Amalgamated Financial Corp. · NASDAQ:AMAL
Amalgamated Financial — Q2 2021 Earnings Presentation
23 slides from Amalgamated Financial's earnings presentation, Jul 29, 2021
Slide 1: Second Quarter 2021 Earnings Presentation
Amalgamated Financial Corp. Second Quarter 2021 Earnings Presentation July 29, 2021 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 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 Net
Slide 4: 2Q21 Highlights
2Q21 Highlights INCOME STATEMENT • GAAP net income of $0.33 per diluted share; core net income of $0.32 per diluted share(1) • Pre-tax, pre-provision income(2) of $15.9 million compared to $13.1 million in 1Q21 • Core pre-tax, pre-provision income of $15.6 million compared to $14.1 million in 1Q21 •
Slide 5: Priscilla Sims Brown – President and CEO
Priscilla Sims Brown – President and CEO EARLY OBSERVATIONS • Significant opportunities to better tell the story of Amalgamated’s mission to an increasing market of receptive listeners • Expand and grow the Amalgamated brand to gain share and drive business • Develop opportunities to expand our lend
Slide 6: Trends
Trends KEY FINANCIAL TRENDS THROUGH 2Q21 ($ in millions) 18.8% 8.4% Loans + PACE CAGR(1) Ending Deposits CAGR(1) 3,868 3,683 3,703 5,910 264 421 5,339 3,211 546 4,641 3,439 3,447 4,105 2,780 3,137 3,233 2017 2018 2019 2020 2Q21 2017 2018 2019 2020 2Q21 Pre-tax Pre-Provision Earnings(2)(3) NPA / Tota
Slide 7: Deposit Portfolio
Deposit Portfolio TOTAL DEPOSITS 2Q21 HIGHLIGHTS ($ in millions) • Total ending deposits increased $189.9 million $6,021 compared to 1Q21 due to post-election $5,870 $5,890 $5,910 rebound in political deposits and new $5,720 $5,735 relationships in core markets $5,572 $5,580 $5,431 • Total average d
Slide 8: Political Deposits
Political Deposits HISTORICAL TREND ($ in millions) $1,212 $1,101 $824 $775 $791 $692 $603 $579 $511 $416 $398 $419 $321 $271 $242 $182 $156 $124 $85 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 7/23 8
Slide 9: Interest Earning Assets
Interest Earning Assets INTEREST EARNING ASSETS OF $6.3B AS OF JUNE 30, 2021 We maintain a diverse, low risk profile of interest earning assets • No fossil fuel exposure • $278mm of government guaranteed loans • $194mm residential solar loans • $848mm agency securities with strong credit profiles C&
Slide 10: Loans and Held-to-Maturity Securities
Loans and Held-to-Maturity Securities TOTAL LOANS AND PACE (HTM) 2Q21 HIGHLIGHTS ($ in millions) • Total loans decreased $85.4 million, or -2.6% Total Loans, net Loan Yield compared to 1Q21 due to continued 3,500 prepayment activity and paydowns on $3,638 7.00% $3,554 $3,447 commercial revolvers 3,0
Slide 11: Investment Securities
Investment Securities SECURITIES – BOOK VALUE(1) 2Q21 HIGHLIGHTS ($ millions) • Investment Securities totaled $2.4 billion 2,500 $2,425 book value for 2Q21 $2,199 9.00% $2,008 • Securities increased $225.6 million in 2Q21 2,000 $1,933 $1,924 compared to 1Q21 with continued mix shift $848 7.00% towar
Slide 12: Net Interest Income and Margin
Net Interest Income and Margin NET INTEREST INCOME & MARGIN 2Q21 HIGHLIGHTS ($ millions) 50.0 • Net interest income is $42.0 million, 9.00% compared to $41.8 million in 1Q21 Net Interest Income Net Interest Margin 8.00% $45.2 $45.7 • 2Q21 NIM at 2.75%; a decrease of 10 bps 45.0 $44.4 7.00%and 35 bps
Slide 13: Solar Tax-Equity Investments
Solar Tax-Equity Investments OVERVIEW OF SOLAR TAX EQUITY INVESTMENTS • Realization of tax benefits in the project life and subsequent write-down of investment creates volatility in the earnings stream • Current projects are expected to generate a slight loss in the next two quarters; net accretive
Slide 14: Non-Interest Expense and Efficiency
Non-Interest Expense and Efficiency 50.0 NON-INTEREST EXPENSE 2Q21 HIGHLIGHTS 100.00% ($ millions) • Efficiency ratio of 66.4% for 2Q21 45.0 • Core efficiency ratio of 66.8% for 90.00% 40.0 $37.9 2Q21(1) 35.0 $32.7 $32.7 $32.8 $31.5 $31.7 • Non-interest expense for 2Q21 is $31.4 $31.4 80.00% $30.4 $
Slide 15: Allowance for Loan Losses
Allowance for Loan Losses ALLOWANCE FOR LOAN LOSSES (ALLL) 2Q21 HIGHLIGHTS CHANGE FROM 4Q20 TO 2Q21 ($ millions) • Allowance for loan losses totals $38.0 million in 2Q21, or $1.3 million higher compared to 1Q21 primarily due to specific reserves 4Q20 Allowance $41.6 • 2Q21 allowance is $3.6 million
Slide 16: Credit Quality Portfolio
Credit Quality Portfolio NPA / TOTAL ASSETS 2Q21 HIGHLIGHTS 1.38% 1.27% • Nonperforming assets are $71.0 million as of 2Q21, 1.15% 1.22% 1.08% compared to $81.0 million in 1Q21 • Net charge-offs of 0.04% in 2Q21 is 16 bps lower than 1Q21 due to $6.0 million in charge-offs in 1Q21 primarily related t
Slide 17: Returns
Returns ROAE & CORE ROATCE (1)(2) 20.00% 18.00% 16.00% 14.00% 13.4% 12.00% 10.3% 10.7% 10.1% 9.6% 10.00% 9.1% 9.1% 8.6% 7.6% 7.7% 8.00% 6.00% 4.00% 2.00% 0.00% 2Q20 3Q20 4Q20 1Q21 2Q21 ROAE CORE ROATCE (1) See non-GAAP disclosures on pages 21-22 (2) ROATCE excluding equity method investments for sol
Slide 18: Capital
Capital TIER 1 LEVERAGE RATIO 2Q21 HIGHLIGHTS • Regulatory capital ratios remain strong 7.97% 8.06% 7.93% 7.69% • Tier 1 leverage ratio of 7.93% 7.39% as of 2Q21 • Common Equity Tier 1 Capital of 13.63% 2Q20 3Q20 4Q20 1Q21 2Q21 • Tier 1 leverage ratio is 11 bps lower COMMON EQUITY TIER 1 RATIO due t
Slide 19: 2021 Guidance
2021 Guidance 2021 FINANCIAL OUTLOOK • Core Pre-tax pre-provision earnings of $66 million to $72 million • Excludes impact of solar tax equity income/(loss) and any future non-core items • Net Interest Income of $168 million to $174 million • No change in Fed rate targets 19
Slide 20: Appendix
Appendix
Slide 21: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials As of and for the As of and for the Three Months Ended Six Months Ended (in thousands) June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Core operating revenue Net Interest income $ 41,991 $ 41,844 $ 44,439 $ 83,836 $ 89,127 Non-interest inc
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 Six Months Ended (in thousands) June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Tangible common equity Stockholders' Equity (GAAP) $ 548,211 $ 540,222 $ 503,702 $ 548,211 $ 503,702 Les
Slide 23: Thank You
Thank You amalgamatedbank.com Member FDIC
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