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On Thursday, Piper Sandler maintained its Overweight rating for Amerant Bancorp Inc (NYSE:AMTB), currently trading at $19.48 with a market capitalization of $816 million, maintaining a steady price target of $32.00. According to InvestingPro data, analyst price targets range from $24 to $32, with a consensus recommendation leaning towards Buy. The firm’s analysts highlighted ongoing concerns regarding the bank’s elevated credit costs and deteriorating financial metrics, which could potentially affect investor confidence. In the first quarter of 2025, Amerant Bancorp reported a core earnings per share (EPS) of $0.24, falling short of market expectations mainly due to higher credit costs. InvestingPro analysis reveals that while the company has struggled with profitability over the last twelve months, analysts expect net income growth and a return to profitability this year, with a forecasted EPS of $2.06 for FY2025. Despite this miss, the quarter included positive developments such as $5.0 million in share repurchases and the planned redemption of all outstanding senior notes on April 1, 2025, aimed at reducing interest expenses and optimizing the capital structure.
Piper Sandler noted that pre-provision net revenue (PPNR) actually surpassed their estimates, but the EPS shortfall was driven by a higher loan loss provision (LLP), which reduced EPS by $0.15. The analysts expressed that beyond the EPS miss, the greater concern for investors might stem from the discrepancy between the mid-quarter guidance indicating improving credit trends and the actual quarter-end results. The management’s update revealed that year-end financials from customers prompted $34 million in downgrades to substandard non-accrual status.
The increase in non-performing loans (NPLs), non-performing assets (NPAs), and classified loans was significant and is expected to exert pressure on Amerant Bancorp’s stock value. Despite the challenges, the shares are currently trading at approximately 93% of tangible book value per share (TBVPS), suggesting that the market has already accounted for some of the negative developments. Based on InvestingPro’s comprehensive Fair Value analysis, the stock appears to be trading above its Fair Value, with a Price/Book ratio of 0.92 and a dividend yield of 1.85%. Piper Sandler’s reiteration of the Overweight rating indicates their belief in the stock’s potential value despite the recent hurdles faced by the company. Investors seeking deeper insights can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers, which provides comprehensive analysis of AMTB along with 1,400+ other US stocks.
In other recent news, Amerant Bancorp Inc. reported its first-quarter 2025 results, which did not meet expectations, leading Raymond (NSE:RYMD) James to downgrade the company’s stock rating from Outperform to Market Perform. The analysts cited persistent credit challenges and a downward revision in loan growth outlook as reasons for the downgrade. Despite these challenges, Amerant Bancorp has announced a $0.09 per-share dividend, consistent with its previous payouts, demonstrating its commitment to shareholder value. Additionally, Raymond James had previously maintained an Outperform rating for Amerant Bancorp, expressing confidence in its strategic repositioning despite recent financial setbacks.
Amerant Bancorp also announced a revision to its executive incentive plan, introducing a new performance-based restricted stock unit agreement for top executives. This change aligns with the company’s long-term incentive strategy and ties executive rewards to the company’s financial performance. In another development, Howard A. Levine, Senior Executive Vice-President and Chief Consumer Banking Officer, will depart from Amerant Bancorp, with his responsibilities temporarily distributed among other senior executives. The company is in the process of finalizing the terms of Levine’s departure and has not yet named a permanent successor.
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