Amalgamated Financial Corp. · NASDAQ:AMAL
Amalgamated Financial — Q3 2023 Earnings Presentation
27 slides from Amalgamated Financial's earnings presentation, Oct 26, 2023
Slide 1: Third Quarter 2023 Earnings Presentation
Amalgamated Financial Corp. Third Quarter 2023 Earnings Presentation October 26, 2023 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: 3Q23 Highlights
3Q23 Highlights BALANCE SHEET INCOME STATEMENT(1) Deposit growth(2) $172.8MM | +2.7% Net Income - GAAP $22.3MM Core Net Income $23.3MM Loans growth $113.0MM | +2.7% Net Interest Income $63.7MM PACE growth $48.3MM | +4.6% Core Diluted EPS $0.76 Net Interest Margin 3.29% CAPITAL Core Return on Assets
Slide 5: Solar Tax-Equity Investments
Solar Tax-Equity Investments OVERVIEW OF SOLAR TAX EQUITY INVESTMENTS • Metrics excluding the impact of tax credits or accelerated depreciation is a meaningful way to evaluate our performance and are adjusted in accordance with the below chart ◦ Immediate realization of tax benefits and subsequent a
Slide 6: Trends
Trends KEY FINANCIAL TRENDS THROUGH 3Q23 ($ in millions) Loans + PACE Ending Deposits + Brokered CDs > 10.4% CAGR(1) > 11.5% CAGR(1) $5,406 $6,991 $4,973 $6,356 $6,595 $74 $392 9.8% $1,109 6.1% $5,339 CAGR(1) $912 CAGR(1) $4,641 $3,703 $3,868 $3,904 (excl. (Loans) Brokered CD) $4,297 $264 $421 $627
Slide 7: Deposit Portfolio
Deposit Portfolio TOTAL DEPOSITS 3Q23 HIGHLIGHTS ($ in billions) • Total deposits increased $96.2 million or 1.4% in 3Q23 $7.2 $7.1 $7.0 $6.9 $7.0 $6.6 All following metrics exclude Brokered CDs $1.2 $0.7 $1.0 $1.0 $0.8 $0.6 $0.1 $0.6 $0.4 • Deposits increased $172.8 million compared to 2Q23 $0.5 $0
Slide 8: Super-Core Deposits
Super-Core Deposits SUPER-CORE DEPOSITS(2) BY IMPACT SEGMENT 3Q23 HIGHLIGHTS ($ in billions) • Super-core deposits(2) make up $3.4 billion, or 53% of total core deposits(3) Weighted Avg. Total Balance % of Total Impact Sector Account Duration ($M) Core Deposits ◦ Super-core deposits are minimum (Yea
Slide 9: Political Deposits
Political Deposits HISTORICAL TREND +17.3mm ($ in billions) $1.3 $1.2 $1.2 +17% $1.1 +15% $1.1 growth growth $1.0 $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 2Q23 3Q23
Slide 10: Interest Earning Assets
Interest Earning Assets INTEREST EARNING ASSETS OF $7.7B AS OF SEPTEMBER 30, 2023 We maintain a diverse, low risk profile of interest earning assets • No fossil fuel exposure • $766mm agency securities • $225mm of government • $1,428mm of non-agency guaranteed loans securities • $354mm residential s
Slide 11: Held-to-Maturity Securities
Held-to-Maturity Securities HELD-TO-MATURITY SECURITIES(1) 3Q23 HIGHLIGHTS ($ in millions) PACE (HTM) Non Pace HTM • HTM securities, excluding PACE assessments PACE (HTM) Yield Non-Pace HTM Yield represent 28% of the total investment portfolio $1,683 $1,619 $1,655 • HTM PACE securities saw $32.7 mil
Slide 12: Investment Securities
Investment Securities SECURITIES – BOOK VALUE(1)(2) 3Q23 HIGHLIGHTS ($ millions) • Investment Securities totaled $3.3 billion book $3,579 value for 3Q23 $3,485 $3,390 $3,378 $973 $3,303 • Agency securities made up 23.2% of the total $887 $834 $794 portfolio, down from 23.5% in 2Q23, reflecting $766
Slide 13: Investment Securities Composition
Investment Securities Composition AFS Portfolio Composition(1)(2) 3Q23 HIGHLIGHTS ($ in millions) • Weighted average duration(4) is 2.4 years $144 for the total securities portfolio, excl. PACE $534 AFS $1,581mm • Valuation Loss as % of relative portfolio balance ◦ Total $128.7 million | 7.9% $903 ◦
Slide 14: Loans Held for Investment
Loans Held for Investment TOTAL LOANS LOAN COMPOSITION ($ in millions) ($ in millions) $28 $38 $38 $29 $39 $333 $324 $335 $327 $338 $456 $457 $457 $4,198 $4,252 $4,365 $464 $4,106 $468 $924 $949 $1,050 $805 $926 $3,871 $1,096 $1,095 $968 $1,063 $885 $1,332 $1,372 $1,390 $1,389 $1,410 4.40% 4.33% 4.5
Slide 15: Net Interest Income and Margin
Net Interest Income and Margin NET INTEREST INCOME & MARGIN 3Q23 HIGHLIGHTS ($ millions) • Net interest income was $63.7 million, Net Interest Income Net Interest Margin compared to $63.0 million in 2Q23 $67.6 $67.3 $67.3 • 3Q23 NIM at 3.29%; a decrease of 4 basis $63.7 points compared to 2Q23 $63.0
Slide 16: Non-Interest Income
Non-Interest Income CORE NON-INTEREST INCOME ex-solar (1) 3Q23 HIGHLIGHTS ($ millions) • Our trust business held $39.6 billion in assets under custody and $13.9 billion in assets under management, compared to $8.2 $7.8 $40.3 billion and $14.5 billion, $7.5 $7.3 $7.5 respectively, in the preceding qu
Slide 17: Non-Interest Expense and Efficiency
Non-Interest Expense and Efficiency NON-INTEREST EXPENSE 3Q23 HIGHLIGHTS ($ millions) • Efficiency ratio of 53.0% for 3Q23 $38.6 $38.6 $37.2 $37.5 $37.0 $37.3 $36.3 $36.3 $35.6 $35.6 • Core efficiency ratio excluding the impact of our solar tax equity investments of 51.7% for 3Q23(1) • Non-interest
Slide 18: Credit Quality
Credit Quality NPA / TOTAL ASSETS 3Q23 HIGHLIGHTS 0.69% • Nonperforming assets were $36.5 million as of 3Q23, 0.49% compared to $35.3 million in 2Q23 0.44% 0.45% 0.46% • Net charge-offs of 0.27% in 3Q23 due to a $1.2 million charge-off on a multifamily loan subsequently sold at par early in 4Q23 3Q2
Slide 19: Allowance for Credit Losses on Loans
Allowance for Credit Losses on Loans 3Q23 HIGHLIGHTS ALLOWANCE WATERFALL ($ millions) • The allowance for credit losses on loans grew slightly, having increased by $0.4 $2.4 million compared to prior quarter. $1.2 $67.8 $67.4 $2.0 $(2.2) $(0.01) $(2.9) ALLOWANCE FOR CREDIT LOSSES ON LOANS / TOTAL LO
Slide 20: Returns
Returns Core ROAE & Core ROATCE ex-solar (1)(2)(3)(4) 22.6% 21.8% 19.2% 19.9% 18.6% 19.2% 16.8% 17.3% 17.2% 17.7% 3Q22 4Q22 1Q23 2Q23 3Q23 Core ROAE ex-solar Core ROATCE ex-solar (1) Refer to Reconciliation of Non-GAAP Financial Measures on slides 25-26 for further details (2) ROAE was 17.8%, 19.9%,
Slide 21: Capital
Capital TIER 1 LEVERAGE RATIO 3Q23 HIGHLIGHTS 7.96% 7.80% • Regulatory capital ratios remained strong 7.52% 7.50% 7.89% 7.78% ◦ Tier 1 leverage ratio of 7.89% as of 7.27% 7.52% 7.50% 3Q23 7.16% ◦ Bank tier 1 leverage ratio of 8.58% as of Q3 2023 3Q22 4Q22 1Q23 2Q23 3Q23 ◦ Common Equity Tier 1 Capita
Slide 22: Tangible Book Value
Tangible Book Value TANGIBLE COMMON EQUITY & TANGIBLE BOOK VALUE 3Q23 SUMMARY ($ millions) • TBV increase of 3.9% primarily driven by: $22 $1 $531 ◦ $22.3 million in net income $(3) $(3) $— ◦ Offset by regular retained earnings impact of dividend $513 issuance and planned share buybacks $17.51 ◦ No
Slide 23: 2023 Guidance
2023 Guidance 2023 FINANCIAL OUTLOOK - UPDATED • Core pre-tax, pre-provision earnings(1) from $133 - $140 million to: ◦ $136 - $139 million - includes effect of forward rate curve and deposit migration to interest bearing through 2023 • Net Interest Income from $248 - $255 million to: ◦ $256 - $258
Slide 24: Appendix
Appendix
Slide 25: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials As of and for the As of and for the Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (in thousands) June 30, 2023 2023 2022 2023 2022 Core operating revenue Net Interest income (GAAP) $ 63,728 $ 62,985 $ 67,628 $ 193,9
Slide 26: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials As of and for the As of and for the Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (in thousands) June 30, 2023 2023 2022 2023 2022 Tangible common equity Stockholders' equity (GAAP) $ 546,291 $ 528,614 $ 487,738 $ 5
Slide 27: Thank You
Thank You amalgamatedbank.com Member FDIC
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