On Friday, Piper Sandler reaffirmed an Overweight stock rating for Amerant Bancorp Inc (NYSE:NYSE:AMTB) with a steady price target of $33.00, representing significant upside from the current trading price of $21.56. The $904.6 million market cap bank’s stock has recently entered oversold territory according to InvestingPro technical indicators. The firm’s analyst highlighted the company’s recent actions, including the sale of a significant loan portfolio and updates on credit quality.
Amerant Bancorp disclosed the sale of 323 business-purpose, investment property, residential mortgage loans with a combined outstanding balance of approximately $71.4 million. The sale resulted in a loss of about $12.6 million, equating to an approximate 17.5% discount. This development tempers the positive news shared in mid-November regarding the company’s financial health. InvestingPro’s comprehensive analysis indicates a WEAK overall financial health score, with detailed metrics available in the Pro Research Report.
Despite the loss incurred from the loan sale, the company has seen a notable reduction in overall criticized loans, which have decreased to roughly $128.8 million from $190 million at the end of the third quarter of 2024. However, classified loans have increased due to two recent downgrades. Piper Sandler now anticipates net charge-offs (NCOs) of around 85 basis points, which will likely lead to a loan loss provision (LLP) of approximately $21.5 million for the quarter.
Although the recent updates present a mixed outlook and have led to a reduced earnings per share (EPS) estimate for the fourth quarter of 2024, Piper Sandler remains optimistic. The firm expects stronger core loan and deposit trends to drive forward estimates higher. The analyst expressed a positive stance on Amerant Bancorp’s longer-term trends leading into 2026 and the potential for the company’s shares.
In other recent news, Amerant Bancorp has reported significant developments including a Q3 loss of $48.2 million, mainly due to strategic repositioning of the company’s investment portfolio and real estate losses.
Despite this setback, the company’s core pre-provision net revenue remained robust at $31.3 million, with total assets increasing to $10.38 billion. Research firms Stephens and Piper Sandler have maintained their Overweight rating on Amerant Bancorp, with both firms setting a price target of $29.00.
The bank has also completed a notable loan portfolio sale valued at $71.4 million, resulting in a loss of approximately $12.6 million. However, Amerant Bancorp has achieved core loan growth for the fourth quarter of approximately $310 million, surpassing Stephens’ forecast of around $265 million.
In addition to these financial updates, Amerant Bancorp has extended its share repurchase program to December 2025, authorizing the repurchase of up to $20 million of the company’s Class A common stock. The bank is also focusing on community support and growth, preparing for the opening of new banking centers in Florida and targeting a 60% efficiency ratio, 1% return on assets, and 12% return on equity by the second half of 2025.
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