Amalgamated Financial Corp. · NASDAQ:AMAL
Amalgamated Financial — Corporate Update (December 2022)
25 slides from Amalgamated Financial's corporate update, Dec 19, 2022
Slide 1: Fourth Quarter 2022 Investor Presentation Update
amalgamatedbank.com Member FDIC Amalgamated Financial Corp. Fourth Quarter 2022 Investor Presentation Update December 20, 2022
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: 3Q22 Highlights & 4Q22 Updates
3Q22 Highlights & 4Q22 Updates 4 1. See non-GAAP disclosures on pages 23-24 2. The above-referenced preliminary unaudited financial information is based solely on management’s estimates, reflects currently available preliminary financial information and remains subject to additional procedures. Our
Slide 5: Solar Tax-Equity Investments
-$1.8 -$0.8 $5.3 $0.1 -$0.9 -$1.3 -$1.7 -$3.8 $0.2 $0.2 $0.5 $0.3 $0.3 $0.3 $0.3 $1.2 $5.0 Tax credits (accelerated depreciation) on solar investments Steady state solar income 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 FY22 FY23-25 Solar Tax-Equity Investments OVERVIEW OF SOLAR TAX EQUITY INVESTMENTS • Met
Slide 6: Key Financial Trends Through 3Q22
Ending Deposits $56.2 $69.4 $84.9 $73.3 $122.5 2018 2019 2020 2021 Sept YTD Trends 6 KEY FINANCIAL TRENDS THROUGH 3Q22 ($ in millions) (1) Compounded Annual Growth Rate (“CAGR”) (2) See solar tax investment slide 5 for components of income exclusions (3) Sept YTD 2022 earnings are annualized (4) GAA
Slide 7: Deposit Portfolio
Deposit Portfolio 7 3Q22 HIGHLIGHTS • Total average deposits increased $191.1 million • Total ending deposits decreased $130.9 million compared to 2Q22 primarily related to timing of our pension and benefit fund clients normal payroll withdrawals as well as the first leg of political deposit runoff
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 $0.7 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 12/15/22 8 HISTORICAL TREND ($ in billions) Political Deposits 4Q22 UPDATES • Although cyclical, political deposit balances o
Slide 9: Interest Earning Assets
Interest Earning Assets 9 INTEREST EARNING ASSETS OF $7.6B AS OF SEPTEMBER 30, 2022 We maintain a diverse, low risk profile of interest earning assets Multifamily & Commercial Real Estate $1.2 B • No fossil fuel exposure • $244mm of government guaranteed loans • $397mm residential solar loans with s
Slide 10: Held-to-Maturity Securities
• HTM securities, excluding PACE assessments represent 25% of the total investment portfolio • PACE securities saw $115mm new growth during the quarter, due to: ◦ $37mm in PACE PFG purchases ◦ Two additional residential PACE purchases of $62mm and $32mm ◦ One CPACE purchase of $9mm ◦ $25mm in princi
Slide 11: Investment Securities
Investment Securities 11 SECURITIES – BOOK VALUE(1) ($ 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 $3.6 billion book value for 3Q22 • Agency securities made up 27.3%
Slide 12: Loans
• Total loans increased $220.2 million, or 6.1%, compared to 2Q22 ◦ Residential loan balances grew 8.3% during the quarter ◦ Multifamily/CRE loans grew 1.9% during the quarter ◦ C&I, Consumer, and Other loans grew 9.2% during the quarter • 3Q22 yield of 4.11%; an increase of 25 bps compared to 2Q22
Slide 13: Net Interest Income and Margin
Net Interest Income and Margin 13 NET INTEREST INCOME & MARGIN ($ millions) • Net interest income was $67.6 million, compared to $56.5 million in 2Q22 • 3Q22 NIM at 3.50%; an increase of 47 bps compared to 2Q22 • Loan prepayment penalties favorably impacted NIM by 4 bps in 3Q22, compared to 2 bps in
Slide 14: Non-Interest Expense and Efficiency
Non-Interest Expense and Efficiency 14 NON-INTEREST EXPENSE ($ millions) • Efficiency ratio of 49.9% for 3Q22 • Core efficiency ratio excluding the impact of our solar tax equity investments of 48.2% for 3Q22(1) • Non-interest expense for 3Q22 was $36.3 million • Non-interest expense for 3Q22 was $2
Slide 15: Non-Interest Income
Non-Interest Income 15 CORE NON-INTEREST INCOME ex-solar (1) ($ millions) • Our trust business held $37.6 billion in assets under custody and $12.5 billion in assets under management, compared to $38.9 billion and $12.9 billion, respectively, in the preceding quarter; this decline was primarily driv
Slide 16: Allowance for Loan Losses
Allowance for Loan Losses 16 ALLOWANCE FOR LOAN LOSSES / TOTAL LOANS ALLOWANCE FOR LOAN LOSSES (ALLL) CHANGE DURING 3Q22 ($ millions) • Allowance for loan losses totals $42.1 million in 3Q22, or $2.6 million higher compared to 2Q22 primarily due to higher loan balances and qualitative factors, offse
Slide 17: Credit Quality
Credit Quality 17 NPA / TOTAL ASSETS NCO / AVERAGE LOANS(1) (Quarter trend) 3Q22 HIGHLIGHTS • Nonperforming assets were $54.3 million as of 3Q22, compared to $65.3 million in 2Q22 • Net charge-offs of 0.29% in 3Q22 was 18 bps higher than 2Q22 due to activity related to our focus on reducing our nonp
Slide 18: Returns
Returns 18 (1) Refer to Reconciliation of Non-GAAP Financial Measures on slides 22-23 for further details (2) ROAE was 10.3%, 11.2%, 10.3%, 15.2% and 17.8% for 3Q21, 4Q21, 1Q22, 2Q22 and 3Q22, respectively (3) ROATCE was 10.6%, 11.6%, 10.6%, 15.7% and 18.4% for 3Q21, 4Q21, 1Q22, 2Q22 and 3Q22, respe
Slide 19: Capital
Capital 19 TIER 1 LEVERAGE RATIO COMMON EQUITY TIER 1 RATIO • Regulatory capital ratios remained strong ◦ Tier 1 leverage ratio of 7.16% as of 3Q22 ◦ Bank tier 1 leverage ratio of 7.92% as of Q3 2022. ◦ Common Equity Tier 1 Capital of 11.91% • Tier 1 leverage ratio was 8 bps higher than the prior qu
Slide 20: Tangible Book Value
Tangible Book Value 481 23 (3) (1) 1 (30) 471 15.69 16.44 16.34 16.32 16.32 16.34 15.37 15.37 6/30/22 Earnings Dividends @ $.10/ share Buybacks - APIC Buybacks - Share count Other(1) AFS Mark 9/30/22 TANGIBLE COMMON EQUITY & TANGIBLE BOOK VALUE ($ millions) 3Q22 SUMMARY • TBV decline primarily drive
Slide 21: 2022 Guidance
2022 Guidance 21 2022 FINANCIAL OUTLOOK - Exceed High End of Ranges • Core pre-tax pre-provision earnings(1) from $75 - $85 million to: ◦ $120 million (high end) - exceed by $8-9 million • Net Interest Income from $184 - $192 million to: ◦ $230 million (high end) - exceed by $9-10 million • Approxim
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 Nine Months Ended (in thousands) September 30, 2022 June 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Core operating revenue Net Interest income (GAAP) $ 67,628 $ 56,498 $ 43,387 $ 17
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 Nine Months Ended (in thousands) September 30, 2022 June 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Tangible common equity Stockholders' equity (GAAP) $ 487,738 $ 498,041 $ 556,390
Slide 25: Thank You
Thank You amalgamatedbank.com Member FDIC
Amalgamated Financial — Corporate Update (December 2022) on 6ix