Amalgamated Financial Corp. Q2 FY2025 earnings call

• Priscilla highlighted solid Q2 results with core EPS $0.88, noting the bank's flexible model allows levers to drive performance. Deposits saw $209M on-balance sheet growth, political deposits up $137M, and not-for-profit deposits up over $100M. Loans had $60M+ growth in key portfolios but consumer solar/residential loans declined. Introduced new bankers in California for expansion. - Jason discussed American Banker ranking (#38 in top-performing banks $2B-$10B asset size, #1 most improved), net interest income growth, balance sheet growth, share repurchases, dividend authorization, loan portfolio details, credit losses, and infrastructure investments with digital platform launching in Q3.

Deposits: On-balance sheet deposit growth was $209 million in Q2, excluding $112 million of temporary ordinary pension funding deposits. Political deposits increased $137 million (13%) to $1.2 billion, and the not-for-profit segment grew deposits by over $100 million. Loans: Loan growth was balanced at over $60 million across multifamily, CRE, and C&I portfolios, driving about 2% loan growth. However, consumer solar and residential real estate loan portfolios declined. Revenue: Net income was $26 million ($0.84 per diluted share), core net income was $27 million ($0.88 per diluted share). Net interest income grew 3.3%, core noninterest income was $9.3 million, and core noninterest expense was $40.4 million.

• Full year 2025 guidance: core pretax pre-provision earnings $159M-$163M, net interest income $293M-$297M. - Q3 2025: Target modest balance sheet growth to ~$8.6B, net interest income expected $74M-$76M, margin near flat relative to Q2.

• Potential impact of budget law on renewable sector, though projects in pipeline will fund prior to tax credit phase-out. - Stress in consumer solar loan portfolio with exploration of strategic options. - Fluid situation with certain C&I loans, though isolated and not reflective of broad portfolio. - Margin pressure from securities portfolio affecting asset yield neutralization.

Q: Mark Fitzgibbon asked about California expansion, whether it would be organic or involve M&A.

A: Priscilla stated they see significant organic opportunity in California, with activities like expanding in the East Bay from San Francisco office, and M&A not announced on the call.

Q: David Konrad asked about NIM, loan yields, expenses, capital.

A: Jason responded on loan yields in various portfolios, margin outlook with securities portfolio impact, expense tick-up due to new bankers and digital transformation, and dividend payout ratio targeting 20%-25% with potential for increases.