Slide 1: Second Quarter 2023 Earnings Presentation
Amalgamated Financial Corp. Second Quarter 2023 Earnings Presentation July 27, 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: 2Q23 Highlights
2Q23 Highlights BALANCE SHEET INCOME STATEMENT Deposits, ex Net Income - GAAP $21.6MM $-20.3MM | -0.3% Brokered CDs Core Net Income(1) $22.0MM Loans $53.5MM | +1.3% Net Interest Income $63.0MM PACE growth $64.3MM | +6.4% Core Diluted EPS(1) $0.72 Net Interest Margin 3.33% CAPITAL (1) Core Return on
Slide 5: Solar Tax-Equity Investments
Solar Tax-Equity Investments OVERVIEW OF SOLAR TAX EQUITY INVESTMENTS • Metrics excluding the impact of tax credits or accelerated depreciation is a meaningful way to evaluate our performance and are adjusted in accordance with the below chart ◦ Immediate realization of tax benefits and subsequent a
Slide 6: Key Financial Trends Through 2Q23
Trends KEY FINANCIAL TRENDS THROUGH 2Q23 ($ in millions) Loans + PACE Ending Deposits + Brokered CDs > 10.3% CAGR(1) > 12.0% CAGR(1) $6,895 $4,973 $5,245 $6,356 $6,595 $74 $468 9.7% $1,061 5.8% $5,339 CAGR(1) $912 CAGR(1) $4,641 $3,703 $3,868 $3,904 $4,184 (Loans) (excl. Brokered CD) $264 $421 $627
Slide 7: Deposit Portfolio
Deposit Portfolio TOTAL DEPOSITS 2Q23 HIGHLIGHTS ($ in billions) • Total deposits decreased $146.7 million or 2.1% in 2Q23 $7.3 All following metrics exclude Brokered CDs $7.2 $7.0 $6.9 $6.6 $6.7 $1.3 • Deposits decreased $20.3 million compared to 1Q23 $1.2 $0.7 $0.8 primarily related to pension cus
Slide 8: Super-Core Deposits
Super-Core Deposits SUPER-CORE DEPOSITS(2) BY IMPACT SEGMENT 2Q23 HIGHLIGHTS ($ in billions) • Super-core deposits(2) make up $3.6 billion, or 54% of total core deposits(3) Weighted Avg. • Total Balance % of Total Impact Sector Account Duration ($M) Core Deposits ◦ Super-core deposits are minimum (Y
Slide 9: Deposit Composition
Deposit Composition TOTAL CORE DEPOSITS(2) BY IMPACT SEGMENT ($ in billions) $7.38 $7.28 $0.38 $0.48 $6.65 $6.55 $6.54 $0.58 $0.67 $0.41 $0.38 $0.42 $0.50 $0.46 $0.61 $0.52 $0.53 $1.28 $0.60 $0.74 $0.77 $1.15 $0.64 $0.68 $0.84 $0.95 $0.94 $0.90 $0.86 $0.84 $1.34 $1.30 $1.41 $1.18 $1.14 $2.35 $2.27 $
Slide 10: Political Deposits
Political Deposits HISTORICAL TREND ($ in billions) $1.3 $1.2 $1.2 +17% +11.2mm $1.1 +15% $1.1 growth growth $1.0 $1.0 $0.8 $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 7/21/23 •
Slide 11: Interest Earning Assets
Interest Earning Assets INTEREST EARNING ASSETS OF $7.6B AS OF JUNE 30, 2023 We maintain a diverse, low risk profile of interest earning assets • No fossil fuel exposure • $794mm agency securities • $227mm of government • $1,523mm of non-agency guaranteed loans securities • $363mm residential solar
Slide 12: Held-to-Maturity Securities
Held-to-Maturity Securities HELD-TO-MATURITY SECURITIES(1) 2Q23 HIGHLIGHTS ($ in millions) PACE (HTM) Non Pace HTM • HTM securities, excluding PACE assessments PACE (HTM) Yield Non-Pace HTM Yield represent 27% of the total investment portfolio $1,619 $1,655 • HTM PACE securities saw $41.4 million of
Slide 13: Investment Securities
Investment Securities SECURITIES – BOOK VALUE(1)(2) 2Q23 HIGHLIGHTS ($ millions) • Investment Securities totaled $3.4 billion book $3,579 value for 2Q23 $3,569 $3,485 $973 $3,390 $3,378 $1,048 • Agency securities made up 23.5% of the total $887 $834 $794 portfolio, down from 24.6% in 1Q23, reflectin
Slide 14: Investment Securities Composition
Investment Securities Composition AFS Portfolio Composition(1)(2) 2Q23 HIGHLIGHTS ($ in millions) • Weighted average duration(4) is 2.4 years $147 for the total securities portfolio, excl. PACE $555 AFS $1,685mm • Valuation Loss as % of relative portfolio balance ◦ Total $128.1 million | 7.5% $983 ◦
Slide 15: Loans Held for Investment
Loans Held for Investment TOTAL LOANS LOAN COMPOSITION ($ in millions) ($ in millions) $38 $38 $29 $39 $333 $43 $335 $327 $338 $464 $456 $457 $334 $4,198 $4,252 $468 $4,106 $426 $924 $949 $805 $926 $743 $3,871 $968 $1,063 $1,096 $861 $885 $3,648 $1,236 $1,332 $1,372 $1,390 $1,389 4.19% 4.40% 4.33% 3
Slide 16: Net Interest Income and Margin
Net Interest Income and Margin NET INTEREST INCOME & MARGIN 2Q23 HIGHLIGHTS ($ millions) • Net interest income was $63.0 million, Net Interest Income Net Interest Margin compared to $67.3 million in 1Q23 $67.6 $67.3 $67.3 • 2Q23 NIM at 3.33%; a decrease of 26 basis points compared to 1Q23 $63.0 • Lo
Slide 17: Non-Interest Income
Non-Interest Income CORE NON-INTEREST INCOME ex-solar (1) 2Q23 HIGHLIGHTS ($ millions) • Our trust business held $40.3 billion in assets under custody and $14.5 billion in $8.7 assets under management, compared to $8.2 $39.7 billion and $13.9 billion, $7.5 $7.3 $7.5 $2.8 respectively, in the precedi
Slide 18: Non-Interest Expense and Efficiency
Non-Interest Expense and Efficiency NON-INTEREST EXPENSE 2Q23 HIGHLIGHTS ($ millions) • Efficiency ratio of 52.9% for 2Q23 $38.6 $38.6 $37.2 $37.5 $36.3 $36.3 $35.6 $35.6 • Core efficiency ratio excluding the $34.0 $34.3 impact of our solar tax equity investments of 52.3% for 2Q23(1) • Non-interest
Slide 19: Credit Quality
Credit Quality NPA / TOTAL ASSETS 2Q23 HIGHLIGHTS 0.82% • Nonperforming assets were $35.3 million as of 2Q23, 0.69% compared to $38.7 million in 1Q23 0.49% 0.44% 0.45% • Net charge-offs of 0.29% in 2Q23 compared to net charge offs of 0.25% in 1Q23 due to a $1.7 million charge-off on a previously res
Slide 20: Allowance for Credit Losses on Loans
Allowance for Credit Losses on Loans 2Q23 HIGHLIGHTS ALLOWANCE WATERFALL ($ millions) • The allowance for credit losses on loans remained relatively flat, having increased by $1.1 $0.1 million compared to prior quarter. $0.5 $67.3 $0.3 $67.4 $(0.01) $(1.7) ALLOWANCE FOR CREDIT LOSSES ON LOANS / TOTA
Slide 21: Returns
Returns Core ROAE & Core ROATCE ex-solar (1)(2)(3)(4) 22.6% 21.8% 19.2% 19.9% 18.6% 19.2% 16.2% 16.8% 16.8% 17.3% 2Q22 3Q22 4Q22 1Q23 2Q23 Core ROAE ex-solar Core ROATCE ex-solar (1) Refer to Reconciliation of Non-GAAP Financial Measures on slides 26-27 for further details (2) ROAE was 15.2%, 17.8%,
Slide 22: Capital
Capital TIER 1 LEVERAGE RATIO 2Q23 HIGHLIGHTS 7.80% • Regulatory capital ratios remained strong 7.52% 7.50% 7.28% 7.78% ◦ Tier 1 leverage ratio of 7.78% as of 7.27% 7.52% 7.50% 2Q23 7.08% 7.16% ◦ Bank tier 1 leverage ratio of 8.65% as of Q2 2023 2Q22 3Q22 4Q22 1Q23 2Q23 ◦ Common Equity Tier 1 Capita
Slide 23: Tangible Book Value
Tangible Book Value TANGIBLE COMMON EQUITY & TANGIBLE BOOK 2Q23 SUMMARY VALUE • TBV increase of 2.2% primarily driven ($ millions) by: $22 ◦ $21.6 million in net income $1 ◦ Offset by a $7.9 million $(3) $513 $(2) decrease from the previous $(8) $503 quarter in the tax-effected AFS mark-to-market ad
Slide 24: 2023 Guidance
2023 Guidance 2023 FINANCIAL OUTLOOK - UNCHANGED FROM Q1 2023 • Core pre-tax, pre-provision earnings(1) of: ◦ $133 - $140 million - includes effect of forward rate curve and deposit migration to interest bearing through 2023 • Net Interest Income of: ◦ $248 - $255 million - includes effect of forwar
Slide 25: Appendix
Appendix
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 Six Months Ended (in thousands) June 30, 2023 March 31, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Core operating revenue Net Interest income (GAAP) $ 62,985 $ 67,280 $ 56,498 $ 130,264 $ 104,866 Non-int
Slide 27: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials As of and for the As of and for the Three Months Ended Six Months Ended (in thousands) June 30, 2023 March 31, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Tangible common equity Stockholders' equity (GAAP) $ 528,614 $ 519,158 $ 498,041 $ 528,614 $ 498,041 Les
Slide 28: Thank You
Thank You amalgamatedbank.com Member FDIC