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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. On June 3, 2020, the Company started Phase 1 of reintroducing employees working remotely back to the workplace. Given the increasing trend in COVID-19 cases in our markets, particularly in Florida and Texas, during the month of June and continuing in July, we are following a careful, phased-approach which includes a voluntary return of a limited number of employees, based on work location, roles and responsibilities, and various safety protocols. Banking centers have returned to regular business hours, following strict federal, state and local government guidelines supporting the safety of our employees and our customers. Amerant continues to focus on serving customers without interruption, while maintaining a safe environment.

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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, increasing funding to the PPP, was enacted. On July 4, 2020, new legislation was signed into law that extended the deadline to apply for loans under the PPP from June 30, 2020 until August 8, 2020. As of June 30, 2020, total PPP loans were $214.1 million, representing over 2,000 loan applications booked.

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. These programs continued in the second quarter of 2020. As of June 30, 2020, loans modified under these programs totaled $1.1 billion. As of this date, loans in these programs on which the interest-only/or forbearance period expired at that date totaled $504.7 million, or 45.4% of total modified loans. The Company collected payments due on $8.4 million of modified loans through June 30, 2020. Modified loans totaling $496.3 million have payments due by July 31, 2020. 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.

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The COVID-19 pandemic has severely restricted the level of economic activity in the U.S. and around the world since March 2020. Several states and cities across the U.S., including the States of Florida, New York and Texas and cities where the Company has banking centers, LPOs and where the Company’s principal place of business is located, have also implemented quarantines, restrictions on travel, “shelter at home” orders, and restrictions on types of business that may continue to operate. While some of these measures and restrictions have been lifted and certain businesses have reopened in the second quarter 2020, the Company cannot predict when restrictions currently in place may be lifted, or whether restrictions that have been lifted will need to be imposed or tightened in the future if viewed as necessary due to public health concerns.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 in the three months ended March 31, 2020, mostly driven by $19.8 million of estimated losses reflecting deterioration in the macro-economic environment as a result of the impact of COVID-19, compared to no loan loss provision in the three months ended March 31, 2019. The Company recorded a provision for loan losses of $48.6 million in the three months ended June 30, 2020, including $20.2 million related to the estimated deterioration of our loan portfolio caused by the COVID-19 pandemic, compared to a release of loan loss reserves of $1.4 million in the three months ended June 30, 2019. In addition, the Company reviewed goodwill for potential impairment on an interim basis as of June 30, 2020. As as result of its evaluation, the Company determined that goodwill was considered not impaired and, therefore, no impairment charges were recorded. 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 anticipated amount of estimated loan defaults and losses and consequently, the adequacy of the provision for loan losses, whether it will result in impairments to goodwill or other intangibles in future periods or, in general, 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

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 did not elect any of optional expedients as of June 30, 2020. The Company is in the process of evaluating the implications of these amendments to its current efforts for reference rate reform implementation.

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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 May 2020, 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, 2020, and interim periods within fiscal years beginning after December 15, 2021, for private companies. The new guidance on leases is now effective for fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022. 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 evaluating the results of testing. 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.

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

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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.

d) Subsequent Events

At June 30, 2020 and December 31, 2019, interest earning deposits with banks are mainly comprised of deposits with the Federal Reserve of approximately $182 million and $93 million, respectively. At June 30, 2020 and December 31, 2019, the average interest rate on these deposits was approximately 0.54% and 2.19%, respectively. These deposits mature within one year.

3.	Securities

Amortized cost and approximate fair values of debt securities available for sale are summarized as follows:

	June 30, 2020
	Amortized Cost				Gross Unrealized								Estimated Fair Value
(in thousands)					Gains				Losses
U.S. government-sponsored enterprise debt securities	$	807,667			$	24,955			$	(702	)		$	831,920
Corporate debt securities	376,251				12,318				(2,460		)		386,109
U.S. government agency debt securities	230,255				4,653				(2,454		)		232,454
U.S. treasury securities	2,508				7				—				2,515
Municipal bonds	62,168				4,618				—				66,786
	$	1,478,849			$	46,551			$	(5,616	)		$	1,519,784

	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 June 30, 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 $16.3 million and $5.2 million at June 30, 2020 and December 31, 2019, respectively.

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In the three and six month periods ended June 30, 2020 and 2019, proceeds from sales, gross realized gains, gross realized losses of debt securities available for sale were as follows:

	Three Months Ended June 30,								Six Months Ended June 30,
(in thousands)	2020				2019				2020				2019
Proceeds from sales, redemptions and calls of debt securities available for sale	$	100,666			$	103,683			$	239,738			$	216,212
Gross realized gains	7,537				1,125				16,803				1,573
Gross realized losses	—				(133		)		(23		)		(577		)
Realized gains, net	$	7,537			$	992			$	16,780			$	996

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:

	June 30, 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	$	63,660			$	(341	)		$	15,430			$	(361	)		$	79,090			$	(702	)
Corporate debt securities	65,800				(2,460		)		—				—				65,800				(2,460		)
U.S. government agency debt securities	19,577				(131		)		92,772				(2,323		)		112,349				(2,454		)
	$	149,037			$	(2,932	)		$	108,202			$	(2,684	)		$	257,239			$	(5,616	)

	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 June 30, 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.

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Unrealized losses on 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 June 30, 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	$	78,742			$	79,080			$	—			$	—
After 1 year through 5 years	173,554				178,179				—				—
After 5 years through 10 years	306,852				322,314				11,515				12,020
After 10 years	919,701				940,211				54,101				55,064
	$	1,478,849			$	1,519,784			$	65,616			$	67,084

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 $24.4 million and $23.8 million as of June 30, 2020 and December 31, 2019, respectively. These equity securities have no stated maturities. During the three and six month periods ended June 30, 2020, the Company recognized unrealized gains of $0.2 million and $0.6 million, respectively, related to the change in fair value of these mutual funds. No gain was recognized during the three and six month periods ended June 30, 2019.

4.	Loans

The loan portfolio consists of the following loan classes:

(in thousands)	June 30, 2020				December 31, 2019
Real estate loans
Commercial real estate
Non-owner occupied	$	1,841,075			$	1,891,802
Multi-family residential	823,450				801,626
Land development and construction loans	284,766				278,688
	2,949,291				2,972,116
Single-family residential	589,713				539,102
Owner occupied	938,511				894,060
	4,477,515				4,405,278
Commercial loans	1,247,455				1,234,043
Loans to financial institutions and acceptances	16,597				16,552
Consumer loans and overdrafts	130,704				88,466
	$	5,872,271			$	5,744,339

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At June 30, 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.

The amounts above include loans under syndication facilities of approximately $477 million and $562 million at June 30, 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 $11.9 million and $15.2 million at June 30, 2020 and December 31, 2019, respectively.

	June 30, 2020												December 31, 2019
(in thousands)	Venezuela				Others (1)				Total				Venezuela				Others (1)				Total
Real estate loans
Single-family residential (2)	$	93,409			$	9,771			$	103,180			$	103,979			$	7,692			$	111,671
Commercial loans	—				45,029				45,029				—				43,850				43,850
Loans to financial institutions and acceptances	—				10				10				—				5				5
Consumer loans and overdrafts (3)(4)	361				7,585				7,946				8,318				7,593				15,911
	$	93,770			$	62,395			$	156,165			$	112,297			$	59,140			$	171,437

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(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 June 30, 2020.

(4)	Overdrafts to customers outside the United States were de minimis at June 30, 2020 and December 31, 2019.

The age analysis of the loan portfolio by class, including nonaccrual loans, as of June 30, 2020 and December 31, 2019 are summarized in the following tables:

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	June 30, 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	$	1,841,075			$	1,834,585			$	6,490			$	—			$	—			$	6,490			$	8,426			$	—
Multi-family residential	823,450				823,450				—				—				—				—				—				—
Land development and construction loans	284,766				284,766				—				—				—				—				—				—
	2,949,291				2,942,801				6,490				—				—				6,490				8,426				—
Single-family residential	589,713				584,115				38				940				4,620				5,598				7,975				—
Owner occupied	938,511				934,271				502				47				3,691				4,240				11,828				—
	4,477,515				4,461,187				7,030				987				8,311				16,328				28,229				—
Commercial loans	1,247,455				1,239,173				815				3,198				4,269				8,282				48,961				—
Loans to financial institutions and acceptances	16,597				16,597				—				—				—				—				—				—
Consumer loans and overdrafts	130,704				130,611				23				12				58				93				70				—
	$	5,872,271			$	5,847,568			$	7,868			$	4,197			$	12,638			$	24,703			$	77,260			$	—

	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

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5.	Allowance for Loan Losses

The analyses by loan segment of the changes in the allowance for loan losses for the three and six month periods ended June 30, 2020 and 2019, and its allocation by impairment methodology and the related investment in loans, net as of June 30, 2020 and 2019 are summarized in the following tables:

	Three Months Ended June 30, 2020
(in thousands)	Real Estate				Commercial				Financial Institutions				Consumer and Others				Total
Balances at beginning of the period	$	36,430			$	29,062			$	42			$	7,414			$	72,948
Provision for loan losses	18,068				30,542				(42		)		52				48,620
Loans charged-off
Domestic	—				(2,075		)		—				(44		)		(2,119		)
International	—				—				—				(7		)		(7		)
Recoveries	—				50				—				160				210
Balances at end of the period	$	54,498			$	57,579			$	—			$	7,575			$	119,652

	Six Months Ended June 30, 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	29,458				38,072				(42		)		3,132				70,620
Loans charged-off
Domestic	—				(3,176		)		—				(266		)		(3,442		)
International	—				(34		)		—				(258		)		(292		)
Recoveries	—				235				—				308				543
Balances at end of the period	$	54,498			$	57,579			$	—			$	7,575			$	119,652

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	June 30, 2020
(in thousands)	Real Estate				Commercial				Financial Institutions				Consumer and Others				Total
Allowance for loan losses by impairment methodology:
Individually evaluated	$	2,565			$	23,640			$	—			$	1,499			$	27,704
Collectively evaluated	51,933				33,939				—				6,076				91,948
	$	54,498			$	57,579			$	—			$	7,575			$	119,652
Investment in loans, net of unearned income:
Individually evaluated	$	8,426			$	61,101			$	—			$	8,022			$	77,549
Collectively evaluated	2,918,353				2,270,212				16,597				589,560				5,794,722
	$	2,926,779			$	2,331,313			$	16,597			$	597,582			$	5,872,271

	Three Months Ended June 30, 2019
(in thousands)	Real Estate				Commercial				Financial Institutions				Consumer and Others				Total
Balances at beginning of the period	$	22,456			$	29,100			$	106			$	8,660			$	60,322
(Reversal of) provision for loan losses	(556		)		(2,646		)		(46		)		1,898				(1,350		)
Loans charged-off
Domestic	—				(874		)		—				(210		)		(1,084		)
International	—				(43		)		—				(894		)		(937		)
Recoveries	—				287				—				166				453
Balances at end of the period	$	21,900			$	25,824			$	60			$	9,620			$	57,404

	Six Months Ended June 30, 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	(878		)		(2,677		)		(385		)		2,590				(1,350		)
Loans charged-off
Domestic	—				(1,866		)		—				(406		)		(2,272		)
International	—				(61		)		—				(1,300		)		(1,361		)
Recoveries	—				410				—				215				625
Balances at end of the period	$	21,900			$	25,824			$	60			$	9,620			$	57,404

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	June 30, 2019
(in thousands)	Real Estate				Commercial				Financial Institutions				Consumer and Others				Total
Allowance for loan losses by impairment methodology
Individually evaluated	$	527			$	2,608			$	—			$	1,390			$	4,525
Collectively evaluated	21,373				23,216				60				8,230				52,879
	$	21,900			$	25,824			$	60			$	9,620			$	57,404
Investment in loans, net of unearned income
Individually evaluated	$	2,621			$	19,298			$	—			$	6,633			$	28,552
Collectively evaluated	3,123,437				2,104,143				25,006				531,617				5,784,203
	$	3,126,058			$	2,123,441			$	25,006			$	538,250			$	5,812,755

The following is a summary of the recorded investment amount of loan sales by portfolio segment:

Three Months Ended June 30, (in thousands)	Real Estate				Commercial				Financial Institutions				Consumer and others				Total
2020	$	—			$	—			$	—			$	2,126			$	2,126
2019	$	—			$	59,282			$	—			$	2,957			$	62,239

Six Months Ended June 30, (in thousands)	Real Estate				Commercial				Financial Institutions					Consumer and others				Total
2020	$	—			$	11,901			$	—		1,864		$	3,334			$	15,235
2019	$	23,475			$	186,120			$	—		1,864,000		$	4,821			$	214,416

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The following is a summary of impaired loans as of June 30, 2020 and December 31, 2019:

	June 30, 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	$	8,426			$	—			$	8,426			$	3,559			$	8,434			$	2,565
Multi-family residential	—				—				—				—				—				—
Land development and construction loans	—				—				—				—				—				—
	8,426				—				8,426				3,559				8,434				2,565
Single-family residential	5,596				2,645				8,241				6,816				8,381				1,469
Owner occupied	1,525				10,350				11,875				12,413				11,716				522
	15,547				12,995				28,542				22,788				28,531				4,556
Commercial loans	47,088				1,849				48,937				19,130				51,617				23,118
Consumer loans and overdrafts	61				9				70				264				63				30
	$	62,696			$	14,853			$	77,549			$	42,182			$	80,211			$	27,704

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(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				5,598				946
Owner occupied	6,169				7,906				14,075				9,548				13,974				501
	12,844				8,635				21,479				16,913				21,508				2,608
Commercial loans	8,415				13				8,428				8,552				8,476				1,288
Consumer loans and overdrafts	395				9				404				153				402				378
	$	21,654			$	8,657			$	30,311			$	25,618			$	30,386			$	4,274

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(1)	Average using trailing four quarter balances.

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There were no new loan modifications considered troubled debt restructurings (“TDRs”) during the three and six months periods ended June 30, 2020. As of June 30, 2020, TDRs mainly consist of a multiple loan relationship with a South Florida customer including CRE, owner occupied and commercial loans totaling $7.3 million. This TDR consisted of extending repayment terms and adjusting future periodic payments which resulted in no additional reserves at the time of its modification. Four residential loans, totaling $2.1 million at June 30, 2020, which are included in this loan relationship, were not modified. The Company believes the specific reserves associated with this loan relationship, which total $1.4 million at June 30, 2020, are adequate to cover probable losses given current facts and circumstances. In the fourth quarter of 2019, this $7.3 million TDR loan relationship did not perform in accordance with the restructured terms. The Company continues to closely monitor the performance of these loans under their modified terms. Since June 30, 2019, no additional TDRs subsequently defaulted under their modified terms. In addition, during the first half of 2020, the company charged off $1.9 million against the allowance for loan losses associated with TDR loans.

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. These programs continued in the second quarter of 2020. Consistent with accounting and regulatory guidance, temporary modifications granted under these programs are not considered TDRs. Loans which have been modified under these programs totaled $1.1 billion as of June 30, 2020. As of this date, loans in these programs on which the interest-only and/or forbearance period expired totaled $504.7 million, or 45.4% of total modified loans. The Company collected payments due on $8.4 million of modified loans through June 30, 2020. Modified loans totaling $496.3 million are due by July 31, 2020.

    

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Loans by Credit Quality Indicators

Loans by credit quality indicators as of June 30, 2020 and December 31, 2019 are summarized in the following tables:

	June 30, 2020
	Credit Risk Rating
	Nonclassified								Classified
(in thousands)	Pass				Special Mention				Substandard				Doubtful				Loss				Total
Real estate loans
Commercial real estate
Non-owner occupied	$	1,829,770			$	2,127			$	7,242			$	1,936			$	—			$	1,841,075
Multi-family residential	823,450				—				—				—				—				823,450
Land development and construction loans	277,570				7,196				—				—				—				284,766
	2,930,790				9,323				7,242				1,936				—				2,949,291
Single-family residential	581,586				—				8,127				—				—				589,713
Owner occupied	916,485				7,884				14,142				—				—				938,511
	4,428,861				17,207				29,511				1,936				—				4,477,515
Commercial loans	1,185,758				5,664				35,211				20,822				—				1,247,455
Loans to financial institutions and acceptances	16,597				—				—				—				—				16,597
Consumer loans and overdrafts	130,623				—				81				—				—				130,704
	$	5,761,839			$	22,871			$	64,803			$	22,758			$	—			$	5,872,271

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	December 31, 2019
	Credit Risk Rating
	Nonclassified								Classified
(in thousands)	Pass				Special Mention				Substandard				Doubtful				Loss				Total
Real estate loans
Commercial real estate
Non-owner occupied	$	1,879,780			$	9,324			$	762			$	1,936			$	—			$	1,891,802
Multi-family residential	801,626				—				—				—				—				801,626
Land development and construction loans	268,733				9,955				—				—				—				278,688
	2,950,139				19,279				762				1,936				—				2,972,116
Single-family residential	531,811				—				7,291				—				—				539,102
Owner occupied	871,682				8,138				14,240				—				—				894,060
	4,353,632				27,417				22,293				1,936				—				4,405,278
Commercial loans	1,217,399				5,569				8,406				2,669				—				1,234,043
Loans to financial institutions and acceptances	16,552				—				—				—				—				16,552
Consumer loans and overdrafts	88,042				—				67				357				—				88,466
	$	5,675,625			$	32,986			$	30,766			$	4,962			$	—			$	5,744,339

6.	Time Deposits

Time deposits in denominations of $100,000 or more amounted to approximately $1.5 billion and $1.4 billion at June 30, 2020 and December 31, 2019, respectively. Time deposits in denominations of more than $250,000 amounted to approximately $784 million and $733 million at June 30, 2020 and December 31, 2019, respectively. As of June 30, 2020 and December 31, 2019, brokered time deposits amounted to $588 million and $662 million, respectively.

7.	Advances from the Federal Home Loan Bank and Other Borrowings

At June 30, 2020 and December 31, 2019, the Company had outstanding advances from the FHLB and other borrowings as follows:

						Outstanding Balance
Year of Maturity		Interest Rate		Interest Rate Type		At June 30, 2020				At December 31, 2019
						(in thousands)
2020		0.44% to 2.35%		Fixed		—				135,000
2020		1.73% to 2.03%		Variable		—				150,000
2021		1.75% to 3.08%		Fixed		—				210,000
2022		0.65% to 2.80%		Fixed		50,000				120,000
2023 and after (1)		0.62% to 3.23%		Fixed		1,000,000				620,000
						$	1,050,000			$	1,235,000

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(1)	As of June 30, 2020 and December 31, 2019, includes $530 million (fixed interest rates raging from 0.62% to 0.97%) in advances from the FHLB that are callable prior to maturity.

On June 23, 2020, the Company completed a $60.0 million offering of senior notes with a coupon rate of 5.75% and due 2025 (the “Senior Notes”). The net proceeds, after direct issuance costs of $1.6 million, totaled $58.4 million. The Senior Notes are presented net of direct issuance costs in the consolidated financial statements. These costs have been deferred and are being amortized over the term of the Senior Notes of 5 years as an adjustment to yield. These Senior Notes are unsecured and unsubordinated, rank equally with all of our existing and future unsecured and unsubordinated indebtedness, and are fully and unconditionally guaranteed by our wholly-owned intermediate holding company subsidiary Amerant Florida Bancorp.

The following table provides information on the outstanding Trust Preferred Securities issued by, and the junior subordinated debentures issued to, each of the statutory trust subsidiaries as of June 30, 2020 and December 31, 2019:

	June 30, 2020								December 31, 2019
(in thousands)	Amount of Trust Preferred Securities Issued by Trust				Principal Amount of Debenture Issued to Trust				Amount of Trust Preferred Securities Issued by Trust				Principal Amount of Debenture Issued to Trust				Year of Issuance		Annual Rate of Trust Preferred Securities and Debentures		Year of Maturity
Commercebank Capital Trust I	$	—			$	—			$	26,830			$	28,068			1998		8.90%		2028
Commercebank Capital Trust VI	9,250				9,537				9,250				9,537				2002		3-M LIBOR + 3.35%		2033
Commercebank Capital Trust VII	8,000				8,248				8,000				8,248				2003		3-M LIBOR + 3.25%		2033
Commercebank Capital Trust VIII	5,000				5,155				5,000				5,155				2004		3-M LIBOR + 2.85%		2034
Commercebank Capital Trust IX	25,000				25,774				25,000				25,774				2006		3-M LIBOR + 1.75%		2038
Commercebank Capital Trust X	15,000				15,464				15,000				15,464				2006		3-M LIBOR + 1.78%		2036
	$	62,250			$	64,178			$	89,080			$	92,246

On January 30, 2020, the Company redeemed all $26.8 million of its outstanding 8.90% trust preferred capital securities issued by Commercebank Capital Trust I (“Capital Trust I”) at a redemption price of 100%. The Company simultaneously redeemed all junior subordinated debentures held by Capital Trust I as part of this redemption transaction. This redemption reduced total cash and cash equivalents by $27.1 million, financial liabilities by

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10.	Derivative Instruments

At June 30, 2020 and December 31, 2019, the fair values of the Company’s derivative instruments were as follows:

	June 30, 2020								December 31, 2019
(in thousands)	Other Assets				Other Liabilities				Other Assets				Other Liabilities
Interest rate swaps designated as cash flow hedges	$	79			$	2,005			$	301			$	—
Interest rate swaps not designated as hedging instruments:
Customers	47,116				—				11,236				527
Third party broker	—				47,116				527				11,236
	47,116				47,116				11,763				11,763
Interest rate caps not designated as hedging instruments:
Customers	—				57				—				46
Third party broker	16				—				33				—
	16				57				33				46
	$	47,211			$	49,178			$	12,097			$	11,809

No hedge ineffectiveness gains or losses were recognized on derivatives designated as hedging instruments in the three and six month periods ended June 30, 2020 and 2019.

Derivatives Not Designated as Hedging Instruments

Interest Rate Swaps

At June 30, 2020 and December 31, 2019, the Company had 67 and 49 interest rate swap contracts with customers, respectively, with a total notional amount of $456.9 million and $405.2 million, respectively. These instruments involve the payment of variable-rate amounts in exchange for the Company receiving fixed-rate amounts over the life of the contract. In addition, at June 30, 2020 and December 31, 2019, the Company had 67 and 49 interest rate swap mirror contracts, respectively, with third party brokers with similar terms.

In 2019, the Company entered into swap participation agreements with other financial institutions to manage the credit risk exposure on certain interest rate swaps with customers. Under these agreements, the Company, as the beneficiary or guarantor, will receive or make payments from/to the counterparty if the borrower defaults on the related interest rate swap contract. As of June 30, 2020 and December 31, 2019, the Company had two and three swap participation agreements, respectively, with total notional amounts of approximately $32.0 million and $50.2 million, respectively. The notional amount of these agreements is based on the Company’s pro-rata share of the related interest rate swap contracts. As of June 30, 2020 and December 31, 2019, the fair value of swap participation agreements was not significant.

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Interest Rate Caps

11.	Stock-based Incentive Compensation Plan

The Company sponsors the 2018 Equity and Incentive Compensation Plan (the “2018 Equity Plan”). See Note 11 to the Company’s audited consolidated financial statements in the 2019 annual report on Form 10-K for more information on the 2018 Equity Plan and stock-based compensation awards for the year ended 2019, including restricted stocks and restricted stock units (“RSUs”).

Restricted Stock Awards

The following table shows the activity of restricted stock awards during the six months ended June 30, 2020:

	Number of restricted shares		Weighted-average grant date fair value
Non-vested shares, beginning of year	495,131		$	13.48
Granted	6,591		15.17
Vested	(433	)	13.58
Forfeited	(64,281	)	13.45
Non-vested shares at June 30, 2020	437,008		$	13.51

The Company recorded compensation expense related to the restricted stock awards of $0.6 million and $1.5 million during the three months ended June 30, 2020 and 2019, respectively, and $1.0 million and $3.0 million during the six months ended June 30, 2020 and 2019, respectively.The total unamortized deferred compensation expense of $2.1 million for all unvested restricted stock outstanding at June 30, 2020 will be recognized over a weighted average period of 1.2 years.

Restricted Stock Units

The following table shows the activity of RSUs during the six months ended June 30, 2020:

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	Stock-settled RSUs							Cash-settled RSUs						Total RSUs
	Number of RSUs			Weighted-average grant date fair value				Number of RSUs			Weighted-average grant date fair value			Number of RSUs			Weighted-average grant date fair value
Nonvested, beginning of year	35,489			$	13.91			19,230			$	13.45		54,719			$	13.75
Granted	22,302			13.45				11,151			13.45			33,453			13.45
Vested	(3,439	)		18.17				—			—			(3,439	)		18.17
Forfeited	—			—				—			—			—			—
Non-vested, end of year	54,352			$	13.45			30,381			$	13.45		84,733			$	13.45

`

The Company recorded compensation expense related to RSUs of $0.1 million and $0.2 million during the the three and six months ended June 30, 2020, respectively. The total unamortized deferred compensation expense of $0.4 million for all unvested stock-settled RSUs outstanding at June 30, 2020 will be recognized over a weighted average period of 1.0 year.

12.	Income Taxes

The Company uses an estimated annual effective tax rate method in computing its interim tax provision. This effective tax rate is based on forecasted annual consolidated pre-tax income, permanent tax differences and statutory tax rates. Under this method, the tax effect of certain items that do not meet the definition of ordinary income or expense are computed and recognized as discrete items when they occur.

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The components of AOCI are summarized as follows using applicable blended average federal and state tax rates for each period:

	June 30, 2020												December 31, 2019
(in thousands)	Before Tax Amount				Tax Effect				Net of Tax Amount				Before Tax Amount				Tax Effect				Net of Tax Amount
Net unrealized holding gains on debt securities available for sale	$	40,935			$	(10,007	)		$	30,928			$	9,563			$	(2,338	)		$	7,225
Net unrealized holding gains on interest rate swaps designated as cash flow hedges	5,029				(1,230		)		3,799				7,953				(1,944		)		$	6,009
Total AOCI	$	45,964			$	(11,237	)		$	34,727			$	17,516			$	(4,282	)		$	13,234

The components of other comprehensive income for the periods presented is summarized as follows:

	Three Months Ended June 30,
	2020												2019
(in thousands)	Before Tax Amount				Tax Effect				Net of Tax Amount				Before Tax Amount				Tax Effect				Net of Tax Amount
Net unrealized holding gains on debt securities available for sale:
Change in fair value arising during the period	$	12,390			$	(3,029	)		$	9,361			$	18,946			$	(4,633	)		$	14,313
Reclassification adjustment for net gains included in net income	(7,117		)		1,740				(5,377		)		(992		)		243				(749		)
	5,273				(1,289		)		3,984				17,954				(4,390		)		13,564
Net unrealized holding losses on interest rate swaps designated as cash flow hedges:
Change in fair value arising during the period	(211		)		51				(160		)		—				—				—
Reclassification adjustment for net interest income included in net income	(283		)		69				(214		)		(366		)		90				(276		)
	(494		)		120				(374		)		(366		)		90				(276		)
Total other comprehensive income	$	4,779			$	(1,169	)		$	3,610			$	17,588			$	(4,300	)		$	13,288

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	Six Months Ended June 30,
	2020												2019
(in thousands)	Before Tax Amount				Tax Effect				Net of Tax Amount				Before Tax Amount				Tax Effect				Net of Tax Amount
Net unrealized holding gains on debt securities available for sale:
Change in fair value arising during the period	$	47,732			$	(11,669	)		$	36,063			$	40,491			$	(9,900	)		$	30,591
Reclassification adjustment for net gains included in net income	(16,360		)		4,000				(12,360		)		(996		)		244				(752		)
	31,372				(7,669		)		23,703				39,495				(9,656		)		29,839
Net unrealized holding losses on interest rate swaps designated as cash flow hedges:
Change in fair value arising during the period	(2,215		)		541				(1,674		)		(15		)		4				(11		)
Reclassification adjustment for net interest income included in net income	(709		)		173				(536		)		(695		)		170				(525		)
	(2,924		)		714				(2,210		)		(710		)		174				(536		)
Total other comprehensive income	$	28,448			$	(6,955	)		$	21,493			$	38,785			$	(9,482	)		$	29,303

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a) Class A Common Stock

Shares of the Company’s Class A common stock issued and outstanding as of June 30, 2020 and December 31, 2019 were 28,873,196 and 28,927,576, respectively.

b) Class B Common Stock and Treasury Stock

Shares of the Company’s Class B common stock issued as of June 30, 2020 and December 31, 2019 were 13,286,137 and 17,751,053, respectively. As of June 30, 2020 and December 31, 2019, there were 13,286,137 shares and 14,218,596 shares, respectively, of Class B common stock outstanding. As of June 30, 2020, the Company had no shares of Class B common stock held as treasury stock. At December 31, 2019, the Company had 3,532,457 shares of Class B common stock held as treasury stock under the cost method.

On February 14 and February 21, 2020, the Company repurchased an aggregate of 932,459 shares of nonvoting Class B common stock in two privately negotiated transactions (collectively, the “2020 Repurchase”) for $16.00 per share of Class B common stock. The aggregate purchase price for these transactions was approximately $15.2 million, including $0.3 million in broker fees and other expenses. The Company funded the 2020 Repurchase with available cash.

In March 2020, Company’s Board of Directors authorized the cancellation of all 4,464,916 shares of Class B Common Stock previously held as treasury stock, including shares repurchased during 2018, 2019 and 2020, effective March 31, 2020.

The Company and its subsidiaries are parties to various legal actions arising in the ordinary course of business. In the opinion of management, the outcome of these proceedings will not have a significant effect on the Company’s consolidated financial position or results of operations.

The Company occupies various premises under noncancelable lease agreements expiring through the year 2046. Actual rental expenses may include deferred rents that are recognized as rent expense on a straight line basis. Rent expense under these leases was approximately $1.7 million and $1.2 million for the three months ended June 30, 2020 and 2019, respectively, and $3.0 million and $2.8 million for the six months ended June 30, 2020 and 2019, respectively.

Financial instruments whose contract amount represents off-balance sheet credit risk at June 30, 2020 are generally short-term and are as follows:

(in thousands)	Approximate Contract Amount
Commitments to extend credit	$	786,034
Standby letters of credit	12,268
Commercial letters of credit	3,428
	$	801,730

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Assets and liabilities measured at fair value on a recurring basis are summarized below:

	June 30, 2020
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)				Third-Party Models with Observable Market Inputs (Level 2)				Internal Models with Unobservable Market Inputs (Level 3)				Total Carrying Value in the Consolidated Balance Sheet
Assets
Debt securities available for sale
U.S. government sponsored enterprise debt securities	$	—			$	831,920			$	—			$	831,920
Corporate debt securities	—				386,109				—				386,109
U.S. government agency debt securities	—				232,454				—				232,454
Municipal bonds	—				66,786				—				66,786
U.S treasury securities	—				2,515				—				2,515
	—				1,519,784				—				1,519,784
Equity securities with readily determinable fair values not held for trading	—				24,425				—				24,425
Bank owned life insurance	—				214,693				—				214,693
Derivative instruments	—				47,211				—				47,211
	$	—			$	1,806,113			$	—			$	1,806,113
Liabilities
Derivative instruments	$	—			$	49,178			$	—			$	49,178

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	December 31, 2019
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)				Third-Party Models with Observable Market Inputs (Level 2)				Internal Models with Unobservable Market Inputs (Level 3)				Total Carrying Value in the Consolidated Balance Sheet
Assets
Debt securities available for sale
U.S. government sponsored enterprise debt securities	$	—			$	933,112			$	—			$	933,112
Corporate debt securities	—				252,836				—				252,836
U.S. government agency debt securities	—				228,397				—				228,397
U.S. treasury securities	—				104,236				—				104,236
Municipal bonds	—				50,171				—				50,171
	—				1,568,752				—				1,568,752
Equity securities with readily determinable fair values not held for trading	—				23,848				—				23,848
Bank owned life insurance	—				211,852				—				211,852
Derivative instruments	—				12,097				—				12,097
	$	—			$	1,816,549			$	—			$	1,816,549
Liabilities
Derivative instruments	$	—			$	11,809			$	—			$	11,809

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

There were no significant assets or liabilities measured at fair value on a nonrecurring basis at June 30, 2020 and December 31, 2019.

Fair Value of Financial Instruments

The estimated fair value of financial instruments where fair value differs from carrying value are as follows:

	June 30, 2020								December 31, 2019
(in thousands)	Carrying Value				Estimated Fair Value				Carrying Value				Estimated Fair Value
Financial assets:
Loans	$	2,966,143			$	2,847,190			$	2,819,477			$	2,721,291
Financial liabilities:
Time deposits	1,833,597				1,864,959				1,745,735				1,759,347
Advances from the FHLB	1,050,000				1,083,807				1,235,000				1,244,515
Senior notes	58,419				60,724				—				—
Junior subordinated debentures	64,178				53,180				92,246				86,738

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17.	Earnings Per Share

The following table shows the calculation of basic and diluted earnings per share:

	Three Months ended June 30,								Six Months Ended June 30,
(in thousands, except per share data)	2020				2019				2020				2019
Numerator:
Net (loss) income available to common stockholders	$	(15,279	)		$	12,857			$	(11,897	)		$	25,928
Denominator:					`
Basic weighted average shares outstanding	41,720				42,466				41,953				42,610
Dilutive effect of share-based compensation awards	—				353				—				255
Diluted weighted average shares outstanding	41,720				42,819				41,953				42,865
Basic (loss) earnings per common share	$	(0.37	)		$	0.30			$	(0.28	)		$	0.61
Diluted (loss) earnings per common share	$	(0.37	)		$	0.30			$	(0.28	)		$	0.60

As of June 30, 2020 and 2019, potential dilutive instruments consisted of unvested shares of restricted stock and restricted stock units mainly related to the Company’s IPO in 2018, totaling 491,360 and 789,652, respectively. As of June 30, 2020, potential dilutive instruments were not included in the diluted earnings per share computation because the Company reported a net loss and their inclusion would have an anti-dilutive effect. As of June 30, 2019, potential dilutive instruments were included in the diluted earnings per share computation because, when the unamortized deferred compensation cost related to these shares was divided by the average market price per share at those dates, fewer shares would have been purchased than restricted shares assumed issued. Therefore, at those dates, such awards resulted in higher diluted weighted average shares outstanding than basic weighted average shares outstanding, and had a dilutive effect in per share earnings.

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•

the COVID-19 pandemic has significantly impacted economic conditions globally and in the United States, could have a material adverse effect on our business, financial condition and results of operation, and the ultimate impact on our business, financial condition and results of operations, will depend on future developments and other factors that are highly uncertain and will be impacted by the scope, severity and duration of the pandemic and actions taken by governmental authorities in response;

•	as a participating lender in the U.S. Small Business Administration (“SBA”) PPP, the Company and the Bank are subject to additional risks of litigation from the Bank’s customers or other parties regarding the Bank’s processing of loans for the PPP and risks that the SBA may not fund some or all PPP loan guaranties;

•	our strategic plan and growth strategy may not be achieved as quickly or as fully as we seek;

•	operational risks are inherent in our businesses;

•	market conditions and economic cyclicality may adversely affect our industry;

•	our profitability and liquidity may be affected by changes in interest rates and interest rate levels, the shape of the yield curve and economic conditions;

•	our cost of funds may increase as a result of general economic conditions, interest rates, inflation and competitive pressures;

•	many of our loans and our obligations for borrowed money are priced based on variable interest rates tied to the London Interbank Offering Rate, or LIBOR. We are subject to risks that LIBOR will no longer be available as a result of the United Kingdom’s Financial Conduct Authority ceasing to require the submission of LIBOR quotes after 2021;

•	our derivative instruments may expose us to certain risks;

•	our valuation of securities and investments and the determination of the amount of impairments taken on our investments are subjective and, if changed, could materially adversely affect our results of operations or financial condition;

•	our success depends on our ability to compete effectively in highly competitive markets;

•	our success depends on general and local economic conditions where we operate;

•	severe weather, natural disasters, global pandemics, acts of war or terrorism, theft, civil unrest, government expropriation or other external events could have significant effects on our business;

•	defaults by or deteriorating asset quality of other financial institutions could adversely affect us;

•	nonperforming and similar assets take significant time to resolve and may adversely affect our results of operations and financial condition;

•	changes in the real estate markets, including the secondary market for residential mortgage loans, may adversely affect us;

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•	our allowance for loan losses may prove inadequate or we may be negatively affected by credit risk exposures;

•	if our business does not perform well, we may be required to recognize an impairment of our goodwill or other long-lived assets or to establish a valuation allowance against the deferred income tax asset, which could adversely affect our results of operations or financial condition;

•	mortgage servicing rights, or MSRs, requirements may change and require us to incur additional costs and risks;

•	we may be contractually obligated to repurchase mortgage loans we sold to third-parties on terms unfavorable to us;

•	our concentration of CRE loans could result in further increased loan losses, and adversely affect our business, earnings, and financial condition;

•	liquidity risks could affect operations and jeopardize our financial condition;

•	certain funding sources may not be available to us and our funding sources may prove insufficient and/or costly to replace;

•	our Venezuelan deposit concentration may lead to conditions in Venezuela adversely affecting our operations;

•	our investment advisory and trust businesses could be adversely affected by conditions affecting our Venezuelan customers;

•	our brokered deposits and wholesale funding increases our liquidity risk, could increase our interest rate expense and potentially increase our deposit insurance costs;

•	technological changes affect our business including potentially impacting the revenue stream of traditional products and services, and we may have fewer resources than many competitors to invest in technological improvements;

•	potential gaps in our risk management policies and internal audit procedures may leave us exposed to unidentified or unanticipated risk, which could negatively affect our business;

•	we may determine that our internal controls and disclosure controls could have deficiencies or weaknesses;

•	any failure to protect the confidentiality of customer information could adversely affect our reputation and subject us to financial sanctions and other costs that could have a material adverse effect on our business, financial condition and results of operations;

•	our information systems may experience interruptions and security breaches, and are exposed to cybersecurity threats;

•	future acquisitions and expansion activities may disrupt our business, dilute shareholder value and adversely affect our operating results;

•	attractive acquisition opportunities may not be available to us in the future;

•	certain provisions of our amended and restated articles of incorporation and amended and restated bylaws, Florida law, and U.S. banking laws could have anti-takeover effects by delaying or preventing a change of control that you may favor;

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•	we may be unable to attract and retain key people to support our business;

•	our employees may take excessive risks which could negatively affect our financial condition and business;

•	we are subject to extensive regulation that could limit or restrict our activities and adversely affect our earnings;

•	litigation and regulatory investigations are increasingly common in our businesses and may result in significant financial losses and/or harm to our reputation;

•	we are subject to capital adequacy and liquidity standards, and if we fail to meet these standards our financial condition and operations would be adversely affected;

•	our operations are subject to risk of loss from unfavorable fiscal, monetary and political developments in the U.S. and other countries where we do business;

•	changes in accounting rules applicable to banks and financial institutions could adversely affect our financial condition and results of operations;

•	the Dodd-Frank Act currently restricts our future issuance of trust preferred securities and cumulative preferred securities as eligible Tier 1 risk-based capital for purposes of the regulatory capital guidelines for bank holding companies;

•	we may need to raise additional capital in the future, but that capital may not be available when it is needed or on favorable terms;

•	we will be subject to heightened regulatory requirements if our total assets grow in excess of $10 billion;

•	the Federal Reserve may require us to commit capital resources to support the Bank;

•	we may face higher risks of noncompliance with the Bank Secrecy Act and other anti-money laundering statutes and regulations than other financial institutions;

•	failures to comply with the fair lending laws, CFPB regulations or the Community Reinvestment Act could adversely affect us;

•	Fannie Mae and Freddie Mac restructuring may adversely affect the mortgage markets;

•	we adopted a new accounting principle that requires immediate recognition in the statement of income of unrealized changes in the fair value of equity securities, which includes mutual funds, increasing the volatility of our results of operations;

•	we changed our brand from “Mercantil” to “Amerant,” which could adversely affect our business and profitability;

•	we are incurring incremental costs as a separate, public company;

•	as a separate, public company, we spend additional time and resources to comply with rules and regulations that previously did not apply to us;

•	our historical consolidated financial data are not necessarily representative of the results we would have achieved as a separate company and may not be a reliable indicator of our future results;

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•	certain of our directors may have actual or potential conflicts of interest because of their equity ownership in Mercantil Servicios Financieros, C.A., or the Former Parent, or their positions with the Former Parent and us;

•	if securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the price of our common stock and trading volume could decline;

•	our stock price may fluctuate significantly;

•	a limited market exists for the Company’s shares of Class B common stock on the Nasdaq Global Select Market. An active trading market may not develop or continue for the Company’s shares of Class B common stock, which could adversely affect the market price and market volatility of those shares;

•	certain of our existing stockholders could exert significant control over the Company;

•	we have the ability to issue additional equity securities, which would lead to dilution of our issued and outstanding common stock;

•	we expect to issue more Class A common stock in the future which may dilute holders of Class A common stock;

•	holders of Class B common stock have limited voting rights. As a result, holders of Class B common stock will have limited ability to influence shareholder decisions;

•	our dual classes of common stock may limit investments by investors using index-based strategies;

•	we are an “emerging growth company,” and, as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, our common stock may be less attractive to investors;

•	we do not currently intend to pay dividends on our common stock;

•	our ability to pay dividends to shareholders in the future is subject to profitability, capital, liquidity and regulatory requirements and these limitations may prevent us from paying dividends in the future;

•	we face strategic risks as an independent company and from our history as a part of the Former Parent;

•	the fair value of our investment securities can fluctuate due to market conditions out of our control;

•	we may not be able to generate sufficient cash to service all of our debt, including the Senior Notes;

•	we and Amerant Florida Bancorp Inc., the subsidiary guarantor, are each a holding company with limited operations and depend on our subsidiaries for the funds required to make payments of principal and interest on the Senior Notes;

•	we may incur a substantial level of debt that could materially adversely affect our ability to generate sufficient cash to fulfill our obligations under the Senior Notes; and

•	the other factors and information in our Form 10-K and in this Form 10-Q and other filings that we make with the SEC under the Exchange Act and Securities Act. See “Risk Factors” in our Form 10-K and this Form 10-Q.

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•

Net loss of $15.3 million, compared to net income of $12.9 million in the same period of 2019. The net loss compared to net income in the same quarter last year was primarily due to higher provision for loan losses in the second quarter of 2020 and lower net interest income, offset by higher non-interest income and lower non-interest expenses. Operating income, which excludes provision for income tax, provision for loan losses or reversals and net gains on securities, increased to $21.6 million, up 53.8% from $14.0 million in the same period of 2019.

•

Net interest income (“NII”) was $46.3 million, down 13.9% from $53.8 million in the same period of 2019. Lower NII is attributed to a decline in average yields on interest-earning assets, partially offset by higher average interest-earning asset balances and lower deposit and professional funding costs. Net interest margin (“NIM”) was 2.44% in the second quarter of 2020, down from 2.92% in the second quarter 2019.

•

Credit quality remained sound and reserve coverage is strong despite recent developments associated with one large loan relationship. The Company continues to closely monitor the performance of its loan portfolio estimated to be impacted by the decline in business activity associated with the COVID-19 pandemic, and continues refining its estimated probable loss assumptions. The Company recorded a provision for loan losses of $48.6 million during the second quarter of 2020, compared to a release of $1.4 million during the second quarter of 2019. The ratio of the ALL to total loans was 2.04% as of June 30, 2020, up from 0.99% in the same period last year. In the second quarter of 2020, the ratio of loan charge-offs to average total loans remained at a low level of 0.13%, up from 0.11% in the second quarter of 2019.

•	Noninterest income was $19.8 million, up 39.6% from $14.1 million in the same period of 2019. The increase over the same quarter of 2019 was primarily due to higher net gains on the sale of securities in the second quarter of 2020.

•

Noninterest expense was $36.7 million, down 30.6% from $52.9 million in the second quarter of 2019. The year-over-year decline in noninterest expense was mainly driven by lower salaries and employee benefit expenses attributed to staff reductions completed in 2019 and 2018, lower stock compensation expense in the second quarter of 2020, and the deferral of direct origination costs associated with the Small Business Administration (“SBA”)’s Paycheck Protection Program ("PPP") loans funded during the second quarter of 2020. Non-refundable loan origination fees, net of direct costs of originating loans, are deferred and amortized over the term of the related loans as adjustments to interest income in accordance with generally accepted accounting principles (GAAP). Additionally, the Company had lower restructuring costs in the second quarter of 2020 related to Amerant’s transformation efforts. Adjusted noninterest expense was $35.4 million in the second quarter of 2020, down 29.4% from $50.2 million in the second quarter of 2019. Adjusted noninterest expense in the second quarter of 2020 excludes $1.3 million in restructuring expenses, compared $2.7 million in the same quarter last year.

•

The efficiency ratio was 55.6% (53.6% adjusted for restructuring expenses), compared to 77.9% (73.8% adjusted for restructuring expenses) for the corresponding period of 2019. These improvements in the second quarter of 2020 are mainly attributed to the lower noninterest expenses driven by staff reductions, lower stock compensation expense, and the deferral of origination costs associated with PPP loans, as previously explained.

•	Stockholders’ book value per common share increased to $19.69, up 1.8%, from $19.35 at December 31, 2019. Tangible book value per common share increased to $19.18, up 1.8% from $18.84 at December 31, 2019.

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•	Completed the registered offering and sale of $60.0 million senior notes, which bear interest at an annual rate of 5.75% and are due in 2025 (the “Senior Notes”), significantly expanding the Company’s available funding sources.

•	Total loans were $5.9 billion, up $127.9 million , or 2.2%, from $5.7 billion as of December 31, 2019. Total deposits were $6.0 billion, up $267.6 million, or 4.6% from $5.8 billion as of December 31, 2019. These increases are mainly driven by the Company’s participation in the PPP.

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(1)	Total gross loans are net of deferred loan fees and costs.

(2)	During the second quarter of 2020, the Company completed a $60 million offering of Senior Notes with a coupon rate of 5.75%. Senior Notes are presented net of direct issuance cost which is deferred and amortized over 5 years.

(3)	During the six months ended June 30, 2020, the Company redeemed $26.8 million of its 8.90% trust preferred securities. The Company simultaneously redeemed the junior subordinated debentures associated with these trust preferred securities.

(4)	Assets held for clients in an agency or fiduciary capacity which are not assets of the Company and therefore are not included in the consolidated financial statements.

(5)	This presentation contains adjusted financial information determined by methods other than GAAP. This adjusted financial information is reconciled to GAAP in “Non-GAAP Financial Measures Reconciliation” herein.

(7)	Operating data for the periods presented have been annualized.

(8)	NIM is defined as net interest income divided by average interest-earning assets, which are loans, securities, deposits with banks and other financial assets which yield interest or similar income.

(9)	Calculated based upon the average daily balance of total assets.

(10)	Calculated based upon the average daily balance of stockholders’ equity.

(11)	Total stockholders’ equity divided by total risk-weighted assets, calculated according to the standardized regulatory capital ratio calculations.

(12)	Tier 1 capital divided by total risk-weighted assets.

(13)	Tier 1 capital divided by quarter to date average assets. Tier 1 capital is composed of Common Equity Tier 1 (CET 1) capital plus outstanding qualifying trust preferred securities of $62.3 million and $114.1 million at June 30, 2020 and 2019, respectively. See footnote 2 for more information about trust preferred securities redemption transactions in the first quarter of 2020.

(14)	Common Equity Tier 1 (CET 1) capital divided by total risk-weighted assets.

(15)	Tangible common equity is calculated as the ratio of common equity less goodwill and other intangibles divided by total assets less goodwill and other intangible assets. Other intangibles assets are included in other assets in the Company’s consolidated balance sheets.

(16)	Non-performing assets include all accruing loans past due 90 days or more, all nonaccrual loans, restructured loans that are considered “troubled debt restructurings” or “TDRs”, and OREO properties acquired through or in lieu of foreclosure. Non-performing assets were $77.3 million and $32.8 million as of June 30, 2020 and 2019, respectively.

(17)	Non-performing loans include all accruing loans 90 days or more past due, all nonaccrual loans and restructured loans that are considered TDRs. Non-performing loans were $77.3 million and $32.8 million as of June 30, 2020 and 2019, respectively.

(18)	Allowance for loan losses was $119.7 million and $57.4 million as of June 30, 2020 and 2019, respectively. See Note 5 to our audited consolidated financial statements in our Form 10-K and Note 5 to these unaudited interim consolidated financial statements for more details on our impairment models.

(19)	Calculated based upon the average daily balance of outstanding loan principal balance net of deferred loan fees and costs, excluding the allowance for loan losses.

(20)	Other operating expenses is the result of total noninterest expense less salary and employee benefits.

(21)	Efficiency ratio is the result of noninterest expense divided by the sum of noninterest income and net interest income.

(22)	Adjusted efficiency ratio is the efficiency ratio less the effect of restructuring costs, described in “Non-GAAP Financial Measures Reconciliation” herein.

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(1)

At June 30, 2020 and 2019, potential dilutive instruments consisted of unvested shares of restricted stock and restricted stock units totaling 491,360 and 789,652, respectively, mainly related to the Company’s IPO in 2018. See Note 17 to our unaudited interim financial statements in this Form 10-Q for details on the dilutive effects of the issuance of restricted stock and restricted stock units on earnings per share for the three and six month periods ended June 30, 2020 and 2019.

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(1)	Average non-performing loans of $50.4 million and $24.5 million for the three months ended June 30, 2020 and 2019, respectively, and $41.6 million and $22.1 million for the six months ended June 30, 2020,and 2019, respectively, are included in the average loan portfolio, net.

(2)

Includes nontaxable securities with average balances of $62.2 million and $122.9 million for the three months ended June 30, 2020 and 2019, respectively, and $55.8 million and $140.4 million for the six months ended June 30, 2020, and 2019, respectively. The tax equivalent yield for these nontaxable securities for the three months ended June 30, 2020 and 2019 was 3.77% and 4.05%, respectively, and 3.82% and 4.03% for the six months ended June 30, 2020, and 2019, respectively. In 2020 and 2019, the tax equivalent yields were calculated by assuming a 21% tax rate and dividing the actual yield by 0.79.

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(3)

Includes nontaxable securities with average balances of $68.2 million and $82.7 million for the three months ended June 30, 2020 and 2019, respectively, and $70.4 million and $83.7 million for the six months ended June 30, 2020 and 2019, respectively. The tax equivalent yield for these nontaxable securities for the three months ended June 30, 2020 and 2019 was 2.30% and 3.10%, respectively, and 2.56% and 3.33% for the six months ended June 30, 2020, and 2019, respectively. In 2020 and 2019, the tax equivalent yields were calculated by assuming a 21% tax rate and dividing the actual yield by 0.79.

(4)	The terms of the advance agreements require the Bank to maintain certain investment securities or loans as collateral for these advances.

(5)	Net interest margin is defined as net interest income divided by average interest-earning assets, which are loans, securities, deposits with banks and other financial assets which yield interest or similar income.

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(1)	Includes transactions in which the debtor or the customer is domiciled outside the U.S., even when the collateral is located in the U.S.

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(1)	Changes in cash surrender value of BOLI are not taxable.

(2)	Includes net gain on sale of debt securities of $7.5 million and $16.8 million during the three and six month periods ended June 30, 2020, respectively, and unrealized gain on change in market value of mutual fund of $0.2 million and $0.6 million during the three and six month periods ended June 30, 2020, respectively.

(3)	Includes rental income, income from derivative and foreign currency exchange transactions with customers, and valuation income on the investment balances held in the non-qualified deferred compensation plan.

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(1)	Includes advertising, marketing, charitable contributions, community engagement, postage and courier expenses, provisions for possible losses on contingent loans, and debits which mirror the valuation income on the investment balances held in the non-qualified deferred compensation plan in order to adjust our liability to participants of the deferred compensation plan.

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(1)	Total loans, gross are outstanding loan principal balance net of unamortized deferred nonrefundable loan origination fees and loan origination costs, excluding the allowance for loan losses. There were no loans held for sale for the periods presented.

(2)	See Note 5 of our audited consolidated financial statements in the Form 10-K for the year ended December 31, 2019 and Note 5 of these unaudited interim consolidated financial statements for more details on our impairment models.

(3)	Total loans, net are outstanding loan principal balance net of unamortized deferred nonrefundable loan origination fees and loan origination costs, net of the allowance for loan losses.

(1)	Includes loans generally granted to finance the acquisition or operation of non-owner occupied properties such as retail shopping centers, free-standing single-tenant properties, and mixed-use properties with a primary retail component, where the primary source of repayment is derived from the rental income generated from the use of the property by its tenants.

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(1)	Mostly comprised of cash or U.S. Government securities.

(2)	Includes customers’ overdraft balances totaling $0.2 million and $1.3 million as of June 30, 2020 and December 31, 2019, respectively.

(3)	There were no outstanding credit card balances as of June 30, 2020. At December 31, 2019, balances were 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.

(4)	Secured by real estate properties located in the U.S.

(5)	International customers’ overdraft balances were de minimis at each of the dates presented.

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(1)	Consists of outstanding principal amounts, net of collateral of cash, cash equivalents or other financial instruments totaling $11.9 million and $15.2 million as of June 30, 2020 and December 31, 2019, respectively.

(2)	Includes mortgage loans for single-family residential properties located in the U.S. totaling $93.4 million and $104.0 million as of June 30, 2020 and December 31, 2019, respectively.

(3)	Includes loans to borrowers in other countries which do not individually exceed one percent of total assets in any of the reported periods.

(1)	Includes mortgage loans for single-family residential properties located in the U.S. totaling $93.4 million and $104.0 million as of June 30, 2020 and December 31, 2019, respectively.

(2)	Includes loans to borrowers in other countries which do not individually exceed one percent of total assets in any of the reported periods.

(3)	Consists of outstanding principal amounts, net of cash collateral, cash equivalents or other financial instruments totaling $11.9 million and $15.2 million as of June 30, 2020 and December 31, 2019, respectively.

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(1)

Includes: (i) credit card receivables to cardholders for whom charge privileges have been stopped as of December 31, 2019; and (ii) mortgage loans for and secured by single-family residential properties located in the U.S. The total allowance for loan losses, after the charge-offs, for credit card receivables totaled $1.8 million at December 31, 2019. Outstanding credit card balances were repaid during the first quarter of 2020, therefore, there is no allowance for the credit card product as of June 30, 2020.

(2)	Includes transactions in which the debtor or customer is domiciled outside the U.S. and all collateral is located in the U.S.

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(1)	Includes loan modifications that met the definition of TDRs that may be performing in accordance with their modified loan terms. As of June 30, 2020 and December 31, 2019, non-performing TDRs include $7.3 million and $9.8 million, respectively, in a multiple loan relationship to a South Florida borrower.

(2)	As of June 30, 2020, includes a $39.8 million commercial relationship placed in nonaccrual status during the second quarter of 2020.

(3)	Includes transactions in which the debtor or customer is domiciled outside the U.S., but where all collateral is located in the U.S.

(4)	Loans past due 90 days or more but still accruing.

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(1)

June 30, 2020 and December 31, 2019 include $16.3 million and $5.2 million, respectively, in “investment-grade” quality debt securities issued by foreign corporate entities. The securities issuers were from Canada and Japan in three different sectors at June 30, 2020, and from Japan in the financial services sector at December 31, 2019. The Company limits exposure to foreign investments based on cross border exposure by country, risk appetite and policy. All foreign investments are denominated in U.S. Dollars.

(2)	As of June 30, 2020 and December 31, 2019, debt securities in the financial services sector issued by domestic corporate entities represent 2.4% and 1.3% of our total assets, respectively.

(3)	Includes securities issued by U.S. government and U.S. government sponsored agencies.

(4)	Includes an open-end fund incorporated in the U.S. The Fund's objective is to provide a high level of current income consistent with the preservation of capital and investments deemed to be qualified under the Community Reinvestment Act of 1977.

(5)	Includes investments in FHLB and Federal Reserve Bank stock. Amounts correspond to original cost at the date presented. Original cost approximates fair value because of the nature of these investments.

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(1)	Includes brokered deposits of $587.9 million and $682.4 million at June 30, 2020 and December 31, 2019, respectively.

(2)	Domestic deposits, excluding brokered, were up $405.6 million or 16.6%, compared to December 31, 2019.

(3)

Based upon the diligence we customarily perform to "know our customers" for anti-money laundering, OFAC and sanctions purposes, and a review of the Executive Order issued by the President of the United States on August 5, 2019 and the related Treasury Department Guidance, we do not believe that the U.S. economic embargo on certain Venezuelan persons will adversely affect our Venezuelan customer relationships, generally.

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(1)

As of June 30, 2020 and 2019 potential dilutive instruments consisted of unvested shares of restricted stock and restricted stock units mainly related to the Company’s IPO in 2018, totaling 491,360 and 789,652, respectively. As of June 30, 2020, potential dilutive instruments were not included in the diluted earnings per share computation because the Company reported a net loss and their inclusion would have an antidilutive effect. As of June 30, 2019, potential dilutive instruments were included in the diluted earnings per share computation because, when the unamortized deferred compensation cost related to these shares was divided by the average market price per share at that date, fewer shares would have been purchased than restricted shares assumed issued. Therefore, at that date, such awards resulted in higher diluted weighted average shares outstanding than basic weighted average shares outstanding, and had a dilutive effect in per share earnings.

(2)	See “Selected Financial Information” for an explanation of certain non-GAAP financial measures and see “Non-GAAP Financial Measures Reconciliation” for a reconciliation of the non-GAAP financial measures to their GAAP counterparts.

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(1)	As of June 30, 2020 and December 31, 2019, includes $530 million (fixed interest rate raging from 0.62% to 0.97%) in advances from the FHLB that are callable prior to maturity.

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(1)	“Loan portfolio-performing” excludes $77.3 million of non-performing loans.

N/M	Not meaningful

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•	the reduced economic activity may severely impact our customers' businesses, financial condition and liquidity and may prevent one or more of our customers from meeting their obligations to us in full, or at all, or to otherwise seek modifications of such obligations;

•	a decline in the credit quality of our loan portfolio leading to a need to increase our allowance for loan losses;

•	a decline in the credit quality of loans used as collateral to obtain advances from the Federal Home Loan Bank may trigger a request to replace the loans used as collateral with securities and may negatively impact our liquidity ratio;

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•	a significant decline in the value of the collateral used to secure loans that have a related interest rate swap agreement may limit our ability to realize enough value from the collateral to cover the outstanding balance of the loan and the related swap liability;

•	any impairment in value of our tangible and/or intangible assets which could be recorded as a result of weaker economic conditions;

•	the reduced economic activity could develop into a local and/or global economic recession, which could adversely affect the demand for our products and services;

•	increased unemployment and decreased consumer confidence, which could adversely affect account openings and result in decreased deposit activity and increased withdrawal activity;

•	the recent action of the Federal Reserve’s Federal Open Market Committee (‘‘FOMC’’) to lower the target federal funds rate, and any future action of the FOMC to lower the target federal funds rate further, may negatively affect our net interest income;

•	the potential volatility in the fair value and yields of our investment portfolio;

•	a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our ability to access the debt and/or equity markets in the future on attractive terms, or at all, or negatively impact our credit ratings;

•	any reduction/impairment in value of the collateral used by our customers to secure their obligations with us that could be recorded as a result of weaker economic conditions; and

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the potential negative impact of a pandemic, including any preventative or protective actions that governments implement to contain it, or the occurrence of cases of COVID-19 at any of our banking centers or offices, may interfere with the ability of our employees and vendors to perform their respective responsibilities and obligations relative to the conduct of our business and, if a significant number of them are impacted, could result in a deterioration of our ability to ensure business continuity during a disruption.

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•	making it more difficult for us to satisfy our obligations with respect to our debt, including the Senior Notes;

•	requiring us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for other purposes;

•	increasing our vulnerability to adverse economic and industry conditions, which could place us at a disadvantage relative to our competitors that have less debt;

•	limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate; and

•	limiting our ability to borrow additional funds, or to dispose of assets to raise funds, if needed, for working capital, capital expenditures, acquisitions and other corporate purposes.

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