First Republic Bank's (FRC) financial performance for the first quarter showed a decline in net interest income (NII), which fell to $85.9 million, marking a decrease of $1.7 million or 2.0% from the previous quarter's $87.6 million. Despite this drop, the bank maintained its net interest margin at 3.75%, consistent with the last quarter's figures.
The bank experienced solid growth in deposits and delivered strong pre-provision net revenue, exceeding expectations for both net interest income and net interest margin. This positive performance was bolstered by efficient expense management, even as the bank expanded its footprint by opening new locations and enhancing its business development and risk management teams.
However, loan growth remained stagnant on a quarter-over-quarter basis due to significant payoffs and paydowns that countered new loan production. Looking ahead, the bank anticipates strong loan demand in the second quarter, though it acknowledges that borrowers might exhibit caution amid ongoing market volatility and economic uncertainty.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for Amerant Bancorp Inc (AMTB, Financial) is $26.40 with a high estimate of $32.00 and a low estimate of $24.00. The average target implies an upside of 35.52% from the current price of $19.48. More detailed estimate data can be found on the Amerant Bancorp Inc (AMTB) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, Amerant Bancorp Inc's (AMTB, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Amerant Bancorp Inc (AMTB, Financial) in one year is $24.96, suggesting a upside of 28.13% from the current price of $19.48. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Amerant Bancorp Inc (AMTB) Summary page.
AMTB Key Business Developments
Release Date: January 23, 2025
- Total Assets: $9.9 billion at the end of Q4 2024, down from $10.35 billion in Q3 2024.
- Cash and Equivalents: Decreased by $81.5 million to $590.4 million from $671.8 million in Q3 2024.
- Total Investments: $1.5 billion, down from $1.54 billion in Q3 2024.
- Total Gross Loans: Decreased by $294.7 million to $7.27 billion from $7.56 billion in Q3 2024.
- Total Deposits: Decreased by $256.9 million to $7.85 billion from $8.11 billion in Q3 2024.
- Total Capital Ratio: 13.43% in Q4 2024, up from 12.72% in Q3 2024.
- CET1 Ratio: 11.21% in Q4 2024, up from 10.65% in Q3 2024.
- Net Interest Income: $87.6 million, up from $81 million in Q3 2024.
- Net Interest Margin: Increased to 3.75% from 3.49% in Q3 2024.
- Provision for Credit Losses: $9.9 million, down from $19 million in Q3 2024.
- Non-Interest Income: $23.7 million, up from negative $47.7 million in Q3 2024.
- Non-Interest Expense: $83.4 million, up from $76.2 million in Q3 2024.
- Pre-Provision Net Revenue (PPNR): $27.9 million, compared to a loss of $42.9 million in Q3 2024.
- Efficiency Ratio: 74.91%, improved from 228.74% in Q3 2024.
- Return on Assets (ROA): 0.67%, compared to negative 1.92% in Q3 2024.
- Return on Equity (ROE): 7.38%, compared to negative 24.98% in Q3 2024.
- Allowance for Credit Losses to Total Loans: 1.18%, up from 1.15% in Q3 2024.
- Assets Under Management: Increased by $339.5 million to $2.89 billion from $2.55 billion in Q3 2024.
- Diluted Earnings Per Share: $0.40, compared to a diluted loss per share of $1.43 in Q3 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Amerant Bancorp Inc (AMTB, Financial) reported strong organic loan and deposit growth in the fourth quarter of 2024.
- Net interest income increased to $87.6 million, up from $81 million in the third quarter, with a net interest margin improvement to 3.75%.
- The company successfully completed the sale of its Houston franchise, resulting in a deposit premium of $12.5 million.
- Amerant Bancorp Inc (AMTB) improved its capital ratios, with a total capital ratio of 13.43% and a CET1 ratio of 11.21% as of the fourth quarter.
- The company reported a significant improvement in its efficiency ratio, reducing it to 74.91% from 228.74% in the third quarter.
Negative Points
- Total assets decreased to $9.9 billion from $10.35 billion in the third quarter, primarily due to the Houston franchise sale.
- Total deposits decreased by $256.9 million to $7.85 billion, also as a result of the Houston franchise sale.
- Non-performing loans increased by $69.7 million compared to the fourth quarter of 2023, despite a decrease from the third quarter.
- The company recorded a loss of $12.6 million on the sale of business-purpose investment property residential mortgage loans.
- Non-interest expense increased by $7.2 million from the third quarter, driven by transaction costs related to the Houston franchise sale and other non-routine items.
