Amerant Bancorp Inc.
11/03/2026 | Press release | Distributed by Public on 11/03/2026 15:51
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis is designed to provide a better understanding of various factors related to Amerant Bancorp Inc.'s (the "Company," "Amerant," "our" or "we") results of operations and financial condition and its subsidiaries, including its principal subsidiary, Amerant Bank, N.A. (the "Bank"). Amerant Investments, Inc., a securities broker-dealer ("Amerant Investments") is an operating subsidiary of the Bank. For an update on the strategic focus of our mortgage business and Amerant Mortgage, LLC, a mortgage lending company domiciled in Florida ("Amerant Mortgage"), see "Amerant Mortgage and Elant Bank & Trust Updates" below.
This discussion is intended to supplement and highlight information contained in the accompanying unaudited interim consolidated financial statements and related footnotes included in this Quarterly Report on Form 10-Q (the "Form 10-Q"), as well as the information contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 filed on February 27, 2026 (the "2025 Form 10-K").
Cautionary Note Regarding Forward-Looking Statements
Various of the statements made in this Form 10-Q, including information incorporated herein by reference to other documents, are "forward-looking statements" within the meaning of, and subject to, the protections of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions and future performance and condition and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, achievements, or financial condition of the Company to be materially different from future results, performance, achievements, or financial condition expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements, except as required by law. These forward-looking statements should be read together with the "Risk Factors" included in the 2025 Form 10-K, in our quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2026 filed on May 1, 2026, and in our other reports filed with the Securities and Exchange Commission (the "SEC").
All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may," "will," "anticipate," "assume," "seek," "should," "indicate," "would," "believe," "contemplate," "consider", "expect," "estimate," "continue," "plan," "point to," "project," "could," "intend," "target," "goals," "outlooks," "modeled", "dedicated", "create" and other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation:
•Liquidity risks could affect our operations and jeopardize our financial condition and certain funding sources could increase our interest rate expense;
•We may not be able to develop and maintain a strong core deposit base or other low-cost funding sources;
•We may elect or be compelled to seek additional capital in the future, but that capital may not be available when it is needed or on acceptable terms;
•Our ability to receive dividends from our subsidiaries could affect our liquidity and our ability to pay dividends;
•Our profitability is subject to interest rate risk;
•Our allowance for credit losses may prove inadequate;
•Our concentration of CRE loans could result in increased loan losses;
•Many of our loans are to commercial borrowers, which have unique risks compared to other types of loans;
•Our valuation of securities in our investment securities portfolio are subjective and, if changed, we could recognize losses that could materially adversely affect our results of operations or financial condition;
•Nonperforming and similar assets take significant time to resolve and may adversely affect our business, financial condition, results of operations, or cash flows;
•We are subject to environmental liability risk associated with lending activities;
•Increased exposure to residential mortgage assets may heighten sensitivity to interest rate changes, housing market conditions, and secondary market liquidity;
•Many of our major systems depend on and are operated by third-party vendors, and any systems failures or interruptions could adversely affect our operations and the services we provide to our customers;
•Our information systems are exposed to cybersecurity threats and may experience interruptions and security breaches that could adversely affect our business and reputation;
•Our strategic plan and growth strategy may not be achieved as quickly or as fully as we seek;
•Defaults by or deteriorating asset quality of other financial institutions could adversely affect us;
•New lines of business, new products or services, and technological advancements may subject us to additional risks;
•We are susceptible to operational risks in general and fraudulent risk in particular;
•Conditions or developments in Venezuela could adversely affect our operations;
•We are subject to environmental, social and governance, or ESG, risks, many of which are outside of our control, that could harm our reputation, our business, operations, financial condition, and/or the price of our common stock;
•We may be unable to attract and retain key people to support our business;
•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;
•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 adversely affect our business, financial condition, results of operations, or cash flows;
•We could be required to write down our goodwill or other intangible assets;
•We have a net deferred tax asset that may or may not be fully realized;
•We may incur losses due to minority investments in fintech and specialty finance companies;
•We are subject to risks associated with sub-leasing portions of our corporate headquarters building;
•Our success depends on our ability to compete effectively in highly competitive markets;
•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;
•Any failure to maintain effective internal control over financial reporting could impair the reliability of our financial statements, which in turn could harm our business, impair investor confidence in the accuracy and completeness of our financial reports and our access to the capital markets and cause the price of our common stock to decline and subject us to regulatory penalties;
•Changes in accounting standards could materially impact our financial statements;
•Material and negative developments adversely impacting the financial services industry at large and causing volatility in financial markets and the economy may have materially adverse effects on our liquidity, business, financial condition and results of operations;
•Our business may be adversely affected by economic conditions in general and by conditions in the financial markets;
•We are subject to extensive regulation that could limit or restrict our activities and adversely affect our earnings;
•Changes in federal, state or local tax laws, or audits from tax authorities, could negatively affect our business, financial condition, results of operations or cash flows;
•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, whether due to losses, growth opportunities or an inability to raise additional capital or otherwise, our business, financial condition, results of operations, or cash flows would be adversely affected;
•Increases in FDIC deposit insurance premiums and assessments could adversely affect our financial condition;
•Federal banking agencies periodically conduct examinations of our business, including our compliance with laws and regulations, and our failure to comply with any regulatory actions, if any, could adversely impact us;
•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, or CRA, could adversely affect us;
•Our principal shareholders and management own a significant percentage of our shares of voting common stock and will be able to exert significant control over matters subject to shareholder approval;
•The rights of our common shareholders are subordinate to the holders of any debt securities that we have issued or may issue from time to time;
•The stock price of financial institutions, like Amerant, may fluctuate significantly;
•We can issue additional equity securities, which would lead to dilution of our issued and outstanding Class A common stock;
•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;
•We may not be able to generate sufficient cash to service all of our debt, including the Subordinated Notes and the Debentures;
•We are a holding company with limited operations and depend on our subsidiaries for the funds required to make payments of principal and interest on the Subordinated Notes and the Debentures;
•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 Subordinated Notes and the Debentures; and
•The other factors and information included in the 2025 Form 10-K and other filings that we make with the SEC under the Exchange Act and Securities Act. See "Risk Factors" in the 2025 Form 10-K, and in the Form 10-Q for the quarter ended March 31, 2026.
The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in the 2025 Form 10-K. Because of these risks and other uncertainties, our actual future financial condition, results, performance or achievements, or industry results, may be materially different from the results indicated by the forward-looking statements in this Form 10-Q. In addition, our past results of operations are not necessarily indicative of our future results of operations. You should not rely on any forward-looking statements as predictions of future events.
All written or oral forward-looking statements that are made by us or are attributable to us are expressly qualified in their entirety by this cautionary notice, together with those risks and uncertainties described in "Risk Factors" in the 2025 Form 10-K, in our quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2026 filed on May 1, 2026, and in our other filings with the SEC, which are available at the SEC's website www.sec.gov. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update, revise or correct any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
OVERVIEW
Our Company
We are a bank holding company headquartered in Coral Gables, Florida. We provide individuals and businesses with a comprehensive array of deposit, credit, investment, wealth management, retail banking, mortgage, and fiduciary products and services. We serve customers in our United States markets and select international customers. These services are offered through our main subsidiary, Amerant Bank, N.A., or the Bank, which is also headquartered in Coral Gables, FL, as well as the Bank's securities broker-dealer, Amerant Investments Inc., or Amerant Investments. The Bank's primary markets are South Florida, where we are headquartered and operate 21 banking centers in Miami-Dade, Broward and Palm Beach counties; and Tampa, Florida where we have a regional headquarters office and currently operate two banking centers.
Business Developments
For more information on the progress of our business strategy and strategic initiatives in 2025, see Item 1. Business section included in the 2025 Form 10-K.
Amerant Mortgage and Elant Bank & Trust Updates
Since April 2025, the Company had taken actions to wind down the operations of Amerant Mortgage, LLC, a mortgage lending company domiciled in Florida wholly owned by the Bank ("Amerant Mortgage"). As a result of these actions, Amerant Mortgage was formally dissolved as of September 30, 2026, and no longer operates as a subsidiary of the Bank. The Bank continues pursuing its in-footprint, mortgage-focused strategy through a dedicated mortgage department.
In 2023, the Company initiated a plan for the dissolution of Elant Bank & Trust Ltd., a bank and trust company domiciled in George Town, Grand Cayman (the "Cayman Bank"), a subsidiary of the Bank that operated under a Cayman Islands Offshore Bank license and a Trust license and was supervised by the Cayman Islands Monetary Authority. As of September 30, 2026, the Cayman Bank was not an operating subsidiary of the Bank and was formally dissolved as of October 7, 2026. The Bank continues pursuing its fiduciary and trust services business through a dedicated trust department.
Macroeconomic Updates
The third quarter of 2026 was characterized by continued U.S. economic expansion, with current estimates indicating that growth remained solid. Consumer activity continued to support the economy, aided by a generally stable labor market and the wealth effect associated with elevated asset values. Business investment also contributed meaningfully, particularly spending on technology and artificial intelligence-related infrastructure. Conversely, elevated borrowing costs constrained housing and other interest-rate-sensitive sectors, while tariffs, energy-market volatility and geopolitical uncertainty presented risks to the outlook. Inflation remained well above the Federal Reserve's 2% objective, reflecting persistent underlying price pressures. In response, the Federal Open Market Committee increased the federal funds target range by 25 basis points to a target range of 3.75% to 4.00% in September, while deciding to keep them unchanged at its October meeting. The timing and extent of additional increases remain uncertain and dependent on incoming economic data.
Within this economic environment, the Company benefited from its differentiated deposit franchise and diversified earning-asset structure. Foreign deposits remained a meaningful source of lower-cost deposits, helping mitigate domestic pricing pressure and diversify liquidity. We continue to see signs of increased economic activity in Venezuela, including greater capital flows supporting capital expenditures and reinvestment in the oil sector. Higher oil production and favorable market prices are expected to further support liquidity and broader economic activity. We also saw an increase in appetite for the Bank's wealth management products and services.
Higher interest rates also benefited the asset side of the Company's balance sheet. Its diversified mix of fixed- and floating-rate loans allowed the Company to benefit from both the upward repricing of floating-rate loans and the replacement of lower-yielding legacy fixed-rate loans as they matured or repaid. Together with funding discipline and balance-sheet optimization, these dynamics contributed to an improvement in net interest margin to 3.77% and return on assets to 1.00%. The Company continued to generate loan growth and remained focused on supporting future loan and deposit growth while prioritizing relationship profitability and appropriate risk-adjusted returns.
Overall credit conditions remained generally positive, and the Company continued to experience improvement in nonperforming and classified loans. In the broader capital markets, recent widening in investment-grade and high-yield credit spreads indicated greater investor sensitivity to elevated interest rates, albeit below levels historically associated with severe market stress. Artificial intelligence-related investments continue to support economic activity, although the pace of related capital spending contributed to uncertainty regarding the sustainability of investment levels. These market developments reinforce the importance of prudent underwriting, portfolio diversification, risk-adjusted pricing and lending to borrowers with stable, well-established operating histories. The Company's continued focus on this disciplined approach is expected to enhance the resilience of its loan portfolio against potential credit-market turbulence.
While current estimates indicate that the U.S. economy expanded at a solid pace during the third quarter, the outlook remains subject to persistent inflation, potential additional monetary-policy tightening, geopolitical tensions, tariffs, energy-market volatility and uncertainty surrounding the 2026 midterm elections. However, we continue to see strength across our Florida markets, supported by healthy fundamentals and continued population and business growth. The Company's diversified loan structure, international deposit franchise, disciplined credit-risk management and ongoing balance-sheet optimization contributed to improved profitability in the third quarter 2026 and are expected to support its resilience as it pursues continued profitable growth.
Primary Factors Used to Evaluate Our Business
Results of Operations. In addition to net income or loss, the primary factors we use to evaluate and manage our results of operations include net interest income, noninterest income and expenses, and indicators of financial performance including return on assets ("ROA") and return on equity ("ROE"). We also use certain non-GAAP financial measures in the internal evaluation and management of our businesses.
Net Interest Income. Net interest income represents interest income less interest expense. We generate interest income from interest, dividends and fees received on interest-earning assets, including loans and investment securities we own. We incur interest expense from interest paid on interest-bearing liabilities, including interest-bearing deposits, and borrowings such as advances from the Federal Home Loan Bank of Atlanta ("FHLB") and other borrowings such as repurchase agreements, notes, debentures and other funding sources we may have from time to time. Net interest income typically is the most significant contributor to our revenues and net income. To evaluate net interest income, we measure and monitor: (i) yields on our loans and other interest-earning assets; (ii) the costs of our deposits and other funding sources; (iii) our net interest spread; (iv) our net interest margin, or NIM; and (v) our provisions for credit losses. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. NIM is calculated by dividing net interest income for the period by average interest-earning assets during that same period. Because noninterest-bearing sources of funds, such as noninterest-bearing deposits and stockholders' equity, also fund interest-earning assets, NIM includes the benefit of these noninterest-bearing sources of funds. Non-refundable loan origination fees, net of direct costs of originating loans, as well as premiums or discounts paid on loan purchases, including the initial allowance for expected credit losses on purchased seasoned loans, are deferred and recognized over the life of the related loan as an adjustment to interest income in accordance with generally accepted accounting principles ("GAAP").
Changes in market interest rates and the interest we earn on interest-earning assets, or which we pay on interest-bearing liabilities, as well as the volumes and the types of interest-earning assets, interest-bearing and noninterest-bearing liabilities and stockholders' equity, usually have the largest impact on periodic changes in our net interest spread, NIM and net interest income. We measure net interest income before and after the provision for credit losses.
Noninterest Income. Noninterest income consists of, among other revenue streams: (i) service fees on deposit accounts; (ii) income from brokerage, advisory and fiduciary activities; (iii) benefits from and changes in cash surrender value of bank-owned life insurance, or BOLI, policies; (iv) card and trade finance servicing fees; (v) securities gains or losses; (vi) net gains and losses on early extinguishment of FHLB advances, which we may execute from time to time as part of asset/liability management activities; (vii) income from derivative transactions with customers; (viii) derivative gains or losses; and (ix) other noninterest income which includes mortgage banking revenue, gains or losses on the sale of loans originated for investment and other smaller sources of income.
Our income from service fees on deposit accounts is primarily affected by the volume, growth and mix of deposits we hold, as well as the volume of transactions initiated by customers (e.g., wire transfers). These are affected by prevailing market pricing of deposit services, interest rates, our marketing efforts and other factors.
Our income from brokerage, advisory and fiduciary activities consists of brokerage commissions related to our customers' trading volume, fiduciary and investment advisory fees generally based on a percentage of the average value of assets under management and custody ("AUM"), and account administrative services and ancillary fees during the contractual period.
Income from changes in the cash surrender value of our BOLI policies represents the amounts that may be realized under the contracts with the insurance carriers, which are nontaxable.
Interchange fees, other fees and revenue sharing are recognized when earned. Trade finance servicing fees, which primarily include commissions on letters of credit, are generally recognized over the service period on a straight line basis. Card servicing fees include credit and debit card interchange fees and other fees. We have also entered into referral arrangements with recognized U.S.-based card issuers, which permit us to serve our customers and earn referral fees and share interchange revenue without exposure to credit risk.
Our gains and losses on sales of securities are derived from sales from our securities portfolio and are primarily dependent on changes in U.S. Treasury interest rates and asset liability management activities. Generally, as U.S. Treasury rates increase, our securities portfolio decreases in market value, and as U.S. Treasury rates decrease, our securities portfolio increases in value. We also recognize unrealized gains or losses on changes in the valuation of trading securities and marketable equity securities not held for trading.
Our fee income generated on customer interest rate swaps and other loan level derivatives are primarily dependent on volume of transactions completed with customers and are included in noninterest income.
Derivatives unrealized net gains and derivatives unrealized net losses are primarily derived from changes in market value of uncovered interest rate caps with clients.
Other noninterest income includes mortgage banking income and losses generated through our mortgage banking operation comprised of Amerant Mortgage through the early part of the fourth quarter of 2025, and later through the Bank. Other noninterest income also consists of gain on sale of loans, gain on loans market valuation, foreign currency exchange transactions with customers, other fees and smaller sources of income.
Noninterest Expense. Noninterest expenses generally increase as our business grows and whenever necessary to implement or enhance policies and procedures for regulatory compliance, and other purposes.
Noninterest expense consists of: (i) salaries and employee benefits; (ii) occupancy and equipment expenses; (iii) professional and other services fees; (iv) FDIC deposit and business insurance assessments and premiums; (v) telecommunication and data processing expenses; (vi) depreciation and amortization; (vii) advertising and marketing expenses; (viii) income or expenses on other real estate and repossessed assets, net; (ix) losses on sale of assets; and (x) other operating expenses.
Salaries and employee benefits include compensation, severance expenses, employee benefits, and employer tax expenses for our personnel. Salaries and employee benefits are partially offset by costs directly related to the origination of loans, which are deferred and amortized over the life of the related loans as adjustments to interest income in accordance with GAAP.
Occupancy expenses consist of lease expense on our leased properties, including right-of-use or ROU asset impairment charges, and other occupancy-related expenses. Equipment expense includes furniture, fixtures and equipment related expenses. Rental income associated with subleasing portions of the Company's headquarters building and the subleasing of the New York office space, primarily, is included as a reduction to rent expense under lease agreements under occupancy and equipment cost.
Professional and other services fees include the cost of outsourced services, including technology infrastructure, banking processing services and other professional consulting fees from our technology provider; legal; accounting and related consulting fees; card processing fees; directors' fees; regulatory agency fees; such as OCC examination fees, and other fees related to our business operations.
Advertising expenses include the costs of promoting the Amerant brand, as well as the costs associated with promoting the Company's products and services to create positive awareness, or consideration to buy the Company's products and services. These costs include expenses to produce, deliver and communicate advertisements using available media and technologies, primarily streaming and other digital advertising platforms. Advertising expenses are expensed as incurred, except for media production costs which are expensed upon the first airing of the advertisement.
FDIC deposit and business insurance assessments and premiums include deposit insurance, net of any credits applied against these premiums, corporate liability and other business insurance premiums.
Telecommunication and data processing expenses include expenses paid to our third-party data processing system providers and other telecommunication and data service providers.
Depreciation and amortization expense includes the value associated with the depletion of the value on our owned properties and equipment, including leasehold improvements made to our leased properties.
OREO and repossessed assets expense includes expenses and revenue (rental income) from the operation of foreclosed property/assets as well as fair value adjustments and gains/losses from the sale of OREO and repossessed assets.
Other operating expenses include earnings credits, business development expenses, community engagement, charitable contributions, mortgage loan origination and servicing expenses, postage and courier expenses, and other small operational expenses. Earnings credits are provided to certain commercial depositors primarily in the mortgage banking industry to help offset deposit service charges incurred.
Primary Factors Used to Evaluate Our Financial Condition
The primary factors we use to evaluate and manage our financial condition include asset quality, capital and liquidity.
Asset Quality. We manage the diversification and quality of our assets based upon factors that include the level, distribution and risks in each category of assets. Problem assets may be categorized as classified, delinquent, nonaccrual, nonperforming and restructured assets. We also manage the adequacy of our allowance for credit losses, or the allowance, the diversification and quality of loan and investment portfolios, the extent of counterparty risks, credit risk concentrations and other factors.
We review and update our allowance for expected credit losses periodically to calibrate loss estimation models based on our loan volumes, and credit and economic conditions in our markets. The models may differ among our loan segments to reflect their different asset types, and includes qualitative factors, which are updated periodically based on the type of loan and other factors.
Capital. Financial institution regulators have established minimum capital ratios for banks and bank holding companies. We manage capital based upon factors that include: (i) the level and quality of capital and our overall financial condition; (ii) the trend and volume of problem assets; (iii) the adequacy of reserves; (iv) the level and quality of earnings; (v) the risk exposures in our balance sheet under various scenarios, including stressed conditions; (vi) the Tier 1 capital ratio, the total capital ratio, the Tier 1 leverage ratio, and the CET1 capital ratio; (vii) the tangible equity ratio; and (viii) other factors, including market conditions.
Liquidity. Our deposit base consists primarily of personal and commercial accounts maintained by individuals and businesses in our primary markets and select international core depositors. The Company is focused on relationship-driven core deposits. The Company may also use third party providers of domestic sources of deposits as part of its balance sheet management strategies. We define core deposits as total deposits excluding all time deposits. This definition of core deposits differs from the Federal Financial Institutions Examination Council's (the "FFIEC") Uniform Bank Performance Report (the "UBPR") definition of "core deposits," which exclude brokered time deposits and retail time deposits of more than $250,000. See "Core Deposits" discussion for more details.
We manage liquidity based upon factors that include the amount of core deposit relationships as a percentage of total deposits, the level of diversification of our funding sources, the allocation and amount of our deposits among deposit category, the short-term funding sources used to fund assets, the amount of non-deposit funding used to fund assets, the availability of unused funding sources, off-balance sheet obligations, the amount of cash and liquid securities we hold, the availability of assets readily convertible into cash without undue loss, the characteristics and maturities of our assets when compared to the characteristics of our liabilities and other factors.
Seasonality. Our loan production, generally, is subject to seasonality, with the lowest volume typically in the first quarter of each year.
Summary Results
The summary results for the three and nine month periods ended September 30, 2026 include the following:
•Total assets were $10.2 billion at September 30, 2026, up $434.6 million, or 4.4%, compared to $9.8 billion at December 31, 2025.
•Total gross loans, which includes all loans held for sale, were $7.1 billion at September 30, 2026, up $376.2 million, or 5.6%, compared to $6.7 billion at December 31, 2025.
•Cash, cash equivalents and restricted cash were $361.5 million, down $108.7 million, or 23.1%, compared to $470.2 million at December 31, 2025.
•Investment securities were $2.2 billion, up by $141.1 million, or 6.8%, compared to $2.1 billion at December 31, 2025.
•Total deposits were $8.2 billion at September 30, 2026, up $458.7 million, or 5.9%, compared to $7.8 billion at December 31, 2025.
•Core deposits were $6.3 billion, up by $527.6 million, or 9.1%, compared to $5.8 billion at December 31, 2025.
•Total advances from the FHLB were $715.0 million, up $3.0 million, or 0.4%, compared to $712.0 million as of December 31, 2025.
•Net Interest Margin ("NIM") decreased to 3.77% in the three months ended September 30, 2026 compared to 3.92% in the three months ended September 30, 2025. NIM was 3.62% in the nine months ended September 30, 2026 compared to 3.83% in the nine months ended September 30, 2025.
•Average yield on loans decreased to 6.35% in the three months ended September 30, 2026 from 6.93% in the three months ended September 30, 2025. Average yield on loans decreased to 6.32% in the nine months ended September 30, 2026 compared to 6.89% in the nine months ended September 30, 2025.
•Average cost of total deposits decreased to 2.07% in the three months ended September 30, 2026 compared to 2.41% in the three months ended September 30, 2025. Average cost of total deposits decreased to 2.19% in the nine months ended September 30, 2026 compared to 2.51% in the nine months ended September 30, 2025.
•Loan to deposit ratio was 85.78% at September 30, 2026 compared to 86.01% at December 31, 2025.
•Asset Quality and Allowance for Credit Losses:
◦Total non-performing assets were $159.5 million at September 30, 2026, down $27.4 million, or 14.7%, compared to $186.9 million at December 31, 2025. As of September 30, 2026, non-performing assets consist of $149.5 million in non-performing loans and $10.0 million in other real estate owned.
◦The ACL as of September 30, 2026 was $94.8 million compared to $79.3 million as of December 31, 2025.
◦Classified loans were $213.0 million, down by $141.8 million, or 40.0%, compared to $354.8 million at December 31, 2025, while non-performing loans were $149.5 million, down $21.9 million, or 12.8%, compared to $171.4 million at December 31, 2025. Special mention loans were $120.7 million, down $15.7 million, or 11.5%, compared to $136.5 million at December 31, 2025.
•Assets Under Management and custody ("AUM") totaled $3.4 billion, as of September 30, 2026, up $192.3 million, or 5.9%, from $3.3 billion as of December 31, 2025.
•Pre-tax pre-provision net revenue ("PPNR")(1) was $39.7 million in the three months ended September 30, 2026, an increase of $6.1 million, or 18.2%, compared to $33.6 million in the three months ended September 30, 2025. PPNR(1) was $102.3 million, in the nine months ended September 30, 2026, a decrease of $1.0 million, or 1.0%, compared to $103.3 million in the nine months ended September 30, 2025.
•Net Interest Income ("NII") was $90.5 million in the three months ended September 30, 2026, down $3.7 million, or 3.9%, from $94.2 million in the three months ended September 30, 2025. NII was $253.3 million in the nine months ended September 30, 2026, down $17.2 million, or 6.4%, compared to $270.5 million in the nine months ended September 30, 2025.
•Provision for credit losses was $6.2 million in the three months ended September 30, 2026, down $8.4 million, or 57.5% compared to $14.6 million in the three months ended September 30, 2025. Provision for credit losses was $18.8 million in the nine months ended September 30, 2026, down $20.4 million, or 52.1%, compared to $39.1 million in the nine months ended September 30, 2025.
•Noninterest income was $18.3 million in the three months ended September 30, 2026, up $1.0 million, or 6.1%, from $17.3 million in the three months ended September 30, 2025. Noninterest income was $53.9 million in the nine months ended September 30, 2026, down $2.7 million, or 4.8%, compared to $56.6 million in the nine months ended September 30, 2025.
•Noninterest expense was $69.1 million in the three months ended September 30, 2026, down $8.7 million, or 11.2%, from $77.8 million in the three months ended September 30, 2025. Noninterest expense was $204.9 million in the nine months ended September 30, 2026, down $18.9 million, or 8.4%, compared to $223.8 million in the nine months ended September 30, 2025.
•The efficiency ratio was 63.5% in the three months ended September 30, 2026 compared to 69.8% in the three months ended September 30, 2025. The efficiency ratio was 66.7% in the nine months ended September 30, 2026 compared to 68.4% in the nine months ended September 30, 2025. See "Net Income" section for more information on the key drivers of noninterest income, noninterest expense, and net interest income.
•Return on average Assets ("ROA") was 1.00% in the three months ended September 30, 2026, compared to 0.57% in the three months ended September 30, 2025. ROA was 0.86% in the nine months ended September 30, 2026, compared to 0.65% in the nine months ended September 30, 2025.
•Return on average equity ("ROE") was 11.29% in the three months ended September 30, 2026 compared to 6.21% in the three months ended September 30, 2025. ROE was 9.4% in the nine months ended September 30, 2026, compared to 7.2% in the nine months ended September 30, 2025.
1Non-GAAP measure, see "Non-GAAP Financial Measures" for more information and for a reconciliation to GAAP.
Results of Operations - Comparison of Results of Operations for the Three and Nine Month Periods Ended September 30, 2026 and 2025
Net income
The table below sets forth certain results of operations data for the three and nine month periods ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except per share amounts and percentages) | 2026 | 2025 | 2026 vs 2025 | 2026 | 2025 | 2026 vs 2025 | |||||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 90,464 | $ | 94,152 | $ | (3,688) | (3.9) | % | $ | 253,320 | $ | 270,535 | $ | (17,215) | (6.4) | % | |||||||||||||||||||||||||||||||
| Provision for credit losses | 6,200 | 14,600 | (8,400) | (57.5) | % | 18,750 | 39,106 | (20,356) | (52.1) | % | |||||||||||||||||||||||||||||||||||||
|
Net interest income after provision for credit losses
|
84,264 | 79,552 | 4,712 | 5.9 | % | 234,570 | 231,429 | 3,141 | 1.4 | % | |||||||||||||||||||||||||||||||||||||
| Noninterest income | 18,339 | 17,291 | 1,048 | 6.1 | % | 53,882 | 56,594 | (2,712) | (4.8) | % | |||||||||||||||||||||||||||||||||||||
| Noninterest expense | 69,098 | 77,835 | (8,737) | (11.2) | % | 204,894 | 223,789 | (18,895) | (8.4) | % | |||||||||||||||||||||||||||||||||||||
| Income before income tax expense | 33,505 | 19,008 | 14,497 | 76.3 | % | 83,558 | 64,234 | 19,324 | 30.1 | % | |||||||||||||||||||||||||||||||||||||
| Income tax expense | (7,789) | (4,252) | (3,537) | (83.2) | % | (18,926) | (14,518) | (4,408) | (30.4) | % | |||||||||||||||||||||||||||||||||||||
| Net income attributable to Amerant Bancorp Inc. | $ | 25,716 | $ | 14,756 | $ | 10,960 | 74.3 | % | $ | 64,632 | $ | 49,716 | $ | 14,916 | 30.0 | % | |||||||||||||||||||||||||||||||
| Basic earnings per common share | $ | 0.66 | $ | 0.35 | $ | 0.31 | 88.6 | % | $ | 1.63 | $ | 1.19 | $ | 0.44 | 37.0 | % | |||||||||||||||||||||||||||||||
| Diluted earnings per common share (1) | $ | 0.65 | $ | 0.35 | $ | 0.30 | 85.7 | % | $ | 1.62 | $ | 1.19 | $ | 0.43 | 36.1 | % | |||||||||||||||||||||||||||||||
__________________
(1) In the three and nine month periods ended September 30, 2026 and 2025, potential dilutive instruments consisted of unvested shares of restricted stock, restricted stock units and performance share units. See Note 13 to our unaudited interim consolidated financial statements in this Form 10-Q for details on the dilutive effects of the issuance of restricted stock, restricted stock units and performance share units on earnings per share.
Three Months Ended September 30, 2026 and 2025
In the three months ended September 30, 2026, net income attributable to the Company was $25.7 million, or $0.65 income per diluted share, compared to net income of $14.8 million, or $0.35 income per diluted share, in the same quarter of 2025. The increase of $11.0 million, or 74.3%, in the three months ended September 30, 2026 was primarily driven by: (i) lower noninterest expense; (ii) lower provision for credit losses; and (iii) higher noninterest income. These were partially offset by: (i) lower net interest income; and (ii) higher income tax expense driven by higher pretax net income.
Net interest income was $90.5 million in the three months ended September 30, 2026, a decrease of $3.7 million, or 3.9%, from $94.2 million in the three months ended September 30, 2025. This was primarily driven by a decrease in interest income, partially offset by a decrease in interest expense. The decrease in interest income was primarily driven by: (i) a decrease in the average rates on all interest-earning assets, primarily in the average yields of the debt securities held for trading portfolio, other short-term investments, the loan portfolio and deposits with banks; and (ii) decreases in the average balances of deposits with banks, loans and debt securities held for trading during the period. The decrease in interest income was partially offset by an increase in the average balances of debt securities available for sale during the period. Additionally, the decrease in interest income was partially offset by a decrease in interest expense which was primarily driven by: (i) a decrease in the total average rates of interest-bearing liabilities, primarily in the average rates paid on total deposits, FHLB advances, and Junior subordinated debentures; and (ii) a decrease in the average balances of time deposits. Net interest margin decreased to 3.77% in the three months ended September 30, 2026, from 3.92% in the three months ended September 30, 2025. See "Net Interest Income" for more details.
Noninterest income was $18.3 million in the three months ended September 30, 2026, compared to $17.3 million in the three months ended September 30, 2025. The increase was mainly driven by: (i) the absence of derivative losses; (ii) higher deposits and service fees; (iii) higher brokerage, advisory and fiduciary income; (iv) higher gains on the early extinguishment of FHLB advances; and (v) higher cards and trade finance servicing fees. These were partially offset by decreases in: (i) loan-level derivative income; (ii) securities gains, net; and (iii) other noninterest income. See "Noninterest Income" for more details.
Noninterest expense was $69.1 million in the three months ended September 30, 2026, a decrease of $8.7 million, or 11.2%, compared to $77.8 million in the same period in 2025. This decrease was mainly due to lower: (i) other operating expenses; (ii) advertising expenses; (iii) OREO and repossessed assets expense; (iv) losses on loans held for sale carried at the lower of cost or fair value; and (v) professional and other services fees. These were partially offset by higher: (i) salaries and employee benefits, (ii) occupancy and equipment expenses, and (iii) telecommunication and data processing expenses. See "Noninterest Expense" for more details.
In the three months ended September 30, 2026, the Company did not incur significant noninterest expenses related to Amerant Mortgage. In the three months ended September 30, 2025, the Company incurred $2.1 million of noninterest expenses. These expenses consisted primarily of salaries and employee benefits, mortgage lending costs, and professional and other service fees in the third quarter of 2025. Amerant Mortgage had no full-time equivalent employees ("FTEs") at September 30, 2026 compared to 5 FTEs at September 30, 2025. As of September 30, 2026, Amerant Mortgage has been dissolved and no longer operates as a subsidiary of the Bank.
Nine Months Ended September 30, 2026 and 2025
In the nine months ended September 30, 2026, net income attributable to the Company was $64.6 million, or $1.62 income per diluted share, compared to net income of $49.7 million, or $1.19 income per diluted share, in the same period of 2025. The increase of $14.9 million, or 30.0%, in the nine months ended September 30, 2026 was primarily driven by lower provision for credit losses and lower noninterest expense. These were partially offset by (i) lower net interest income, (ii) lower noninterest income, and (iii) higher income tax expense driven by higher pretax net income.
Net interest income was $253.3 million in the nine months ended September 30, 2026, a decrease of $17.2 million, or 6.4%, from $270.5 million in the nine months ended September 30, 2025. This was primarily driven by a decrease of $40.2 million, or 8.9%, in interest income, partially offset by a decrease of $23.0 million or 12.8% in interest expense. The decrease in interest income was driven by: (i) a decrease in the average rates on all interest-earning assets, primarily in the average yields of the loan portfolio, debt securities available for sale and deposits with banks; and (ii) decreases in the average balances of the loan portfolio, deposits with banks, and debt securities held for trading during the period. The decrease in interest income was partially offset by an increase in the average balances of debt securities available for sale during the period, as well as a decrease in interest expense which was primarily driven by: (i) a decrease in the average rates paid on total interest-bearing liabilities; and (ii) a decrease in the average balances of time deposits. These decreases were partially offset by an increase in the average balances of interest bearing demand, savings, and money market deposit accounts. Net interest margin decreased to 3.62% in the nine months ended September 30, 2026 from 3.83% in the nine months ended September 30, 2025. See "Net Interest Income" for more details.
Noninterest income was $53.9 million in the nine months ended September 30, 2026 compared to noninterest income of $56.6 million in the nine months ended September 30, 2025. The decrease was mainly driven by: (i) other noninterest income; (ii) loan-level derivative income; and (iii) securities gains, net. These decreases were partially offset by: (i) the absence of derivative losses; (ii) higher brokerage, advisory and fiduciary activities; (iii) higher deposits and service fees; (iv) higher gains on the early extinguishment of FHLB advances; and (v) higher change in cash surrender value of BOLI. See "Noninterest Income" for more details.
Noninterest expense was $204.9 million in the nine months ended September 30, 2026, a decrease of $18.9 million, or 8.4%, compared to $223.8 million in the same period in 2025. This decrease was mainly due to lower: (i) other operating expenses; (ii) professional and other service fees; (iii) advertising expenses; (iv) OREO and repossessed assets expenses; (v) FDIC assessments and insurance expenses; and (vi) occupancy and equipment expenses. These were partially offset by higher losses on loans held for sale carried at the lower of cost or fair value and higher telecommunications and data processing expenses. See "Noninterest Expense" for more details.
In the nine months ended September 30, 2026 and 2025, the Company incurred noninterest expenses of $0.4 million and $8.3 million, respectively, related to Amerant Mortgage which consists of salaries and employee benefits expense, mortgage lending costs and professional and other services fees. Amerant Mortgage had no full-time equivalent employees ("FTEs") at September 30, 2026 compared to five at September 30, 2025. As of September 30, 2026, Amerant Mortgage has been dissolved and no longer operates as a subsidiary of the Bank.
Average Balance Sheet, Interest and Yield/Rate Analysis
The following tables present average balance sheet information, interest income, interest expense and the corresponding average yields earned and rates paid for the three and nine month periods ended September 30, 2026 and 2025. The average balances for loans include both performing and non-performing balances. Interest income on loans includes the effects of discount accretion and the amortization of non-refundable loan origination fees, net of direct loan origination costs as well as the amortization of net premiums/discounts on loan purchases, accounted for as yield adjustments. Average balances represent the daily average balances for the periods presented.
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) |
Average Balances |
Income/ Expense |
Yield/ Rates |
Average Balances |
Income/ Expense |
Yield/ Rates |
|||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||||
| Loan portfolio, net (1) | $ | 6,816,846 | $ | 109,086 | 6.35 | % | $ | 6,946,370 | $ | 121,414 | 6.93 | % | |||||||||||||||||||||||
|
Debt securities available for sale (2)(3)
|
2,381,772 | 29,028 | 4.84 | % | 1,973,763 | 24,146 | 4.85 | % | |||||||||||||||||||||||||||
| Debt securities held for trading | - | - | - | % | 119,429 | 1,665 | 5.53 | % | |||||||||||||||||||||||||||
| Equity securities with readily determinable fair value not held for trading | 2,496 | 22 | 3.50 | % | 2,528 | 20 | 3.14 | % | |||||||||||||||||||||||||||
| Federal Reserve Bank and FHLB stock | 53,374 | 811 | 6.03 | % | 57,681 | 906 | 6.23 | % | |||||||||||||||||||||||||||
| Deposits with banks (4) | 253,782 | 2,455 | 3.84 | % | 413,522 | 4,516 | 4.33 | % | |||||||||||||||||||||||||||
|
Other short-term investments
|
- | - | - | % | 7,122 | 76 | 4.23 | % | |||||||||||||||||||||||||||
| Total interest-earning assets | 9,508,270 | 141,402 | 5.90 | % | 9,520,415 | 152,743 | 6.37 | % | |||||||||||||||||||||||||||
| Total noninterest-earning assets (5) | 704,526 | 723,510 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 10,212,796 | $ | 10,243,925 | |||||||||||||||||||||||||||||||
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) |
Average Balances |
Income/ Expense |
Yield/ Rates |
Average Balances |
Income/ Expense |
Yield/ Rates |
|||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Checking and saving accounts | |||||||||||||||||||||||||||||||||||
| Interest bearing demand, savings, and money market deposits (6) | 4,579,959 | 26,548 | 2.30 | % | 4,395,707 | 28,900 | 2.61 | % | |||||||||||||||||||||||||||
| Time deposits | 1,910,075 | 16,834 | 3.50 | % | 2,084,940 | 20,950 | 3.99 | % | |||||||||||||||||||||||||||
| Total deposits | 6,490,034 | 43,382 | 2.65 | % | 6,480,647 | 49,850 | 3.05 | % | |||||||||||||||||||||||||||
| Securities sold under agreements to repurchase | - | - | - | % | - | - | - | % | |||||||||||||||||||||||||||
| Advances from the FHLB (7) | 634,927 | 6,098 | 3.81 | % | 726,520 | 7,316 | 4.00 | % | |||||||||||||||||||||||||||
| Senior notes | 7,360 | 147 | 7.92 | % | - | - | - | % | |||||||||||||||||||||||||||
| Subordinated notes | 29,902 | 361 | 4.79 | % | 29,731 | 362 | 4.83 | % | |||||||||||||||||||||||||||
| Junior subordinated debentures | 64,178 | 950 | 5.87 | % | 64,178 | 1,063 | 6.57 | % | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 7,226,401 | 50,938 | 2.80 | % | 7,301,076 | 58,591 | 3.18 | % | |||||||||||||||||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | 1,828,805 | 1,726,507 | |||||||||||||||||||||||||||||||||
| Accounts payable, accrued liabilities and other liabilities | 253,852 | 273,921 | |||||||||||||||||||||||||||||||||
| Total noninterest-bearing liabilities | 2,082,657 | 2,000,428 | |||||||||||||||||||||||||||||||||
| Total liabilities | 9,309,058 | 9,301,504 | |||||||||||||||||||||||||||||||||
| Stockholders' equity | 903,738 | 942,421 | |||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 10,212,796 | $ | 10,243,925 | |||||||||||||||||||||||||||||||
| Excess of average interest-earning assets over average interest-bearing liabilities | $ | 2,281,869 | $ | 2,219,339 | |||||||||||||||||||||||||||||||
| Net interest income | $ | 90,464 | $ | 94,152 | |||||||||||||||||||||||||||||||
| Net interest rate spread | 3.10 | % | 3.19 | % | |||||||||||||||||||||||||||||||
| Net interest margin (8) | 3.77 | % | 3.92 | % | |||||||||||||||||||||||||||||||
| Cost of total deposits (8) | 2.07 | % | 2.41 | % | |||||||||||||||||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 131.58 | % | 130.40 | % | |||||||||||||||||||||||||||||||
| Average non-performing loans/ Average total loans | 2.30 | % | 1.30 | % | |||||||||||||||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) |
Average Balances |
Income/ Expense |
Yield/ Rates |
Average Balances |
Income/ Expense |
Yield/ Rates |
|||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||||
| Loan portfolio, net (1) | 6,672,710 | 315,209 | 6.32 | % | 7,078,705 | 364,601 | 6.89 | % | |||||||||||||||||||||||||||
|
Debt securities available for sale (2)(3)
|
2,336,361 | 84,130 | 4.81 | % | 1,740,625 | 64,041 | 4.92 | % | |||||||||||||||||||||||||||
| Debt securities held for trading | 179 | - | - | % | 60,075 | 2,008 | 4.47 | % | |||||||||||||||||||||||||||
| Equity securities with readily determinable fair value not held for trading | 2,525 | 58 | 3.07 | % | 2,511 | 60 | 3.19 | % | |||||||||||||||||||||||||||
| Federal Reserve Bank and FHLB stock | 55,853 | 2,567 | 6.14 | % | 57,359 | 2,759 | 6.43 | % | |||||||||||||||||||||||||||
| Deposits with banks (4) | 289,603 | 8,018 | 3.70 | % | 502,191 | 16,560 | 4.41 | % | |||||||||||||||||||||||||||
|
Other short-term investments
|
3,653 | 98 | 3.59 | % | 6,870 | 217 | 4.22 | % | |||||||||||||||||||||||||||
| Total interest-earning assets | 9,360,884 | 410,080 | 5.86 | % | 9,448,336 | 450,246 | 6.37 | % | |||||||||||||||||||||||||||
| Total noninterest-earning assets (5) | 714,582 | 733,305 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 10,075,466 | $ | 10,181,641 | |||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Checking and saving accounts | |||||||||||||||||||||||||||||||||||
| Interest bearing demand, savings, and money market deposits (6) | 4,543,021 | 80,067 | 2.36 | % | 4,344,282 | 85,626 | 2.64 | % | |||||||||||||||||||||||||||
| Time deposits | 1,971,971 | 52,770 | 3.58 | % | 2,153,720 | 67,093 | 4.17 | % | |||||||||||||||||||||||||||
| Total deposits | 6,514,992 | 132,837 | 2.73 | % | 6,498,002 | 152,719 | 3.14 | % | |||||||||||||||||||||||||||
| Securities sold under agreements to repurchase | 32 | 1 | 4.18 | % | 35 | 1 | 3.82 | % | |||||||||||||||||||||||||||
| Advances from the FHLB (7) | 686,409 | 19,879 | 3.87 | % | 722,493 | 21,746 | 4.02 | % | |||||||||||||||||||||||||||
| Senior notes | 2,480 | 147 | 7.92 | % | 19,742 | 1,020 | 6.91 | % | |||||||||||||||||||||||||||
| Subordinated notes | 29,859 | 1,084 | 4.85 | % | 29,689 | 1,084 | 4.88 | % | |||||||||||||||||||||||||||
| Junior subordinated debentures | 64,178 | 2,812 | 5.86 | % | 64,178 | 3,141 | 6.54 | % | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 7,297,950 | 156,760 | 2.87 | % | 7,334,139 | 179,711 | 3.28 | % | |||||||||||||||||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | 1,587,733 | 1,636,816 | |||||||||||||||||||||||||||||||||
| Accounts payable, accrued liabilities and other liabilities | 267,314 | 287,021 | |||||||||||||||||||||||||||||||||
| Total noninterest-bearing liabilities | 1,855,047 | 1,923,837 | |||||||||||||||||||||||||||||||||
| Total liabilities | 9,152,997 | 9,257,976 | |||||||||||||||||||||||||||||||||
| Stockholders' equity | 922,469 | 923,665 | |||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 10,075,466 | $ | 10,181,641 | |||||||||||||||||||||||||||||||
| Excess of average interest-earning assets over average interest-bearing liabilities | $ | 2,062,934 | $ | 2,114,197 | |||||||||||||||||||||||||||||||
| Net interest income | $ | 253,320 | $ | 270,535 | |||||||||||||||||||||||||||||||
| Net interest rate spread | 2.99 | % | 3.09 | % | |||||||||||||||||||||||||||||||
| Net interest margin (8) | 3.62 | % | 3.83 | % | |||||||||||||||||||||||||||||||
| Cost of total deposits (8) | 2.19 | % | 2.51 | % | |||||||||||||||||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 128.27 | % | 128.83 | % | |||||||||||||||||||||||||||||||
| Average non-performing loans/ Average total loans | 2.41 | % | 1.36 | % | |||||||||||||||||||||||||||||||
__________________
(1) Includes loans held for investment net of the allowance for credit losses, and loans held for sale. Non-performing loans are included in the total loan portfolio balances.
(2) Includes the average balance of net unrealized gains and losses in the fair value of debt securities available for sale.
(3) Includes nontaxable securities with average balances of $49.4 million and $54.2 million for the three months ended September 30, 2026 and September 30, 2025, respectively, and $50.4 million and $54.6 million in the nine months ended September 30, 2026 and 2025, respectively. The tax equivalent yield for these nontaxable securities was 4.75% and 4.60% for the three months ended September 30, 2026 and September 30, 2025, respectively, and 4.80% and 4.68% for the nine months ended September 30, 2026 and 2025, respectively. In 2026 and 2025, the tax equivalent yields were calculated assuming a 21% tax rate and dividing the actual yield by 0.79.
(4) Deposits with banks in this table include time deposits with banks maturing in more than three months that are not considered cash and cash equivalents in the Company's consolidated balance sheet.
(5) Excludes the allowance for credit losses.
(6) To emphasize material items, certain line items that were presented separately in prior years have been aggregated into a single line item in this table. This includes interest-bearing demand, savings, and money market deposits. Prior periods have been conformed to this presentation for comparability.
(7) The terms of the FHLB advance agreements require the Bank to maintain certain investment securities or loans as collateral for these advances.
(8) Net interest margin, or NIM: defined as net interest income, or NII, divided by average interest-earning assets, which are loans, securities, deposits with banks and other financial assets which yield interest or similar income. Cost of total deposits: calculated based upon the average balance of total noninterest bearing and interest bearing deposits, which includes time deposits.
Net Interest Income
Three Months Ended September 30, 2026 and 2025
The Company continued to execute strategic repricing across its deposit products and continued growth in the lower-cost international deposits to offset lower yields on the loan portfolio during the third quarter of 2026 compared to the same period last year. See discussions further below for more details.
Net interest income in the three months ended September 30, 2026, was $90.5 million, a decrease of $3.7 million, or 3.9%, from $94.2 million in the three months ended September 30, 2025. This was primarily driven by a decrease of $11.3 million, or 7.4%, in interest income, offset by a decrease of $7.7 million or 13.1% in interest expense. The decrease in interest income was primarily driven by: (i) a total of 47 basis points decrease in the average rates on all interest-earning assets, primarily in the average yields of the debt securities held for trading portfolio, other short-term investments, the loan portfolio and deposits with banks; and (ii) decreases of $159.7 million, or 38.6%, $129.5 million, or 1.9%, and $119.4 million or 100.0%, in the average balances of interest earning deposits with banks, loans and debt securities held for trading, respectively, during the period. In addition, there was an increase of $408.0 million, or 20.7%, in the average balances of debt securities available for sale during the period. The decrease in interest income was partially offset by a decrease in interest expense which was primarily driven by: (i) a decrease of 38 basis points in the total average rates of interest-bearing liabilities, primarily in the average rates paid on total deposits, FHLB advances, and Junior subordinated debentures; and (ii) a decrease of $174.9 million, or 8.4%, in the average balances of time deposits. Net interest margin was 3.77% in the three months ended September 30, 2026, a decrease from 3.92% in the three months ended September 30, 2025. See discussions further below for more details.
Interest Income
Total interest income was $141.4 million in the three months ended September 30, 2026, a decrease of $11.3 million, or 7.4%, compared to $152.7 million for the same period of 2025. The decrease was driven by: (i) a total of 47 basis points decrease in the average rates on all interest-earning assets, primarily in the average yields of the debt securities held for trading portfolio, other short-term investments, the loan portfolio and deposits with banks; and (ii) decreases of $159.7 million, or 38.6%, $129.5 million, or 1.9%, and $119.4 million or 100.0%, in the average balances of deposits with banks, loans and debt securities held for trading, respectively, during the period. The decreases were partially offset by an increase of $408.0 million, or 20.7%, in the average balances of debt securities available for sale during the period.
Interest income on loans in the three months ended September 30, 2026 was $109.1 million, a decrease of $12.3 million, or 10.2%, compared to $121.4 million in the same period last year, primarily due to a 58 basis points decrease in average yields. The decrease in interest income on loans was also due to the decrease in the average balance of the total loan portfolio during the quarter compared to the same period in 2025. See "Average Balance Sheet, Interest and Yield/Rate Analysis" for detailed information.
Interest income on debt securities available for sale was $29.0 million in the three months ended September 30, 2026, an increase of $4.9 million, or 20.2%, compared to $24.1 million in the same period of 2025. This was primarily due to an increase of $408.0 million, or 20.7%, in the average balance of these securities which were partially offset by a decrease of 1 basis point in average yields. The increase in the average balance was primarily as a result of additional purchases of fixed rate investments in the nine months ended September 30, 2026, which were partially offset by sales and paydowns in the same period.
The Company had no debt securities held for trading in the three months ended September 30, 2026, as the entire portfolio was sold during the fourth quarter of 2025. In comparison, the Company had average balances of $119.4 million and interest income of $1.7 million from these securities during the same period of 2025.
In the three months ended September 30, 2026, the average balance of accumulated net unrealized losses included in the carrying value of debt securities were $67.7 million, compared to the average balance of accumulated net unrealized losses of $32.7 million in the same period last year.
As of September 30, 2026, floating rate investments, which are entirely comprised of available for sale debt securities, represent 7.1% of our total investment portfolio compared to 15.4% at September 30, 2025. In addition, the expected overall duration increased to 5.8 years at September 30, 2026 from 4.4 years at September 30, 2025. This increase is attributable to slower projected prepayments speeds as well as a smaller proportion of floating rate investments which carry a lower duration than fixed rate investments.
Interest Expense
Interest expense was $50.9 million in the three months ended September 30, 2026, a decrease of $7.7 million or 13.1%, compared to $58.6 million in the same period of 2025. This was primarily due to: (i) a decrease of 38 basis points in the total average rates of interest-bearing liabilities, primarily in the average rates paid on total deposits, FHLB advances, and Junior subordinated debentures; and (ii) a decrease of $174.9 million, or 8.4%, in the average balances of time deposits. These decreases were partially offset by an increase of $184.3 million, or 4.2% in the average balances of interest-bearing demand, savings and money market deposits.
Interest expense on interest-bearing deposits was $43.4 million in the three months ended September 30, 2026, a decrease of $6.5 million, or 13.0%, compared to $49.9 million in the same period of 2025. This was mainly driven by a decrease of 40 basis points in the average rates paid on total deposits, partially offset by an increase of $9.4 million, or 0.1%, in their average balance. See below for a detailed explanation of changes by major deposit category:
•Time deposits. Interest expense on total time deposits decreased $4.1 million, or 19.6%, in the three months ended September 30, 2026 compared to the same period in 2025. This was mainly due to a decrease of 49 basis points in the average rates paid on time deposits. In addition, there was a decrease of $174.9 million, or 8.4%, in the average balance of these deposits, which includes a $126.0 million decrease in the average balance of customer CDs, as well as, a $48.9 million decrease in the average balance of brokered time deposits.
•Interest bearing demand, savings and money market deposit accounts. Interest expense on interest bearing demand, savings and money market deposit accounts decreased $2.4 million, or 8.1%, in the three months ended September 30, 2026 compared to the same period in 2025. This was mainly due to a net decrease of 31 basis points in the average costs on these deposits. This was partially offset by a net increase of $184.3 million, or 4.19%, in the average balance of these deposits.
Interest expense on advances from the FHLB decreased $1.2 million, or 16.6%, in the three months ended September 30, 2026 compared to the same period in 2025, primarily driven by a decrease of $91.6 million, or 12.6%, in their average balance, as well as, a decrease of 19 basis points in average rates paid.
Nine Months Ended September 30, 2026 and 2025
Net interest income in the nine months ended September 30, 2026, was $253.3 million, a decrease of $17.2 million, or 6.4%, from $270.5 million in the nine months ended September 30, 2025. This was primarily driven by a decrease of $40.2 million, or 8.9%, in interest income, partially offset by a decrease of $23.0 million or 12.8% in interest expense. The decrease in interest income was primarily driven by: (i) a total of a 51 basis points decrease in the average rates on all interest-earning assets, primarily in the average yields of the loan portfolio, debt securities available for sale and deposits with banks; and (ii) decreases of $406.0 million, or 5.7%, $212.6 million, or 42.3%, and $59.9 million, or 99.7% in the average balances of the loan portfolio, deposits with banks, and debt securities held for trading, respectively, during the period. The decrease in interest income was partially offset by a decrease in interest expense which was primarily driven by: (i) a decrease of 41 basis points in the average rates paid on total interest-bearing liabilities; and (ii) a decrease of $181.7 million, or 8.4%, in the average balances of time deposits. These decreases were partially offset by an increase of $198.7 million, or 4.6%, in the average balances of interest bearing demand, savings, and money market deposit accounts. In addition, there was an increase of $595.7 million, or 34.2%, in the average balances of debt securities available for sale during the period. Net interest margin was 3.62% in the nine months ended September 30, 2026, a decrease of 21 basis points from 3.83% in the nine months ended September 30, 2025. See discussions further below for more details.
During the nine months ended September 30, 2026, we had lower average balance of loans and deposit balances with banks compared to the same period last year. The Company was able to reprice its interest-bearing deposits to offset lower average yields on the loan portfolio we recorded during the first nine months of 2026 compared to the same period last year. Additionally, we continued investing in higher-yielding, fixed rate, debt securities available for sale, and maintaining interest-earning funds at the Federal Reserve. See discussions further below for more details.
Interest Income
Total interest income was $410.1 million in the nine months ended September 30, 2026, a decrease of $40.2 million, or 8.9%, compared to $450.2 million for the same period of 2025. This was primarily driven by: (i) a total of 51 basis points decrease in the average rates on all interest-earning assets, primarily in the average yields of the loan portfolio, debt securities available for sale and deposits with banks; and (ii) decreases of $406.0 million, or 5.7%, $212.6 million, or 42.3%, and $59.9 million, or 99.7% in the average balances of the loan portfolio, deposits with banks, and debt securities held for trading, respectively, during the period. The decreases were partially offset by an increase of $595.7 million, or 34.2%, in the average balances of debt securities available for sale during the period.
Interest income on loans in the nine months ended September 30, 2026 was $315.2 million, a decrease of $49.4 million, or 13.5%, compared to $364.6 million in the same period last year, primarily due to a 57 basis points decrease in the average yields, as well as a decrease in the average balances of the portfolio. See "-Average Balance Sheet, Interest and Yield/Rate Analysis" for detailed information.
Interest income on debt securities available for sale was $84.1 million in the nine months ended September 30, 2026, an increase of $20.1 million, or 31.4%, compared to $64.0 million in the same period of 2025. In the nine months ended September 30, 2026, the average balance of accumulated net unrealized losses included in the carrying value of these securities was $33.9 million compared to $41.0 million in the same period last year.
The Company had no interest income on debt securities held for trading in the nine months ended September 30, 2026, compared to $2.0 million during the same period of 2025, as the Company sold the entire debt securities held for trading portfolio during the fourth quarter of 2025.
Interest expense
Interest expense was $156.8 million in the nine months ended September 30, 2026, a decrease of $23.0 million or 12.8%, compared to $179.7 million in the same period of 2025. This was primarily due to: (i) a decrease of 41 basis points in the average rates paid on total interest-bearing liabilities; and (ii) a decrease of $181.7 million, or 8.4%, in the average balances of time deposits. These decreases were partially offset by an increase of $198.7 million, or 4.6%, in the average balances of interest bearing demand, savings, and money market deposit accounts.
Interest expense on interest-bearing deposits was $132.8 million in the nine months ended September 30, 2026, a decrease of $19.9 million, or 13.0%, compared to $152.7 million for the same period of 2025. This was mainly driven by a decrease of 41 basis points in the average rates paid on total deposits. These decreases were partially offset by an increase of $17.0 million, or 0.3%, in their average balance. See below for a detailed explanation of changes by major deposit category:
•Time deposits. Interest expense on total time deposits decreased $14.3 million, or 21.3%, in the nine months ended September 30, 2026 compared to the same period in 2025. This was mainly due to a decrease of 59 basis points in the average cost of total time deposits. In addition, there was a decrease of $181.7 million, or 8.4%, in the average balance of these deposits, which includes a decrease of $112.3 million in the average balance of brokered time deposits, as well as, a decrease of $69.4 million in the average balance of customer CDs.
•Interest bearing demand, savings and money market deposit accounts. Interest expense on interest bearing demand, savings and money market deposit accounts decreased $5.6 million, or 6.5% in the nine months ended September 30, 2026 compared to the same period in 2025, mainly due to a decrease of 28 basis points in the average costs on these deposits. The decrease was offset by an increase of $198.7 million, or 4.6%, in the average balances of these deposits.
Interest expense on advances from the FHLB decreased $1.9 million, or 8.6%, in the nine months ended September 30, 2026 compared to the same period of 2025, primarily driven by a decrease of $36.1 million, or 5.0%, in their average balance and a decrease of 15 basis points in average rates paid. See "Capital Resources and Liquidity Management" for more details on the repayment and restructuring of advances from the FHLB.
Analysis of the Allowance for Credit Losses
Set forth in the table below are the changes in the allowance for credit losses for each of the periods presented.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Balance at the beginning of the period | $ | 85,499 | $ | 86,519 | $ | 79,276 | $ | 84,963 | |||||||||||||||
|
Initial ACL on acquired PSLs (1)
|
2,481 | - | 4,841 | - | |||||||||||||||||||
| Charge-offs | |||||||||||||||||||||||
| Real estate loans | |||||||||||||||||||||||
| Commercial Real Estate (CRE) | |||||||||||||||||||||||
|
Multi-family residential
|
- | (1,268) | - | (1,268) | |||||||||||||||||||
| Single-family residential | - | (33) | - | (249) | |||||||||||||||||||
| Owner occupied | - | - | - | (130) | |||||||||||||||||||
| - | (1,301) | - | (1,647) | ||||||||||||||||||||
| Commercial | (3,097) | (6,244) | (13,311) | (24,571) | |||||||||||||||||||
| Consumer and others | (826) | (1,991) | (5,256) | (7,277) | |||||||||||||||||||
| Total Charge-offs | $ | (3,923) | $ | (9,536) | $ | (18,567) | $ | (33,495) | |||||||||||||||
| Recoveries | |||||||||||||||||||||||
| Real estate loans | |||||||||||||||||||||||
| Commercial Real Estate (CRE) | |||||||||||||||||||||||
| Non-Owner occupied | $ | - | $ | 67 | $ | - | $ | 67 | |||||||||||||||
| Land development and construction loans | 15 | 10 | 54 | 28 | |||||||||||||||||||
| 15 | 77 | 54 | 95 | ||||||||||||||||||||
| Single-family residential | - | 3 | 13 | 3 | |||||||||||||||||||
| Owner occupied | - | - | 42 | 40 | |||||||||||||||||||
| 15 | 80 | 109 | 138 | ||||||||||||||||||||
| Commercial | 1,498 | 1,876 | 6,518 | 5,480 | |||||||||||||||||||
| Consumer and others | 375 | 729 | 1,268 | 1,826 | |||||||||||||||||||
| Total Recoveries | $ | 1,888 | $ | 2,685 | $ | 7,895 | $ | 7,444 | |||||||||||||||
| Net charge-offs | (2,035) | (6,851) | (10,672) | (26,051) | |||||||||||||||||||
|
Provision for credit losses - loans
|
8,900 | 15,250 | 21,400 | 36,006 | |||||||||||||||||||
| Balance at the end of the period | $ | 94,845 | $ | 94,918 | $ | 94,845 | $ | 94,918 | |||||||||||||||
__________________
(1)The ACL relates to residential and commercial loans with an aggregate principal balance of $190.6 million and $376.8 million, in the three and nine months ended September 30, 2026, respectively, that were identified as PSL at the acquisition date. The Company adopted new accounting guidance related to PSLs effective January 1, 2026. See Note 1 to our unaudited interim consolidated financial statements in this Form 10-Q.
Three Months Ended September 30, 2026 and 2025
The Company recorded a provision for credit losses on loans of $8.9 million in the three months ended September 30, 2026, compared to $15.3 million in the same period last year. In the third quarter of 2026, the provision for credit losses on loans was driven by: (i) $12.6 million in specific reserve allocations, (ii) $2.0 million requirements for charge-offs, and (iii) $0.2 million due to loan growth. These increases were partially offset by approximately a $6.0 million decrease due to changes in credit quality and macroeconomic factors.
During the three months ended September 30, 2026, charge-offs decreased $5.6 million, or 58.9%, compared to the same period last year. In the three months ended September 30, 2026, charge-offs included: (i) approximately $2.1 million related to one large commercial relationship; (ii) $0.5 million related to indirect consumer loans; and (iii) $1.4 million related to other smaller balance loans, including business banking and consumer loans. These charge-offs were partially offset by $1.9 million in recoveries.
In the three months ended September 30, 2025, charge-offs included: (i) $4.1 million related to two commercial loans; (ii) $1.8 million related to several small business commercial loans; (iii) $1.3 million related to one commercial real estate loan; (iv) $1.8 million related to purchased indirect consumer loans; and (v) $0.5 million related to other smaller balance loans, including retail and business banking and consumer loans. This was partially offset by $2.7 million in recoveries.
The ratio of net charge-offs over the average total loan portfolio held for investment was 0.12% in the three months ended September 30, 2026, compared to 0.39% for the same period in 2025.
Nine Months Ended September 30, 2026 and 2025
The Company recorded a provision for credit losses on loans of $21.4 million in the nine months ended September 30, 2026, compared to $36.0 million in the same period last year. In the first nine months of 2026, the provision for credit losses on loans was primarily driven by: (i) approximately $16.5 million net increase in specific reserves, and (ii) $9.2 million additional reserves for charge-offs. These increases were partially offset by a $2.5 million decrease due to changes in credit quality and macroeconomic factors, and a $1.8 million release related to loans held for investment volume changes.
During the nine months ended September 30, 2026, charge-offs decreased $14.9 million, or 44.6%, compared to the same period of the prior year. In the nine months ended September 30, 2026, charge-offs included: (i) approximately $4.3 million related to a commercial loan participation agreement that was wound down in the prior quarter, with no credit exposure as of September 30, 2026; (ii) $9.3 million related to three commercial relationships, including a $2.2 million unsecured consumer loan associated with one of those relationships; (iii) $2.6 million related to indirect consumer loans; and (iv) $2.4 million related to other smaller- balance business banking and consumer loans. These charge-offs were partially offset by $7.9 million in recoveries.
In the nine months ended September 30, 2025, charge-offs included: (i) $19.9 million related to five commercial loans; (ii) $6.8 million related to purchased indirect consumer loans; (iii) $4.7 million related to several small business commercial loans; (iv) $1.3 million related to one commercial real estate loan and (v) $0.8 million related to other smaller balance loans, including retail and business banking and consumer loans. This was partially offset by $7.4 million in recoveries.
The ratio of net charge-offs over the average total loan portfolio held for investment was 0.21% in the first nine months of 2026, compared to 0.49% in the first nine months of 2025.
Consistent with the Company's applicable policy, the Company has requested independent third-party collateral valuations on all real estate securing nonperforming loans with existing valuations older than 12 months and combined outstanding balances in excess of $1.0 million. As of September 30, 2026, there were 4 relationships recently downgraded totaling $8.2 million with appraisals older than 12 months, for which new appraisals have been ordered. No additional provision for credit losses was deemed necessary in both periods as a result of these valuations.
We continue to proactively and carefully monitor the Company's credit quality practices, including examining and responding to patterns or trends that may arise across certain industries or regions.
Noninterest Income
The table below sets forth a comparison for each of the categories of noninterest income for the periods presented.
| Three Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 vs 2025 | |||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | Amount | % | Amount | % | Amount | % | |||||||||||||||||||||||||||||
| Deposits and service fees | $ | 6,184 | 33.7 | % | $ | 5,056 | 29.2 | % | $ | 1,128 | 22.3 | % | |||||||||||||||||||||||
| Brokerage, advisory and fiduciary activities | 5,746 | 31.3 | % | 4,995 | 28.9 | % | 751 | 15.0 | % | ||||||||||||||||||||||||||
| Change in cash surrender value of bank owned life insurance ("BOLI") (1) | 2,690 | 14.7 | % | 2,554 | 14.8 | % | 136 | 5.3 | % | ||||||||||||||||||||||||||
| Cards and trade finance servicing fees | 1,556 | 8.5 | % | 1,321 | 7.6 | % | 235 | 17.8 | % | ||||||||||||||||||||||||||
| Gain on early extinguishment of FHLB advances, net | 621 | 3.4 | % | - | - | % | 621 | N/M | |||||||||||||||||||||||||||
|
Loan-level derivative income (2)
|
536 | 2.9 | % | 2,372 | 13.7 | % | (1,836) | (77.4) | % | ||||||||||||||||||||||||||
|
Derivative losses, net (3)
|
- | - | % | (1,383) | (8.0) | % | 1,383 | 100.0 | % | ||||||||||||||||||||||||||
|
Securities (losses) gains, net (4)
|
(26) | (0.1) | % | 1,203 | 7.0 | % | (1,229) | (102.2) | % | ||||||||||||||||||||||||||
|
Other noninterest income
|
1,032 | 5.6 | % | 1,173 | 6.8 | % | (141) | (12.0) | % | ||||||||||||||||||||||||||
| Total noninterest income | $ | 18,339 | 100.0 | % | $ | 17,291 | 100.0 | % | $ | 1,048 | 6.1 | % | |||||||||||||||||||||||
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 vs 2025 | |||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | Amount | % | Amount | % | Amount | % | |||||||||||||||||||||||||||||
| Deposits and service fees | $ | 16,475 | 30.6 | % | $ | 15,161 | 26.8 | % | $ | 1,314 | 8.7 | % | |||||||||||||||||||||||
| Brokerage, advisory and fiduciary activities | 16,837 | 31.2 | % | 14,717 | 26.0 | % | 2,120 | 14.4 | % | ||||||||||||||||||||||||||
| Change in cash surrender value of bank owned life insurance ("BOLI") (1) | 7,883 | 14.6 | % | 7,494 | 13.2 | % | 389 | 5.2 | % | ||||||||||||||||||||||||||
| Cards and trade finance servicing fees | 4,427 | 8.2 | % | 4,517 | 8.0 | % | (90) | (2.0) | % | ||||||||||||||||||||||||||
|
Loan-level derivative income (2)
|
3,241 | 6.0 | % | 7,084 | 12.5 | % | (3,843) | (54.3) | % | ||||||||||||||||||||||||||
|
Securities gains, net (4)
|
898 | 1.7 | % | 3,046 | 5.4 | % | (2,148) | (70.5) | % | ||||||||||||||||||||||||||
| Gain on early extinguishment of FHLB advances, net | 675 | 1.3 | % | - | - | % | 675 | N/M | |||||||||||||||||||||||||||
|
Derivative losses, net (3)
|
- | - | % | (3,235) | (5.7) | % | 3,235 | 100.0 | % | ||||||||||||||||||||||||||
|
Other noninterest income
|
3,446 | 6.4 | % | 7,810 | 13.8 | % | (4,364) | (55.9) | % | ||||||||||||||||||||||||||
| Total noninterest income | $ | 53,882 | 100.0 | % | $ | 56,594 | 100.0 | % | $ | (2,712) | (4.8) | % | |||||||||||||||||||||||
__________
(1) Changes in cash surrender value of BOLI are not taxable.
(2) Income from interest rate swaps and other derivative transactions with customers.
(3) In the three and nine months ended September 30, 2025, includes net unrealized losses in connection with TBA MBS derivative contracts.
(4) In the three and nine month periods ended September 30, 2026, amounts are primarily in connection with gains on the sale of debt securities available for sale. In the three and nine month periods ended September 30, 2025, amounts are primarily in connection with gains on market valuation of trading securities.
N/M Not meaningful
Three Months Ended September 30, 2026 and 2025
Total noninterest income increased $1.0 million, or 6.1%, in the three months ended September 30, 2026, compared to the same period last year, primarily driven by: (i) the absence of derivative losses; (ii) higher deposits and service fees; (iii) higher brokerage, advisory and fiduciary income; (iv) higher gains on the early extinguishment of FHLB advances; and (v) higher cards and trade finance servicing fees. These were partially offset by decreases in: (i) loan-level derivative income; (ii) securities gains/losses; and (iii) other noninterest income.
There were no derivative gains or losses in the three months ended September 30, 2026 compared to having $1.4 million in derivative losses in the same period in 2025, as the Company had no derivative trading activity during the three months ended September 30, 2026. During the three months ended September 30, 2025, the Company had entered into a TBA MBS derivative contract to mitigate changes in the market valuation of the trading securities held during the period resulting in losses of approximately $1.4 million.
Deposits and service fees increased $1.1 million, or 22.3%, in the three months ended September 30, 2026, compared to the same period in 2025, primarily due to the increase in income related to wire transfers as well as service charges on business and personal accounts.
Brokerage, advisory and fiduciary fees increased $0.8 million, or 15.0%, in the three months ended September 30, 2026, compared to the same period in 2025. This was mainly driven by higher volume from fixed income trading in the third quarter of 2026 compared to the third quarter of 2025, as well as higher advisory fees resulting from net new assets as well as higher valuations compared to the prior year.
Gain on the early extinguishment of FHLB advances increased $0.6 million, in the three months ended September 30, 2026 compared to the same period in 2025. The Company repaid approximately $407.1 million of advances from the FHLB in the three months ended September 30, 2026, which resulted in these gains.
Cards and trade financing servicing fees increased $0.2 million, or 17.8%, in the three months ended September 30, 2026 compared to the same period in 2025, primarily due to higher commissions earned on the issuance of letters of credit.
Loan-level derivative income decreased $1.8 million, or 77.4%, in the three months ended September 30, 2026 compared to the same period in 2025, primarily due to lower volume of transactions with loan customers during the period.
There were net losses on securities in the three months ended September 30, 2026 compared to net gains in the same period in 2025. The change was primarily due to the absence of the valuation gain recognized in the three months ended September 30, 2025 of approximately $1.2 million from its trading portfolio, which was subsequently sold during the fourth quarter of 2025.
Other noninterest income decreased $0.1 million, or 12.0%, in the three months ended September 30, 2026 compared to the same period in 2025, primarily due to the absence of approximately $0.3 million gain on the sale of equipment financing leases recorded in the three months ended September 30, 2025, which was partially offset by the absence of mortgage banking loss due to the wind down of Amerant Mortgage in the same period as well as higher other smaller sources of income in the three months ended September 30, 2026.
Our AUMs totaled $3.4 billion at September 30, 2026, an increase of $192.3 million, or 5.9%, from $3.3 billion at December 31, 2025, primarily driven by net new assets during the period.
Nine Months Ended September 30, 2026 and 2025
Total noninterest income decreased $2.7 million, or 4.8%, in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025 mainly due to lower: (i) other noninterest income; (ii) loan-level derivative income; and (iii) securities gains. These decreases were partially offset by: (i) absence of derivative losses; (ii) higher brokerage, advisory and fiduciary activities; (iii) higher deposits and service fees; (iv) higher gains on the early extinguishment of FHLB advances; and (v) higher change in cash surrender value of BOLI.
There were no derivative gains or losses in the nine months ended September 30, 2026 compared to having $3.2 million in derivative losses in the same period in 2025, as the Company had no derivative trading activity during the nine months ended September 30, 2026. During the nine months ended September 30, 2025, the Company had entered into a TBA MBS derivative contract to mitigate changes in the market valuation of the trading securities held during the period resulting in losses of approximately $3.2 million.
Other noninterest income decreased by $4.4 million or 55.9% in the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to: (i) a decrease of approximately $2.8 million on gain on sale of loans; and (ii) the absence of $0.9 million in mortgage banking income related to Amerant Mortgage in the nine months ended September 30, 2025.
Loan-level derivative income decreased $3.8 million, or 54.3%, in the nine months ended September 30, 2026 compared to the same period in 2025, mainly driven by lower volume of transactions with loan customers during the period.
Securities gains decreased $2.1 million, or 70.5% , compared to the same period in 2025. In the nine months ended September 30, 2026, the Company realized approximately $0.9 million in gains on the sale of debt securities available for sale, compared to a valuation gain of approximately $3.0 million from its trading portfolio, which was subsequently sold during the fourth quarter of 2025.
Brokerage, advisory and fiduciary fees increased $2.1 million, or 14.4%, in the nine months ended September 30, 2026, compared to the same period in 2025. This was mainly driven by higher fees from fixed income trading, commissions in connection with the Company's Senior notes offering as well as higher advisory fees. These increases were partially offset by lower trust management fees during the period.
Deposits and service fees increased $1.3 million, or 8.7%, in the nine months ended September 30, 2026, compared to the same period in 2025. This was primarily driven by increase in commissions income for wire transfers and other smaller deposit fees during the period.
Gain on the early extinguishment of FHLB advances increased $0.7 million, compared to the same period in 2025. The Company repaid $417.0 million of advances from the FHLB during the period, which resulted in these gains.
Changes in cash surrender value of BOLI increased $0.4 million, or 5.2% in the nine months ended September 30, 2026, compared to the same period in 2025, primarily due to higher yields on all policies driven by reinvestments on general accounts.
Noninterest Expense
The table below presents a comparison for each of the categories of noninterest expense for the periods presented.
| Three Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 vs 2025 | |||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | Amount | % | Amount | % | Amount | % | |||||||||||||||||||||||||||||
| Salaries and employee benefits | $ | 36,895 | 53.4 | % | $ | 35,094 | 45.1 | % | $ | 1,801 | 5.1 | % | |||||||||||||||||||||||
| Professional and other services fees | 15,257 | 22.1 | % | 15,997 | 20.6 | % | (740) | (4.6) | % | ||||||||||||||||||||||||||
| Occupancy and equipment | 5,899 | 8.5 | % | 5,211 | 6.7 | % | 688 | 13.2 | % | ||||||||||||||||||||||||||
| Telecommunications and data processing | 3,428 | 5.0 | % | 3,155 | 4.1 | % | 273 | 8.7 | % | ||||||||||||||||||||||||||
| FDIC assessments and insurance | 2,701 | 3.9 | % | 2,549 | 3.3 | % | 152 | 6.0 | % | ||||||||||||||||||||||||||
| Depreciation and amortization | 1,397 | 2.0 | % | 1,487 | 1.9 | % | (90) | (6.1) | % | ||||||||||||||||||||||||||
| Advertising expenses | 2,378 | 3.4 | % | 3,987 | 5.1 | % | (1,609) | (40.4) | % | ||||||||||||||||||||||||||
| (Reversals) losses on loans held for sale carried at the lower of cost or fair value (1) | (65) | (0.1) | % | 881 | 1.1 | % | (946) | (107.4) | % | ||||||||||||||||||||||||||
|
Other real estate owned and repossessed assets (income) expense, net
|
(1,308) | (1.9) | % | 215 | 0.3 | % | (1,523) | (708.4) | % | ||||||||||||||||||||||||||
| Other operating expenses (2) | 2,516 | 3.7 | % | 9,259 | 11.8 | % | (6,743) | (72.8) | % | ||||||||||||||||||||||||||
|
Total noninterest expenses
|
$ | 69,098 | 100.0 | % | $ | 77,835 | 100.0 | % | $ | (8,737) | (11.2) | % | |||||||||||||||||||||||
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 vs 2025 | |||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | Amount | % | Amount | % | Amount | % | |||||||||||||||||||||||||||||
| Salaries and employee benefits | 104,381 | 50.9 | % | 104,477 | 46.7 | % | $ | (96) | (0.1) | % | |||||||||||||||||||||||||
| Professional and other services fees | 39,760 | 19.4 | % | 44,228 | 19.8 | % | (4,468) | (10.1) | % | ||||||||||||||||||||||||||
| Occupancy and equipment | 16,317 | 8.0 | % | 16,838 | 7.5 | % | (521) | (3.1) | % | ||||||||||||||||||||||||||
| Telecommunications and data processing | 10,592 | 5.2 | % | 9,559 | 4.3 | % | 1,033 | 10.8 | % | ||||||||||||||||||||||||||
| Advertising expenses | 9,591 | 4.7 | % | 12,441 | 5.6 | % | (2,850) | (22.9) | % | ||||||||||||||||||||||||||
| FDIC assessments and insurance | 8,023 | 3.9 | % | 8,681 | 3.9 | % | (658) | (7.6) | % | ||||||||||||||||||||||||||
| Depreciation and amortization | 4,386 | 2.1 | % | 4,626 | 2.1 | % | (240) | (5.2) | % | ||||||||||||||||||||||||||
| Losses on loans held for sale carried at the lower of cost or fair value (1) | 2,876 | 1.4 | % | 881 | 0.4 | % | 1,995 | 226.4 | % | ||||||||||||||||||||||||||
|
Other real estate owned and repossessed assets (income) expense, net
|
(1,793) | (0.9) | % | 980 | 0.4 | % | (2,773) | (283.0) | % | ||||||||||||||||||||||||||
|
Other operating expenses (2)
|
10,761 | 5.3 | % | 21,078 | 9.3 | % | (10,317) | (48.9) | % | ||||||||||||||||||||||||||
|
Total noninterest expenses
|
$ | 204,894 | 100.0 | % | $ | 223,789 | 100.0 | % | $ | (18,895) | (8.4) | % | |||||||||||||||||||||||
___
(1) Includes valuation allowances and releases of allowances on previous loans held for sale.
(2) Loan-level derivative expenses previously presented separately for the three and nine month periods ended September 30, 2025, have been reclassified and are now included in this category.
Three Months Ended September 30, 2026 and 2025
Noninterest expense decreased $8.7 million, or 11.2%, in the three months ended September 30, 2026 compared to the same period in 2025, mainly due to lower: (i) other operating expenses; (ii) advertising expenses; (iii) OREO and repossessed assets income; (iv) releases on loans held for sale carried at the lower of cost or fair value; and (v) professional and other services fees. These were partially offset by higher: (i) salaries and employee benefits; (ii) occupancy and equipment expenses; and (iii) telecommunication and data processing expenses.
Other operating expenses decreased $6.7 million, or 72.8%, in the three months ended September 30, 2026 compared to the same period a year ago, mainly driven by: (i) the absence of the $3.5 million in earnings credits we had in the three months ended September 30, 2025; (ii) a decrease of $1.8 million in loan-level derivative expenses;(iii) a decrease of $0.7 million in indirect loan origination costs and mortgage loan servicing and origination expenses; (iv) a decrease of $0.4 million in charitable contributions; and (v) a decrease of $0.3 million in other smaller operating expenses.
Certain mortgage banking expenses related to Amerant Mortgage were a component of other operating expenses and primarily consisted of mortgage lending costs and professional and other services fees. Mortgage banking expenses within other operating expenses were not significant in the three months ended September 30, 2026, compared to $0.6 million in the same period last year. This was a reflection of the Company's wind-down of Amerant Mortgage's operations.
Advertising expenses decreased $1.6 million, or 40.4%, in the three months ended September 30, 2026 compared to the same period last year mainly driven by lower advertising expenses associated with various strategic optimization and cost-saving initiatives.
Other real estate owned and repossessed assets expenses decreased $1.5 million, or 708.4%, in the three months ended September 30, 2026, compared to the same period in 2025. In the three months ended September 30, 2026, the Company sold one of the two units of an OREO commercial real estate property and recorded a loss on sale of approximately $1.3 million. In addition, the Company recorded other OREO expenses of approximately $0.4 million in the three months ended September 30, 2026. These results were offset by a $2.6 million valuation gain on a recent appraisal of the remaining unit of the property and OREO income of $0.5 million, both of which were recorded in the three months ended September 30, 2026. In the three months ended September 30, 2025, the Company recorded a $0.5 million valuation allowance on an OREO property and other OREO expenses of approximately $0.2 million, which were partially offset by $0.5 million in OREO rental income.
Losses on loans held for sale carried at the lower of cost or fair value decreased $0.9 million, or 107.4%, in the three months ended September 30, 2026, compared to the same period in 2025. In the three months ended September 30, 2026, the Company did not incur significant losses on the transfer of loans held for sale during the quarter and no significant valuation adjustments on existing loans held for sale. In comparison, during the three months ended September 30, 2025, the Company recognized a loss of approximately $0.9 million on the sale of one substandard owner-occupied loan.
Professional and other services fees decreased $0.7 million, or 4.6%, in the three months ended September 30, 2026 compared to the same period last year. This was mainly driven by decreases in consulting fees, as well as legal fees in connection with various projects.
Salaries and employee benefits increased $1.8 million, or 5.1%, in the three months ended September 30, 2026 compared to the same period last year mainly driven by higher variable compensation driven by improved results, as well as, higher regular salaries.
Occupancy and equipment expenses increased $0.7 million, or 13.2%, in the three months ended September 30, 2026 compared to the same period last year mainly driven by lower sublease income recognized during the period which resulted in a smaller offset to other occupancy and equipment related expenses.
Telecommunications and data processing increased $0.3 million, or 8.7%, in the three months ended September 30, 2026 compared to the same period last year. This was mainly driven by an increase in computer expenses.
Nine Months Ended September 30, 2026 and 2025
Noninterest expense decreased by $18.9 million, or 8.4%, in the nine months ended September 30, 2026 compared to the same period in 2025, mainly due to lower: (i) other operating expenses; (ii) professional and other service fees; (iii) advertising expenses; (iv) OREO and repossessed assets expenses; (v) FDIC assessments and insurance expenses; and (vi) occupancy and equipment expenses. These were partially offset by higher losses on loans held for sale carried at the lower of cost or fair value and higher telecommunications and data processing expenses.
Other operating expenses decreased $10.3 million, or 48.9%, in the nine months ended September 30, 2026 compared to the same period last year. This was primarily due to: (i) the absence of $6.9 million in earnings credits in the same period last year; (ii) a decrease of approximately $2.2 million in indirect loan origination costs and mortgage loan origination and servicing expenses; (iii) a decrease of $2.2 million in loan-level derivative expenses; (iv) a net decrease of approximately $0.5 million in other smaller operating expenses; and (v) a decrease of $0.2 million in charitable contributions. These were partially offset by an increase of approximately $1.8 million in write-down of an equity investment carried at cost.
Mortgage banking expenses included within other operating expenses were $0.3 million during the first nine months of 2026, compared to $2.1 million in the same period last year as the dissolution of Amerant Mortgage was completed during the third quarter of 2026.
Professional and other services fees decreased by $4.5 million, or 10.1%, in the nine months ended September 30, 2026 compared to the same period last year. This was mainly driven by a decrease in fees related to our technology provider as a result of savings achieved from vendor contract renegotiations, and a combined net decrease in other vendor fees.
Advertising expenses decreased by $2.9 million, or 22.9%, in the nine months ended September 30, 2026 compared to the same period last year, mainly driven by lower advertising expenses associated with various strategic optimization and cost-saving initiatives.
Other real estate owned and repossessed assets expenses decreased by $2.8 million, or 283.0% in the nine months ended September 30, 2026 compared to the same period last year. In the nine months ended September 30, 2026, the Company sold one of the two units of an OREO commercial real estate property and recorded a loss on sale of approximately $1.3 million. In addition, the Company recorded other OREO expenses of $0.9 million in the first nine months of 2026. These results were offset by a $2.6 million valuation gain on a recent appraisal of the remaining unit of the property, and OREO income of $1.5 million, both of which were recorded in the nine months ended September 30, 2026. In the nine months ended September 30, 2025, the Company recorded $2.4 million of OREO valuation allowances and other OREO expenses of approximately $0.7 million. These were partially offset by $1.6 million in OREO rental income and approximately $0.5 million in net gains on sale of two OREO properties.
FDIC assessments and insurance expenses decreased $0.7 million, or 7.6%, in the nine months ended September 30, 2026 compared to the same period last year mainly due to having lower average assets this period compared to last year resulting in lower FDIC assessments.
Occupancy and equipment expenses decreased by $0.5 million, or 3.1% in the nine months ended September 30, 2026 compared to the same period one year ago primarily due to lower equipment expenses.
Salaries and employee benefits decreased by $0.1 million, or 0.1%, in the nine months ended September 30, 2026 compared to the same period one year ago, mainly driven by lower severance expenses and lower sign-on bonuses and bonus commissions. These were partially offset by higher regular salaries and variable compensation driven by improved results.
Losses on loans held for sale carried at the lower of cost or fair value increased $2.0 million, or 226.4%, in the nine months ended September 30, 2026, compared to the same period last year. In the nine months ended September 30, 2026, the Company had losses on the sale and valuation allowances of various loans transferred to loans held for sale during the period, in comparison to the same period in 2025 having a loss on the sale of one substandard owner-occupied loan.
Telecommunications and data processing expenses increased $1.0 million, or 10.8%, in the nine months ended September 30, 2026, compared to the same period last year mainly due to an increase in computer expenses.
Income Taxes
The table below sets forth information related to our income taxes for the periods presented.
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | |||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 vs 2025 | 2026 | 2025 | 2026 vs 2025 | |||||||||||||||||||||||||||||||||||||||
| (in thousands, except effective tax rates and percentages) | ||||||||||||||||||||||||||||||||||||||||||||
| Income before income tax expense | $ | 33,505 | $ | 19,008 | $ | 14,497 | 76.3 | % | $ | 83,558 | $ | 64,234 | $ | 19,324 | 30.1 | % | ||||||||||||||||||||||||||||
| Income tax expense | $ | 7,789 | $ | 4,252 | $ | 3,537 | 83.2 | % | $ | 18,926 | $ | 14,518 | $ | 4,408 | 30.4 | % | ||||||||||||||||||||||||||||
| Effective income tax rate | 23.25 | % | 22.37 | % | 0.88 | % | 3.9 | % | 22.65 | % | 22.60 | % | 0.05 | % | 0.2 | % | ||||||||||||||||||||||||||||
In the third quarter of 2026, income tax expense increased to $7.8 million from $4.3 million in the third quarter of 2025, mainly driven by higher income before income taxes in the third quarter of 2026 compared to the same period last year. In the nine months ended September 30, 2026, income tax expense increased to $18.9 million from $14.5 million in the same period last year, primarily driven by higher income before income taxes in the first nine months of 2026 compared to the same period last year.
As of September 30, 2026, the Company's net deferred tax assets were $78.1 million, an increase of $42.6 million, or 119.6%, compared to $35.6 million as of December 31, 2025. This was primarily driven by an increase of $39.9 million in connection with $156.5 million in net unrealized holding losses on debt securities available for sale and, to a lesser extent, an increase in the allowance for credit losses and other smaller components during the period.
Non-GAAP Financial Measures
The Company supplements its financial results that are determined in accordance with accounting principles generally accepted in the United States of America ("GAAP") with non-GAAP financial measures, such as "pre-tax pre-provision net revenue (PPNR)", "tangible common equity ratio", and "tangible stockholders' equity (book value) per common share". This supplemental information is not required by, or is not presented in accordance with GAAP. The Company refers to these financial measures and ratios as "non-GAAP financial measures".
We use certain non-GAAP financial measures, including those mentioned above, both to explain our results to shareholders and the investment community and in the internal evaluation and management of our business. Management believes that these supplementary non-GAAP financial measures and the information they provide are useful to investors since these measures permit investors to view our performance using the same tools that our management uses to evaluate our past performance and prospects for future performance. While we believe that these non-GAAP financial measures are useful in evaluating our performance, this information should be considered as supplemental and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ from similar measures presented by other companies.
Beginning in the first quarter of 2026, the Company reviewed and updated its use of non-GAAP financial measures and now presents a limited set of metrics that management uses to evaluate performance and make operating decisions. As part of this update, the Company discontinued the presentation of "Core PPNR", "core noninterest income", and "core noninterest expense", as management determined these measures are no longer primary metrics used internally. This change does not reflect any change in the Company's underlying business, operations, or GAAP financial results.
The following tables set forth selected financial information derived from the Company's interim unaudited and annual audited consolidated financial statements, adjusted for certain items, including the provision for credit losses, income taxes and goodwill and other intangible assets. The Company believes these adjusted numbers are useful to understand the Company's performance and underlying trends.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
|
(in thousands)
|
2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income attributable to Amerant Bancorp Inc. | $ | 25,716 | $ | 14,756 | $ | 64,632 | $ | 49,716 | |||||||||||||||
| Plus: provision for credit losses (1) | 6,200 | 14,600 | 18,750 | 39,106 | |||||||||||||||||||
| Plus: provision for income tax expense | 7,789 | 4,252 | 18,926 | 14,518 | |||||||||||||||||||
|
Pre-tax pre-provision net revenue (PPNR)
|
$ | 39,705 | $ | 33,608 | $ | 102,308 | $ | 103,340 | |||||||||||||||
|
(in thousands, except percentages, share data and per share amounts)
|
As of September 30, 2026
|
As of December 31, 2025
|
||||||||||||
| Stockholders' equity | $ | 840,817 | $ | 938,802 | ||||||||||
|
Less: goodwill and other intangibles (2)
|
(21,389) | (23,103) | ||||||||||||
| Tangible common stockholders' equity | $ | 819,428 | $ | 915,699 | ||||||||||
| Total assets | 10,211,645 | 9,777,018 | ||||||||||||
|
Less: goodwill and other intangibles (2)
|
(21,389) | (23,103) | ||||||||||||
| Tangible assets | $ | 10,190,256 | $ | 9,753,915 | ||||||||||
| Common shares outstanding | 39,127,237 | 40,595,273 | ||||||||||||
| Tangible common equity ratio | 8.04 | % | 9.39 | % | ||||||||||
| Stockholders' book value per common share | $ | 21.49 | $ | 23.13 | ||||||||||
| Tangible stockholders' equity book value per common share | $ | 20.94 | $ | 22.56 | ||||||||||
(1) Includes provision for credit losses on loans and provision for loan contingencies.
(2) As of September 30, 2026, other intangible assets primarily consist of naming rights. As of December 31, 2025, also includes mortgage servicing rights ("MSRs"). Other intangible assets are included in other assets in the Company's consolidated balance sheets.
Financial Condition - Comparison of Financial Condition as of September 30, 2026 and December 31, 2025
Assets. Total assets were $10.2 billion as of September 30, 2026, an increase of $434.6 million, or 4.4%, compared to $9.8 billion at December 31, 2025. This result was primarily driven by increases of: (i) $360.6 million, or 5.4%, in total loans held for investment and loans held for sale, net of the ACL; (ii) $141.1 million, or 6.8%, in total securities, mainly debt securities available for sale and (iii) deferred tax assets of $42.6 million, or 119.6%, resulting primarily from higher unrealized valuation losses of securities available for sale as a result of changes in market interest rates. The increases were partially offset primarily by a decrease of $108.7 million, or 23.1%, in cash and cash equivalents. See "-Average Balance Sheet, Interest and Yield/Rate Analysis" for detailed information, including changes in the composition of our interest-earning assets.
Cash and Cash Equivalents. Cash and cash equivalents decreased to $361.5 million at September 30, 2026 from $470.2 million at December 31, 2025, primarily as a result of a decrease in interest earning cash balances which were placed in higher-yielding assets.
At September 30, 2026 and December 31, 2025, interest earning deposits with banks, mainly cash balances held at the Federal Reserve, were $299.7 million and $409.4 million, respectively. In addition, at September 30, 2026 and December 31, 2025, the Company's cash and cash equivalents included restricted cash of $28.7 million and $6.2 million, respectively, which was held primarily to cover margin calls on derivative transactions with certain brokers. Furthermore, at December 31, 2025, the Company's cash and cash equivalents included other short-term investments of $7.2 million, consisting of US Treasury Bills that mature in 90 days or less. At September 30, 2026, the Company had no such other short-term investments included in cash and cash equivalents.
Cash and cash equivalents provided by operating activities were $107.8 million in the nine months ended September 30, 2026, mainly driven by: (i) net income of $64.6 million; (ii) net increase of $23.7 million in operating assets and liability; (iii) a non-cash adjustment of $18.8 million for the provision for credit losses; and (iv) net sales of $2.6 million in mortgage loans held for sale at fair value. These results include a net decrease of $1.9 million in other non-cash adjustments.
Net cash used in investing activities was $678.2 million during the nine months ended September 30, 2026, mainly driven by: (i) purchases of securities totaling $822.0 million, mainly comprised of debt securities available for sale, and (ii) a net increase in loans originated for investment of $605.9 million. These disbursements were partially offset by: (i) maturities, sales, calls and paydowns of investment securities totaling $525.4 million, (ii) proceeds from the sale of loans originated for investment of $218.9 million, and proceeds from the sale of other real estate owned of $6.7 million.
In the nine months ended September 30, 2026, net cash provided by financing activities was $461.8 million, mainly due to: (i) proceeds from FHLB advances of $620.0 million, (ii) a net increase in total demand, savings and money market deposit balances of $527.6 million, and (iii) issuance of Senior Notes, net of issuance costs of $48.4 million. This was partially offset by: (i) repayments of FHLB advances of $617.0 million, (ii) a net decrease of $68.8 million in time deposits; (iii) an aggregate of $37.1 million of Class A common stock repurchased, and (iv) $10.9 million of dividends declared and paid by the Company in the nine months ended September 30, 2026. See "-Capital Resources and Liquidity Management" for more details on changes in FHLB advances and common stock transactions in the nine months ended September 30, 2026.
Loans
Loans are our largest component of interest-earning assets. The table below depicts the trend of loans as a percentage of total assets and the allowance for loan losses as a percentage of total loans for the periods presented.
| September 30, 2026 | December 31, 2025 | ||||||||||
| (in thousands, except percentages) | |||||||||||
| Total loans, gross (1) | $ | 7,073,445 | $ | 6,697,235 | |||||||
| Total loans, gross / total assets | 69.3 | % | 68.5 | % | |||||||
| Allowance for credit losses | $ | 94,845 | $ | 79,276 | |||||||
|
Allowance for credit losses / total loans held for investment, gross (1) (2)
|
1.36 | % | 1.20 | % | |||||||
| Total loans, net (3) | $ | 6,978,600 | $ | 6,617,959 | |||||||
| Total loans, net / total assets | 68.3 | % | 67.7 | % | |||||||
_______________
(1) Total loans, gross consists of the principal balance of outstanding loans, including loans held for investment, loans held for sale at the lower of cost or fair value, and mortgage loans held for sale, net of unamortized deferred nonrefundable loan origination fees and loan origination costs, unamortized premiums paid on purchased loans and the unamortized balance of initial allowance for credit losses on purchased seasoned loans.
(2) See Note 5 of our audited consolidated financial statements included in the 2025 Form 10-K and our unaudited interim consolidated financial statements included in this Form 10-Q for more details on our credit loss estimates.
(3) Total loans, net consists of the principal balance of outstanding loans, including loans held for investment, loans held for sale carried at the lower of cost or fair value, and mortgage loans held for sale, net of unamortized deferred nonrefundable loan origination fees and loan origination costs, unamortized premiums paid on purchased loans, the unamortized balance of initial allowance for credit losses on purchased seasoned loans and the allowance for credit losses.
The table below summarizes the composition of our loans held for investment by type of loan as of the end of each period presented.
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
| Real Estate Loans | |||||||||||
| Commercial real estate (CRE) | |||||||||||
| Non-owner occupied | $ | 1,468,739 | $ | 1,591,861 | |||||||
| Multi-family residential | 220,001 | 322,447 | |||||||||
| Land development and construction loans | 500,872 | 534,028 | |||||||||
| 2,189,612 | 2,448,336 | ||||||||||
|
Single-family residential
|
2,159,674 | 1,515,181 | |||||||||
| Owner occupied | 710,758 | 809,336 | |||||||||
| 5,060,044 | 4,772,853 | ||||||||||
|
Commercial loans
|
1,657,316 | 1,446,406 | |||||||||
| Loans to financial institutions and acceptances (1) | 49,502 | 148,602 | |||||||||
| Consumer loans and overdrafts (2) | 209,999 | 245,530 | |||||||||
| Total Loans held for investment (3) | $ | 6,976,861 | $ | 6,613,391 | |||||||
__________________
(1) This portfolio consists of loans to non-depository financial institutions, such as mortgage companies and other financial intermediaries.
(2) Includes customers' overdraft balances totaling $0.1 million and $4.4 million, at each of the dates presented.
(3) Includes international loans for which the country of risk is primarily Venezuela. All international loans are denominated in and payable in U.S. dollars and represent less than 10% of total assets and total loans held for investment at any of the periods shown. Management does not consider these balances to represent a significant concentration of credit risk.
The composition of our CRE loan portfolio held for investment by industry segment at September 30, 2026 and December 31, 2025 is depicted in the following table:
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
| Retail (1) | $ | 577,335 | $ | 617,861 | |||||||
| Multifamily | 220,001 | 322,447 | |||||||||
| Office Space | 395,902 | 469,746 | |||||||||
| Specialty (2) | 178,422 | 182,847 | |||||||||
| Land and Construction | 500,872 | 534,028 | |||||||||
| Hospitality | 201,111 | 239,355 | |||||||||
| Industrial and Warehouse | 115,969 | 82,052 | |||||||||
|
Total CRE Loans Held for Investment
|
$ | 2,189,612 | $ | 2,448,336 | |||||||
(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 primarily dedicated to retail, where the primary source of repayment is derived from the rental income generated from the use of the property by its tenants.
(2) Includes marinas, schools, nursing and residential care facilities, and other specialty type CRE properties.
The table below summarizes the composition of our loans held for sale by type of loan as of September 30, 2026 and December 31, 2025:
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
|
Loans held for sale at the lower of cost or fair value
|
|||||||||||
| Real estate loans | |||||||||||
| Commercial real estate | |||||||||||
| Non-owner occupied | $ | 59,826 | $ | 43,406 | |||||||
| Land development and construction loans (1) | 23,626 | 22,339 | |||||||||
| 83,452 | 65,745 | ||||||||||
| Owner occupied | $ | 12,395 | 15,167 | ||||||||
|
Total loans held for sale at the lower of cost or fair value (2)
|
95,847 | 80,912 | |||||||||
|
Mortgage loans held for sale at fair value
|
|||||||||||
|
Single-family residential
|
737 | 2,932 | |||||||||
| Total mortgage loans held for sale at fair value | 737 | $ | 2,932 | ||||||||
| Total loans held for sale | $ | 96,584 | $ | 83,844 | |||||||
___________
(1)As of September 30, 2026, there were no non-accrual loans categorized held for sale. As of December 31, 2025, there were two non-accrual loans with an outstanding balance of $16.2 million which includes $3.2 million categorized as 60-89 days past due and $13.0 million as greater than 90 days past due as of December 31, 2025.
(2)As of September 30, 2026 and December 31, 2025, these loans were rated Pass and Substandard, respectively.
As of September 30, 2026, total loans held for investment were $7.0 billion, up $363.5 million, or 5.5%, compared to $6.6 billion at December 31, 2025. This reflects net increases of (i)$644.5 million, or 42.5%, in single-family residential loans and (ii)$210.9 million, or 14.6%, in commercial loans. These increases were partially offset by net decreases of (i) $258.7 million, or 10.6%, in CRE loans; (ii) $99.1 million, or 66.7%, in loans to financial institutions and acceptances, primarily due to scheduled maturities during the nine months ended September 30, 2026; (iii) $98.6 million, or 12.2%, in owner occupied loans; and (iv) $35.5 million, or 14.5%, in consumer loans. The increases include loan purchases totaling $736.6 million in single family residential loans and $210.5 million in commercial syndicated loans. The net decreases in CRE and owner occupied loans and the net increase in single-family residential loans include decreases of $202.8 million, $13.0 million, and $16.8 million, respectively, in loans transferred from held for investment to held for sale, at the lower of cost or fair value. The decrease in consumer loans was mainly attributable to lower balances in indirect consumer loans, as we discontinued purchases of these loans and the portfolio continues to run off over time.
As of September 30, 2026, loans held for sale at the lower of cost or fair value were $95.8 million, up $14.9 million, or 18.5%, compared to $80.9 million at December 31, 2025. The increase is principally due to $232.6 million in loans transferred from loans held for investment to held for sale, at the lower of cost or fair value, including $202.8 million in commercial real estate loans, $13.0 million in owner occupied loans, and $16.8 million in residential loans. This was partially offset by decreases from: (i) loan sales of $167.7 million in real estate loans, (ii) loan payoffs and paydowns of $47.1 million, primarily in connection with two loans, and (iii) a market valuation allowance adjustment, net of releases of $2.9 million.
As of September 30, 2026, loans under syndication facilities, included in loans held for investment, were $736.4 million, an increase of $301.5 million, or 69.3%, compared to $434.9 million at December 31, 2025. The increase was primarily driven by the purchase of $210.5 million of commercial syndicated loans, partially offset by the transfer of two loans totaling $52.9 million to held for sale. In addition, there were net increases of $94.3 million and $49.6 million in club deals and Shared National Credit ("SNC") facilities, respectively. As of September 30, 2026 and December 31, 2025, there were no SNC loans that financed highly leveraged transactions. At September 30, 2026 and December 31, 2025, loans under syndication facilities held for investment include SNCs of $313.6 and $53.5 million, respectively.
Loan Quality
Allocation of Allowance for Credit Losses
In the following table, we present the allocation of the ACL by loan segment at the end of the periods presented. The amounts shown in this table should not be interpreted as an indication that charge-offs in future periods will occur in these amounts or percentages. These amounts represent our best estimates of expected credit losses to be collected throughout the life of the loans, at the reported dates, derived from historical events, current conditions and reasonable and supportable forecasts at the dates reported. Our allowance for credit losses is established using estimates and judgments, which consider the views of our regulators in their periodic examinations. Re-evaluation of the ACL estimate in future periods, in light of changes in composition and characteristics of the loan portfolio, changes in the reasonable and supportable forecast and other factors then prevailing may result in material changes in the amount of the ACL and credit loss expense in those future periods. We also show the percentage of each loan class, which includes loans in nonaccrual status.
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Allowance | % of Loans in Each Category to Total Loans Held for Investment | Allowance | % of Loans in Each Category to Total Loans Held for Investment | ||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||
| Total Loans | |||||||||||||||||||||||
| Real estate | $ | 22,144 | 32.6 | % | $ | 23,117 | 39.0 | % | |||||||||||||||
| Commercial | 52,029 | 35.1 | % | 34,353 | 35.4 | % | |||||||||||||||||
| Financial institutions | - | - | % | - | - | % | |||||||||||||||||
| Consumer and others (1) | 20,672 | 32.3 | % | 21,806 | 25.6 | % | |||||||||||||||||
| Total Allowance for Credit Losses | $ | 94,845 | 100.0 | % | $ | 79,276 | 100.0 | % | |||||||||||||||
| % of Total Loans held for investment | 1.36 | % | 1.20 | % | |||||||||||||||||||
__________________
(1) Includes indirect consumer loans purchased, and mortgage loans secured by single-family residential properties located in the U.S., in all periods presented
The ACL was determined utilizing a reasonable and supportable forecast period. The ACL was determined using a weighted-average of various macroeconomic scenarios provided by a third-party, and incorporated qualitative components.
Non-Performing Assets
In the following table, we present a summary of our non-performing assets by loan class, which includes non-performing loans by portfolio segment, both domestic and international, and other real estate owned, or OREO and other repossessed assets, at the dates presented. Non-performing loans consist of: (i) nonaccrual loans where the accrual of interest has been discontinued; and (ii) accruing loans 90 days or more contractually past due as to interest or principal.
______________
| September 30, 2026 | December 31, 2025 | ||||||||||
| (in thousands) | |||||||||||
|
Non-Accrual Loans
|
|||||||||||
|
Real Estate Loans
|
|||||||||||
|
Commercial real estate (CRE)
|
|||||||||||
| Non-owner occupied | $ | 4,677 | $ | 4,288 | |||||||
|
Multi-family residential
|
377 | - | |||||||||
|
Land development and construction loans
|
- | 16,200 | |||||||||
| 5,054 | 20,488 | ||||||||||
|
Single-family residential
|
31,077 | 26,082 | |||||||||
|
Owner occupied
|
24,833 | 28,733 | |||||||||
| 60,964 | 75,303 | ||||||||||
|
Commercial loans
|
79,452 | 83,761 | |||||||||
|
Consumer loans and overdrafts
|
7,667 | 9,204 | |||||||||
|
Total Non-Accrual Loans
|
$ | 148,083 | $ | 168,268 | |||||||
|
Past Due Accruing Loans
|
|||||||||||
| Real Estate Loans | |||||||||||
| Single-family residential | 179 | $ | - | ||||||||
| Owner occupied | 1,220 | 730 | |||||||||
| Commercial loans | - | 2,372 | |||||||||
| Consumer loans and overdrafts | - | - | |||||||||
|
Total Past Due Accruing Loans (1)
|
1,399 | 3,102 | |||||||||
| Total Non-Performing Loans | $ | 149,482 | $ | 171,370 | |||||||
| OREO and other repossessed assets | 10,044 | 15,542 | |||||||||
| Total Non-Performing Assets | $ | 159,526 | $ | 186,912 | |||||||
(1) Loans past due 90 days or more but still accruing.
The following table presents the activity of non-performing assets by type of loan in the nine months ended September 30, 2026:
| Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| (in thousands) | Commercial Real Estate | Single-family Residential | Owner-occupied | Commercial | Financial Institutions | Consumer and Others | OREO | Total | ||||||||||||||||||
| Balance at beginning of period | $ | 20,488 | $ | 26,082 | $ | 29,463 | $ | 86,133 | $ | - | $ | 9,204 | $ | 15,542 | $ | 186,912 | ||||||||||
| Plus: loans placed in nonaccrual status | 15,752 | 25,636 | 20,410 | 40,957 | - | 5,327 | - | 108,082 | ||||||||||||||||||
| Less: nonaccrual loan charge-offs | - | - | - | (13,311) | - | (5,256) | - | (18,567) | ||||||||||||||||||
| Less: nonaccrual loans sold, net of charge offs | (16,200) | (17,006) | - | - | - | - | - | (33,206) | ||||||||||||||||||
| Less: nonaccrual loan collections and others | (14,986) | (3,521) | (24,310) | (31,955) | - | (1,608) | - | (76,380) | ||||||||||||||||||
| Plus (Less): (decrease) increase in past-due accruing loans (1) | - | 179 | 490 | (2,372) | - | - | - | (1,703) | ||||||||||||||||||
| Less: loans returned to accrual status | - | (114) | - | - | - | - | - | (114) | ||||||||||||||||||
| OREO valuation allowance and sales, net | - | - | - | - | - | - | (5,498) | (5,498) | ||||||||||||||||||
| Balances at end of period | $ | 5,054 | $ | 31,256 | $ | 26,053 | $ | 79,452 | $ | - | $ | 7,667 | $ | 10,044 | $ | 159,526 | ||||||||||
__________________
(1) Loans past due 90 days or more but still accruing.
The decrease in nonperforming assets during the nine months ended September 30, 2026 was primarily due to $76.4 million in collections, $33.2 million loan sales, and $18.6 million in charge-offs. These results were partially offset by: (i) the downgrade of 15 loan relationships totaling $67.0 million, that included a combination of CRE, owner-occupied, commercial and residential loans; and (ii) $41.1 million of smaller balance loans.
During the three months ended September 30, 2026, the Company sold one of two units of a commercial real estate property classified as other real estate owned, with a carrying value of $8.1 million, resulting in a loss of $1.3 million. Additionally, the Company recorded a valuation gain of $2.6 million based on a recent appraisal of the remaining unit of the property.
In October 2026, the Company collected $5.0 million upon the full payoff of a loan that had been classified as "substandard" and placed in non-accrual as of September 30, 2026.
Non-performing loans are generally rated Classified. See discussion on Classified and Special Mention Loans below for more details, including details about new loans downgraded during period.
We recognized no interest income on nonaccrual loans during the nine months ended September 30, 2026 and 2025.
The Company's loans by credit quality indicators are summarized in the following table. We have no purchased-credit-impaired loans.
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Special Mention | Substandard | Doubtful | Total (1) | Special Mention | Substandard | Doubtful | Total (1) | |||||||||||||||||||||||||||||||||||||||
| Loans held for investment | |||||||||||||||||||||||||||||||||||||||||||||||
| Real Estate Loans | |||||||||||||||||||||||||||||||||||||||||||||||
|
Commercial Real Estate (CRE) |
|||||||||||||||||||||||||||||||||||||||||||||||
|
Non-owner occupied |
$ | 75,800 | $ | 20,454 | $ | - | $ | 96,254 | $ | 56,126 | $ | 34,213 | $ | - | $ | 90,339 | |||||||||||||||||||||||||||||||
| Multi-family residential | - | 377 | - | 377 | 31,704 | 22,435 | - | 54,139 | |||||||||||||||||||||||||||||||||||||||
|
Land development and construction loans |
35,901 | - | - | 35,901 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| 111,701 | 20,831 | - | 132,532 | 87,830 | 56,648 | - | 144,478 | ||||||||||||||||||||||||||||||||||||||||
|
Single-family residential
|
2,500 | 31,077 | - | 33,577 | 733 | 26,010 | - | 26,743 | |||||||||||||||||||||||||||||||||||||||
|
Owner occupied
|
4,964 | 61,478 | - | 66,442 | 12,485 | 51,965 | - | 64,450 | |||||||||||||||||||||||||||||||||||||||
| 119,165 | 113,386 | - | 232,551 | 101,048 | 134,623 | - | 235,671 | ||||||||||||||||||||||||||||||||||||||||
| Commercial loans | 1,555 | 91,917 | - | 93,472 | 35,408 | 129,610 | 459 | 165,477 | |||||||||||||||||||||||||||||||||||||||
| Loans to financial institutions and acceptances | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
|
Consumer loans and overdrafts |
- | 7,667 | - | 7,667 | - | 9,204 | - | 9,204 | |||||||||||||||||||||||||||||||||||||||
| $ | 120,720 | $ | 212,970 | $ | - | $ | 333,690 | $ | 136,456 | $ | 273,437 | $ | 459 | $ | 410,352 | ||||||||||||||||||||||||||||||||
| Loans held for sale at the lower of cost or fair value | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-owner occupied | - | - | - | - | - | 43,406 | - | 43,406 | |||||||||||||||||||||||||||||||||||||||
| Land development and construction loans | - | - | - | - | - | 22,339 | - | 22,339 | |||||||||||||||||||||||||||||||||||||||
| Owner occupied | - | - | - | - | - | 15,167 | - | 15,167 | |||||||||||||||||||||||||||||||||||||||
| Total loans held for sale | - | - | - | - | - | 80,912 | - | 80,912 | |||||||||||||||||||||||||||||||||||||||
| Total | $ | 120,720 | $ | 212,970 | $ | - | $ | 333,690 | $ | 136,456 | $ | 354,349 | $ | 459 | $ | 491,264 | |||||||||||||||||||||||||||||||
__________
(1) There are no loans categorized as "Loss" as of the dates presented.
Classified Loans
Classified loans include substandard and doubtful loans. The following table presents the activity of classified loans in the nine months ended September 30, 2026:
| Nine Months Ended September 30, 2026 | |||||||||||||||||||||||
| (in thousands) | Commercial Real Estate | Single-family Residential | Owner-occupied | Commercial | Financial Institutions | Consumer and Others | Total | ||||||||||||||||
| Balance at beginning of period | $ | 122,393 | $ | 26,010 | $ | 67,132 | $ | 130,069 | $ | - | $ | 9,204 | $ | 354,808 | |||||||||
|
Plus: loans downgraded to substandard and doubtful
|
7,793 | 25,645 | 33,804 | 39,142 | 35,210 | 5,327 | 146,921 | ||||||||||||||||
|
Less: classified loan charge-offs
|
- | - | - | (13,311) | - | (5,256) | (18,567) | ||||||||||||||||
| Less: classified loans sold, net of charge offs | (88,203) | (17,006) | - | - | - | - | (105,209) | ||||||||||||||||
| Less: classified loan collections and others | (21,152) | (2,736) | (39,458) | (63,983) | (35,210) | (1,608) | (164,147) | ||||||||||||||||
|
Less: loans upgraded
|
- | (836) | - | - | - | - | (836) | ||||||||||||||||
| Balances at end of period | $ | 20,831 | $ | 31,077 | $ | 61,478 | $ | 91,917 | $ | - | $ | 7,667 | $ | 212,970 | |||||||||
Classified loans decreased $141.8 million, or 40.0%, primarily due to loan sales and payoffs totaling $105.2 million and $164.1 million, respectively, and $18.6 million in charge-offs. These results were partially offset by downgrades totaling $146.9 million, including: i) one $35.2 million non-depository financial institution loan in accrual status secured by underlying CRE collateral which was later paid off; (ii) seven commercial relationships totaling $29.3 million; (iii) six owner-occupied relationships totaling $33.8 million; (iv) one $16.8 million single-family residential loan in non-accrual status which was later sold; (v) two CRE loan totaling $6.9 million; and (vi) $41.6 million related to other smaller loans.
Composition of Classified Loans at September 30, 2026
As of September 30, 2026, classified loans had the following composition: (i) $90.4 million had real estate collateral with a weighted-average loan-to-value ratio of 68.4%; (ii) $81.1 million of cash-flow-dependent loans; (iii) $17.2 million of collateral-dependent loans other than real estate, primarily asset-based lending; and (iv) $24.3 million of loans collectively evaluated for purposes of determining the allowance for credit losses.
Special Mention Loans.
The following table presents the activity of special mention loans by type of loan in the nine months ended September 30, 2026:
| Nine Months Ended September 30, 2026 | |||||||||||||||||||||||
| (in thousands) | Commercial Real Estate | Single-family Residential | Owner-occupied | Commercial | Financial Institutions | Consumer and Others | Total | ||||||||||||||||
| Balance at beginning of period | $ | 87,830 | $ | 733 | $ | 12,485 | $ | 35,408 | $ | - | $ | - | $ | 136,456 | |||||||||
| Downgrades to Special Mention | 110,219 | 2,500 | 4,985 | 2,648 | - | - | 120,352 | ||||||||||||||||
| Upgrades to Pass | (28,071) | (730) | (3,997) | (34,548) | - | - | (67,346) | ||||||||||||||||
| Downgrades to Substandard | - | - | (8,472) | (1,623) | - | - | (10,095) | ||||||||||||||||
| Valuation allowances | (1,311) | - | - | - | - | - | (1,311) | ||||||||||||||||
| Payoffs/Paydowns | (26,046) | (3) | (37) | (330) | - | - | (26,416) | ||||||||||||||||
| Loans Sold | (30,920) | - | - | - | - | - | (30,920) | ||||||||||||||||
| Balances at end of period | $ | 111,701 | $ | 2,500 | $ | 4,964 | $ | 1,555 | $ | - | $ | - | $ | 120,720 | |||||||||
All special mention loans remained current at September 30, 2026.
The decrease in Special Mention loans was primarily driven by upgrades to Pass totaling $67.3 million, primarily related to two commercial relationships based on year-end financial information received. Additionally, there were loan payoffs and paydowns totaling $26.5 million mainly related to one CRE loan, and $10.1 million downgraded to classified. The Company also sold a loan totaling $30.9 million and recorded valuation allowances of $1.3 million. These were partially offset by downgrades to Special Mention totaling $120.4 million mainly real estate secured loans.
Potential problem loans, which are accruing loans classified as substandard and are less than 90 days past due, at September 30, 2026 and December 31, 2025, are as follows:
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
| Real estate loans | |||||||||||
| Commercial real estate (CRE) | |||||||||||
| Non-owner occupied | $ | 15,777 | $ | 73,332 | |||||||
| Multi-family residential | - | 22,435 | |||||||||
| Land development and construction loans | - | 6,139 | |||||||||
| 15,777 | 101,906 | ||||||||||
| Single-family residential | - | 44 | |||||||||
|
Owner occupied
|
35,425 | 38,399 | |||||||||
| 51,202 | 140,349 | ||||||||||
| Commercial loans | 14,717 | 46,308 | |||||||||
| Loans to depository institutions and acceptances | - | - | |||||||||
| $ | 65,919 | $ | 186,657 | ||||||||
At September 30, 2026 total potential problem loans decreased by $120.7 million, or 64.7%, compared to $186.7 million at December 31, 2025. This was primarily driven by a reduction of approximately $177.3 million from loan sales and loan payoffs, as well as a $14.9 million decrease resulting from loans moving to non-accrual status and related balance reductions. These improvements were partially offset by an increase of $71.5 million in potential problem loans attributable to loan downgrades.
Securities
The following table sets forth the book value and percentage of each category of securities at September 30, 2026 and December 31, 2025. The book value for trading securities, debt securities classified as available for sale and equity securities with readily determinable fair value not held for trading represents fair value. The Company determined that an ACL on its debt securities available for sale at September 30, 2026 and December 31, 2025 was not required.
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||
| Debt securities available for sale: | |||||||||||||||||||||||
| U.S. Government agency and sponsored enterprise residential MBS | 1,927,613 | 86.6 | % | $ | 1,824,510 | 87.5 | % | ||||||||||||||||
| U.S. Treasury Securities | 19,642 | 0.9 | % | 1,000 | 0.1 | % | |||||||||||||||||
| U.S. Government agency and sponsored enterprise commercial MBS | 138,391 | 6.2 | % | 152,249 | 7.3 | % | |||||||||||||||||
| U.S. Government agency and sponsored enterprise obligations | 78,914 | 3.5 | % | 45,455 | 2.2 | % | |||||||||||||||||
| Municipal Bonds | 1,481 | 0.1 | % | 1,669 | 0.1 | % | |||||||||||||||||
| $ | 2,166,041 | 97.3 | % | $ | 2,024,883 | 97.2 | % | ||||||||||||||||
| Equity securities with readily determinable fair value not held for trading (1) | $ | 2,435 | 0.1 | % | $ | 2,548 | 0.1 | % | |||||||||||||||
| Other securities (2): | $ | 57,152 | 2.6 | % | $ | 57,138 | 2.7 | % | |||||||||||||||
| $ | 2,225,628 | 100.0 | % | $ | 2,084,569 | 100.0 | % | ||||||||||||||||
__________________
(1) In 2023, the Company purchased an investment in an open-end fund incorporated in the U.S. with an original cost of $2.5 million. 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.
(2) Includes investments in FHLB and Federal Reserve stock. Amounts correspond to original cost at the date presented. Original cost approximates fair value because of the nature of these investments.
As of September 30, 2026, total securities increased $141.1 million, or 6.8%, to $2.2 billion compared to $2.1 billion at December 31, 2025. The increase in the nine months ended September 30, 2026 was mainly driven by purchases of $822.0 million, consisting mainly of fixed-rate debt securities available for sale. This increase was partially offset by (i) maturities, sales, calls and pay downs, totaling $525.4 million of debt securities available for sale and FHLB stock and (ii) net pre-tax unrealized losses of $156.5 million on debt securities available for sale primarily attributable to changes in market interest rates during the current period.
During the nine months ended September 30, 2026, the Company purchased $217.5 million of U.S. treasury bills and Treasury notes and sold $200 million of U.S. treasury bills. As of September 30, 2026, the Company's U.S. treasury securities portfolio consists solely of Treasury notes, including approximately $1.0 million with maturities of more than 90 days and less than one year and $18.7 million with longer-term maturity. These purchases reflect the Company's efforts of improving net interest income and actively managing its expected liquidity requirements.
Debt securities available for sale had net unrealized holding losses of $158.7 million at September 30, 2026, compared to December 31, 2025 when net unrealized holding losses were $23.9 million and net unrealized holding gains were $21.7 million. Higher market interest rates during the third quarter and year to date reduced the fair value of the available-for-sale securities portfolio and tangible common equity and increased unrealized losses in accumulated other comprehensive loss. Higher rates also extended the expected duration of mortgage-backed securities as projected prepayments slowed. The Company continues to maintain sufficient liquidity and funding capacity, including the ability to pledge securities in the portfolio as collateral for additional borrowings, if needed, and does not expect to be required to sell these securities before recovery of their amortized cost. The Company believes these securities are not credit-impaired because the change in fair value is attributable to changes in interest rates and investment securities markets, generally, and not credit quality. As a result, the Company did not record an ACL on these securities as of September 30, 2026 and December 31, 2025.
The following tables set forth the book value, scheduled maturities and weighted average yields for our securities portfolio at September 30, 2026 and December 31, 2025. Similar to the table above, the book value for securities available for sale, trading securities and equity securities with readily determinable fair value not held for trading is equal to fair market value.
| September 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | Total | Less than a year | One to five years | Five to ten years | Over ten years | No maturity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt securities available for sale | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Government agency and sponsored enterprise obligations | 78,914 | 4.09 | % | - | - | % | 1,993 | 4.41 | % | 43,296 | 3.85 | % | 33,625 | 4.37 | % | - | - | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Municipal bonds | 1,481 | 2.40 | % | - | - | % | 336 | 1.79 | % | 650 | 2.43 | % | 495 | 2.76 | % | - | - | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury Securities | 19,642 | 4.78 | % | 989 | 3.57 | % | 490 | 3.47 | % | - | - | % | 18,163 | 4.88 | % | - | - | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Government agency and sponsored enterprise commercial MBS | 138,391 | 4.20 | % | 1,667 | 4.70 | % | 42,877 | 3.79 | % | 37,413 | 3.91 | % | 56,434 | 4.70 | % | - | - | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Government agency and sponsored enterprise residential MBS | 1,927,613 | 4.81 | % | 6 | 4.01 | % | 1,410 | 6.14 | % | 4,520 | 4.18 | % | 1,921,677 | 4.81 | % | - | - | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2,166,041 | 4.74 | % | 2,662 | 4.28 | % | 47,106 | 3.87 | % | 85,879 | 3.88 | % | 2,030,394 | 4.80 | % | - | - | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity securities with readily determinable fair value not held for trading | 2,435 | 3.62 | % | $ | - | - | % | - | - | % | - | - | % | - | - | % | 2,435 | 3.62 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other securities | 57,152 | 6.17 | % | $ | - | - | % | - | - | % | - | - | % | - | - | % | 57,152 | 6.17 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 2,225,628 | 4.78 | % | $ | 2,662 | 4.28 | % | $ | 47,106 | 3.87 | % | $ | 85,879 | 3.88 | % | $ | 2,030,394 | 4.80 | % | $ | 59,587 | 6.07 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | Total | Less than a year | One to five years | Five to ten years | Over ten years | No maturity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt securities available for sale | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Government Agency and Sponsored Enterprise Obligations | 45,455 | 4.66 | % | - | - | % | 2,614 | 5.25 | % | 18,140 | 4.44 | % | 24,701 | 4.75 | % | - | - | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Municipal Bonds | 1,669 | 2.31 | % | - | - | % | - | - | % | 356 | 1.63 | % | 1,313 | 2.49 | % | - | - | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury Securities | 1,000 | 3.57 | % | - | - | % | 1,000 | 3.57 | % | - | - | % | - | - | % | - | - | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Government Agency and Sponsored Enterprise Commercial MBS | 152,249 | 4.13 | % | - | - | % | 46,746 | 3.55 | % | 40,931 | 3.90 | % | 64,572 | 4.70 | % | - | - | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Government Agency and Sponsored Enterprise Residential MBS | 1,824,510 | 5.00 | % | $ | - | - | % | 856 | 5.70 | % | 6,233 | 4.48 | % | 1,817,421 | 5.00 | % | - | - | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 2,024,883 | 4.92 | % | $ | - | - | % | $ | 51,216 | 3.67 | % | $ | 65,660 | 4.09 | % | $ | 1,908,007 | 4.98 | % | $ | - | - | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Equity securities with readily determinable fair value not held for trading | 2,548 | 6.56 | % | - | - | % | - | - | % | - | - | % | - | - | % | 2,548 | 6.56 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other securities | $ | 57,138 | 6.39 | % | $ | - | - | % | $ | - | - | % | $ | - | - | % | $ | - | - | % | $ | 57,138 | 6.39 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| $ | 2,084,569 | 4.96 | % | $ | - | - | % | $ | 51,216 | 3.67 | % | $ | 65,660 | 4.09 | % | $ | 1,908,007 | 4.98 | % | $ | 59,686 | 6.40 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
The investment portfolio's weighted expected average effective duration increased to 5.8 years at September 30, 2026 compared to 4.4 years at December 31, 2025, mainly due to higher market rates which decreased modeled prepayment expectations of the debt securities available for sale portfolio.
Liabilities
Total liabilities were $9.4 billion at September 30, 2026, an increase of $532.6 million, or 6.0%, compared to $8.8 billion at December 31, 2025. This was primarily driven by increases of: (i) $458.7 million, or 5.9%, in total deposits, mainly due to an increase in core deposits; (ii) $48.4 million from new senior debt issued in the third quarter of 2026; and (iii) $25.9 million, or 20.2%, in accounts payable, accrued liabilities and other liabilities, primarily due to an increase in cash collateral liabilities associated with swap contracts. This increase was partially offset by a decrease of $3.5 million, or 3.0%, in operating lease liability. See "Deposits" and "Capital Resources and Liquidity Management" for more details on the changes in advances from the FHLB and total deposits.
Deposits
The growth in deposits during the first nine months of 2026, particularly in lower-cost and non-interest bearing deposits, reflects the Company's ongoing efforts to expand its international deposit franchise and deepen longstanding client relationships, together with the benefits the Company believes it derives from its differentiated, relationship-driven business model. As a result of improved economic activity in Venezuela in the first nine months of 2026 supported, in part, by U.S.-related business activity, the Company experienced significant growth in international deposits, particularly from Venezuelan customers, reflecting the successful execution of its strategy and approach to developing and deepening its international deposit relationships. The Company continues to view this business as a meaningful growth opportunity, especially in Venezuela, where the Company believes it has high brand recognition, and longstanding relationships with local financial institutions, commercial clients and private banking customers.
During the first nine months of 2026, deposits from Venezuelan customers increased to $2.4 billion as of September 30, 2026, compared to $1.9 billion as of December 31, 2025. These are primarily operating deposits primarily tied to essential processes in the banking and oil industries, which the Company is able to service through established banking channels and supported by our existing compliance, due diligence, and relationship management framework. Our efforts also included building solid customer relationship teams across our business development areas in South Florida and Tampa in the first nine months of 2026.
Total deposits were $8.2 billion at September 30, 2026, an increase of $0.5 billion, or 5.9%, compared to $7.8 billion as of December 31, 2025. The increase in deposits in the nine months ended September 30, 2026 was mainly due to increases of: (i) $508.6 million, or 32.3%, in noninterest bearing demand deposits and (ii) $19.0 million, or 0.5%, in interest-bearing demand, savings and money market deposits. These increases were partially offset by a decrease of $68.8 million, or 3.4%, in time deposits. During the quarter of 2026, we migrated approximately $270.0 million in low-cost interest-bearing deposits to noninterest-bearing demand deposits without affecting client retention. This migration provides a clearer view of the strength of our noninterest-bearing deposit base and the underlying value of these stable relationships.
The $68.8 million, or 3.4%, net decrease in time deposits includes a decrease of $130.6 million, or 8.4% in customer CDs, which was partially offset by an increase of $61.8 million or 14.2%, in brokered time deposits. As of September 30, 2026 total brokered deposits, which are all domestic deposits, were $497.4 million, compared to $435.7 million at December 31, 2025.
CDARS and ICS reciprocal deposits are offered through the Company's participation in the IntraFi Network. The network facilitates the placement of customer funds into certificates of deposit, demand deposit, or money market accounts issued by other member banks in increments of less than $250,000. This structure enables customers to receive full FDIC insurance coverage on large balances while the Company retains the relationship. In exchange, the Company accepts reciprocal deposits from other network banks, maintaining overall deposit levels. As of September 30, 2026 and December 31, 2025, reciprocal deposits in the Intrafi Network amounted to $1.0 billion and $0.9 billion, respectively.
We use non-reciprocal deposit placement services through the IntraFi Network. These arrangements allow us to place excess customer deposits to other network participants while maintaining the customer relationship. Under these non-reciprocal placement transactions, customer deposit funds are transferred to other participating institutions. As a result, these deposits are excluded from the Company's consolidated balance sheets. As of December 31, 2025, we placed approximately $162.6 million of deposits to other participating institutions. There were no placements of non-reciprocal deposits as of September 30, 2026.
Deposits by Country of Domicile
The following table shows deposits by country of domicile of the depositor as of the dates presented and the changes during the period.
| Change | |||||||||||||||||||||||
| (in thousands, except percentages) | September 30, 2026 | December 31, 2025 | Amount | % | |||||||||||||||||||
| Deposits | |||||||||||||||||||||||
|
Domestic
|
$ | 5,033,484 | $ | 5,168,371 | $ | (134,887) | (2.6) | % | |||||||||||||||
| Foreign: | |||||||||||||||||||||||
|
Venezuela (1)
|
2,395,066 | 1,910,980 | 484,086 | 25.3 | % | ||||||||||||||||||
| Others | 817,122 | 707,583 | 109,539 | 15.5 | % | ||||||||||||||||||
| Total foreign | 3,212,188 | 2,618,563 | 593,625 | 22.7 | % | ||||||||||||||||||
| Total deposits | $ | 8,245,672 | $ | 7,786,934 | $ | 458,738 | 5.9 | % | |||||||||||||||
_________________
(1) Based upon the diligence we customarily perform to "know our customers" for anti-money laundering, OFAC and sanctions purposes, we believe that the U.S. economic embargo on certain Venezuelan persons will not adversely affect our Venezuelan customer relationships, generally.
Domestic deposits decreased by $134.9 million, or 2.6%, in the nine months ended September 30, 2026, primarily driven by decreases of: (i) $144.8 million in non-interest bearing deposits; and (ii) $98.5 million in customer time deposits. These decreases were partially offset by increases of: (i) $46.6 million in interest-bearing demand, savings and money market deposits; and (ii) $61.8 million in brokered time deposits. The decrease was primarily driven by lower balances from large domestic commercial fund providers and was partially offset by higher balances in Private Banking deposits.
During the nine months ended September 30, 2026, total foreign deposits increased $593.6 million, or 22.7%, primarily driven by an increase of $653.2 million in non-interest-bearing deposits. The increase in non-interest bearing deposits included a migration of approximately $270.0 million of low-cost interest-bearing deposits to noninterest-bearing demand deposits during the third quarter of 2026, as well as growth in balances from international large fund providers. The increase was partially offset by decreases of (i) $32.1 million in customer time deposits, and (ii) $27.5 million in interest-bearing demand, savings and money market deposits. Also, as part of our strategic diversification efforts, while deposits from customers domiciled in Venezuela increased $484.1 million, or 25.3%, deposits from countries other than Venezuela also increased $109.5 million, or 15.5%, which demonstrates the value of our international customer relationships.
Core Deposits
Our core deposits were $6.3 billion and $5.8 billion as of September 30, 2026 and December 31, 2025, and represented 76.6% and 74.4% of our total deposits at those dates, respectively. The increase of $527.6 million, or 9.1%, in core deposits in the nine months ended September 30, 2026 was mainly driven by the increase in noninterest bearing demand deposits, as well as an increase in interest bearing deposits. The increase in noninterest bearing demand deposits is largely driven by the increase in foreign deposits, primarily Venezuela and the migration of approximately $270.0 million in low-cost interest bearing deposits to noninterest bearing demand deposits, part of the Company's effort to optimize its deposit base without affecting client retention.
We define "core deposits" as total deposits excluding all time deposits.
Brokered Deposits
We utilize brokered deposits primarily as an asset and liability management tool. As of September 30, 2026 and December 31, 2025, brokered deposits, consisting primarily of time deposits, were $497.4 million and $435.7 million, respectively, and represented 6.0% and 5.6% of total deposits as of the respective reporting dates. The Company has not historically sold brokered CDs in individual denominations over $100,000.
Large Fund Providers
Large fund providers consist of third party relationships with balances over $20 million. At September 30, 2026 and December 31, 2025, our large fund providers included 29 and 20, respectively, deposit relationships with total balances of $1.1 billion and 962.3 million, respectively. The increase in balances from large fund providers in the nine months ended September 30, 2026 was mainly driven by international customer deposits and included large operating deposits primarily tied to customer relationships in essential processes in the country's banking and oil industries.
Large Time Deposits by Maturity
The following table sets forth the maturities of our time deposits with individual balances equal to or greater than $100,000 as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||
| Less than 3 months | $ | 480,974 | 40.8 | % | $ | 406,673 | 31.4 | % | |||||||||||||||
| 3 to 6 months | 403,874 | 34.2 | % | 382,427 | 29.5 | % | |||||||||||||||||
| 6 to 12 months | 227,351 | 19.3 | % | 415,755 | 32.1 | % | |||||||||||||||||
| 1 to 3 years | 60,382 | 5.1 | % | 77,859 | 6.0 | % | |||||||||||||||||
| Over 3 years | 6,759 | 0.6 | % | 13,520 | 1.0 | % | |||||||||||||||||
| Total | $ | 1,179,340 | 100.0 | % | $1,296,234 | 100.0 | % | ||||||||||||||||
Short-Term Borrowings
In addition to deposits, we use short-term borrowings from time to time, such as advances from the FHLB and borrowings from other banks, as a source of funds to meet the daily liquidity needs of our customers and fund growth in earning assets. Short-term borrowings have maturities of 12 months or less as of the reported period-end.
All of the Company's short-term borrowings at September 30, 2026 corresponded to FHLB advances. There were no other borrowings or repurchase agreements outstanding at September 30, 2026 and December 31, 2025.
The following table sets forth information about the outstanding amounts of our short-term borrowings at the close of, and for the nine months ended September 30, 2026 and at December 31, 2025.
|
September 30,
2026 |
December 31,
2025 |
|||||||||||||
| (in thousands, except percentages) | ||||||||||||||
|
Outstanding at period-end
|
$
|
280,000
|
$
|
-
|
||||||||||
|
Average amount
|
44,444
|
20,000
|
||||||||||||
|
Maximum amount outstanding at any month-end
|
280,000
|
100,000
|
||||||||||||
|
Weighted average interest rate:
|
||||||||||||||
|
During period
|
3.96
|
%
|
4.08
|
%
|
||||||||||
|
End of period
|
4.02
|
%
|
-
|
%
|
||||||||||
Return on Equity and Assets
The following table shows annualized return on average assets, return on average equity, and average equity to average assets ratio for the periods presented:
|
Three Months Ended September 30,
|
Nine Months Ended September 30, | ||||||||||||||||||||||
|
2026
|
2025
|
2026
|
2025
|
||||||||||||||||||||
| (in thousands, except percentages and per share data) | |||||||||||||||||||||||
| Net income attributable to the Company | $ | 25,716 | $ | 14,756 | $ | 64,632 | $ | 49,716 | |||||||||||||||
| Basic earnings per common share | 0.66 | 0.35 | 1.63 | 1.19 | |||||||||||||||||||
| Diluted earnings per common share (1) | 0.65 | 0.35 | 1.62 | 1.19 | |||||||||||||||||||
| Average total assets | $ | 10,212,796 | $ | 10,243,925 | $ | 10,075,466 | $ | 10,181,641 | |||||||||||||||
| Average stockholders' equity | 903,738 | 942,421 | 922,469 | 923,665 | |||||||||||||||||||
|
Net income attributable to the Company / Average total assets (ROA)
|
1.00 | % | 0.57 | % | 0.86 | % | 0.65 | % | |||||||||||||||
|
Net income attributable to the Company / Average stockholders' equity (ROE)
|
11.29 | % | 6.21 | % | 9.37 | % | 7.20 | % | |||||||||||||||
| Average stockholders' equity / Average total assets ratio | 8.85 | % | 9.20 | % | 9.16 | % | 9.07 | % | |||||||||||||||
__________________
(1)In the three and nine month periods ended September 30, 2026 and 2025, potential dilutive instruments consisted of unvested shares of restricted stock, restricted stock units and performance share units. See Note 13 to our unaudited interim consolidated financial statements in this Form 10-Q for details on the dilutive effects of the issuance of restricted stock, restricted stock units and performance share units on earnings per share for the nine months ended September 30, 2026 and 2025.
During the three months ended September 30, 2026, basic and diluted earnings per share increased compared to the same period in 2025, primarily driven by higher net income. During the nine months ended September 30, 2026, basic and diluted earnings per share increased compared to the same period one year ago, primarily driven by improved net income in the current period compared to the same period last year.
Capital Resources and Liquidity Management
Capital Resources
Stockholders' equity is influenced primarily by earnings, dividends, if any, and changes in accumulated other comprehensive income or loss (AOCI/AOCL) caused primarily by fluctuations in unrealized holding gains or losses, net of taxes, on debt securities available for sale and derivative instruments. AOCI or AOCL are not included in stockholders' equity for purposes of determining our capital for bank regulatory purposes.
Total stockholders' equity was $840.8 million as of September 30, 2026, a decrease of $98.0 million, or 10.4%, compared to $938.8 million as of December 31, 2025. This decrease was primarily driven by: (i) an aggregate of $37.1 million of Class A common stock repurchased in the nine months ended September 30, 2026; (ii) $10.9 million of dividends declared and paid by the Company in the nine months ended September 30, 2026, and (iii) $118.0 million of other comprehensive loss, mainly due to net unrealized holding losses on debt securities available for sale. This was partially offset by net income of $64.6 million in the nine months ended September 30, 2026.
Common Stock Transactions
In the three and nine month periods ended September 30, 2026, the Company repurchased an aggregate of 70,592 and 1,620,085 shares, respectively, of Class A common stock under the Stock Repurchase Program at a weighted average price of $28.47 and $22.71 per share, respectively, including transaction costs. The aggregate purchase price for these transactions was $2.0 million and $37.1 million in the three and nine month periods ended September 30, 2026, including certain transaction costs. See Note 1 to our unaudited interim consolidated financial statements in this Form 10-Q for more details on the Stock Repurchase Program.
Dividends
Set forth below are the details of dividends declared and paid by the Company for the first nine months ended September 30, 2026:
| Declaration Date | Record Date | Payment Date | Dividend Per Share | Dividend Amount | ||||||||||
| 07/22/2026 | 08/14/2026 | 08/28/2026 | $0.09 | $3.5 million | ||||||||||
| 04/22/2026 | 05/15/2026 | 05/29/2026 | $0.09 | $3.6 million | ||||||||||
| 01/22/2026 | 02/13/2026 | 02/27/2026 | $0.09 | $3.7 million | ||||||||||
On October 21, 2026, the Company's Board of Directors declared a cash dividend of $0.09 per share of the Company's common stock. The dividend is payable on November 27, 2026, to shareholders of record at the close of business on November 13, 2026.
Liquidity Management
We manage our liquidity based on several factors that include the amount of core deposit relationships as a percentage of total deposits, the level of diversification of our funding sources, the allocation and amount of our deposits among deposit types, the short-term funding sources used to fund assets, the amount of non-deposit funding used to fund assets, the availability of unused funding sources, off-balance sheet obligations, the amount of cash and liquid securities we hold, the availability of assets readily convertible into cash without undue loss, the characteristics and maturities of our assets when compared to the characteristics of our liabilities and other factors.
Liquidity risk management is a relevant element of our asset/liability management. Our contingency funding plan is constantly monitored by our Assets and Liabilities Committee and serves as the basis to identify our liquidity needs. The contingency funding plan models several liquidity stress scenarios to evaluate different potential liquidity outflows or funding gaps resulting from economic disruptions and volatility in the financial markets, among other factors.
Customer deposits have been our principal source of funding, supplemented by our investment securities portfolio, our short-term and long-term borrowings as well as loan repayments and amortizations. The Company's liquidity position includes cash and cash equivalents, including restricted cash, of $361.5 million at September 30, 2026, compared to $470.2 million at December 31, 2025.
At September 30, 2026 and December 31, 2025, the Company had $0.7 billion of outstanding advances from the FHLB. At September 30, 2026 and December 31, 2025, we had an additional $2.3 billion and $2.1 billion, respectively, of remaining borrowing capacity with the FHLB. This additional borrowing capacity is determined by the FHLB. In the nine months ended September 30, 2026 the Company borrowed $620.0 million from the FHLB and repaid $617.0 million of FHLB advances. The Company recognized a gain of $0.7 million as a result of the early repayment of certain FHLB advances. The Company may repay advances from the FHLB prior to their stated maturity as part of the Company's asset and liability management strategies.
There were no other borrowings as of September 30, 2026 and December 31, 2025.
We also have available uncommitted federal funds lines with several banks. We had no outstanding borrowings under uncommitted federal funds lines with banks at September 30, 2026 and December 31, 2025.
Holding Company
We are a corporation separate and apart from the Bank and, therefore, must provide for our own liquidity. Historically, our main source of funding has been dividends declared and paid to us by the Bank. The Company is the obligor and guarantor on our junior subordinated debt, the Subordinated Notes and the newly issued senior notes.
On September 17, 2026, the Company issued $50.0 million of senior notes due 2031. The net proceeds will be used to enhance holding company liquidity and provide additional financial flexibility to support capital management activities and strategic growth initiatives. The Senior Notes are unsecured and unsubordinated obligations of the Company and rank equally with all of the Company's existing and future unsecured and unsubordinated indebtedness.
The Company, as a separate stand-alone entity, held cash and cash equivalents mainly at the Bank totaling $68.0 million as of September 30, 2026 and $17.5 million as of December 31, 2025 in funds available to service its outstanding debt agreements and for general corporate purposes.
Subsidiary Dividends
There are statutory and regulatory limitations that affect the ability of the Bank to pay dividends to the Company. These limitations exclude the effects of AOCI/AOCL. Management believes that these limitations will not affect the Company's ability to meet its ongoing short-term cash obligations. See "Supervision and Regulation" in the 2025 Form 10-K.
On April 22, 2026, the Board of Directors of the Bank approved the payment of a cash dividend in the amount of $15.0 million by the Bank to the Company. The Company received this dividend on April 30, 2026.
On July 23, 2026, the Board of Directors of the Bank approved the payment of a cash dividend in the amount of $20.0 million by the Bank to the Company. The Company received this dividend on July 28, 2026.
On October 21, 2026, the Board of Directors of the Bank approved the payment of a cash dividend in the amount of $25.0 million by the Bank to the Company which was paid in October 2026.
Based on our current outlook, we believe that net income, advances from the FHLB, available other borrowings and any dividends paid to us by the Bank will be sufficient to fund liquidity requirements for at least the next twelve months and the foreseeable future.
Regulatory Capital Requirements
The Company's consolidated regulatory capital amounts and ratios are presented in the following table:
|
Actual
|
Required for Capital Adequacy Purposes
|
Regulatory Minimums To be Well Capitalized
|
|||||||||||||||||||||||||||||||||
| (in thousands, except percentages) |
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||||||||||||
| September 30, 2026 | |||||||||||||||||||||||||||||||||||
| Total capital ratio | $ | 1,132,039 | 14.48 | % | $ | 625,430 | 8.00 | % | $ | 781,788 | 10.00 | % | |||||||||||||||||||||||
| Tier 1 capital ratio | 1,004,341 | 12.85 | % | 469,073 | 6.00 | % | 625,430 | 8.00 | % | ||||||||||||||||||||||||||
| Tier 1 leverage ratio | 1,004,341 | 9.78 | % | 410,586 | 4.00 | % | 513,232 | 5.00 | % | ||||||||||||||||||||||||||
| Common Equity Tier 1 (CET1) | 943,824 | 12.07 | % | 351,804 | 4.50 | % | 508,162 | 6.50 | % | ||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Total capital ratio | $ | 1,102,426 | 14.10 | % | $ | 625,550 | 8.00 | % | $ | 781,938 | 10.00 | % | |||||||||||||||||||||||
| Tier 1 capital ratio | 983,662 | 12.58 | % | 469,163 | 6.00 | % | 625,550 | 8.00 | % | ||||||||||||||||||||||||||
| Tier 1 leverage ratio | 983,662 | 9.62 | % | 408,990 | 4.00 | % | 511,237 | 5.00 | % | ||||||||||||||||||||||||||
| Common Equity Tier 1 (CET1) | 923,069 | 11.80 | % | 351,872 | 4.50 | % | 508,260 | 6.50 | % | ||||||||||||||||||||||||||
The Bank's consolidated regulatory capital amounts and ratios are presented in the following table:
|
Actual
|
Required for Capital Adequacy Purposes
|
Regulatory Minimums to be Well Capitalized
|
|||||||||||||||||||||||||||||||||
| (in thousands, except percentages) |
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||||||||||||
| September 30, 2026 | |||||||||||||||||||||||||||||||||||
| Total capital ratio | $ | 1,102,853 | 14.13 | % | $ | 624,585 | 8.00 | % | $ | 780,732 | 10.00 | % | |||||||||||||||||||||||
| Tier 1 capital ratio | 1,005,208 | 12.88 | % | 468,439 | 6.00 | % | 624,585 | 8.00 | % | ||||||||||||||||||||||||||
| Tier 1 leverage ratio | 1,005,208 | 9.84 | % | 408,424 | 4.00 | % | 510,530 | 5.00 | % | ||||||||||||||||||||||||||
| Common Equity Tier 1 (CET1) | 1,005,208 | 12.88 | % | 351,329 | 4.50 | % | 507,476 | 6.50 | % | ||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Total capital ratio | $ | 1,052,893 | 13.49 | % | $ | 624,495 | 8.00 | % | $ | 780,619 | 10.00 | % | |||||||||||||||||||||||
| Tier 1 capital ratio | 963,923 | 12.35 | % | 468,372 | 6.00 | % | 624,495 | 8.00 | % | ||||||||||||||||||||||||||
| Tier 1 leverage ratio | 963,923 | 9.47 | % | 407,159 | 4.00 | % | 508,949 | 5.00 | % | ||||||||||||||||||||||||||
| Common Equity Tier 1 (CET1) | 963,923 | 12.35 | % | 351,279 | 4.50 | % | 507,402 | 6.50 | % | ||||||||||||||||||||||||||
Off-Balance Sheet Arrangements
The following table shows the outstanding balance of financial instruments whose contracts represent off-balance sheet credit risk as of the end of the periods presented. Except as disclosed below, we are not involved in any other off-balance sheet contractual relationships that are reasonably likely to have a current or future material effect on our financial condition, a change in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. For more details on the Company's off-balance sheet arrangements, see Note 19 to our audited consolidated financial statements included in the 2025 Form 10-K.
| (in thousands) |
September 30, 2026
|
December 31, 2025
|
|||||||||
|
Commitments to extend credit
|
$
|
1,327,634
|
$
|
1,605,254
|
|||||||
|
Standby letters of credit
|
181,927
|
179,288
|
|||||||||
|
$
|
1,509,561
|
$
|
1,784,542
|
||||||||
Contractual Obligations
In the normal course of business, we and our subsidiaries enter into various contractual obligations that may require future cash payments. Significant commitments for future cash obligations include capital expenditures related to operating leases, certain binding agreements we have entered into for services including outsourcing of technology services as well as loan purchases, advertising and other services, and other borrowing arrangements which are not material to our liquidity needs. We currently anticipate that our available funds, credit facilities, and cash flows from operations will be sufficient to meet our operational cash needs for the foreseeable future. Other than the changes discussed herein, there have been no material changes to the contractual obligations previously disclosed in the 2025 Form 10-K.
During the nine months ended September 30, 2026, the Company borrowed advances from the FHLB totaling $620.0 million and repaid a total of $617.0 million of outstanding advances. Repayments include $417.0 million of advances that were terminated prior to their original maturities.
In the nine months ended September 30, 2026, total time deposits decreased by $68.8 million, or 3.4%. See "Deposits" for additional information.
Critical Accounting Policies and Estimates
For our critical accounting policies and estimates disclosure, see the 2025 Form 10-K where such matters are disclosed for the Company's latest fiscal year ended December 31, 2025.
Recently Issued Accounting Pronouncements. For a description of recently issued accounting pronouncements, see Note 1 to the Company's audited consolidated financial statements in the 2025 Form 10-K and in this Form 10-Q.
Amerant Bancorp Inc. published this content on November 03, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 03, 2026 at 21:51 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]