Amalgamated Financial Corp. · NASDAQ:AMAL
Amalgamated Financial — Q4 2020 Earnings Presentation
25 slides from Amalgamated Financial's earnings presentation, Jan 28, 2021
Slide 1: Fourth Quarter and Full Year 2020 Earnings Presentation
Amalgamated Bank Fourth Quarter and Full Year 2020 Earnings Presentation January 28, 2021 amalgamatedbank.com Member FDIC
Slide 2: Safe Harbor Statements
Safe Harbor Statements FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act, Section 21E of the Securities Exchange Act of 1934, as amended. any statement that does not describe historical or current facts
Slide 3: 4Q20 Highlights
4Q20 Highlights 4Q20 HIGHLIGHTS • GAAP net income of $0.44 per diluted share; core net income of $0.44 per diluted share(1) • Pre-tax, pre-provision income(2) of $23.0 million compared to $20.1 million in 3Q20 • Core pre-tax, pre-provision income of $23.0 million compared to $25.9 million in 3Q20 •
Slide 4: 2020 Highlights
2020 Highlights FY20 HIGHLIGHTS • GAAP net income of $1.48 per diluted share; core net income of $1.61 per diluted share(1) • Pre-tax, pre-provision income(2) of $86.7 million compared to $68.0 million in 2019 • Core pre-tax, pre-provision income of $92.3 million compared to $69.4 million in 2019 •
Slide 5: Trends
Trends KEY FINANCIAL TRENDS THROUGH 2020 ($ in millions) 11.6% 18.2% Loans + PACE CAGR(1) Ending Deposits CAGR(1) 3,868 5,339 3,703 264 421 4,641 3,211 4,105 3,439 3,447 3,233 2,780 2017 2018 2019 2020 2017 2018 2019 2020 Pre-tax Pre-Provision Earnings 48.7% NPA / Total Assets CAGR(1) 86.7 68.0 2.20
Slide 6: Deposit Portfolio
Deposit Portfolio TOTAL DEPOSITS 4Q20 HIGHLIGHTS ($ in millions) • Total ending deposits decreased $682.3 $6,021 million compared to 3Q20 due to the election $5,870 $5,890 cycle • Total average deposits decreased $5,572 $5,431 $318.1 million $5,339 $5,077 • $244.8 million of average non-interest bea
Slide 7: Political Deposits
Political Deposits HISTORICAL TREND ($ in millions) $1,212 $1,101 $775 $650 $579 $603 $511 $416 $398 $419 $321 $271 $242 $156 $182 $124 $85 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 26-Jan 7
Slide 8: Liquidity Sources
Liquidity Sources LIQUIDITY SOURCES AMOUNT TO $3.7B AS OF DECEMBER 31, 2020 • 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 (commercial and multifamil
Slide 9: Interest Earning Assets
Interest Earning Assets INTEREST EARNING ASSETS OF $5.7B AS OF DECEMBER 31, 2020 We maintain a diverse, low risk profile of interest earning assets • No fossil fuel exposure • $220mm of government guaranteed loans • $150mm residential solar loans C&I, Consumer with strong credit profiles • $832mm ag
Slide 10: Loans and Held-to-Maturity Securities
Loans and Held-to-Maturity Securities TOTAL LOANS, NET 4Q20 HIGHLIGHTS ($ in millions) • Total loans decreased $107.1 million, or -12.0% Total Loans, net Yield annualized, compared to 3Q20 due to high 3,700 $3,638 $3,554 8.00% prepayments in residential and CRE $3,515 3,500 $3,439 $3,447 7.00% • 4Q2
Slide 11: COVID-19 Deferrals
COVID-19 Deferrals COVID-19 LOAN DEFERRALS ($ millions) • Loan deferrals in 4Q20 have decreased by $252 million compared to 3Q20; represent 1.2% of portfolio Total Loans Deferrals as of: % of $ millions 12/31/20 12/31/20 9/30/20 Portfolio(1) Multifamily $ 947 $ 15 $ 124 1.5% CRE & Construction 429 2
Slide 12: Investment Securities
Investment Securities SECURITIES – BOOK VALUE(1) 4Q20 HIGHLIGHTS ($ millions) • Investment Securities totaled $2.0 billion 2,250 book value for 4Q20 $2,008 8.40% 2,050 $1,933 $1,924 • Securities increased slightly in 4Q20 $1,176 7.40% compared to 3Q20 with continued mix shift 1,850 $1,745 $1,069 $1,
Slide 13: Net Interest Income and Margin
Net Interest Income and Margin NET INTEREST INCOME & MARGIN 4Q20 HIGHLIGHTS ($ millions) 50.0 • Net interest income is $45.7 million, 9.00% Net Interest Income Net Interest Margin compared to $45.2 million in 3Q20 8.00% $45.2 $45.7 $44.7 $44.4 • 4Q20 NIM at 3.06%; an increase of 18 bps 45.0 7.00%and
Slide 14: Solar Tax-Equity Investments
Solar Tax-Equity Investments OVERVIEW OF SOLAR TAX EQUITY INVESTMENTS • Realization of tax benefits in the project life and subsequent write-down of investment creates volatility in the earnings stream • Current projects are expected to generate losses in the next three quarters and then a stream of
Slide 15: Non-Interest Expense and Efficiency
Non-Interest Expense and Efficiency 50.0 NON-INTEREST EXPENSE 100.00% 4Q20 HIGHLIGHTS ($ millions) 45.0 • Efficiency ratio of 58.7% for 4Q20 • Core efficiency ratio of 58.7% for 90.00% 40.0 $37.9 4Q20(1) 35.0 $33.5 $32.7 $32.7 • Non-interest expense for 4Q20 is $32.4 $32.3 80.00% $30.8 $30.4 $31.1 $
Slide 16: Allowance for Loan Losses
Allowance for Loan Losses ALLOWANCE FOR LOAN LOSSES (ALLL) 4Q20 HIGHLIGHTS CHANGE FROM 4Q19 TO 4Q20 ($ millions) • Allowance for loan losses totals $41.6 million in 4Q20, or $6.5 million lower compared to 3Q20 4Q19 ALLL 33.8 due to specific reserves on multifamily loans Indirect C&I 3.4 COVID-19 fac
Slide 17: Credit Quality Portfolio
Credit Quality Portfolio NPA / TOTAL ASSETS 4Q20 HIGHLIGHTS 1.38% • Nonperforming assets are $82.2 million as of 1.25% 1.22% 1.14% 1.15% 4Q20, compared to $80.6 million in 3Q20 • Net charge-offs of 1.24% in 4Q20 is 65 bps higher than 3Q20 due to an $11.0 million charge-off related to an indirect C&I
Slide 18: Returns
Returns 20.00%ROAE & CORE ROATCE (1) 18.00% 16.00% 14.00% 13.4% 12.00% 10.7% 10.3% 10.7% 9.7% 9.6% 10.00% 9.1% 8.6% 8.00% 7.6% 7.7% 6.00% 4.00% 2.00% 0.00% 4Q19 1Q20 2Q20 3Q20 4Q20 ROAE CORE ROATCE (1) See non-GAAP disclosures on pages 23-24 18
Slide 19: Capital
Capital TIER 1 LEVERAGE RATIO 4Q20 HIGHLIGHTS • Regulatory capital ratios remain 8.90% strong 8.47% 7.97% 7.69% 7.39% • Tier 1 leverage ratio of 7.97% as of 4Q20 • Common Equity Tier 1 Capital of 13.11% 4Q19 1Q20 2Q20 3Q20 4Q20 • Tier 1 leverage ratio increased by COMMON EQUITY TIER 1 RATIO 37bps du
Slide 20: FY 2020 Outlook - Revisited
FY 2020 Outlook - Revisited 2020 GUIDANCE Actuals Core pre-tax pre-provision earnings of $70 to $78 million $84.9mm1 Assumes: Year-end 2019 yield curve with no change in Fed rate targets 10% balance sheet growth 12.3% Core efficiency ratio of 64% or lower 57.6% Core expense run rate of appro
Slide 21: 2021 Guidance
2021 Guidance 2021 FINANCIAL OUTLOOK • Core Pre-tax pre-provision earnings of $72 to $88 million • Excludes impact of solar tax equity income/(loss) and any future non-core items • Year-end 2020 yield curve with no change in Fed rate targets • Approximately 10% balance sheet growth, driven by deposi
Slide 22: Appendix
Appendix
Slide 23: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials As of and for the Three As of and for the Twelve Months Ended Months Ended December 31, September 30, December 31, December 31, (in thousands) 2020 2020 2019 2020 2019 Core operating revenue Net Interest income $ 45,655 $ 45,234 $ 42,250 $ 180,016 $ 166,637 Non-
Slide 24: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials As of and for the Three As of and for the Twelve Months Ended Months Ended December 31, September 30, December 31, December 31, (in thousands) 2020 2020 2019 2020 2019 Tangible common equity Stockholders' Equity (GAAP) $ 535,821 $ 522,497 $ 490,544 $ 535,821 $ 4
Slide 25: Thank You
Thank You amalgamatedbank.com Member FDIC
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