Amalgamated Financial Corp. Reports Record Second Quarter 2022 Financial Results

Rhea-AI Summary

Amalgamated Financial Corp. (AMAL) reported record earnings of $19.6 million, or $0.63 per diluted share for Q2 2022, up from $14.2 million or $0.45 in Q1 2022. Core net income reached $20.9 million, driven by increased net interest income of $56.5 million, a 16.7% increase. Deposits rose by $317.7 million to $7.3 billion. Loan growth was notable, with a 5.1% increase to $3.6 billion. The bank maintains a strong capital position with regulatory capital ratios above required standards.

Positive

• Record earnings of $19.6 million for Q2 2022.
• Core net income increased to $20.9 million, excluding tax impacts.
• Net interest income rose by $8.1 million to $56.5 million.
• Deposits grew by $317.7 million, totaling $7.3 billion.
• Improved credit quality with criticized loans decreasing by 24.26%.

Negative

• Provision for loan losses increased to $2.9 million.
• Nonperforming assets increased to $65.3 million, or 0.82% of total assets.

NEW YORK, July 28, 2022 (GLOBE NEWSWIRE) -- Amalgamated Financial Corp. (the “Company” or “Amalgamated”) (Nasdaq: AMAL), the holding company for Amalgamated Bank (the “Bank”), today announced record financial results for the second quarter ended June 30, 2022.

Second Quarter 2022 Highlights

• Record earnings of $19.6 million, or $0.63 per diluted share, compared to $14.2 million, or $0.45 per diluted share, on a linked quarter basis.
• Excluding the tax credit or accelerated depreciation impact of our solar tax equity investments, core net income was $20.9 million, or $0.67 per diluted share, as compared to $14.3 million, or $0.45 per diluted share, on a linked quarter basis.
• Deposits increased $317.7 million, or 4.6%, to $7.3 billion on a linked quarter basis and political deposits increased by $131.5 million to $1.3 billion on a linked quarter basis.
• Industry leading average cost of deposits of eight basis points, where non-interest bearing deposits comprised 54% of total deposits.
• Loans, including net deferred origination costs increased $176.3 million, or 5.1%, to $3.6 billion, on a linked quarter basis.
• PACE assessments grew $18.5 million to $742.1 million on a linked quarter basis, comprised of a $15.7 million increase in commercial and $2.8 million increase in residential.
• Net interest income grew $8.1 million, or 16.7%, to $56.5 million compared to $48.4 million, while net interest margin grew by 27 basis points to 3.03%, compared to 2.76%, each on a linked quarter basis.
• Credit quality improved with criticized loans declining $43.5 million, or 24.26%, to $135.8 million, on a linked quarter basis.
• Repurchased approximately 463,900 shares, or $8.8 million of common stock under our $40 million share repurchase program announced in the first quarter of 2022.
• Regulatory capital remains above bank “well capitalized” standards.

Priscilla Sims Brown, President and Chief Executive Officer, commented, “Our second quarter results are a clear validation of executing our strategy as we reported record earnings driven by our third consecutive quarter of approximately 5% loan growth. As I reflect on my first year as CEO of Amalgamated, we have done what we said we would do. We have implemented our lending strategy and financed the investment through earnings. We leaned deeper into our mission by lending to customer segments focused on sustainability, economic justice, community financing, and other social causes. We built a reliable lending platform staffed with experienced bankers, enabling us to sustain profitable growth and continue developing our industry-leading deposit franchise. And all of these accomplishments have resulted in financial performance that proves socially responsible banking and profitability can exist together to create our uniquely valuable franchise.”

Second Quarter Earnings

Net income for the second quarter of 2022 was $19.6 million, or $0.63 per diluted share, compared to $14.2 million, or $0.45 per diluted share, for the first quarter of 2022. The $5.4 million increase for the second quarter of 2022 compared to the preceding quarter was primarily driven by an $8.1 million increase in net interest income, partially offset by a $0.6 million increase in provision for loan losses, a $0.6 million loss on sales of securities, and a $2.0 million increase in income tax expense related to our increased pre-tax income.

Core net income excluding the effect of tax credits and accelerated depreciation from our solar investments (non-GAAP)¹ for the second quarter of 2022 was $20.9 million, or $0.67 per diluted share, compared to $14.3 million, or $0.45 per diluted share, for the first quarter of 2022. Excluded from core net income for the second quarter of 2022 was $0.6 million of non-interest income related to losses on sales of securities, $0.3 million of non-interest expenses related to the now-terminated acquisition of Amalgamated Bank of Chicago (“ABOC”), and $0.9 million of accelerated depreciation from our solar investments (recorded as equity method non-interest income). Excluded for the first quarter of 2022 was $0.2 million of non-interest income related to gains on the sale of securities, $0.4 million of non-interest expenses related to the aforementioned terminated acquisition, and $0.1 million of tax credits on solar investments in the first quarter of 2022. Presentation excluding the temporary effect of the tax credits and accelerated depreciation of solar investments reduces the financial statement volatility associated with these investments.

Net interest income was $56.5 million for the second quarter of 2022, compared to $48.4 million for the first quarter of 2022. The $8.1 million increase from the preceding quarter mainly reflected higher interest income on securities and FHLB stock of $4.9 million driven by a $251.3 million increase in average securities and a 37 basis point increase in securities yield due to the rising interest rate environment. Loan interest income increased $2.6 million driven by a $224.1 million increase in average loan balances, offset by slightly higher interest expense on deposits driven by a $127.6 million increase in average interest bearing deposit balances.

Net interest margin was 3.03% for the second quarter of 2022, an increase of 27 basis points from 2.76% in the first quarter of 2022. The margin increase compared to the preceding quarter was driven by large increases on floating rate yields from interest-earning assets, while costs on interest-bearing liabilities remained flat. Prepayment penalties earned in loan income contributed two basis points to our net interest margin in the second quarter of 2022, compared to three basis points in the first quarter of 2022.

Provision for loan losses totaled an expense of $2.9 million for the second quarter of 2022 compared to an expense of $2.3 million in the first quarter of 2022. The increase in the provision expense on a linked quarter basis is primarily driven by a specific reserve from the downgrade of one legacy commercial and industrial loan.

Core non-interest income excluding the effect of tax credits and accelerated depreciation from our solar investments was $8.7 million for the second quarter of 2022, compared to $7.2 million in the first quarter of 2022. The increase of $1.5 million was primarily related to one-time beneficiary income on BOLI, as well as higher gains on sale of nonperforming commercial loans.

Non-interest expense for the second quarter of 2022 was $34.3 million, a decrease of $0.1 million from the first quarter of 2022. The decrease of $0.1 million from the preceding quarter is primarily driven by a $0.9 million decrease to data processing mainly related to the pass-through of certain Trust Department operating expense to related funds, offset by an expected $0.4 million increase in compensation and employee benefits and a $0.4 million increase in residential lending foreclosure expense.

Our provision for income tax expense was $6.9 million for the second quarter of 2022, compared to $4.9 million for the first quarter of 2022. The increase is based on a higher pre-tax income. Our effective tax rate for the second quarter of 2022 was 25.9%, compared to 25.8% for the first quarter of 2022.

______________
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.} 

Balance Sheet Quarterly Summary

Total assets were $7.9 billion at June 30, 2022, compared to $7.7 billion at March 31, 2022. The increase of $0.2 billion was driven primarily by a $178.2 million increase in loans receivable net of deferred fees and costs and a $113.8 million increase in investment securities offset by a reduction in cash of $41.5 million. To reduce exposure to interest rate volatility we also transferred $277.3 million of available-for-sale securities to held-to-maturity, resulting in $12.3 million of tax effected other comprehensive losses which will accrete out of balance sheet equity over the duration of the transferred securities.

Total loans, net of deferred loan origination costs at June 30, 2022 were $3.6 billion, an increase of $178.2 million, or 5.1%, compared to March 31, 2022. The increase in loans is primarily driven by a $92.9 million increase in residential loans mainly from direct originations, a $39.8 million increase in multifamily loans, a $36.9 million increase in our consumer and other loans due to solar loan originations from existing flow arrangements, and a $19.2 million increase in commercial and industrial loans, offset by a $13.2 million decrease in the commercial real estate portfolio as we selectively de-risk our exposure in metropolitan areas. Our continued focus on credit quality improvement in the commercial portfolio resulted in $15.6 million of payoffs of criticized loans in addition to certain other pass grade loans.

Deposits at June 30, 2022 were $7.3 billion, an increase of $317.7 million, or 4.6%, as compared to $7.0 billion as of March 31, 2022. Deposits held by politically active customers, such as campaigns, PACs, advocacy-based organizations, and state and national party committees were $1.3 billion as of June 30, 2022, an increase of $131.5 million on a linked quarter basis.
Noninterest-bearing deposits represent 54% of average deposits and 54% of ending deposits for the quarter ended June 30, 2022, contributing to an average cost of deposits of eight basis points in the second quarter of 2022.

Nonperforming assets totaled $65.3 million, or 0.82% of period-end total assets at June 30, 2022, an increase of $4.2 million, compared with $61.1 million, or 0.80% of period-end total assets at March 31, 2022. The increase in non-performing assets was primarily driven by the restructuring of $6.5 million in loans that are part of one borrower relationship, as well as two loans totaling $5.2 million that were moved to nonaccrual in the second quarter of 2022, partially offset by one $3.5 million nonaccrual multifamily loan that was paid off.

The allowance for loan losses increased $2.0 million to $39.5 million at June 30, 2022 from $37.5 million at March 31, 2022, primarily due to increases in loan balances, offset by improved credit quality. At June 30, 2022, we had $60.1 million of impaired loans for which there was a specific allowance of $6.1 million, compared to $58.2 million of impaired loans at March 31, 2022 for which there was a specific allowance of $4.6 million. The ratio of allowance to total loans was 1.08% at June 30, 2022 and 1.08% at March 31, 2022.

Capital Quarterly Summary

As of June 30, 2022, our Common Equity Tier 1 Capital Ratio was 11.76%, Total Risk-Based Capital Ratio was 14.42%, and Tier-1 Leverage Capital Ratio was 7.08%, compared to 12.36%, 15.16%, and 7.34%, respectively, as of March 31, 2022. Stockholders’ equity at June 30, 2022 was $498.0 million, compared to $526.8 million at March 31, 2022. The decrease in stockholders’ equity was driven by a $37.4 million increase in accumulated other comprehensive loss due to the tax effected mark-to-market on our securities portfolio and a $8.5 million decrease in additional paid-in capital due to our common stock repurchase activity, partially offset by $19.6 million of net income for the quarter.

Our tangible book value per share was $15.69 as of June 30, 2022 compared to $16.45 as of March 31, 2022, primarily as a result of a $37.4 million decline from the previous quarter in the tax effected mark-to-market adjustment for the fair value of our available-for-sale securities portfolio. The mark-to-market adjustment had no impact on our Tier 1 Capital Ratio or other risk based ratios. Tangible common equity was 6.07% of total assets, compared to 6.68% as of March 31, 2022.

Conference Call

As previously announced, Amalgamated Financial Corp. will host a conference call to discuss its second quarter 2022 results today, July 28th, 2022 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. Second 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 13730114. The telephonic replay will be available until August 4, 2022.

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 http://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 six branches in New York City, Washington D.C., San Francisco, and 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 June 30, 2022, our total assets were $7.9 billion, total net loans were $3.6 billion, and total deposits were $7.3 billion. Additionally, as of June 30, 2022, our trust business held $38.9 billion in assets under custody and $12.9 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 operating revenue excluding solar tax impact,” “Core non-interest expense,” “Core net income,” “Core net income excluding solar tax impact,” “Tangible common equity,” “Average tangible common equity,” “Core return on average assets,” “Core return on average assets excluding solar tax impact,” “Core return on average tangible common equity,” “Core return on average tangible common equity excluding solar tax impact,” “Core efficiency ratio,” and “Core efficiency ratio excluding solar tax impact.”

Our management utilizes this information to compare our operating performance for June 30, 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 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 non-interest expense” is defined as total non-interest expense excluding costs related to branch closures and restructuring/severance costs. We believe the most directly comparable GAAP financial measure is total non-interest expense.

“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 depreciation on solar equity investments, and taxes on notable pre-tax items. We believe the most directly comparable GAAP financial measure is net income.

“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.

“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.

“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.

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, and in this release include statements related to the tax effected other comprehensive losses cycling out of balance sheet equity in 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, including, but not limited to, the negative impacts and disruptions resulting from the outbreak of the novel coronavirus, or COVID-19, which may continue to have an adverse impact on our business, operations and performance, and could continue to have a negative impact on our credit portfolio, share price, borrowers, and on the economy as a whole, both domestically and globally; (vii) fluctuations or unanticipated changes in interest rates on loans or deposits or that affect the yield curve; (vii) 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; (xii) 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 proceedings that may be instituted against us in connection with the termination of the merger agreement with ABOC. 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 Trout
shareholderrelations@amalgamatedbank.com
800-895-4172

Consolidated Statements of Income (unaudited)
	Three Months Ended												Six Months Ended
	June 30,				March 31,				June 30,				June 30,
($ in thousands)	2022				2022				2021				2022				2021
INTEREST AND DIVIDEND INCOME
Loans	$	33,766			$	31,127			$	30,156			$	64,893			$	61,265
Securities		24,307				19,115				13,094				43,422				25,264
Federal Home Loan Bank of New York stock		45				40				41				85				89
Interest-bearing deposits in banks		551				179				131				730				221
Total interest and dividend income		58,669				50,461				43,422				109,130				86,839
INTEREST EXPENSE
Deposits		1,481				1,402				1,431				2,883				3,003
Borrowed funds		690				691				—				1,381				—
Total interest expense		2,171				2,093				1,431				4,264				3,003
NET INTEREST INCOME		56,498				48,368				41,991				104,866				83,836
Provision for (recovery of) loan losses		2,912				2,293				1,682				5,205				(1,579	)
Net interest income after provision for loan losses		53,586				46,075				40,309				99,661				85,415
NON-INTEREST INCOME
Trust Department fees		3,479				3,491				3,292				6,970				7,118
Service charges on deposit accounts		2,826				2,447				2,296				5,273				4,475
Bank-owned life insurance		1,283				814				531				2,097				1,319
Gain (loss) on sale of securities		(582	)			162				321				(420	)			342
Gain (loss) on sale of loans, net		492				(157	)			720				335				1,426
Gain (loss) on other real estate owned, net		—				—				(407	)			—				(407	)
Equity method investments		(638	)			432				(1,555	)			(206	)			(5,237	)
Other		386				233				129				619				290
Total non-interest income		7,246				7,422				5,327				14,668				9,326
NON-INTEREST EXPENSE
Compensation and employee benefits		18,046				17,669				16,964				35,715				35,003
Occupancy and depreciation		3,457				3,440				3,352				6,897				6,853
Professional fees		2,745				2,815				3,211				5,560				6,871
Data processing		4,327				5,184				3,322				9,511				6,327
Office maintenance and depreciation		784				725				820				1,509				1,475
Amortization of intangible assets		261				262				302				523				604
Advertising and promotion		761				854				628				1,615				1,225
Other		3,965				3,448				2,796				7,413				5,831
Total non-interest expense		34,346				34,397				31,395				68,743				64,189
Income before income taxes		26,486				19,100				14,241				45,586				30,552
Income tax expense (benefit)		6,873				4,935				3,833				11,808				7,955
Net income	$	19,613			$	14,165			$	10,408			$	33,778			$	22,597
Earnings per common share - basic	$	0.64			$	0.46			$	0.33			$	1.09			$	0.73
Earnings per common share - diluted	$	0.63			$	0.45			$	0.33			$	1.08			$	0.72

Consolidated Statements of Financial Condition
($ in thousands)	June 30, 2022				December 31, 2021
Assets	(unaudited)
Cash and due from banks	$	6,075			$	8,622
Interest-bearing deposits in banks		326,463				321,863
Total cash and cash equivalents		332,538				330,485
Securities:
Available for sale, at fair value (amortized cost of $2,193,657 and $2,103,049, respectively)		2,105,547				2,113,410
Held-to-maturity (fair value of $1,317,058 and $849,704, respectively)		1,375,666				843,569
Loans held for sale		5,657				3,279
Loans receivable, net of deferred loan origination costs (fees)		3,648,404				3,312,224
Allowance for loan losses		(39,477	)			(35,866	)
Loans receivable, net		3,608,927				3,276,358
Resell agreements		225,926				229,018
Accrued interest and dividends receivable		31,001				28,820
Premises and equipment, net		10,870				11,735
Bank-owned life insurance		106,163				107,266
Right-of-use lease asset		31,728				33,115
Deferred tax asset		56,194				26,719
Goodwill		12,936				12,936
Other intangible assets		3,628				4,151
Equity investments		6,271				6,856
Other assets		30,205				50,159
Total assets	$	7,943,257			$	7,077,876
Liabilities
Deposits	$	7,291,167			$	6,356,255
Subordinated debt		83,899				83,831
Operating leases		45,605				48,160
Other liabilities		24,545				25,755
Total liabilities		7,445,216				6,514,001
Stockholders’ equity
Common stock, par value $.01 per share (70,000,000 shares authorized; 30,684,246 and 31,130,143 shares issued and outstanding, respectively)		307				311
Additional paid-in capital		286,901				297,975
Retained earnings		288,868				260,047
Accumulated other comprehensive income (loss), net of income taxes		(78,168	)			5,409
Total Amalgamated Financial Corp. stockholders' equity		497,908				563,742
Noncontrolling interests		133				133
Total stockholders' equity		498,041				563,875
Total liabilities and stockholders’ equity	$	7,943,257			$	7,077,876

Select Financial Data
	As of and for the									As of and for the
	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,
(Shares in thousands)	2022			2022			2021			2022			2021
Selected Financial Ratios and Other Data:
Earnings per share
Basic	$	0.64		$	0.46		$	0.33		$	1.09		$	0.73
Diluted		0.63			0.45			0.33			1.08			0.72
Core net income (non-GAAP)
Basic	$	0.66		$	0.46		$	0.33		$	1.12		$	0.74
Diluted		0.65			0.46			0.32			1.11			0.73
Core net income excluding solar tax impact (non-GAAP)
Basic	$	0.68		$	0.46		$	0.37		$	1.14		$	0.88
Diluted		0.67			0.45			0.36			1.12			0.87
Book value per common share (excluding minority interest)	$	16.23		$	16.99		$	17.64		$	16.23		$	17.64
Tangible book value per share (non-GAAP)	$	15.69		$	16.45		$	17.07		$	15.69		$	17.07
Common shares outstanding		30,684			30,995			31,074			30,684			31,074
Weighted average common shares outstanding, basic		30,818			31,107			31,136			30,962			31,109
Weighted average common shares outstanding, diluted		31,189			31,456			31,572			31,332			31,545

Select Financial Data
	As of and for the									As of and for the
	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,
	2022			2022			2021			2022			2021
Selected Performance Metrics:
Return on average assets	1.01	%		0.78	%		0.65	%		0.90	%		0.72	%
Core return on average assets (non-GAAP)	1.05	%		0.79	%		0.64	%		0.92	%		0.74	%
Core return on average assets excluding solar tax impact (non-GAAP)	1.08	%		0.79	%		0.72	%		0.94	%		0.87	%
Return on average equity	15.20	%		10.25	%		7.62	%		12.64	%		8.36	%
Core return on average tangible common equity (non-GAAP)	16.25	%		10.72	%		7.70	%		13.38	%		8.86	%
Core return on average tangible common equity excluding solar tax impact (non-GAAP)	16.76	%		10.68	%		8.68	%		13.61	%		10.44	%
Average equity to average assets	6.67	%		7.58	%		8.57	%		7.11	%		8.63	%
Tangible common equity to tangible assets	6.07	%		6.68	%		8.09	%		6.07	%		8.09	%
Loan yield	3.86	%		3.85	%		3.82	%		3.86	%		3.83	%
Securities yield	2.66	%		2.28	%		2.15	%		2.48	%		2.17	%
Deposit cost	0.08	%		0.09	%		0.10	%		0.08	%		0.11	%
Net interest margin	3.03	%		2.76	%		2.75	%		2.90	%		2.80	%
Efficiency ratio(1)	53.88	%		61.65	%		66.35	%		57.51	%		68.90	%
Core efficiency ratio (non-GAAP)	52.90	%		61.07	%		66.80	%		56.69	%		67.98	%
Core efficiency ratio excluding solar tax impact (non-GAAP)	52.20	%		61.14	%		64.39	%		56.32	%		64.11	%
Asset Quality Ratios:
Nonaccrual loans to total loans	0.67	%		0.84	%		1.64	%		0.67	%		1.64	%
Nonperforming assets to total assets	0.82	%		0.80	%		1.08	%		0.82	%		1.08	%
Allowance for loan losses to nonaccrual loans	161.81	%		129.71	%		73.20	%		161.81	%		73.20	%
Allowance for loan losses to total loans	1.08	%		1.08	%		1.20	%		1.08	%		1.20	%
Annualized net charge-offs (recoveries) to average loans	0.11	%		0.08	%		0.04	%		0.09	%		0.12	%
Capital Ratios:
Tier 1 leverage capital ratio	7.08	%		7.34	%		7.93	%		7.08	%		7.93	%
Tier 1 risk-based capital ratio	11.76	%		12.36	%		13.63	%		11.76	%		13.63	%
Total risk-based capital ratio	14.42	%		15.16	%		14.68	%		14.42	%		14.68	%
Common equity tier 1 capital ratio	11.76	%		12.36	%		13.63	%		11.76	%		13.63	%
(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 June 30, 2022							At March 31, 2022							At June 30, 2021
	Amount				% of total loans			Amount				% of total loans			Amount				% of total loans
Commercial portfolio:
Commercial and industrial	$	743,403			20.4	%		$	724,177			20.9	%		$	619,037			19.5	%
Multifamily		853,514			23.4	%			813,702			23.5	%			848,651			26.8	%
Commercial real estate		340,987			9.4	%			354,174			10.2	%			351,707			11.1	%
Construction and land development		43,212			1.2	%			40,242			1.2	%			42,303			1.3	%
Total commercial portfolio		1,981,116			54.4	%			1,932,295			55.8	%			1,861,698			58.7	%
Retail portfolio:
Residential real estate lending		1,236,088			33.9	%			1,143,175			33.0	%			1,085,791			34.3	%
Consumer and other		426,394			11.7	%			389,452			11.2	%			222,265			7.0	%
Total retail		1,662,482			45.6	%			1,532,627			44.2	%			1,308,056			41.3	%
Total loans held for investment		3,643,598			100.0	%			3,464,922			100.0	%			3,169,754			100.0	%
Net deferred loan origination costs (fees)		4,806							5,252							5,707
Allowance for loan losses		(39,477	)						(37,542	)						(38,012	)
Total loans, net	$	3,608,927						$	3,432,632						$	3,137,449
Held-to-maturity securities portfolio:
PACE assessments	$	742,146			53.9	%		$	723,646			76.5	%		$	545,795			87.4	%
Other securities		633,520			46.1	%			222,701			23.5	%			79,031			12.6	%
Total held-to-maturity securities	$	1,375,666			100.0	%		$	946,347			100.0	%		$	624,826			100.0	%

Net Interest Income Analysis
	Three Months Ended
	June 30, 2022									March 31, 2022									June 30, 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	$	305,134		$	551		0.72	%		$	423,878		$	179		0.17	%		$	510,473		$	131		0.10	%
Securities and FHLB stock		3,443,987			23,308		2.71	%			3,192,642			18,435		2.34	%			2,298,264			12,651		2.21	%
Resell Agreements		231,468			1,044		1.81	%			219,221			720		1.33	%			148,977			484		1.30	%
Total loans, net(1)(2)		3,504,223			33,766		3.86	%			3,280,115			31,127		3.85	%			3,162,896			30,156		3.82	%
Total interest earning assets		7,484,812			58,669		3.14	%			7,115,856			50,461		2.88	%			6,120,610			43,422		2.85	%
Non-interest earning assets:
Cash and due from banks		9,296									9,226									7,545
Other assets		266,186									267,689									266,613
Total assets	$	7,760,294								$	7,392,771								$	6,394,768
Interest bearing liabilities:
Savings, NOW and money market deposits	$	3,030,788		$	1,332		0.18	%		$	2,896,086		$	1,247		0.17	%		$	2,567,396		$	1,174		0.18	%
Time deposits		192,181			149		0.31	%			199,340			155		0.32	%			258,257			257		0.40	%
Total deposits		3,222,969			1,481		0.18	%			3,095,426			1,402		0.18	%			2,825,653			1,431		0.20	%
Other Borrowings		83,886			690		3.30	%			84,597			691		3.31	%			—			—		0.00	%
Total interest bearing liabilities		3,306,855			2,171		0.26	%			3,180,023			2,093		0.27	%			2,825,653			1,431		0.20	%
Non-interest bearing liabilities:
Demand and transaction deposits		3,855,735									3,549,483									2,909,555
Other liabilities		80,274									102,874									111,794
Total liabilities		7,242,864									6,832,380									5,847,002
Stockholders' equity		517,430									560,391									547,766
Total liabilities and stockholders' equity	$	7,760,294								$	7,392,771								$	6,394,768
Net interest income / interest rate spread				$	56,498		2.88	%					$	48,368		2.61	%					$	41,991		2.65	%
Net interest earning assets / net interest margin	$	4,177,957					3.03	%		$	3,935,833					2.76	%		$	3,294,957					2.75	%
Total Cost of Deposits							0.08	%								0.09	%								0.10	%

(1) Amounts are net of deferred origination costs (fees) and the allowance for loan losses
(2) Includes prepayment penalty interest income in 2Q2022, 1Q2022, and 2Q2021 of $379, $399, and $504, respectively (in thousands)

Net Interest Income Analysis
	Six Months Ended
	June 30, 2022									June 30, 2021
(In thousands)	Average Balance		Income / Expense				Yield / Rate			Average Balance		Income / Expense				Yield / Rate
Interest earning assets:
Interest-bearing deposits in banks	$	364,178		$	730		0.40	%		$	445,340		$	221		0.10	%
Securities and FHLB stock		3,319,009			41,743		2.54	%			2,208,263			24,451		2.23	%
Resell Agreements		225,378			1,764		1.58	%			151,607			902		1.20	%
Total loans, net(1)(2)		3,392,788			64,893		3.86	%			3,228,235			61,265		3.83	%
Total interest earning assets		7,301,353			109,130		3.01	%			6,033,445			86,839		2.90	%
Non-interest earning assets:
Cash and due from banks		9,261									7,432
Other assets		266,932									272,930
Total assets	$	7,577,546								$	6,313,807
Interest bearing liabilities:
Savings, NOW and money market deposits	$	2,963,809		$	2,579		0.18	%		$	2,540,277		$	2,395		0.19	%
Time deposits		195,741			304		0.31	%			269,063			608		0.46	%
Total deposits		3,159,550			2,883		0.18	%			2,809,340			3,003		0.22	%
Other Borrowings		84,239			1,381		3.31	%			249			—		0.00	%
Total interest bearing liabilities		3,243,789			4,264		0.27	%			2,809,589			3,003		0.22	%
Non-interest bearing liabilities:
Demand and transaction deposits		3,703,455									2,848,401
Other liabilities		91,510									110,654
Total liabilities		7,038,754									5,768,644
Stockholders' equity		538,792									545,163
Total liabilities and stockholders' equity	$	7,577,546								$	6,313,807
Net interest income / interest rate spread				$	104,866		2.74	%					$	83,836		2.68	%
Net interest earning assets / net interest margin	$	4,057,564					2.90	%		$	3,223,856					2.80	%
Total Cost of Deposits							0.08	%								0.11	%

(1) Amounts are net of deferred origination costs (fees) and the allowance for loan losses
(2) Includes prepayment penalty interest income in June YTD 2022 and June YTD 2021 of $778 and $1,146, respectively (in thousands)

Deposit Portfolio Composition
(In thousands)	June 30, 2022			March 31, 2022			June 30, 2021
Non-interest bearing demand deposit accounts	$	3,965,907		$	3,759,349		$	2,948,718
NOW accounts		208,795			212,550			200,758
Money market deposit accounts		2,540,657			2,416,201			2,136,719
Savings accounts		388,185			386,253			371,047
Time deposits		187,623			199,120			252,750
Total deposits	$	7,291,167		$	6,973,473		$	5,909,992

	Three Months Ended
	June 30, 2022						March 31, 2022						June 30, 2021
(In thousands)	Average Balance			Average Rate Paid			Average Balance			Average Rate Paid			Average Balance			Average Rate Paid
Non-interest bearing demand deposit accounts	$	3,855,735		0.00	%		$	3,549,482		0.00	%		$	2,909,554		0.00	%
NOW accounts		211,007		0.09	%			208,134		0.08	%			204,341		0.08	%
Money market deposit accounts		2,431,571		0.19	%			2,310,294		0.19	%			1,993,643		0.21	%
Savings accounts		388,210		0.11	%			377,659		0.11	%			369,412		0.10	%
Time deposits		192,181		0.31	%			199,340		0.32	%			258,257		0.43	%
Total deposits	$	7,078,704		0.08	%		$	6,644,909		0.09	%		$	5,735,207		0.10	%

Asset Quality
(In thousands)	June 30, 2022				March 31, 2022				June 30, 2021
Loans 90 days past due and accruing	$	—			$	—			$	—
Nonaccrual loans held for sale		4,841				2,490				—
Nonaccrual loans excluding held for sale loans and restructured loans		8,109				10,835				31,437
Troubled debt restructured loans - nonaccrual		16,288				18,107				20,494
Troubled debt restructured loans - accruing		35,683				29,259				18,683
Other real estate owned		307				307				307
Impaired securities		56				59				59
Total nonperforming assets	$	65,284			$	61,057			$	70,980
Nonaccrual loans:
Commercial and industrial	$	9,550			$	8,099			$	14,561
Multifamily		3,494				3,537				10,266
Commercial real estate		3,931				3,988				4,066
Construction and land development		5,053				5,053				—
Total commercial portfolio		22,028				20,677				28,893
Residential real estate lending		898				7,404				22,320
Consumer and other		1,471				861				718
Total retail portfolio		2,369				8,265				23,038
Total nonaccrual loans	$	24,397			$	28,942			$	51,931
Nonaccrual loans to total loans		0.67	%			0.84	%			1.64	%
Nonperforming assets to total assets		0.82	%			0.80	%			1.08	%
Allowance for loan losses to nonaccrual loans		161.81	%			129.71	%			73.20	%
Allowance for loan losses to total loans		1.08	%			1.08	%			1.20	%
Annualized net charge-offs (recoveries) to average loans		0.11	%			0.08	%			0.04	%

Credit Quality
	June 30, 2022
($ in thousands)	Pass			Special Mention			Substandard			Doubtful			Total
Commercial and industrial	$	710,534		$	7,923		$	24,946		$	—		$	743,403
Multifamily		800,167			25,433			27,914			—			853,514
Commercial real estate		301,243			20,966			18,778			—			340,987
Construction and land development		35,736			—			7,476			—			43,212
Residential real estate lending		1,235,190			—			898			—			1,236,088
Consumer and other		424,923			—			1,471			—			426,394
Total loans	$	3,507,793		$	54,322		$	81,483		$	—		$	3,643,598

	March 31, 2022
($ in thousands)	Pass			Special Mention			Substandard			Doubtful			Total
Commercial and industrial	$	691,834		$	7,221		$	25,122		$	—		$	724,177
Multifamily		745,349			32,737			35,616			—			813,702
Commercial real estate		291,320			2,899			59,955			—			354,174
Construction and land development		32,766			—			7,476			—			40,242
Residential real estate lending		1,135,481			290			7,404			—			1,143,175
Consumer and other		388,907			—			545			—			389,452
Total loans	$	3,285,657		$	43,147		$	136,118		$	—		$	3,464,922

	June 30, 2021
($ in thousands)	Pass			Special Mention			Substandard			Doubtful			Total
Commercial and industrial	$	568,878		$	17,569		$	32,133		$	457		$	619,037
Multifamily		711,551			101,579			32,348			3,173			848,651
Commercial real estate		234,018			45,236			72,453			—			351,707
Construction and land development		34,414			535			7,354			—			42,303
Residential real estate lending		1,063,176			295			22,320			—			1,085,791
Consumer and other		221,835			—			430			—			222,265
Total loans	$	2,833,872		$	165,214		$	167,038		$	3,630		$	3,169,754

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												Six Months Ended
(in thousands)	June 30, 2022				March 31, 2022				June 30, 2021				June 30, 2022				June 30, 2021
Core operating revenue
Net Interest income (GAAP)	$	56,498			$	48,368			$	41,991			$	104,866			$	83,836
Non-interest income		7,246				7,422				5,327				14,668				9,327
Less: Securities (gain) loss		582				(162	)			(321	)			420				(339	)
Core operating revenue (non-GAAP)		64,326				55,628				46,997				119,954				92,824
Add: Tax (credits) depreciation on solar investments		862				(64	)			1,760				798				5,597
Core operating revenue excluding solar tax impact (non-GAAP)		65,188				55,564				48,757				120,752				98,421
Core non-interest expense
Non-interest expense (GAAP)	$	34,346			$	34,397			$	31,395			$	68,743			$	64,189
Less: Severance(1)		(34	)			(52	)			—				(86	)			(1,090	)
Less: ABOC		(282	)			(371	)			—				(653	)			—
Core non-interest expense (non-GAAP)		34,030				33,974				31,395				68,004				63,099
Core net income
Net Income (GAAP)	$	19,613			$	14,165			$	10,408			$	33,778			$	22,598
Less: Securities (gain) loss		582				(162	)			(321	)			420				(339	)
Add: Severance(1)		34				52				—				86				1,090
Add: ABOC		282				371				—				653				—
Less: Tax on notable items		(233	)			(67	)			86				(300	)			(196	)
Core net income (non-GAAP)		20,278				14,359				10,173				34,637				23,153
Add: Tax (credits) depreciation on solar investments		862				(64	)			1,760				798				5,597
Add: Tax effect of solar income		(224	)			17				(474	)			(207	)			(1,457	)
Core net income excluding solar tax impact (non-GAAP)		20,916				14,312				11,459				35,228				27,293
Tangible common equity
Stockholders' equity (GAAP)	$	498,041			$	526,762			$	548,211			$	498,041			$	548,211
Less: Minority interest		(133	)			(133	)			(133	)			(133	)			(133	)
Less: Goodwill		(12,936	)			(12,936	)			(12,936	)			(12,936	)			(12,936	)
Less: Core deposit intangible		(3,628	)			(3,890	)			(4,755	)			(3,628	)			(4,755	)
Tangible common equity (non-GAAP)		481,344				509,803				530,387				481,344				530,387
Average tangible common equity
Average stockholders' equity (GAAP)	$	517,430			$	560,391			$	547,766			$	538,792			$	545,163
Less: Minority interest		(133	)			(133	)			(133	)			(133	)			(133	)
Less: Goodwill		(12,936	)			(12,936	)			(12,936	)			(12,936	)			(12,936	)
Less: Core deposit intangible		(3,755	)			(4,017	)			(4,903	)			(3,886	)			(5,052	)
Average tangible common equity (non-GAAP)		500,606				543,305				529,794				521,837				527,042
Core return on average assets
Denominator: Total average assets		7,760,294				7,392,773				6,394,768				7,577,547				6,313,807
Core return on average assets (non-GAAP)		1.05	%			0.79	%			0.64	%			0.92	%			0.74	%
Core return on average assets excluding solar tax impact (non-GAAP)		1.08	%			0.79	%			0.72	%			0.94	%			0.87	%
Core return on average tangible common equity
Denominator: Average tangible common equity		500,606				543,305				529,794				521,837				527,042
Core return on average tangible common equity (non-GAAP)		16.25	%			10.72	%			7.70	%			13.38	%			8.86	%
Core return on average tangible common equity excluding solar tax impact (non-GAAP)		16.76	%			10.68	%			8.68	%			13.61	%			10.44	%
Core efficiency ratio
Numerator: Core non-interest expense (non-GAAP)	$	34,030			$	33,974			$	31,395			$	68,004			$	63,099
Core efficiency ratio (non-GAAP)		52.90	%			61.07	%			66.80	%			56.69	%			67.98	%
Core efficiency ratio excluding solar tax impact (non-GAAP)		52.20	%			61.14	%			64.39	%			56.32	%			64.11	%

(1) Salary and COBRA reimbursement expense for positions eliminated

FAQ

What were Amalgamated Financial's earnings for Q2 2022?

The earnings for Q2 2022 were $19.6 million, or $0.63 per diluted share.

How did Amalgamated Financial's deposits change in Q2 2022?

Deposits increased by $317.7 million to $7.3 billion in Q2 2022.

What was the net interest income for Amalgamated Financial in Q2 2022?

Net interest income for Q2 2022 was $56.5 million, a 16.7% increase from the previous quarter.

What is the current status of Amalgamated Financial's credit quality?

Credit quality improved, with criticized loans declining by 24.26% to $135.8 million.

What are the future expectations for Amalgamated Financial following the latest earnings report?

Future expectations remain positive due to strong loan growth and maintaining a solid capital position.