Amalgamated Financial Corp. earnings

Management highlights

- Thanked colleagues, customers, and shareholders. - Strong first quarter with growth in net revenue, net interest margin, deposits, and tier one capital. - Deposit franchise performed well with broad-based strength. - Chose to keep more deposits on balance sheet to drive core net interest income. - Loan growth solid led by commercial real estate lending. - Addressed additional reserves taken for a single borrower multi-family relationship, viewing it as isolated. - Strategy builds on mission-focused approach, looking to expand and consolidate market share. - Jason discussed net income, core net income, net interest income, core non-interest income, expenses, core efficiency ratio, and credit quality details.

Guidance

- Raised net interest income target to $333 million and core pre-tax pre-provision earnings target to $183 million. - New annual balance sheet growth target of approximately 8% for 2026. - Anticipate interest income to increase to between $81 to $83 million in the second quarter. - Fee income expected to be around $9.8 to $10 million per quarter with modest improvement.

Segment performance

Net revenue grew 9.7% to $93.4 million. Net interest margin expanded nine basis points to 3.75%. On balance sheet deposits increased $229 million to $8.2 billion. Net loans up approximately $66 million, or 1.3%, led by commercial real estate lending. Political deposits increased $133 million to $1.9 billion. Labor franchise generated $106 million of growth. Not-for-profit deposits grew $115 million. Average non-interest bearing deposits increased to 41% of total deposits. Super core deposits approaching 60% of total on balance sheet deposits. PACE portfolio expanded, with total assessments up $15.8 million, or 1.2%, to approximately $1.3 billion.

Risks & headwinds

- Single borrower multi-family relationship moved to non-accrual, leading to additional specific reserves. - Non-performing assets rose to $99.3 million, or 1.08% of total assets. - Criticized and classified loans increased $51.6 million primarily related to the single borrower. - Allowance for credit losses increased to $68.2 million, representing 1.35% of total loans.

Analyst Q&A

• Q: Talk about loan to value on the DC relationship and strategy timing of resolution.

  A: Jason said resolution timing is difficult as news is new, reserving was to limit P&L volatility, some loans likely resolve sooner, others may have longer tail.

• Q: Break down net interest income guide.

  A: Balance sheet size expected to end at around $9.6 billion, $81 to $83 million NII expected in second quarter, margin to have slight compression in second quarter then modest expansion.

• Q: Fee income outlook.

  A: Fee income gradually growing, expected to be about $9.8 to $10 million per quarter with growth in commercial banking and trust-related revenue.

• Q: Detail on multifamily relationship.

  A: Isolated to single borrower, notice of intent to default led to non-accrual loans, reserves established conservatively, reviewed broader DC metro exposure.

• Q: Color on political deposits trend.

  A: Political deposits on track with prior trend, building over time, diversified growth from segments.

• Q: Loan growth from multifamily.

  A: Pleased with pipeline, 250% RBC, plenty of exposure with strong metrics, expect strong growth, balance between portfolios.

• Q: Growth in C-PACE book.

  A: C-PACE has been tremendous, partnership with Electrify strong, contributing to pipeline and yield growth