Amalgamated Financial Corp. Q1 FY2025 earnings call

• Balance Sheet Strength: Low-risk asset profile, low commercial real estate lending concentration, high liquidity, and strong return metrics. - Earnings Metrics: Core earnings per share $0.88, core net income $27.1 million, core return on average equity 15.23%, core return on average assets 1.33%. - Deposit Growth: $446 million total deposit growth, political deposits up 11%, not-for-profit segment deposits at $1.37 billion. - Capital Return: Paid dividend $0.14 per share, repurchased ~$3.5 million of stock, board authorized $40 million share repurchase program. - Risk Management: Run multiple risk-based scenarios, conservative approach to credit, monitoring macroeconomic and social environment.

Net Interest Income: $70.6 million, within the guidance of $70-$71 million, with a net interest margin of 3.55% (within one basis point of guidance). Total deposits increased by $446 million, with political deposits up $103 million to $1.1 billion. Net loans receivable at March 31, 2025, were $4.6 billion, with multifamily loans up $20.3 million and commercial and industrial loans up $7.8 million, offset by decreases in other loan categories. Capital ratios: CET1 ratio at 14.32% (improved 43 basis points), tier one leverage at 9.22% (improved 22 basis points). The not-for-profit segment deposits were $1.37 billion, representing 18.5% of on-balance sheet deposits at quarter-end.

• Full-year 2025: Core pretax pre-provision earnings expected $159 million to $163 million, net interest income $293 million to $297 million. - Second Quarter 2025: Net interest margin expected to expand 2-4 basis points, net interest income range $72-$74 million, with a target balance sheet size of approximately $8.4 billion dependent on projected deposit balances.

• Macroeconomic and social uncertainty potentially affecting clients. - Potential impact of federal government funding reductions and headcount cuts on clients. - Credit risks related to certain loans, e.g., $8.3 million commercial industrial nonaccrual loan.

Q: Any color on the $8.3 million nonaccrual loan and funding for clean energy projects?

A: Sufficient collateral for the nonaccrual loan, and no funding dry-up for clean energy projects; capital flowing into these markets.

Q: How to protect Amalgamated from political environment impacts?

A: Operate as a bank, maintain strong capital, liquidity, and high-quality credit portfolio.

Q: Comments on buyback program and capital ratios?

A: Aggressive buyback plan, target tier one leverage above 9%, maintain strong capital ratios.

Q: Outlook for political deposit pipeline and off-balance sheet strategy?

A: Political deposits growing, off-balance sheet strategy used to manage balance sheet size towards target.

Q: Expenses and digital projects?

A: Expenses on track, professional fees for digital transformation, trending towards lower end of guidance range.

Q: Impact of new administration?

A: No tangible impact seen, diversified deposits and credit portfolio protect against risks.