Amalgamated Financial Corp. · NASDAQ:AMAL
Amalgamated Financial — Q4 2022 Earnings Presentation
25 slides from Amalgamated Financial's earnings presentation, Jan 26, 2023
Slide 1: Fourth Quarter 2022 Earnings Presentation
amalgamatedbank.com Member FDIC Amalgamated Financial Corp. Fourth Quarter 2022 Earnings Presentation January 26, 2023
Slide 2: Safe Harbor Statements
2 Safe Harbor Statements INTRODUCTION On March 1, 2021 (the “Effective Date”), Amalgamated Financial Corp. (the “Company”) completed its holding company reorganization and acquired all of the outstanding stock of Amalgamated Bank (the “Bank”). In this presentation, unless the context indicates other
Slide 3: Safe Harbor Statements cont.
3 Safe Harbor Statements cont. NON-GAAP FINANCIAL MEASURES This presentation contains certain non-GAAP financial measures including, without limitation, “Core Operating Revenue,” “Core Non-interest Expense,” “Tangible Common Equity,” “Average Tangible Common Equity,” “Core Efficiency Ratio,” “Core N
Slide 4: 4Q22 Highlights
4Q22 Highlights 4 INCOME STATEMENT • Earnings of $24.8 million, or $0.80 per diluted share on a GAAP basis; • Core earnings excluding solar tax equity(1) was $27.2 million, or $0.87 per diluted share • Core pre-tax, pre-provision earnings(2) excluding solar tax equity(1) of $39.1 million compared to
Slide 5: Solar Tax-Equity Investments
Solar Tax-Equity Investments ACTUAL AND PROJECTED SOLAR INCOME $ millions 5 OVERVIEW OF SOLAR TAX EQUITY INVESTMENTS • Metrics excluding the impact of tax credits or accelerated depreciation is a meaningful way to evaluate our performance and are adjusted in accordance with the below chart ◦ Immedia
Slide 6: Key Financial Trends Through 4Q22
Trends 6 KEY FINANCIAL TRENDS THROUGH 4Q22 ($ in millions) 11.6% CAGR(1) 12.6% CAGR(1) Ending Deposits NPA / Total Assets Net Loans + PACE $4,105 $4,641 $5,339 $6,356 $6,595 2018 2019 2020 2021 2022 1.27% 1.25% 1.38% 0.77% 0.44% 2018 2019 2020 2021 2022 >> $3,211 $3,703 $3,868 $3,904 $4,973 $3,211 $
Slide 7: Deposit Portfolio
Deposit Portfolio 7 TOTAL DEPOSITS ($ in billions) 4Q22 HIGHLIGHTS $6.4 $7.0 $7.3 $7.2 $6.6 $6.8 $5.4 $5.9 $6.0 $6.0 $6.0 $6.2 $1.0 $1.1 $1.3 $1.2 $0.6 $0.6 Political Other Deposits 4Q21 1Q22 2Q22 3Q22 4Q22 1/20/23 • Total ending deposits decreased $565.3 million compared to 3Q22 primarily related t
Slide 8: Political Deposits Historical Trend
$0.4 $0.2 $0.3 $0.4 $0.5 $0.6 $0.8 $1.1 $1.2 $0.6 $0.7 $0.8 $1.0 $1.0 $1.1 $1.3 $1.2 $0.6 $0.6 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1/20/23 8 HISTORICAL TREND ($ in billions) Political Deposits 4Q22 UPDATES • Although cyclical, political deposit b
Slide 9: Interest Earning Assets
Investment Securities $2.4B PACE Securities $0.9B Cash, Resell Agreements, and Other $0.1B Residential $1.4B Multifamily & Commercial Real Estate $1.3B C&I, Consumer and Other $1.4B Interest Earning Assets 9 INTEREST EARNING ASSETS OF $7.6B AS OF DECEMBER 31, 2022 We maintain a diverse, low risk pro
Slide 10: Held-to-Maturity Securities
• HTM securities, excluding PACE assessments represent 26% of the total investment portfolio • PACE securities $55mm of new growth ◦ $43mm in PACE PFG purchases ◦ Two CPACE purchases totaling $34mm ◦ $22mm in principal payments • 100% of PACE portfolio, and 42% of Non-Pace HTM securities is mission-
Slide 11: Investment Securities
Investment Securities 11 SECURITIES – BOOK VALUE(1) ($ millions) 1. Securities book value excludes unrealized Available for Sale (AFS) gain / loss on sale 2. MBS/ABS does not include PACE assessments • Investment Securities totaled $3.5 billion book value for 4Q22 • Agency securities made up 25.5% o
Slide 12: Loans
• Total loans increased $231.8 million, or 6.1%, compared to 3Q22 ◦ Multifamily/CRE loans grew 6.2% during the quarter ◦ C&I, Consumer, and Other loans grew 9.2% during the quarter ◦ Residential loan balances grew 2.0% during the quarter • 4Q22 yield of 4.24%; an increase of 13 bps compared to 3Q22
Slide 13: Net Interest Income and Margin
Net Interest Income and Margin 13 NET INTEREST INCOME & MARGIN ($ millions) • Net interest income was $67.3 million, compared to $67.6 million in 3Q22 • 4Q22 NIM at 3.56%; an increase of 6 bps compared to 3Q22 • Loan prepayment penalties favorably impacted NIM by 1 bps in 4Q22, compared to 4 bps in
Slide 14: Non-Interest Expense and Efficiency
Non-Interest Expense and Efficiency 14 NON-INTEREST EXPENSE ($ millions) • Efficiency ratio of 49.7% for 4Q22 • Core efficiency ratio excluding the impact of our solar tax equity investments of 47.6% for 4Q22(1) • Non-interest expense for 4Q22 was $35.6 million • Non-interest expense for 4Q22 was $0
Slide 15: Non-Interest Income
Non-Interest Income 15 CORE NON-INTEREST INCOME ex-solar (1) ($ millions) • Our trust business held $38.1 billion in assets under custody and $13.4 billion in assets under management, compared to $37.6 billion and $12.5 billion, respectively, in the preceding quarter; this increase was primarily dri
Slide 16: Allowance for Loan Losses
Allowance for Loan Losses 16 ALLOWANCE FOR LOAN LOSSES / TOTAL LOANS ALLOWANCE FOR LOAN LOSSES (ALLL) CHANGE DURING 4Q22 ($ millions) • Allowance for loan losses totaled $45.0 million in 4Q22, or $2.9 million higher than 3Q22, primarily due to higher loan balances and specific reserves 4Q22 HIGHLIGH
Slide 17: Credit Quality Portfolio
Credit Quality Portfolio 17 NPA / TOTAL ASSETS NCO / AVERAGE LOANS(1) 4Q22 HIGHLIGHTS • Nonperforming assets were $34.8 million as of 4Q22, compared to $54.3 million in 3Q22 • Net charge-offs of 0.15% in 4Q22 was 14 bps lower than 3Q22 due to higher relative charge-offs in Q3 related to our focus on
Slide 18: Returns
Returns 18 (1) Refer to Reconciliation of Non-GAAP Financial Measures on slides 22-23 for further details (2) ROAE was 11.2%, 10.3%, 15.2%, 17.8% and 19.9% for 4Q21, 1Q22, 2Q22, 3Q22, and 4Q22, respectively (3) ROATCE was 11.6%, 10.6%, 15.7%, 18.4% and 20.6% for 4Q21, 1Q22, 2Q22, 3Q22, and 4Q22, res
Slide 19: Capital
Capital 19 TIER 1 LEVERAGE RATIO COMMON EQUITY TIER 1 RATIO • Regulatory capital ratios remained strong ◦ Tier 1 leverage ratio of 7.52% as of 4Q22 ◦ Bank tier 1 leverage ratio of 8.44% as of Q4 2022. ◦ Common Equity Tier 1 Capital of 11.82% • Tier 1 leverage ratio was 36 bps higher compared to the
Slide 20: Tangible Book Value
Tangible Book Value 471 25 (3) — — 1 (1) 493 15.37 16.18 16.07 16.07 16.07 16.09 16.05 16.05 9/30/22 Earnings Dividends @ $.10/ share Buybacks - APIC Buybacks - Share count Other(1) AFS Mark 12/31/22 TANGIBLE COMMON EQUITY & TANGIBLE BOOK VALUE ($ millions) 4Q22 SUMMARY • TBV increase primarily driv
Slide 21: 2023 Guidance
2023 Guidance 21 2023 FINANCIAL OUTLOOK • Core pre-tax pre-provision earnings excluding solar tax equity(1) of $142 million to $148 million • Net Interest Income of $256 million to $263 million • Approximately 3% balance sheet growth, driven by: ◦ Loan portfolio optimization and securities mix-shift
Slide 22: Appendix
Appendix
Slide 23: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials 23 As of and for the As of and for the Three Months Ended Year Ended (in thousands) December 31, 2022 September 30, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Core operating revenue Net Interest income (GAAP) $ 67,346 $ 67,628 $ 47,081 $ 239,840
Slide 24: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials 24 As of and for the As of and for the Three Months Ended Year Ended (in thousands) December 31, 2022 September 30, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Tangible common equity Stockholders' equity (GAAP) $ 508,955 $ 487,738 $ 563,875 $ 508,
Slide 25: Thank You
Thank You amalgamatedbank.com Member FDIC
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