Amalgamated Financial Corp. Reports Record Fourth Quarter 2022 Financial Results

Rhea-AI Summary

Amalgamated Financial Corp. (AMAL) reported strong fourth quarter 2022 results with net income of $24.8 million, or $0.80 per diluted share, versus $22.9 million in Q3 2022. Core net income was $27.2 million, up from $24.8 million. Full-year net income reached $81.5 million, a significant increase from $52.9 million in 2021. Total loans rose by $784.6 million (23.9%) to $4.1 billion. However, total deposits decreased by $565.3 million (7.9%) to $6.6 billion, primarily due to the end of political campaign deposits. The net interest margin improved to 3.56%. The company maintains robust capital ratios above regulatory standards.

Positive

• Net income increased by 8.3% to $24.8 million in Q4 2022.
• Core net income was up 9.7% to $27.2 million for Q4 2022.
• Total loans receivable grew by 23.9% year-over-year, reaching $4.1 billion.
• Full-year net income surged 54.2% to $81.5 million compared to 2021.
• Tangible book value per share increased to $16.05 from $15.37.

Negative

• Total deposits decreased by $565.3 million (7.9%) in Q4 2022.
• Nonperforming assets increased to $34.8 million, or 0.4% of total assets.

NEW YORK, Jan. 26, 2023 (GLOBE NEWSWIRE) -- Amalgamated Financial Corp. (the “Company” or “Amalgamated”) (Nasdaq: AMAL), the holding company for Amalgamated Bank (the “Bank”), today announced financial results for the fourth quarter ended December 31, 2022.

Fourth Quarter 2022 Highlights (on a linked quarter basis)

• Net income of $24.8 million, or $0.80 per diluted share, compared to $22.9 million, or $0.74 per diluted share.
• Core net income excluding the impact of solar tax equity investments (non-GAAP)¹ was $27.2 million, or $0.87 per diluted share, as compared to $24.8 million, or $0.80 per diluted share.
• Average cost of deposits of 34 basis points for the quarter, where non-interest-bearing deposits comprised 51% of total deposits.
• Loans receivable, net of allowance and deferred fees and costs, increased $231.8 million, or 6.1%, to $4.1 billion.
• PACE assessments grew $55.2 million to $911.9 million, comprised of a $34.6 million increase in commercial and a $20.6 million increase in residential.
• Net interest income was level at $67.3 million compared to $67.6 million, while net interest margin grew by 6 basis points to 3.56%, compared to 3.50%.

Full Year 2022 Highlights (from year end 2021)

• Net income of $81.5 million, or $2.61 per diluted share, compared to $52.9 million, or $1.68 per diluted share.
• Core net income excluding the impact of solar tax equity investments (non-GAAP)¹ was $87.2 million, or $2.79 per diluted share, as compared to $55.1 million, or $1.75 per diluted share, or an increase of 58.3%.
• Total deposits increased by $238.8 million, or 3.76% to $6.6 billion, with a peak balance of $7.4 billion in August leading up to the congressional elections held in November.
• Loans receivable, net of allowance and deferred fees and costs, increased $784.6 million, or 23.9%, to $4.1 billion.
• Net interest income increased $65.5 million or 37.6%, to $239.8 million compared to $174.3 million.
• Nonaccrual loans decreased to $21.7 million or 0.5% of total loans compared to $28.2 million or 0.9% of total loans.
• Credit quality improved as classified or criticized assets declined by $125.3 million or 54.3% to $105.6 million.
• Regulatory capital remains above bank “well capitalized” standards.

Priscilla Sims Brown, President and Chief Executive Officer, commented, “Our record fourth quarter and full year 2022 results reflect the successful execution of the strategy that we outlined eighteen months ago.   A strategy that was designed to accelerate loan growth, improve our profitability, and drive earnings as we strived to be the most improved bank in the country for financial metrics.   I am proud to say that our full year 2022 results have exceeded our expectations as we grew our loan portfolio 23.9%, improved our return on average assets 24 bps to 1.05% and increased diluted earnings per share 56% to $2.61. With these results and momentum, I am excited to lead our Bank into its next centennial and I am delighted to honor the women and men who have shaped Amalgamated’s 100 year-old history.”

Fourth Quarter Earnings

Net income for the fourth quarter of 2022 was $24.8 million, or $0.80 per diluted share, compared to $22.9 million, or $0.74 per diluted share, for the third quarter of 2022. The $1.9 million increase for the fourth quarter of 2022 was primarily due to an $0.7 million decrease in non-interest expense, a $0.9 million decrease in provision for loan losses, and a $1.3 million decrease in income tax expense related to an elected change in taxable income recognition, offset by a $0.3 million decrease in net interest income, a $0.8 million decrease in non-interest income.

Core net income excluding the impact of solar tax equity investments (non-GAAP)¹ for the fourth quarter of 2022 was $27.2 million, or $0.87 per diluted share, compared to $24.8 million, or $0.80 per diluted share, for the third quarter of 2022. Excluded from core net income for the fourth quarter of 2022 was $1.4 million of pre-tax losses on the sale of securities and $1.7 million of accelerated depreciation from our solar tax equity investments. Excluded from the third quarter of 2022 was $1.8 million of pre-tax losses on the sale of securities, $0.6 million of pre-tax gains on subordinated debt repurchases, and $1.3 million of accelerated depreciation from our solar tax investments.

Presentation excluding the temporary effect of the tax credits and accelerated depreciation of our solar tax equity investments isolates the financial statement volatility associated with these investments.

Net interest income was $67.3 million for the fourth quarter of 2022, compared to $67.6 million for the third quarter of 2022. The $0.3 million decrease from the preceding quarter reflected increased interest expense on deposits of $3.2 million driven by a 40 basis point increase in interest-bearing deposit costs, and $4.8 million in increased interest expense from borrowings, primarily related to interest expense on Federal Home Loan Bank advances. The increase in interest expense was offset by higher interest income on securities of $4.0 million, driven by a 73 basis point increase in securities yield, and loan interest income which increased by $4.2 million, driven by a $283.9 million increase in average loan balance, and a 13 basis point increase in loan yields.

Net interest margin was 3.56% for the fourth quarter of 2022, an increase of six basis points from 3.50% in the third quarter of 2022. Increases in yields on interest-earning assets were offset by increased rates and average balances of interest-bearing liabilities, particularly due to an increase in Federal Home Loan Bank advances. Prepayment penalties earned in loan income contributed one basis point to our net interest margin in the fourth quarter of 2022, compared to four basis points in the third quarter of 2022.

Provision for loan losses totaled an expense of $4.4 million for the fourth quarter of 2022 compared to an expense of $5.4 million in the third quarter of 2022. The decrease in provision expense in the fourth quarter of 2022 was primarily related to $1.6 million in charge-offs related to nonperforming loans that were transferred to held for sale in the previous quarter and subsequently sold in the current quarter. Adjusted, our provision for loan losses in the current quarter increased by $0.6 million related to higher loan balances, increases in certain specific reserves, and elevated charge-offs in consumer solar loans.

Core non-interest income excluding the impact of solar tax equity investments (non-GAAP)¹ was $7.3 million for the fourth quarter of 2022, compared to $7.5 million in the third quarter of 2022. The decrease of $0.2 million was primarily driven by slightly lower Trust Department fees, a $0.2 million loss on the disposition of other real estate owned, and a $0.6 million loss on the sale of nonperforming held for sale loans, mostly offset by increased business banking fees and one-time beneficiary income on bank-owned life insurance.

Core non-interest expense (non-GAAP)¹ for the fourth quarter of 2022 was $35.6 million, a decrease of $0.7 million from the third quarter of 2022. This was primarily driven by a $1.5 million decrease in professional fees, offset by a $0.5 million increase in advertising and promotion expense, and increased other expenses related to recruiting services.

Our provision for income tax expense was $6.8 million for the fourth quarter of 2022, compared to $8.1 million for the third quarter of 2022. Our effective tax rate for the fourth quarter of 2022 was 21.6%, compared to 26.0% for the third quarter of 2022. The decrease in tax expense was related to an elected change in taxable income recognition. Without the change in election, our effective tax rate was 26.1%.

Balance Sheet Quarterly Summary

Total assets were $7.8 billion at December 31, 2022, compared to $7.9 billion at September 30, 2022. Notable changes within individual balance sheet line items include a $96.1 million decrease in investment securities, $231.8 million increase in loans receivable, net, a $167.1 million decrease in resell agreements, a $565.3 million decrease in deposits, and an increase in borrowed funds of $505.0 million.

Total loans receivable, net of allowance and deferred fees and costs, at December 31, 2022 were $4.1 billion, an increase of $231.8 million, or 6.1%, compared to September 30, 2022. The increase in loans is primarily driven by a $120.6 million increase in commercial and industrial loans, an $82.7 million increase in multifamily loans, and a $39.8 million increase in residential loans, offset by a $3.8 million decrease in consumer and other loans, a $1.3 million decrease in construction and land development loans, and a $2.9 million decrease in commercial real estate loans as we continue to reduce that asset class exposure. Our continued focus on credit quality improvement resulted in $12.7 million of payoffs of criticized or classified loans in the quarter.

Deposits at December 31, 2022 were $6.6 billion, a decrease of $565.3 million, or 7.9%, as compared to $7.2 billion as of September 30, 2022. Deposits held by politically active customers, such as campaigns, PACs, advocacy-based organizations, and state and national party committees were $643.6 million as of December 31, 2022, a decrease of $513.7 million compared to $1.2 billion as of September 30, 2022. The decline in political deposits is related to the conclusion of congressional elections in the fourth quarter of 2022 and is in-line with expectations we shared in the previous quarter.

Non-interest-bearing deposits represent 53% of average deposits and 51% of ending deposits for the quarter ended December 31, 2022, contributing to an average cost of deposits of 34 basis points in the fourth quarter of 2022.

Nonperforming assets totaled $34.8 million, or 0.4% of period-end total assets at December 31, 2022, a decrease of $19.5 million, compared with $54.3 million, or 0.7% on a linked quarter basis. The decrease in nonperforming assets was primarily driven by the sale of $10.2 million of restructured loans held for sale, and $12.7 million in payoffs of criticized or classified loans.

The allowance for loan losses increased $2.9 million to $45.0 million at December 31, 2022 from $42.1 million at September 30, 2022, primarily due to higher loan balances. At December 31, 2022, we had $27.8 million of impaired loans for which a specific allowance of $5.7 million was made, compared to $38.2 million of impaired loans at September 30, 2022 for which a specific allowance of $5.2 million was made. The ratio of allowance to total loans was 1.10% at December 31, 2022 and 1.09% at September 30, 2022.

Capital Quarterly Summary

As of December 31, 2022, our Common Equity Tier 1 Capital Ratio was 11.82%, Total Risk-Based Capital Ratio was 14.28%, and Tier-1 Leverage Capital Ratio was 7.52%, compared to 11.91%, 14.43% and 7.16%, respectively, as of September 30, 2022. Stockholders’ equity at December 31, 2022 was $509.0 million, compared to $487.7 million at September 30, 2022. The increase in stockholders’ equity was primarily driven by $24.8 million of net income, partially offset by $3.2 million in dividends. There was no significant change during the quarter to the accumulated other comprehensive loss due to the tax effected mark-to-market on our securities portfolio.

Our tangible book value per share (non-GAAP)¹ was $16.05 as of December 31, 2022 compared to $15.37 as of September 30, 2022, primarily a result of $24.8 million of net income in the quarter. Tangible common equity (non-GAAP)¹ was 6.30% of tangible assets, compared to 6.00% as of September 30, 2022.

Conference Call

As previously announced, Amalgamated Financial Corp. will host a conference call to discuss its fourth quarter results today, January 26, 2023 at 11:00am (Eastern Time). The conference call can be accessed by dialing 1-877-407-9716 (domestic) or 1-201-493-6779 (international) and asking for the Amalgamated Financial Corp. Fourth Quarter 2022 Earnings Call. A telephonic replay will be available approximately two hours after the call and can be accessed by dialing 1-844-512-2921, or for international callers 1-412-317-6671 and providing the access code 13733696. The telephonic replay will be available until February 2, 2023.

Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of our website at http://ir.amalgamatedbank.com/. The online replay will remain available for a limited time beginning immediately following the call.

The presentation materials for the call can be accessed on the investor relations section of our website at https://ir.amalgamatedbank.com/.

About Amalgamated Financial Corp.

Amalgamated Financial Corp. is a Delaware public benefit corporation and a bank holding company engaged in commercial banking and financial services through its wholly-owned subsidiary, Amalgamated Bank. Amalgamated Bank is a New York-based full-service commercial bank and a chartered trust company with a combined network of five branches across New York City, Washington D.C., and San Francisco, and a commercial office in Boston. Amalgamated Bank was formed in 1923 as Amalgamated Bank of New York by the Amalgamated Clothing Workers of America, one of the country’s oldest labor unions. Amalgamated Bank provides commercial banking and trust services nationally and offers a full range of products and services to both commercial and retail customers. Amalgamated Bank is a proud member of the Global Alliance for Banking on Values and is a certified B Corporation®. As of December 31, 2022, our total assets were $7.8 billion, total net loans were $4.1 billion, and total deposits were $6.6 billion. Additionally, as of December 31, 2022, our trust business held $38.1 billion in assets under custody and $13.4 billion in assets under management.

Non-GAAP Financial Measures

This release (and the accompanying financial information and tables) refers to certain non-GAAP financial measures including, without limitation, “Core operating revenue,” “Core non-interest expense,” “Core net income,” “Tangible common equity,” “Average tangible common equity,” “Core return on average assets,” “Core return on average tangible common equity,” and “Core efficiency ratio.”

Our management utilizes this information to compare our operating performance for December 31, 2022 versus certain periods in 2022 and 2021 and to prepare internal projections. We believe these non-GAAP financial measures facilitate making period-to-period comparisons and are meaningful indications of our operating performance. In addition, because intangible assets such as goodwill and other discrete items unrelated to our core business, which are excluded, vary extensively from company to company, we believe that the presentation of this information allows investors to more easily compare our results to those of other companies.

The presentation of non-GAAP financial information, however, is not intended to be considered in isolation or as a substitute for GAAP financial measures. We strongly encourage readers to review the GAAP financial measures included in this release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this release with other companies’ non-GAAP financial measures having the same or similar names. Reconciliations of non-GAAP financial disclosures to comparable GAAP measures found in this release are set forth in the final pages of this release and also may be viewed on our website, amalgamatedbank.com.

Terminology

Certain terms used in this release are defined as follows:

“Core efficiency ratio” is defined as “Core non-interest expense” divided by “Core operating revenue.” We believe the most directly comparable performance ratio derived from GAAP financial measures is an efficiency ratio calculated by dividing total non-interest expense by the sum of net interest income and total non-interest income.

“Core efficiency ratio excluding solar tax impact” is defined as “Core non-interest expense” divided by “Core operating revenue excluding solar tax impact.” We believe the most directly comparable performance ratio derived from GAAP financial measures is an efficiency ratio calculated by dividing total non-interest expense by the sum of net interest income and total non-interest income.

“Core net income” is defined as net income after tax excluding gains and losses on sales of securities, gains on the sale of owned property, costs related to branch closures, restructuring/severance costs, acquisition costs, and taxes on notable pre-tax items. We believe the most directly comparable GAAP financial measure is net income.

“Core net income excluding solar tax impact” is defined as net income after tax excluding gains and losses on sales of securities, gains on the sale of owned property, costs related to branch closures, restructuring/severance costs, acquisition costs, tax credits and accelerated depreciation on solar equity investments, and taxes on notable pre-tax items. We believe the most directly comparable GAAP financial measure is net income.

“Core non-interest expense” is defined as total non-interest expense excluding costs related to branch closures, restructuring/severance, and acquisitions. We believe the most directly comparable GAAP financial measure is total non-interest expense.

“Core non-interest income excluding the impact of solar tax equity investments” is defined as total non-interest income excluding gains and losses on sales of securities, gains on the sale of owned property, and tax credits and depreciation on solar equity investments. We believe the most directly comparable GAAP financial measure is non-interest income.

“Core operating revenue” is defined as total net interest income plus “core non-interest income”, defined as non-interest income excluding gains and losses on sales of securities and gains on the sale of owned property. We believe the most directly comparable GAAP financial measure is the total of net interest income and non-interest income.

“Core operating revenue excluding solar tax impact” is defined as total net interest income plus non-interest income excluding gains and losses on sales of securities, gains on the sale of owned property, and tax credits and depreciation on solar equity investments. We believe the most directly comparable GAAP financial measure is the total of net interest income and non-interest income.

“Core return on average assets” is defined as “Core net income” divided by average total assets. We believe the most directly comparable performance ratio derived from GAAP financial measures is return on average assets calculated by dividing net income by average total assets.

“Core return on average assets excluding solar tax impact” is defined as “Core net income excluding solar tax impact” divided by average total assets. We believe the most directly comparable performance ratio derived from GAAP financial measures is return on average assets calculated by dividing net income by average total assets.

“Core return on average tangible common equity” is defined as “Core net income” divided by “Average tangible common equity.” We believe the most directly comparable performance ratio derived from GAAP financial measures is return on average equity calculated by dividing net income by average total stockholders’ equity.

“Core return on average tangible common equity excluding solar tax impact” is defined as “Core net income excluding solar tax impact” divided by “Average tangible common equity.” We believe the most directly comparable performance ratio derived from GAAP financial measures is return on average equity calculated by dividing net income by average total stockholders’ equity.

“Tangible assets” are defined as total assets excluding, as applicable, goodwill and core deposit intangibles. We believe the most directly comparable GAAP financial measure is total assets.

“Tangible common equity”, and “Tangible book value” are defined as stockholders’ equity excluding, as applicable, minority interests, preferred stock, goodwill and core deposit intangibles. We believe that the most directly comparable GAAP financial measure is total stockholders’ equity.

Forward-Looking Statements

Statements included in this release that are not historical in nature are intended to be, and are hereby identified as, forward-looking statements within the meaning of the Private Securities Litigation Reform Act, Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally can be identified through the use of forward-looking terminology such as “may,” “will,” “anticipate,” “should,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “in the future,” “may” and “intend,” as well as other similar words and expressions of the future. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors, any or all of which could cause actual results to differ materially from the results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: (i) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses; (ii) continued fluctuation of the interest rate environment; (iii) our inability to maintain the historical growth rate of the loan portfolio; (iv) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (v) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on our results, including as a result of compression to net interest margin; (vi) greater than anticipated adverse conditions in the national or local economies including in our core markets, which may have an adverse impact on our business, operations and performance, and could have a negative impact on our credit portfolio, share price, and borrowers; (vii) fluctuations or unanticipated changes in interest rates on loans or deposits or that affect the yield curve; (viii) any matter that would cause us to conclude that there was impairment of any asset, including intangible assets; (ix) the results of regulatory examinations; (x) potential deterioration in real estate values; (xi) changes in legislation, regulation, policies, or administrative practices, whether by judicial, governmental, or legislative action; (xii) the risk that the preliminary financial information reported herein and our current preliminary analysis will be different when our review is finalized; (xiii) increased competition for experienced executives in the banking industry; (xiv) a failure in or breach of our operational or security systems or infrastructure, or those of third party vendors or other service providers, including as a result of unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; and (xv) the outcome of any legal or regulatory proceedings that may be instituted against us; and (xvi) physical and transitional risks related to climate change as they impact our business and the businesses that we finance. Additional factors which could affect the forward-looking statements can be found in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the SEC and available on the SEC's website at https://www.sec.gov/. We disclaim any obligation to update or revise any forward-looking statements contained in this release, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by law.

Investor Contact:
Jamie Lillis
Solebury Strategic Communications
shareholderrelations@amalgamatedbank.com
800-895-4172

Consolidated Statements of Income

	Three Months Ended												Year Ended
	December 31,				September 30,				December 31,				December 31,
($ in thousands)		2022				2022				2021				2022				2021
INTEREST AND DIVIDEND INCOME	(unaudited)				(unaudited)				(unaudited)				(unaudited)
Loans	$	42,492			$	38,264			$	32,138			$	145,649			$	123,318
Securities		35,567				31,580				16,549				110,654				56,557
Interest-bearing deposits in banks		485				971				200				2,186				651
Total interest and dividend income		78,544				70,815				48,887				258,489				180,526
INTEREST EXPENSE
Deposits		5,682				2,491				1,407				11,056				5,823
Borrowed funds		5,516				696				399				7,593				399
Total interest expense		11,198				3,187				1,806				18,649				6,222
NET INTEREST INCOME		67,346				67,628				47,081				239,840				174,304
Provision for (recovery of) loan losses		4,434				5,363				3,568				15,002				(287	)
Net interest income after provision for loan losses		62,912				62,265				43,513				224,838				174,591
NON-INTEREST INCOME
Trust Department fees		3,607				3,872				2,881				14,449				13,352
Service charges on deposit accounts		2,991				2,735				2,414				10,999				9,355
Bank-owned life insurance		986				785				530				3,868				2,388
Gain (loss) on sale of securities		(1,373	)			(1,844	)			(106	)			(3,637	)			649
Gain (loss) on sale of loans, net		(578	)			(367	)			181				(610	)			1,887
Gain (loss) on other real estate owned, net		(168	)			—				—				(168	)			(407	)
Equity method investments		(1,416	)			(1,151	)			5,870				(2,773	)			150
Other		177				973				591				1,769				1,015
Total non-interest income		4,226				5,003				12,361				23,897				28,389
NON-INTEREST EXPENSE
Compensation and employee benefits		19,470				19,527				17,359				74,712				69,844
Occupancy and depreciation		3,345				3,481				3,730				13,723				14,023
Professional fees		1,684				3,173				3,742				10,417				12,961
Data processing		4,072				4,149				5,194				17,732				16,042
Office maintenance and depreciation		696				807				695				3,012				3,057
Amortization of intangible assets		262				262				302				1,047				1,207
Advertising and promotion		1,331				795				982				3,741				3,230
Other		4,710				4,064				3,028				16,187				11,891
Total non-interest expense		35,570				36,258				35,032				140,571				132,255
Income before income taxes		31,568				31,010				20,842				108,164				70,725
Income tax expense (benefit)		6,813				8,066				4,918				26,687				17,788
Net income		24,755				22,944				15,924				81,477				52,937
Earnings per common share - basic	$	0.81			$	0.75			$	0.51			$	2.64			$	1.70
Earnings per common share - diluted	$	0.80			$	0.74			$	0.50			$	2.61			$	1.68

Consolidated Statements of Financial Condition

($ in thousands)	December 31, 2022				September 30, 2022				December 31, 2021
Assets	(unaudited)				(unaudited)
Cash and due from banks	$	5,110			$	3,404			$	8,622
Interest-bearing deposits in banks		58,430				62,819				321,863
Total cash and cash equivalents		63,540				66,223				330,485
Securities:
Available for sale, at fair value		1,812,476				1,957,486				2,113,410
Held-to-maturity, at amortized cost		1,541,301				1,492,423				843,569
Loans held for sale		7,943				17,916				3,279
Loans receivable, net of deferred loan origination costs		4,106,002				3,871,290				3,312,224
Allowance for loan losses		(45,031	)			(42,122	)			(35,866	)
Loans receivable, net		4,060,971				3,829,168				3,276,358
Resell agreements		25,754				192,834				229,018
Accrued interest and dividends receivable		41,441				34,767				28,820
Premises and equipment, net		9,856				10,539				11,735
Bank-owned life insurance		105,624				105,915				107,266
Right-of-use lease asset		28,236				29,991				33,115
Deferred tax asset		62,507				64,046				26,719
Goodwill		12,936				12,936				12,936
Other intangible assets		3,105				3,366				4,151
Equity investments		8,305				7,683				6,856
Other assets		59,129				42,924				50,159
Total assets	$	7,843,124			$	7,868,217			$	7,077,876
Liabilities
Deposits	$	6,595,037			$	7,160,307			$	6,356,255
Subordinated debt		77,708				77,679				83,831
Borrowed funds		580,000				75,000				—
Operating leases		40,779				43,229				48,160
Other liabilities		40,645				24,264				25,755
Total liabilities	$	7,334,169			$	7,380,479			$	6,514,001
Stockholders’ equity
Common stock, par value $.01 per share		307				307				311
Additional paid-in capital		286,947				286,431				297,975
Retained earnings		330,275				308,743				260,047
Accumulated other comprehensive income (loss), net of income taxes		(108,707	)			(107,876	)			5,409
Total Amalgamated Financial Corp. stockholders' equity		508,822				487,605				563,742
Noncontrolling interests		133				133				133
Total stockholders' equity		508,955				487,738				563,875
Total liabilities and stockholders’ equity	$	7,843,124			$	7,868,217			$	7,077,876

Select Financial Data

	As of and for the									As of and for the
	Three Months Ended									Year Ended
	December 31,			September 30,			December 31,			December 31,
(Shares in thousands)		2022			2022			2021			2022			2021
Selected Financial Ratios and Other Data:
Earnings per share
Basic	$	0.81		$	0.75		$	0.51		$	2.64		$	1.70
Diluted		0.80			0.74			0.50			2.61			1.68
Core net income (non-GAAP)
Basic	$	0.84		$	0.78		$	0.54		$	2.74		$	1.75
Diluted		0.83			0.77			0.53			2.70			1.72
Core net income excluding solar tax impact (non-GAAP)
Basic	$	0.89		$	0.81		$	0.41		$	2.83		$	1.77
Diluted		0.87			0.80			0.40			2.79			1.75
Book value per common share (excluding minority interest)		16.57			15.90			18.11			16.57			18.11
Tangible book value per share (non-GAAP)		16.05			15.37			17.56			16.05			17.56
Common shares outstanding, par value $.01 per share(1)		30,700			30,672			31,130			30,700			31,130
Weighted average common shares outstanding, basic		30,679			30,673			31,108			30,818			31,104
Weighted average common shares outstanding, diluted		31,055			31,032			31,516			31,193			31,512
(1) 70,000,000 shares authorized; 30,700,198, 30,672,303, and 31,130,143 shares issued and outstanding, respectively, for the periods ended December 31, 2022, September 30, 2022, and December 31, 2021.

Select Financial Data

	As of and for the									As of and for the
	Three Months Ended									Year Ended
	December 31,			September 30,			December 31,			December 31,
	2022			2022			2021			2022			2021
Selected Performance Metrics:
Return on average assets	1.26	%		1.15	%		0.90	%		1.05	%		0.81	%
Core return on average assets (non-GAAP)	1.31	%		1.19	%		0.95	%		1.09	%		0.83	%
Core return on average assets excluding solar tax impact (non-GAAP)	1.38	%		1.24	%		0.72	%		1.13	%		0.84	%
Return on average equity	19.89	%		17.79	%		11.23	%		15.65	%		9.59	%
Core return on average tangible common equity (non-GAAP)	21.47	%		19.11	%		12.20	%		16.73	%		10.16	%
Core return on average tangible common equity excluding solar tax impact (non-GAAP)	22.58	%		19.88	%		9.23	%		17.30	%		10.31	%
Average equity to average assets	6.32	%		6.44	%		8.02	%		6.74	%		8.40	%
Tangible common equity to tangible assets	6.30	%		6.00	%		7.74	%		6.30	%		7.74	%
Loan yield	4.24	%		4.11	%		4.01	%		4.03	%		3.88	%
Securities yield	4.08	%		3.35	%		2.20	%		3.14	%		2.22	%
Deposit cost	0.34	%		0.14	%		0.09	%		0.16	%		0.10	%
Net interest margin	3.56	%		3.50	%		2.77	%		3.22	%		2.77	%
Efficiency ratio(1)	49.70	%		49.92	%		58.94	%		53.30	%		65.25	%
Core efficiency ratio (non-GAAP)(1)	48.76	%		49.09	%		57.18	%		52.42	%		64.24	%
Core efficiency ratio excluding solar tax impact (non-GAAP)	47.65	%		48.24	%		62.81	%		51.68	%		63.90	%
Asset Quality Ratios:
Nonaccrual loans to total loans	0.53	%		0.51	%		0.85	%		0.53	%		0.85	%
Nonperforming assets to total assets	0.44	%		0.69	%		0.77	%		0.44	%		0.77	%
Allowance for loan losses to nonaccrual loans	207.53	%		212.51	%		127.10	%		207.53	%		127.10	%
Allowance for loan losses to total loans	1.10	%		1.09	%		1.08	%		1.10	%		1.08	%
Annualized net charge-offs (recoveries) to average loans	0.15	%		0.29	%		0.44	%		0.16	%		0.17	%
Capital Ratios:
Tier 1 leverage capital ratio	7.52	%		7.16	%		7.62	%		7.52	%		7.62	%
Tier 1 risk-based capital ratio	11.82	%		11.91	%		12.98	%		11.82	%		12.98	%
Total risk-based capital ratio	14.28	%		14.43	%		15.95	%		14.28	%		15.95	%
Common equity tier 1 capital ratio	11.82	%		11.91	%		12.98	%		11.82	%		12.98	%
(1) Efficiency ratio is calculated by dividing total non-interest expense by the sum of net interest income and total non-interest income

Loan and Held-to-Maturity Securities Portfolio Composition

(In thousands)	At December 31, 2022							At September 30, 2022							At December 31, 2021
	Amount				% of total loans			Amount				% of total loans			Amount				% of total loans
Commercial portfolio:
Commercial and industrial	$	925,641			22.5	%		$	805,087			20.8	%		$	729,385			22.1	%
Multifamily		967,521			23.6	%			884,790			22.9	%			821,801			24.8	%
Commercial real estate		335,133			8.2	%			338,002			8.7	%			369,429			11.2	%
Construction and land development		37,696			0.9	%			38,946			1.0	%			31,539			1.0	%
Total commercial portfolio		2,265,991			55.2	%			2,066,825			53.4	%			1,952,154			59.1	%
Retail portfolio:
Residential real estate lending		1,371,779			33.5	%			1,332,010			34.5	%			1,063,682			32.3	%
Consumer and other		463,999			11.3	%			467,793			12.1	%			291,818			8.8	%
Total retail		1,835,778			44.8	%			1,799,803			46.6	%			1,355,500			41.1	%
Total loans held for investment		4,101,769			100.0	%			3,866,628			100.0	%			3,307,654			100.2	%
Net deferred loan origination costs		4,233							4,662							4,570
Allowance for loan losses		(45,031	)						(42,122	)						(35,866	)
Total loans, net	$	4,060,971						$	3,829,168						$	3,276,358
Held-to-maturity securities portfolio:
PACE assessments		911,877			59.2	%			856,701			57.4	%			627,394			74.4	%
Other securities		629,424			40.8	%			635,722			42.6	%			216,175			25.6	%
Total held-to-maturity securities	$	1,541,301			100.0	%		$	1,492,423			100.0	%		$	843,569			100.0	%

Net Interest Income Analysis

	Three Months Ended
	December 31, 2022									September 30, 2022									December 31, 2021
(In thousands)	Average Balance		Income / Expense				Yield / Rate			Average Balance		Income / Expense				Yield / Rate			Average Balance		Income / Expense				Yield / Rate
Interest-earning assets:
Interest-bearing deposits in banks	$	85,886		$	485		2.24	%		$	222,071		$	971		1.73	%		$	561,027		$	200		0.14	%
Securities(1)		3,400,994			34,939		4.08	%			3,522,863			29,735		3.35	%			2,876,150			15,973		2.20	%
Resell agreements		46,909			628		5.31	%			232,956			1,845		3.14	%			138,436			576		1.65	%
Total loans, net(2)(3)		3,977,554			42,492		4.24	%			3,693,688			38,264		4.11	%			3,177,018			32,138		4.01	%
Total interest-earning assets		7,511,343			78,544		4.15	%			7,671,578			70,815		3.66	%			6,753,342			48,887		2.87	%
Non-interest-earning assets:
Cash and due from banks		5,267									4,783									8,072
Other assets		289,979									265,736									249,476
Total assets	$	7,806,589								$	7,942,097								$	7,010,890
Interest-bearing liabilities:
Savings, NOW and money market deposits	$	2,967,150		$	5,161		0.69	%		$	3,031,402		$	2,329		0.30	%		$	2,765,380		$	1,220		0.18	%
Time deposits and brokered certificates of deposit		204,185			521		1.01	%			184,476			162		0.35	%			215,562			187		0.34	%
Total interest-bearing deposits		3,171,335			5,682		0.71	%			3,215,878			2,491		0.31	%			2,980,942			1,407		0.19	%
Federal Home Loan Bank advances		451,032			4,713		4.15	%			3,314			25		2.99	%			—			—		0.00	%
Other Borrowings		94,271			801		3.37	%			82,009			671		3.25	%			49,891			399		3.17	%
Total interest-bearing liabilities		3,716,638			11,196		1.20	%			3,301,201			3,187		0.38	%			3,030,833			1,806		0.24	%
Non-interest-bearing liabilities:
Demand and transaction deposits		3,522,352									4,053,953									3,290,932
Other liabilities		73,838									75,143									126,746
Total liabilities		7,312,828									7,430,297									6,448,511
Stockholders' equity		493,761									511,800									562,379
Total liabilities and stockholders' equity	$	7,806,589								$	7,942,097								$	7,010,890
Net interest income / interest rate spread				$	67,348		2.95	%					$	67,628		3.28	%					$	47,081		2.63	%
Net interest earning assets / net interest margin	$	3,794,705					3.56	%		$	4,370,377					3.50	%		$	3,722,509					2.77	%
Total deposits / total cost of deposits	$	6,693,687					0.34	%		$	7,269,831					0.14	%		$	6,271,874					0.09	%
Total borrowings / total cost of funds	$	7,238,990					0.61	%		$	7,355,154					0.17	%		$	6,321,765					0.11	%

(1) Includes Federal Home Loan Bank (FHLB) stock in the average balance, and dividend income on FHLB stock in interest income
(2) Amounts are net of deferred origination costs and the allowance for loan losses
(3) Includes prepayment penalty interest income in 4Q2022, 3Q2022, and 4Q2021 of $82, $800, and $353, respectively (in thousands)

Net Interest Income Analysis

	Year Ended
	December 31, 2022									December 31, 2021
(In thousands)	Average Balance		Income / Expense				Yield / Rate			Average Balance		Income / Expense				Yield / Rate
Interest-earning assets:
Interest-bearing deposits in banks	$	258,214		$	2,186		0.85	%		$	521,681		$	651		0.12	%
Securities(1)		3,391,056			106,417		3.14	%			2,461,661			54,615		2.22	%
Resell agreements		182,304			4,237		2.32	%			138,833			1,942		1.40	%
Total loans, net(2)(3)		3,615,437			145,649		4.03	%			3,180,093			123,318		3.88	%
Total interest-earning assets		7,447,011			258,489		3.47	%			6,302,268			180,526		2.86	%
Non-interest-earning assets:
Cash and due from banks		7,126									7,853
Other assets		273,028									259,718
Total assets	$	7,727,165								$	6,569,839
Interest-bearing liabilities:
Savings, NOW and money market deposits	$	2,981,688		$	10,068		0.34	%		$	2,622,584		$	4,788		0.18	%
Time deposits and brokered certificates of deposit		195,030			987		0.51	%			248,507			1,035		0.42	%
Total interest-bearing deposits		3,176,718			11,055		0.35	%			2,871,091			5,823		0.20	%
Federal Home Loan Bank advances		114,521			4,738		4.14	%			123			—		0.00	%
Other Borrowings		86,205			2,854		3.31	%			12,575			399		3.17	%
Total interest-bearing liabilities		3,377,444			18,647		0.55	%			2,883,789			6,222		0.22	%
Non-interest-bearing liabilities:
Demand and transaction deposits		3,746,152									3,017,621
Other liabilities		82,931									116,256
Total liabilities		7,206,527									6,017,666
Stockholders' equity		520,638									552,173
Total liabilities and stockholders' equity	$	7,727,165								$	6,569,839
Net interest income / interest rate spread				$	239,842		2.92	%					$	174,304		2.64	%
Net interest earning assets / net interest margin	$	4,069,567					3.22	%		$	3,418,479					2.77	%
Total deposits / total cost of deposits	$	6,922,870					0.16	%		$	5,888,712					0.10	%
Total borrowings / total cost of funds	$	7,123,596					0.26	%		$	5,901,410					0.11	%

(1) Includes Federal Home Loan Bank (FHLB) stock in the average balance, and dividend income on FHLB stock in interest income
(2) Amounts are net of deferred origination costs (fees) and the allowance for loan losses
(3) Includes prepayment penalty interest income in December YTD 2022 and December YTD 2021 of $1.7 million and $1.7 million, respectively

Deposit Portfolio Composition

	Three Months Ended
(In thousands)	December 31, 2022						September 30, 2022						December 31, 2021
	Ending Balance			Average Balance			Ending Balance			Average Balance			Ending Balance			Average Balance
Non-interest-bearing demand deposit accounts	$	3,331,067		$	3,522,352		$	3,839,155		$	4,053,953		$	3,335,005		$	3,290,932
NOW accounts		206,434			200,633			204,473			210,972			210,844			204,556
Money market deposit accounts		2,445,396			2,385,446			2,549,024			2,437,920			2,227,953			2,190,423
Savings accounts		386,190			381,071			384,644			382,510			375,301			370,401
Time deposits		151,699			167,138			183,011			184,476			207,152			215,562
Brokered CD		74,251			37,047			—			—			—			—
Total deposits	$	6,595,037		$	6,693,687		$	7,160,307		$	7,269,831		$	6,356,255		$	6,271,874

	Three Months Ended
	December 31, 2022						September 30, 2022						December 31, 2021
	Average Rate Paid(1)			Cost of Funds			Average Rate Paid(1)			Cost of Funds			Average Rate Paid(1)			Cost of Funds
Non-interest-bearing demand deposit accounts	0.00	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
NOW accounts	0.74	%		0.52	%		0.34	%		0.19	%		0.08	%		0.09	%
Money market deposit accounts	1.16	%		0.74	%		0.43	%		0.33	%		0.16	%		0.20	%
Savings accounts	0.75	%		0.49	%		0.32	%		0.19	%		0.11	%		0.11	%
Time deposits	0.69	%		0.41	%		0.44	%		0.35	%		0.29	%		0.34	%
Brokered CD	3.83	%		3.72	%		0.00	%		0.00	%		0.00	%		0.00	%
Total deposits	0.57	%		0.34	%		0.19	%		0.14	%		0.08	%		0.09	%
Interest-bearing deposits excluding brokered CDs	1.15	%		0.68	%		0.41	%		0.31	%		0.16	%		0.19	%
(1)Average rate paid is calculated as the weighted average of spot rates on deposit accounts as of December 31, 2022.

Asset Quality

(In thousands)	December 31, 2022				September 30, 2022				December 31, 2021
Loans 90 days past due and accruing	$	—			$	—			$	—
Nonaccrual loans held for sale		6,914				5,858				1,000
Troubled debt restructured loans - accruing loans held for sale		—				10,179				—
Nonaccrual loans excluding held for sale loans and restructured loans		8,197				7,499				10,835
Troubled debt restructured loans - nonaccrual		13,502				12,322				13,497
Troubled debt restructured loans - accruing		6,102				18,396				24,997
Other real estate owned		—				—				307
Impaired securities		36				37				63
Total nonperforming assets	$	34,751			$	54,291			$	54,586
Nonaccrual loans:
Commercial and industrial	$	9,629			$	9,356			$	8,313
Multifamily		3,828				3,494				2,907
Commercial real estate		4,851				4,914				4,054
Construction and land development		—				—				—
Total commercial portfolio		18,308				17,764				15,274
Residential real estate lending		1,807				675				12,525
Consumer and other		1,584				1,382				420
Total retail portfolio		3,391				2,057				12,945
Total nonaccrual loans	$	21,699			$	19,821			$	28,219
Nonaccrual loans to total loans		0.53	%			0.51	%			0.85	%
Nonperforming assets to total assets		0.44	%			0.69	%			0.77	%
Allowance for loan losses to nonaccrual loans		207.53	%			212.51	%			127.10	%
Allowance for loan losses to total loans		1.10	%			1.09	%			1.08	%
Annualized net charge-offs (recoveries) to average loans		0.15	%			0.29	%			0.44	%

Credit Quality

	December 31, 2022			September 30, 2022			December 31, 2021
($ in thousands)
Criticized and classified loans
Commercial and industrial	$	32,004		$	26,756		$	36,073
Multifamily		19,860			42,105			99,932
Commercial real estate		35,180			39,628			74,168
Construction and land development		16,426			2,424			7,476
Residential real estate lending		1,807			675			12,817
Consumer and other		323			1,382			420
Total loans	$	105,600		$	112,970		$	230,886

Criticized and classified loans to total loans
Commercial and industrial	0.78	%		0.69	%		1.09	%
Multifamily	0.48	%		1.09	%		3.02	%
Commercial real estate	0.86	%		1.02	%		2.24	%
Construction and land development	0.40	%		0.06	%		0.23	%
Residential real estate lending	0.04	%		0.02	%		0.39	%
Consumer and other	0.01	%		0.04	%		0.01	%
	2.57	%		2.92	%		6.98	%

Reconciliation of GAAP to Non-GAAP Financial Measures
The information provided below presents a reconciliation of each of our non-GAAP financial measures to the most directly comparable GAAP financial measure.

	As of and for the												As of and for the
	Three Months Ended												Year Ended
(in thousands)	December 31, 2022				September 30, 2022				December 31, 2021				December 31, 2022				December 31, 2021
Core operating revenue
Net Interest income (GAAP)	$	67,346			$	67,628			$	47,081			$	239,840			$	174,304
Non-interest income		4,226				5,003				12,361				23,897				28,389
Less: Securities (gain) loss		1,373				1,844				106				3,637				(649	)
Less: Subdebt repurchase gain		—				(617	)			—				(617	)			—
Core operating revenue (non-GAAP)	$	72,945			$	73,858			$	59,548			$	266,757			$	202,044
Add: Tax (credits) depreciation on solar investments		1,706				1,306				(5,337	)			3,811				1,055
Core operating revenue excluding solar tax impact (non-GAAP)	$	74,651			$	75,164			$	54,211			$	270,568			$	203,099
Core non-interest expense
Non-interest expense (GAAP)	$	35,570			$	36,258			$	35,032			$	140,571			$	132,255
Less: Other one-time expenses(1)		—				—				(984	)			(738	)			(2,466	)
Core non-interest expense (non-GAAP)	$	35,570			$	36,258			$	34,048			$	139,833			$	129,789
Core net income
Net Income (GAAP)	$	24,755			$	22,944			$	15,924			$	81,477			$	52,937
Less: Securities (gain) loss		1,373				1,844				106				3,637				(649	)
Less: Subdebt repurchase gain		—				(617	)			—				(617	)			—
Add: Other one-time expenses		—				—				984				738				2,466
Less: Tax on notable items		(296	)			(319	)			(257	)			(927	)			(457	)
Core net income (non-GAAP)	$	25,832			$	23,852			$	16,757			$	84,308			$	54,297
Add: Tax (credits) depreciation on solar investments		1,706				1,306				(5,337	)			3,811				1,055
Add: Tax effect of solar income		(368	)			(340	)			1,259				(940	)			(265	)
Core net income excluding solar tax impact (non-GAAP)	$	27,170			$	24,818			$	12,679			$	87,179			$	55,087
Tangible common equity
Stockholders' equity (GAAP)	$	508,955			$	487,738			$	563,875			$	508,955			$	563,875
Less: Minority interest		(133	)			(133	)			(133	)			(133	)			(133	)
Less: Goodwill		(12,936	)			(12,936	)			(12,936	)			(12,936	)			(12,936	)
Less: Core deposit intangible		(3,105	)			(3,366	)			(4,151	)			(3,105	)			(4,151	)
Tangible common equity (non-GAAP)	$	492,781			$	471,303			$	546,655			$	492,781			$	546,655
Average tangible common equity
Average stockholders' equity (GAAP)	$	493,761			$	511,800			$	562,379			$	520,638			$	552,173
Less: Minority interest		(133	)			(133	)			(133	)			(133	)			(133	)
Less: Goodwill		(12,936	)			(12,936	)			(12,936	)			(12,936	)			(12,936	)
Less: Core deposit intangible		(3,232	)			(3,494	)			(4,299	)			(3,622	)			(4,748	)
Average tangible common equity (non-GAAP)	$	477,460			$	495,237			$	545,011			$	503,947			$	534,356
Core return on average assets
Denominator: Total average assets	$	7,806,589			$	7,942,097			$	7,010,890			$	7,727,165			$	6,569,839
Core return on average assets (non-GAAP)2		1.31	%			1.19	%			0.95	%			1.09	%			0.83	%
Core return on average assets excluding solar tax impact (non-GAAP)2		1.38	%			1.24	%			0.72	%			1.13	%			0.84	%
Core return on average tangible common equity
Denominator: Average tangible common equity	$	477,460			$	495,237			$	545,011			$	503,947			$	534,356
Core return on average tangible common equity (non-GAAP)2		21.47	%			19.11	%			12.20	%			16.73	%			10.16	%
Core return on average tangible common equity excluding solar tax impact (non-GAAP)2		22.58	%			19.88	%			9.23	%			17.30	%			10.31	%
Core efficiency ratio
Core operating revenue (non-GAAP)	$	72,945			$	73,858			$	59,548			$	266,757			$	202,044
Core efficiency ratio (non-GAAP)		48.76	%			49.09	%			57.18	%			52.42	%			64.24	%
Core efficiency ratio excluding solar tax impact (non-GAAP)		47.65	%			48.24	%			62.81	%			51.68	%			63.90	%

(1) Salary and COBRA reimbursement expense for positions eliminated, plus expenses related to the termination of the merger agreement with Amalgamated Bank of Chicago
(2) Calculated using core net income (non-GAAP) and core net income excluding solar tax investments (non-GAAP), respectively, as the numerator.

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¹ Reconciliations of non-GAAP financial measures to the most comparable GAAP measure are set forth on the last page of the financial information accompanying this press release and may also be found on our website, www.amalgamatedbank.com.

FAQ

What were Amalgamated Financial Corp.'s Q4 2022 earnings results?

Amalgamated Financial Corp. reported a net income of $24.8 million, or $0.80 per diluted share, for Q4 2022.

How much did total loans increase for Amalgamated Financial in 2022?

Total loans increased by $784.6 million, or 23.9%, to $4.1 billion for the full year 2022.

What is the current status of Amalgamated Financial's deposits?

As of December 31, 2022, total deposits decreased by $565.3 million (7.9%) to $6.6 billion.

What are the key financial metrics for Amalgamated Financial in 2022?

Key metrics for 2022 include a net income of $81.5 million and a diluted EPS of $2.61.

How does Amalgamated Financial's net interest margin compare in Q4 2022?

The net interest margin for Q4 2022 improved to 3.56%, up from 3.50% in Q3 2022.