Amalgamated Financial Corp. · NASDAQ:AMAL
Amalgamated Financial — Q4 2021 Earnings Presentation
23 slides from Amalgamated Financial's earnings presentation, Jan 27, 2022
Slide 1: Fourth Quarter 2021 Earnings Presentation
amalgamatedbank.com Member FDIC Amalgamated Financial Corp. Fourth Quarter 2021 Earnings Presentation January 27, 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: 4Q21 Highlights
4Q21 Highlights 4 1. See non-GAAP disclosures on pages 21-22 2. Pre-tax, pre-provision income is defined as net interest income plus non-interest income less non-interest expense 3. Core pre-tax, pre-provision income excluding the effects of tax credits or losses on solar investments INCOME STATEMEN
Slide 5: ABOC Transaction Update
ABOC Transaction Update 5Note: 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) Strong Financial Metrics… ~17% GAAP EPS Accretion to AMA
Slide 6: Trends: Key Financial Trends Through 4Q21
Trends 6 KEY FINANCIAL TRENDS THROUGH 4Q21 ($ in millions) 1. Compounded Annual Growth Rate (“CAGR”) 2. Pre-tax Pre-provision Earnings, excluding tax credits on solar investments, was $79.3 million in 2020, and $71.5 million in 2021 8.9% CAGR(1) 18.4% CAGR(1) 27.8% CAGR(1) Pre-tax Pre-Provision Earn
Slide 7: Deposit Portfolio
Deposit Portfolio 7 TOTAL DEPOSITS ($ in billions) 4Q21 HIGHLIGHTS • Total ending deposits increased $131.8 million compared to 3Q21 due to post-election rebound in political deposits and new relationships in core markets ◦ Total average deposits increased $311.9 million • Average non-interest beari
Slide 8: Political Deposits Historical Trend
8 HISTORICAL TREND ($ in millions) Political Deposits $182 $271 $419 $511 $579 $775 $1,101 $1,212 $603 $692 $791 $1,015 $990 $986 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1/19/22
Slide 9: Interest Earning Assets
Interest Earning Assets 9 INTEREST EARNING ASSETS OF $6.8B AS OF DECEMBER 31, 2021 We maintain a diverse, low risk profile of interest earning assets Multifamily & Commercial Real Estate $1.2 B • No fossil fuel exposure • $259mm of government guaranteed loans • $265mm residential solar loans with st
Slide 10: Loans and Held-to-Maturity Securities
Loans and Held-to-Maturity Securities 10 TOTAL LOANS ($ in millions) HELD-TO-MATURITY SECURITIES ($ in millions) • Total loans increased $189.9 million, or 6.2%, compared to 3Q21 due to increased loan originations and reduced run-off • 4Q21 Yield of 4.01%; an increase of 17 bps compared to 3Q21 (12
Slide 11: Investment Securities
Investment Securities 11 SECURITIES – BOOK VALUE(1) ($ 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 $2.9 billion book value for 4Q21 • Securities increased $276.4 milli
Slide 12: Net Interest Income and Margin
Net Interest Income and Margin 12 NET INTEREST INCOME & MARGIN ($ millions) • Net interest income was $47.1 million, compared to $43.4 million in 3Q21 • 4Q21 NIM at 2.77%; an increase of 7 bps compared to 3Q21 and a decrease of 29 bps compared to 4Q20 • 4Q21 NIM was negatively impacted by approximat
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 change in the fair value of the investment creates volatility in the earnings stream • New solar tax-equity investment contributed $5.3 million in income in Q4, but
Slide 14: Non-Interest Expense and Efficiency
Non-Interest Expense and Efficiency 14 NON-INTEREST EXPENSE ($ millions) • Efficiency ratio of 58.9% for 4Q21 • Core efficiency ratio of 57.2% for 4Q21(1) • Non-interest expense for 4Q21 was $35.0 million • Non-interest expense for 4Q21 was $2.0 million higher compared to 3Q21 primarily due to $0.9
Slide 15: Allowance for Loan Losses
Allowance for Loan Losses 15 ALLOWANCE FOR LOAN LOSSES / TOTAL LOANS ALLOWANCE FOR LOAN LOSSES (ALLL) CHANGE FROM 4Q20 TO 4Q21 ($ millions) • Allowance for loan losses totaled $35.9 million in 4Q21, unchanged from 3Q21 because loss factor, quantitative and credit quality improvements were offset by
Slide 16: Credit Quality Portfolio
Credit Quality Portfolio 16 NPA / TOTAL ASSETS NCO / AVERAGE LOANS(1) 4Q21 HIGHLIGHTS • Nonperforming assets were $54.6 million as of 4Q21, compared to $67.8 million in 3Q21 • Net charge-offs to average loans of 0.44% in 4Q21 was 46 bps higher than 3Q21 primarily related to our focus on reducing non
Slide 17: Returns
Returns 17 (1) See non-GAAP disclosures on pages 21-22 (2) Core ROATCE excluding tax credits on solar investments was 8.6%, 12.3%, 8.7%, 11.1% and 9.2% for 4Q20, 1Q21, 2Q21, 3Q21 and 4Q21, respectively ROAE & CORE ROATCE (1)(2) 10.3% 9.1% 7.6% 10.3% 11.2%10.7% 10.0% 7.7% 10.6% 12.2% ROAE CORE ROATCE
Slide 18: Capital
Capital 18 TIER 1 LEVERAGE RATIO COMMON EQUITY TIER 1 RATIO • Regulatory capital ratios remained strong ◦ Tier 1 leverage ratio of 7.62% as of 4Q21 ◦ Excluding the excess liquidity, tier 1 leverage ratio would be 8.17% ◦ Common Equity Tier 1 Capital of 12.98% • Tier 1 leverage ratio was 23 bps lower
Slide 19: 2022 Guidance
2022 Guidance 19 2022 FINANCIAL OUTLOOK • Assumptions are based on AMAL stand-alone company and do not include ABOC accretion impact • ABOC accretion projections remain unchanged. Targeting deal close in early second quarter 2022 • Core pre-tax pre-provision earnings of $75 million to $85 million ◦
Slide 20: Appendix
Appendix
Slide 21: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials 21 As of and for the As of and for the Three Months Ended Year Ended (in thousands) December 31, 2021 September 30, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Core operating revenue Net Interest income (GAAP) $ 47,081 $ 43,387 $ 45,655 $ 174,304
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 Year Ended (in thousands) December 31, 2021 September 30, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Tangible common equity Stockholders' Equity (GAAP) $ 563,875 $ 556,390 $ 535,821 $ 563,
Slide 23: Thank You
Thank You amalgamatedbank.com Member FDIC
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