Amalgamated Financial Corp. · NASDAQ:AMAL
Amalgamated Financial — Q2 2022 Earnings Presentation
24 slides from Amalgamated Financial's earnings presentation, Jul 28, 2022
Slide 1: Second Quarter 2022 Earnings Presentation
amalgamatedbank.com Member FDIC Amalgamated Financial Corp. Second Quarter 2022 Earnings Presentation July 28, 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: 2Q22 Highlights
2Q22 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 • Record earnings of $19.6 million, or $0.63 per diluted share on a GAAP basis; • Core net income exclud
Slide 5: Solar Tax-Equity Investments
-$3.8 -$1.8 -$0.8 $5.3 $0.1 -$0.9 -$1.3 -$3.8 $0.0 $0.2 $0.2 $0.5 $0.3 $0.3 $0.3 $1.2 $5.0 Tax credits (accelerated depreciation) on solar investments Steady state solar income 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 FY22 FY23-25 Solar Tax-Equity Investments OVERVIEW OF SOLAR TAX EQUITY INVESTMENTS • Imm
Slide 6: Key Financial Trends Through 2Q22
Ending Deposits $56.2 $69.4 $84.9 $73.3 $106.4 2018 2019 2020 2021 June YTD Trends 6 KEY FINANCIAL TRENDS THROUGH 2Q22 ($ in millions) (1) Compounded Annual Growth Rate (“CAGR”) (2) See solar tax investment slide 5 for components of income exclusions (3) June YTD 2022 earnings are annualized (4) GAA
Slide 7: Deposit Portfolio
Deposit Portfolio 7 2Q22 HIGHLIGHTS • Total ending deposits increased $317.7 million compared to 1Q22 due to momentum in all customer segments, including political deposits related to upcoming elections, and new relationships in core markets ◦ Political deposits make up 17.6% of the total deposit po
Slide 8: Interest Earning Assets
Interest Earning Assets 8 INTEREST EARNING ASSETS OF $7.7B AS OF JUNE 30, 2022 We maintain a diverse, low risk profile of interest earning assets Multifamily & Commercial Real Estate $1.2 B • No fossil fuel exposure • $239mm of government guaranteed loans • $367mm residential solar loans with strong
Slide 9: Held-to-Maturity Securities
• In May, $277.3 million AFS securities were transferred into our Non-Pace HTM securities portfolio to reduce potential mark to market volatility • HTM securities, excluding PACE assessments represent 23% of the total investment portfolio • 100% of PACE portfolio, and 41% of Non-Pace HTM securities
Slide 10: Investment Securities
Investment Securities 10 SECURITIES – BOOK VALUE(1) ($ 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 2Q22 • Securities increased $113.8 mil
Slide 11: Loans
• Total loans increased $178.2 million, or 5.1%, compared to 1Q22 due to new loan originations in our residential real estate and solar portfolios, partially offset by commercial loan payoffs • 2Q22 yield of 3.86%; an increase of 1 bps compared to 1Q22 • The total balance of mission-aligned loans in
Slide 12: Net Interest Income and Margin
Net Interest Income and Margin 12 NET INTEREST INCOME & MARGIN ($ millions) • Net interest income was $56.5 million, compared to $48.4 million in 1Q22 • 2Q22 NIM at 3.03%; an increase of 27 bps compared to 1Q22 • NIM was negatively impacted by approximately 8 bps due to cash in excess of $100 millio
Slide 13: Non-Interest Expense and Efficiency
Non-Interest Expense and Efficiency 13 NON-INTEREST EXPENSE ($ millions) • Efficiency ratio of 53.9% for 2Q22 • Core efficiency ratio excluding the tax credit or accelerated depreciation impact of our solar tax equity investments of 52.2% for 2Q22(1) • Non-interest expense for 2Q22 was $34.3 million
Slide 14: Non-Interest Income
Non-Interest Income 14 CORE NON-INTEREST INCOME ex-solar (1) ($ millions) • Our trust business held $38.9 billion in assets under custody and $12.9 billion in assets under management, compared to $39.7 billion and $15.1 billion, respectively, in the preceding quarter; this decline was primarily driv
Slide 15: Allowance for Loan Losses
Allowance for Loan Losses 15 ALLOWANCE FOR LOAN LOSSES / TOTAL LOANS ALLOWANCE FOR LOAN LOSSES (ALLL) CHANGE DURING 2Q22 ($ millions) • Allowance for loan losses totals $39.5 million in 2Q22, or $2.0 million higher compared to 1Q22 primarily due to higher loan balances and specific reserves, offset
Slide 16: Credit Quality
Credit Quality 16 NPA / TOTAL ASSETS NCO / AVERAGE LOANS(1) (Quarter trend) 2Q22 HIGHLIGHTS • Nonperforming assets were $65.3 million as of 2Q22, compared to $61.1 million in 1Q22 • Net charge-offs of 0.11% in 2Q22 was 3 bps higher than 1Q22 due to increased charge-off activity related to our focus
Slide 17: Returns
Returns 17 (1) Refer to Reconciliation of Non-GAAP Financial Measures on slides 22-23 for further details (2) ROAE was 7.6%, 10.3%, 11.2%, 10.3% and 15.2% for 2Q21, 3Q21, 4Q21, 1Q22 and 2Q22, respectively (3) ROATCE was 7.9%, 10.6%, 11.6%, 10.6% and 15.7% for 2Q21, 3Q21, 4Q21, 1Q22 and 2Q22, respect
Slide 18: Capital
Capital 18 TIER 1 LEVERAGE RATIO COMMON EQUITY TIER 1 RATIO • Regulatory capital ratios remained strong ◦ Tier 1 leverage ratio of 7.08% as of 2Q22 ◦ Excluding the excess liquidity(1), tier 1 leverage ratio would be 7.28% ◦ Bank tier 1 leverage ratio of 7.84% as of Q2 2022. ◦ Common Equity Tier 1 Ca
Slide 19: Tangible Book Value
Tangible Book Value 510 20 (2) (9) 1 (37) 481 16.45 17.09 17.01 16.72 16.96 16.91 15.69 15.69 03/31/22 Earnings Dividends @ $.08/ share Buybacks - APIC Buybacks - Share count Other(1) AFS Mark 6/30/22 TANGIBLE COMMON EQUITY & TANGIBLE BOOK VALUE ($ millions) 2Q22 SUMMARY • TBV decline primarily driv
Slide 20: 2022 Guidance
2022 Guidance 20 2022 FINANCIAL OUTLOOK - Higher End of Ranges • Core pre-tax pre-provision earnings(1) from $75 - $85 million to: ◦ $97 - $105 million - includes effect of rate hikes through June ◦ $110 - $120 million - includes effect of July hike and forward rate curve through 2022 • Net Interest
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 Six Months Ended (in thousands) June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Core operating revenue Net Interest income (GAAP) $ 56,498 $ 48,368 $ 41,991 $ 104,866 $ 83,836 Non-i
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 Six Months Ended (in thousands) June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Tangible common equity Stockholders' equity (GAAP) $ 498,041 $ 526,762 $ 548,211 $ 498,041 $ 548,211
Slide 24: Thank You
Thank You amalgamatedbank.com Member FDIC
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