Amalgamated Financial Corp. · NASDAQ:AMAL
Amalgamated Financial — Q3 2022 Earnings Presentation
24 slides from Amalgamated Financial's earnings presentation, Oct 27, 2022
Slide 1: Third Quarter 2022 Earnings Presentation
Amalgamated Financial Corp. Third Quarter 2022 Earnings Presentation October 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: 3Q22 Highlights
3Q22 Highlights INCOME STATEMENT • Record earnings of $22.9 million, or $0.74 per diluted share on a GAAP basis; • Core net income excluding the impact of solar tax equity investments was $24.8 million, or $0.80 per diluted share(1) • Core pre-tax, pre-provision income(2) excluding the impact of sol
Slide 5: Solar Tax-Equity Investments
Solar Tax-Equity Investments OVERVIEW OF SOLAR TAX EQUITY INVESTMENTS • Metrics excluding the impact of tax credits or accelerated depreciation is a meaningful way to evaluate our performance and are adjusted in accordance with the below chart ◦ Immediate realization of tax benefits and subsequent a
Slide 6: Trends
Trends KEY FINANCIAL TRENDS THROUGH 3Q22 ($ in millions) Loans + PACE Ending Deposits 16.0% > 10.6% CAGR(1) > CAGR(1) $4,686 $7,160 4.8% $6,356 $3,703 $3,868 $3,904 $5,339 $857 CAGR(1) (Loans) $4,641 $3,211 $264 $421 $627 $3,829 $4,105 $3,439 $3,447 $3,211 $3,276 2018 2019 2020 2021 3Q22 2018 2019 2
Slide 7: Deposit Portfolio
Deposit Portfolio TOTAL DEPOSITS 3Q22 HIGHLIGHTS ($ in billions) • Total average deposits increased $191.1 million $7.3 $7.2 • Total ending deposits decreased $130.9 million $7.0 compared to 2Q22 primarily related to timing of our $6.4 $1.3 $1.2 pension and benefit fund clients normal payroll $6.2 $
Slide 8: Interest Earning Assets
Interest Earning Assets INTEREST EARNING ASSETS OF $7.6B AS OF SEPTEMBER 30, 2022 We maintain a diverse, low risk profile of interest earning assets • No fossil fuel exposure • $244mm of government guaranteed loans • $397mm residential solar loans with strong credit profiles • $980mm agency securiti
Slide 9: Held-to-Maturity Securities
Held-to-Maturity Securities HELD-TO-MATURITY SECURITIES 3Q22 HIGHLIGHTS ($ in millions) PACE (HTM) Non Pace HTM • HTM securities, excluding PACE assessments PACE (HTM) Yield Non-Pace HTM Yield represent 25% of the total investment portfolio $1,492 $1,376 • PACE securities saw $115mm new growth durin
Slide 10: Investment Securities
Investment Securities SECURITIES – BOOK VALUE(1) 3Q22 HIGHLIGHTS ($ millions) $3,586 $3,596 $3,420 • Investment Securities totaled $3.6 billion book $1,055 $980 value for 3Q22 $994 $2,946 • Agency securities made up 27.3% of the total $929 portfolio in 3Q22, down from 29.4% in 2Q22, $2,662 reflectin
Slide 11: Loans
Loans TOTAL LOANS (1)(2) $3,829 3Q22 HIGHLIGHTS ($ in millions) $3,609 • Total loans increased $220.2 million, or 6.1%, $3,435 compared to 2Q22 $3,277 ◦ Residential loan balances grew 8.3% during the quarter $3,087 ◦ Multifamily/CRE loans grew 1.9% during 4.01% 4.11% the quarter 3.84% 3.85% 3.86% ◦
Slide 12: Net Interest Income and Margin
Net Interest Income and Margin NET INTEREST INCOME & MARGIN 3Q22 HIGHLIGHTS ($ millions) • Net interest income was $67.6 million, compared to $56.5 million in 2Q22 Net Interest Income Net Interest Margin $67.6 • 3Q22 NIM at 3.50%; an increase of 47 bps compared to 2Q22 • Loan prepayment penalties fa
Slide 13: Non-Interest Expense and Efficiency
Non-Interest Expense and Efficiency NON-INTEREST EXPENSE 3Q22 HIGHLIGHTS ($ millions) • Efficiency ratio of 49.9% for 3Q22 $36.3 $36.3 $35.0 $34.0 $34.0 $34.4 $34.0 $34.3 • Core efficiency ratio excluding the $32.6 $33.0 impact of our solar tax equity investments of 48.2% for 3Q22(1) • Non-interest
Slide 14: Non-Interest Income
Non-Interest Income CORE NON-INTEREST INCOME ex-solar (1) 3Q22 HIGHLIGHTS ($ millions) • Our trust business held $37.6 billion in assets under custody and $12.5 billion in $8.7 assets under management, compared to $8.1 $38.9 billion and $12.9 billion, $7.0 $7.2 $7.2 $2.8 respectively, in the precedi
Slide 15: Allowance for Loan Losses
Allowance for Loan Losses ALLOWANCE FOR LOAN LOSSES (ALLL) 3Q22 HIGHLIGHTS CHANGE DURING 3Q22 ($ millions) • Allowance for loan losses totals $42.1 million in 3Q22, or $2.6 million higher compared to 2Q22 Allowance Waterfall primarily due to higher loan balances and qualitative factors, offset by im
Slide 16: Credit Quality
Credit Quality NPA / TOTAL ASSETS 3Q22 HIGHLIGHTS • Nonperforming assets were $54.3 million as of 3Q22, 0.99% compared to $65.3 million in 2Q22 0.77% 0.80% 0.82% 0.69% • Net charge-offs of 0.29% in 3Q22 was 18 bps higher than 2Q22 due to activity related to our focus on reducing our nonperforming as
Slide 17: Returns
Returns Core ROAE & Core ROATCE ex-solar (1)(2)(3)(4) 19.2% 19.9% 16.2% 16.8% 10.7% 11.1% 10.4% 10.7% 8.9% 9.2% 3Q21 4Q21 1Q22 2Q22 3Q22 Core ROAE ex-solar Core ROATCE ex-solar Core ROAE and Core ROATCE ex-solar for Q2 2022 would be 17.2% and 17.7%, respectively assuming no change in OCI from Q1 202
Slide 18: Capital
Capital TIER 1 LEVERAGE RATIO 3Q22 HIGHLIGHTS 8.55% • Regulatory capital ratios remained strong 8.17% 7.69% 7.28% 7.27% ◦ Tier 1 leverage ratio of 7.16% as of 7.85% 3Q22 7.62% 7.34% 7.16% 7.08% ◦ Bank tier 1 leverage ratio of 7.92% as of Q3 2022. 3Q21 4Q21 1Q22 2Q22 3Q22 Tier 1 Leverage Leverage Rat
Slide 19: Tangible Book Value
Tangible Book Value TANGIBLE COMMON EQUITY & TANGIBLE BOOK 3Q22 SUMMARY VALUE ($ millions) • TBV decline primarily driven by a $29.8 million decline from the previous quarter in the tax effected AFS mark-to-market 23 1 adjustment (3) (1) ◦ TBV decline of 2.0% reflective of 481 increases in long-term
Slide 20: 2022 Guidance
2022 Guidance 2022 FINANCIAL OUTLOOK - Exceed High End of Ranges • Core pre-tax pre-provision earnings(1) from $75 - $85 million to: ◦ $120 million (high end) - exceed by $9-10 million • Net Interest Income from $184 - $192 million to: ◦ $230 million (high end) - exceed by $8-$9 million • Approximat
Slide 21: Appendix
Appendix
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 Nine Months Ended September 30, September 30, September 30, September 30, (in thousands) June 30, 2022 2022 2021 2022 2021 Core operating revenue Net Interest income (GAAP) $ 67,628 $ 56,498 $ 43,387 $ 172,4
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 Nine Months Ended September 30, September 30, September 30, September 30, (in thousands) June 30, 2022 2022 2021 2022 2021 Tangible common equity Stockholders' equity (GAAP) $ 487,738 $ 498,041 $ 556,390 $ 4
Slide 24: Thank You
Thank You amalgamatedbank.com Member FDIC
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