Amalgamated Financial Corp. · NASDAQ:AMAL
Amalgamated Financial — Merger or Acquisition (September 2021)
21 slides from Amalgamated Financial's merger presentation, September 2021
Slide 1: Amalgamated announces another perfect union
Amalgamated announces another perfect union September 2021 + amalgamatedbank.com amalgamatedbank.com Member Member FDIC FDIC
Slide 2: Safe Harbor Statements
Safe Harbor Statements INTRODUCTION On March 1, 2021 (the “Effective Date”), Amalgamated Financial Corp. (the “Company” or “Amal” ) completed its holding company reorganization and acquired all of the outstanding stock of Amalgamated Bank (the “Bank”). In this presentation, unless the context indica
Slide 3: Safe Harbor Statements
Safe Harbor Statements 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 Incom
Slide 4: AMAL: Uniquely Positioned Business Model
AMAL: Uniquely Positioned Business Model NICHE TARGETED MISSION-BASED CUSTOMER SEGMENT AMERICA’S LARGEST SOCIALLY RESPONSIBLE BANK LABOR UNIONS SUSTAINABILITY PHILANTHROPIES • 30,000+ Labor Organizations • Environmental action organizations • $350bn in assets from progressive • 14.6 million American
Slide 5: Attractive Focus
Attractive Focus San Francisco Boston Entry via Acquisition (1) Chicago De Novo Entry Entry via Pending Acquisition $1.9 $1.0 $0.9 $2.2 $3.5 $3.9 $4.6 $13.2 $2.5 Target Customer Assets: $8bn (2) Target Customer Assets: $8bn (2) Target Customer Assets: $18bn (2) New York City $13.8 $12.9 Washington,
Slide 6: Strategic Rationale of Transaction
Strategic Rationale of Transaction CONSISTENT WITH GOAL OF CREATING A HIGH-PERFORMING BANK • Acquisition of ABOC solidifies AMAL’s position as Largest Socially Responsible Bank in the United States with $7.6bn in combined assets • ABOC is a unique bank operating within AMAL’s existing mission-based
Slide 7: Transaction Creates Significant Value
Transaction Creates Significant Value Strong Financial Metrics… Franchise Scaled for Success (2) $7.6bn $3.7bn ~17% No Combined Assets Gross Loans/Leases GAAP EPS Accretion to AMAL(1) Ownership Dilution (Cash Deal) 14% increase 16% increase ~2 years 2.9 years $6.8bn $71.2bn EPS Pull Forward TBV Earn
Slide 8: Key Highlights
Key Highlights 1 Rich Chicago History 2 Core Deposit Portfolio • 99 year old Chicago banking franchise • 79% of deposit relationships are over 10 • Serving union customers since 1922 years old • 59% non-interest bearing with <5% CDs 12.5% of loan portfolio • 9 BPS total cost of deposits 57.3% of dep
Slide 9: Snapshot
Snapshot BRANCH LOCATIONS: CHICAGO & WARRENVILLE, IL FRANCHISE OVERVIEW • Founded in 1922 by Amalgamated Clothing Works of America, the same union that founded AMAL • Holding Company: Amalgamated Investments Company • Provides a wide variety of products and services including lending, checking, savi
Slide 10: Transaction Terms and Assumptions
Transaction Terms and Assumptions Transaction Acquisition of Amalgamated Investment Company (BHC of Amalgamated Bank of Chicago) Structure Consideration 100% Cash Base Purchase Price: $97 million(1) plus Value to ABOC Contingent Additional Purchase Price of up to $1.1 million assuming specific perfo
Slide 11: Thorough Due Diligence Process
Thorough Due Diligence Process IN DEPTH REVIEW OF ENTERPRISE AND OPERATIONS Diligence Focus Areas Credit Diligence Detail Credit Diligence Process • Hired external firm to assist in Customer and Stakeholders Technology and Operations loan portfolio credit review • Significant involvement by both fir
Slide 12: Leadership, Management, & Governance
Leadership, Management, & Governance AMAL BOARD OF DIRECTORS – REMAINS INTACT • Strong, majority independent board, consistent with public company standards CONTINUITY IN LEADERSHIP • AMAL leadership team to run pro forma company • Continued engagement from ABOC leadership – contingent value payment
Slide 13: Transaction Fits Our Disciplines
Transaction Fits Our Disciplines Mission Alignment ✓ Meaningfully Accretive to EPS: 17% ✓ • Commitment to socially responsible banking • ~2 Year EPS Pull Forward Identified Market Opportunity ✓ Manageable TBV Dilution: 2.9yrs ✓ • Enters Chicago market with scale • Tactical deployment of capital • Pr
Slide 14: Compelling Investment Thesis
Compelling Investment Thesis Strong Operating Fit ✓ AMAL Stock Valuation is Attractive ✓ • Low cost of deposits in nation’s 3rd • Low P/TBV and relatively low P/E largest MSA • Transaction delivers EPS growth • Attractive loan yields • ~5bps improvement to ROAA; ~1% lower • Deployable excess Liquidi
Slide 15: Supplemental Information
Supplemental Information
Slide 16: Pro Forma Deposit / Funding Composition
Pro Forma Deposit / Funding Composition AMAL Stand Alone ABOC Stand Alone Pro Forma Total: $5.9bn Total: $836.2mm Total: $6.7bn Retail Time MMDA & MMDA & Deposits Retail Time MMDA & Other Savings Retail Time Other Savings 1.4% Deposits Other Savings 18.8% Deposits 39.5% NOW & Other 1.3% 42.4% Jumbo
Slide 17: Pro Forma Loan Composition
Pro Forma Loan Composition AMAL Stand Alone ABOC Stand Alone (2) Pro Forma Total: $3.2bn Total: $489.3mm Total: $3.7bn Consumer and Consumer and Other Consumer and Other Commercial Residential Commercial Other 0.1% 6.2% Commercial and Industrial Real Estate and Industrial 7.2% 19.5% 9.3% and Industr
Slide 18: Amalgamated Bank of Chicago: Asset Quality
Amalgamated Bank of Chicago: Asset Quality NONPERFORMING LOANS CONSERVATIVE CREDIT MARK 5.4x 0.90% $459k $363k Multifamily Loans 44% $822k of NPLs 1-4 Family Loans 56% 0.17% NPLs / Loans Gross Credit Mark Source: S&P Global Market Intelligence as of 6/30/21 Note: All figures adjusted for sale of the
Slide 19: Trust Business Overview
Trust Business Overview: $44.3 $46.2 $52.2 $55.8 16.6 15.4 $39.3 $36.5 COMPLEMENTARY SOURCES OF FEE REVENUE 13.3 10.5 13.8 9.4 Amalgamated Financial Corp. 36.8 39.2 31.0 32.4 27.1 28.8 • Amalgamated has provided trust and investment management services for over 40 years • Offers a wide range of trus
Slide 20: Amalgamated Bank
Amalgamated Bank COMPANY OVERVIEW DISTINCT HERITAGE • NASDAQ: AMAL Founded by a union nearly 100 years ago, Amalgamated supports financial equity by providing access to banking products and services • Market Cap(1): $449 million • Commercial Bank and Chartered Trust Company • Total Assets: $6.6 bill
Slide 21: Multiples and Pro Forma Impact
Multiples and Pro Forma Impact IMPLIED TRANSACTION MULTIPLES(1) Transaction Value / Tangible Book Value 1.20x Transaction Value / 2022E Earnings 15.0x Transaction Value / 2023E Earnings 13.2x Transaction Value / 2023E Earnings + Cost Synergies 7.2x PRO FORMA IMPACT Estimated 2022E EPS Accretion 16.8
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