Amalgamated Financial Corp. · NASDAQ:AMAL
Amalgamated Financial — Q4 2022 Earnings Presentation
25 slides from Amalgamated Financial's earnings presentation, Jan 26, 2023
Slide 1: Fourth Quarter 2022 Earnings Presentation
Amalgamated Financial Corp. Fourth Quarter 2022 Earnings Presentation January 26, 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 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: 4Q22 Highlights
4Q22 Highlights INCOME STATEMENT • Earnings of $24.8 million, or $0.80 per diluted share on a GAAP basis; • Core earnings excluding solar tax equity(1) was $27.2 million, or $0.87 per diluted share • Core pre-tax, pre-provision earnings(2) excluding solar tax equity(1) of $39.1 million compared to $
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: Trends
Trends KEY FINANCIAL TRENDS THROUGH 4Q22 ($ in millions) Net Loans + PACE 11.6% Ending Deposits 12.6% > CAGR(1) > CAGR(1) $4,973 $6,595 $6,356 $912 6.0% $5,339 $3,703 $3,868 $3,904 CAGR(1) $4,105 $4,641 $4,061 (Loans) $3,211 $264 $421 $627 $3,439 $3,447 $3,211 $3,276 2018 2019 2020 2021 2022 2018 20
Slide 7: Deposit Portfolio
Deposit Portfolio TOTAL DEPOSITS 4Q22 HIGHLIGHTS ($ in billions) • Total ending deposits decreased $565.3 million compared to 3Q22 primarily related to political deposit runoff resulting from the congressional election in early $7.3 $7.2 $7.0 $6.8 November, as well as timing of our pension and benef
Slide 8: Political Deposits
Political Deposits HISTORICAL TREND 4Q22 UPDATES ($ in billions) • Although cyclical, political deposit $1.3 balances overall have shown an upward trend YoY - highs and lows $1.2 $1.2 have both grown higher $1.1 $1.1 $1.0 $1.0 ◦ High deposit points are reflected +15% in the quarter preceding a major
Slide 9: Interest Earning Assets
Interest Earning Assets INTEREST EARNING ASSETS OF $7.6B AS OF DECEMBER 31, 2022 We maintain a diverse, low risk profile of interest earning assets • No fossil fuel exposure • $234mm of government guaranteed loans • $385mm residential solar loans with strong credit profiles • $893mm agency securitie
Slide 10: Held-to-Maturity Securities
Held-to-Maturity Securities HELD-TO-MATURITY SECURITIES 4Q22 HIGHLIGHTS ($ in millions) PACE (HTM) Non Pace HTM PACE (HTM) Yield Non-Pace HTM Yield • HTM securities, excluding PACE assessments represent 26% of the total investment portfolio $1,541 $1,492 • PACE securities $55mm of new growth $1,376
Slide 11: Investment Securities
Investment Securities SECURITIES – BOOK VALUE(1) ($ millions) 4Q22 HIGHLIGHTS $3,586 $3,596 $3,501 $3,420 $1,055 $980 • Investment Securities totaled $3.5 billion book $893 value for 4Q22 $994 $2,946 • Agency securities made up 25.5% of the total $929 portfolio in 4Q22, down from 27.3% in 3Q22, refl
Slide 12: Loans
Loans TOTAL LOANS (1)(2) 4Q22 HIGHLIGHTS ($ in millions) $4,062 • Total loans increased $231.8 million, or 6.1%, $3,829 compared to 3Q22 $3,609 ◦ Multifamily/CRE loans grew 6.2% during $3,435 the quarter $3,277 ◦ C&I, Consumer, and Other loans grew 4.11% 4.24% 9.2% during the quarter 4.01% 3.85% 3.8
Slide 13: Net Interest Income and Margin
Net Interest Income and Margin NET INTEREST INCOME & MARGIN 4Q22 HIGHLIGHTS ($ millions) • Net interest income was $67.3 million, compared to $67.6 million in 3Q22 Net Interest Income Net Interest Margin • 4Q22 NIM at 3.56%; an increase of 6 bps $67.6 $67.3 compared to 3Q22 • Loan prepayment penalti
Slide 14: Non-Interest Expense and Efficiency
Non-Interest Expense and Efficiency NON-INTEREST EXPENSE 4Q22 HIGHLIGHTS ($ millions) • Efficiency ratio of 49.7% for 4Q22 $36.3 $36.3 $35.6 $35.6 $35.0 $34.0 $34.0 $34.4 $34.0 $34.3 • Core efficiency ratio excluding the impact of our solar tax equity investments of 47.6% for 4Q22(1) • Non-interest
Slide 15: Non-Interest Income
Non-Interest Income CORE NON-INTEREST INCOME ex-solar (1) 4Q22 HIGHLIGHTS ($ millions) • Our trust business held $38.1 billion in assets under custody and $13.4 billion in $8.7 assets under management, compared to $37.6 billion and $12.5 billion, $7.5 $7.3 $7.2 $7.2 $2.8 respectively, in the precedi
Slide 16: Allowance for Loan Losses
Allowance for Loan Losses ALLOWANCE FOR LOAN LOSSES (ALLL) 4Q22 HIGHLIGHTS CHANGE DURING 4Q22 ($ millions) • Allowance for loan losses totaled $45.0 million in 4Q22, or $2.9 million higher than 3Q22, Allowance Waterfall primarily due to higher loan balances and specific reserves 0.4 0.3 45.0 2.4 (0.
Slide 17: Credit Quality Portfolio
Credit Quality Portfolio NPA / TOTAL ASSETS 4Q22 HIGHLIGHTS • Nonperforming assets were $34.8 million as of 4Q22, 0.80% 0.82% 0.77% compared to $54.3 million in 3Q22 0.69% 0.44% • Net charge-offs of 0.15% in 4Q22 was 14 bps lower than 3Q22 due to higher relative charge-offs in Q3 related to our focu
Slide 18: Returns
Returns Core ROAE & Core ROATCE ex-solar (1)(2)(3)(4) 22.6% 21.8% 19.2% 19.9% 16.2% 16.8% 10.4% 10.7% 8.9% 9.2% 4Q21 1Q22 2Q22 3Q22 4Q22 Core ROAE ex-solar Core ROATCE ex-solar (1) Refer to Reconciliation of Non-GAAP Financial Measures on slides 22-23 for further details (2) ROAE was 11.2%, 10.3%, 1
Slide 19: Capital
Capital TIER 1 LEVERAGE RATIO 4Q22 HIGHLIGHTS 8.17% • Regulatory capital ratios remained strong 7.69% 7.52% 7.28% 7.27% ◦ Tier 1 leverage ratio of 7.52% as of 7.62% 4Q22 7.34% 7.52% 7.08% 7.16% ◦ Bank tier 1 leverage ratio of 8.44% as of Q4 2022. 4Q21 1Q22 2Q22 3Q22 4Q22 Tier 1 Leverage Leverage Rat
Slide 20: Tangible Book Value
Tangible Book Value TANGIBLE COMMON EQUITY & TANGIBLE BOOK 4Q22 SUMMARY VALUE ($ millions) • TBV increase primarily driven by a record $24.8 million in net income, offset by modest impacts of dividend issuance and tax effected AFS mark-to-market 25 — — 1 493 adjustment (3) (1) ◦ TBV increase of 4.5%
Slide 21: 2023 Guidance
2023 Guidance 2023 FINANCIAL OUTLOOK • Core pre-tax pre-provision earnings excluding solar tax equity(1) of $142 million to $148 million • Net Interest Income of $256 million to $263 million • Approximately 3% balance sheet growth, driven by: ◦ Loan portfolio optimization and securities mix-shift to
Slide 22: Appendix
Appendix
Slide 23: 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) 2022 2022 2021 2022 2021 Core operating revenue Net Interest income (GAAP) $ 67,346 $ 67,628 $ 47,081 $ 239,840 $ 1
Slide 24: 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) 2022 2022 2021 2022 2021 Tangible common equity Stockholders' equity (GAAP) $ 508,955 $ 487,738 $ 563,875 $ 508,955
Slide 25: Thank You
Thank You amalgamatedbank.com Member FDIC
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