Amalgamated Financial Corp. Q4 FY2024 earnings call

Key Points

• Quarterly results showed near-record core earnings per share of $0.90.
• During election cycle, political deposits outperformed prior cycle, short-term borrowings lower, cost of deposits and funds down, net interest margin increased.
• Full year 2024: Record earnings of $106.4 million, deposit growth over 6%, built capital.
• 2025 focus: Grow C&I lending, sustainable lending, trust business, technology infrastructure.
• Q4 financials: Net income $24.5 million, core net income $28 million, net interest income up 1 million, margin up 8 basis points.
• Balance sheet: Tangible book value per share increased, CET1 ratio industry-leading, dividend increased, share repurchased.

In the fourth quarter, political deposits ended at $326 million, 50.6% higher than the prior cycle, totaling nearly $1 billion. Short-term borrowings were $250.7 million, substantially lower than $580 million in the prior cycle. Net interest margin increased to 3.59%. Loan growth was nearly 4%. Total deposits at December 31, 2024 were $7.2 billion, a decrease of $414 million from the linked quarter. Tangible book value per share increased $0.31 or 1.4% to $22.60. Core return on average equity was 15.8%, core return on average assets was 1.34%. CET1 ratio was at 13.9%, Tier-1 leverage improved to 9.06%.

2025 Guidance

• Core pre-tax pre-provision earnings: $159 million to $163 million, net interest income: $293 million to $297 million.
• First quarter 2025: Net interest margin may compress 2-3 basis points, net interest income range $70 million to $71 million.
• 2025: Normalized growth, investments for future revenue growth, considering forward rate curve and potential rate changes.

Risks

• Interest rate changes: Could impact net interest income.
• Election cycle: Political deposit outflows and funding mix fluctuations.
• Credit quality: Criticized assets, loan portfolio restructuring risks.

Q: Mark Fitzgibbon asked about loan growth, loan pipeline, criticized C&I loans, PACE credits.

A: Jason Darby and Sam Brown responded, discussing loan growth plans, pipeline diversity, handling of criticized C&I loans, and PACE growth expectations.

Q: Chris O'Connell asked about expense guide, balance sheet growth, PACE growth, deposit outflows, tax rate.

A: Jason Darby, Priscilla Sims Brown, and Sam Brown answered, covering expense targets, balance sheet growth strategies, PACE growth projections, deposit outflow trends, and tax rate estimates.