Amerant Bancorp: CRE Headwinds Easing — tactical long with defined risk/return

Hook / Thesis
Amerant Bancorp (AMTB) has been through the same CRE-driven pressure as many regional banks, but the most recent quarters suggest the worst of the credit shock may be behind it. Management reported continued net interest income strength and a return to positive quarterly net income in fiscal Q3 2025 (period ending 09/30/2025). The shares are trading roughly at book value and yield about 1.7% on the current quarterly dividend cadence. We see a tactical long opportunity: downside is defined, upside is asymmetric if provisions normalize and market sentiment toward regional CRE risk improves.

Why the market should care
Amerant is a small regional bank exposed to commercial real estate and middle-market commercial lending in South Florida and selective international customers. Banks like Amerant are highly sensitive to credit-cycle dynamics, especially CRE. When the market fears an uncontrolled deterioration in CRE collateral values, valuations compress. Conversely, when provisions and charge-offs stabilize, earnings power — driven by net interest margin and fee income — can reassert itself quickly. Amerant’s latest results show that interest income remains a meaningful driver of revenue, while provisions have moved off peak levels, supporting a re-rating if the trend continues.

Business snapshot and what matters
Amerant provides deposit, credit, investment, wealth management and fiduciary services through branches and digital channels. For an investor the key levers are:

• Net interest income and margin - the lift from higher rates and asset mix.
• Credit provisions and net charge-offs - a key swing item tied to CRE performance.
• Operating expense control and noninterest income - determines operating leverage.
• Capital / book value - supports ability to absorb losses and maintain dividends.

What the numbers show
Use the most recent reported quarter (fiscal Q3 2025, period 07/01/2025 - 09/30/2025):

• Revenues (interest and dividend income, operating) came in at $152.743 million for the quarter.
• Net operating interest income after provision for losses was $79.552 million (interest income/expense after provision for losses).
• Provision for loan, lease and other losses was $14.6 million in Q3 2025 - down from some prior peaks but not yet at trough levels.
• Operating income was $19.008 million and net income attributable to the parent was $14.756 million for the quarter (basic EPS $0.35; diluted shares ~41.77 million).
• Balance sheet scale: assets ~ $10.4102 billion and equity attributable to parent ~ $944.94 million as of the quarter end.
• Dividends: the company has paid a quarterly cash dividend of $0.09 consistently; that annualizes to $0.36 and implies a yield around 1.7% at a ~21.70 share price.

Putting valuation context around those numbers: using the latest diluted average shares (41,774,101) and the recent trade price ~21.70, the market capitalization is roughly $906 million. That sits very close to reported equity of $944.94 million, implying a Price/Book near 0.96x. In plain terms the market is valuing Amerant around its tangible equity, leaving potential upside if earnings and provisioning continue to normalize.

Why we think CRE provisioning is stabilizing
The provision line has moved off the extremes seen in earlier quarters: Q1 2025 was elevated (provision ~$18.45M), Q2 2025 dipped (~$6.06M), and Q3 2025 rose again to $14.6M but still well below some prior peaks. This pattern looks less like an accelerating credit deterioration and more like a normalization and reallocation of provisions as portfolios are re-underwritten and remediated. Importantly, Amerant's interest income base remains strong (quarterly interest-and-dividend income ~ $152.7M), giving the company earning capacity to absorb moderate credit costs without impairing capital.

Catalysts that could unlock upside

• Continued decline in provision expense and stable-to-lower net charge-offs - the primary earnings catalyst.
• Quarterly earnings beats and positive guidance on credit quality - management commentary that CRE performance is stabilizing.
• Deposit growth or funding-cost improvement that expands net interest margin.
• Shareholder-friendly actions (modest buybacks or maintained dividend) that support valuation near book.

Trade plan (actionable)
We recommend a tactical long position sized so the maximum loss (to the recommended stop) represents 1.5-2% of portfolio capital for a typical retail account. This is a swing trade horizon (several weeks to a few months) aimed at exploiting sentiment-driven re-rating if credit metrics improve.

Execution notes: scale in if the price hits the low end of the entry band; consider trimming half at Target 1 and holding remainder to Target 2. If the stock gaps below the stop on heavy volume, exit immediately to respect the risk framework.

Valuation framing
At the suggested entry the implied market cap (~$906 million using 41.77M diluted shares and a $21.70 price) roughly equals reported equity of $944.94 million, so Price/Book is roughly 0.96x. For a bank facing elevated CRE concerns that's not an uncommon discount - the market is effectively pricing in modest future losses. If Amerant can keep quarterly provisions low to mid-teens (or decline further), earnings should support a move back above book, removing the discount. The company also pays a steady $0.09 quarterly dividend which covers part of the return while the re-rating plays out.

Catalysts timeline

• Upcoming quarterly disclosures and management commentary that show provision trajectory (near term: periodic earnings and regulatory filings).
• Any public indicators of improved CRE occupancy/value in their markets or specific loan workout progress that reduce uncertainty.
• Operational improvements (cost control) showing up in sequential quarters and lifting operating income marginally.

Risks and counterarguments

• CRE remains the dominant risk: A renewed deterioration in commercial real estate values or tenant cash flow would force higher provisions and could quickly push P/B lower. The provision line is still volatile quarter-to-quarter (Q3 2025 was $14.6M after Q2 2025 at $6.06M), illustrating sensitivity.
• Funding and deposit risk: regional banks can face deposit volatility. If deposits decline or funding costs spike, net interest margin and earnings could compress.
• Regulatory / litigation overhang: there were investor alerts and law-firm investigations referenced in the company’s newsflow in 2025; legal or regulatory outcomes could be a headwind or create headline risk and volatility.
• Valuation complacency: Price/Book near 1x assumes equity is fully available to absorb losses; large, unexpected charge-offs could quickly impair book and equity, making the trade loss larger than expected.
• Macro / rates risk: if rates move in a way that compresses loan values or increases borrower stress, credit costs could reaccelerate even if current portfolios look stable.

Counterargument to our thesis: one could argue the market is right to price Amerant near book because future CRE losses are uncertain and the company’s prior quarters showed material swings in provision. If provisions reaccelerate, the bank’s earnings and capital could deteriorate, and there would be little upside. That is a fair view; our trade explicitly limits that downside with a stop close to the tangible risk point and uses a scaled entry to manage the provisioning volatility.

What would change our mind
We would tighten our view (move to neutral or close the position) if any of the following occur:

• Sustained sequential increase in the provision for loan losses beyond the company's recent volatility (e.g., several quarters above ~$20M).
• Material unexpected charge-offs that materially reduce book value or regulatory capital ratios.
• Clear deterioration in deposit trends or a need to raise expensive wholesale funding.

Conversely, we would add to the position if management reports clear and sustained declines in provisioning and commentary indicates improvement in CRE workout outcomes or seasoning of re-underwritten loans.

Bottom line
Amerant trades near book with an earnings base capable of absorbing moderate credit expenses. The company’s most recent quarter shows net interest income strength and a return to profitability, while provisions appear to have moved off the worst levels. That combination - earnings capacity plus a valuation at or below book - creates an asymmetric swing trade: limited downside (if you respect the stop) and meaningful upside if credit metrics continue to improve. This is not a low-risk buy-and-forget; it is a tactical long for investors who accept bank/CRE cyclicality and manage position size and stops.

Disclosure: This is a trade idea, not investment advice. Manage sizing, confirm live quotes and filings, and consider tax and account-specific constraints before acting.