# Amerant Bancorp Inc.: Form 10-Q for the period ended Sep 30, 2024

- Company: [Amerant Bancorp Inc.](/companies/amtb.md) (CIK 1734342)
- Form: 10-Q
- Filed: 2024-11-04
- Accepted by EDGAR: Nov 1, 2024, 20:14 ET
- Period: 2024-09-30
- Accession: 0001734342-24-000058
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1734342/000173434224000058/amtb-20240930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1734342/000173434224000058/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Income tax | 3 months, 2024-07-01 to 2024-09-30 | −$13.7m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-01-01 to 2024-09-30 | −$9.5m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | −$48.2m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | −$32.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-07-01 to 2024-09-30 | −$1.43 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-01-01 to 2024-09-30 | −$0.97 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | −$1.43 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | −$0.97 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-07-01 to 2024-09-30 | 33,784,999 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-01-01 to 2024-09-30 | 33,635,439 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | $4.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-01-01 to 2024-09-30 | $6.6m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2024-01-01 to 2024-09-30 | $9.0m | us-gaap:PaymentsOfDividends |
| Share repurchases | 9 months, 2024-01-01 to 2024-09-30 | $7.6m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Total assets | at 2024-09-30 | $10.35bn | us-gaap:Assets |
| Total liabilities | at 2024-09-30 | $9.45bn | us-gaap:Liabilities |
| Shareholders' equity | at 2024-09-30 | $902.9m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 185,175 characters.

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”) .The Bank has two operating subsidiaries: Amerant Investments, Inc., a securities broker-dealer (“Amerant Investments”) and Amerant Mortgage, LLC, a mortgage lending company domiciled in Florida (“Amerant Mortgage”).

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, 2023 filed on March 7, 2024 (the “2023 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”).

All statements other than statements of historical fact are statements that could be forward-looking statements. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions and future performance and condition. Examples of forward-looking statements include but are not limited to: the Company’s strategic rationale for, and proposed benefits of the Houston Sale Transaction, the Company’s ability to consummate and close the Houston Sale Transaction on terms acceptable to the Company, if at all, and the Company’s expected use of proceeds from the Houston Sale Transaction, our future operating or financial performance, including revenues, expenses, expense savings, income or loss and earnings or loss per share, and other financial items; statements regarding expectations, plans or objectives for future operations, products or services, and our expectations on our securities repositioning and loan recoveries or reaching positive resolutions on problem loans. Forward-looking statements 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 2023 Form 10-K, in our quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2024 filed on May 3, 2024, in this Form 10-Q, and in our other filings with the U.S. Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website www.sec.gov.

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” 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 and the determination of a credit loss allowance in our investment securities portfolio are subjective and, if changed, 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, financial condition, or cash flows;
- The pending sale of our Houston banking operations may not be completed in accordance with expected plans or on the currently contemplated timeline, or at all, and the pending sale may be disruptive to the Company;
- We are subject to environmental liability risk associated with lending activities;
- Deterioration in the real estate markets, including the secondary market for residential mortgage loans, can adversely affect us;
- 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 and services, or strategic project initiatives may subject us to additional risks;
- We face significant operational risks;
- We may not have the ability or resources to keep pace with rapid technological changes in the financial services industry or implement new technology effectively;
- Conditions in Venezuela could adversely affect our operations;
- Our ability to achieve our environmental, social and governance goals are subject to risks, many of which are outside of our control, and our reputation could be harmed if we fail to meet such goals;
- 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 Senior Notes, 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 Senior Notes, 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 Senior Notes, the Subordinated Notes and the Debentures; and
- The other factors and information included in the 2023 Form 10-K and other filings that we make with the SEC under the Exchange Act and Securities Act. *See “*Risk Factors” in the 2023 Form 10-K, in the Form 10-Q for the quarter ended March 31, 2024, and in this Form 10-Q.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in the 2023 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.

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. 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 2023 Form 10-K, in the Form 10-Q for the quarter ended March 31, 2024, in this Form 10-Q, and in our other filings with the SEC, which are available at the SEC’s website www.sec.gov.

### OVERVIEW

### Our Company

We are a bank holding company headquartered in Coral Gables, Florida. We provide individuals and businesses a comprehensive array of deposit, credit, investment, wealth management, retail banking, mortgage services, and fiduciary services. We serve customers in our United States markets and select international customers. These services are offered through the Bank, which is also headquartered in Coral Gables, Florida, and its operating subsidiaries, Amerant Investments and Amerant Mortgage. Fiduciary, investment, wealth management and mortgage lending services are provided by the Bank, the Bank’s securities broker-dealer, Amerant Investments, and the mortgage company, Amerant Mortgage. The Bank’s primary markets are South Florida, where we are headquartered and operate eighteen banking centers in Miami-Dade, Broward and Palm Beach counties; Tampa, Florida where we have a regional headquarters office and currently operate one banking center that serve the greater Tampa markets and; Houston, Texas, where we operate six banking centers that serve the nearby areas of Harris, Montgomery, Fort Bend and Waller counties.

The Cayman Bank is a subsidiary of the Bank. The Company is executing a plan for the dissolution of the Cayman Bank and, as of the end of the third quarter of 2024, the Cayman Bank no longer had any trust relationships, many of which were transferred to the Bank. The dissolution of the Cayman Bank, is expected to be completed in the first quarter of 2025, once regulatory approval from the applicable regulatory agency is received.

### Business Developments

For more information on the progress of our business strategy and strategic initiatives in 2023, *see* Item 1. Business section included in the 2023 Form 10-K.

#### Public Offering and Securities Repositioning

On September 27, 2024, the Company completed a public offering of 8,684,210 shares of its Class A voting common stock, at a price to the public of $19.00 per share, which included 784,210 shares issued upon the exercise in full by the underwriters of their option to purchase additional shares of common stock (the “Public Offering”). The total gross proceeds from the offering were approximately $165 million, with net proceeds of approximately $155.8 million after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. The Company intends to use the net proceeds of the Public Offering for general corporate purposes and to support its continued organic growth, which may include, among other things, working capital, investments in the Bank, resolution of non-performing loans, and potential balance sheet optimization strategies.

Upon successfully completing the Public Offering, the Company initiated the previously announced repositioning of the Company’s securities portfolio (the “Securities Repositioning”). The Securities Repositioning consisted of the following actions: (i) transfer at their fair value (which was below their amortized cost) of all of the Company’s debt securities previously classified as held to maturity and carried at amortized cost to the available for sale category; (ii) sale of all corporate notes and subordinated debt, and (iii) sale of all other debt securities classified as available for sale (including those previously classified as held to maturity) with book yields of less than 2.75%. As a result of the Securities Repositioning, the Company recorded a pre-tax loss of approximately $68.5 million ($53.1 million after-tax) in the three and nine months ended September 30, 2024. The Company completed the Securities Repositioning in October 2024, which resulted in an additional pre-tax loss on sale of approximately $8.3 million as a result of the subsequent decline in the fair value of the securities.

#### Sale of Houston Banking Operations

On April 16, 2024, the Bank entered into a Purchase and Assumption Agreement (the “Purchase Agreement”) with MidFirst Bank (“MidFirst”) pursuant to which MidFirst will purchase certain assets and assume certain liabilities (the “Houston Sale Transaction”) of the banking operations and six branches in the Houston, Texas metropolitan statistical area (collectively, the “Branches”). Pursuant to the terms of the Purchase Agreement, MidFirst has agreed to assume certain deposit liabilities and to acquire certain loans, as well as cash, real property, personal property and other fixed assets associated with the Branches, as well as 45 team members. On July 30, 2024, regulatory approval for the Houston Sale Transaction was received. The Houston Sale Transaction is expected to close on November 8, 2024, subject to the satisfaction of customary closing conditions.

The purchase price for the purchased assets will be computed as the sum of: (a) $13.0 million (the “Deposit Premium”), provided that, if the balance of non-interest checking deposits included in deposits or the total balance of deposits (excluding insured cash sweep deposits) decrease by more than 15% between March 13, 2024 and the closing date, then the Deposit Premium shall be equal to the sum of (i) 9.50% of the average daily balance of non-interest checking deposits included in deposits, (ii) 1.85% of the average daily balance of deposits other than non-interest checking deposits, insured cash sweep deposits and time deposits included in deposits, (iii) 0.25% of the average daily balance of insured cash sweep deposits included in Deposits, and (iv) 0.50% of the average daily balance of time deposits included in deposits, with the average daily balance in each case being for the 30-day period ending on the fifth business day prior to closing, provided further, that the Deposit Premium shall in no event be lower than $9.25 million, (b) the aggregate amount of cash on hand as of the closing date, (c) the aggregate net book value of all assets being assumed (excluding cash on hand, real property and accrued interest with respect to the loans to be acquired), (d) the appraised value of the real property to be acquired, and (e) accrued interest with respect to the loans to be acquired. The purchase price is subject to a customary post-closing adjustment based on the delivery within thirty calendar days following the closing date of a final closing statement setting forth the purchase price and any necessary adjustment payment amount.

The Bank and MidFirst made customary representations, warranties, and covenants in the Purchase Agreement. The Bank and MidFirst also agreed to indemnify each other (subject to customary limitations) with respect to the Transaction, including for breaches of representations and warranties, breaches of covenants, liabilities not retained or assumed, and conduct of the business of the Branches and operation and use of the purchased assets during certain time periods.

The following assets and liabilities classified as held for sale are included in the Company’s consolidated balance sheet as of September 30, 2024:

*(in thousands)*

| Assets |  |
| --- | ---: |
| Loans held for sale, at lower of cost or fair value (1) | $553,941 |
| Accrued interest receivable and other assets (2) | 21,353 |
| Total assets | $575,294 |
| **Liabilities** |  |
| Noninterest bearing demand deposits (3) | $79,563 |
| Interest bearing demand deposits | 65,071 |
| Savings and money market | 120,068 |
| Time deposits | 326,014 |
| Total deposits | 590,716 |
| Other liabilities: |  |
| Operating lease liabilities | 7,171 |
| Other liabilities (4) | 5,777 |
| Total liabilities | $603,664 |

(1) In the first nine months ended September 30, 2024, the Company recognized a valuation allowance of $1.3 million as a result of the fair value adjustment of these loans.

(2) Includes premises and equipment for $8.0 million, operating lease right-of-use assets for $6.5 million, $4.3 million in derivative assets and other assets for $2.7 million.

(3) Includes $5.1 million in escrow accounts.

(4) Includes $5.8 million in derivative liabilities.

The Company recorded non-routine expense items in the first nine months of 2024 in connection with the Houston Sale Transaction totaling approximately $5.5 million as follows: (i) $3.4 million in market value adjustments for two branches owned based on third party appraisals; (ii) $1.3 million in loan valuation allowance due to deferred loan costs; (iii) $0.5 million for legal and investment banking fees; and (iv) $0.3 million in intangible write-off. These charges were partially offset by a $4.4 million release in credit reserves after transferring the loans to held for sale. There are no significant non-routine expenses recorded in the third quarter of 2024 in connection with the Houston Sale Transaction.

#### Other Actions

In the first nine months ended September 30, 2024, we hired new team members and added them to our business development teams across South and Central Florida. The Company also hired a Market President for each of Palm Beach, Central Florida as well as Broward County, who will oversee Amerant’s ongoing expansion in those markets.

We officially opened new banking centers in downtown Ft. Lauderdale, FL and Miami, FL. We also officially opened our new regional headquarters office for Broward County, located in Plantation, FL. More recently, we signed a letter of intent for a second banking center in Miami Beach, following the signed agreement we previously announced for the first Miami Beach banking center. We also signed a letter of intent for our second Tampa regional location. Both are expected to open by mid-2025. Lastly, we expect to open a new regional headquarter office for Palm Beach County, located in West Palm Beach, Fl., in the first quarter of 2025.

We continued with our strategy of building brand recognition across our markets. We announced a strategic partnership becoming the “Official Bank of Fort Lauderdale United FC”. We also entered into multi-year partnerships becoming the “Hometown Bank of the Miami Marlins” in Miami, FL, as well as being named the “Bank of the Tampa Bay Rays” in Tampa, FL.

We believe these strategic actions will support our ongoing efforts in becoming the bank of choice in the markets we serve.

### 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, 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 transaction with customers; (viii) derivative gains or losses; (ix) gains or losses on the sale of properties; and (x) other noninterest income which includes mortgage banking revenue.

Our income from service fees on deposit accounts is affected primarily by the volume, growth and mix of deposits we hold and volume of transactions initiated by customers (i.e. 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. In the fourth quarter of 2023, the Company restructured certain of its BOLI contracts, by surrendering existing lower-yielding policies and reinvesting the proceeds in higher-yielding policies. This transaction is expected to increase income from this source prospectively.

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 marketable equity securities not held for trading.

Our fee income generated on customer interest rate swaps and other loan level derivatives is primarily dependent on the 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 generated through our subsidiary, Amerant Mortgage, and consists of gain on sale of loans, gain on loans market valuation, other fees and smaller sources of income. Mortgage banking income was $2.8 million and $0.5 million in the three months ended September 30, 2024 and 2023, respectively, and $5.8 million and $3.9 million in the nine months ended September 30, 2024 and 2023, respectively. Other income in the nine months ended September 30, 2024, includes $0.5 million of proceeds from BOLI death benefits.

***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) loan-level derivative expenses; (v) FDIC deposit and business insurance assessments and premiums; (vi) telecommunication and data processing expenses; (vii) depreciation and amortization; (viii) advertising and marketing expenses; (ix) other real estate and repossessed assets, net; (x) contract termination costs; (xi) losses on sale of assets, and (xii) other operating expenses.

Salaries and employee benefits include compensation (including severance expenses which we generally consider non-routine), 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 expense consists 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 and banking processing services from our new technology provider, and other professional consulting fees associated with our transition to a new core banking platform, legal, accounting and related consulting fees, card processing fees, director’s fees, regulatory agency fees, such as OCC examination fees, and other fees related to our business operations.

Loan-level derivative expenses are incurred in back-to-back derivative transactions with commercial loan clients and with brokers. The Company pays a fee upon inception of the back-to-back derivative transactions, corresponding to the spread between a wholesale rate and a retail rate.

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, as well as expenses related to the disposition of fixed assets due to the write off of in-development software in 2023.

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 community engagement and other operational expenses. Other operating expenses are partially offset by other operating expenses 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.

Noninterest expenses include salaries and employee benefits, mortgage lending costs and professional and other service fees in connection with Amerant Mortgage’s ongoing business.

Non-routine noninterest expense items include restructuring expenses and other non-routine noninterest expenses. Restructuring expenses are those incurred for actions designed to implement the Company’s business strategy. These actions include, but are not limited to reductions in workforce, streamlining operational processes, decommissioning of legacy technologies, enhanced sales tools and training, expanded product offerings and improved customer analytics to identify opportunities. Other non-routine noninterest expenses include the effect of non-routine items such as the valuation of OREO and loans held for sale, the sale of repossessed assets, impairment of investments, expenses in connection with the Houston Sale Transaction, and losses related to the Company’s Securities Repositioning. *See* table below for more details.

The table below shows a detail of non-routine noninterest expenses for the periods presented.

*(in thousands)*

| Non-routine noninterest expense items Restructuring costs (1): | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Staff reduction costs (2) | $— | $489 | $— | $2,886 |
| Contract termination costs (3) | — | — | — | 1,550 |
| Consulting and other professional fees and software expenses (4) | — | — | — | 4,750 |
| Disposition of fixed assets (5) | — | — | — | 1,419 |
| Branch closure expenses and related charges (6) | — | 252 | — | 2,279 |
| Total restructuring costs | $— | $741 | $— | $12,884 |
| Other non-routine noninterest expense items: |  |  |  |  |
| Losses on loans held for sale carried at the lower of cost or fair value (7) | — | 5,562 | 1,258 | 5,562 |
| Goodwill and intangible assets impairment (8) | — | — | 300 | — |
| Legal and broker fees (8) | — | — | 561 | — |
| Fixed assets impairment (8)(9) | — | — | 3,443 | — |
| Other real estate owned valuation expense | 5,672 | — | 5,672 | 2,649 |
| Impairment charge on investment carried at cost (10) | — | — | — | 1,963 |
| Total non-routine noninterest expense items | $5,672 | $6,303 | $11,234 | $23,058 |

(1) Expenses incurred for actions designed to implement the Company’s business strategy. These actions include, but are not limited to reductions in workforce, streamlining operational processes, implementation of new technology system applications, decommissioning of legacy technologies, enhanced sales tools and training, expanded product offerings and improved customer analytics to identify opportunities.

(2) Staff reduction costs consist of severance expenses related to organizational rationalization.

(3) Contract termination and related costs associated with third party vendors resulting from the Company’s engagement of FIS.

(4) In the nine months ended September 30, 2023, includes $4.6 million in nonrecurrent expenses in connection with the engagement of FIS. There were no significant nonrecurrent expenses in connection with engagement of FIS in the three month and nine month periods ended September 30, 2024.

(5) In the nine months ended September 30, 2023, includes expenses in connection with the disposition of fixed assets due to the write off of in-development software.

(6) In each of the three and nine months periods ended September 30, 2023, includes expenses in connection with the closure of a branch in Houston, Texas in 2023. In addition, in the nine months ended September 30, 2023, includes expenses associated with the closure of a branch in Miami, Florida in 2023, including $0.9 million of accelerated amortization of leasehold improvements and $0.6 million of right-of-use, or ROU asset impairment. Furthermore, in the nine months ended September 30, 2023, includes $0.5 million of ROU asset impairment associated with the closure of a branch in Houston, Texas in 2023.

(7) In the nine months ended September 30, 2024, amounts shown are in connection with the Houston Sale Transaction. In the three and nine months period ended September 30, 2023, includes a fair value adjustment of $5.6 million related to a New York-based CRE loan held for sale carried at the lower of cost or fair value.

(8) In the nine months ended September 30, 2024, amount shown are in connection with the Houston Sale Transaction.

(9) In the nine months ended September 30, 2024, related to Houston branches and included as part of occupancy and equipment expenses. *See “*Noninterest Expenses” for details.

(10) In the nine months ended September 30, 2023, includes an impairment charge of $2.0 million related to an investment carried at cost and included in other assets.

### 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.

***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 common 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 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.

***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 months ended September 30, 2024 include the following:

- Total assets were $10.35 billion at September 30, 2024, up $636.8 million, or 6.6%, compared to $9.72 billion at December 31, 2023.
- Cash and cash equivalents were $671.8 million, up $350.0 million or 108.7%, compared to $321.9 million at December 31, 2023.
- Average yield on loans increased to 7.08% in the three months ended September 30, 2024 compared to 6.77% in the three months ended September 30, 2023. Average yield on loans increased to 7.08% in the nine months ended September 30, 2024 compared to 6.65% in the nine months ended September 30, 2023.
- Total gross loans, which includes all loans held for sale, were $7.56 billion at September 30, 2024, up $297.1 million, or 4.1%, compared to $7.26 billion at December 31, 2023.
- Total deposits were $8.11 billion at September 30, 2024, up $216.1 million, or 2.7%, compared to $7.89 billion at December 31, 2023.
- Core deposits were $5.7 billion at September 30, 2024, up $109.6 million, or 2.0%, compared to $5.6 billion at December 31, 2023.
- Average cost of total deposits increased to 2.99% in the three months ended September 30, 2024 compared to 2.66% in the three months ended September 30, 2023. Average cost of total deposits increased to 2.99% in the nine months ended September 30, 2024 compared to 2.33% in the nine months ended September 30, 2023.
- Loan to deposit ratio was 93.23% at September 30, 2024 compared to 92.02% at December 31, 2023.
- Total advances from the FHLB were $915.0 million, up $270.0 million or 41.9%, compared to $645.0 million as of December 31, 2023. The Bank had $1.9 billion of availability remaining as of September 30, 2024.
- Total non-performing assets increased to $129.4 million at September 30, 2024, up $74.9 million, or 137.1%, compared to $54.6 million at December 31, 2023.
- OREO was $14.5 million, a decrease of $5.7 million, or 28.1% from $20.2 million as of December 31, 2023.
- The Allowance for Credit Losses, or ACL, on loans as of September 30, 2024 was $79.9 million, down $15.6 million, or 16.3%, compared to $95.5 million as of December 31, 2023.
- Assets Under Management and custody (“AUM”) totaled $2.55 billion, as of September 30, 2024, up $261.4 million, or 11.4%, from $2.29 billion as of December 31, 2023.
- Pre-provision net revenue (“PPNR”)(1) was negative $42.9 million in the three months ended September 30, 2024, a decrease of $79.3 million, or 217.7%, compared to $36.5 million in the three months ended September 30, 2023. PPNR (1) was $8.4 million, in the nine months ended September 30, 2024, a decrease of $103.5 million, or 92.5%, compared to $111.9 million in the nine months ended September 30, 2023.
- Net Interest Margin (“NIM”) was 3.49% in the three months ended September 30, 2024 compared to 3.57% in the three months ended September 30, 2023. NIM was 3.52% in the nine months ended September 30, 2024 compared to 3.76% in the nine months ended September 30, 2023.
- Net Interest Income (“NII”) was $81.0 million in the three months ended September 30, 2024, up $2.4 million, or 3.1%, from $78.6 million in the three months ended September 30, 2023. NII was $238.3 million in the nine months ended September 30, 2024, down $6.5 million, or 2.6%, compared to $244.8 million in the nine months ended September 30, 2023.
- Provision for credit losses was $19.0 million in the three months ended September 30, 2024, compared to $8.0 million in the three months ended September 30, 2023. Provision for credit losses was $50.6 million in the nine months ended September 30, 2024, up $1.8 million, or 3.6%, compared to $48.8 million in the nine months ended September 30, 2023.
- Non-interest income was negative $47.7 million in the three months ended September 30, 2024, down $69.6 million or 317.5%, from $21.9 million in the three months ended September 30, 2023. Non-interest income was negative $13.8 million in the nine months ended September 30, 2024, down $81.7 million, or 120.3%, compared to $67.9 million in the nine months ended September 30, 2023.
- Non-interest expense was $76.2 million in the three months ended September 30, 2024, up $11.8 million, or 18.3%, from $64.4 million in the three months ended September 30, 2023. Non-interest expense was $216.1 million in the nine months ended September 30, 2024, up $14.5 million, or 7.2%, compared to $201.7 million in the nine months ended September 30, 2023.
- The efficiency ratio was 228.7% in the three months ended September 30, 2024 compared to 64.1% in the three months ended September 30, 2023. The efficiency ratio was 96.24% in the nine months ended September 30, 2024 compared to 64.49% in the nine months ended September 30, 2023.
- Return on average Assets (“ROA”) was negative 1.92% in the three months ended September 30, 2024, compared to 0.92% in the three months ended September 30, 2023. ROA was negative 0.44% in the nine months ended September 30, 2024, compared to 0.7% in the nine months ended September 30, 2023.
- Return on average equity (“ROE”) was negative 24.98% in the three months ended September 30, 2024 compared to 11.93% in the three months ended September 30, 2023. ROE was negative 5.79% in the nine months ended September 30, 2024, compared to 8.97% in the nine months ended September 30, 2023.

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, 2024 and 2023

### Net income

The table below sets forth certain results of operations data for the three and nine month periods ended September 30, 2024 and 2023:

*(in thousands, except per share amounts and percentages)*

|  | Three Months Ended September 30, 2024 | 2023 | Change 2024 vs 2023 |  | Nine Months Ended September 30, 2024 | 2023 | Change 2024 vs 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net interest income | $80,999 | $78,577 | $2,422 | 3.1% | $238,322 | $244,787 | $(6,465) | (2.6)% |
| Provision for credit losses | 19,000 | 8,000 | 11,000 | 137.5% | 50,550 | 48,777 | 1,773 | 3.6% |
| Net interest income after provision for credit losses | 61,999 | 70,577 | (8,578) | (12.2)% | 187,772 | 196,010 | (8,238) | (4.2)% |
| Noninterest (loss) income | (47,683) | 21,921 | (69,604) | (317.5)% | (13,775) | 67,883 | (81,658) | (120.3)% |
| Noninterest expense | 76,208 | 64,420 | 11,788 | 18.3% | 216,104 | 201,653 | 14,451 | 7.2% |
| (Loss) income before income tax expense | (61,892) | 28,078 | (89,970) | (320.4)% | (42,107) | 62,240 | (104,347) | (167.7)% |
| Income tax benefit (expense) | 13,728 | (6,337) | 20,065 | 316.6% | 9,474 | (13,511) | 22,985 | 170.1% |
| Net (loss) income before attribution of noncontrolling interest | (48,164) | 21,741 | (69,905) | (321.5)% | (32,633) | 48,729 | (81,362) | (167.0)% |
| Less: noncontrolling interest | — | (378) | 378 | 100.0% | — | (884) | 884 | 100.0% |
| Net (loss) income attributable to Amerant Bancorp Inc. | $(48,164) | $22,119 | $(70,283) | (317.8)% | $(32,633) | $49,613 | $(82,246) | (165.8)% |
| Basic (loss) earnings per common share | $(1.43) | $0.66 | $(2.09) | (316.7)% | $(0.97) | $1.48 | $(2.45) | (165.5)% |
| Diluted (loss) earnings per common share (1) | $(1.43) | $0.66 | $(2.09) | (316.7)% | $(0.97) | $1.47 | $(2.44) | (166.0)% |

(1) In the three and nine month periods ended September 30, 2024 and 2023, 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, 2024 and 2023

In the three months ended September 30, 2024, net loss attributable to the Company was $48.2 million, or $1.43 loss per diluted share, compared to net income of $22.1 million, or $0.66 per diluted share, in the same quarter of 2023. The decrease of $70.3 million, or 317.8%, in the three months ended September 30, 2024 was primarily driven by (i) losses on securities resulting from the Securities Repositioning initiated in the period, included in noninterest (loss) income (ii) higher noninterest expense and (iii) provision for credit losses. These results were partially offset mainly by higher net interest margin and an income tax benefit driven by the net loss in the period.

In the three months ended September 30, 2023, net income excludes a loss of $0.4 million attributable to a non-controlling interest in Amerant Mortgage. There was no non-controlling interest as of and for the three months ended September 30, 2024. See the 2023 Form 10-K for more information on changes in non-controlling interest in Amerant Mortgage in 2023.

Net interest income was $81.0 million in the three months ended September 30, 2024, an increase of $2.4 million, or 3.1%, from $78.6 million in the three months ended September 30, 2023. This was primarily driven by higher yields and higher average balances of interest-earning assets. The increase was partially offset by higher average balances in deposits mainly in money market accounts and time deposits as well as higher average balances of other interest-bearing liabilities; and (i) a decrease in the average balances of debt securities held to maturity.

Noninterest income was a loss of $47.7 million in the three months ended September 30, 2024 compared to income of $21.9 million in the three months ended September 30, 2023. The decrease was mainly driven by: (i) higher securities losses as a result of the Securities Repositioning initiated during the third quarter of 2024 and; (ii) the absence of the $7.0 million net gain on the early extinguishment of FHLB advances recorded in the three months ended September 30, 2023. These decreases were partially offset by: (i) higher loan-level derivative income; (ii) higher other noninterest income; (iii) higher additional income stemming from BOLI policies following the restructuring completed in the fourth quarter of 2023; and (iv) higher cards and trade servicing fees. *See “*Noninterest Income” for more details.

Noninterest expense was $76.2 million in the three months ended September 30, 2024, an increase of $11.8 million, or 18.3%, compared to $64.4 million in the same period in 2023. This increase was mainly due to: (i) higher professional and other service fees; (ii) an increase in OREO expenses due to a $5.7 million valuation expense recorded during the quarter; (iii) higher salary and employee benefits; (iv) higher loan-level derivative expenses; (v) higher advertising expenses; and (vi) higher FDIC and insurance expenses. These increases were partially offset by: (i) the absence of a valuation expense of $5.6 million in the third quarter of 2023 related to the fair value adjustment of a New York-based CRE loan held for sale; (ii) lower occupancy and equipment expenses; (iii) lower other operating expenses; (iv) lower telecommunication and data processing expenses; and (v) lower depreciation and amortization expense. *See “*Noninterest Expense” for more details.

In the three months ended September 30, 2024 and 2023, noninterest expense included total non-routine items of $5.7 million and $6.3 million, respectively. There were no restructuring costs in the three months ended September 30, 2024, compared to $0.7 million in the same period in 2023. Other non-routine items in noninterest expense in the three months ended September 30, 2024, include $5.7 million related to an OREO valuation expense. *See “*Our Company - Primary Factors Used to Evaluate Our Business” for detailed information on non-routine items in noninterest expense.

In the three months ended September 30, 2024 and 2023, the Company incurred noninterest expenses of $3.9 million and $3.0 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 81 full time equivalent employees (“FTEs”) at September 30, 2024 compared to 98 at September 30, 2023.

#### Nine Months Ended September 30, 2024 and 2023

In the nine months ended September 30, 2024, there was a net loss of $32.6 million, or $0.97 loss per diluted share, compared to net income of $49.6 million, or $1.47 per diluted share, in the same period of 2023. The decrease of $82.2 million or 165.8%, was primarily due to: (i) losses on securities resulting from the Securities Repositioning initiated in the most recent period, included in lower noninterest (loss) income; (ii) higher noninterest expense; (iii) higher provision for credit losses, and (iv) lower net interest income. This was partially offset by an income tax benefit driven by the net loss in the period.

In the nine months ended September 30, 2023, net income excludes a loss of $0.9 million, attributable to a noncontrolling interest in Amerant Mortgage. There was no non-controlling interest as of and for the nine months ended September 30, 2024. See the 2023 Form 10-K for more information on changes in non-controlling interest in Amerant Mortgage in 2023.

Net interest income was $238.3 million in the nine months ended September 30, 2024, a decrease of $6.5 million, or 2.6%, from $244.8 million in the same period in 2023. This was primarily driven by: (i) higher cost and average balances of interest-bearing liabilities mainly in time deposits and money market accounts and lower average balances of debt securities held to maturity. The decrease in net interest income was partially offset by higher average balances and yields on the total interest earning assets. *See “*Net Interest Income” for more details.

Noninterest income was a loss of $13.8 million in the nine months ended September 30, 2024, compared to $67.9 million in the same period of 2023, mainly due to: (i) higher securities losses as a result of the Securities Repositioning initiated during the third quarter of 2024; (ii) lower gains on the early extinguishment of advances from the FHLB in the nine months ended September 30, 2024 compared to the same period last year; and (iii) lower deposits and service fees. These decreases were partially offset by: (i) higher loan-level derivative income; (ii) higher additional income stemming from BOLI policies following the restructuring completed in the fourth quarter of 2023; (iii) higher other noninterest income; (iv) higher cards and trade servicing fees; and (v) higher brokerage, advisory and fiduciary fees. *See “*Noninterest Income” for more details.

Noninterest expense was $216.1 million in the nine months ended September 30, 2024, an increase of $14.5 million, or 7.2%, compared to $201.7 million in the same period in 2023, mainly due to: (i) higher professional and other service fees; (ii) an increase in OREO expenses due to a $5.7 million valuation expense recorded during the quarter; (iii) higher salary and employee benefits; (iv) higher advertising expenses; (v) higher loan-level derivative expenses; (vi) higher occupancy and equipment expenses; and (vii) higher FDIC assessments and insurance expenses. This increase was partially offset by: (i) a decrease in losses on loans held for sale due to lower valuation allowance in the first nine months of 2024 compared to 2023; (ii) lower telecommunication and data processing expenses; (iii) the absence of contract termination costs in the first nine months of 2024; (iv) lower depreciation and amortization expense; and (v) lower other operating expenses. *See “*Noninterest Expense” for more details.

In the nine months ended September 30, 2024 and 2023, noninterest expense included total non-routine items of $11.2 million and $23.1 million, respectively. There were no restructuring costs in the nine months ended September 30, 2024, compared to $12.9 million in the nine months ended September 30, 2023. Other non-routine items in noninterest expense in the nine months ended September 30, 2024, include (i) $5.7 million related to an OREO valuation expense; (ii) $3.4 million in fixed assets impairment; (iii) a $1.3 million loss on loans held for sale for valuation expense, (iv) $0.6 million in legal and broker fees, and (v) $0.3 million in goodwill and intangible asset impairment. All non-routine items mentioned in the nine months ended September 30, 2024 are all in connection with the Houston Sale Transaction except for the OREO valuation expense. Other non-routine items in noninterest expense in the nine months ended September 30, 2023 included: (i) $2.0 million impairment charge on an investment carried at cost and included as part of other assets, and (ii) a $2.6 million loss on sale of repossessed assets in connection with our equipment-financing activities. *See “*Our Company - Primary Factors Used to Evaluate Our Business” for detailed information on non-routine items in noninterest expense.

In the nine months ended September 30, 2024 and 2023, the Company incurred noninterest expenses of $10.5 million and $10.9 million, respectively, related to Amerant Mortgage which consists of salaries and employee benefits expense, mortgage lending costs and professional and other services fees.

### 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, 2024 and 2023. 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.

*(in thousands, except percentages)*

| Interest-earning assets: | Three Months Ended September 30, 2024 Average Balances | Income/ Expense | Yield/ Rates | 2023 Average Balances | Income/ Expense | Yield/ Rates |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Loan portfolio, net (1)(2) | $7,291,632 | $129,752 | 7.08% | $7,048,891 | $120,244 | 6.77% |
| Debt securities available for sale (3) (4) | 1,313,366 | 14,273 | 4.32% | 1,052,147 | 10,924 | 4.12% |
| Debt securities held to maturity (5) | 205,958 | 1,752 | 3.38% | 232,146 | 1,958 | 3.35% |
| Debt securities held for trading | — | — | —% | 2,048 | 4 | 0.77% |
| Equity securities with readily determinable fair value not held for trading | 2,525 | 19 | 2.99% | 2,479 | 21 | 3.36% |
| Federal Reserve Bank and FHLB stock | 61,147 | 1,083 | 7.05% | 54,056 | 961 | 7.05% |
| Deposits with banks | 344,469 | 4,670 | 5.39% | 344,015 | 5,248 | 6.05% |
| Other short-term investments | 6,677 | 88 | 5.24% | 1,964 | 23 | 4.65% |
| **Total interest-earning assets** | 9,225,774 | 151,637 | 6.54% | 8,737,746 | 139,383 | 6.33% |
| **Total non-interest-earning assets (6)** | 760,198 |  |  | 756,141 |  |  |
| Total assets | $9,985,972 |  |  | $9,493,887 |  |  |

70

*(in thousands, except percentages)*

| Interest-bearing liabilities: Checking and saving accounts | Three Months Ended September 30, 2024 Average Balances | Income/ Expense | Yield/ Rates | 2023 Average Balances | Income/ Expense | Yield/ Rates |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Interest bearing DDA | $2,294,323 | $15,345 | 2.66% | $2,523,092 | $16,668 | 2.62% |
| Money market | 1,541,987 | 16,804 | 4.34% | 1,144,580 | 11,013 | 3.82% |
| Savings | 247,903 | 26 | 0.04% | 280,096 | 32 | 0.05% |
| Total checking and saving accounts | 4,084,213 | 32,175 | 3.13% | 3,947,768 | 27,713 | 2.79% |
| Time deposits | 2,324,694 | 27,260 | 4.67% | 2,201,138 | 22,482 | 4.05% |
| Total deposits | 6,408,907 | 59,435 | 3.69% | 6,148,906 | 50,195 | 3.24% |
| Securities sold under agreements to repurchase | — | — | —% | 326 | 4 | 4.87% |
| Advances from the FHLB (7) | 863,913 | 8,833 | 4.07% | 800,978 | 8,207 | 4.07% |
| Senior notes | 59,725 | 942 | 6.27% | 59,409 | 942 | 6.29% |
| Subordinated notes | 29,561 | 361 | 4.86% | 29,391 | 361 | 4.87% |
| Junior subordinated debentures | 64,178 | 1,067 | 6.61% | 64,178 | 1,097 | 6.78% |
| **Total interest-bearing liabilities** | 7,426,284 | 70,638 | 3.78% | 7,103,188 | 60,806 | 3.40% |
| Non-interest-bearing liabilities: |  |  |  |  |  |  |
| Non-interest-bearing demand deposits | 1,491,406 |  |  | 1,335,041 |  |  |
| Accounts payable, accrued liabilities and other liabilities | 301,373 |  |  | 320,369 |  |  |
| Total non-interest-bearing liabilities | 1,792,779 |  |  | 1,655,410 |  |  |
| Total liabilities | 9,219,063 |  |  | 8,758,598 |  |  |
| Stockholders’ equity | 766,909 |  |  | 735,289 |  |  |
| Total liabilities and stockholders' equity | $9,985,972 |  |  | $9,493,887 |  |  |
| Excess of average interest-earning assets over average interest-bearing liabilities | $1,799,490 |  |  | $1,634,558 |  |  |
| **Net interest income** |  | $80,999 |  |  | $78,577 |  |
| Net interest rate spread |  |  | 2.76% |  |  | 2.93% |
| Net interest margin (8) |  |  | 3.49% |  |  | 3.57% |
| Cost of total deposits (9) |  |  | 2.99% |  |  | 2.66% |
| Ratio of average interest-earning assets to average interest-bearing liabilities | 124.23% |  |  | 123.01% |  |  |
| Average non-performing loans/ Average total loans | 1.54% |  |  | 0.56% |  |  |

71

*(in thousands, except percentages)*

| Interest-earning assets: | Nine Months Ended September 30, 2024 Average Balances | Income/ Expense | Yield/ Rates | September 30, 2023 Average Balances | Income/ Expense | Yield/ Rates |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Loan portfolio, net (1)(2) | $7,102,716 | $376,574 | 7.08% | $7,006,633 | $348,315 | 6.65% |
| Debt securities available for sale (3) (4) | 1,273,797 | 41,562 | 4.36% | 1,050,648 | 31,494 | 4.01% |
| Debt securities held to maturity (5) | 217,272 | 5,597 | 3.44% | 236,325 | 6,046 | 3.42% |
| Debt securities held for trading | — | — | —% | 783 | 6 | 1.02% |
| Equity securities with readily determinable fair value not held for trading | 2,490 | 87 | 4.67% | 2,455 | 21 | 1.14% |
| Federal Reserve Bank and FHLB stock | 55,352 | 2,922 | 7.05% | 54,911 | 2,833 | 6.90% |
| Deposits with banks | 377,139 | 15,681 | 5.55% | 342,127 | 14,272 | 5.58% |
| Other short-term investments | 6,337 | 248 | 5.22% | 662 | 23 | 4.65% |
| **Total interest-earning assets** | 9,035,103 | 442,671 | 6.54% | 8,694,544 | 403,010 | 6.20% |
| Total non-interest-earning assets (6) | 788,240 |  |  | 735,943 |  |  |
| Total assets | $9,823,343 |  |  | $9,430,487 |  |  |
| **Interest-bearing liabilities:** |  |  |  |  |  |  |
| Checking and saving accounts |  |  |  |  |  |  |
| Interest bearing DDA | $2,382,548 | $49,860 | 2.80% | $2,503,147 | $46,201 | 2.47% |
| Money market | 1,462,034 | 46,611 | 4.26% | 1,215,005 | 28,295 | 3.11% |
| Savings | 254,661 | 79 | 0.04% | 288,959 | 114 | 0.05% |
| Total checking and saving accounts | 4,099,243 | 96,550 | 3.15% | 4,007,111 | 74,610 | 2.49% |
| Time deposits | 2,291,539 | 79,355 | 4.63% | 2,006,417 | 53,844 | 3.59% |
| Total deposits | 6,390,782 | 175,905 | 3.68% | 6,013,528 | 128,454 | 2.86% |
| Securities sold under agreements to repurchase | 41 | 2 | 6.52% | 130 | 5 | 5.14% |
| Advances from the FHLB (7) | 749,195 | 21,357 | 3.81% | 862,310 | 22,591 | 3.50% |
| Senior notes | 59,646 | 2,826 | 6.33% | 59,330 | 2,825 | 6.37% |
| Subordinated notes | 29,519 | 1,083 | 4.90% | 29,349 | 1,084 | 4.94% |
| Junior subordinated debentures | 64,178 | 3,176 | 6.61% | 64,178 | 3,264 | 6.80% |
| **Total interest-bearing liabilities** | 7,293,361 | 204,349 | 3.74% | 7,028,825 | 158,223 | 3.01% |
| Non-interest-bearing liabilities: |  |  |  |  |  |  |
| Non-interest bearing demand deposits | 1,459,325 |  |  | 1,348,242 |  |  |
| Accounts payable, accrued liabilities and other liabilities | 318,273 |  |  | 313,967 |  |  |
| Total non-interest-bearing liabilities | 1,777,598 |  |  | 1,662,209 |  |  |
| Total liabilities | 9,070,959 |  |  | 8,691,034 |  |  |
| Stockholders’ equity | 752,384 |  |  | 739,453 |  |  |
| Total liabilities and stockholders' equity | $9,823,343 |  |  | $9,430,487 |  |  |
| Excess of average interest-earning assets over average interest-bearing liabilities | $1,741,742 |  |  | $1,665,719 |  |  |
| **Net interest income** |  | $238,322 |  |  | $244,787 |  |
| Net interest rate spread |  |  | 2.80% |  |  | 3.19% |
| Net interest margin (8) |  |  | 3.52% |  |  | 3.76% |
| Cost of total deposits (9) |  |  | 2.99% |  |  | 2.33% |
| Ratio of average interest-earning assets to average interest-bearing liabilities | 123.88% |  |  | 123.70% |  |  |
| Average non-performing loans/ Average total loans | 0.93% |  |  | 0.48% |  |  |

(1) Includes loans held for investment net of the allowance for credit losses, and loans held for sale. The average balance of the allowance for credit losses was $92.1 million and $101.2 million in the three months ended September 30, 2024 and 2023, respectively, and $93.2 million and $89.1 million in the nine months ended September 30, 2024 and September 30, 2023, respectively. The average balance of total loans held for sale was $612.9 million and $58.8 million in the three months ended September 30, 2024 and 2023, respectively, and $352.8 million, and $70.1 million in the nine months ended September 30, 2024 and September 30, 2023, respectively.

(2) Includes average non-performing loans of $113.5 million and $39.8 million for the three months ended September 30, 2024 and 2023, respectively, and $66.3 million and $34.1 million for the nine months ended September 30, 2024 and September 30, 2023, respectively.

(3) Includes the average balance of net unrealized gains and losses in the fair value of debt securities available for sale. The average balance includes average net unrealized losses of $89.4 million and $119.8 million in the three months ended September 30, 2024 and 2023, respectively, and average net unrealized losses of $102.2 million and $110.5 million in the nine months ended September 30, 2024 and September 30, 2023, respectively.

(4) Includes nontaxable securities with average balances of $19.9 million and $18.6 million for the three months ended September 30, 2024 and 2023, respectively, and $19.9 and $18.6 million, for the nine months ended September 30, 2024 and September 30, 2023, respectively. The tax equivalent yield for these nontaxable securities was 4.33% and 4.34% for the three months ended September 30, 2024 and 2023, respectively, and 4.28% and 4.64% in the nine months ended September 30, 2024 and September 30, 2023, respectively. In 2024 and 2023, the tax equivalent yields were calculated by assuming a 21% tax rate and dividing the actual yield by 0.79.

(5) Includes nontaxable securities with average balances of $44.5 million and $49.6 million for the three months ended September 30, 2024 and 2023, respectively, and $47.8 million and $50.1 million for the nine months ended September 30, 2024 and September 30, 2023, respectively. The tax equivalent yield for these nontaxable securities was 4.43% and 4.26% for the three months ended September 30, 2024 and 2023, respectively, and 4.23% and 4.21% in the nine months ended September 30, 2024 and September 30, 2023, respectively. In 2024 and 2023, the tax equivalent yields were calculated by assuming a 21% tax rate and dividing the actual yield by 0.79.

(6) Excludes the allowance for credit losses.

(7) The terms of the FHLB advance agreements require the Bank to maintain certain investment securities or loans as collateral for these advances.

(8) NIM is defined as net interest income divided by average interest-earning assets, which are loans, securities, deposits with banks and other financial assets which yield interest or similar income.

(9) Calculated based upon the average balance of total noninterest bearing and interest bearing deposits.

### Net Interest Income

#### Three Months Ended September 30, 2024 and 2023

Net interest income in the three months ended September 30, 2024,was $81.0 million, an increase of $2.4 million, or 3.1%, from $78.6 million in the three months ended September 30, 2023. This was primarily driven by: (i) an increase of 21 basis points in the yield on total interest earning assets; and (ii) an increase of $261.2 million, or 24.8%, and $242.7 million or 3.44%, in the average balances of debt securities available for sale and the loan portfolio, respectively, during the period. These increases were partially offset primarily by (i) higher average balances of deposits mainly in money market accounts and time deposits; and (ii) a decrease of $26.2 million, or 11.3%, in the average balances of debt securities held to maturity. Net interest margin was 3.49% in the three months ended September 30, 2024, a decrease of 8 basis points from 3.57% in the three months ended September 30, 2023. *See* discussions further below for more details.

During the third quarter of 2024 we had higher average balance of loans and debt securities available for sale compared to the same period last year. Our asset-sensitive position enabled us to partially offset, via repricing of variable-rate loans, and new loan originations at higher market rates, the incremental cost of deposits and borrowings we recorded during the third quarter of 2024. Additionally, we continued investing in higher-yielding, fixed rate, debt securities available for sale, and maintaining a high average balance in funds at the Federal Reserve. *See* discussions further below for more details. Lastly, during the third quarter of 2024, the Company initiated the Securities Repositioning, which included transferring all debt securities previously classified as held to maturity to the available for sale category. See “Our Company” for more details on the Securities Repositioning strategy.

#### Interest Income

Total interest income was $151.6 million in the three months ended September 30, 2024, an increase of $12.3 million, or 8.8%, compared to $139.4 million for the same period of 2023. This was primarily driven by a 21 basis points increase in the average yield on total interest earning assets. In addition, there was an increase of $261.2 million, or 24.8%, and $242.7 million, or 3.4%, in the average balances of debt securities available for sale and the loan portfolio, respectively, during the period. These increases were partially offset primarily by a decrease of $26.2 million, or 11.3%, in the average balance of debt securities held to maturity.

Interest income on loans in the three months ended September 30, 2024 was $129.8 million, an increase of $9.5 million, or 7.9%, compared to $120.2 million in the same period last year, primarily due to a 31 basis points increase in average yields, mainly attributable to higher market rates. The increase in the average balance of loans includes: (i) originations of single-family residential, and (ii) originations of commercial loans. The increase in interest income on loans was partially offset by the increase in the average balance of non-performing loans in the three months ended September 30, 2024 compared to the same period in 2023. *See “*-Average Balance Sheet, Interest and Yield/Rate Analysis” for detailed information.

Interest income on debt securities available for sale was $14.3 million in the three months ended September 30, 2024, an increase of $3.3 million, or 30.7%, compared to $10.9 million in the same period of 2023. This was mainly due to an increase of $261.2 million, or 24.8% in the average balance of these securities as well as an increase of 20 basis points in average yields, primarily driven by higher market rates. In the three months ended September 30, 2024, the average balance of accumulated net unrealized loss included in the carrying value of these securities was $89.4 million compared to $119.8 million in the same period last year. As of September 30, 2024, corporate debt securities comprised 9.3% of the available-for-sale portfolio, down from 24.4% at September 30, 2023.

As of September 30, 2024, floating rate investments represent 14.3% of our total investment portfolio compared to 15.4% at September 30, 2023. In addition, the expected overall duration decreased to 4.9 years at September 30, 2024 from 5.3 years at September 30, 2023 due to lower expected market rates, and the effect of the Securities Repositioning previously discussed.

#### Interest Expense

Interest expense was $70.6 million in the three months ended September 30, 2024, an increase of $9.8 million, or 16.2%, compared to $60.8 million in the same period of 2023. This was primarily due to: (i) higher average cost of total deposits mainly in money market accounts and time deposits as well as advances from FHLB. In addition, there was an increase of $323.1 million, or 4.5%, in the average balance of total interest bearing liabilities, mainly in money market accounts and time deposits.

Interest expense on interest-bearing deposits was $59.4 million in the three months ended September 30, 2024, an increase of $9.2 million, or 18.4%, compared to $50.2 million for the same period of 2023. This was mainly driven by an increase of 45 basis points in the average rates paid on total deposits, and an increase of $260.0 million, or 4.2%, in their average balance. *See* below for a detailed explanation of changes by major deposit category:

- *Time deposit*s. Interest expense on total time deposits increased $4.8 million, or 21.3%, in the three months ended September 30, 2024 compared to the same period in 2023. This was mainly due to an increase of 62 basis points in the average cost of total time deposits. In addition, there was an increase of $123.6 million, or 5.6%, in the average balance of these deposits, which includes an increase of $103.5 million in the average balance of customer CDs and an increase of $20.1 million in brokered time deposits.
- *Interest bearing checking and savings accounts*. Interest expense on checking and savings accounts increased $4.5 million, or 16.1% in the three months ended September 30, 2024 compared to the same period one year ago, mainly due to an increase of 34 basis points in the average costs on these deposits. In addition, there was an increase of $397.4 million, or 34.7%, in the average balance of money market accounts in the three months ended September 30, 2024 compared to the same period in 2023. This increase in money market accounts was partially offset by decreases in the average balances of interest bearing demand deposits and savings accounts in the three months ended September 30, 2024 compared to the same period in 2023.

Interest expense on advances from the FHLB increased $0.6 million, or 7.6%, in the three months ended September 30, 2024 compared to the same period of 2023, primarily driven by an increase of $62.9 million, or 7.9%, in the average balance on this funding source compared to the same period in 2023. In the first nine months of 2024, the Company borrowed $1.4 billion, and repaid $1.1 billion of advances from the FHLB. *See “*Capital Resources and Liquidity Management” for more details on the repayment of advances from the FHLB.

#### Nine Months Ended September 30, 2024 and 2023

Net interest income was $238.3 million in the nine months ended September 30, 2024, a decrease of $6.5 million, or 2.6%, from $244.8 million in the same period of 2023. This was primarily driven by: (i) higher cost of total deposits mainly in time deposits and money market accounts; (ii) an increase of $264.5 million, or 3.76%, in the average balance of total interest-bearing liabilities primarily in time deposits and money market accounts, and (iii) a decrease of $19.1 million, or 8.1% in the average balance of debt securities held to maturity. The decrease in net interest income was partially offset by an increase of 34 basis points in the yield on total interest earning assets. In addition, there were increases of $223.1 million, or 21.2%, $96.1 million, or 1.4%, and $35.0 million, or 10.2%, in the average balance of debt securities available for sale, loans, and interest earning deposits with banks, respectively. Net interest margin was 3.52% in the nine months ended September 30, 2024, a decrease of 24 basis points from 3.76% in the nine months ended September 30, 2023. *See* discussions further below for more details.

In the nine months ended September 30, 2024, the Company initiated the Securities Repositioning, which included transferring all debt securities previously classified as held to maturity to the available for sale category. See “Our Company” for more details on the Securities Repositioning.

#### Interest Income

Total interest income was $442.7 million in the nine months ended September 30, 2024, an increase of $39.7 million, or 9.8%, compared to $403.0 million for the same period of 2023. This was primarily driven by a 34 basis points increase in the average yield on total interest earning assets. In addition, there were increases of $223.1 million, or 21.24%, $96.1 million, or 1.4%, and $35.0 million, or 10.2%, in the average balances of debt securities available for sale, loans, and interest earning deposits with banks, respectively. These increases were partially offset by a decrease of $19.1 million, or 8.06%, in the average balance of debt securities held to maturity.

Interest income on loans in the nine months ended September 30, 2024 was $376.6 million, an increase of $28.3 million, or 8.1%, compared to $348.3 million in the same period last year, primarily due to: (i) a 43 basis points increase in average yields, mainly attributable to higher market rates, and (ii) an increase of $96.1 million, or 1.4%, in the average balance of loans. The increase in the average balance of loans includes: (i) increase in commercial loans; (ii) increase in originations of single-family residential and construction loans mostly through AMTM and;(iii) increase in loans to financial institutions and acceptances. *See “*-Average Balance Sheet, Interest and Yield/Rate Analysis” for detailed information.

Interest income on debt securities available for sale was $41.6 million in the nine months ended September 30, 2024, an increase of $10.1 million, or 32.0%, compared to $31.5 million in the same period of 2023. This was mainly due to an increase of 35 basis points in average yields, primarily driven by higher market rates and an increase of $223.1 million, or 21.2%, in the average balance of these securities. In the nine months ended September 30, 2024, the average balance of accumulated net unrealized loss included in the carrying value of these securities was $102.2 million compared to $110.5 million in the same period last year.

Interest income on debt securities held to maturity was $5.6 million in the nine months ended September 30, 2024, a decrease of $0.4 million, or 7.4%, compared to $6.0 million in the same period of 2023. This was mainly due to a decrease of $19.1 million, or 8.1%, in the average balance of these securities.

#### Interest Expense

Interest expense was $204.3 million in the nine months ended September 30, 2024, an increase of $46.1 million, or 29.2%, compared to $158.2 million in the same period of 2023. This was primarily due to higher cost of total deposits. In addition, there was an increase of $264.5 million, or 3.76%, in the average balance of total interest bearing liabilities, mainly time deposits and money market accounts.

Interest expense on interest-bearing deposits was $175.9 million in the nine months ended September 30, 2024, an increase of $47.5 million, or 36.9%, compared to $128.5 million for the same period of 2023. This was mainly driven by an increase of 82 basis points in the average rates paid on total interest-bearing deposits, and an increase of $377.3 million, or 6.3%, in their average balance. *See* below for a detailed explanation of changes by major deposit category:

- *Time deposit*s. Interest expense on total time deposits increased $25.5 million, or 47.4%, in the nine months ended September 30, 2024 compared to the same period in 2023. This was mainly due to an increase of 104 basis points in the average cost of total time deposits. In addition, there was an increase of $285.1 million, or 14.2%, in the average balance of these deposits, including $260.8 million in customer CDs and $24.3 million in brokered time deposits, respectively.
- *Interest bearing checking and savings accounts*. Interest expense on checking and savings accounts increased $21.9 million, or 29.4%, in the nine months ended September 30, 2024 compared to the same period one year ago. This increase was primarily due to an increase of 66 basis points in the average costs on these deposits. In addition, there was an increase of $92.1 million, or 2.3% in the average balance of total interest bearing checking and savings accounts in the nine months ended September 30, 2024 compared to the same period in 2023. This was mainly driven by: (i) higher average domestic personal accounts, and (ii) higher average balance of international commercial accounts. These increases were partially offset by a decrease in the average balance of international personal accounts.

Interest expense on advances from the FHLB decreased $1.2 million, or 5.5%, in the nine months ended September 30, 2024 compared to the same period of 2023, primarily driven by a decrease of $113.1 million, or 13.1%, in the average balances of these borrowings. The decrease in interest expense on advances from the FHLB was partially offset by the increase of 31 basis points in the average rate paid on these borrowings. *See “*Capital Resources and Liquidity Management” for more details on the early repayment 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.

*(in thousands)*

|  | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Balance at the beginning of the period | $94,400 | $105,956 | $95,504 | $83,500 |
| **Charge-offs** |  |  |  |  |
| Real estate loans |  |  |  |  |
| Commercial Real Estate (CRE) |  |  |  |  |
| Non-owner occupied | $— | $(90) | $— | $(90) |
| Multi-family residential | — | — | (591) | — |
| Single-family residential | — | — | — | (39) |
| Commercial | (31,416) | (9,288) | (47,294) | (18,715) |
| Consumer and others | (4,175) | (6,441) | (21,122) | (20,389) |
| **Total Charge-offs** | $(35,591) | $(15,819) | $(69,007) | $(39,233) |
| **Recoveries** |  |  |  |  |
| Real estate loans |  |  |  |  |
| Commercial Real Estate (CRE) |  |  |  |  |
| Non-Owner occupied | $— | $— | $— | $116 |
| Land development and construction loans | 15 | 10 | 51 | $173 |
|  | 15 | 10 | 51 | 289 |
| Single-family residential | 12 | 13 | 36 | 62 |
| Owner occupied | — | — | 17 | — |
|  | 27 | 23 | 104 | 351 |
| Commercial | 1,944 | 736 | 2,908 | 5,114 |
| Consumer and others | 1,240 | 477 | 2,461 | 864 |
| **Total Recoveries** | $3,211 | $1,236 | $5,473 | $6,329 |
| Net charge-offs | (32,380) | (14,583) | (63,534) | (32,904) |
| Provision for credit losses - loans | 17,870 | 7,400 | 47,920 | 48,177 |
| **Balance at the end of the period** | $79,890 | $98,773 | $79,890 | $98,773 |

77

#### Three Months Ended September 30, 2024 and 2023

The Company recorded a provision for credit losses on loans of $17.9 million in the three months ended September 30, 2024, compared to $7.4 million in the same period last year. In the third quarter of 2024, the provision for credit losses on loans includes $14.7 million to cover charge-offs, $2.3 million due to loan composition and volume changes, and $0.9 million due to credit quality and macro-economic factor updates.

During the three months ended September 30, 2024, charge-offs increased $19.8 million, or 125.0%, compared to the same period of the prior year. In the three months ended September 30, 2024, charge-offs include (i) $28.8 million related to six commercial loans; (ii) $4.1 million in consumer loans, primarily purchased indirect consumer loans, and (iii) $2.7 million in multiple smaller balance commercial and consumer loans. Charge-offs in the third quarter of 2024 were partially offset by $3.2 million in recoveries, which include $1.6 million related to one commercial loan and $1.6 million related to multiple commercial and consumer loan recoveries.

The ratio of net charge-offs over the average total loan portfolio held for investment was 1.90% in the third quarter of 2024, compared to 0.82% in the third quarter of 2023. See the 2023 Form 10-K for more information on charge-offs for the year ended December 31, 2023.

#### Nine Months Ended September 30, 2024 and 2023

The Company recorded a provision for credit losses on loans of $47.9 million in the nine months ended September 30, 2024, compared to $48.8 million in the same period last year. During this period, the provision for credit losses on loans included $51.9 million to cover charge-offs, and $6.5 million due to loan composition and volume changes. These provision requirements were partially offset by a release of $6.1 million due to credit quality and macroeconomic factor updates and a $4.4 million release due to the Houston loan portfolio classification as held-for-sale.

During the nine months ended September 30, 2024, charge-offs increased $29.8 million, or 75.9%, compared to the same period of the prior year. In the nine months ended September 30, 2024, charge-offs include: (i) $38.7 million related to seven commercial loans; (ii) $21.1 million related to multiple consumer and overdraft loans, primarily purchased indirect consumer loans, and (iii) $9.2 million in connection with multiple smaller commercial and real estate loans. Charge-offs in the nine months ended September 30, 2024 were partially offset by $5.2 million in recoveries, which include $2.7 million of a commercial loan and $2.4 million related to multiple commercial and consumer loan recoveries. The downgrades were not concentrated in a specific industry or geography.

In the nine months ended September 30, 2023, charge-offs included: (i) $6.5 million related to an equipment-financing commercial loan relationship that was transferred to other repossessed assets in the first quarter of 2023 and subsequently sold in the second quarter of 2023; (ii) $20.4 million related to multiple consumer loans, primarily purchased indirect consumer loans, and (iii) $12.3 million in connection with multiple commercial and real estate loans. Charge-offs in the first nine months of 2023, were partially offset primarily by a $3.1 million recovery from a Miami-based U.S. coffee trader (“the Coffee Trader”) charged-off in 2022.

The ratio of net charge-offs over the average total loan portfolio held for investment was 1.24% in the first nine months of 2024, compared to 0.63% in the first nine months of 2023.

During the nine months ended September 30, 2024, consistent with the Company’s applicable policy, the Company has requested independent third-party collateral valuations on all real estate securing non-performing loans with existing valuations older than 12-months and outstanding balances in excess of $1.0 million. As of September 30, 2024, there where five loans recently downgraded totaling $4.9 million with appraisals older than 12 month, for which new appraisals have been ordered. No additional provision for credit losses were deemed necessary as a result of these valuations.

During the nine months ended 2023, consistent with the Company’s applicable policy, the Company obtained independent third-party collateral valuations on all real estate securing non-performing loans with existing valuations older than 12-months and outstanding balances in excess of $1.0 million, to support current ACL levels. No additional provision for credit losses were deemed necessary 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 (loss) Income

The table below sets forth a comparison for each of the categories of noninterest (loss) income for the periods presented.

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2024 Amount% |  | 2023 Amount% |  | Change 2024 vs 2023 Amount% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Deposits and service fees | $5,046 | 10.6% | $5,053 | 23.1% | $(7) | (0.1)% |
| Brokerage, advisory and fiduciary activities | 4,466 | 9.4% | 4,370 | 19.9% | 96 | 2.2% |
| Change in cash surrender value of bank owned life insurance (“BOLI”) (1) | 2,332 | 4.9% | 1,483 | 6.8% | 849 | 57.3% |
| Loan-level derivative income (2) | 3,515 | 7.4% | 1,196 | 5.5% | 2,319 | 193.9% |
| Cards and trade finance servicing fees | 1,430 | 3.0% | 734 | 3.4% | 696 | 94.8% |
| Gain on early extinguishment of FHLB advances, net | — | —% | 7,010 | 32.0% | (7,010) | (100.0)% |
| Derivative (losses) gains, net (3) | — | —% | (77) | (0.4)% | 77 | (100.0)% |
| Securities losses, net (4) | (68,484) | (143.6)% | (54) | (0.3)% | (68,430) | NM |
| Other noninterest income (5) | 4,012 | 8.3% | 2,206 | 10.0% | 1,806 | 81.9% |
| Total noninterest (loss) income | $(47,683) | (100.0)% | $21,921 | 100.0% | $(69,604) | (317.5)% |

*(in thousands, except percentages)*

|  | Nine Months Ended September 30, 2024 Amount% |  | 2023 Amount% |  | Change 2024 vs 2023 Amount% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Deposits and service fees | $14,652 | 106.4% | $14,952 | 22.0% | $(300) | (2.0)% |
| Brokerage, advisory and fiduciary activities | 13,331 | 96.8% | 12,808 | 18.9% | 523 | 4.1% |
| Change in cash surrender value of bank owned life insurance (“BOLI”) (1) | 6,916 | 50.2% | 4,324 | 6.4% | 2,592 | 59.9% |
| Loan-level derivative income (2) | 6,338 | 46.0% | 3,743 | 5.5% | 2,595 | 69.3% |
| Cards and trade finance servicing fees | 3,984 | 28.9% | 1,829 | 2.7% | 2,155 | 117.8% |
| Gain on early extinguishment of FHLB advances, net | 189 | 1.4% | 33,623 | 49.5% | (33,434) | (99.4)% |
| Derivative (losses) gains, net (3) | (196) | (1.4)% | 179 | 0.3% | (375) | (209.5)% |
| Securities losses, net (4) | (68,655) | (498.4)% | (11,022) | (16.2)% | (57,633) | 522.9% |
| Other noninterest income (5) | 9,666 | 70.1% | 7,447 | 10.9% | 2,219 | 29.8% |
| Total noninterest (loss) income | $(13,775) | (100.0)% | $67,883 | 100.0% | $(81,658) | (120.3)% |

(1) Changes in cash surrender value of BOLI are not taxable.

(2) Income from interest rate swaps and other derivative transactions with customers. The Company incurs expenses related to derivative transactions with customers which are included as part of noninterest expenses under loan-level derivative expense. *See* Noninterest Expense section for more details.

(3) Net unrealized gains and losses related to uncovered interest rate caps with clients.

(4) In the three and nine months ended September 30, 2024, includes a total net loss of $68.5 million as a result of the Securities Repositioning initiated during the third quarter of 2024.

(5) Includes mortgage banking income of $2.8 million and $0.5 million in the three months ended September 30, 2024 and September 30, 2023, respectively, and $5.8 million and $3.9 million in the nine months ended September 30, 2024 and September 30, 2023, respectively, primarily consisting of net gains on sale, valuation and derivative transactions associated with mortgage loans held for sale activity, and other smaller sources of income related to the operations of Amerant Mortgage. In addition, includes $0.5 million in BOLI death benefits received in the nine months ended September 30, 2024. Other sources of income in the periods shown include foreign currency exchange transactions with customers and valuation income on the investment balances held in the non-qualified deferred compensation plan.

NM- not meaningful

#### Three Months Ended September 30, 2024 and 2023

Total noninterest income decreased $69.6 million, or 317.5%, in the three months ended September 30, 2024, compared to the three months ended September 30, 2023 mainly due to: (i) higher securities losses as a result of the investment portfolio repositioning initiated during the third quarter of 2024, and (ii) the absence of the $7.0 million net gain on the early extinguishment of FHLB advances in the three months ended September 30, 2023. These decreases were partially offset by: (i) higher loan-level derivative income; (ii) higher other noninterest income; (iii) higher additional income stemming from BOLI policies following the restructuring completed in the fourth quarter of 2023 and; (iv) higher cards and trade servicing fees.

In the three months ended September 30, 2024, the Company had gains or losses associated with the early repayment of FHLB advances, compared to a net gain of $7.0 million on the early repayment of approximately $225 million of advances from the FHLB in the three months ended September 30, 2023.

Other noninterest income increased $1.8 million, or 81.9%, in the three months ended September 30, 2024 compared to the same period in 2023, primarily driven by higher mortgage banking income.

Loan-level derivative income increased $2.3 million, or 193.9%, in the three months ended September 30, 2024 compared to the same period in 2023, mainly driven by a higher volume of derivative transactions with clients during the current quarter, compared to the same period of 2023. In addition, loan-level derivative income includes $1.6 million resulting from the unwinding of a swap related to the sale of a non-performing loan.

Our AUMs totaled $2.55 billion at September 30, 2024, an increase of $261.4 million, or 11.4%, from $2.29 billion at December 31, 2023, primarily driven by increased market valuations as well as net new assets as we continue to execute on our relationship-focused strategy.

#### Nine Months Ended September 30, 2024 and 2023

Total noninterest income decreased $81.7 million, or 120.3%, in the nine months ended September 30, 2024, compared to the same period in 2023, mainly due to: (i) higher securities losses as a result of the Securities Repositioning initiated during the third quarter of 2024; (ii) lower gains on the early extinguishment of advances from the FHLB in the nine months ended September 30, 2024 compared to the same period last year; (iii) having derivative losses in the nine months ended September 30, 2024 compared to gains in the same period in 2023, and (iv) lower deposits and service fees. These decreases were partially offset by: (i) higher loan-level derivative income; (ii) higher additional income stemming from BOLI policies following the restructuring completed in the fourth quarter of 2023; (iii) higher other noninterest income; (iv) higher cards and trade servicing fees; and (v) higher brokerage, advisory and fiduciary fees.

In the nine months ended September 30, 2024, the Company recorded net gains of $0.2 million on the early repayment of approximately $915.0 million of advances from the FHLB. In the nine months ended September 30, 2023 the Company recorded a net gain of $33.6 million on the early extinguishment of approximately $1.1 billion of advances from the FHLB. These early repayments of advances from the FHLB are part of the Company’s asset/liability management strategies.

Other noninterest income increased $2.2 million, or 29.8%, in the nine months ended September 30, 2024 compared to the same period in 2023, primarily driven by: (i) higher mortgage banking income; (ii) higher miscellaneous income; (iii) BOLI death benefit receipt of $0.5 million; and (iv) higher foreign currency valuation.

Deposits and service fees decreased $0.3 million, or 2.0%, in the nine months ended September 30, 2024 compared to the same period last year, primarily due to lower service charge income fees received during the period.

Loan-level derivative income increased $2.6 million, or 69.3%, in the nine months ended September 30, 2024 compared to the same period last year, mainly driven by a higher volume of derivative transactions with clients during the period compared to the same period last year. In addition, loan-level derivative income includes $1.6 million resulting from the unwinding of a swap related to the sale of a non-performing loan during the third quarter of 2024.

Brokerage, advisory and fiduciary activities increased $0.5 million, or 4.1%, in the nine months ended September 30, 2024 compared to the same period last year, primarily driven by higher brokerage fees as a result of higher equity trading volumes/commissions.

### Noninterest Expense

The table below presents a comparison for each of the categories of noninterest expense for the periods presented.

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2024 Amount% |  | 2023 Amount% |  | Change 2024 vs 2023 Amount% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Salaries and employee benefits (1) | $34,979 | 45.9% | $31,334 | 48.6% | $3,645 | 11.6% |
| Professional and other services fees (2) | 13,711 | 18.0% | 5,325 | 8.3% | 8,386 | 157.5% |
| Occupancy and equipment (3) | 5,891 | 7.7% | 7,293 | 11.3% | (1,402) | (19.2)% |
| Telecommunications and data processing (4) | 2,991 | 3.9% | 3,556 | 5.5% | (565) | (15.9)% |
| Advertising expenses | 3,468 | 4.6% | 2,724 | 4.2% | 744 | 27.3% |
| FDIC assessments and insurance | 2,863 | 3.8% | 2,590 | 4.0% | 273 | 10.5% |
| Depreciation and amortization (5) | 1,737 | 2.3% | 1,795 | 2.8% | (58) | (3.2)% |
| Losses on loans held for sale carried at the lower cost or fair value (6) | — | —% | 5,562 | 8.6% | (5,562) | (100.0)% |
| Other real estate owned and repossessed assets expense, net (7) | 5,535 | 7.3% | (134) | (0.2)% | 5,669 | NM |
| Loan-level derivative expense (9) | 1,802 | 2.4% | 18 | —% | 1,784 | 9,911.1% |
| Other operating expenses (10) | 3,231 | 4.1% | 4,357 | 6.9% | (1,126) | (25.8)% |
| Total noninterest expenses (11) | $76,208 | 100.0% | $64,420 | 100.0% | $11,788 | 18.3% |

*(in thousands, except percentages)*

|  | Nine Months Ended September 30, 2024 Amount% |  | 2023 Amount% |  | Change 2024 vs 2023 Amount% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Salaries and employee benefits (1) | $101,794 | 47.1% | $100,457 | 49.8% | $1,337 | 1.3% |
| Professional and other services fees (2) | 36,784 | 17.0% | 20,368 | 10.1% | 16,416 | 80.6% |
| Occupancy and equipment (3) | 21,408 | 9.9% | 20,828 | 10.3% | 580 | 2.8% |
| Telecommunications and data processing (4) | 9,256 | 4.3% | 11,647 | 5.8% | (2,391) | (20.5)% |
| Advertising expenses | 10,789 | 5.0% | 9,642 | 4.8% | 1,147 | 11.9% |
| FDIC assessments and insurance | 8,643 | 4.0% | 8,066 | 4.0% | 577 | 7.2% |
| Depreciation and amortization (5) | 4,866 | 2.3% | 5,362 | 2.7% | (496) | (9.3)% |
| Losses on loans held for sale carried at the lower cost or fair value (6) | 1,258 | 0.6% | 5,562 | 2.8% | (4,304) | (77.4)% |
| Other real estate owned and repossessed assets expense, net (7) | 5,033 | 2.3% | 2,297 | 1.1% | 2,736 | 119.1% |
| Contract termination costs (8) | — | —% | 1,550 | 0.8% | (1,550) | (100.0)% |
| Loan-level derivative expense (9) | 2,386 | 1.1% | 1,728 | 0.9% | 658 | 38.1% |
| Other operating expenses (10) | 13,887 | 6.4% | 14,146 | 6.9% | (259) | (1.8)% |
| Total noninterest expenses (11) | $216,104 | 100.0% | $201,653 | 100.0% | $14,451 | 7.2% |

(1) Includes staff reduction costs of $0.5 million and $2.9 million in the three and nine months ended September 30, 2023, respectively, which consist of severance expenses primarily related to organizational rationalization.

(2) Includes $0.3 million in legal expenses in connection with the Houston Sale Transaction in the nine months ended September 30, 2024. Additionally, includes additional non-routine expenses of $4.6 million in the nine months ended September 30, 2023, related to the engagement of FIS. Lastly, includes recurring service fees in connection with the engagement of FIS in the three and nine month periods ended September 30, 2024.

(3) In the nine months ended September 30, 2024, includes fixed assets impairment charge of $3.4 million in connection with the Houston Sale Transaction. In each of the three and nine months ended September 30, 2023, includes a rent termination fee of $0.3 million in connection with the closure of a branch in Houston, Texas. In addition, in the nine months ended September 30, 2023, includes $0.6 million related to ROU asset impairment in connection with the closure of a branch in Miami, Florida in 2023 as well as $0.5 million related to ROU asset impairment in connection with the closure of a branch in Houston, Texas in 2023.

(4) Includes a charge of $1.4 million in the nine months ended September 30, 2023 related to the disposition of fixed assets due to the write off of in-development software.

(5) Includes a charge of $0.9 million in the nine month period ended September 30, 2023 for the accelerated depreciation of leasehold improvements in connection with the closure of a branch in Miami, Florida in 2023.

(6) In the nine months ended September 30, 2024, amount shown are in connection with the Houston Sale Transaction. In the three and nine month periods ended September 30, 2023, includes valuation allowance as a result of changes in the fair value of loans held for sale carried at the lower of cost or fair value.

(7) Includes OREO rental income of $0.5 million and $0.4 million in the three months ended September 30, 2024 and September 30, 2023, and $1.4 million and $0.9 million in the nine months ended September 30, 2024 and September 30, 2023, respectively. In addition, in the nine months ended September 30, 2023, includes a loss on sale of repossessed assets in connection with our equipment-financing activities of $2.6 million. Lastly, includes $5.7 million of OREO valuation expense in the three months ended September 30, 2024.

(8) Contract termination and related costs associated with third party vendors resulting from the Company’s transition to our new technology provider.

(9) Includes service fees in connection with our loan-level derivative income generation activities.

(10) In the nine months ended September 30, 2024, includes broker fees of $0.3 million in connection with the Houston Sale Transaction. Additionally, in the nine months ended September 30, 2023, includes an impairment charge of $2.0 million related to an investment carried at cost and included in other assets. All periods shown includes mortgage loan origination and servicing expenses, charitable contributions, community engagement, postage and courier expenses, and debits which mirror the valuation income on the investment balances held in the non-qualified deferred compensation plan in order to adjust the liability to participants of the deferred compensation plan and other small expenses.

(11) Includes $3.9 million and $3.0 million in the three months ended September 30, 2024 and September 30, 2023, respectively, and $10.5 million and $10.9 million in the nine months ended September 30, 2024 and September 30, 2023, related to Amerant Mortgage, primarily consisting of salaries and employee benefits, mortgage lending costs and professional and other services fees.

NM - not meaningful

#### Three Months Ended September 30, 2024 and 2023

Noninterest expense increased $11.8 million, or 18.3%, in the three months ended September 30, 2024 compared to the same period in 2023, mainly due to: (i) higher professional and other service fees; (ii) an increase in OREO expenses due to a $5.7 million valuation expense recorded during the quarter; (iii) higher salary and employee benefits; (iv) higher loan-level derivative expenses, and (v) higher advertising expenses. These increases were partially offset by: (i) the absence of a valuation expense of $5.6 million in the third quarter of 2023 related to the fair value adjustment of a New York-based CRE loan held for sale; (ii) lower occupancy and equipment expenses; (iii) lower other operating expenses, and (iv) lower telecommunication and data processing expenses.

Professional and other services fees increased $8.4 million, or 157.5%, in the three months ended September 30, 2024 compared to the same period last year. This was mainly driven by higher recurrent fees in connection with the current technology provider, and higher legal fees across various projects. These increases were partially offset by lower combined smaller vendor fees.

Other operating expenses decreased $1.1 million, or 25.8%, in the three months ended September 30, 2024 compared to the same period in 2023, mainly driven by (i) lower loan costs and mortgage loan servicing fees and (ii) lower business development expenses. This decrease was partially offset by: (i) higher expenses associated with operating charge-offs, (ii) higher public relations expenses, (iii) higher travel expenses; and (iv) higher training expenses.

Telecommunication and data processing expenses decreased $0.6 million, or 15.9%, in the three months ended September 30, 2024 compared to the same period last year, primarily driven by the absence of the additional expenses related to the old technology provider and lower ATM processing fees.

Salaries and employee benefits increased $3.6 million, or 11.6%, in the three months ended September 30, 2024 compared to the same period one year ago, mainly driven by: (i) higher salary expense as a result of the new hires and higher average FTEs during ther period; (ii) higher variable compensation and bonus accruals based on performance and production. This was partially offset by lower severance expenses in the third quarter of 2024. At September 30, 2024, our FTEs were 735, a net increase of 35 FTEs, or 5.0% compared to 700 FTEs at September 30, 2023.

Occupancy and equipment expenses decreased $1.4 million, or 19.2%, in the three months ended September 30, 2024 compared to the same period one year ago partially due to (i) the absence of additional expenses in the third quarter of 2023 related to a branch closure in Houston, Texas, and (ii) lower equipment maintenance expenses.

Loan-level derivative expenses increased $1.8 million in the three months ended September 30, 2024 compared to the same period last year, mainly driven by higher volume of derivative transactions during the third quarter of 2024. In addition, loan-level derivative expenses include $1.6 million resulting from the unwinding of a swap related to the sale of a non-performing loan

#### Nine Months Ended September 30, 2024 and 2023

Noninterest expense increased $14.5 million, or 7.2%, in the nine months ended September 30, 2024 compared to the same period in 2023, mainly due to: (i) higher professional and other service fees; (ii) an increase in OREO expenses due to a $5.7 million valuation expense recorded during the quarter; (iii) higher salary and employee benefits; (iv) higher advertising expenses; (v) higher loan-level derivative expenses; (vi) higher occupancy and equipment expenses; and (vii) higher FDIC assessments and insurance expenses. These increases were partially offset by: (i) a decrease in losses on loans held for sale due to lower valuation allowance in the first nine months of 2024 compared to 2023; (ii) lower telecommunication and data processing expenses; (iii) the absence of contract termination costs in the first nine months of 2024; (iv) lower depreciation and amortization expense; and (v) lower other operating expenses.

Professional and other services fees increased $16.4 million, or 80.6%, in the nine months ended September 30, 2024 compared to the same period last year. This was mainly driven by higher recurrent fees in connection with the current technology provider, and higher legal fees across various projects. These increases were partially offset by lower other professional fees.

Advertising expenses increased $1.1 million, or 11.9%, in the nine months ended September 30, 2024 compared to the same period last year, mainly due to higher expenses resulting from campaigns in connection with our partnerships with professional sports teams.

Telecommunication and data processing expenses decreased $2.4 million, or 20.5%, in the nine months ended September 30, 2024 compared to the same period last year, primarily driven by the absence of the additional expenses in the nine months ended 2023 in connection with the disposition of fixed assets due to the write off of in-development software.

FDIC assessments and insurance increased $0.6 million, or 7.2%, in the nine months ended September 30, 2024 compared to the same period last year, primarily driven by higher FDIC assessment rates and higher average assets.

Depreciation and amortization expenses decreased $0.5 million, or 9.3%, in the nine months ended September 30, 2024 compared to the same period last year. This was mainly driven by lower leasehold improvement charges associated with branches as well as various depreciation associated with computer hardware.

Salaries and employee benefits increased $1.3 million, or 1.3%, in the nine months ended September 30, 2024 compared to the same period one year ago, mainly driven by: (i) higher salaries in connection with new hires and (ii) higher variable compensation and bonus accruals based on performance and production. These results were partially offset by lower severance expenses.

Occupancy and equipment expenses increased $0.6 million, or 2.8%, in the nine months ended September 30, 2024 compared to the same period one year ago primarily due to an impairment charge of $3.4 million in connection with the Houston Sale Transaction. This increase was partially offset by a decrease in software expenses.

Loan-level derivative expenses increased $0.7 million, or 38.1%, in the nine months ended September 30, 2024 compared to the same period last year, mainly driven by higher volume of derivative transactions in the first nine months of 2024. In addition, loan-level derivative expenses include $1.6 million resulting from the unwinding of a swap related to the sale of a non-performing loan during the third quarter of 2024.

### Income Taxes

The table below sets forth information related to our income taxes for the periods presented.

*(in thousands, except effective tax rates and percentages)*

|  | Three Months Ended September 30, 2024 | 2023 | Change 2024 vs 2023 |  | Nine Months Ended September 30, 2024 | 2023 | Change 2024 vs 2023 |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| (Loss) income before income tax expense | $(61,892) | $28,078 | $(89,970) | (320.4)% | $(42,107) | $62,240 | $(104,347) | (167.7)% |
| Income tax (benefit) expense | $(13,728) | $6,337 | $(20,065) | (316.6)% | $(9,474) | $13,511 | $(22,985) | (170.1)% |
| Effective income tax rate | 22.18% | 22.57% | (0.39)% | (1.7)% | 22.50% | 21.71% | 0.79% | 3.6% |

In the three and nine months ended September 30, 2024, the Company recorded an income tax benefit compared to an income tax expense in the comparable periods of 2023, mainly driven by the net loss recorded in the current periods arising from the Securities Repositioning initiated in the three and nine months ended September 30, 2024.

As of September 30, 2024, the Company’s net deferred tax assets were $41.1 million, a decrease of $14.5 million, or 26.1%, compared to $55.6 million as of December 31, 2023. This result was mainly driven by: (i) a decrease of $19.6 million in unrealized holding losses on debt securities available for sale in the current period, and (ii) the realization of the tax benefit in the first nine months of 2024 related to the valuation allowance on loans held for sale recorded in the fourth quarter of 2023 of $35.5 million.

### Non-GAAP Financial Measures

The Company supplements its financial results that are determined in accordance with Generally Accepted Accounting Principles (GAAP) with non-GAAP financial measures, such as “pre-provision net revenue (PPNR)”, “core pre-provision net revenue (Core PPNR)”, “core noninterest income” and “core noninterest expenses”, “tangible stockholders’ equity (book value) per common share”, “tangible common equity ratio, adjusted for net unrealized accumulated losses on debt securities held to maturity”, and “tangible stockholders' equity (book value) per common share, adjusted for net unrealized accumulated losses on debt securities held to maturity”. 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” and they should not be considered in isolation or as a substitute for the GAAP measures presented herein.

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 businesses. Our management believes that these 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, especially in light of the additional costs we have incurred in connection with the Company’s restructuring activities that began in 2018 and continued in 2024, and including the effect of non-routine items such as the sale of loans and securities (including the Securities Repositioning initiated at the end of the third quarter of 2024) and other repossessed assets, the valuation of securities, derivatives, loans held for sale and other real estate owned and repossessed assets, the early repayment of FHLB advances, impairment of investments, and other non-routine actions intended to improve customer service and operating performance, as well as certain non-routine items recorded in 2024 in connection with the Houston Sale Transaction. 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.

The following table is a reconciliation of the Company’s PPNR, Core PPNR, core noninterest income and core noninterest expense, non-GAAP financial measures, as of the dates presented:

*(in thousands)*

|  | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| **Net (loss) income attributable to Amerant Bancorp Inc.** | **$(48,164)** | **$22,119** | **$(32,633)** | **$49,613** |
| Plus: provision for credit losses (1) | 19,000 | 8,000 | 50,550 | 48,777 |
| Plus: provision for income tax (benefit) expense | (13,728) | 6,337 | (9,474) | 13,511 |
| **Pre-provision net revenue (PPNR)** | (42,892) | 36,456 | 8,443 | 111,901 |
| Plus: non-routine noninterest expense items | 5,672 | 6,303 | 11,234 | 23,058 |
| Less: non-routine noninterest income items | 68,484 | (6,879) | 68,662 | (22,780) |
| **Core pre-provision net revenue (Core PPNR)** | $31,264 | $35,880 | $88,339 | $112,179 |
| **Total noninterest (loss) income** | **$(47,683)** | **$21,921** | **$(13,775)** | **$67,883** |
| Less: Non-routine noninterest (loss) income items: |  |  |  |  |
| Derivatives (losses) gains, net | — | (77) | (196) | 179 |
| Securities losses, net | (68,484) | (54) | (68,655) | (11,022) |
| Gains on early extinguishment of FHLB advances, net | — | 7,010 | 189 | 33,623 |
| Total non-routine noninterest (loss) income items | $(68,484) | $6,879 | $(68,662) | $22,780 |
| **Core noninterest income** | $20,801 | $15,042 | $54,887 | $45,103 |
| **Total noninterest expenses** | **$76,208** | **$64,420** | **$216,104** | **$201,653** |
| Less: non-routine noninterest expense items |  |  |  |  |
| Restructuring costs (2): |  |  |  |  |
| Staff reduction costs (3) | — | 489 | — | 2,886 |
| Contract termination costs (4) | — | — | — | 1,550 |
| Consulting and other professional fees and software expenses (5) | — | — | — | 4,750 |
| Disposition of fixed assets (6) | — | — | — | 1,419 |
| Branch closure expenses and related charges (7) | — | 252 | — | 2,279 |
| Total restructuring costs | — | 741 | — | 12,884 |
| Other non-routine noninterest expense items: |  |  |  |  |
| Losses on loans held for sale carried at the lower of cost or fair value (8) | — | 5,562 | 1,258 | 5,562 |
| Goodwill and intangible assets impairment (8) | — | — | 300 | — |
| Legal and broker fees (8) | — | — | 561 | — |
| Loss on sale of repossessed assets and other real estate owned valuation expense (9) | 5,672 | — | 5,672 | 2,649 |
| Fixed assets impairment (8)(10) | — | — | 3,443 | — |
| Impairment charge on investment carried at cost | — | — | — | 1,963 |
| Total non-routine noninterest expense items | $5,672 | $6,303 | $11,234 | $23,058 |
| **Core noninterest expenses** | $70,536 | $58,117 | $204,870 | $178,595 |

(1) Includes provision for credit losses on loans in all periods shown. *See “*Analysis of the Allowance for Credit Losses” for details.

(2) Expenses incurred for actions designed to implement the Company’s business strategy. These actions include, but are not limited to reductions in workforce, streamlining operational processes, implementation of new technology system applications, decommissioning of legacy technologies, enhanced sales tools and training, expanded product offerings and improved customer analytics to identify opportunities.

(3) Staff reduction costs consist of severance expenses related to organizational rationalization.

(4) Contract termination and related costs associated with third party vendors resulting from the Company’s engagement of FIS.

(5) In the nine months ended September 30, 2023, includes nonrecurrent expenses of $4.6 million in connection with the engagement of FIS.

(6) In the nine months ended September 30, 2023, includes expenses in connection with the disposition of fixed assets due to the write off of in-development software.

(7) In each of the three and nine month periods ended September 30, 2023, includes expenses in connection with the closure of a branch in Houston, Texas in 2023. In addition, in the nine months ended September 30, 2023, includes expenses associated with the closure of a branch in Miami, Florida in 2023, including $0.9 million of accelerated amortization of leasehold improvements and $0.6 million of right-of-use, or ROU asset impairment. Furthermore, in the nine months ended September 30, 2023, includes $0.5 million of ROU asset impairment associated with the closure of a branch in Houston, Texas in 2023.

(8) In the nine months ended September 30, 2024, amounts shown are in connection with the Houston Sale Transaction.

(9) In the nine months ended September 30, 2023, amount represents the loss on sale of repossessed assets in connection with our equipment-financing activities.

(10) Related to Houston branches and included as part of occupancy and equipment expenses. *See “*Noninterest Expenses” for details.

The following table is a reconciliation of the Company’s tangible common equity and tangible assets, non- GAAP financial measures, to total equity and total assets, respectively, as of the dates presented:

*(in thousands, except percentages, share data and per share amounts)*

|  | As of September 30, 2024 | As of December 31, 2023 |
| --- | ---: | ---: |
| **Stockholders' equity** | **$902,888** | **$736,068** |
| Less: goodwill and other intangibles (1) | (24,366) | (25,029) |
| Tangible common stockholders' equity | $878,522 | $711,039 |
| **Total assets** | **10,353,127** | **9,716,327** |
| Less: goodwill and other intangibles (1) | (24,366) | (25,029) |
| Tangible assets | $10,328,761 | $9,691,298 |
| Common shares outstanding | 42,103,623 | 33,603,242 |
| **Tangible common equity ratio** | 8.51% | 7.34% |
| **Stockholders' book value per common share** | $21.44 | $21.90 |
| **Tangible stockholders' equity book value per common share** | $20.87 | $21.16 |
| Tangible common stockholders' equity | $878,522 | $711,039 |
| Less: Net unrealized accumulated losses on debt securities held to maturity, net of tax (2) | — | (16,197) |
| Tangible common stockholders' equity, adjusted for net unrealized accumulated losses on debt securities held to maturity | $878,522 | $694,842 |
| Tangible assets | $10,328,761 | $9,691,298 |
| Less: Net unrealized accumulated losses on debt securities held to maturity, net of tax (2) | — | (16,197) |
| Tangible assets, adjusted for net unrealized accumulated losses on debt securities held to maturity | $10,328,761 | $9,675,101 |
| Common shares outstanding | 42,103,623 | 33,603,242 |
| **Tangible common equity ratio, adjusted for net unrealized accumulated losses on debt securities held to maturity** | 8.51% | 7.18% |
| **Tangible stockholders' book value per common share, adjusted for net unrealized accumulated losses on debt securities held to maturity** | $20.87 | $20.68 |

(1) At September 30, 2024 and December 31, 2023, other intangible assets consist primarily of naming rights of $2.1 million and $2.5 million, respectively, and mortgage servicing rights (“MSRs”) of $1.4 million and $1.4 million, respectively.

(2) There were no debt securities held to maturity at September 30, 2024. At December 31, 2023, amounts were calculated based upon the fair value of debt securities held to maturity, and assuming a tax rate of 25.36%, respectively.

### Financial Condition - Comparison of Financial Condition as of September 30, 2024 and December 31, 2023

***Assets.*** Total assets were $10.35 billion as of September 30, 2024, an increase of $636.8 million, or 6.6%, compared to $9.72 billion at December 31, 2023. This result was primarily driven by increases of: (i) $350.0 million, or 108.7%, in cash and cash equivalents; (ii) $312.7 million, or 4.4%, in total loans held for investment, net of the ACL, and loans held for sale, and (iii) $45.6 million, or 3.0%, in total securities, mainly debt securities available for sale. The increases were partially offset by decreases of: (i) $226.6 million, or 100.0%, in debt securities held for maturity as a result of the Company’s Securities Repositioning, (ii) $18.3 million, or 15.5%, in operating lease right-of-use assets; and (iii) $34.1 million, or 13.3%, in accrued interest receivable and other assets primarily driven by collection of a receivable from an insurance carrier for $62.5 million in connection with the restructuring of the Company’s BOLI policies completed in the fourth quarter of 2023. *See “*-Average Balance Sheet, Interest and Yield/Rate Analysis” for detailed information, including changes in the composition of our interest-earning assets.

As of September 30, 2024, securities sold and securities purchased which were pending settlement at that date totaled approximately $24.9 million and $23.1 million, respectively, and are included in other assets and other liabilities, respectively, on the Company’s consolidated balance sheet. These balances were settled in October 2024. Additionally, total accrued interest receivable and other assets at September 30, 2024 include premises and equipment for $8.0 million, operating lease right-of-use assets for $6.5 million, and other assets for $6.9 million which the Company reclassified to held for sale as part of the Houston Sale Transaction. *See “*Our Company- Business Developments” for additional information.

***Cash and Cash Equivalents.*** Cash and cash equivalents increased to $671.8 million at September 30, 2024 from $321.9 million at December 31, 2023, primarily as a result of an increase in interest earning cash balances.

At September 30, 2024 and December 31, 2023, cash balances held at the Federal Reserve Bank were $613 million and $246 million, respectively. In addition, at September 30, 2024 and December 31, 2023, the Company’s cash and cash equivalents included restricted cash of $10.1 million and $25.8 million, respectively, which was held primarily to cover margin calls on derivative transactions with certain brokers. Furthermore, at September 30, 2024 and December 31, 2023, the Company’s cash and cash equivalents included other short-term investments of $6.9 million and $6.1 million, respectively, which consist of US Treasury Bills that mature in 90 days or less.

Cash and cash equivalents provided by operating activities were $4.7 million in the nine months ended September 30, 2024, mainly driven by: (i) a non-cash adjustment of $68.7 million in connection with losses on securities; (ii) a non-cash adjustment of $50.6 million for the provision for credit losses; and (iii) other non-cash adjustments totaling $4.2 million. This was partially offset by: (i) a net decrease in operating assets and liabilities of $46.8 million; (ii) net originations of mortgage loans held for sale at fair value of $39.3 million, and (iii) the net loss of $32.6 million.

Net cash used in investing activities was $278.3 million during the nine months ended September 30, 2024, mainly driven by: (i) a net increase in loans originated for investment of $788.6 million, and (ii) purchases of investment securities totaling $288.1 million. These disbursements were partially offset by: (i) proceeds of sale of loans carried at the lower of cost or fair value and held for investment totaling $469.9 million; (ii) $62.7 million collected from insurance carriers during the first nine months of 2024 in connection with the restructuring of BOLI completed in 2023; (iii) maturities, sales, calls and paydowns of investment securities totaling $271.2 million and; (iv) BOLI death benefits received of $1.2 million. See the 2023 Form 10-K for more information on the restructuring of BOLI.

In the nine months ended September 30, 2024, net cash provided by financing activities was $623.6 million. These activities included: (i) net proceeds from advances from the FHLB of $270.2 million; (ii) net proceeds from our common stock issuance of $155.8 million; (iii) an increase in total demand, savings and money market deposit balances of $109.6 million, and (iv) a net increase of $106.5 million in time deposits. These proceeds were partially offset by: (i) $9.0 million of dividends declared and paid by the Company in the nine months ended September 30, 2024, and (ii) an aggregate of $7.6 million of Class A common stock repurchased in the first nine months of 2024. *See “*-Capital Resources and Liquidity Management” for more details on changes in FHLB advances and common stock transactions in the first nine months ended September 30, 2024.

### 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.

*(in thousands, except percentages)*

|  | September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Total loans, gross (1) | $7,561,963 | $7,264,912 |
| Total loans, gross / total assets | 73.0% | 74.8% |
| Allowance for credit losses | $79,890 | $95,504 |
| Allowance for credit losses / total loans held for investment, gross (1) (2) | 1.15% | 1.39% |
| Total loans, net (3) | $7,482,073 | $7,169,408 |
| Total loans, net / total assets | 72.3% | 73.8% |

(1) Total loans, gross is 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, and unamortized premiums paid on purchased loans, excluding the allowance for credit losses on loans. At September 30, 2024 and December 31, 2023, there were $43.9 million and $26.2 million, respectively, in mortgage loans held for sale carried at fair value in connection with the Company’s mortgage banking activities. In addition, September 30, 2024 and December 31, 2023, includes $553.9 million and $365.2 million respectively, in loans held for sale carried at the lower of estimated cost or fair value.

(2) *See* Note 5 of our audited consolidated financial statements included in the 2023 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 is 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, and unamortized premiums paid on purchased loans, excluding 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. International loans include transactions in which the debtor or customer is domiciled outside the U.S., even when the collateral is U.S. property. All international loans are denominated and payable in U.S. Dollars.

*(in thousands)*

| Domestic Loans: Real Estate Loans Commercial real estate (CRE) | September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Non-owner occupied | $1,688,308 | $1,616,200 |
| Multi-family residential | 351,815 | 407,214 |
| Land development and construction loans | 421,489 | 300,378 |
|  | 2,461,612 | 2,323,792 |
| Single-family residential | 1,459,552 | 1,422,113 |
| Owner occupied | 1,001,762 | 1,175,331 |
|  | 4,922,926 | 4,921,236 |
| Commercial loans (1) | 1,630,018 | 1,461,269 |
| Loans to financial institutions and acceptances | 92,489 | 13,375 |
| Consumer loans and overdrafts (2) (3) | 277,032 | 389,991 |
| **Total Domestic Loans** | 6,922,465 | 6,785,871 |
| **International Loans:** |  |  |
| Real Estate Loans |  |  |
| Single-family residential (4) | 40,047 | 44,495 |
| Commercial loans | 300 | 41,918 |
| Consumer loans and overdrafts (5) | 1,359 | 1,209 |
| **Total International Loans** | 41,706 | 87,622 |
| **Total Loans held for investment** | $6,964,171 | $6,873,493 |

(1) As of September 30, 2024 and December 31, 2023, includes $50.9 million and $56.5 million, respectively, in commercial loans and leases originated under a white-label equipment financing solution launched in the second quarter of 2022.

(2) Includes customers’ overdraft balances totaling $0.1 million and $2.6 million as of September 30, 2024 and December 31, 2023, respectively.

(3) Includes indirect lending loans purchased with an outstanding balance of $103.9 million and $210.9 million at September 30, 2024 and December 31, 2023, respectively.

(4) Secured by real estate properties located in the U.S.

(5) International customers’ overdraft balances were de minimis at each of the dates presented.

The composition of our CRE loan portfolio held for investment by industry segment at September 30, 2024 and December 31, 2023 is depicted in the following table:

*(in thousands)*

|  | September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Retail (1) | $738,626 | $728,349 |
| Multifamily | 351,815 | 407,214 |
| Office Space | 432,170 | 347,649 |
| Specialty (2) | 158,559 | 152,277 |
| Land and Construction | 421,489 | 300,378 |
| Hospitality | 286,756 | 282,085 |
| Industrial and Warehouse | 72,197 | 105,840 |
| Total CRE (3) | $2,461,612 | $2,323,792 |

(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, nursing and residential care facilities, and other specialty type CRE properties.

(3) Includes loans held for investment in the NY loan portfolio, which were $223.0 million at September 30, 2024 and $217.0 million at December 31, 2023.

The table below summarizes the composition of our loans held for sale by type of loan as of the end of each period presented:

*(in thousands)*

| Loans held for sale at the lower of cost or fair value Real estate loans Commercial real estate | September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Non-owner occupied | $111,591 | $— |
| Multi-family residential | — | 309,612 |
| Land development and construction loans | 35,020 | 55,607 |
|  | 146,611 | 365,219 |
| Single-family residential | 87,820 | — |
| Owner occupied | 221,774 | — |
|  | 456,205 | 365,219 |
| Commercial loans | 87,866 | — |
| Consumer loans | 9,870 | — |
| Total loans held for sale at the lower of cost or fair value | 553,941 | 365,219 |
| **Mortgage loans held for sale at fair value** |  |  |
| Land development and construction loans | 10,608 | 12,778 |
| Single-family residential | 33,243 | 13,422 |
| Total mortgage loans held for sale at fair value (1)(2) | 43,851 | 26,200 |
| Total loans held for sale (3) | $597,792 | $391,419 |

(1) In the first nine months of 2024, the Company transferred $18.6 million and $9.5 million of land development and construction loans and single-family residential loans, respectively, from the loans held for sale to the loans held for investment category. *See* 2023 Form 10-K on transfer activities in 2023.

(2) Loans held for sale in connection with Amerant Mortgage’s ongoing business.

(3) As of September 30, 2024, there were $0.6 million in loans between 60 and 90 days past due (None at December 30, 2023); all loans remained in accrual status at each of the periods shown.

At September 30, 2024 and December 31, 2023, there were $43.9 million and $26.2 million, respectively, of mortgage loans held for sale carried at their estimated fair value.

As of September 30, 2024 and December 31, 2023, the Company had $553.9 million and $365.2 million in loans held for sale carried at the lower of cost or fair value, which were previously recorded as loans held for investment. In the second quarter of 2024, the Company transferred an aggregate of $553.1 million in connection with the Houston Sale Transaction. The Company recorded a valuation allowance of $1.3 million as a result of the transfer in the same period. In the fourth quarter of 2023, the Company transferred an aggregate of $401.0 million in Houston-based CRE loans held for investment to the loans held for sale category, and recognized a valuation allowance of $35.5 million as a result of the fair value adjustment of these loans. The Company sold these loans in the first quarter of 2024 and there was no material impact to the Company’s results of operations as a result of this transaction in 2024.

As of September 30, 2024, total loans held for investment were $7.0 billion, up $90.7 million, or 1.3%, compared to $6.9 billion at December 31, 2023. Domestic loans held for investment increased $136.6 million, or 2.0%, as of September 30, 2024, compared to December 31, 2023. Excluding the impact of the aforementioned transfer to held for sale of Houston loans, domestic loans held for investment increased $690.5 million in the first nine months of 2024. The increase in total domestic loans held for investment includes: (i) a net increase of $137.8 million, or 5.9% in domestic CRE loans; (ii) a net increase of $168.7 million, or 11.5% in domestic commercial loans, including $41.7 million in connection with a commercial loan relationship formerly domiciled outside the US, and (iii) a net increase of $37.4 million, or 2.6% in domestic single-family residential loans. These increases were partially offset by a net decrease of $173.6 million, or 14.8%, ain domestic owner occupied loans. In addition, there was a decrease in domestic consumer loans of $113.0 million, or 29.0%, in the first nine months of 2024, as the Company discontinued the purchases of indirect consumer loans in 2023 and such indirect lending portfolio is set to runoff over time.

In the nine months ended September 30, 2024, the Company has added approximately $276.0 million in single-family residential and construction loans through Amerant Mortgage, which includes loans originated and purchased from different channels.

Loans to international customers, primarily from Venezuela and other customers in Latin America decreased $45.9 million, or 52.4%, in the nine months ended September 30, 2024, mainly driven by $41.7 million in connection with a commercial loan relationship which is now domiciled in the US, and pay downs totaling $4.2 million to existing single family residential loans.

As of September 30, 2024, loans under syndication facilities, included in loans held for investment, were $390.6 million, an increase of $118.8 million, or 43.7%, compared to $271.8 million at December 31, 2023. This was mainly driven by a net increase of $127.8 million in club deals partially offset by a net decrease of $9.0 million of Shared National Credit Facilities (“SNC”). At September 30, 2024 and December 31, 2023, loans under SNC facilities held for investment were $77.9 million and $87.0 million, respectively. As of September 30, 2024, there were no SNC loans that financed highly leveraged transactions, compared to $5.5 million, or 0.1%, of total loans as of December 31, 2023.

### Foreign Outstanding

The table below summarizes the composition of our international loan portfolio by country of risk for the periods presented. All of our foreign loans are denominated in U.S. Dollars, and bear fixed or variable rates of interest based upon different market benchmarks plus a spread.

*(in thousands, except percentages)*

|  | September 30, 2024 Net Exposure (1) | % Total Assets | December 31, 2023 Net Exposure (1) | % Total Assets |
| --- | ---: | ---: | ---: | ---: |
| Venezuela (2) | $33,556 | 0.3% | $37,699 | 0.4% |
| Other | 8,150 | 0.1% | 49,923 | 0.5% |
| Total | $41,706 | 0.4% | $87,622 | 0.9% |

(1) Consists of outstanding principal amounts, net of collateral of cash, cash equivalents or other financial instruments totaling $7.8 million and $7.2 million as of September 30, 2024 and December 31, 2023, respectively.

(2) Includes mortgage loans for single-family residential properties located in the U.S. totaling $33.4 million and $37.7 million as of September 30, 2024 and December 31, 2023, respectively.

The maturities of our outstanding international loans were:

*(in thousands)*

|  | September 30, 2024 Less than 1 year | 1-3 Years | More than 3 years | Total | December 31, 2023 Less than 1 year | 1-3 Years | More than 3 years | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Venezuela | $168 | $— | $33,388 | $33,556 | $262 | $— | $37,437 | $37,699 |
| Other | 300 | 1,228 | 6,622 | 8,150 | 3,180 | 5,725 | 41,018 | 49,923 |
| Total | $468 | $1,228 | $40,010 | $41,706 | $3,442 | $5,725 | $78,455 | $87,622 |

95

### 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.

*(in thousands, except percentages)*

| Total Loans | September 30, 2024 Allowance | % of Loans in Each Category to Total Loans Held for Investment | December 31, 2023 Allowance | % of Loans in Each Category to Total Loans Held for Investment |
| --- | ---: | ---: | ---: | ---: |
| Real estate (2) | $16,953 | 37.9% | $25,876 | 35.8% |
| Commercial | 38,905 | 38.1% | 41,809 | 39.0% |
| Financial institutions | — | 0.2% | — | 0.2% |
| Consumer and others (1) | 24,032 | 23.8% | 27,819 | 25.0% |
| **Total Allowance for Credit Losses** | **$79,890** | **100.0%** | **$95,504** | **100.0%** |
| **% of Total Loans held for investment** | 1.15% |  | 1.39% |  |

(1) Includes (i) unsecured indirect consumer loans (domestic) to qualified individuals purchased in 2022, 2021 and 2020; and (ii) mortgage loans for and secured by single-family residential properties located in the U.S.

(2) Includes transactions in which the debtor or customer is domiciled outside the U.S. and all collateral is located in the U.S.

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. There have been no material changes in our policies and methodology to estimate the ACL in the nine months ended September 30, 2024.

### 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.

*(in thousands)*

| Non-Accrual Loans Domestic Loans: Commercial real estate (CRE) | September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Non-owner occupied | $1,916 | $— |
| Multi-family residential | — | 8 |
|  | 1,916 | 8 |
| Single-family residential | 13,452 | 2,459 |
| Owner occupied | 29,240 | 3,822 |
|  | 44,608 | 6,289 |
| Commercial loans | 68,654 | 21,949 |
| Consumer loans and overdrafts | — | 38 |
| **Total Non-Accrual Loans** | $113,262 | $28,276 |
| **Past Due Accruing Loans (1)** |  |  |
| Real Estate Loans |  |  |
| Single-family residential | $1,129 | $5,218 |
| Commercial | 104 | 857 |
| Consumer loans and overdrafts | 434 | 49 |
| **Total Past Due Accruing Loans** | 1,667 | 6,124 |
| **Total Non-Performing Loans** | $114,929 | $34,400 |
| **OREO and other repossessed assets** | 14,509 | 20,181 |
| **Total Non-Performing Assets** | $129,438 | $54,581 |

(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, 2024:

*(in thousands)*

|  | Nine Months Ended September 30, 2024 Commercial Real Estate | Single-family Residential | Owner-occupied | Commercial | Financial Institutions | Consumer and Others | OREO and Other Repossessed Assets | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| **Balance at beginning of period** | $8 | $7,677 | $3,822 | $22,806 | $— | $87 | $20,181 | $54,581 |
| Plus: loans placed in nonaccrual status | 4,270 | 13,165 | 59,350 | 102,863 | — | 21,105 | — | 200,753 |
| Less: nonaccrual loan charge-offs | (591) | — | — | (47,294) | — | (21,122) | — | (69,007) |
| Less: nonaccrual loans sold, net of charge offs | (1,768) | — | (30,249) | (3,342) | — | — | — | (35,359) |
| Less: nonaccrual loan collections and others | (3) | (2,172) | (3,683) | (5,522) | — | (21) | — | (11,401) |
| (Less) Plus: (decrease) increase in past-due accruing loans | — | (4,089) | — | (753) | — | 385 | — | (4,457) |
| Loans returned to accrual status | — | — | — | — | — | — | — | — |
| OREO valuation expense | — | — | — | — | — | — | (5,672) | (5,672) |
| **Balances at end of period** | $1,916 | $14,581 | $29,240 | $68,758 | $— | $434 | $14,509 | $129,438 |

The increase in nonperforming loans during the nine months ended September 30, 2024 was primarily due to certain loans that were downgraded based on updated borrowers’ financial statements received in the second and third quarters of 2024. See discussion on Classified and Special Mention Loans below for more details.

We recognized no interest income on nonaccrual loans during the nine months ended September 30, 2024 and 2023.

The Company’s loans by credit quality indicators are summarized in the following table. We have no purchased-credit-impaired loans.

*(in thousands)*

| Real Estate Loans Commercial Real Estate (CRE) | September 30, 2024 Special Mention | Substandard (2) | Doubtful | Total (1) | December 31, 2023 Special Mention | Substandard | Doubtful | Total (1) |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Non-owner occupied | $34,374 | $1,916 | $— | $36,290 | $— | $— | $— | $— |
| Multi-family residential | — | — | — | — | — | 8 | — | 8 |
| Single-family residential (2) | — | 13,544 | — | 13,544 | — | 2,800 | — | 2,800 |
| Owner occupied | 29,603 | 29,310 | — | 58,913 | 15,723 | 3,890 | — | 19,613 |
|  | 63,977 | 44,770 | — | 108,747 | 15,723 | 6,698 | — | 22,421 |
| Commercial loans (2) | 12,442 | 69,429 | — | 81,871 | 30,261 | 22,971 | — | 53,232 |
| Consumer loans and overdrafts | — | — | — | — | — | 41 | — | 41 |
|  | **$76,419** | **$114,199** | **$—** | **$190,618** | **$45,984** | **$29,710** | **$—** | **$75,694** |

(1) There are no loans categorized as a “Loss” as of the dates presented.

(2) Substandard loans balances for single-family residential and commercial loans differ slightly from the balances included in our press release to report the Company’s financial results for the fiscal quarter ended September 30, 2024 dated October 23, 2024.

***Classified Loans***. Classified loans include substandard and doubtful loans. Substandard loans as of September 30, 2024, include 11 downgraded commercial and owner occupied loans totaling $88.1 million, and two commercial real estate loans totaling $7.3 million. For more information on the activity of Classified loans in the nine months ended September 30, 2024, please refer to non-performing assets table above. All nonaccrual loans are classified as Substandard.

***Special Mention Loans.*** The following table presents the activity of special mention loans by type of loan in the nine months ended September 30, 2024:

*(in thousands)*

|  | Nine Months Ended September 30, 2024 Commercial Real Estate | Single-family Residential | Owner-occupied | Commercial | Financial Institutions | Consumer and Others | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| **Balance at beginning of period** | $— | $— | $15,723 | $30,261 | $— | $— | $45,984 |
| Downgrades to Special Mention | 34,438 | — | 32,961 | 48,174 | — | — | 115,573 |
| Upgrades to Pass | — | — | (5,056) | (3,056) | — | — | (8,112) |
| Downgrades to Substandard | — | — | (13,932) | (62,889) | — | — | (76,821) |
| Payoffs/Paydowns | (64) | — | (93) | (48) | — | — | (205) |
| **Balances at end of period** | $34,374 | $— | $29,603 | $12,442 | $— | $— | $76,419 |

All special mention loans remained current at September 30, 2024 with the exception of one relationship totaling $5.5 million being over thirty days past due.

Potential problem loans, which are accruing loans classified as substandard and are less than 90 days past due, at September 30, 2024 and December 31, 2023, are as follows:

*(in thousands)*

| Real estate loans | September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Single-family residential (1) | 229 | 221 |
| Owner occupied | 70 | 78 |
|  | 299 | 299 |
| Commercial loans | 778 | 967 |
|  | $1,077 | $1,266 |

(1) Corresponds to both domestic and international single-family residential loans.

### Securities

The following table sets forth the book value and percentage of each category of securities at September 30, 2024 and December 31, 2023. The book value for debt securities classified as available for sale and equity securities with readily determinable fair value not held for trading represents fair value. The book value for debt securities classified as held to maturity represents amortized cost less ACL if required. The Company determined that an ACL on its debt securities available for sale at September 30, 2024 and December 31, 2023 was not required. In the nine months ended September 30, 2024, the Company reclassified all its debt securities held to maturity to the available for sale category. As a result, there are no debt securities held to maturity as of September 30, 2024. The Company determined that an ACL on its debt securities held to maturity as of December 31, 2023 was not required.

*(in thousands, except percentages)*

| Debt securities available for sale: | September 30, 2024 Amount% |  | December 31, 2023 Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| U.S. government-sponsored enterprise debt securities | $831,830 | 53.9% | $557,307 | 37.2% |
| Corporate debt securities (1) (2) | 136,766 | 8.9% | 260,802 | 17.4% |
| U.S. government agency debt securities | 504,150 | 32.7% | 390,777 | 26.1% |
| U.S. treasury securities | 1,999 | 0.1% | 1,991 | 0.1% |
| Municipal bonds | 1,633 | 0.1% | 1,668 | 0.1% |
| Collateralized loan obligations | — | —% | 4,957 | 0.4% |
|  | $1,476,378 | 95.7% | $1,217,502 | 81.3% |
| **Debt securities held to maturity (3)** | $— | —% | $226,645 | 15.1% |
| **Equity securities with readily determinable fair value not held for trading (4)** | $2,562 | 0.2% | $2,534 | 0.2% |
| **Other securities (5):** | $63,604 | 4.1% | $50,294 | 3.4% |
|  | $1,542,544 | 100.0% | $1,496,975 | 100.0% |

(1) As of September 30, 2024 and December 31, 2023 corporate debt includes $10.7 million and $10.5 million, respectively, of debt securities issued by foreign corporate entities. The securities’ issuers were from Canada in two different sectors at September 30, 2024, and at December 31, 2023. The Company limits exposure to foreign investments based on cross border exposure by country, risk appetite and policy. All foreign investments are denominated in U.S. Dollars.

(2) As of September 30, 2024, as a result of the Company’s Securities Repositioning strategy, the Company sold its debt securities issued by domestic corporate entities including subordinated debt securities issued by financial institutions.

(3) During the third quarter of 2024, the Company executed the Securities Repositioning and transferred all its debt securities held to maturity to the available for sale category.

(4) 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.

(5) Includes investments in FHLB and Federal Reserve Bank 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, 2024, total securities increased $45.6 million, or 3.0%, to $1.54 billion compared to $1.50 billion at December 31, 2023. The increase in the nine months ended September 30, 2024 was mainly driven by purchases of debt securities held for sale and FHLB stock totaling $288.1 million. This increase was partially offset by: (i) maturities, sales, calls and pay downs, totaling $271.2 million, and (ii) net pre-tax unrealized holding losses, on debt securities available for sale of $78.2 million primarily attributable to changes in market interest rates during the period.

Upon successfully completing the Public Offering, the Company initiated the Securities Repositioning aimed at improving yields, increasing liquidity and de-risking the securities portfolio. As part of this strategy, in the third quarter of 2024, the Company: (i) transferred at their fair value (which was below their amortized cost basis) all of the debt securities previously classified as held to maturity and carried at amortized cost to the debt securities available for sale category; (ii) sold all of the Company’s investments in subordinated debt securities, included in corporate debt securities, which resulted in a pre-tax loss on sale of approximately $6.7 million in the third quarter of 2024; and (iii) decided to sell all other corporate debt securities. In addition, as a result of its decision to sell all debt securities available for sale (including those previously classified as held to maturity) which had accumulated unrealized losses and met the criteria for inclusion in the Securities Repositioning, the Company recorded a pre-tax impairment loss totaling approximately $61.8 million on debt securities available for sale which resulted in a write down of their previous amortized cost to their estimated fair value as of September 30, 2024. The Company completed the Securities Repositioning in October 2024, which resulted in an additional pre-tax loss on sale of approximately $8.1 million as a result of the subsequent decline in fair market value of the securities.

Debt securities available for sale had net unrealized holding losses of $26.5 million and net unrealized holding gains of $7.7 million at September 30, 2024, compared to December 31, 2023 when net unrealized holding losses were $100.3 million and net unrealized holding gains were $3.2 million. During the nine months ended September 30, 2024, the Company recorded pre-tax unrealized holding gains of $78.2 million which are included in accumulated other comprehensive income for the period. This includes $68.7 million of pre-tax reclassification adjustment for net losses included in the net loss for period due to the pre-tax impairment loss of approximately $61.8 million, and the loss on sale on debt securities available for sale of approximately $6.7 million, as a result of the Securities Repositioning.The Company wrote down the previous amortized cost on these securities to their estimated fair value as of September 30, 2024.

Except for the debt securities available for sale that met the criteria for inclusion in the Securities Repositioning, the Company does not intend to sell these debt securities and it is more likely than not that it will not be required to sell the securities before their anticipated recovery. 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, 2024 and December 31, 2023.

As a result of the Securities Repositioning in the third quarter of 2024, which included transferring all debt securities previously classified as held to maturity to the available for sale category, the Company does not have any debt securities classified as held to maturity at September 30, 2024.

The following tables set forth the book value, scheduled maturities and weighted average yields for our securities portfolio at September 30, 2024 and December 31, 2023. Similar to the table above, the book value for securities available for sale and equity securities with readily determinable fair value not held for trading is equal to fair market value and the book value for debt securities held to maturity is equal to amortized cost less an ACL if required.

*(in thousands, except percentages)*

| September 30, 2024 Amount Debt securities available for sale | Total Yield | Amount | Less than a year Yield | Amount | One to five years Yield | Amount | Five to ten years Yield | Amount | Over ten years Yield | Amount | No maturity Yield |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| U.S. Government sponsored enterprise debt | $831,830 | 4.28% | $231 | 2.94% | $44,490 | 1.22% | $65,090 | 3.99% | $722,019 | 4.50% | $— | —% |
| Corporate debt-domestic | 126,056 | 4.84% | 6,973 | 4.96% | 68,001 | 5.23% | 39,522 | 4.46% | 11,560 | 3.72% | — | —% |
| U.S. Government agency debt | 504,150 | 4.91% | 1,160 | 4.20% | 2,876 | 6.02% | 3,885 | 6.03% | 496,229 | 4.90% | — | —% |
| Municipal bonds | 1,633 | 2.52% | — | —% | — | —% | 347 | 2.02% | 1,286 | 2.65% | — | —% |
| Corporate debt-foreign | 10,710 | 5.12% | — | —% | 10,710 | 5.12% | — | —% | — | —% | — | —% |
| Collateralized loan obligations | — | —% | — | —% | — | —% | — | —% | — | —% | — | —% |
| U.S. treasury securities | 1,999 | 4.47% | 1,999 | 4.47% | — | —% | — | —% | — | —% | — | —% |
|  | $1,476,378 | 4.55% | $10,363 | 4.74% | $126,077 | 3.82% | $108,844 | 4.23% | $1,231,094 | 4.65% | $— | —% |
| **Debt securities held to maturity** | $— | —% | $— | —% | $— | —% | $— | —% | $— | —% | $— | —% |
| **Equity securities with readily determinable fair value not held for trading** | 2,562 | 2.94% | — | —% | — | —% | — | — | — | —% | 2,562 | 2.94% |
| **Other securities** | $63,604 | 7.09% | $— | —% | $— | —% | $— | —% | $— |  | $63,604 | 7.09% |
|  | $1,542,544 | 4.65% | $10,363 | 4.74% | $126,077 | 3.82% | $108,844 | 4.23% | $1,231,094 | 4.65% | $66,166 | 6.93% |

103

*(in thousands, except percentages)*

| December 31, 2023 Amount Debt securities available for sale | Total Yield | Amount | Less than a year Yield | Amount | One to five years Yield | Amount | Five to ten years Yield | Amount | Over ten years Yield | Amount | No maturity Yield |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| U.S. Government sponsored enterprise debt | $557,307 | 3.98% | $616 | 2.82% | $36,757 | 3.22% | $28,642 | 4.12% | $491,292 | 4.03% | $— | —% |
| Corporate debt-domestic | 250,351 | 4.42% | — | —% | 89,262 | 5.42% | 149,868 | 3.87% | 11,221 | 3.71% | — | —% |
| U.S. Government agency debt | 390,777 | 4.10% | 134 | 3.05% | 2,294 | 4.17% | 6,167 | 6.34% | 382,182 | 4.06% | — | —% |
| Municipal bonds | 1,668 | 2.44% | — | —% | — | —% | 347 | 1.91% | 1,321 | 2.58% | — | —% |
| Corporate debt-foreign | 10,451 | 3.64% | — | —% | 8,368 | 3.81% | 2,083 | 2.98% | — | —% | — | —% |
| Collateralized loan obligations | 4,957 | 6.57% | — | —% | — | —% | — | —% | 4,957 | 6.57% | — | —% |
| U.S. treasury securities | 1,991 | 4.47% | 1,991 | 4.47% | — | —% | — | —% | — | —% | — | —% |
|  | $1,217,502 | 4.12% | $2,741 | 4.03% | $136,681 | 4.71% | $187,107 | 3.98% | $890,973 | 4.05% | $— | —% |
| **Debt securities held to maturity** | $226,645 | 3.40% | $— | —% | $— | —% | $19,099 | 2.30% | $207,546 | 3.50% | $— | —% |
| **Equity securities with readily determinable fair value not held for trading** | 2,534 | 2.80% | — | —% | — | —% | — | —% | — | —% | 2,534 | 2.8% |
| **Other securities** | $50,294 | 6.89% | $— | —% | $— | —% | $— | —% | $— | —% | $50,294 | 6.89% |
|  | $1,496,975 | 4.10% | $2,741 | 4.03% | $136,681 | 4.71% | $206,206 | 3.82% | $1,098,519 | 3.95% | $52,828 | 6.69% |

The investment portfolio’s weighted expected average effective duration decreased to 4.9 years at September 30, 2024 compared to 5.0 years at December 31, 2023, due to expected lower rates and the effect of the Securities Repositioning, previously discussed.

### Liabilities

Total liabilities were $9.45 billion at September 30, 2024, an increase of $470.0 million, or 5.2%, compared to $9.0 billion at December 31, 2023. This was primarily driven by an increase of (i) $270.0 million, or 41.9%, in advances from the FHLB; (ii) $216.1 million, or 2.7%, in total deposits, mainly due to an increase in savings and money market deposits; and $0.8 million, or 0.5%, in accounts payable, accrued liabilities and other liabilities. These increases were partially offset by a decrease of $17.3 million, or 14.0%, in operating lease liabilities. *See “*Capital Resources and Liquidity Management” and “Deposits” for more details on the changes in advances from the FHLB and total deposits. Total accounts payable, accrued liabilities and other liabilities as of September 30, 2024 include approximately $12.9 million in connection with the Houston Sale Transaction. *See “*Our Company- Business Developments” for additional information.

### Deposits

We continue with our efforts in growing our deposits. Our efforts include the additions of new team members to our business development teams across South Florida and Tampa, and the opening of new banking centers in various locations in Florida in the first nine months of 2024. Total deposits as of September 30, 2024 include deposits held for sale of approximately $590.7 million in connection with the Houston Sale Transaction. *See “*Our Company- Business Developments” for additional information.

Total deposits were $8.11 billion at September 30, 2024, an increase of $216.1 million, or 2.7%, compared to December 31, 2023. The increase in deposits in the nine months ended September 30, 2024 was mainly due to an increase of: (i) $225.5 million, or 14.0%, in savings and money market deposits; (ii) $106.5 million, or 4.6%, in time deposits; and (iii) $55.1 million, or 3.9%, in noninterest bearing demand deposits. These increases were partially offset by a decrease of $171.0 million, or 6.7% in interest bearing deposits.

The $106.5 million, or 4.6%, net increase in time deposits includes an increase of $124.4 million, or 7.9% in customer CDs. This was partially offset by a decrease of $17.9 million, or 2.5% in brokered time deposits.

The $171.0 million, or 6.7% decrease in interest-bearing demand deposits was primarily due to decreases in higher-cost municipal deposits, as well as international personal deposit accounts during the period.

As of September 30, 2024 total brokered deposits were $701.8 million, a decrease of $35.1 million, or 4.8%, compared to $736.9 million at December 31, 2023.

### 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.

*(in thousands, except percentages)*

| Deposits | September 30, 2024 | December 31, 2023 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Domestic (1) | $5,553,336 | $5,430,059 | $123,277 | 2.3% |
| Foreign: |  |  |  |  |
| Venezuela (2) | 1,887,282 | 1,870,979 | 16,303 | 0.9% |
| Others (3) | 670,326 | 593,825 | 76,501 | 12.9% |
| Total foreign | 2,557,608 | 2,464,804 | 92,804 | 3.8% |
| Total deposits | $8,110,944 | $7,894,863 | $216,081 | 2.7% |

(1) Includes brokered deposits of $701.8 million and $736.9 million at September 30, 2024 and December 31, 2023, respectively.

(2) 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.

(3) Our other foreign deposits do not include deposits from Venezuelan resident customers.

Our domestic deposits increased $123.3 million, or 2.3%, in the nine months ended September 30, 2024, primarily driven by increases of: (i) $236.1 million in savings and money market accounts; (ii) $29.0 million in domestic noninterest bearing accounts; and (iii) $43.8 million in domestic customer time deposits. These increases were partially offset by decreases of: (i)$173.8 million in domestic interest bearing accounts; and (ii) $11.8 million in domestic brokered time deposits.

During the nine months ended September 30, 2024, total foreign deposits increased $92.8 million, or 3.8%, primarily driven by an increase of $16.3 million, or 0.9%, in deposits from customers domiciled in Venezuela, mostly in time deposits and noninterest bearing deposits. There was also an increase of $76.5 million, or 12.9%, in deposits from countries other than Venezuela.

### Core Deposits

Our core deposits were $5.71 billion and $5.60 billion as of September 30, 2024 and December 31, 2023, respectively. Core deposits represented 70.4% and 70.9% of our total deposits at those dates, respectively. The increase of $109.6 million, or 2.0%, in core deposits in the nine months ended September 30, 2024 was mainly driven by increase in savings and money market deposits. We define “core deposits” as total deposits excluding all time deposits.

### Brokered Deposits

We utilize brokered deposits primarily as an asset/liability management tool. As of September 30, 2024, we had $701.8 million in brokered deposits, which represented 8.7% of our total deposits at that date (9.3% as of December 31, 2023). As of September 30, 2024, brokered deposits decreased $35.1 million, or 4.8%, compared to $736.9 million as of December 31, 2023, mainly due to maturities of brokered time deposits, partially offset by new issuances during the period. As of September 30, 2024 and December 31, 2023, brokered deposits included time deposits of $701.6 million and $719.5 million, respectively. We had no significant brokered interest bearing demand and money market deposits as of September 30, 2024. ($17.4 million as of December 31, 2023). 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, 2024 and December 31, 2023, our large fund providers included 15 and 19 deposit relationships, respectively, with total balances of $783.7 million and $1.1 billion, respectively. The decrease in balances from large fund providers in the nine months ended September 30, 2024 was mainly driven by the decrease in higher-cost municipal deposits as the Company continues its focus on depository relationships.

### 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, 2024 and December 31, 2023:

*(in thousands, except percentages)*

|  | September 30, 2024 |  | December 31, 2023 |  |
| --- | ---: | ---: | ---: | ---: |
| Less than 3 months | $403,429 | 28.8% | $178,102 | 13.7% |
| 3 to 6 months | 458,906 | 32.7% | 239,843 | 18.4% |
| 6 to 12 months | 373,825 | 26.7% | 698,897 | 53.6% |
| 1 to 3 years | 141,167 | 10.1% | 174,792 | 13.4% |
| Over 3 years | 25,175 | 1.7% | 12,974 | 0.9% |
| Total | $1,402,502 | 100.0% | $1,304,608 | 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.

There were no outstanding short-term borrowings as of September 30, 2024. Short-term borrowings outstanding at December 31, 2023 matured in January 2024. There were no other short-term borrowings outstanding in the nine months ended September 30, 2024. All of our outstanding short-term borrowings at December 31, 2023 corresponded to advances from the FHLB. There were no other borrowings or repurchase agreements outstanding at September 30, 2024 and December 31, 2023.

The following table sets forth information about the outstanding amounts of our short-term borrowings at the close of, and for the year ended December 31, 2023.

*(in thousands, except percentages)*

|  | December 31, 2023 |
| --- | ---: |
| Outstanding at period-end | $40,000 |
| Average amount | 49,572 |
| Maximum amount outstanding at any month-end | 204,863 |
| Weighted average interest rate: |  |
| During period | 4.27% |
| End of period | 5.46% |

107

### 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:

*(in thousands, except percentages and per share data)*

|  | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Net income attributable to the Company | $(48,164) | $22,119 | $(32,633) | $49,613 |
| Basic (loss) earnings per common share | (1.43) | 0.66 | (0.97) | 1.48 |
| Diluted (loss) earnings per common share (1) | (1.43) | 0.66 | (0.97) | 1.47 |
| Average total assets | $9,985,972 | $9,493,887 | $9,823,343 | $9,430,487 |
| Average stockholders' equity | 766,909 | 735,289 | 752,384 | 739,453 |
| Net (loss) income attributable to the Company / Average total assets (ROA) | (1.92)% | 0.92% | (0.44)% | 0.70% |
| Net (loss) income attributable to the Company / Average stockholders' equity (ROE) | (24.98)% | 11.93% | (5.79)% | 8.97% |
| Average stockholders' equity / Average total assets ratio | 7.68% | 7.74% | 7.66% | 7.84% |

(1) In the three and nine month periods ended September 30, 2024 and 2023, potential dilutive instruments consisted of unvested shares of restricted stock, restricted stock units and performance share units. S*ee* 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 three and nine month periods ended September 30, 2024 and 2023.

During the three and nine month periods ended September 30, 2024, basic and diluted earnings per share decreased compared to the same period one year ago, primarily driven by the net loss recorded in the current periods compared to the net income earned in the comparable periods.

### 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 $902.9 million as of September 30, 2024, an increase of $166.8 million, or 22.7%, compared to $736.1 million as of December 31, 2023. This increase was primarily driven by: (i) net proceeds of $155.8 million from the issuance of common stock in a public offering completed in the period, discussed below, and (ii) a decrease in AOCL due to reclassification into net loss of net accumulated unrealized losses previously included in AOCL on debt securities available for sale as a result of the Securities Repositioning. The increase was offset by: (i) a net loss of $32.6 million in the first nine months of 2024; (ii) $9.0 million of dividends declared and paid by the Company in the first nine months of 2024, and (iii) an aggregate of $7.6 million of Class A common stock repurchased in the first nine months of 2024.

### Common Stock Transactions

In the three and nine month periods ended September 30, 2024, the Company repurchased an aggregate of 143,674 shares of Class A common stock at a weighted average price of $21.59 per share, and 344,326 shares of Class A common stock at a weighted average price of $21.94 per share, respectively, under the 2023 Class A Common Stock Repurchase Program. The aggregate purchase price for these transactions was $3.1 million and $7.6 million in the three and nine month periods ended September 30, 2024, respectively, including transaction costs.

### Public Offering

On September 27, 2024, the Company completed a public offering of 8,684,210 shares of its Class A voting common stock, at a price to the public of $19.00 per share, which included 784,210 shares issued upon the exercise in full by the underwriters of their option to purchase additional shares of common stock. The total gross proceeds from the offering were approximately $165 million, with net proceeds of approximately $155.8 million after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. The Company intends to use the net proceeds of the Public Offering for general corporate purposes and to support its continued organic growth, which may include, among other things, working capital, investments in the Bank, resolution of non-performing loans, and potential balance sheet optimization strategies.

### Dividends

Set forth below are the details of dividends declared and paid by the Company for the first nine months ended September 30, 2024:

| Declaration Date | Record Date | Payment Date | Dividend Per Share | Dividend Amount |
| --- | --- | --- | ---: | --- |
| 07/24/2024 | 08/15/2024 | 08/30/2024 | $0.09 | $3.0 million |
| 04/24/2024 | 05/15/2024 | 05/30/2024 | $0.09 | $3.0 million |
| 01/17/2024 | 02/14/2024 | 02/29/2024 | $0.09 | $3.0 million |

### 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 of $671.8 million at September 30, 2024, compared to $321.9 million at December 31, 2023.

At September 30, 2024 and December 31, 2023, the Company had $915.0 million and $645.0 million, respectively, of outstanding advances from the FHLB. At September 30, 2024 and December 31, 2023, we had an additional $1.9 billion and $2.1 billion, respectively, of remaining credit availability with the FHLB, and $1.6 billion, and $1.9 billion, respectively, of FHLB borrowing capacity. This additional borrowing capacity is determined by the FHLB. In the nine months ended September 30, 2024, the Company repaid $1.1 billion in advances from the FHLB, and borrowed $1.4 billion from this source. In the nine months ended September 30, 2024, the Company had no significant gains or losses on the repayments of the advances from the FHLB. These repayments are part of the Company’s asset/liability management strategies.

There were no other borrowings as of September 30, 2024 and December 31, 2023.

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, 2024 and December 31, 2023.

#### 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 and the guarantor of the Senior Notes and Subordinated Notes. As previously discussed, On September 27, 2024, the Company completed a public offering of its common stock, which resulted in net proceeds to the Company of $155.8 million recorded in the three and nine months ended September 30, 2024. Following the completion of this offering, the Company contributed cash totaling $90 million to its Bank subsidiary also recorded in the same periods of 2024.

The Company held cash and cash equivalents mainly at the Bank of $106.4 million as of September 30, 2024 and $46.8 million as of December 31, 2023, in funds available to service its Senior Notes, Subordinated Notes and junior subordinated debt and for general corporate purposes, as a separate stand-alone entity.

#### 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 2023 Form 10-K.

In December 2023, the Board of Directors of the Bank approved the payment of a cash dividend of $20 million by the Bank to the Company. The Company received this dividend from the Bank in the first quarter of 2024.

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 the foreseeable future.

### Regulatory Capital Requirements

The Company’s consolidated regulatory capital amounts and ratios are presented in the following table:

*(in thousands, except percentages)*

| September 30, 2024 | Actual Amount | Ratio | Required for Capital Adequacy Purposes Amount | Ratio | Regulatory Minimums To be Well Capitalized Amount | Ratio |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Total capital ratio | $1,076,914 | 12.72% | $664,848 | 8.00% | $831,060 | 10.00% |
| Tier 1 capital ratio | 961,717 | 11.36% | 498,636 | 6.00% | 664,848 | 8.00% |
| Tier 1 leverage ratio | 961,717 | 9.56% | 393,214 | 4.00% | 491,517 | 5.00% |
| Common Equity Tier 1 (CET1) | 900,985 | 10.65% | 373,977 | 4.50% | 540,189 | 6.50% |
| **December 31, 2023** |  |  |  |  |  |  |
| Total capital ratio | $979,777 | 12.12% | $646,481 | 8.00% | $808,101 | 10.00% |
| Tier 1 capital ratio | 851,787 | 10.54% | 484,860 | 6.00% | 646,481 | 8.00% |
| Tier 1 leverage ratio | 851,787 | 8.84% | 385,598 | 4.00% | 481,998 | 5.00% |
| Common Equity Tier 1 (CET1) | 790,959 | 9.79% | 363,645 | 4.50% | 525,266 | 6.50% |

The Bank’s consolidated regulatory capital amounts and ratios are presented in the following table:

*(in thousands, except percentages)*

| September 30, 2024 | Actual Amount | Ratio | Required for Capital Adequacy Purposes Amount | Ratio | Regulatory Minimums to be Well Capitalized Amount | Ratio |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Total capital ratio | $1,020,975 | 12.08% | $678,521 | 8.00% | $848,151 | 10.00% |
| Tier 1 capital ratio | 935,361 | 11.07% | 508,891 | 6.00% | 678,521 | 8.00% |
| Tier 1 leverage ratio | 935,361 | 9.34% | 400,644 | 4.00% | 500,805 | 5.00% |
| Common Equity Tier 1 (CET1) | 935,361 | 11.07% | 381,668 | 4.50% | 551,298 | 6.50% |
| **December 31, 2023** |  |  |  |  |  |  |
| Total capital ratio | $964,678 | 11.95% | $645,662 | 8.00% | $807,077 | 10.00% |
| Tier 1 capital ratio | 866,141 | 10.73% | 484,246 | 6.00% | 645,662 | 8.00% |
| Tier 1 leverage ratio | 866,141 | 9.03% | 383,864 | 4.00% | 479,830 | 5.00% |
| Common Equity Tier 1 (CET1) | 866,141 | 10.73% | 363,185 | 4.50% | 524,600 | 6.50% |

111

### 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 2023 Form 10-K.

*(in thousands)*

|  | September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Commitments to extend credit | $1,446,374 | $1,305,816 |
| Letters of credit | 108,163 | 29,605 |
|  | $1,554,537 | $1,335,421 |

112

### 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, 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 2023 Form 10-K.

In the nine months ended September 30, 2024, the Company borrowed $1.4 billion in advances from the FHLB and repaid $1.1 billion of these borrowings.

In the nine months ended September 30, 2024, total time deposits increased $106.5 million, or 4.6%. *See “*Deposits” for additional information.

### Critical Accounting Policies and Estimates

For our critical accounting policies and estimates disclosure, *see* the 2023 Form 10-K where such matters are disclosed for the Company’s latest fiscal year ended December 31, 2023.

***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 2023 Form 10-K.

## Market risk

As filed, 6,699 characters.

We believe interest rate and price risks are the most significant market risks impacting us. We monitor and evaluate these risks using sensitivity analyses to measure the effects on earnings, equity and the available for sale portfolio mark-to-market exposure, of changes in market interest rates. Exposures are managed to a set of limits previously approved by our Board of Directors and monitored by management. See discussions below for material changes in our market risk exposure as compared to those discussed in our 2023 Form 10-K, Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk”.

### Earnings Sensitivity

The following table shows the sensitivity of our net interest income as a function of modeled interest rate changes:

*(in thousands, except percentages)*

| Change in Interest Rates (Basis points) | Change in earnings (1) September 30, 2024 |  | December 31, 2023 |  |
| --- | ---: | ---: | ---: | ---: |
| Increase of 200 | $26,678 | 7.4% | $20,487 | 6.1% |
| Increase of 100 | 20,741 | 5.8% | 15,618 | 4.7% |
| Decrease of 50 | (7,139) | (2.0)% | (3,923) | (1.2)% |
| Decrease of 100 | (14,745) | (4.1)% | (10,273) | (3.1)% |
| Decrease of 200 | (33,978) | (9.4)% | (21,290) | (6.3)% |

(1) Represents the change in net interest income, and the percentage that change represents of the base scenario net interest income. The base scenario assumes (i) flat interest rates over the next 12 months, (ii) that total financial instrument balances are kept constant over time and (iii) that interest rate shocks are instant and parallel to the yield curve, for the various interest rates and indices that affect our net interest income.

Net interest income in the base scenario increased to approximately $361.0 million in the three months ended September 30, 2024 compared to $336.0 million as of December 31, 2023. This increase is mainly due to (i) the growth in the size of the balance sheet as total assets increased $636.8 million, or 6.6%, in the first nine months of 2024 compared to December 31, 2023; and (ii) loan production at higher rates. This was partially offset by the higher cost of total deposits and borrowings.

The Company periodically reviews the scenarios used for earnings sensitivity to reflect market conditions.

#### Economic Value of Equity (EVE) Analysis

The following table shows the sensitivity of our EVE as a function of interest rate changes as of the periods presented:

| Change in Interest Rates (Basis points) | Change in equity (1) September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Increase of 200 | (12.35)% | (4.66)% |
| Increase of 100 | (3.63)% | (0.38)% |
| Decrease of 50 | 2.27% | 3.61% |
| Decrease of 100 | 3.29% | 1.83% |
| Decrease of 200 | 2.74% | 2.73% |

(1) Represents the percentage of equity change in a static balance sheet analysis assuming interest rate shocks are instant and parallel to the yield curves for the various interest rates and indices that affect our net interest income.

During the periods reported, the modeled effects on the EVE remained within established Company risk limits.

#### Available for Sale Portfolio mark-to-market exposure

The Company measures the potential change in the market price of its investment portfolio, and the resulting potential change on its equity for different interest rate scenarios. This table shows the result of this test as of September 30, 2024 and December 31, 2023:

*(in thousands)*

| Change in Interest Rates (Basis points) | Change in market value (1) September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Increase of 200 | $(160,834) | $(112,010) |
| Increase of 100 | (79,879) | (54,182) |
| Decrease of 50 | 37,962 | 34,956 |
| Decrease of 100 | 74,035 | 55,312 |
| Decrease of 200 | 134,936 | 112,809 |

(1) Represents the amounts by which the investment portfolio mark-to-market would change assuming rate shocks that are instant and parallel to the yield curves for the various interest rates and indices that affect our net interest income.

The estimated average effective duration of our investment portfolio decreased to 4.9 years at September 30, 2024 compared to 5.0 years at December 31, 2023, due to expected lower rates and the effect of the Securities Repositioning, previously discussed. Additionally, the floating rate portfolio increased to 14.3% at September 30, 2024 from 13.3% at December 31, 2023.

### Limits Approval Process

The following table sets forth information regarding our interest rate sensitivity due to the maturities of our interest bearing assets and liabilities as of September 30, 2024. This information may not be indicative of our interest rate sensitivity position at other points in time.

*(in thousands except percentages)*

| Earning Assets | September 30, 2024 Total | Less than one year | One to three years | Four to Five Years | More than five years | Non-rate |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Cash and cash equivalents | $671,841 | $614,354 | $— | $— | $— | $57,487 |
| Securities: |  |  |  |  |  |  |
| Debt available for sale, at fair value | 1,476,378 | 251,963 | 172,189 | 142,291 | 909,935 | — |
| Debt held to maturity, at amortized cost | — | — | — | — | — | — |
| Federal Reserve and FHLB stock | 63,605 | 50,341 | — | — | — | 13,264 |
| Marketable equity securities | 2,562 | 2,562 | — | — | — | — |
| Loans held for sale | 597,792 | 597,792 | — | — | — | — |
| Loans held for investment-performing (1) | 6,849,242 | 4,177,662 | 1,224,464 | 653,461 | 793,655 | — |
| **Earning Assets** | $9,661,418 | $5,694,672 | $1,396,653 | $795,752 | $1,703,590 | $70,751 |
| Liabilities |  |  |  |  |  |  |
| Interest bearing demand deposits | 2,389,605 | 2,389,605 | — | — | — | — |
| Saving and money market | 1,835,700 | 1,835,700 | — | — | — | — |
| Time deposits | 2,403,578 | 1,815,902 | 485,222 | 101,929 | 526 | — |
| FHLB advances | 915,000 | — | 260,000 | 655,000 | — | — |
| Senior Notes | 59,764 | — | 59,764 | — | — | — |
| Subordinated Notes | 29,582 | — | — | — | 29,582 | — |
| Junior subordinated debentures | 64,178 | 64,178 | — | — | — | — |
| **Interest bearing liabilities** | $7,697,407 | $6,105,385 | $804,986 | $756,929 | $30,108 | $— |
| Interest rate sensitivity gap |  | (410,713) | 591,667 | 38,823 | 1,673,482 | 70,751 |
| Cumulative interest rate sensitivity gap |  | (410,713) | 180,954 | 219,777 | 1,893,259 | 1,964,010 |
| Earnings assets to interest bearing liabilities (%) |  | 93.3% | 173.5% | 105.1% | 5,658.3% | N/M |

(1) “Loan held for investment-performing” excludes $114.9 million of non-performing loans (non-accrual loans and loans 90 days or more past-due and still accruing).

N/M Not meaningful

## Controls and procedures

As filed, 1,946 characters.

### Disclosure Controls and Procedures

The Company maintains a set of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosures. The CEO and the CFO, with assistance from other members of management, have evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024, and, based on their evaluation, have concluded that the disclosure controls and procedures were effective as of such date.

### Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 2,028 characters.

For detailed information about certain risk factors that could materially affect our business, financial condition or future results see "Risk Factors" in Part I, Item 1A of the 2023 Form 10-K and the Form 10-Q for the quarter ended March 31, 2024. Set forth below are material changes to our existing risk factors previously disclosed in the 2023 Form 10-K and the Form 10-Q for the quarters ended March 31, 2024 . Other than the risk factor set forth below, there have been no material changes to the risk factors previously disclosed in the 2023 Form 10-K and the Form 10-Q for the quarter ended March 31, 2024.

**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.**

As of September 30, 2024, our executive officers, directors and each of our greater than 5% holders of our common stock beneficially owned outstanding shares of Class A voting and non-voting common stock representing, in the aggregate, approximately 29% of the outstanding shares of our Class A voting and non-voting common stock (without giving effect to the broad family holdings of the Capriles, Marturet, and Vollmer families, which will bring the percentage to an aggregate of approximately 51%). As a result, these shareholders, if they act individually or together, may exert a significant degree of influence over our management and affairs and over matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions, such as mergers, the sale of substantially all of our assets and other extraordinary corporate matters.

Furthermore, the interests of these shareholders may not always coincide with the interests of other shareholders, including you and, accordingly, they could cause us to enter into transactions or agreements which we might not otherwise consider or prevent us from adopting actions that we might otherwise implement.

Filed Nov 4, 2024.
Source: SEC EDGAR, the filing index for accession 0001734342-24-000058. Last ingested by Listed: Nov 3, 2026, 21:11 ET. No prices; not investment advice.