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On Thursday, Raymond (NSE:RYMD) James made a change to the rating of Amerant Bancorp Inc (NYSE: NYSE:AMTB), downgrading it from Outperform to Market Perform. The adjustment followed the release of the company’s first-quarter 2025 results, which did not meet the expectations set by Raymond James or the consensus. The $816 million market cap bank, currently trading at 0.92 times book value and offering a 1.85% dividend yield, has seen its stock decline nearly 13% year-to-date. Analysts at the firm cited persistent credit headwinds as a contributing factor to their reassessment of the bank’s stock.
According to the analysts, Amerant Bancorp’s recent quarterly performance showed negative trends that were not anticipated, especially after the company took a more proactive stance in addressing credit issues with a capital raise in September 2024. Despite this strategic move, the expected tangible improvements have not materialized to the extent predicted by Raymond James. InvestingPro data reveals the company has not been profitable over the last twelve months, though analysts expect a return to profitability with projected earnings of $2.06 per share in 2025.
The downgrade also reflects concerns over the current uncertain and volatile market environment, influenced by tariffs and other policy changes from the Trump administration. Additionally, a downward revision in Amerant Bancorp’s loan growth outlook, partly due to a sequential decline in balance this quarter against forecasts for solid growth, has prompted a more cautious stance from the analysts.
Nevertheless, there is a silver lining as Amerant Bancorp plans to scale back its mortgage operations, which is expected to save approximately $2.5 million per quarter on a gross basis. Despite this cost-saving measure, Raymond James has only slightly reduced its earnings per share estimate for 2026 ahead of the bank’s earnings call.
In summary, the downgrade to Market Perform from Outperform by Raymond James reflects a combination of Amerant Bancorp’s first-quarter performance falling short of expectations, ongoing credit challenges, and broader economic uncertainties. The bank’s decision to cut back on its mortgage operations is seen as a mitigating action, but the analysts have decided to adopt a wait-and-see approach for the time being. With a beta of 1.05 indicating slightly higher market sensitivity, and trading above its InvestingPro Fair Value, investors seeking deeper insights can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports, available for over 1,400 US stocks.
In other recent news, Amerant Bancorp Inc. announced a $0.09 per-share dividend, continuing its tradition of providing regular returns to shareholders. Keefe, Bruyette & Woods analysts have raised their price target for Amerant Bancorp to $27, citing strong fourth-quarter results for 2024, which included a notable 10 cents per share beat in pre-provision net revenue. The company’s net interest margin and net interest income improved due to recent bond restructuring and organic growth. Raymond James maintained its Outperform rating for Amerant Bancorp, acknowledging recent challenges but expressing confidence in the bank’s strategic repositioning and capital raise. Additionally, Amerant Bancorp revised its executive compensation structure, introducing a performance-based restricted stock unit agreement that aligns with its Long-Term Incentive Plan. The bank also announced the departure of Howard A. Levine, its Chief Consumer Banking Officer, with responsibilities temporarily reassigned among senior executives. These developments reflect Amerant Bancorp’s ongoing efforts to enhance its financial performance and strategic positioning.
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