Amalgamated Financial Corp. · NASDAQ:AMAL
Amalgamated Financial — Q4 2023 Earnings Presentation
26 slides from Amalgamated Financial's earnings presentation, Jan 25, 2024
Slide 1: Fourth Quarter 2023 Earnings Presentation
Amalgamated Financial Corp. Fourth Quarter 2023 Earnings Presentation January 25, 2024 amalgamatedbank.com Member FDIC
Slide 2: Safe Harbor Statements
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 otherwi
Slide 3: Safe Harbor Statements cont.
Safe Harbor Statements cont. NON-GAAP FINANCIAL MEASURES This presentation refers to certain non-GAAP financial measures including, without limitation, “Core operating revenue,” “Core non-interest expense,” “Core non-interest income,” “Core net income,” “Tangible common equity,” “Average tangible co
Slide 4: 4Q23 Highlights
4Q23 Highlights BALANCE SHEET INCOME STATEMENT(1) Deposit growth(2) $170.8MM | +2.6% Net Income - GAAP $22.7MM Core Net Income $22.1MM Loans growth $48.7MM | +1.1% Net Interest Income $67.3MM PACE growth $21.5MM | +1.9% Core Diluted EPS $0.72 Net Interest Margin 3.44 % CAPITAL Core Return on Assets
Slide 5: Solar Tax-Equity Investments
Solar Tax-Equity Investments OVERVIEW OF SOLAR TAX EQUITY INVESTMENTS • Metrics excluding the impact of tax credits or accelerated depreciation is a meaningful way to evaluate our performance and are adjusted in accordance with the below chart ◦ Immediate realization of tax benefits and subsequent a
Slide 6: Trends
Trends KEY FINANCIAL TRENDS THROUGH 4Q23 ($ in millions) Loans + PACE 10.0% Ending Deposits + Brokered CDs 10.9% > CAGR(1) > CAGR(1) $5,451 6.0% $7,012 9.9% $4,973 $1,130 CAGR(1) (Loans) $6,356 $6,595 $74 $242 CAGR(1) (excl. Brokered $912 $3,703 $3,868 $3,904 CD) $4,321 $5,339 $4,061 $264 $421 $627
Slide 7: Deposit Portfolio
Deposit Portfolio 4Q23 HIGHLIGHTS • Total deposits increased $21 million or 0.3% in 4Q23 TOTAL DEPOSITS (on-Balance Sheet) ($ in billions) All following metrics exclude Brokered CDs $7.0 $7.0 $7.0 $7.0 $6.9 $6.6 • Total on-balance sheet deposits increased $171 million $0.7 $1.0 $1.0 $1.1 $0.8 $0.6 $
Slide 8: Super-Core Deposits
Super-Core Deposits SUPER-CORE DEPOSITS(2) BY IMPACT SEGMENT 4Q23 HIGHLIGHTS ($ in billions) • Super-core deposits(2) make up $3.6 billion, or 52% of total core deposits(3) Weighted Avg. Total Balance % of Total Impact Sector Account Duration ($M) Core Deposits ◦ Super-core deposits are minimum (Yea
Slide 9: Political Deposits
Political Deposits HISTORICAL TREND ($ in billions) +$32.3mm $1.3 $1.2 $1.2 $1.2 $1.2 $1.1 +15% $1.1 +17% growth growth $1.0 $1.0 $1.0 $0.8 $0.8 $0.8 +49% $0.7 $0.7 growth $0.6 $0.6 $0.6 $0.5 $0.4 $0.3 $0.2 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q2
Slide 10: Investment Securities
Investment Securities SECURITIES – BOOK VALUE(1)(2) ($ millions) 4Q23 HIGHLIGHTS $3,485 • Investment Securities totaled $3.3 billion book $3,390 $3,378 $3,303 $3,282 value for 4Q23 $887 $834 $794 $766 $770 • Agency securities made up 23.5% of the total portfolio in 4Q23, up from 23.2% in 3Q23 $912 $
Slide 11: Investment Securities Composition
Investment Securities Composition AFS Portfolio Composition(1)(2) 4Q23 HIGHLIGHTS ($ in millions) • Weighted average duration(4) is 2.5 years for the $144 total securities portfolio, excl. PACE $528 AFS $1,532mm • Valuation Loss (Gain) as % of relative portfolio balance ◦ Total $102.3 million | 6.5%
Slide 12: Loans Held for Investment
Loans Held for Investment TOTAL LOANS LOAN COMPOSITION ($ in millions) ($ in millions) $29 $28 $24 $4,411 $38 $38 $4,365 $324 $353 $4,198 $4,252 $335 $327 $333 $4,106 $457 $457 $449 $464 $456 $924 $949 $1,050 $1,011 $926 4.68% $1,063 $1,096 $1,095 $1,148 4.56% $968 4.40% 4.33% 4.19% $1,372 $1,390 $1
Slide 13: Mission-Aligned Loan Portfolio
Mission-Aligned Loan Portfolio MULTIFAMILY LOANS BY IMPACT SEGMENT(1) C&I LOANS BY IMPACT SEGMENT(1) ($ in millions) ($ in millions) C&I Climate $119 $11 Protection Detail $1 $250 Commercial Solar: $354mm $7 Community Solar $58 $534 and Other: $181mm $151 $1,028 CRE AND LAND LOANS BY IMPACT CONSUMER
Slide 14: Net Interest Income and Margin
Net Interest Income and Margin NET INTEREST INCOME & MARGIN(1)(2) 4Q23 HIGHLIGHTS ($ millions) • Net interest income was $67.3 million, Net Interest Income Net Interest Margin compared to $63.7 million in 3Q23 • 4Q23 NIM at 3.44%; an increase of 15 bps $67.3 $67.3 $67.3 compared to 3Q23 $63.0 $63.7
Slide 15: Non-Interest Income
Non-Interest Income CORE NON-INTEREST INCOME (1) 4Q23 HIGHLIGHTS ($ millions) • Our trust business held $41.7 billion in assets under custody and $14.8 billion in $8.5 assets under management, compared to $8.2 $7.8 $39.6 billion and $13.9 billion, $7.3 $7.5 respectively, in the preceding quarter; $2
Slide 16: Non-Interest Expense and Efficiency
Non-Interest Expense and Efficiency NON-INTEREST EXPENSE 4Q23 HIGHLIGHTS ($ millions) • Efficiency ratio of 49.2% for 4Q23 $38.6 $38.6 • Core efficiency ratio excluding the $37.7 $37.8 $37.5 $37.3 impact of our solar tax equity $37.2 $37.0 investments of 49.7% for 4Q23(1) • Non-interest expense for
Slide 17: Credit Quality
Credit Quality NPA / TOTAL ASSETS 4Q23 HIGHLIGHTS • Nonperforming assets were $34.2 million as of 4Q23, 0.49% compared to $36.5 million in 3Q23 0.45% 0.46% 0.43% 0.37% • Net charge-offs of 0.51% in 4Q23 was 23 bps higher than 3Q23 due to the charge-off of one $4.7mm construction loan 4Q22 1Q23 2Q23
Slide 18: Allowance for Credit Losses on Loans
Allowance for Credit Losses on Loans ALLOWANCE WATERFALL 4Q23 HIGHLIGHTS ($ millions) • Allowance for credit losses on loans totaled $65.7 million in 4Q23, or $2.1 million lower than 3Q23, primarily due to the charge-off of $67.8 $1.3 one $4.7mm construction loan, partially offset $4.4 $65.7 by impr
Slide 19: Performance Tracking
Performance Tracking Capital Ratios Per-Share KPI's 12.51% 12.63% 12.98% 12.31% 12.23% $18.74 $16.78 $17.43 $16.05 $16.42 7.52% 7.50% 7.78% 7.89% 8.07% $2.40 $2.42 $2.31 $2.34 $2.48 $0.83 $0.74 $0.72 $0.76 $0.72 6.59% 6.72% 7.16% 6.30% 6.43% 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 Leverage
Slide 20: 2024 Guidance
2024 Guidance 2024 FINANCIAL OUTLOOK • Core pre-tax pre-provision earnings of $143 million to $148 million • Net Interest Income of $268 million to $272 million - considers the effect of the forward rate curve through 2024 • Conditional 2H Balance Sheet growth ~ 3%: ◦ 1H Neutral Balance Sheet ~ $8B
Slide 21: Appendix
Appendix
Slide 22: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials As of and for the As of and for the Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, (in thousands) 2023 2023 2022 2023 2022 Core operating revenue Net Interest income (GAAP) $ 67,319 $ 63,728 $ 67,346 $ 261,311 $ 2
Slide 23: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials As of and for the As of and for the Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, (in thousands) 2023 2023 2022 2023 2022 Tangible common equity Stockholders' equity (GAAP) $ 585,364 $ 546,291 $ 508,955 $ 585,364
Slide 24: Impact Segment Definitions
Impact Segment Definitions LOAN TYPES INCLUDED WITHIN EACH IMPACT SEGMENT Climate Protection Community Empowerment Health & Wellness • Renewable Energy • Non-Profits • Medical Facilities • Energy Efficiency • CDFI's • Rehabilitation Centers • Energy Storage • Labor Unions • Senior Care • Political O
Slide 25: Tangible Book Value
Tangible Book Value TANGIBLE COMMON EQUITY & TANGIBLE 4Q23 SUMMARY BOOK VALUE • TBV increase of 7.51% primarily driven by: ($ millions) ◦ $22.7 million in net income ◦ $19.2 million improvement in the tax- 19 570 affected mark-to-market adjustment ◦ Offset slightly by regular retained earnings impac
Slide 26: Thank You
Thank You amalgamatedbank.com Member FDIC
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