Amalgamated Financial Corp. · NASDAQ:AMAL
Amalgamated Financial — Q2 2022 Earnings Presentation
24 slides from Amalgamated Financial's earnings presentation, Jul 28, 2022
Slide 1: Amalgamated Financial Corp. Second Quarter 2022 Earnings Presentation
Amalgamated Financial Corp. Second Quarter 2022 Earnings Presentation July 28, 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: 2Q22 Highlights
2Q22 Highlights INCOME STATEMENT • Record earnings of $19.6 million, or $0.63 per diluted share on a GAAP basis; • Core net income excluding the tax credit or accelerated depreciation impact of solar tax equity investments was $20.9 million, or $0.67 per diluted share(1) • Core pre-tax, pre-provisio
Slide 5: Solar Tax-Equity Investments
Solar Tax-Equity Investments OVERVIEW OF SOLAR TAX EQUITY INVESTMENTS • Immediate realization of tax benefits and subsequent accelerated depreciation of the value of the investment creates volatility in the GAAP and core earnings presentations • Metrics excluding the impact of tax credits or acceler
Slide 6: Trends
Trends KEY FINANCIAL TRENDS THROUGH 2Q22 ($ in millions) Loans + PACE Ending Deposits 13.6% > 7.0% CAGR(1) > CAGR(1) $4,351 $7,291 $6,356 $3,703 $3,868 $3,904 $742 2.6% CAGR(1) $5,339 $3,211 $264 $421 $627 (Loans) $4,641 $3,439 $3,447 $3,609 $4,105 $3,211 $3,276 2018 2019 2020 2021 2Q22 2018 2019 20
Slide 7: Deposit Portfolio
Deposit Portfolio TOTAL DEPOSITS 2Q22 HIGHLIGHTS ($ in billions) • Total ending deposits increased $317.7 million compared to 1Q22 due to momentum in all customer segments, $7.3 including political deposits related to upcoming elections, $7.0 and new relationships in core markets $6.4 $1.3 ◦ Politic
Slide 8: Interest Earning Assets
Interest Earning Assets INTEREST EARNING ASSETS OF $7.7B AS OF JUNE 30, 2022 We maintain a diverse, low risk profile of interest earning assets • No fossil fuel exposure • $239mm of government guaranteed loans • $367mm residential solar loans with strong credit profiles C&I, Consumer and • $1,055mm
Slide 9: Held-to-Maturity Securities
Held-to-Maturity Securities HELD-TO-MATURITY SECURITIES 2Q22 HIGHLIGHTS ($ in millions) • In May, $277.3 million AFS securities were PACE (HTM) Non Pace HTM transferred into our Non-Pace HTM securities PACE (HTM) Yield Non-Pace HTM Yield portfolio to reduce potential mark to market $1,376 volatility
Slide 10: Investment Securities
Investment Securities SECURITIES – BOOK VALUE(1) 2Q22 HIGHLIGHTS ($ millions) $3,586 $3,420 $1,055 • Investment Securities totaled $3.6 billion $994 book value for 2Q22 $2,946 $2,662 $929 • Securities increased $113.8 million in 2Q22 $2,425 $871 compared to 1Q22 with continued mix shift $848 $724 $7
Slide 11: Loans
Loans TOTAL LOANS (1)(2) 2Q22 HIGHLIGHTS ($ in millions) • Total loans increased $178.2 million, or 5.1%, $3,609 compared to 1Q22 due to new loan originations $3,277 $3,435 $3,138 $3,087 in our residential real estate and solar portfolios, partially offset by commercial loan payoffs 3.84% 4.01% 3.85
Slide 12: Net Interest Income and Margin
Net Interest Income and Margin NET INTEREST INCOME & MARGIN 2Q22 HIGHLIGHTS ($ millions) • Net interest income was $56.5 million, compared to $48.4 million in 1Q22 Net Interest Income Net Interest Margin $56.5 • 2Q22 NIM at 3.03%; an increase of 27 bps compared to 1Q22 $48.4 • NIM was negatively imp
Slide 13: Non-Interest Expense and Efficiency
Non-Interest Expense and Efficiency NON-INTEREST EXPENSE 2Q22 HIGHLIGHTS ($ millions) • Efficiency ratio of 53.9% for 2Q22 $35.0 $34.0 $34.0 $34.4 $34.0 $34.3 • Core efficiency ratio excluding the tax $32.6 $33.0 $31.4 $31.4 credit or accelerated depreciation impact of our solar tax equity investmen
Slide 14: Non-Interest Income
Non-Interest Income CORE NON-INTEREST INCOME ex-solar (1) 2Q22 HIGHLIGHTS ($ millions) • Our trust business held $38.9 billion in assets under custody and $12.9 billion in $8.7 assets under management, compared to $39.7 billion and $15.1 billion, $7.0 $7.2 $7.2 $2.8 respectively, in the preceding qu
Slide 15: Allowance for Loan Losses
Allowance for Loan Losses ALLOWANCE FOR LOAN LOSSES (ALLL) 2Q22 HIGHLIGHTS CHANGE DURING 2Q22 ($ millions) • Allowance for loan losses totals $39.5 million in 2Q22, or $2.0 million higher compared to 1Q22 Allowance Waterfall primarily due to higher loan balances and specific reserves, offset by impr
Slide 16: Credit Quality
Credit Quality NPA / TOTAL ASSETS 2Q22 HIGHLIGHTS • Nonperforming assets were $65.3 million as of 2Q22, 1.08% compared to $61.1 million in 1Q22 0.99% 0.80% 0.82% 0.77% • Net charge-offs of 0.11% in 2Q22 was 3 bps higher than 1Q22 due to increased charge-off activity related to our focus on reducing
Slide 17: Returns
Returns Core ROAE & Core ROATCE ex-solar (1)(2)(3)(4) 16.2% 16.8% 10.7% 11.1% 10.4% 10.7% 8.4% 8.7% 8.9% 9.2% 2Q21 3Q21 4Q21 1Q22 2Q22 Core ROAE ex-solar Core ROATCE ex-solar Core ROAE and Core ROATCE ex-solar for Q2 2022 would be 14.8% and 15.2%, respectively assuming no change in OCI from Q1 2022
Slide 18: Capital
Capital TIER 1 LEVERAGE RATIO 2Q22 HIGHLIGHTS 8.49% 8.55% • Regulatory capital ratios remained strong 8.17% 7.69% 7.28% ◦ Tier 1 leverage ratio of 7.08% as of 7.93% 7.85% 2Q22 7.62% 7.34% 7.08% ◦ Excluding the excess liquidity(1), tier 1 leverage ratio would be 7.28% 2Q21 3Q21 4Q21 1Q22 2Q22 Tier 1
Slide 19: Tangible Book Value
Tangible Book Value TANGIBLE COMMON EQUITY & TANGIBLE BOOK 2Q22 SUMMARY VALUE ($ millions) • TBV decline primarily driven by a $37.4 million decline from the previous quarter in 20 the tax effected AFS mark-to-market (2) 1 adjustment 510 (9) ◦ TBV decline of 4.6% reflective of increases in long-term
Slide 20: 2022 Guidance
2022 Guidance 2022 FINANCIAL OUTLOOK - Higher End of Ranges • Core pre-tax pre-provision earnings(1) from $75 - $85 million to: ◦ $97 - $105 million - includes effect of rate hikes through June ◦ $110 - $120 million - includes effect of July hike and forward rate curve through 2022 • Net Interest In
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 Six Months Ended (in thousands) June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Core operating revenue Net Interest income (GAAP) $ 56,498 $ 48,368 $ 41,991 $ 104,866 $ 83,836 Non-inte
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 Six Months Ended (in thousands) June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Tangible common equity Stockholders' equity (GAAP) $ 498,041 $ 526,762 $ 548,211 $ 498,041 $ 548,211 Les
Slide 24: Thank You
Thank You amalgamatedbank.com Member FDIC
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