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Six former Amerant Bank locations in Houston will open their doors Tuesday as branches of MidFirst Bank in a deal that allows Coral Gables, Florida-based Amerant to concentrate on expanding retail banking operations in its home state.
Parent company Amerant Bancorp Inc. will continue to provide home loans nationwide through another subsidiary, Amerant Mortgage.
Jerry Plush
“This strategic decision allows us to focus on accelerating growth in our core markets in Florida as we execute on our expansion plans in both the south Florida and greater Tampa markets,” Amerant Bank chairman and CEO Jerry Plush said in a statement.
Oklahoma City-based MidFirst Bank, which claims to be the largest privately owned bank in the nation with $39 billion in assets, added 45 employees, $574 million in deposits and $479 million in loans in closing the deal Friday.
Jeff Records
“Houston is a highly desirable and fast-growing market, and this acquisition is important to our growth plans for Texas,” MidFirst Bank Chairman and CEO Jeff Records said in a statement.
In announcing the deal in April, Amerant said MidFirst would pay a deposit premium of about $13 million. Divesting its assets in Houston improves Amerant’s capital position and puts it in a better position to expand in Florida, the company said in an investor presentation.
Like many regional banks, Amerant has significant exposure to commercial real estate loans, which made up 35 percent of loans held for investment as of Sept. 30. Amerant reported a $48 million third quarter loss on Oct. 23, with charge-offs on its $7 billion loan portfolio tripling from a year ago to 1.52 percent.
But Amerant says it’s got plenty of capital, having raised $156 million in net proceeds from a Sept. 27 public offering of 8.68 million shares at $19 a share.
Amerant’s 10.65 percent Common Equity Tier 1 (CET1) capital ratio as of Sept. 30 was well above the 6.5 percent regulatory minimum required for the bank to be considered well capitalized.
The divestiture of Amerant’s Houston operations was expected to boost the company’s CET1 capital ratio to 11.2 percent, and it’s projected to remain above 11 percent in 2025, the company said in reporting Q3 earnings.
Shares in Amerant Bancorp, which in the last year have changed hands for as little as $18.54 and as much as $27, closed at $24.42 Monday and are up 25 percent in the last month.
Amerant paid a dividend of 9 cents per share on Aug. 30 — $3 million in total — and is scheduled to pay out the same amount on Nov. 29.
Nationwide mortgage footprint
Amerant Bank provides home loans in Florida through Amerant Bank, which employs 158 registered mortgage loan originators, according to records maintained by the Nationwide Mortgage Licensing System (NMLS).
In 2021, Amerant expanded its mortgage footprint by forming a joint venture, Amerant Mortgage, with former City National Bank executives Howard Levine, Tony Eelman, Marshall Martin and Joe Keel.
Initially focused on providing mortgages through retail branches, Amerant Mortgage quickly hired a team of industry veterans to branch out into wholesale lending, providing products and services to mortgage brokers and their clients in most states.
Amerant Mortgage, which is now a wholly owned subsidiary of Amerant Bancorp, employs 40 registered loan originators and sponsors 23 more, according to NMLS records.
Mortgage business turns profitable
After posting losses in the fourth quarter of 2021 and the first quarter of 2022, the mortgage business has generated positive stand-alone net income for Amerant ever since.
During the quarter ending Sept. 30, Amerant generated $2.8 million in stand-alone income from mortgage banking, including income from mortgage servicing rights.
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