances | 16,576 |
| | 16,552 |
|
Consumer loans and overdrafts | 139,912 |
| | 88,466 |
|
| $ | 5,668,327 |
| | $ | 5,744,339 |
|
At March 31, 2020 and December 31, 2019, loans with an outstanding principal balance of $1.5 billion and $1.6 billion, respectively, were pledged as collateral to secure advances from the FHLB.
Amerant Bancorp Inc. and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)
The amounts above include loans under syndication facilities of approximately $488 million and $562 million at March 31, 2020 and December 31, 2019, respectively, which include Shared National Credit facilities and agreements to enter into credit agreements with other lenders (club deals), and other agreements.
The following tables summarize international loans by country, net of loans fully collateralized with cash of approximately $14.5 million and $15.2 million at March 31, 2020 and December 31, 2019, respectively.
|
| | | | | | | | | | | | | | | | | | | | | | | |
| March 31, 2020 | | December 31, 2019 |
(in thousands) | Venezuela | | Others (1) | | Total | | Venezuela | | Others (1) | | Total |
Real estate loans | | | | | | | | | | | |
Single-family residential (2) | $ | 97,517 |
| | $ | 7,571 |
| | $ | 105,088 |
| | $ | 103,979 |
| | $ | 7,692 |
| | $ | 111,671 |
|
Commercial loans | — |
| | 57,348 |
| | 57,348 |
| | — |
| | 43,850 |
| | 43,850 |
|
Loans to financial institutions and acceptances | — |
| | 8 |
| | 8 |
| | — |
| | 5 |
| | 5 |
|
Consumer loans and overdrafts (3)(4) | 427 |
| | 7,688 |
| | 8,115 |
| | 8,318 |
| | 7,593 |
| | 15,911 |
|
| $ | 97,944 |
| | $ | 72,615 |
| | $ | 170,559 |
| | $ | 112,297 |
| | $ | 59,140 |
| | $ | 171,437 |
|
__________________
| |
(1) | Loans to borrowers in 12 other countries which do not individually exceed 1% of total assets (14 countries at December 31, 2019) |
| |
(2) | Corresponds to mortgage loans secured by single-family residential properties located in the U.S. |
| |
(3) | At December 31, 2019, Venezuela balances are mostly comprised of credit card extensions of credit to customers with deposits with the Bank. The Company phased out its legacy credit card products to further strengthen its credit quality. During the first quarter of 2020, the remaining balances related to the credit card product were repaid, therefore, there are no outstanding credit card balances as of March 31, 2020. |
| |
(4) | Overdrafts to customers outside the United States were de minimis at March 31, 2020 and December 31, 2019. |
The age analysis of the loan portfolio by class, including nonaccrual loans, as of March 31, 2020 and December 31, 2019 are summarized in the following tables: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| March 31, 2020 |
| Total Loans, Net of Unearned Income | | | | Past Due | | Total Loans in Nonaccrual Status | | Total Loans 90 Days or More Past Due and Accruing |
(in thousands) | | Current | | 30-59 Days | | 60-89 Days | | Greater than 90 Days | | Total Past Due | | |
Real estate loans | | | | | | | | | | | | | | | |
Commercial real estate | | | | | | | | | | | | | | | |
Non-owner occupied | $ | 1,875,293 |
| | $ | 1,875,293 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 1,936 |
| | $ | — |
|
Multi-family residential | 834,016 |
| | 834,016 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
Land development and construction loans | 225,179 |
| | 225,179 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| 2,934,488 |
| | 2,934,488 |
| | — |
| | — |
| | — |
| | — |
| | 1,936 |
| | — |
|
Single-family residential | 569,340 |
| | 557,717 |
| | 8,438 |
| | — |
| | 3,185 |
| | 11,623 |
| | 7,077 |
| | 5 |
|
Owner occupied | 923,260 |
| | 910,269 |
| | 9,004 |
| | 1,208 |
| | 2,779 |
| | 12,991 |
| | 13,897 |
| | — |
|
| 4,427,088 |
| | 4,402,474 |
| | 17,442 |
| | 1,208 |
| | 5,964 |
| | 24,614 |
| | 22,910 |
| | 5 |
|
Commercial loans | 1,084,751 |
| | 1,076,834 |
| | 5,626 |
| | 425 |
| | 1,866 |
| | 7,917 |
| | 9,993 |
| | — |
|
Loans to financial institutions and acceptances | 16,576 |
| | 16,576 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
Consumer loans and overdrafts | 139,912 |
| | 139,682 |
| | 170 |
| | 29 |
| | 31 |
| | 230 |
| | 467 |
| | 12 |
|
| $ | 5,668,327 |
| | $ | 5,635,566 |
| | $ | 23,238 |
| | $ | 1,662 |
| | $ | 7,861 |
| | $ | 32,761 |
| | $ | 33,370 |
| | $ | 17 |
|
Amerant Bancorp Inc. and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2019 |
| Total Loans, Net of Unearned Income | | | | Past Due | | Total Loans in Nonaccrual Status | | Total Loans 90 Days or More Past Due and Accruing |
(in thousands) | | Current | | 30-59 Days | | 60-89 Days | | Greater than 90 Days | | Total Past Due | | |
Real estate loans | | | | | | | | | | | | | | | |
Commercial real estate | | | | | | | | | | | | | | | |
Non-owner occupied | $ | 1,891,802 |
| | $ | 1,891,801 |
| | $ | 1 |
| | $ | — |
| | $ | — |
| | $ | 1 |
| | $ | 1,936 |
| | $ | — |
|
Multi-family residential | 801,626 |
| | 801,626 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
Land development and construction loans | 278,688 |
| | 278,688 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| 2,972,116 |
| | 2,972,115 |
| | 1 |
| | — |
| | — |
| | 1 |
| | 1,936 |
| | — |
|
Single-family residential | 539,102 |
| | 530,399 |
| | 4,585 |
| | 1,248 |
| | 2,870 |
| | 8,703 |
| | 7,291 |
| | — |
|
Owner occupied | 894,060 |
| | 888,158 |
| | 1,360 |
| | 1,724 |
| | 2,818 |
| | 5,902 |
| | 14,130 |
| | — |
|
| 4,405,278 |
| | 4,390,672 |
| | 5,946 |
| | 2,972 |
| | 5,688 |
| | 14,606 |
| | 23,357 |
| | — |
|
Commercial loans | 1,234,043 |
| | 1,226,320 |
| | 4,418 |
| | 608 |
| | 2,697 |
| | 7,723 |
| | 9,149 |
| | — |
|
Loans to financial institutions and acceptances | 16,552 |
| | 16,552 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
Consumer loans and overdrafts | 88,466 |
| | 88,030 |
| | 215 |
| | 176 |
| | 45 |
| | 436 |
| | 416 |
| | 5 |
|
| $ | 5,744,339 |
| | $ | 5,721,574 |
| | $ | 10,579 |
| | $ | 3,756 |
| | $ | 8,430 |
| | $ | 22,765 |
| | $ | 32,922 |
| | $ | 5 |
|
Amerant Bancorp Inc. and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)
| |
5. | Allowance for Loan Losses |
The analyses by loan segment of the changes in the allowance for loan losses for the three months ended March 31, 2020 and 2019, and its allocation by impairment methodology and the related investment in loans, net as of March 31, 2020 and 2019 are summarized in the following tables: |
| | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2020 |
(in thousands) | Real Estate | | Commercial | | Financial Institutions | | Consumer and Others | | Total |
Balances at beginning of the period | $ | 25,040 |
| | $ | 22,482 |
| | $ | 42 |
| | $ | 4,659 |
| | $ | 52,223 |
|
Provision for loan losses | 11,390 |
| | 7,530 |
| | — |
| | 3,080 |
| | 22,000 |
|
Loans charged-off | | | | | | | | | |
Domestic | — |
| | (1,101 | ) | | — |
| | (222 | ) | | (1,323 | ) |
International | — |
| | (34 | ) | | — |
| | (251 | ) | | (285 | ) |
Recoveries | — |
| | 185 |
| | — |
| | 148 |
| | 333 |
|
Balances at end of the period | $ | 36,430 |
| | $ | 29,062 |
| | $ | 42 |
| | $ | 7,414 |
| | $ | 72,948 |
|
| | | | | | | | | |
Allowance for loan losses by impairment methodology: | | | | | | | | | |
Individually evaluated | $ | 1,157 |
| | $ | 4,038 |
| | $ | — |
| | $ | 1,525 |
| | $ | 6,720 |
|
Collectively evaluated | 35,273 |
| | 25,024 |
| | 42 |
| | 5,889 |
| | 66,228 |
|
| $ | 36,430 |
| | $ | 29,062 |
| | $ | 42 |
| | $ | 7,414 |
| | $ | 72,948 |
|
Investment in loans, net of unearned income: | | | | | | | | | |
Individually evaluated | $ | 1,936 |
| | $ | 24,232 |
| | $ | — |
| | $ | 7,521 |
| | $ | 33,689 |
|
Collectively evaluated | 2,931,900 |
| | 2,104,220 |
| | 16,576 |
| | 581,942 |
| | 5,634,638 |
|
| $ | 2,933,836 |
| | $ | 2,128,452 |
| | $ | 16,576 |
| | $ | 589,463 |
| | $ | 5,668,327 |
|
Amerant Bancorp Inc. and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2019 |
(in thousands) | Real Estate | | Commercial | | Financial Institutions | | Consumer and Others | | Total |
Balances at beginning of the period | $ | 22,778 |
| | $ | 30,018 |
| | $ | 445 |
| | $ | 8,521 |
| | $ | 61,762 |
|
(Reversal of) provision for loan losses | (322 | ) | | (31 | ) | | (339 | ) | | 692 |
| | — |
|
Loans charged-off | | | | | | | | |
|
Domestic | — |
| | (992 | ) | | — |
| | (196 | ) | | (1,188 | ) |
International | — |
| | (18 | ) | | — |
| | (406 | ) | | (424 | ) |
Recoveries | — |
| | 123 |
| | — |
| | 49 |
| | 172 |
|
Balances at end of the period | $ | 22,456 |
| | $ | 29,100 |
| | $ | 106 |
| | $ | 8,660 |
| | $ | 60,322 |
|
| | | | | | | | | |
Allowance for loan losses by impairment methodology | | | | | | | | | |
Individually evaluated | $ | — |
| | $ | 1,593 |
| | $ | — |
| | $ | 1,202 |
| | $ | 2,795 |
|
Collectively evaluated | 22,456 |
| | 27,507 |
| | 106 |
| | 7,458 |
| | 57,527 |
|
| $ | 22,456 |
| | $ | 29,100 |
| | $ | 106 |
| | $ | 8,660 |
| | $ | 60,322 |
|
Investment in loans, net of unearned income | | | | | | | | | |
Individually evaluated | $ | 711 |
| | $ | 12,325 |
| | $ | — |
| | $ | 3,392 |
| | $ | 16,428 |
|
Collectively evaluated | 3,016,569 |
| | 2,137,165 |
| | 27,985 |
| | 536,291 |
| | 5,718,010 |
|
| $ | 3,017,280 |
| | $ | 2,149,490 |
| | $ | 27,985 |
| | $ | 539,683 |
| | $ | 5,734,438 |
|
The following is a summary of the recorded investment amount of loan sales by portfolio segment:
|
| | | | | | | | | | | | | | | | | | | |
Three Months Ended March 31, (in thousands) | Real Estate | | Commercial | | Financial Institutions | | Consumer and others | | Total |
2020 | $ | — |
| | $ | 11,901 |
| | $ | — |
| | $ | 1,208 |
| | $ | 13,109 |
|
2019 | $ | 23,475 |
| | $ | 126,838 |
| | $ | — |
| | $ | 1,864 |
| | $ | 152,177 |
|
Amerant Bancorp Inc. and Subsidiaries
Notes to Interim Consolidated Financial Statements (Unaudited)
The following is a summary of impaired loans as of March 31, 2020 and December 31, 2019: |
| | | | | | | | | | | | | | | | | | | | | | | |
| March 31, 2020 |
| Recorded Investment | | | | |
(in thousands) | With a Valuation Allowance | | Without a Valuation Allowance | | Total | | Year Average (1) | | Total Unpaid Principal Balance | | Valuation Allowance |
Real estate loans | | | | | | | | | | | |
Commercial real estate | | | | | | | | | | | |
Non-owner occupied | $ | 1,936 |
| | $ | — |
| | $ | 1,936 |
| | $ | 1,943 |
| | $ | 1,936 |
| | $ | 1,157 |
|
Multi-family residential | — |
| | — |
| | — |
| | 164 |
| | — |
| | — |
|
Land development and construction loans | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| 1,936 |
| | — |
| | 1,936 |
| | 2,107 |
| | 1,936 |
| | 1,157 |
|
Single-family residential | 4,499 |
| | 2,831 |
| | 7,330 |
| | 6,471 |
| | 7,610 |
| | 1,071 |
|
Owner occupied | 1,481 |
| | 12,470 |
| | 13,951 |
| | 11,857 |
| | 13,791 |
| | 510 |
|
| 7,916 |
| | 15,301 |
| | 23,217 |
| | 20,435 |
| | 23,337 |
| | 2,738 |
|
Commercial loans | 8,139 |
| | 1,854 |
| | 9,993 |
| | 9,228 |
| | 10,039 |
| | 3,528 |
|
Consumer loans and overdrafts | 470 |
| | 9 |
| | 479 |
| | 270 |
| | 537 |
| | 454 |
|
| $ | 16,525 |
| | $ | 17,164 |
| | $ | 33,689 |
| | $ | 29,933 |
| | $ | 33,913 |
| | $ | 6,720 |
|
_______________
| |
(1) | Average using trailing four quarter balances. |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2019 |
| Recorded Investment | | | | |
(in thousands) | With a Valuation Allowance | | Without a Valuation Allowance | | Total | | Year Average (1) | | Total Unpaid Principal Balance | | Valuation Allowance |
Real estate loans | | | | | | | | | | | |
Commercial real estate | | | | | | | | | | | |
Non-owner occupied | $ | 1,936 |
| | $ | — |
| | $ | 1,936 |
| | $ | 1,459 |
| | $ | 1,936 |
| | $ | 1,161 |
|
Multi-family residential | — |
| | — |
| | — |
| | 342 |
| | — |
| | — |
|
Land development and construction loans | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| 1,936 |
| | — |
| | 1,936 |
| | 1,801 |
| | 1,936 |
| | 1,161 |
|
Single-family residential | 4,739 |
| | 729 |
| | 5,468 |
| | 5,564 | |