Amalgamated Financial Corp. · NASDAQ:AMAL
Amalgamated Financial — Q3 2021 Earnings Presentation
24 slides from Amalgamated Financial's earnings presentation, Oct 28, 2021
Slide 1: Third Quarter 2021 Earnings Presentation
amalgamatedbank.com Member FDIC Amalgamated Financial Corp. Third Quarter 2021 Earnings Presentation October 28, 2021
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: 3Q21 Highlights
3Q21 Highlights 4 1. See non-GAAP disclosures on pages 22-23 2. Pre-tax, pre-provision income is defined as net interest income plus non-interest income less non-interest expense INCOME STATEMENT • GAAP net income of $0.46 per diluted share; core net income of $0.46 per diluted share(1) • Pre-tax, p
Slide 5: Four Pillars Designed to Fuel our Growth
Priscilla Sims Brown – President and CEO 5 Four Pillars Designed to Fuel our Growth and Mission while Effectively Managing Risk • Building our business through our mission as America's Socially Responsible Bank by focusing on sustainability through our ESG efforts. • Improving our focus on and deepe
Slide 6: ABOC Transaction Creates Significant Value
ABOC Transaction Creates Significant Value 6 Note: All figures contemplate payment of contingent purchase price and associated payouts under management contracts, and achievement of anticipated synergies 1. 2023 GAAP EPS accretion (assumes deal closes in Q4-2021) 2. Pro forma balance sheet estimated
Slide 7: Key Financial Trends Through 3Q21
Trends 7 KEY FINANCIAL TRENDS THROUGH 3Q21 ($ in millions) 1. Compounded Annual Growth Rate (“CAGR”) 2. Sept YTD 2021 Pre-tax Pre-Provision earnings are annualized 3. Pre-tax Pre-provision Earnings, excluding the impact of equity method investments for solar initiatives, was $79.3 million in 2020, a
Slide 8: Deposit Portfolio
Deposit Portfolio 8 TOTAL DEPOSITS ($ in millions) 3Q21 HIGHLIGHTS • Total ending deposits increased $314.5 million compared to 2Q21 due to post-election rebound in political deposits and new relationships in core markets ◦ Total average deposits increased $224.8 million • Average non-interest beari
Slide 9: Political Deposits Historical Trend
9 HISTORICAL TREND ($ in millions) Political Deposits $398 $182 $271 $419 $511 $579 $775 $1,101 $1,212 $603 $692 $791 $1,015 $891 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 10/21
Slide 10: Interest Earning Assets
Interest Earning Assets 10 INTEREST EARNING ASSETS OF $6.6B AS OF SEPTEMBER 30, 2021 We maintain a diverse, low risk profile of interest earning assets Multifamily & Commercial Real Estate $1.2 B • No fossil fuel exposure • $266mm of government guaranteed loans • $224mm residential solar loans with
Slide 11: Loans and Held-to-Maturity Securities
Loans and Held-to-Maturity Securities 11 TOTAL LOANS ($ in millions) HELD-TO-MATURITY SECURITIES ($ in millions) • Total loans decreased $50.0 million, or 1.6%, compared to 2Q21 due to continued prepayment activity and principal paydowns • 3Q21 Yield of 3.84%; an increase of 2 bps compared to 2Q21 a
Slide 12: Investment Securities
Investment Securities 12 SECURITIES – BOOK VALUE(1) ($ 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 $2.7 billion book value for 3Q21 • Securities increased $231.0 milli
Slide 13: Net Interest Income and Margin
Net Interest Income and Margin 13 NET INTEREST INCOME & MARGIN ($ millions) • Net interest income was $43.4 million, compared to $42.0 million in 2Q21 • 3Q21 NIM at 2.70%; a decrease of 5 bps and 18 bps, compared to 2Q21 and 3Q20, respectively • NIM was negatively impacted by approximately 24 bps du
Slide 14: Solar Tax-Equity Investments
Solar Tax-Equity Investments OVERVIEW OF SOLAR TAX EQUITY INVESTMENTS • Realization of tax benefits in the project life and subsequent change in the fair value of the investment creates volatility in the earnings stream • Current projects are expected to generate a slight loss in the next two quarte
Slide 15: Non-Interest Expense and Efficiency
Non-Interest Expense and Efficiency 15 NON-INTEREST EXPENSE ($ millions) • Efficiency ratio of 66.0% for 3Q21 • Core efficiency ratio of 65.7% for 3Q21(1) • Non-interest expense for 3Q21 was $33.0 million • Non-interest expense for 3Q21 was $1.6 million higher compared to 2Q21 primarily due to $0.4
Slide 16: Allowance for Loan Losses
Allowance for Loan Losses 16 ALLOWANCE FOR LOAN LOSSES / TOTAL LOANS ALLOWANCE FOR LOAN LOSSES (ALLL) CHANGE FROM 4Q20 TO 3Q21 ($ millions) • Allowance for loan losses totals $35.9 million in 3Q21, or $2.1 million lower compared to 2Q21 primarily due to improved loss and qualitative factors, improve
Slide 17: Credit Quality Portfolio
Credit Quality Portfolio 17 NPA / TOTAL ASSETS NCO / AVERAGE LOANS(1) (Quarter trend) 3Q21 HIGHLIGHTS • Nonperforming assets were $67.8 million as of 3Q21, compared to $71.0 million in 2Q21 • Net charge-offs of -0.02% in 3Q21 was 6 bps lower than 2Q21 due to a shift from a net charge-off position in
Slide 18: Returns
Returns 18 (1) See non-GAAP disclosures on pages 22-23 (2) ROATCE excluding equity method investments for solar initiatives was 10.9%, 9.7%, 12.3%, 8.6% and 10.7% for 3Q20, 4Q20, 1Q21, 2Q21 and 3Q21 respectively ROAE & CORE ROATCE (1)(2) 9.6% 10.3% 9.1% 7.6% 10.3% 13.4% 10.7% 10.1% 7.7% 10.6% ROAE C
Slide 19: Capital
Capital 19 TIER 1 LEVERAGE RATIO COMMON EQUITY TIER 1 RATIO • Regulatory capital ratios remained strong ◦ Tier 1 leverage ratio of 7.85% as of 3Q21 ◦ Excluding the excess liquidity, tier 1 leverage ratio would be 8.56% ◦ Common Equity Tier 1 Capital of 13.98% • Tier 1 leverage ratio was 8 bps lower
Slide 20: 2021 Guidance
2021 Guidance 20 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
Slide 21: Appendix
Appendix
Slide 22: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials 22 As of and for the As of and for the Three Months Ended Nine Months Ended (in thousands) September 30, 2021 June 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Core operating revenue Net Interest income $ 43,387 $ 41,991 $ 45,234 $ 127,223 $
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, 2021 June 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Tangible common equity Stockholders' Equity (GAAP) $ 556,390 $ 548,211 $ 522,497
Slide 24: Thank You
Thank You amalgamatedbank.com Member FDIC
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