Amalgamated Financial Corp. · NASDAQ:AMAL
Amalgamated Financial — Q4 2021 Earnings Presentation
23 slides from Amalgamated Financial's earnings presentation, Jan 27, 2022
Slide 1: Fourth Quarter 2021 Earnings Presentation
Amalgamated Financial Corp. Fourth Quarter 2021 Earnings Presentation January 27, 2022 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 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
Slide 4: 4Q21 Highlights
4Q21 Highlights INCOME STATEMENT (1) • GAAP net income of $0.50 per diluted share; core net income of $0.53 per diluted share • Pre-tax, pre-provision income(2) of $24.4 million compared to $17.1 million in 3Q21 • Core pre-tax, pre-provision income(3) of $20.2 million compared to $17.8 million in 3Q
Slide 5: ABOC Transaction Update
ABOC Transaction Update 1 3 Ongoing Extensive Preparation Well-Positioned with and Integration with ABOC Successful $85 Million Debt Team Capital Raise Acquisition now expected to close Closed public offering of 3.250% in early second quarter 2022 Fixed-to-Floating Rate Subordinated Notes due 2031 d
Slide 6: Trends
Trends KEY FINANCIAL TRENDS THROUGH 4Q21 ($ in millions) Net Loans + PACE 8.9% Ending Deposits 18.4% > CAGR(1) > CAGR(1) $3,868 $3,904 $6,356 $3,703 $264 $421 $627 $5,339 $3,211 $4,641 $— $3,439 $3,447 $4,105 $2,780 $3,277 $— $3,233 2017 2018 2019 2020 4Q21 2017 2018 2019 2020 4Q21 Pre-tax Pre-Provi
Slide 7: Deposit Portfolio
Deposit Portfolio TOTAL DEPOSITS 4Q21 HIGHLIGHTS ($ in billions) $6.4 $6.2 $6.3 • Total ending deposits increased $131.8 million compared to 3Q21 due to post-election rebound $6.0 $5.9 in political deposits and new relationships in $5.7 $5.7 core markets $5.6 $5.6 ◦ Total average deposits increased
Slide 8: Political Deposits
Political Deposits HISTORICAL TREND ($ in millions) $1,212 $1,101 $1,015 $990 $986 $775 $791 $692 $603 $579 $511 $419 $271 $182 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1/19/22 8
Slide 9: Interest Earning Assets
Interest Earning Assets INTEREST EARNING ASSETS OF $6.8B AS OF DECEMBER 31, 2021 We maintain a diverse, low risk profile of interest earning assets • No fossil fuel exposure • $259mm of government guaranteed loans • $265mm residential solar loans with strong credit profiles C&I, Consumer and • $929m
Slide 10: Loans and Held-to-Maturity Securities
Loans and Held-to-Maturity Securities TOTAL LOANS 4Q21 HIGHLIGHTS ($ in millions) • Total loans increased $189.9 million, or 6.2%, Total Loans, net Loan Yield compared to 3Q21 due to increased loan originations and reduced run-off $3,447 $3,277 $3,223 $3,137 $3,087 • 4Q21 Yield of 4.01%; an increase
Slide 11: Investment Securities
Investment Securities SECURITIES – BOOK VALUE(1) ($ millions) 4Q21 HIGHLIGHTS $2,946 • Investment Securities totaled $2.9 billion $2,662 book value for 4Q21 $2,425 $929 • Securities increased $276.4 million in 4Q21 $2,199 $871 compared to 3Q21 with continued mix shift $2,008 toward non-agency partia
Slide 12: Net Interest Income and Margin
Net Interest Income and Margin NET INTEREST INCOME & MARGIN 4Q21 HIGHLIGHTS ($ millions) • Net interest income was $47.1 million, compared to $43.4 million in 3Q21 Net Interest Income Net Interest Margin • 4Q21 NIM at 2.77%; an increase of 7 bps $47.1 $45.7 compared to 3Q21 and a decrease of 29 $43.
Slide 13: Solar Tax-Equity Investments
Solar Tax-Equity Investments OVERVIEW OF SOLAR TAX-EQUITY INVESTMENTS • Realization of tax benefits in the project life and subsequent change in the fair value of the investment creates volatility in the earnings stream • New solar tax-equity investment contributed $5.3 million in income in Q4, but
Slide 14: Non-Interest Expense and Efficiency
Non-Interest Expense and Efficiency NON-INTEREST EXPENSE 4Q21 HIGHLIGHTS ($ millions) • Efficiency ratio of 58.9% for 4Q21 $35.0 $32.7 $32.7 $32.8 $32.6 $33.0 $34.0 • Core efficiency ratio of 57.2% for $31.7 $31.4 $31.4 4Q21(1) 71.5% • Non-interest expense for 4Q21 was $35.0 million 66.3% 66.0% 69.2
Slide 15: Allowance for Loan Losses
Allowance for Loan Losses ALLOWANCE FOR LOAN LOSSES (ALLL) 4Q21 HIGHLIGHTS CHANGE FROM 4Q20 TO 4Q21 ($ millions) • Allowance for loan losses totaled $35.9 million 4Q20 Allowance $ 41.6 in 4Q21, unchanged from 3Q21 because loss Loan balances (2.4) factor, quantitative and credit quality Changes in cr
Slide 16: Credit Quality Portfolio
Credit Quality Portfolio NPA / TOTAL ASSETS 4Q21 HIGHLIGHTS 1.38% 1.27% • Nonperforming assets were $54.6 million as of 4Q21, 1.08% compared to $67.8 million in 3Q21 0.99% 0.77% • Net charge-offs to average loans of 0.44% in 4Q21 was 46 bps higher than 3Q21 primarily related to our focus on reducing
Slide 17: Returns
Returns ROAE & CORE ROATCE (1)(2) 12.2% 11.2% 10.3% 10.7% 10.0% 10.3% 10.6% 9.1% 7.6% 7.7% 4Q20 1Q21 2Q21 3Q21 4Q21 ROAE CORE ROATCE (1) See non-GAAP disclosures on pages 21-22 (2) Core ROATCE excluding tax credits on solar investments was 8.6%, 12.3%, 8.7%, 11.1% and 9.2% for 4Q20, 1Q21, 2Q21, 3Q21
Slide 18: Capital
Capital TIER 1 LEVERAGE RATIO 4Q21 HIGHLIGHTS 8.26% 8.47% 8.50% 8.56% 8.17% • Regulatory capital ratios remained strong 7.97% 8.06% 7.93% 7.85% 7.62% ◦ Tier 1 leverage ratio of 7.62% as of 4Q21 ◦ Excluding the excess liquidity, 4Q20 1Q21 2Q21 3Q21 4Q21 tier 1 leverage ratio would be Tier 1 Leverage
Slide 19: 2022 Guidance
2022 Guidance 2022 FINANCIAL OUTLOOK • Assumptions are based on AMAL stand-alone company and do not include ABOC accretion impact • ABOC accretion projections remain unchanged. Targeting deal close in early second quarter 2022 • Core pre-tax pre-provision earnings of $75 million to $85 million ◦ Exc
Slide 20: Appendix
Appendix
Slide 21: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials As of and for the As of and for the Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, (in thousands) 2021 2021 2020 2021 2020 Core operating revenue Net Interest income (GAAP) $ 47,081 $ 43,387 $ 45,655 $ 174,304 $ 1
Slide 22: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials As of and for the As of and for the Three Months Ended Year Ended December September December December December (in thousands) 31, 2021 30, 2021 31, 2020 31, 2021 31, 2020 Tangible common equity Stockholders' Equity (GAAP) $ 563,875 $ 556,390 $ 535,821 $ 563,875
Slide 23: Thank You
Thank You amalgamatedbank.com Member FDIC
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