Amerant Bancorp (AMTB) - 2024 Q4 - Annual Report

Financial Position and Assets - As of December 31, 2024, the company had net deferred tax assets (DTAs) with a book value of $53.5 million, based on a U.S. corporate income tax rate of 21%[289]. - The company anticipates that its total assets may exceed$ 10 billion in 2025, which would subject it to additional regulatory requirements[307]. - As of December 31, 2024, total earning assets amount to $9,255,505,000, with$ 5,653,575,000 maturing in less than one year[743]. - The company holds $7,124,310,000 in performing loans, with$ 4,700,832,000 maturing in less than one year[743]. - Interest-bearing liabilities total $7,248,485,000, with$ 6,038,970,000 maturing in less than one year[743]. - The company has $1,437,170,000 in debt available for sale, with$ 344,207,000 maturing in less than one year[743]. - Cash and cash equivalents stand at $590,359,000, with$ 520,863,000 maturing in less than one year[743]. - The company has $58,278,000 in Federal Reserve and FHLB stock, with$ 42,285,000 maturing in less than one year[743]. Regulatory and Compliance Risks - The company is subject to extensive regulation that could limit its activities and adversely affect its earnings, with compliance costs potentially impacting profitability[306]. - The company may incur additional costs and resource allocation to comply with potential changes in regulations under the new presidential administration[309]. - The company may face regulatory scrutiny regarding compliance with anti-money laundering laws, which could result in significant penalties[323]. - The company is required to meet capital adequacy and liquidity standards; failure to do so could adversely affect its financial condition and operations[317]. - The bank must maintain a capital conservation buffer of 2.5% and meet other regulatory capital ratios to avoid constraints on dividends and financial obligations[345]. Market and Economic Risks - The company is exposed to potential adverse effects from economic conditions, including downturns in the U.S. economy and market conditions, particularly in its primary markets of Miami-Dade, Broward, Palm Beach, and Hillsborough counties[302]. - The company faces risks related to market disruptions that could negatively impact loan performance and increase default rates, affecting its financial condition[303]. - The company anticipates that FDIC insurance premiums may increase significantly, which could reduce profitability and limit business opportunities[319]. - Changes in corporate tax rates could affect the value of the company's DTAs and may require a write-off of a portion of those assets[289]. Investment and Debt Management - The company has no limitations on incurring additional debt, which could increase financial obligations and risks associated with debt management[348]. - The company's ability to meet debt obligations depends on future operating performance and prevailing economic conditions, including inflation and interest rates[343]. - The company expects to redeem the senior notes by April 1, 2025, but the subordinated notes and debentures will remain outstanding[342]. - As of December 31, 2024, the company had $60.0 million in senior notes with a 5.75% coupon rate maturing on June 30, 2025,$ 30.0 million in subordinated notes at 4.25% due March 15, 2032, and $64.2 million in junior subordinated debentures[342]. Shareholder and Ownership Structure - The company’s executive officers and directors own approximately 36% of the outstanding shares, potentially exerting significant control over corporate matters[330]. - The company is authorized to issue up to 250 million shares of Class A common stock, which could lead to dilution of existing shareholders' equity interests[336]. Performance Metrics - The company reported a net interest income increase to approximately$ 361.0 million in December 31, 2024, up from $336.0 million in December 31, 2023, primarily due to higher interest income and a 1.9% increase in total assets[731]. - The sensitivity analysis indicated that a 200 basis point increase in interest rates would result in a$ 24,427 thousand (6.8%) increase in earnings for December 31, 2024[729]. - The economic value of equity (EVE) analysis showed a decrease of 13.61% with a 200 basis point increase in interest rates as of December 31, 2024[734]. - The average duration of the investment portfolio increased to 5.2 years as of December 31, 2024, compared to 5.0 years in 2023, mainly due to lower mortgage-backed securities prepayments[738]. - The company measures potential changes in the market price of its investment portfolio, with a 200 basis point increase in interest rates resulting in a market value decrease of $150,674 thousand as of December 31, 2024[737]. - The interest rate sensitivity gap is negative$ 385,395,000 for less than one year, indicating potential exposure to interest rate fluctuations[743]. - Cumulative interest rate sensitivity gap reaches $2,007,020,000, reflecting the company's long-term interest rate risk management[743]. - Earnings assets to interest-bearing liabilities ratio is 93.6% for less than one year, indicating a strong asset-liability management[743]. International Exposure - As of December 31, 2024, 24.1% of total deposits, amounting to$ 1.9 billion, were from residents of Venezuela, indicating significant exposure to international markets[325]. - The company’s total loan exposure to international markets was $40.7 million, or less than 1.5% of total loans, as of December 31, 2024[325]. Legal and Litigation Risks - The company faces risks of litigation and regulatory investigations that could lead to significant financial losses and harm to reputation[315]. - The company is subject to potential tax audits which may result in penalties or additional taxes, adversely impacting financial performance[313].