Amalgamated Financial Corp. · NASDAQ:AMAL
Amalgamated Financial — Q1 2020 Earnings Presentation
28 slides from Amalgamated Financial's earnings presentation, 2020
Slide 1: Amalgamated Bank Q1 2020
AMALGAMATED BANK Q1 2020 amalgamatedbank.com Member FDIC
Slide 2: Safe Harbor Statements
Safe Harbor Statements FORWARD-LOOKING STATEMENTS Statements included in this presentation that are not historical in nature are intended to be, and are hereby identified as, forward-looking statements within the meaning of the Private Securities Litigation Reform Act, Section 21E of the Securities
Slide 3: 2019 Highlights
2019 Highlights Full Year 2019 Developments Revenues +7.7% 4Q19 Dividend of $0.08 per share, increased from the previous quarter by $0.02 Net Income +5.7% 1Q20 share repurchase estimated at $7mm; $2.1mm remaining Core Net Income +15.9%1 Deposits +13.0% Credit is stable and we are monit
Slide 4: Amalgamated Bank Overview
Amalgamated Bank Overview Commercial Bank and Chartered Trust Company • Founded by Amalgamated Clothing Workers of America (ACWA) labor union in 1923 as NYC’s first labor bank Distinct • Amalgamated supports financial equity by providing access to banking products and services Heritage • Workers Uni
Slide 5: Mission Aligned Initiatives
Mission Aligned Initiatives We are proud of our missioned aligned initiatives and accomplishments Created the Corporate Social Responsibility (CSR) Committee to assist in creating strategy for ESG goals and for developing, implementing and monitoring initiatives and policies to meet that strategy
Slide 6: Uniquely Positioned Business Model
Uniquely Positioned Business Model Niche targeted mission-based customer segment LABOR UNIONS SUSTAINABILITY PHILANTHROPIES • 30,000+ Labor Organizations • Environmental action organizations • $350bn in assets from progressive • 14.6mm Americans • Sustainable businesses philanthropies • Internationa
Slide 7: Successfully Improved Operating Performance
Successfully Improved Operating Performance Increased De-Risked Higher Disciplined Enhanced 2014 Low-Cost Balance Net Interest Expense 2019 Profitability Deposits Sheet Margin Culture Non-interest Bearing Nonperforming Loans / Net Interest Margin Core Efficiency Ratio(1) Core ROATCE(1) Deposits Tota
Slide 8: Attractive Geographic Focus
Attractive Geographic Focus • Current footprint includes New York City, Washington D.C. and San Francisco • Planned expansion into Commercial markets in Boston and Los Angeles in 2020 San Francisco (1) Boston (2) Chicago $1.0 $1.9 $0.9 $2.2 $3.5 $3.9 $13.2 $2.5 $4.6 Target Customer Assets: $8bn (3)
Slide 9: Low-Cost, Low Beta Core Deposit Franchise
Low-Cost, Low Beta Core Deposit Franchise Annual Deposit Growth (EOM) Deposit Beta Analysis $ in millions $ in millions 62% $4,641 $4,105 394 425 Q419 $3,233 40% Average Cost $3,009 2,074 of Deposits $2,733 391 0.36% 486 30% 2,123 507 24% 23% 1,461 1,510 1,264 2,174 1,381 1,558 962 1,013 4% 2015 201
Slide 10: Political Deposits
Political Deposits Political Deposits(1) Trend $ in millions $708.5 $578.6 $510.9 $416.4 $419.4 $397.8 $321.4 $271.0 $241.8 $181.9 $156.5 $124.1 $84.8 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 11-Mar 1. Deposits from politically active customers such as campaigns, PACs, and state a
Slide 11: Conservative Asset Allocation
Conservative Asset Allocation • Shift away from Indirect C&I and Legacy run-off into Residential Lending • De-risking of C&I portfolio began in early 2018 and is approximately 90% complete by year-end 2019 Loans, net(1) $ in millions 2017 Composition 2019 Composition Direct C&I $46 2% Other $62 2% D
Slide 12: Conservative Asset Allocation
Conservative Asset Allocation • NPA excluding run-off portfolios is 0.45% • Approximately 4% of portfolio makes up 78% of NPA Non-Performing Asset Portfolio, December 31, 2019 $ in millions Total % NPA % NPA % Book Bal NPA of Book Bal Performing of Book Bal Non-Performing of Book Bal Residential $1,
Slide 13: Conservative Asset Allocation
Conservative Asset Allocation • Strict credit culture in place to maintain conservative credit standards and underwrite each loan on our balance sheet • Expanded into residential Property Assessed Clean Energy (“PACE”) financing which allows residential borrowers to finance energy efficient home imp
Slide 14: PACE Overview
PACE Overview What is PACE? Property Assessed Clean Energy (PACE) assessments Consumer financing for qualifying residential home improvements PACE assessment is recorded as a special tax assessment and is senior to any mortgages Municipalities administer remittance as part of its normal tax
Slide 15: Increased Capital Return Opportunity
Increased Capital Return Opportunity Amalgamated prudently manages its capital in-line with its lower risk profile Capital Overview Common Equity Tier 1 Ratio Strong capital ratios with Bank deemed “well capitalized” 13.6% 13.5% 13.2% 13.3% 13.0% Exploring establishing a Bank Holding Company (BH
Slide 16: Interest Rate Risk Scenarios
Interest Rate Risk Scenarios Interest Rate Scenarios and Estimated Change in Net Interest Income $ in thousands Change in Market Interest Rates as of Estimated Increase (Decrease) in: Dec 31, 2019 Economic Economic Year 1 Year 1 Immediate Shift Value of Equity Value of Equity Net Interest Income Net
Slide 17: Financial Update
Financial Update
Slide 18: Net Interest Income and Margin
Net Interest Income and Margin Net Interest Income & Margin $ in millions 4Q19 Highlights 50.0 6.00% Net Interest Income Net Interest Margin 5.50% Net interest income was $42.3 45.0 million, compared to $41.8 million in $41.9 $41.8 $42.3 5.00% $40.2 $40.8 3Q19 40.0 4.50% 3.65% 3.66% 4.00% 3.57% 3.
Slide 19: Non-Interest Expense and Efficiency
Non-Interest Expense and Efficiency Non-Interest Expense $ in millions 4Q19 Highlights 50 100.0% Core efficiency ratio of 63.50% for 45 2Q19(1) 90.0% 40 Non-interest expense for the 2Q19 $35.0 35 $33.3 $33.5 was $31.0 million, $0.4 million $31.8 $31.9 $32.4 $31.3 $31.4 $30.8 $31.0 80.0% decrease
Slide 20: Investment Securities
Investment Securities 1,650 3.90% Securities & Yield 1,450 $ in millions $1,510 $922 4Q19 Highlights $1,299 3.70% $1,256 $1,234 $1,193 1,250 $685 Investment Securities totaled $1.5 $638 $677 3.50% 1,050 $601 billion book value for 4Q19 3.37% 3.30% 3.34% 850 3.28% 3.28% Securities increase of $27
Slide 21: Credit Quality
Credit Quality Portfolio Credit Quality Ratios 4Q19 Highlights NPA / Assets NPL / Total Loans 1.50% 1.42% Nonperforming assets were $73.9 1.27% 1.25% million as of 2Q19, compared to $56.6 1.15% million in 1Q19 0.90% 0.74% $17.4 million increase was due to 0.45% 0.49% 0.53% $6.8 million increase
Slide 22: Tangible Book Value Per Share
Tangible Book Value Per Share Steady, Stable Growth in Tangible Book Value per Share Tangible Book Value per Share Adjusted Tangible Book Value per Share(1) with Capital Returns Added Back (Dividends & Share Buybacks) $16 $16 15.26 14.93 $15 $15 $14 $14 13.16 13.22 $13 $13 12.02 12.03 $12 $12 $11 $1
Slide 23: Loan Net Loan Portfolio
Keep slide? Loan Net Loan Portfolio Portfolio (Net) Loans, net 3,700 $ in millions 6.00% 4Q19 Highlights Total Loans, net Yield Total loans decreased slightly by $28.3 million, or 0.8% compared to 3,500 $3,467 5.50% $3,439 3Q19 $3,291 4Q19 Yield at 4.13%; decrease of 9 3,300 $3,267 5.00% bps and
Slide 24: Liquidity
Liquidity Strong Levels of Liquidity Liquidity sources amount to $3.5bn as of December 31, 2019 Capacity to borrow from Federal Home Loan Bank (FHLB) presents largest source of balance sheet funding Ability to borrow based on existing balance sheet assets as collateral, primarily mortgage (comme
Slide 25: Appendix
Appendix
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures For the Three For the Twelve Months Ended Months Ended (in thousands) December 31, September 30, December 31, December 31, 2019 2019 2018 2019 2018 Core operating revenue Net interest income (GAAP) $ 42,250 $ 41,757 $ 40,205 $ 166,637 $ 149,745 Non inter
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures For the Three For the Twelve Months Ended Months Ended (in thousands) December 31, September 30, December 31, December 31, 2019 2019 2018 2019 2018 Average tangible common equity Average Stockholders Equity (GAAP) $ 488,744 $ 482,208 $ 426,290 $ 470,727
Slide 28: Thank You
Thank You amalgamatedbank.com
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