Raymond James has moved Amerant Bancorp from Outperform to Market Perform following a weaker-than-expected Q1 2025 earnings report. The bank posted earnings per share of $0.28, falling short of the $0.40 estimate, largely due to rising credit costs that caught analysts off guard.
🟧 Credit Headwinds
Analyst Michael Rose pointed to mounting pressure from credit issues and a more conservative outlook on loan growth. These dynamics have weighed heavily on sentiment and led to the more cautious rating.
🟧 Strategic Pullback
In an effort to cut expenses, Amerant is winding down its mortgage banking operations, which is expected to save the company roughly $2.5 million per quarter. While cost-saving measures are a positive step, the downgrade suggests uncertainty remains around broader profitability trends.
📈 Dividend Fundamentals
💵 Quarterly Dividend: Amerant continues to deliver a dividend of $0.09 per share, offering a yield of about 1.93%.
🧮 Payout Ratio: With a modest payout ratio of 26.28%, the bank is maintaining discipline in capital returns amid earnings volatility.
Despite ongoing shareholder payouts, the downgrade reflects broader caution in light of operational challenges and evolving credit conditions. Investors may want to monitor how Amerant navigates the road ahead.