Amalgamated Financial Corp. (“Amalgamated” or the “Company”)
(Nasdaq: AMAL) today announced preliminary results for the second
quarter of 2023.
Second Quarter 2023 Highlights (on a linked
quarter basis)
- Net income of $21.6 million, or
$0.70 per diluted share, compared to $21.3 million, or $0.69 per
diluted share.
- Core net income of $22.0 million,
or $0.72 per diluted share, as compared to $23.0 million, or $0.74
per diluted share.
Deposits and Liquidity
- Total deposits decreased $146.7
million, or 2.1%, to $6.9 billion including a $126.4 million
decline in Brokered CD utilization.
- Excluding Brokered CDs, deposits
remained essentially unchanged at $6.4 billion, reflecting a strong
and stable deposit base.
- Average cost of deposits, excluding
Brokered CDs, was 87 basis points for the quarter, where
non-interest bearing deposits remained steady and comprised a
noteworthy 46% of total deposits.
- Super-core deposits totaled
approximately $3.6 billion, had a weighted average life of 17
years, and comprised 55% of total deposits excluding Brokered
CDs.
- Total uninsured deposits were
$3.9 billion, improving to 57% of total deposits. Excluding
uninsured super-core deposits of approximately $2.5 billion,
remaining uninsured deposits were approximately 20-23% of total
deposits with immediate liquidity coverage of 183%.
- Cash and borrowing capacity totaled
$2.6 billion (immediately available) plus unpledged securities
(two-day availability) of $758.3 million for total liquidity
within two-days of $3.3 billion (improving to 85% of total
uninsured deposits).
Assets and Margin
- Loans receivable, net of deferred
loan origination costs, increased $53.5 million, or 1.3%, to $4.3
billion.
- PACE assessments grew $64.3 million
to $1.1 billion.
- Net interest income was $63.0
million, at the high-end of the guidance range provided in the
first quarter. Net interest margin was 3.33%, in line with
expectations.
Share Repurchase
- Repurchased approximately 139,000
shares, or $2.2 million of common stock under the Company's
$40 million share repurchase program announced in the first quarter
of 2022.
- The Company expects to continue
repurchasing shares through its common stock share repurchase
program, with $23.5 million of remaining capacity. The timing and
exact amount of stock repurchase activity will be informed by
economic and regulatory considerations as well as Amalgamated's
position, earnings outlook, and capital deployment priorities.
Investments and Capital
- Tangible common equity ratio of
6.59%, represents another consecutive quarter of improvement.
- Available for sale securities,
which are 73% of the Company's traditional securities portfolio,
had unrealized losses of 7.6%, with an effective duration of 1.8
years.
- Held-to-maturity securities, which
are 27% of the Company's traditional securities portfolio, had
unrealized losses of 11.0%, with an effective duration of 4.1
years.
- Regulatory capital remains above
bank “well capitalized” standards, with a Common Equity Tier 1
ratio of 12.49% at June 30, 2023, and continues to increase in line
with strategic plans.
- Our leverage ratio was 7.78%, an
increase of 28 basis points from the prior quarter.
Second Quarter 2023 Earnings Release and
Conference Call:
The Company will release its second quarter 2023
financial results before market open on Thursday, July 27, 2023.
The Company will host a conference call at 11:00 a.m. Eastern Time
on the same day to discuss the financial results.
Investors and analysts interested in
participating in the call are invited to dial 1-877-407-9716
(international callers please dial 1-201-493-6779) approximately 10
minutes prior to the start of the call. A live audio webcast of the
conference call will be available on the website at
https://ir.amalgamatedbank.com/.
A replay of the conference call will be
available within two hours of the conclusion of the call and can be
accessed both online and by dialing 1-844-512-2921 (international
callers please dial 1-412-317-6671). The pin to access the
telephone replay is 13739618. The replay will be available until
August 3, 2023.
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 March
31, 2023, our total assets were $7.8 billion, total net loans were
$4.1 billion, and total deposits were $7.0 billion. Additionally,
as of March 31, 2023, our trust business held $39.7 billion in
assets under custody and $13.9 billion in assets under
management.
Non-GAAP Financial Measures
This release (and the accompanying financial
information and tables) refer to certain non-GAAP financial
measures including, without limitation, “Core net income,” and
“Tangible common equity,”
Our management utilizes this information to
compare our operating performance for June 30, 2023 versus
certain periods in 2023 and 2022 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:
“Super-core deposits” are defined as total
deposits from commercial and consumer customers, with a
relationship length of greater than 5 years. We believe the most
directly comparable GAAP financial measure is total deposits.
“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.
“Tangible common equity” is 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.
"Traditional securities portfolio" is defined as
total investment securities excluding PACE assessments. We believe
the most directly comparable GAAP financial measure is total
investment securities.
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,” “aspire,”
“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) uncertain conditions in the banking
industry and in national, regional and local economies in our core
markets, which may have an adverse impact on our business,
operations and financial performance; (ii) deterioration in the
financial condition of borrowers resulting in significant increases
in loan losses and provisions for those losses; (iii) deposit
outflows and subsequent declines in liquidity caused by factors
that could include lack of confidence in the banking system, a
deterioration in market conditions or the financial condition of
depositors; (iv) changes in our deposits, including an increase in
uninsured deposits; (v) unfavorable conditions in the capital
markets, which may cause declines in our stock price and the value
of our investments; (vi) continued fluctuation of the interest rate
environment, including changes in net interest margin or changes
that affect the yield curve on investments; (vii) potential
deterioration in real estate collateral values; (viii) changes in
legislation, regulation, public policies, or administrative
practices impacting the banking industry, including increased
regulation and FDIC assessments in the aftermath of recent bank
failures; (ix) the outcome of legal or regulatory proceedings that
may be instituted against us; (x) our inability to maintain the
historical growth rate of the loan portfolio; (xi) changes in loan
underwriting, credit review or loss reserve policies associated
with economic conditions, examination conclusions, or regulatory
developments; (xii) 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; (xiii) any matter that would cause us to conclude
that there was impairment of any asset, including intangible
assets; (xiv) the risk that the preliminary financial information
reported herein and our current preliminary analysis will be
different when our review is finalized; (xv) increased competition
for experienced members of the workforce including executives in
the banking industry; (xvi) 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; (xvii) a downgrade in our credit rating; (xviii)
increased political opposition to Environmental, Social and
Governance (“ESG”) practices; (xix) recessionary conditions; (xx)
the ongoing economic effects of the COVID-19 pandemic; and (xxi)
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
LillisSolebury Strategic
Communicationsshareholderrelations@amalgamatedbank.com
800-895-4172
Source: Amalgamated Financial Corp.
Reconciliation of GAAP to Non-GAAP
Financial MeasuresThe 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 |
|
Three Months Ended |
(in thousands) |
June 30, 2023 |
|
March 31, 2023 |
Core net income |
|
|
|
Net Income (GAAP) |
$ |
21,642 |
|
|
$ |
21,338 |
|
Less: Securities (gain) loss |
|
267 |
|
|
|
3,086 |
|
Less: Subdebt repurchase gain |
|
— |
|
|
|
(780 |
) |
Add: Other one-time expenses |
|
285 |
|
|
|
— |
|
Less: Tax on notable items |
|
(147 |
) |
|
|
(604 |
) |
Core net income (non-GAAP) |
|
22,047 |
|
|
|
23,040 |
|
Add: Tax (credits) depreciation on solar investments |
|
— |
|
|
|
— |
|
Add: Tax effect of solar income |
|
— |
|
|
|
— |
|
Core net income excluding solar tax impact (non-GAAP) |
|
22,047 |
|
|
|
23,040 |
|
|
|
|
|
Tangible common equity |
|
|
|
Stockholders' equity (GAAP) |
$ |
528,614 |
|
|
$ |
519,158 |
|
Less: Minority interest |
|
(133 |
) |
|
|
(133 |
) |
Less: Goodwill |
|
(12,936 |
) |
|
|
(12,936 |
) |
Less: Core deposit intangible |
|
(2,661 |
) |
|
|
(2,883 |
) |
Tangible common equity (non-GAAP) |
|
512,884 |
|
|
|
503,206 |
|
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