UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 25, 2024
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (212 ) 895-8988
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR § 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR § 240.12b-2).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On January 25, 2024, Amalgamated Financial Corp. (the "Company") issued a press release announcing financial results for the fourth quarter and year ended December 31, 2023. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Item 2.02, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
Item 7.01 Regulation FD Disclosure.
On January 25, 2024, the Company will hold an earnings conference call and webcast at 11:00 a.m. (Eastern Time) to discuss financial results for the fourth quarter and year ended December 31, 2023. The press release contains information about how to access the conference call and webcast. A copy of the slide presentation to be used during the earnings call and webcast is furnished as Exhibit 99.2 to this Current Report on Form 8-K. The slide presentation is also available on our website, www.amalgamatedbank.com, under the “Investor Relations” section.
The information in this Item 7.01, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits The following exhibit index lists the exhibits that are either filed or furnished with this Current Report on Form 8-K:
EXHIBIT INDEX
| Exhibit No. | Description | |||||||||||||
| 99.1 | ||||||||||||||
| 99.2 | ||||||||||||||
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. | |||||||||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AMALGAMATED FINANCIAL CORP. | |||||||||||
By: | /s/ Priscilla Sims Brown | ||||||||||
Name: | Priscilla Sims Brown | ||||||||||
Title: | Chief Executive Officer | ||||||||||
Date: | |||||||||||
2
Amalgamated Financial Corp. Reports Fourth Quarter 2023 Financial Results: $170.8 Million Deposit Growth Excluding Brokered CDs; Net Interest Margin Rises to 3.44% Common Equity Tier 1 Capital Ratio of 12.98% | Return on Average Assets of 1.13% NEW YORK, January 25, 2024 – (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, 2023. Fourth Quarter 2023 Highlights (on a linked quarter basis) • Net income of $22.7 million, or $0.74 per diluted share, compared to $22.3 million, or $0.73 per diluted share. • Core net income1 of $22.1 million, or $0.72 per diluted share, compared to $23.3 million, or $0.76 per diluted share. • A tax adjustment of $3.3 million detracted $0.11 per diluted share from both GAAP and core net income. Deposits and Liquidity • Total deposits increased $21.1 million, or 0.3%, to $7.0 billion including a $149.7 million decline in Brokered CDs. • Excluding Brokered CDs, on-balance sheet deposits increased $170.8 million or 2.6% to $6.8 billion. • Political deposits increased $236.1 million, or 24.8%, to $1.2 billion. • Off-balance sheet deposits totaled $303.1 million, comprised primarily of transactional political deposits and transitional deposits scheduled for our Trust business. • Average cost of deposits excluding Brokered CDs, increased 14 basis points to 125 basis points for the quarter, where non-interest-bearing deposits comprised 43% of total deposits, nearly identical to the prior quarter. • Cash, off-balance sheet deposits, and borrowing capacity, totaled $3.0 billion (immediately available) plus unpledged securities (two-day availability) of $582 million for total liquidity within two-days of $3.6 billion (89% of total uninsured deposits). Assets and Margin • Net loans receivable increased $48.7 million, or 1.1%, to $4.3 billion. • Total PACE assessments grew $21.5 million, or 1.9% to $1.1 billion. • Net interest income grew $3.6 million, or 5.63%, to $67.3 million. • Net interest margin expanded 15 basis points to 3.44%. Investments and Capital • Tangible common equity1 ratio of 7.16%, representing a fifth consecutive quarter of improvement. • Traditional available-for-sale securities, which are 70% of the traditional securities portfolio, had unrealized losses of 6.7%, with an effective duration of 1.9 years. • Traditional held-to-maturity securities, which are 30% of the traditional securities portfolio, had unrecognized losses of 7.2%, with an effective duration of 4.1 years. • Regulatory capital remains above bank “well capitalized” standards. • Leverage ratio of 8.07%, increasing 18 basis points from the prior quarter and Common Equity Tier 1 ratio of 12.98% representing a conservative asset mix. Share Repurchase • Repurchased approximately 65,000 shares, or $1.1 million of common stock under the Company’s $40 million share repurchase program announced in the first quarter of 2022, with $19.8 million of remaining capacity. 1 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.
Full Year 2023 Highlights (from year end 2022) • Net income of $88.0 million, or $2.86 per diluted share, compared to $81.5 million, or $2.61 per diluted share, an increase of 8.0%. • Core net income1 was $90.5 million, or $2.94 per diluted share, as compared to $87.2 million, or $2.79 per diluted share, an increase of 3.8%. • Total deposits increased by $417.0 million, or 6.3% to $7.0 billion. • Net loans receivable increased $284.6 million, or 7.0%, to $4.3 billion. • Total PACE assessments increased $218.0 million, or 23.9%, to $1.1 billion. • Net interest income increased $21.5 million or 9.0%, to $261.3 million compared to $239.8 million. • Nonperforming assets were stable, increasing 6 basis points to $34.2 million or 0.43% of total assets. • Classified or criticized assets improved by 12 basis points to 2.48% of total loans. Priscilla Sims Brown, President and Chief Executive Officer, commented, “We are operating in an enviable position of managing deposit liquidity instead of searching for it. In today's highly constrained liquidity environment, we are punching well above our weight, giving us many options to deliver above peer returns.” Fourth Quarter Earnings Net income for the fourth quarter of 2023 was $22.7 million, or $0.74 per diluted share, compared to $22.3 million, or $0.73 per diluted share, for the third quarter of 2023. The $0.4 million increase during the quarter was primarily driven by a $3.6 million increase in net interest income and a $2.6 million increase in non-interest income, offset by a $1.8 million increase in provision for credit losses, and a $3.7 million increase in income tax expense primarily driven by a state and city tax examination that reduced the Bank’s net operating loss carryforwards, which resulted in additional tax liabilities and a write-down of deferred tax assets totaling $3.3 million. Core net income1 for the fourth quarter of 2023 was $22.1 million, or $0.72 per diluted share, compared to $23.3 million, or $0.76 per diluted share, for the third quarter of 2023. Excluded from core net income for the quarter, pre-tax was $2.3 million of losses on the sale of securities, and $3.3 million of tax credits from our solar tax equity investments. Excluded from the third quarter of 2023, pre-tax was $1.7 million of losses on the sale of securities, $0.6 million of pre-tax gains on subordinated debt repurchases, and $0.3 million in severance costs. Net interest income was $67.3 million for the fourth quarter of 2023, compared to $63.7 million for the third quarter of 2023. Loan interest income increased $2.0 million driven by a $56.2 million increase in average loan balances coupled with a 12 basis point increase in loan yields. Interest income on securities increased $1.8 million driven by a 27 basis point increase in securities yield offset by a decrease in the average balance of securities of $32.6 million. The increase in interest income was offset by higher interest expense on total interest-bearing deposits of $2.2 million driven by a 14 basis point increase in cost and an increase in the average balance of total interest-bearing deposits of $128.7 million. The changes in deposit costs were primarily related to increased rates on select non-time deposit products and also a 55 basis point increase in the cost of time deposits. Net interest margin was 3.44% for the fourth quarter of 2023, an increase of 15 basis points from 3.29% in the third quarter of 2023. The increase is largely due to increased yields and average balances of interest-earning assets driven mainly by strong PACE originations and commercial lending portfolio repricing. Prepayment penalties had no impact on our net interest margin in the fourth quarter of 2023, which is the same as in the prior quarter. Provision for credit losses totaled an expense of $3.8 million for the fourth quarter of 2023 compared to an expense of $2.0 million in the third quarter of 2023. The expense in the fourth quarter is primarily driven by $4.7 million charge-off on a construction loan, partially offset by improvements in macro-economic forecasts used in the CECL model. 2
Core non-interest income1 was $8.5 million for the fourth quarter of 2023, compared to $7.8 million in the third quarter of 2023. The increase was primarily related to fees from our treasury investment services as well as fees earned from off- balance sheet reciprocal deposits. Core non-interest expense1 for the fourth quarter of 2023 was $37.7 million, an increase of $0.7 million from the third quarter of 2023. This was mainly driven by a $0.2 million increase in professional fees, and a $0.4 million increase in other expense primarily related to residential loan servicing expenses. Our provision for income tax expense was $12.5 million for the fourth quarter of 2023, compared to $8.8 million for the third quarter of 2023. The increase is primarily driven by a $3.3 million adjustment related to a state and city tax examination as previously mentioned. Excluding the tax adjustment, our effective tax rate for the fourth quarter of 2023 was 26.2%, compared to 28.4% for the third quarter of 2023. Balance Sheet Quarterly Summary Total assets were $8.0 billion at December 31, 2023, compared to $7.9 billion at September 30, 2023, in keeping with our strategy to keep our balance sheet flat. Notable changes within individual balance sheet line items include a $48.7 million increase in net loans receivable, and a $50.0 million increase in resell agreements. Additionally, deposits excluding Brokered CDs increased by $170.8 million while Brokered CDs decreased $149.7 million. Total net loans receivable, at December 31, 2023 were $4.3 billion, an increase of $48.7 million, or 1.1% for the quarter. The increase in loans is primarily driven by a $53.2 million increase in multifamily loans, a $29.3 million increase in the commercial real estate portfolio, and a $16.1 million increase in residential loans, offset by a $39.4 million decrease in commercial and industrial loans, mainly related to paydowns on revolving lines. During the quarter, criticized or classified loans increased $22.0 million largely related to the downgrade of an $18.7 million commercial and industrial loan to substandard and accruing. Total deposits at December 31, 2023 were $7.0 billion, an increase of $21.1 million, or 0.3%, during the quarter. Total deposits excluding Brokered CDs increased by $170.8 million to $6.8 billion, or a 2.6% increase. Deposits held by politically active customers, such as campaigns, PACs, advocacy-based organizations, and state and national party committees were $1.2 billion as of December 31, 2023, an increase of $236.1 million during this quarter, of which a substantial portion were moved off-balance sheet. Non-interest-bearing deposits represented 41% of average total deposits and 42% of ending total deposits for the quarter, contributing to an average cost of total deposits of 143 basis points. Super- core deposits1 totaled approximately $3.6 billion, had a weighted average life of 16 years, and comprised 53% of total deposits, excluding Brokered CDs. Total uninsured deposits were $4.0 billion, comprising 58% of total deposits. Excluding uninsured super-core deposits of approximately $2.6 billion, remaining uninsured deposits were approximately 21%-24% of total deposits with immediate liquidity coverage of 202%. Nonperforming assets totaled $34.2 million, or 0.43% of period-end total assets at December 31, 2023, a decrease of $2.3 million, compared with $36.5 million, or 0.46% on a linked quarter basis. The decrease in nonperforming assets was primarily driven by a charge-off of a $4.7 million construction loan and sale of a $1.2 million multifamily loan held for sale, offset by a $4.2 million increase in residential real estate nonaccrual loans. During the quarter, the allowance for credit losses on loans decreased $2.1 million to $65.7 million. The ratio of allowance to total loans was 1.49%, a decrease of 6 basis points from 1.55% in the third quarter of 2023. 3
Capital Quarterly Summary As of December 31, 2023, our Common Equity Tier 1 Capital ratio was 12.98%, Total Risk-Based Capital ratio was 15.64%, and Tier-1 Leverage Capital ratio was 8.07%, compared to 12.63%, 15.28% and 7.89%, respectively, as of September 30, 2023. Stockholders’ equity at December 31, 2023 was $585.4 million, an increase of $39.1 million during the quarter. The increase in stockholders’ equity was primarily driven by $22.7 million of net income for the quarter offset by $3.1 million in dividends paid at $0.10 per outstanding share, $1.1 million of common stock repurchases, and a $19.3 million improvement in accumulated other comprehensive loss due to the tax effected mark-to-market on our available for sale securities portfolio. Tangible book value per share was $18.74 as of December 31, 2023 compared to $17.43 as of September 30, 2023. Tangible common equity improved to 7.16% of tangible assets, compared to 6.72% as of September 30, 2023. Conference Call As previously announced, Amalgamated Financial Corp. will host a conference call to discuss its fourth quarter results today, January 25, 2024 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 2023 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 13743057. The telephonic replay will be available until February 1, 2024. 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, 2023, our total assets were $8.0 billion, total net loans were $4.3 billion, and total deposits were $7.0 billion. Additionally, as of December 31, 2023, our trust business held $41.7 billion in assets under custody and $14.8 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 operating revenue,” “Core non-interest expense,” “Core non-interest income,” “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.” 4
Our management utilizes this information to compare our operating performance for December 31, 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: “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 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, 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” 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 accelerated 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”. 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 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. “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. 5
“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. "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. 6
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 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) increased regulatory scrutiny and exposure from the use of “big data” techniques, machine learning, and artificial intelligence; (xviii) a downgrade in our credit rating; (xix) increased political opposition to Environmental, Social and Governance (“ESG”) practices and Diversity, Equity and Inclusion (“DEI”) practices; (xx) physical and transitional risks related to climate change as they impact our business and the businesses that we finance; and (xxi) future repurchase of our shares through our common stock repurchase program. 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 7
Consolidated Statements of Income December 31, September 30, December 31, December 31, ($ in thousands) 2023 2023 2022 2023 2022 INTEREST AND DIVIDEND INCOME (unaudited) (unaudited) (unaudited) (unaudited) Loans $ 51,551 $ 49,578 $ 42,492 $ 191,295 $ 145,649 Securities 42,014 39,971 35,567 161,003 110,654 Interest-bearing deposits in banks 2,419 1,687 485 5,779 2,186 Total interest and dividend income 95,984 91,236 78,544 358,077 258,489 INTEREST EXPENSE Deposits 25,315 23,158 5,682 81,124 11,056 Borrowed funds 3,350 4,350 5,516 15,642 7,593 Total interest expense 28,665 27,508 11,198 96,766 18,649 NET INTEREST INCOME 67,319 63,728 67,346 261,311 239,840 Provision for credit losses(1) 3,756 2,014 4,434 14,670 15,002 Net interest income after provision for credit losses 63,563 61,714 62,912 246,641 224,838 NON-INTEREST INCOME Trust Department fees 3,562 3,678 3,607 15,175 14,449 Service charges on deposit accounts 3,102 2,731 2,991 10,999 10,999 Bank-owned life insurance income 828 727 986 2,882 3,868 Losses on sale of securities (2,340) (1,699) (1,373) (7,392) (3,637) Gains (losses) on sale of loans, net 2 26 (578) 32 (610) Loss on other real estate owned, net — — (168) — (168) Equity method investments income (loss) 3,671 550 (1,416) 4,932 (2,773) Other income 581 767 177 2,708 1,769 Total non-interest income 9,406 6,780 4,226 29,336 23,897 NON-INTEREST EXPENSE Compensation and employee benefits 21,249 21,345 19,470 85,774 74,712 Occupancy and depreciation 3,421 3,349 3,345 13,605 13,723 Professional fees 2,426 2,222 1,684 9,637 10,417 Data processing 4,568 4,545 4,072 17,744 17,732 Office maintenance and depreciation 700 685 696 2,830 3,012 Amortization of intangible assets 222 222 262 888 1,047 Advertising and promotion 750 816 1,331 4,181 3,741 Federal deposit insurance premiums 1,000 1,200 788 4,018 3,228 Other expense 3,416 2,955 3,922 12,570 12,959 Total non-interest expense 37,752 37,339 35,570 151,247 140,571 Income before income taxes 35,217 31,155 31,568 124,730 108,164 Income tax expense 12,522 8,847 6,813 36,752 26,687 Net income $ 22,695 $ 22,308 $ 24,755 $ 87,978 $ 81,477 Earnings per common share - basic $ 0.75 $ 0.73 $ 0.81 $ 2.88 $ 2.64 Earnings per common share - diluted $ 0.74 $ 0.73 $ 0.80 $ 2.86 $ 2.61 Three Months Ended Year Ended (1) In accordance with the adoption of the Current Expected Credit Losses (“CECL”) standard on January 1, 2023, the provision for credit losses as of December 31, 2023 and September 30, 2023 is calculated under the current expected credit losses model. For December 31, 2022, the provision presented is the provision for loan losses calculated using the incurred loss model. 8
Consolidated Statements of Financial Condition ($ in thousands) December 31, 2023 September 30, 2023 December 31, 2022 Assets (unaudited) (unaudited) Cash and due from banks $ 2,856 $ 5,494 $ 5,110 Interest-bearing deposits in banks 87,714 134,725 58,430 Total cash and cash equivalents 90,570 140,219 63,540 Securities: Available for sale, at fair value 1,483,042 1,491,450 1,812,476 Held-to-maturity, at amortized cost: Traditional securities, net of allowance for credit losses(1) of $54 and $55 at December 31, 2023 and September 30, 2023, respectively 620,232 612,026 629,424 PACE assessments, net of allowance for credit losses(1) of $667 and $670 at December 31, 2023 and September 30, 2023, respectively 1,076,602 1,069,834 911,877 1,696,834 1,681,860 1,541,301 Loans held for sale 1,817 2,189 7,943 Loans receivable, net of deferred loan origination costs 4,411,319 4,364,745 4,106,002 Allowance for credit losses(1) (65,691) (67,815) (45,031) Loans receivable, net 4,345,628 4,296,930 4,060,971 Resell agreements 50,000 — 25,754 Federal Home Loan Bank of New York ("FHLBNY") stock, at cost 4,389 4,389 29,607 Accrued interest and dividends receivable 55,484 47,745 41,441 Premises and equipment, net 7,807 8,428 9,856 Bank-owned life insurance 105,528 105,708 105,624 Right-of-use lease asset 21,074 22,907 28,236 Deferred tax asset, net 56,603 63,322 62,507 Goodwill 12,936 12,936 12,936 Intangible assets, net 2,217 2,439 3,105 Equity method investments 13,024 11,813 8,305 Other assets 25,371 17,397 29,522 Total assets $ 7,972,324 $ 7,909,732 $ 7,843,124 Liabilities Deposits $ 7,011,988 $ 6,990,854 $ 6,595,037 Subordinated debt, net 70,546 70,427 77,708 FHLBNY advances 4,381 4,381 580,000 Other borrowings 230,000 230,000 — Operating leases 30,646 33,242 40,779 Other liabilities 39,399 34,537 40,645 Total liabilities 7,386,960 7,363,441 7,334,169 Stockholders’ equity Common stock, par value $.01 per share 307 307 307 Additional paid-in capital 288,232 287,579 286,947 Retained earnings 388,033 368,420 330,275 Accumulated other comprehensive loss, net of income taxes (86,004) (105,294) (108,707) Treasury stock, at cost (5,337) (4,854) — Total Amalgamated Financial Corp. stockholders' equity 585,231 546,158 508,822 Noncontrolling interests 133 133 133 Total stockholders' equity 585,364 546,291 508,955 Total liabilities and stockholders’ equity $ 7,972,324 $ 7,909,732 $ 7,843,124 (1) In accordance with the adoption of the CECL standard on January 1, 2023, the allowance for credit losses on both loans and securities as of December 31, 2023 and September 30, 2023 is calculated under the current expected credit losses model. For December 31, 2022, no allowance was calculated on securities, and the allowance on loans presented is the allowance for loan losses calculated using the incurred loss model. 9
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) 2023 2023 2022 2023 2022 Selected Financial Ratios and Other Data: Earnings per share Basic $ 0.75 $ 0.73 $ 0.81 $ 2.88 $ 2.64 Diluted 0.74 0.73 0.80 2.86 2.61 Core net income (non-GAAP) Basic $ 0.73 $ 0.76 $ 0.89 $ 2.96 $ 2.83 Diluted 0.72 0.76 0.87 2.94 2.79 Book value per common share (excluding minority interest) $ 19.23 $ 17.93 $ 16.57 $ 19.23 $ 16.57 Tangible book value per share (non-GAAP) $ 18.74 $ 17.43 $ 16.05 $ 18.74 $ 16.05 Common shares outstanding, par value $.01 per share(1) 30,428 30,459 30,700 30,428 30,700 Weighted average common shares outstanding, basic 30,418 30,481 30,679 30,555 30,818 Weighted average common shares outstanding, diluted 30,616 30,590 31,055 30,785 31,193 (1) 70,000,000 shares authorized; 30,736,141, 30,736,141, and 30,700,198 shares issued for the periods ended December 31, 2023, September 30, 2023, and December 31, 2022 respectively, and 30,428,359, 30,458,781, and 30,700,198 shares outstanding for the periods ended December 31, 2023, September 30, 2023, and December 31, 2022 respectively 10
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, 2023 2023 2022 2023 2022 Selected Performance Metrics: Return on average assets 1.13 % 1.12 % 1.26 % 1.12 % 1.05 % Core return on average assets (non-GAAP) 1.10 % 1.17 % 1.38 % 1.15 % 1.13 % Return on average equity 16.23 % 16.43 % 19.89 % 16.57 % 15.65 % Core return on average tangible common equity (non-GAAP) 16.22 % 17.67 % 22.58 % 17.55 % 17.30 % Average equity to average assets 6.95 % 6.82 % 6.32 % 6.74 % 6.74 % Tangible common equity to tangible assets (non-GAAP) 7.16 % 6.72 % 6.30 % 7.16 % 6.30 % Loan yield 4.68 % 4.56 % 4.24 % 4.49 % 4.03 % Securities yield 5.21 % 4.94 % 4.08 % 4.93 % 3.14 % Deposit cost 1.43 % 1.33 % 0.34 % 1.17 % 0.16 % Net interest margin 3.44 % 3.29 % 3.56 % 3.41 % 3.22 % Efficiency ratio (1) 49.20 % 52.96 % 49.70 % 52.04 % 53.30 % Core efficiency ratio (non-GAAP) 49.73 % 51.71 % 47.65 % 51.33 % 51.68 % Asset Quality Ratios: Nonaccrual loans to total loans 0.75 % 0.79 % 0.53 % 0.75 % 0.53 % Nonperforming assets to total assets 0.43 % 0.46 % 0.37 % 0.43 % 0.37 % Allowance for credit losses on loans to nonaccrual loans(2) 197.97 % 197.58 % 207.53 % 197.97 % 207.53 % Allowance for credit losses on loans to total loans(2) 1.49 % 1.55 % 1.10 % 1.49 % 1.10 % Annualized net charge-offs (recoveries) to average loans 0.51 % 0.27 % 0.15 % 0.33 % 0.16 % Capital Ratios: Tier 1 leverage capital ratio 8.07 % 7.89 % 7.52 % 8.07 % 7.52 % Tier 1 risk-based capital ratio 12.98 % 12.63 % 12.31 % 12.98 % 12.31 % Total risk-based capital ratio 15.64 % 15.28 % 14.87 % 15.64 % 14.87 % Common equity tier 1 capital ratio 12.98 % 12.63 % 12.31 % 12.98 % 12.31 % (1) Efficiency ratio is calculated by dividing total non-interest expense by the sum of net interest income and total non-interest income (2) In accordance with the adoption of the CECL standard on January 1, 2023, the allowance for credit losses on loans as of December 31, 2023 and September 30, 2023 are calculated under the current expected credit losses model. For December 31, 2022, the allowance on loans presented is the allowance for loan losses calculated using the incurred loss model. 11
Loan and PACE Assessments Portfolio Composition (In thousands) At December 31, 2023 At September 30, 2023 At December 31, 2022 Amount % of total loans Amount % of total loans Amount % of total loans Commercial portfolio: Commercial and industrial $ 1,010,998 22.9 % $ 1,050,355 24.1 % $ 925,641 22.5 % Multifamily 1,148,120 26.1 % 1,094,955 25.1 % 967,521 23.6 % Commercial real estate 353,432 8.0 % 324,139 7.4 % 335,133 8.2 % Construction and land development 23,626 0.5 % 28,326 0.6 % 37,696 0.9 % Total commercial portfolio 2,536,176 57.5 % 2,497,775 57.2 % 2,265,991 55.2 % Retail portfolio: Residential real estate lending 1,425,596 32.3 % 1,409,530 32.3 % 1,371,779 33.5 % Consumer solar(1) 408,260 9.3 % 415,324 9.5 % 416,849 10.2 % Consumer and other (1) 41,287 0.9 % 42,116 1.0 % 47,150 1.1 % Total retail 1,875,143 42.5 % 1,866,970 42.8 % 1,835,778 44.8 % Total loans held for investment 4,411,319 100.0 % 4,364,745 100.0 % 4,101,769 100.0 % Net deferred loan origination costs(2) — — 4,233 Allowance for credit losses(3) (65,691) (67,815) (45,031) Loans receivable, net $ 4,345,628 $ 4,296,930 $ 4,060,971 PACE assessments: Held-to-maturity, at amortized cost 1,077,269 95.3 % 1,070,504 96.5 % 911,877 100.0 % Available for sale, at fair value 53,303 4.7 % 38,526 3.5 % — — % Total PACE assessments 1,130,572 100.0 % 1,109,030 100.0 % 911,877 100.0 % Allowance for credit losses(3) (667) (670) — Total PACE assessments, net $ 1,129,905 $ 1,108,360 $ 911,877 (1) The Company adopted the CECL standard on January 1, 2023. As a result, the classification of loan segments was updated, and all loan balances for presented periods have been reclassified. (2) With the adoption of the CECL standard, loans balances as of December 31, 2023 and September 30, 2023 are presented at amortized cost, net of deferred loan origination costs. (3) With the adoption of the CECL standard, the allowance for credit losses on both loans and securities as of December 31, 2023 and September 30, 2023 are calculated under the current expected credit losses model. For December 31, 2022, no allowance was calculated on securities, and the allowance on loans presented is the allowance for loan losses calculated using the incurred loss model. 12
Net Interest Income Analysis Three Months Ended December 31, 2023 September 30, 2023 December 31, 2022 (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 $ 190,994 $ 2,419 5.02 % $ 170,830 $ 1,687 3.92 % $ 85,886 $ 485 2.24 % Securities(1) 3,175,784 41,741 5.21 % 3,208,334 39,971 4.94 % 3,400,994 34,939 4.08 % Resell agreements 16,848 273 6.43 % — — 0.00 % 46,909 628 5.31 % Loans receivable, net (2)(3) 4,370,946 51,551 4.68 % 4,314,767 49,578 4.56 % 3,977,554 42,492 4.24 % Total interest-earning assets 7,754,572 95,984 4.91 % 7,693,931 91,236 4.70 % 7,511,343 78,544 4.15 % Non-interest-earning assets: Cash and due from banks 5,357 6,129 5,267 Other assets 220,580 204,506 289,979 Total assets $ 7,980,509 $ 7,904,566 $ 7,806,589 Interest-bearing liabilities: Savings, NOW and money market deposits $ 3,629,658 $ 19,808 2.17 % $ 3,446,027 $ 17,157 1.98 % $ 2,967,150 $ 5,161 0.69 % Time deposits 183,225 1,423 3.08 % 176,171 1,122 2.53 % 167,138 174 0.41 % Brokered CDs 309,378 4,084 5.24 % 371,329 4,879 5.21 % 37,047 347 3.72 % Total interest-bearing deposits 4,122,261 25,315 2.44 % 3,993,527 23,158 2.30 % 3,171,335 5,682 0.71 % Other borrowings 304,869 3,350 4.36 % 376,585 4,350 4.58 % 545,303 5,514 4.01 % Total interest-bearing liabilities 4,427,130 28,665 2.57 % 4,370,112 27,508 2.50 % 3,716,638 11,196 1.20 % Non-interest-bearing liabilities: Demand and transaction deposits 2,921,961 2,920,737 3,522,352 Other liabilities 76,588 74,964 73,838 Total liabilities 7,425,679 7,365,813 7,312,828 Stockholders' equity 554,830 538,753 493,761 Total liabilities and stockholders' equity $ 7,980,509 $ 7,904,566 $ 7,806,589 Net interest income / interest rate spread $ 67,319 2.34 % $ 63,728 2.20 % $ 67,348 2.95 % Net interest-earning assets / net interest margin $ 3,327,442 3.44 % $ 3,323,819 3.29 % $ 3,794,705 3.56 % Total deposits excluding Brokered CDs / total cost of deposits excluding Brokered CDs $ 6,734,844 1.25 % $ 6,542,935 1.11 % $ 6,656,640 0.32 % Total deposits / total cost of deposits $ 7,044,222 1.43 % $ 6,914,264 1.33 % $ 6,693,687 0.34 % Total funding / total cost of funds $ 7,349,091 1.55 % $ 7,290,849 1.50 % $ 7,238,990 0.61 % (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. With the adoption of the CECL standard on January 1, 2023, the average balance of the allowance for credit losses on loans was reclassified for all presented periods to other assets to allow for comparability. (3) Includes prepayment penalty interest income in 4Q2023, 3Q2023, and 4Q2022 of $167, $0, and $82, respectively (in thousands) 13
Net Interest Income Analysis Year Ended December 31, 2023 December 31, 2022 (In thousands) Average Balance Income / Expense Yield / Rate Average Balance Income / Expense Yield / Rate Interest-earning assets: Interest-bearing deposits in banks $ 142,053 $ 5,779 4.07 % $ 258,214 $ 2,186 0.85 % Securities(1) 3,250,788 160,298 4.93 % 3,391,056 106,417 3.14 % Resell agreements 10,233 705 6.89 % 182,304 4,237 2.32 % Loans receivable, net (2)(3) 4,259,195 191,295 4.49 % 3,615,437 145,649 4.03 % Total interest-earning assets 7,662,269 358,077 4.67 % 7,447,011 258,489 3.47 % Non-interest-earning assets: Cash and due from banks 5,140 7,126 Other assets 208,902 273,028 Total assets $ 7,876,311 $ 7,727,165 Interest-bearing liabilities: Savings, NOW and money market deposits $ 3,344,407 $ 59,818 1.79 % $ 2,981,688 $ 10,068 0.34 % Time deposits 167,167 3,452 2.07 % 185,692 638 0.34 % Brokered CDs 364,833 17,854 4.89 % 9,338 349 3.74 % Total interest-bearing deposits 3,876,407 81,124 2.09 % 3,176,718 11,055 0.35 % Other borrowings 350,039 15,642 4.47 % 200,726 7,592 3.78 % Total interest-bearing liabilities 4,226,446 96,766 2.29 % 3,377,444 18,647 0.55 % Non-interest-bearing liabilities: Demand and transaction deposits 3,045,013 3,746,152 Other liabilities 73,770 82,931 Total liabilities 7,345,229 7,206,527 Stockholders' equity 531,082 520,638 Total liabilities and stockholders' equity $ 7,876,311 $ 7,727,165 Net interest income / interest rate spread $ 261,311 2.38 % $ 239,842 2.92 % Net interest-earning assets / net interest margin $ 3,435,823 3.41 % $ 4,069,567 3.22 % Total deposits excluding Brokered CDs / total cost of deposits excluding Brokered CDs $ 6,556,587 0.96 % $ 6,913,532 0.15 % Total deposits / total cost of deposits $ 6,921,420 1.17 % $ 6,922,870 0.16 % Total funding / total cost of funds $ 7,271,459 1.33 % $ 7,123,596 0.26 % (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. With the adoption of the CECL standard on January 1, 2023, the average balance of the allowance for credit losses on loans was reclassified for all presented periods to other assets to allow for comparability. (3) Includes prepayment penalty interest income in December YTD 2023 and December YTD 2022 of $0.1 million and $1.7 million, respectively 14
Deposit Portfolio Composition Three Months Ended December 31, 2023 September 30, 2023 December 31, 2022 (In thousands) Ending Balance Average Balance Ending Balance Average Balance Ending Balance Average Balance Non-interest-bearing demand deposit accounts $ 2,940,398 $ 2,921,961 $ 2,808,300 $ 2,920,737 $ 3,331,067 $ 3,522,352 NOW accounts 200,382 191,889 192,654 192,883 206,434 200,633 Money market deposit accounts 3,100,681 3,090,805 3,059,982 2,893,930 2,445,396 2,385,446 Savings accounts 340,860 346,964 357,470 359,214 386,190 381,071 Time deposits 187,457 183,225 180,529 176,171 151,699 167,138 Brokered CDs 242,210 309,378 391,919 371,329 74,251 37,047 Total deposits $ 7,011,988 $ 7,044,222 $ 6,990,854 $ 6,914,264 $ 6,595,037 $ 6,693,687 Total deposits excluding Brokered CDs $ 6,769,778 $ 6,734,844 $ 6,598,935 $ 6,542,935 $ 6,520,786 $ 6,656,640 Three Months Ended December 31, 2023 September 30, 2023 December 31, 2022 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 0.99 % 1.00 % 0.95 % 1.01 % 0.73 % 0.52 % Money market deposit accounts 2.89 % 2.35 % 2.31 % 2.14 % 0.94 % 0.74 % Savings accounts 1.20 % 1.15 % 1.16 % 1.14 % 0.75 % 0.49 % Time deposits 3.01 % 3.08 % 2.88 % 2.53 % 2.57 % 0.41 % Brokered CDs 5.09 % 5.24 % 5.14 % 5.21 % 3.84 % 3.72 % Total deposits 1.62 % 1.43 % 1.46 % 1.33 % 0.52 % 0.34 % Interest-bearing deposits excluding brokered CDs 2.65 % 2.21 % 2.16 % 2.00 % 1.07 % 0.68 % (1) Average rate paid is calculated as the weighted average of spot rates on deposit accounts as of December 31, 2023. 15
Asset Quality (In thousands) December 31, 2023 September 30, 2023 December 31, 2022 Loans 90 days past due and accruing $ — $ — $ — Nonaccrual loans held for sale 989 2,189 6,914 Nonaccrual loans - Commercial 23,189 28,041 18,308 Nonaccrual loans - Retail 9,994 6,283 3,391 Nonaccrual securities 31 31 36 Total nonperforming assets $ 34,203 $ 36,544 $ 28,649 Nonaccrual loans: Commercial and industrial $ 7,533 $ 7,575 $ 9,629 Multifamily — — 3,828 Commercial real estate 4,490 4,575 4,851 Construction and land development 11,166 15,891 — Total commercial portfolio 23,189 28,041 18,308 Residential real estate lending 7,218 3,009 1,807 Consumer solar 2,673 2,817 1,584 Consumer and other 103 457 — Total retail portfolio 9,994 6,283 3,391 Total nonaccrual loans $ 33,183 $ 34,324 $ 21,699 Nonaccrual loans to total loans 0.75 % 0.79 % 0.53 % Nonperforming assets to total assets 0.43 % 0.46 % 0.37 % Allowance for credit losses on loans to nonaccrual loans 198 % 198 % 208 % Allowance for credit losses on loans to total loans 1.49 % 1.55 % 1.10 % Annualized net charge-offs (recoveries) to average loans 0.51 % 0.27 % 0.16 % 16
Credit Quality December 31, 2023 September 30, 2023 December 31, 2022 ($ in thousands) Criticized and classified loans Commercial and industrial $ 69,843 $ 45,959 $ 32,004 Multifamily 10,306 10,999 19,860 Commercial real estate 8,637 8,762 35,180 Construction and land development 11,166 15,891 16,426 Residential real estate lending 7,218 3,009 1,807 Consumer solar 2,673 2,817 1,584 Consumer and other 103 457 — Total loans $ 109,946 $ 87,894 $ 106,861 Criticized and classified loans to total loans Commercial and industrial 1.58 % 1.05 % 0.78 % Multifamily 0.23 % 0.25 % 0.48 % Commercial real estate 0.20 % 0.20 % 0.86 % Construction and land development 0.25 % 0.36 % 0.40 % Residential real estate lending 0.16 % 0.07 % 0.04 % Consumer solar 0.06 % 0.06 % 0.04 % Consumer and other — % 0.01 % — % Total loans 2.48 % 2.00 % 2.60 % 17
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, 2023 September 30, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Core operating revenue Net Interest income (GAAP) $ 67,319 $ 63,728 $ 67,346 $ 261,311 $ 239,840 Non-interest income 9,406 6,780 4,226 29,336 23,897 Less: Securities (gain) loss 2,340 1,699 1,373 7,392 3,637 Less: Subdebt repurchase gain — (637) — (1,417) (617) Add: Tax (credits) depreciation on solar investments (3,251) — 1,706 (3,251) 3,811 Core operating revenue (non-GAAP) $ 75,814 $ 71,570 $ 74,651 $ 293,371 $ 270,568 Core non-interest expense Non-interest expense (GAAP) $ 37,752 $ 37,339 $ 35,570 $ 151,247 $ 140,571 Less: Other one-time expenses(1) (47) (332) — (665) (738) Core non-interest expense (non-GAAP) $ 37,705 $ 37,007 $ 35,570 $ 150,582 $ 139,833 Core net income Net Income (GAAP) $ 22,695 $ 22,308 $ 24,755 $ 87,979 $ 81,477 Less: Securities (gain) loss 2,340 1,699 1,373 7,392 3,637 Less: Subdebt repurchase gain — (637) — (1,417) (617) Add: Other one-time expenses 47 332 — 665 738 Add: Tax (credits) depreciation on solar investments (3,251) — 1,706 (3,251) 3,811 Less: Tax on notable items 227 (396) (664) (909) (1,867) Core net income (non-GAAP) $ 22,058 $ 23,306 $ 27,170 $ 90,459 $ 87,179 Tangible common equity Stockholders' equity (GAAP) $ 585,364 $ 546,291 $ 508,955 $ 585,364 $ 508,955 Less: Minority interest (133) (133) (133) (133) (133) Less: Goodwill (12,936) (12,936) (12,936) (12,936) (12,936) Less: Core deposit intangible (2,217) (2,439) (3,105) (2,217) (3,105) Tangible common equity (non-GAAP) $ 570,078 $ 530,783 $ 492,781 $ 570,078 $ 492,781 Average tangible common equity Average stockholders' equity (GAAP) $ 554,830 $ 538,753 $ 493,761 $ 531,082 $ 520,638 Less: Minority interest (133) (133) (133) (133) (133) Less: Goodwill (12,936) (12,936) (12,936) (12,936) (12,936) Less: Core deposit intangible (2,325) (2,547) (3,232) (2,656) (3,622) Average tangible common equity (non-GAAP) $ 539,436 $ 523,137 $ 477,460 $ 515,357 $ 503,947 Core return on average assets Denominator: Total average assets (GAAP) $ 7,980,509 $ 7,904,566 $ 7,806,589 $ 7,876,312 $ 7,727,165 Core return on average assets (non-GAAP) 1.10% 1.17% 1.38% 1.15% 1.13% Core return on average tangible common equity Denominator: Average tangible common equity $ 539,436 $ 523,137 $ 477,460 $ 515,357 $ 503,947 Core return on average tangible common equity (non-GAAP) 16.22% 17.67% 22.58% 17.55% 17.30% Core efficiency ratio Numerator: Core non-interest expense (non-GAAP) 37,705 37,007 35,570 150,582 139,834 Core efficiency ratio (non-GAAP) 49.74% 51.71% 47.65% 51.33% 51.68% (1) Severance expense for positions eliminated plus, for 2022, expenses related to the termination of the merger agreement with Amalgamated Bank of Chicago. 18
amalgamatedbank.com Member FDIC Amalgamated Financial Corp. Fourth Quarter 2023 Earnings Presentation January 25, 2024
2 Safe Harbor Statements INTRODUCTION On March 1, 2021 (the “Effective Date”), Amalgamated Financial Corp. (the “Company”) completed its holding company reorganization and acquired all of the outstanding stock of Amalgamated Bank (the “Bank”). In this presentation, unless the context indicates otherwise, references to “we,” “us,” and “our” refer to the Company and the Bank. However, if the discussion relates to a period before the Effective Date, the terms refer only to the Bank. FORWARD-LOOKING STATEMENTS Statements included in this presentation 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 forward- looking statements include, but are not limited to, our 2023 Guidance, and statements related to future loss/income (including projected non-interest income) of solar tax equity investments. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors, many of which are beyond our control and 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: 1. 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; 2. deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses 3. 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; 4. changes in our deposits, including an increase in uninsured deposits; 5. unfavorable conditions in the capital markets, which may cause declines in our stock price and the value of our investments; 6. continued fluctuation of the interest rate environment including changes in net interest margin or changes that affect the yield curve on investments; 7. potential deterioration in real estate collateral values 8. changes in legislation, regulation, public policies, or administrative practices impacting the banking industry, including increased regulation in the aftermath of the recent bank failures; 9. the outcome of any legal or regulatory proceedings that may be instituted against us 10. our inability to maintain the historical growth rate of our loan portfolio; 11. changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; 12. 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 13. any matter that would cause us to conclude that there was impairment of any asset, including intangible assets; 14. the risk that the preliminary financial information reported herein and our current preliminary analysis could be different when our review is finalized; 15. increased competition for experienced members of the workforce including executives in the banking industry; 16. 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; 17. increased regulatory scrutiny and exposure from the use of "big data" techniques, machine learning, and artificial intelligence; 18. a downgrade in our credit rating; 19. increased political opposition to Environmental, Social and Governance (“ESG”) practices and Diversity, Equality and Inclusion ("DEI") practices; 20. physical and transitional risks related to climate change as they impact our business and the businesses that we finance; 21. future repurchase of our shares through our common stock repurchase program. Additional factors which could affect the forward-looking statements can be found in our Annual Report 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 www.sec.gov/. We disclaim any obligation to update or revise any forward-looking statements contained in this presentation, which speak only as of the date hereof, or to update the reasons why actual results could differ from those contained in or implied by such statements, whether as a result of new information, future events or otherwise, except as required by law.
3 Safe Harbor Statements cont. NON-GAAP FINANCIAL MEASURES This presentation refers to certain non-GAAP financial measures including, without limitation, “Core operating revenue,” “Core non-interest expense,” “Core non-interest income,” “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, 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 in this presentation 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 presentation and also may be viewed on our website, amalgamatedbank.com. You should assume that all numbers presented are unaudited unless otherwise noted.
4Q23 Highlights 4 (1) See non-GAAP disclosures on pages 22-23 (2) Excludes Brokered CDs and off-balance sheet deposits INCOME STATEMENT(1) BALANCE SHEET CAPITAL Net Income - GAAP $22.7MM Core Net Income $22.1MM Net Interest Income $67.3MM Core Diluted EPS $0.72 Net Interest Margin 3.44 % Core Return on Assets 1.10 % Core Efficiency 49.73 % Deposit growth(2) $170.8MM | +2.6% Loans growth $48.7MM | +1.1% PACE growth $21.5MM | +1.9% Tier 1 8.07 % | +18 bps CET1 12.98 % | +35 bps TBV/sh $18.74 | +7.5% TCE 7.16 % | +44 bps
-$3.8 $3.3 $1.8 -$1.8 -$1.1 -$0.9 -$2.0 -$3.2 $1.2 $1.6 $0.3 $0.3 $0.3 $0.4 $1.2 $1.7 Tax credits (accelerated depreciation) on solar investments Steady state solar income FY22 FY23 1Q24 2Q24 3Q24 4Q24 FY24 FY25 Solar Tax-Equity Investments ACTUAL AND PROJECTED SOLAR INCOME(1)(2)(3) $ millions 5 OVERVIEW OF SOLAR TAX EQUITY INVESTMENTS • Metrics excluding the impact of tax credits or accelerated depreciation is a meaningful way to evaluate our performance and are adjusted in accordance with the below chart ◦ Immediate realization of tax benefits and subsequent accelerated depreciation of the value of the investment creates volatility in the GAAP and core earnings presentations ◦ Steady state income is generally achieved within 4-6 quarters of initial investment and all investments are net profitable over their lives (generally 5 years) • Forecast below includes one new solar tax equity initiative as of 4Q23 (1) Actual 2023 results and projected solar income forecasts have been revised in 4Q23 (2) Balances presented are not tax effected (3) Refer to Reconciliation of Non-GAAP Financial Measures on slides 22-23 for further details on impact to key ratios Actual Forecast
Trends 6 KEY FINANCIAL TRENDS THROUGH 4Q23 ($ in millions) 10.0% CAGR(1) 10.9% CAGR(1) Ending Deposits + Brokered CDs NPA / Total Assets Loans + PACE $4,641 $5,339 $6,356 $6,595 $7,012 $4,641 $5,339 $6,356 $6,521 $6,770 $74 $242 2019 2020 2021 2022 2023 1.25% 1.38% 0.77% 0.44% 0.43% 2019 2020 2021 2022 2023 >> $3,703 $3,868 $3,904 $4,973 $5,451 $3,439 $3,447 $3,276 $4,061 $4,321 $264 $421 $627 $912 $1,130 2019 2020 2021 2022 2023 6.0% CAGR(1) (Loans) (1) Compounded Annual Growth Rate (“CAGR”) (2) See solar tax investment slide 5 for solar components of income excluded from Core Income (3) GAAP Pre-tax, pre-provision income was $139.4 in 2023, $123.2 million in 2022, $70.4 million in 2021, and $86.7 in 2020, the only years impacted by our solar investments Core Pre-Tax Pre-Provision Earnings(2)(3) $69.4 $84.9 $73.3 $130.7 $142.8 2019 2020 2021 2022 2023 19.8% CAGR(1) 9.9% CAGR(1) (excl. Brokered CD)
$6.6 $7.0 $6.9 $7.0 $7.0 $7.0 $5.9 $5.7 $5.6 $5.6 $5.8 $5.7 $0.1 $0.6 $0.5 $0.4 $0.2 $0.2 $0.6 $0.7 $0.8 $1.0 $1.0 $1.1 Political Brokered CDs All Other Deposits 4Q22 1Q23 2Q23 3Q23 4Q23 1/17/24 TOTAL DEPOSITS (on-Balance Sheet) ($ in billions) Deposit Portfolio $1.71 $1.26 $0.81 $0.99 $0.96 $0.60 $0.45 CML - Labor CML - Social/Philanthropy Consumer CML - Political(2) CML - NFP(2) CML - Other(1) CML - Climate/Sustainability • Total deposits increased $21 million or 0.3% in 4Q23 All following metrics exclude Brokered CDs • Total on-balance sheet deposits increased $171 million ◦ Political deposits grew $236 million ◦ Other segment deposits grew $203 million, particularly in not-for-profit and labor ◦ $303 million moved off-balance sheet • Total cost of deposits of 125 basis points, compared to 111 basis points in Q3 as we proactively price to maintain and attract deposits ◦ Interest bearing deposit cost was 221 basis points in Q4 and 200 basis points in Q3 • Non-interest bearing deposits represented 43% of ending deposits in 4Q23 and 43% in 3Q23 ◦ Reciprocal deposits decreased by $42 million, or 3% in the quarter • Loan/Deposit ratio of 63% as of 4Q23 4Q23 HIGHLIGHTS TOTAL CORE DEPOSITS(2) BY IMPACT SEGMENT ($ in billions) (1) CML - Other contains but is not limited to: nursing homes, commercial real estate, and non-impact accounts (2) Core deposits is defined as total deposits including deposits held off-balance sheet, but excluding all brokered deposits, deposits from deposit listing services, temporary transaction deposits, certain escrow deposits, and intercompany deposits, transactional political deposits, and transitional deposits scheduled for our Trust business. We believe the most directly comparable GAAP financial measure is total deposits. 7
Super-Core Deposits 8 SUPER-CORE DEPOSITS(2) BY IMPACT SEGMENT ($ in billions) 4Q23 HIGHLIGHTS (1) CML - Other contains but is not limited to: nursing homes, commercial real estate, and non-impact accounts (2) Super-core deposits are defined as all deposit accounts with a relationship length of over 5 years, excluding brokered certificates of deposit (3) Core deposits is defined as total deposits including deposits held off-balance sheet, but excluding all brokered deposits, deposits from deposit listing services, temporary transaction deposits, certain escrow deposits, intercompany deposits, transactional political deposits and transitional deposits scheduled for our Trust business.. We believe the most directly comparable GAAP financial measure is total deposits. • Super-core deposits(2) make up $3.6 billion, or 52% of total core deposits(3) ◦ Super-core deposits are minimum 5-years old & concentrated within mission-aligned segments ◦ Highly sticky • Weighted average account life of our super-core deposits is 16 years, compared to 2 years for our other core deposits • Cash and borrowing potential totals $3.0 billion, or 202% of uninsured non-super- core deposits, with a total borrowings utilization rate of 7% excluding subordinated debt • Total available liquidity, including cash, unpledged non-PACE securities and borrowing potential totals $3.6 billion or 104% of non-super-core deposits Impact Sector Total Balance ($M) % of Total Core Deposits Weighted Avg. Account Duration (Years) CML - Labor 1,427 21% 20 Consumer - Labor 635 9% 23 CML - Social/Philanthropy 611 9% 9 CML - Political 455 7% 8 CML - Climate/Sustainability 157 2% 8 CML - NFP 68 1% 9 CML - Other(1) 210 3% 16 Total $3,563 52% 16 Other Core Deposits $3,235 48% 2 Total Core Deposits(3) $6,797 9
9 HISTORICAL TREND ($ in billions) Political Deposits • Although cyclical, political deposit balances overall have shown an upward trend YoY - highs and lows have both grown higher ◦ High deposit points are reflected in the quarter preceding a major election season - orange bars ◦ Low deposit points are reflected in the quarter during a major election - gray bars • Strong political deposit growth of $236 million in 4Q23(1), comprising 16.8% of all deposits(1) • Certain political deposits considered non-core have been moved off-balance sheet in the quarter $0.2 $0.3 $0.4 $0.5 $0.6 $0.8 $1.1 $1.2 $0.6 $0.7 $0.8 $1.0 $1.0 $1.1 $1.3 $1.2 $0.6 $0.7 $0.8 $1.0 $1.2 $1.2 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1/17/2024 +49% growth +$32.3mm +17% growth +15% growth (1) Calculation includes deposits currently held off-balance sheet and excludes Brokered CD's
Investment Securities 10 SECURITIES – BOOK VALUE(1)(2) ($ millions) 1. Securities book value excludes unrealized Available for Sale (AFS) gain / loss on sale 2. Non-Agency includes corporate bonds 3. MBS/ABS does not include PACE assessments • Investment Securities totaled $3.3 billion book value for 4Q23 • Agency securities made up 23.5% of the total portfolio in 4Q23, up from 23.2% in 3Q23 • PACE assessments are considered non-agency securities, which are non-rated(3) • Total PACE LTV of 12% • 85.6% of all non-agency MBS/ABS securities are AAA rated and 99.9% are A rated or higher(3); 98.8% of CLO’s are AAA-rated ◦ As of 4Q23 average subordination for the C&I CLOs was 44.4% • 30% of the total securities portfolio (or 46% of the securities portfolio excluding PACE) has a floating rate of interest 4Q23 HIGHLIGHTS $3,485 $3,390 $3,378 $3,303 $3,282 $1,686 $1,560 $1,523 $1,428 $1,382 $912 $996 $1,061 $1,109 $1,130 $887 $834 $794 $766 $770 4.43% 5.07% 5.20% 5.27% 5.43% 2.81% 3.20% 3.12% 3.12% 3.22% 4.32% 5.07% 5.31% 5.44% 5.75% Non-Agency PACE Agency PACE Yield Agency Yield Non-Agency Yield 4Q22 1Q23 2Q23 3Q23 4Q23
• Valuation Loss (Gain) as % of relative portfolio balance ◦ Total $102.3 million | 6.5% ◦ ex-PACE $102.7 million | 6.7% ◦ PACE $(0.44) million | 0.8% • Weighted Average Duration (in years) ◦ Total 2.0 ◦ ex-PACE 1.9 ◦ PACE 4.6 $528 $861 $144 Investment Securities Composition AFS Portfolio Composition(1)(2) ($ in millions) HTM Portfolio Composition(1)(2)(3) ($ in millions) $243 $359 $18 Agency Non-Agency Corporates & Other (1) Both AFS and HTM securities balances shown at book value (2) PACE assets not included in AFS or HTM portfolio composition chart (3) In May of 2022, $277.3 million AFS securities were transferred into our Non-Pace HTM securities portfolio to reduce potential mark to market volatility (4) Weighted average duration calculated using market values of securities 4Q23 HIGHLIGHTS • Weighted average duration(4) is 2.5 years for the total securities portfolio, excl. PACE $1,532mm $620mm AFS HTM • Valuation Loss (Gain) as % of relative portfolio balance ◦ Total $148.0 million | 8.7% ◦ ex-PACE $44.9 million | 7.2% ◦ PACE $103.2 million | 9.6% • Weighted Average Duration (in years) ◦ Total 5.2 ◦ ex-PACE 4.1 ◦ PACE 5.8 11
Loans Held for Investment 12 17.4% 8.7% 15.7% 23.8% 5.9% 12.9% 15.6% Office Office - Owner Occupied Retail Industrial Mixed Use Education Other $1,372 $1,390 $1,389 $1,410 $1,426 $968 $1,063 $1,096 $1,095 $1,148 $926 $924 $949 $1,050 $1,011 $464 $456 $457 $457 $449$335 $327 $333 $324 $353$38 $38 $29 $28 $24 Residential Multifamily C&I Consumer/other CRE Construction and land 4Q22 1Q23 2Q23 3Q23 4Q23 LOAN COMPOSITION ($ in millions) CRE COMPOSITION BY PROPERTY TYPE 42.2% 54.5% 49.2% 40.8% 39.7% 57.1% 57.7% Weighted Avg. LTV TOTAL LOANS ($ in millions) $4,106 $4,198 $4,252 $4,365 $4,411 4.19% 4.40% 4.33% 4.56% 4.68% Total Loans, net Loan Yield 4Q22 1Q23 2Q23 3Q23 4Q23 MULTIFAMILY COMPOSITION BY RENT STABILIZATION 25.8% 17.8% 16.4% 3.6% 4.8% 31.6% Pre 1974 RS Section 8 421a FHEPs Other - Stabilized Non Rent-Stabilized 52.8% 61.3% 58.0% 54.7% 54.0% 48.7% Weighted Avg. LTV
Mission-Aligned Loan Portfolio MULTIFAMILY LOANS BY IMPACT SEGMENT(1) ($ in millions) $1,028 $1 $119 CRE AND LAND LOANS BY IMPACT SEGMENT(1) ($ in millions) $90 $4 $77 $5$6 $194 C&I LOANS BY IMPACT SEGMENT(1) ($ in millions) $11 $534 $151 $58 $7 $250 CONSUMER AND OTHER LOANS BY IMPACT SEGMENT(1)(2) ($ in millions) $407 $43 13(1) For more detail on specific loan types included in each impact segment, see Appendix page 24 (2) Does not include residential or HELOC loans C&I Climate Protection Detail Commercial Solar: $354mm Community Solar and Other: $181mm
Net Interest Income and Margin 14 NET INTEREST INCOME & MARGIN(1)(2) ($ millions) • Net interest income was $67.3 million, compared to $63.7 million in 3Q23 • 4Q23 NIM at 3.44%; an increase of 15 bps compared to 3Q23 • Loan prepayment penalties had no impact on NIM in both 4Q23 and 3Q23 4Q23 HIGHLIGHTS $67.3 $67.3 $63.0 $63.7 $67.3 3.54% 3.59% 3.33% 3.29% 3.44% Net Interest Income Net Interest Margin 4Q22 1Q23 2Q23 3Q23 4Q23 (1) The calculated NIM figures here exclude Allowance for Credit Loss from total interest earning assets across all quarters (2) If Allowance for Credit Loss were included in the NIM calculations above (as it was until 1Q2023), net interest margin would be 3.56% and 3.62% for 4Q22, and 1Q23, respectively
Non-Interest Income 15 CORE NON-INTEREST INCOME (1) ($ millions) • Our trust business held $41.7 billion in assets under custody and $14.8 billion in assets under management, compared to $39.6 billion and $13.9 billion, respectively, in the preceding quarter; this increase was primarily driven by an increase in fair value due to modest market improvements in Q4 • Trust fee income fell $0.1 million quarter over quarter, primarily due to decreases in Trust Department fees as we strive for net revenue quality • Retail banking income rose $0.4mm quarter over quarter, driven by higher treasury investment service fees and increased one-way-sell income on ICS accounts 4Q23 HIGHLIGHTS (1) See non-GAAP disclosures on pages 22-23 $7.3 $7.5 $8.2 $7.8 $8.5 $0.7 $1.1 $1.5 $1.4 $1.8 $3.6 $3.9 $4.0 $3.7 $3.6 $3.0 $2.5 $2.7 $2.7 $3.1 Retail banking Trust fee income Core other income (1) 4Q22 1Q23 2Q23 3Q23 4Q23
Non-Interest Expense and Efficiency 16 NON-INTEREST EXPENSE ($ millions) • Efficiency ratio of 49.2% for 4Q23 • Core efficiency ratio excluding the impact of our solar tax equity investments of 49.7% for 4Q23(1) • Non-interest expense for 4Q23 was $37.8 million • Non-interest expense for 4Q23 was $0.5 million higher compared to 3Q23 4Q23 HIGHLIGHTS (1) See non-GAAP disclosures on pages 22-23 $35.6 $38.6 $37.2 $37.0 $37.7 $35.6 $38.6 $37.5 $37.3 $37.8 47.6% 51.6% 52.3% 51.7% 49.7%49.7% 53.3% 52.9% 53.0% 49.2% Core NIX NIX Core Eff Ratio (1) Eff Ratio 4Q22 1Q23 2Q23 3Q23 4Q23
Credit Quality 17 NPA / TOTAL ASSETS NCO / AVERAGE LOANS(1) (Quarter Trend) 4Q23 HIGHLIGHTS • Nonperforming assets were $34.2 million as of 4Q23, compared to $36.5 million in 3Q23 • Net charge-offs of 0.51% in 4Q23 was 23 bps higher than 3Q23 due to the charge-off of one $4.7mm construction loan • Criticized and classified loans increased by $22.0 million, due to targeted risk rating adjustments on 3 commercial & industrial loans or 25.0%; Pass rated loans are 98% of loan portfolio 0.37% 0.49% 0.45% 0.46% 0.43% 4Q22 1Q23 2Q23 3Q23 4Q23 0.15% 0.25% 0.29% 0.27% 0.51% Solar Residential Commercial 4Q22 1Q23 2Q23 3Q23 4Q23 CRITICIZED AND CLASSIFIED LOANS ($ millions) $107 $110 $104 $88 $111 4Q22 1Q23 2Q23 3Q23 4Q23 (1) Annualized
Allowance for Credit Losses on Loans 18 ALLOWANCE FOR LOAN LOSSES / TOTAL LOANS • Allowance for credit losses on loans totaled $65.7 million in 4Q23, or $2.1 million lower than 3Q23, primarily due to the charge-off of one $4.7mm construction loan, partially offset by improvements in macro-economic forecasts used in the CECL model 4Q23 HIGHLIGHTS 1.10% 1.61% 1.59% 1.55% 1.49% 4Q22 1Q23 2Q23 3Q23 4Q23 ALLOWANCE WATERFALL ($ millions) $67.8 $(5.5) $(0.5) $(0.1) $4.4 $1.3 $(1.8) $65.7 9/30/2023 NCO's Loan Balances Specific Reserves Charge Off Expense Quant Qual 12/31/23 CECL Adoption
Core ROAE Per-Share KPI'sCapital Ratios 7.52% 7.50% 7.78% 7.89% 8.07% 12.31% 12.23% 12.51% 12.63% 12.98% 6.30% 6.43% 6.59% 6.72% 7.16% Leverage Ratio CET1 TCE 4Q22 1Q23 2Q23 3Q23 4Q23 Core ROAA $16.05 $16.42 $16.78 $17.43 $18.74 $0.83 $0.74 $0.72 $0.76 $0.72 $2.40 $2.42 $2.31 $2.34 $2.48 TBV EPS(1) Rev/Sh(1) 4Q22 1Q23 2Q23 3Q23 4Q23 1.38% 1.19% 1.13% 1.17% 1.10% 4Q22 1Q23 2Q23 3Q23 4Q23 21.8% 18.6% 16.8% 17.2% 15.8% 4Q22 1Q23 2Q23 3Q23 4Q23 (1) Core metrics shown 19 Performance Tracking
2024 Guidance 20 2024 FINANCIAL OUTLOOK • Core pre-tax pre-provision earnings of $143 million to $148 million • Net Interest Income of $268 million to $272 million - considers the effect of the forward rate curve through 2024 • Conditional 2H Balance Sheet growth ~ 3%: ◦ 1H Neutral Balance Sheet ~ $8B ◦ Achieve 8.5% Tier 1 leverage target ◦ Deposit gathering performance | Credit performance | Stable macroeconomic factors
Appendix
Reconciliation of Non-GAAP Financials 22 As of and for the As of and for the Three Months Ended Year Ended (in thousands) December 31, 2023 September 30, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Core operating revenue Net Interest income (GAAP) $ 67,319 $ 63,728 $ 67,346 $ 261,311 $ 239,840 Non-interest income 9,406 6,780 4,226 29,336 23,897 Less: Securities (gain) loss 2,340 1,699 1,373 7,392 3,637 Less: Subdebt repurchase gain — (637) — (1,417) (617) Add: Tax (credits) depreciation on solar investments (3,251) — 1,706 (3,251) 3,811 Core operating revenue (non-GAAP) $ 75,814 $ 71,570 $ 74,651 $ 293,371 $ 270,568 Core non-interest expense Non-interest expense (GAAP) $ 37,752 $ 37,339 $ 35,570 $ 151,247 $ 140,571 Less: Other one-time expenses (1) (47) (332) — (665) (738) Core non-interest expense (non-GAAP) $ 37,705 $ 37,007 $ 35,570 $ 150,582 $ 139,833 Core net income Net Income (GAAP) $ 22,695 $ 22,308 $ 24,755 $ 87,979 $ 81,477 Less: Securities (gain) loss 2,340 1,699 1,373 7,392 3,637 Less: Subdebt repurchase gain — (637) — (1,417) (617) Add: Other one-time expenses 47 332 — 665 738 Less: Tax on notable items (627) (396) (296) (1,782) (927) Add: Tax (credits) depreciation on solar investments (3,251) — 1,706 (3,251) 3,811 Less: Tax on notable items 227 (396) (664) (909) (1,867) Core net income (non-GAAP) $ 22,058 $ 23,306 $ 27,170 $ 90,459 $ 87,179 (1) Severance expense reimbursement expense for positions eliminated plus, for 2022, expenses related to the termination of the merger agreement with Amalgamated Bank of Chicago
Reconciliation of Non-GAAP Financials 23 As of and for the As of and for the Three Months Ended Year Ended (in thousands) December 31, 2023 September 30, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Tangible common equity Stockholders' equity (GAAP) $ 585,364 $ 546,291 $ 508,955 $ 585,364 $ 508,955 Less: Minority interest (133) (133) (133) (133) (133) Less: Goodwill (12,936) (12,936) (12,936) (12,936) (12,936) Less: Core deposit intangible (2,217) (2,439) (3,105) (2,217) (3,105) Tangible common equity (non-GAAP) $ 570,078 $ 530,783 $ 492,781 $ 570,078 $ 492,781 Average tangible common equity Average stockholders' equity (GAAP) $ 554,830 $ 538,753 $ 493,761 $ 531,082 $ 520,638 Less: Minority interest (133) (133) (133) (133) (133) Less: Goodwill (12,936) (12,936) (12,936) (12,936) (12,936) Less: Core deposit intangible (2,325) (2,547) (3,232) (2,656) (3,622) Average tangible common equity (non-GAAP) $ 539,436 $ 523,137 $ 477,460 $ 515,357 $ 503,947 Core return on average assets Core net income (non-GAAP) $ 24,455 $ 23,306 $ 25,832 $ 92,837 $ 84,308 Denominator: Total average assets (GAAP) 7,980,509 7,904,566 7,806,589 7,876,312 7,727,165 Core return on average assets (non-GAAP) 1.10% 1.17% 1.38% 1.15% 1.13% Core return on average tangible common equity Core net income (non-GAAP) $ 24,455 $ 23,306 $ 25,832 $ 92,837 $ 84,308 Denominator: Average tangible common equity 539,436 523,137 477,460 515,357 503,947 Core return on average tangible common equity (non-GAAP)(1) 16.22% 17.67% 22.58% 17.55% 17.30% Core efficiency ratio Numerator: Core non-interest expense (non-GAAP) $ 37,705 $ 37,007 $ 35,570 $ 150,582 $ 139,834 Core operating revenue (non-GAAP) 75,814 71,570 74,651 293,371 270,568 Core efficiency ratio (non-GAAP)(1) 49.74% 51.71% 47.65% 51.33% 51.68% (1) Calculated using core net income (Non-GAAP) in the numerator, as detailed on page 25
Impact Segment Definitions LOAN TYPES INCLUDED WITHIN EACH IMPACT SEGMENT 24 Climate Protection • Renewable Energy • Energy Efficiency • Energy Storage Community Empowerment • Non-Profits • CDFI's • Labor Unions • Political Organizations Health & Wellness • Medical Facilities • Rehabilitation Centers • Senior Care • Memory Care Housing • Low/Middle Income Housing • Workforce Housing Sustainable Commerce • Manufacturers • Distributors • Service Companies with Sustainable Practices Non-Impact • Other loans (including legacy C&I agreements) that are not mission-aligned
Tangible Book Value 531 23 (3) (1) — 2 19 570 17.43 18.18 18.08 18.04 18.08 18.11 18.74 18.74 9/30/23 Earnings Dividends @ $.10/ share Buybacks - Equity Impact Buybacks - Share count Other(1) AFS Mark 12/31/23 TANGIBLE COMMON EQUITY & TANGIBLE BOOK VALUE ($ millions) 4Q23 SUMMARY • TBV increase of 7.51% primarily driven by: ◦ $22.7 million in net income ◦ $19.2 million improvement in the tax- affected mark-to-market adjustment ◦ Offset slightly by regular retained earnings impact of dividend issuance • No accretive affect to TBV from share repurchase activity in the quarter • Tangible Common Equity Ratio was 7.16% • Dividend Payout Ratio was 13.6% (1) Other includes the effect of stock issuance 25
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