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amal-20210729
0001823608false00018236082021-04-132021-04-1300018236082021-07-292021-07-29

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): July 29, 2021 (June 30, 2021)
Amalgamated Financial Corp.
(Exact name of registrant as specified in its charter)
Delaware
001-40136
85-2757101
(State or other jurisdiction
of incorporation)		(Commission File Number)(I.R.S. Employer Identification
No.)
275 Seventh Avenue, New York, New York 10001
(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):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareAMALThe Nasdaq Global Market

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).

Emerging growth company ☒

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 July 29, 2021, Amalgamated Financial Corp. (“Company”) issued a press release announcing financial results for the second quarter ended June 30, 2021. 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 July 29, 2021, the Company will hold an earnings conference call and webcast at 11:00 a.m. (Eastern Time) to discuss financial results for the second quarter ended June 30, 2021. 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:    
President and Chief Executive Officer
Date: July 29, 2021

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Amalgamated Financial Corp. Reports Second Quarter 2021 Financial Results

NEW YORK – (Globe Newswire) -- July 29, 2021: Amalgamated Financial Corp. (the “Company” or “Amalgamated”) (Nasdaq: AMAL), the holding company for Amalgamated Bank (the “Bank”), today announced financial results for the second quarter ended June 30, 20211.

Second Quarter 2021 Highlights
•Net income of $10.4 million, or $0.33 per diluted share, compared to $12.2 million, or $0.39 per diluted share, for the first quarter of 2021 and $10.4 million, or $0.33 per diluted share for the second quarter of 2020.
•Deposits increased $189.9 million to $5.9 billion on a linked quarter basis.
•Political deposits remained strong and stable at $791.3 million as of June 30, 2021, with $99.3 million growth on a linked quarter basis.
•Cost of deposits was 0.10%, down 10 bps from the second quarter of 2020.
•PACE assessments grew $94.2 million to $545.8 million on a linked quarter basis, and grew $222.4 million on a year over year basis. Current quarter growth included $82.8 million of Commercial PACE assessments.
•Loans decreased $85.4 million to $3.1 billion, on a linked quarter basis, due to continued prepayment activity and paydowns on commercial revolvers.
•Net interest margin was 2.75%, compared to 2.85% for the first quarter of 2021 and 3.10% for the second quarter of 2020.
•Repurchased approximately 154,000 shares, or $2.5 million of common stock.
•Regulatory capital remains above bank “well capitalized” standards.
•Nonperforming assets improved to $71.0 million or 1.08% of total assets as of June 30, 2021, compared to $81.0 million or 1.27% of total assets on a linked quarter basis.

Priscilla Sims Brown, President and Chief Executive Officer, commented, “I am encouraged to report that our second quarter results provide confirmation of the continuing soundness of Amalgamated’s financial foundation, which underpins our ability to grow and accelerate profitability. Our deposit franchise remains a source of strength with one of the lowest cost of deposits in the industry at 10 basis points and powered by political deposits which have steadily grown following the recent election cycle. Our underwriting and credit management has positioned the Bank to explore a range of mission-aligned options as we focus on organic loan growth. While the current backdrop remains challenging as loan demand is tepid and prepayments remained elevated, our PACE assessments pipeline in both residential and commercial is encouraging and we are optimistic for loan demand to rebound as we look to the second half of the year.”

Brown added, “I am delighted that the Board asked me to lead Amalgamated into the future. After spending more than 30 years in the banking and financial services sectors, what attracted me to Amalgamated was their ability to redefine the concept of banking, never wavering from their century-long mission of empowering organizations and individuals to advance positive social change. I have spent a good portion of my career building brands both nationally and internationally in banking and financial services firms in the public and private sectors. Amalgamated’s mission is one that needs to be told to a world that is increasingly receptive to hearing it. We see significant opportunities in the markets in which Amalgamated participates and we are strategically evaluating how to maximize our brand and the ways we do business, including deepening our high-value client relationships, expanding our customer base, accelerating organic loan growth, and exploring M&A opportunities. I look forward to providing a more detailed plan on our third quarter call.”

[1] Effective March 1, 2021, the Company acquired all of the outstanding stock of the Bank in a reorganization effected under New York law and in accordance with the terms of a Plan of Acquisition dated September 4, 2020. In this release, 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.


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Results of Operations, Quarter Ended June 30, 2021

Net income for the second quarter of 2021 was $10.4 million, or $0.33 per diluted share, compared to $12.2 million, or $0.39 per diluted share, for the first quarter of 2021 and $10.4 million, or $0.33 per diluted share, for the second quarter of 2020. The $1.8 million decrease for the second quarter of 2021 was primarily due to a $1.7 million provision expense for loan losses compared to a $3.3 million release of provision for loan losses in the preceding quarter. The provision expense increase was partially offset by a $1.4 million decrease in non-interest expense, and a $1.3 million increase in non-interest income.

Core net income (non-GAAP)2 for the second quarter of 2021 was $10.2 million, or $0.32 per diluted share, compared to $13.0 million, or $0.41 per diluted share, for the first quarter of 2021 and $10.6 million, or $0.34 per diluted share, for the second quarter of 2020. Excluded from core net income for the second quarter of 2021 was $0.3 million of non-interest income gains on the sale of securities, and for the first quarter of 2021 was $1.1 million of severance expense related to the modernization of our Trust Department and its related tax impact. Excluded from core net income for the second quarter of 2020 was $0.5 million of non-interest income gains on the sale of securities, $0.7 million in expense related to the closure of six branches, and other adjustments, including the tax effect of such adjustments.

Net interest income was $42.0 million for the second quarter of 2021, compared to $41.8 million for the first quarter of 2021 and $44.4 million for the second quarter of 2020. The $0.2 million increase from the preceding quarter reflected higher income on securities and lower interest expense on deposits, almost wholly offset by a decrease in interest income as average loans decreased $130.9 million from the prepayment and paydowns of residential and commercial loans. The $2.4 million decrease from the second quarter of 2020 was primarily attributable to a decrease in average loans of $408.3 million from the prepayment of residential and commercial loans and a 15 basis point decrease in yield due to lower yields on originations, partially offset by higher income on securities and lower interest expense on deposits.

Net interest margin was 2.75% for the second quarter of 2021, a decrease of 10 basis points from 2.85% in the first quarter of 2021, and a decrease of 35 basis points from 3.10% in the second quarter of 2020. The accretion of the loan mark from the loans acquired in the New Resource Bank acquisition contributed two basis points to our net interest margin in the second quarter of 2021, compared to two and three basis points in the first quarter of 2021 and second quarter of 2020, respectively. Prepayment penalties earned in loan income contributed three basis points to our net interest margin in the second quarter of 2021, compared to four basis points in the first quarter of 2021 and two basis points in the second quarter of 2020.

Provision for loan losses totaled an expense of $1.7 million for the second quarter of 2021 compared to a recovery of $3.3 million in the first quarter of 2021 and an expense of $8.2 million for the second quarter of 2020, respectively. The expense in the second quarter of 2021 was primarily driven by an increase in allowance due to an increase of specific reserves for C&I loans, countered by net balance reductions.

Non-interest income was $5.3 million for the second quarter of 2021, compared to $4.0 million in the first quarter of 2021 and $8.7 million for the second quarter in 2020. This increase of $1.3 million in the second quarter of 2021, compared to the preceding quarter, was primarily due to the expected decrease in equity method investment losses related to investments in solar initiatives partially offset by a decrease of $0.5 million in Trust Department fees primarily attributed to the low interest rate environment and pressure on fixed income bonds. The decrease of $3.4 million in the second quarter of 2021 compared to the corresponding quarter in 2020 was primarily due to a loss of $1.6 million related to equity investments in solar initiatives in the second quarter of 2021 compared to a $1.3 million gain in the second quarter of 2020. The Company primarily recognized the benefit of the tax credits in 2020, the initial year of the equity investment. We expect minimal
[2] 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.


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losses in equity method investments during the remainder of 2021. These impacts do not include any benefits of new solar equity investments that we may make in the future.

Non-interest expense for the second quarter of 2021 was $31.4 million, a decrease of $1.4 million from the first quarter of 2021 and an increase of $0.3 million from the second quarter of 2020. The decrease of $1.4 million from the preceding quarter was primarily due to a $1.1 million charge for severance related to the modernization of our Trust Department in the first quarter of 2021 and a decrease in professional service expense.

Our provision for income tax expense was $3.8 million for the second quarter of 2021, compared to $4.1 million for the first quarter of 2021 and $3.4 million for the second quarter of 2020. Our effective tax rate for the second quarter of 2021 was 26.9%, compared to 25.4% for the first quarter of 2021 and 24.9% for the second quarter of 2020.

Results of Operations, Six Months Ended June 30, 2021

Net income for the six months ended June 30, 2021 was $22.6 million, or $0.72 per average diluted share, compared to $19.9 million, or $0.64 per average diluted share, for same period in 2020. The $2.7 million increase was primarily due to a $1.6 million recovery of provision for loan loss compared to a $16.8 million increase to provision for loan loss for the same period in 2020. This recovery of provision was partially offset by a $8.5 million decrease in non-interest income, a $5.3 million decrease in net interest income and a $0.9 million increase in non-interest expense.

Core net income (non-GAAP) for the six months ended June 30, 2021 of $23.2 million, or $0.73 per diluted share, compared to $19.7 million or $0.63 per diluted share, for the same period last year. Core net income for the first six months of 2021 excludes severance costs, non-interest income gains on the sale of securities, and the tax effect of such adjustments.

Net interest income was $83.8 million for the six months ended June 30, 2021, compared to $89.1 million for the same period in 2020. This decrease of $5.3 million was primarily attributable to a decrease in average loans of $289.6 million and lower yields earned on interest bearing assets. These impacts are partially offset by an increase in average securities of $670.0 million, and a decrease in average rates paid on deposits.

Provision for loan losses totaled a recovery of $1.6 million for the six months ended June 30, 2021, compared to an expense of $16.8 million for the same period in 2020. The recovery for the six months ended June 30, 2021 was primarily driven by a release of allowance for loan loss due to lower loan balances, and the upgrade of one construction loan to a pass rating, countered by an increase in allowance due to an increase of specific reserves for C&I loans.

Non-interest income was $9.3 million for the six months ended June 30, 2021, compared to $17.8 million for the same period in 2020, a decrease of $8.5 million. This decrease is primarily due to a decrease of $6.8 million in a tax credits on equity investment projects, a $1.4 million gain on the sale of a branch reported in other non-interest income in the prior year, a $0.9 million decrease in Trust Department fees primarily attributed to the low interest rate environment and pressure on fixed income bonds, as mentioned above, the expected wind-down of the real estate fund, and a decrease in gain on the sale of securities. These decreases were partially offset by an increase of $1.1 million in gains on the sale of residential loans.

Non-interest expense for the six months ended June 30, 2021 was $64.2 million, an increase of $0.9 million from $63.3 million for the six months ended June 30, 2020. The increase was primarily due to a $1.9 million increase in professional fees mainly related to our holding company formation and chief executive officer search, a $1.1 million increase in data processing mainly related to the modernization of our Trust Department and increased transaction processing post COVID-19, and a $0.9 million increase in other expenses, offset by a $2.9 million decrease in branch occupancy expense attributed to branch closure expenses in the prior year and lower rent expense in the current year.



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We had income tax expense of $8.0 million for the six months ended June 30, 2021, compared to $6.9 million for the same period in 2020. Our effective tax rate was 26.0% for the six months ended June 30, 2021, compared to 25.6% for the same period in 2020.

Financial Condition

Total assets were $6.6 billion at June 30, 2021, compared to $6.0 billion at December 31, 2020. The increase of $0.6 billion was driven primarily by a $508.7 million increase in cash and cash equivalents and a $415.2 million increase in investment securities, of which $94.2 million was from PACE assessments, which was partially offset by a $309.9 million decrease in loans receivable, net.

Total loans, net at June 30, 2021 were $3.1 billion, a decrease of $309.9 million, or 18.1% annualized, compared to December 31, 2020. The decline in loans was primarily driven by a $152.9 million decrease in residential loans due to increased refinancing activity by existing customers, a $119.6 million decrease in commercial real estate and multifamily loans due to refinancing activity by existing customers, and a $58.2 million decrease in C&I loans due to the payoff of one large loan. As of June 30, 2021, the Company had $4.0 million in loans remaining on a payment deferral program and still accruing interest, the majority of which were residential 1-4 family loans, and none were commercial loans.

Deposits at June 30, 2021 were $5.9 billion, an increase of $571.3 million, or 21.6% annualized, as compared to $5.3 billion as of December 31, 2020. Deposits held by politically active customers, such as campaigns, PACs, advocacy-based organizations, and state and national party committees were $791.3 million as of June 30, 2021, an increase of $188.5 million compared to $602.8 million as of December 31, 2020. Noninterest-bearing deposits represent 51% of average deposits and 50% of ending deposits for the quarter ended June 30, 2021, contributing to an average cost of deposits of 0.10% in the second quarter of 2021, a one basis point decrease from the preceding quarter.

Nonperforming assets totaled $71.0 million, or 1.08% of period-end total assets at June 30, 2021, a decrease of $11.2 million, compared with $82.2 million, or 1.38% of period-end total assets at December 31, 2020. The decrease in non-performing assets at June 30, 2021 compared to December 31, 2020 was primarily driven by the payoff of $11.2 million of non-accruing construction loans, and the decrease of $1.4 million of loans ninety days past due and accruing, partially offset by an increase of $2.1 million of C&I loans.

The allowance for loan losses decreased $3.6 million to $38.0 million at June 30, 2021 from $41.6 million at December 31, 2020, primarily due to decreases in loan balances. At June 30, 2021, we had $70.6 million of impaired loans for which a specific allowance of $6.3 million was made, compared to $80.5 million of impaired loans at December 31, 2020 for which a specific allowance of $6.2 million was made. The ratio of allowance to total loans was 1.20% at June 30, 2021 and 1.19% at December 31, 2020.

Capital

As of June 30, 2021, our Common Equity Tier 1 Capital Ratio was 13.63%, Total Risk-Based Capital Ratio was 14.68%, and Tier-1 Leverage Capital Ratio was 7.93%, compared to 13.11%, 14.25% and 7.97%, respectively, as of December 31, 2020. Stockholders’ equity at June 30, 2021 was $548.2 million, compared to $535.8 million at December 31, 2020. The increase in stockholders’ equity was driven by $22.6 million of net income, partially offset by a $1.5 million decrease in accumulated other comprehensive income due to the mark to market on our securities portfolio and $3.7 million decrease in additional paid-in capital.

Our tangible book value per share was $17.07 as of June 30, 2021 compared to $16.66 as of December 31, 2020.



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Conference Call

As previously announced, Amalgamated Financial Corp. will host a conference call to discuss its second quarter 2021 results today, July 29th, 2021 at 11:00am (Eastern Time). The conference call can be accessed by dialing 1-877-407-9716 (domestic) or 1-201-493-6779 (international) and asking for the Amalgamated Financial Corp. Second Quarter 2021 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 13720783. The telephonic replay will be available until August 5, 2021.

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

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

About Amalgamated Financial Corp.

Amalgamated Financial Corp. is a Delaware public benefit corporation and a bank holding company engaged in commercial banking and financial services through its wholly-owned subsidiary, Amalgamated Bank. Amalgamated Bank is a New York-based full-service commercial bank and a chartered trust company with a combined network of six branches in New York City, Washington D.C., San Francisco, and Boston. Amalgamated Bank was formed in 1923 as Amalgamated Bank of New York by the Amalgamated Clothing Workers of America, one of the country's oldest labor unions. Amalgamated Bank provides commercial banking and trust services nationally and offers a full range of products and services to both commercial and retail customers. Amalgamated Bank is a proud member of the Global Alliance for Banking on Values and is a certified B Corporation®. As of June 30, 2021, our total assets were $6.6 billion, total net loans were $3.1 billion, and total deposits were $5.9 billion. Additionally, as of June 30, 2021, our trust business held $39.2 billion in assets under custody and $16.6 billion in assets under management.

Non-GAAP Financial Measures

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

Our management utilizes this information to compare our operating performance for June 30, 2021 versus certain periods in 2020 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-


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GAAP financial disclosures to comparable GAAP measures found in this release are set forth in the final pages of this release and also may be viewed on our website, amalgamatedbank.com.

Terminology

Certain terms used in this release are defined as follows:

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

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

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

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

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

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

“Core 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.

Forward-Looking Statements

Statements included in this release that are not historical in nature are intended to be, and are hereby identified as, forward-looking statements within the meaning of the Private Securities Litigation Reform Act, Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally can be identified through the use of forward-looking terminology such as “may,” “will,” “anticipate,” “should,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “in the future,” “may” and “intend,” as well as other similar words and expressions of the future, and in this press release include statements about expected rebound in loan demand, the wind-down in our real estate fund and the losses in our equity method investments. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors, any or all of which could cause actual results to differ materially from the results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: (i) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses; (ii) continuation of the historically low short-term interest rate environment; (iii) our inability to maintain the historical growth rate of the loan portfolio; (iv) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (v) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on our results, including as a result of compression to net


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interest margin; (vi) greater than anticipated adverse conditions in the national or local economies including in our core markets, including, but not limited to, the negative impacts and disruptions resulting from the outbreak of the novel coronavirus, or COVID-19, which may continue to have an adverse impact on our business, operations and performance, and could continue to have a negative impact on our credit portfolio, share price, borrowers, and on the economy as a whole, both domestically and globally; (vii) fluctuations or unanticipated changes in interest rates on loans or deposits or that affect the yield curve; (viii) the results of regulatory examinations; (ix) potential deterioration in real estate values; (x) changes in legislation, regulation, policies, or administrative practices, whether by judicial, governmental, or legislative action; (xi) the risk that the preliminary financial information reported herein and our current preliminary analysis will be different when our review is finalized; (xii) increased competition for experienced executives in the banking industry; and (xiii) unexpected challenges and potential operational disruptions related to our executive officer transitions. Additional factors which could affect the forward-looking statements can be found in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the SEC and available on the SEC's website at https://www.sec.gov/. We disclaim any obligation to update or revise any forward-looking statements contained in this release, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by law.

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





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Consolidated Statements of Income (unaudited)
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
($ in thousands)20212021202020212020
INTEREST AND DIVIDEND INCOME
    Loans$30,156 $31,109 $35,225 $61,265 $70,837 
    Securities13,094 12,170 11,746 25,264 24,299 
    Federal Home Loan Bank of New York stock41 48 66 89 135 
    Interest-bearing deposits in banks131 90 83 221 479 
                 Total interest and dividend income43,422 43,417 47,120 86,839 95,750 
INTEREST EXPENSE
    Deposits1,4311,5732,6813,0036,596
    Borrowed funds— — — — 27 
                 Total interest expense1,431 1,573 2,681 3,003 6,623 
NET INTEREST INCOME41,991 41,844 44,439 83,836 89,127 
    Provision for (recovery of) loan losses1,682 (3,261)8,221 (1,579)16,808 
                 Net interest income after provision for loan losses40,309 45,105 36,218 85,415 72,319 
NON-INTEREST INCOME
    Trust Department fees 3,2923,8273,9807,1188,066
    Service charges on deposit accounts 2,296 2,178 1,850 4,475 4,261 
    Bank-owned life insurance 531 788 1,111 1,319 1,495 
    Gain (loss) on sale of investment securities available for sale, net321 21 486 342 985 
    Gain (loss) on sale of loans, net720 707 162 1,426 297 
    Gain (loss) on other real estate owned, net(407)—(283)(407)(306)
    Equity method investments(1,555)(3,682)1,289 (5,237)1,289 
    Other129 161 76 290 1,702 
                 Total non-interest income5,327 4,000 8,671 9,326 17,789 
NON-INTEREST EXPENSE
    Compensation and employee benefits16,964 18,039 17,334 35,003 34,792 
    Occupancy and depreciation3,352 3,501 4,241 6,853 9,747 
    Professional fees3,211 3,661 1,988 6,871 4,971 
    Data processing3,322 3,005 2,977 6,327 5,241 
    Office maintenance and depreciation820 655 818 1,475 1,675 
    Amortization of intangible assets302 302 342 604 685 
    Advertising and promotion628 597 672 1,225 1,339 
    Other2,796 3,033 2,696 5,831 4,889 
                 Total non-interest expense31,39532,79331,06864,18963,339
Income before income taxes14,24116,31213,82130,55226,769
    Income tax expense (benefit)3,833 4,123 3,447 7,955 6,850 
                 Net income10,40812,18910,37422,59719,919
Net income attributable to Amalgamated Financial Corp.$10,408 $12,189 $10,374 $22,597 $19,919 
Earnings per common share - basic0.33 0.39 0.33 0.73 0.64 
Earnings per common share - diluted0.33 0.39 0.33 0.72 0.64 



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Consolidated Statements of Financial Condition
($ in thousands)June 30,
2021		December 31, 2020
Assets(unaudited)
Cash and due from banks$7,960 $7,736 
Interest-bearing deposits in banks539,485 31,033 
Total cash and cash equivalents547,445 38,769 
Securities:
Available for sale, at fair value (amortized cost of $1,799,993 and $1,513,409, respectively)1,824,726 1,539,862 
Held-to-maturity (fair value of $621,954 and $502,425, respectively)624,826 494,449 
Loans held for sale8,230 11,178 
Loans receivable, net of deferred loan origination costs (fees)3,175,461 3,488,895 
Allowance for loan losses(38,012)(41,589)
Loans receivable, net3,137,449 3,447,306 
Resell agreements141,651 154,779 
Accrued interest and dividends receivable22,648 23,970 
Premises and equipment, net12,876 12,977 
Bank-owned life insurance106,197 105,888 
Right-of-use lease asset35,072 36,104 
Deferred tax asset, net24,328 36,079 
Goodwill12,936 12,936 
Other intangible assets4,755 5,359 
Equity investments6,296 11,735 
Other assets46,83747,240
                 Total assets$6,556,272 $5,978,631 
Liabilities
Deposits$5,909,992 $5,338,711 
Operating leases51,165 53,173 
Other liabilities46,904 50,926 
                 Total liabilities6,008,061 5,442,810 
Commitments and contingencies——
Stockholders’ equity
Common stock, par value $.01 per share (70,000,000 shares authorized; 31,073,669 and 31,049,525 shares issued and outstanding, respectively)311310
Additional paid-in capital297,283 300,989 
Retained earnings234,769 217,213 
Accumulated other comprehensive income (loss), net of income taxes15,715 17,176 
                 Total Amalgamated Financial Corp. stockholders' equity548,078 535,688 
Noncontrolling interests133 133 
                 Total stockholders' equity548,211 535,821 
                 Total liabilities and stockholders’ equity$6,556,272 $5,978,631 


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Select Financial Data

As of and for theAs of and for the
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
(Shares in thousands)20212021202020212020
Selected Financial Ratios and Other Data:
Earnings
   Basic$0.33 $0.39 $0.33 0.73 0.64 
   Diluted 0.33 0.39 0.33 0.72 0.64 
Core net income (non-GAAP)
   Basic$0.33 $0.42 $0.34 0.74 0.63 
   Diluted 0.32 0.41 0.34 0.73 0.63 
Book value per common share (excluding minority interest)17.64 17.33 16.22 17.64 16.22 
Tangible book value per share (non-GAAP)17.07 16.75 15.61 17.07 15.61 
Common shares outstanding31,074 31,169 31,050 31,074 31,050 
Weighted average common shares outstanding, basic31,136 31,082 31,023 31,109 31,217 
Weighted average common shares outstanding, diluted31,572 31,524 31,035 31,545 31,345 


















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Select Financial Data

As of and for theAs of and for the
Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,
20212021202020212020
Selected Performance Metrics:
Return on average assets0.65 %0.79 %0.69 %0.72 %0.70 %
Core return on average assets (non-GAAP)0.64 %0.85 %0.70 %0.74 %0.69 %
Return on average equity7.62 %9.11 %8.56 %8.36 %8.10 %
Core return on average tangible common equity (non-GAAP)7.70 %10.05 %9.07 %8.86 %8.35 %
Average equity to average assets 8.57 %8.71 %8.03 %8.63 %8.61 %
Tangible common equity to assets 8.09 %8.18 %7.49 %8.09 %7.49 %
Loan yield3.82 %3.83 %3.97 %3.83 %4.05 %
Securities yield2.15 %2.18 %2.59 %2.17 %2.91 %
Deposit cost0.10 %0.11 %0.20 %0.11 %0.26 %
Net interest margin2.75 %2.85 %3.10 %2.80 %3.27 %
Efficiency ratio (1)
66.35 %71.53 %58.50 %68.90 %59.24 %
Core efficiency ratio (non-GAAP) (1)
66.80 %69.18 %57.68 %67.98 %58.56 %
Asset Quality Ratios:
Nonaccrual loans to total loans1.64 %1.78 %1.24 %1.64 %1.24 %
Nonperforming assets to total assets1.08 %1.27 %1.15 %1.08 %1.15 %
Allowance for loan losses to nonaccrual loans73.20 %63.32 %109.49 %73.20 %109.49 %
Allowance for loan losses to total loans1.20 %1.13 %1.36 %1.20 %1.36 %
Annualized net charge-offs (recoveries) to average loans0.04 %0.20 %0.06 %0.12 %0.04 %
Capital Ratios:
Tier 1 leverage capital ratio7.93 %8.06 %7.69 %7.93 %7.69 %
Tier 1 risk-based capital ratio13.63 %13.70 %12.32 %13.63 %12.32 %
Total risk-based capital ratio14.68 %14.74 %13.57 %14.68 %13.57 %
Common equity tier 1 capital ratio13.63 %13.70 %12.32 %13.63 %12.32 %
(1) Efficiency ratio is calculated by dividing total non-interest expense by the sum of net interest income and total non-interest income





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Loan and Held-to-Maturity Securities Portfolio Composition

(In thousands)At June 30, 2021At March 31, 2021At June 30, 2020
Amount% of total loansAmount% of total loansAmount% of total loans
Commercial portfolio:
Commercial and industrial$619,037 19.5%$612,581 18.8 %$617,579 16.8%
Multifamily848,651 26.8%882,231 27.2 %972,129 26.4%
Commercial real estate351,707 11.1%364,308 11.2 %404,064 11.0%
Construction and land development42,303 1.3%50,267 1.5 %65,259 1.8%
   Total commercial portfolio 1,861,698 58.7%1,909,387 58.7 %2,059,031 56.0%
Retail portfolio:
Residential real estate lending1,085,791 34.3%1,137,851 35.0 %1,432,645 38.9%
Consumer and other 222,265 7.0%206,451 6.3 %187,980 5.1%
   Total retail 1,308,056 41.3%1,344,302 41.3 %1,620,625 44.0%
   Total loans 3,169,754 100.0%3,253,689 100.0 %3,679,656 100.0%
Net deferred loan origination costs (fees)5,707 5,815 8,336 
Allowance for loan losses (38,012)(36,662)(50,010)
    Total loans, net $3,137,449 $3,222,842 $3,637,982 
Held-to-maturity securities portfolio:
PACE assessments545,795 87.4%451,643 85.0%323,392 87.3%
Other securities79,031 12.6%79,631 15.0%47,106 12.7%
   Total held-to-maturity securities$624,826 100.0%$531,274 100.0%$370,498 100.0%







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Net Interest Income Analysis

Three Months Ended
June 30, 2021March 31, 2021June 30, 2020
(In thousands)Average
Balance		Income / ExpenseYield /
Rate		Average
Balance		Income / ExpenseYield /
Rate		Average
Balance		Income / ExpenseYield /
Rate
   Interest earning assets:
Interest-bearing deposits in banks$510,473 $131 0.10 %$380,390 $90 0.10 %$364,932 $83 0.09 %
Securities and FHLB stock2,447,241 13,135 2.15 %2,271,218 12,218 2.18 %1,834,892 11,812 2.59 %
Total loans, net (1)(2)
3,162,896 30,156 3.82 %3,293,775 31,109 3.83 %3,571,160 35,225 3.97 %
   Total interest earning assets6,120,610 43,422 2.85 %5,945,383 43,417 2.96 %5,770,984 47,120 3.28 %
   Non-interest earning assets:
Cash and due from banks7,545 7,307 74,877 
Other assets266,613 279,308 224,531 
   Total assets$6,394,768 $6,231,998 $6,070,392 
   Interest bearing liabilities:
Savings, NOW and money market deposits$2,567,396 $1,174 0.18 %$2,512,892 $1,222 0.20 %$2,313,772 $1,755 0.31 %
Time deposits258,257 257 0.40 %280,057 351 0.51 %370,969 926 1.00 %
   Total deposits2,825,653 1,431 0.20 %2,792,949 1,573 0.23 %2,684,741 2,681 0.40 %
Federal Home Loan Bank advances— — 0.00 %495 — 0.00 %— — 0.00 %
   Total interest bearing liabilities2,825,653 1,431 0.20 %2,793,444 1,573 0.23 %2,684,741 2,681 0.40 %
   Non-interest bearing liabilities:
Demand and transaction deposits2,909,554 2,786,581 2,746,529 
Other liabilities111,795 109,420 151,591 
   Total liabilities5,847,002 5,689,445 5,582,861 
   Stockholders' equity547,766 542,553 487,531 
   Total liabilities and stockholders' equity$6,394,768 $6,231,998 $6,070,392 
   Net interest income / interest rate spread$41,991 2.65 %$41,844 2.73 %$44,439 2.88 %
   Net interest earning assets / net interest margin$3,294,957 2.75 %$3,151,939 2.85 %$3,086,243 3.10 %
Total Cost of Deposits0.10 %0.11 %0.20 %

(1) Amounts are net of deferred origination costs (fees) and the allowance for loan losses
(2) Includes prepayment penalty interest income in 2Q2021, 1Q2021, and 2Q2020 of $504, $642, and $239 respectively (in thousands)




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Net Interest Income Analysis

Six Months Ended
June 30, 2021June 30, 2020
(In thousands)Average
Balance		Income / ExpenseYield /
Rate		Average
Balance		Income / ExpenseYield /
Rate
   Interest earning assets:
Interest-bearing deposits in banks$445,340 $221 0.10 %$275,107 $479 0.35 %
Securities and FHLB stock2,359,870 25,353 2.17 %1,689,870 24,434 2.91 %
Total loans, net (1)(2)
3,228,235 61,265 3.83 %3,517,799 70,837 4.05 %
   Total interest earning assets6,033,445 86,839 2.90 %5,482,776 95,750 3.51 %
   Non-interest earning assets:
Cash and due from banks7,432 42,208 
Other assets272,930 223,643 
   Total assets$6,313,807 $5,748,627 
   Interest bearing liabilities:
Savings, NOW and money market deposits$2,540,277 $2,395 0.19 %$2,228,509 $4,492 0.41 %
Time deposits269,063 608 0.46 %376,011 2,104 1.13 %
   Total deposits2,809,340 3,003 0.22 %2,604,520 6,596 0.51 %
Federal Home Loan Bank advances249 — 0.00 %3,187 27 1.70 %
   Total interest bearing liabilities2,809,589 3,003 0.22 %2,607,707 6,623 0.51 %
   Non-interest bearing liabilities:
Demand and transaction deposits2,848,401 2,523,764 
Other liabilities110,654 122,450 
   Total liabilities5,768,644 5,253,921 
   Stockholders' equity545,163 494,706 
   Total liabilities and stockholders' equity$6,313,807 $5,748,627 
   Net interest income / interest rate spread$83,836 2.68 %$89,127 3.00 %
   Net interest earning assets / net interest margin$3,223,856 2.80 %$2,875,069 3.27 %
Total Cost of Deposits0.11 %0.26 %

(1) Amounts are net of deferred origination costs (fees) and the allowance for loan losses
(2) Includes prepayment penalty interest income in June YTD 2021 and June YTD 2020 of $1,146 and $1,001 respectively (in thousands)






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Deposit Portfolio Composition


(In thousands)June 30, 2021March 31, 2021June 30, 2020
Non-interest bearing demand deposit accounts$2,948,718 $2,819,627 $3,089,004 
NOW accounts200,758 206,145198,653 
Money market deposit accounts2,136,719 2,067,8861,876,540 
Savings accounts371,047 361,731342,477 
Time deposits252,750 264,678363,645 
Total deposits$5,909,992 $5,720,067 $5,870,319 

Three Months Ended
June 30, 2021March 31, 2021June 30, 2020
(In thousands)Average
Balance		Average Rate PaidAverage
Balance		Average Rate PaidAverage
Balance		Average Rate Paid
Non-interest bearing demand deposit accounts$2,909,5540.00 %$2,786,5810.00 %$2,746,5290.00 %
NOW accounts204,341 0.08 %198,117 0.08 %237,279 0.17 %
Money market deposit accounts1,993,643 0.21 %1,963,707 0.23 %1,741,466 0.36 %
Savings accounts369,412 0.10 %351,068 0.11 %335,027 0.12 %
Time deposits258,257 0.40 %280,057 0.51 %370,969 0.99 %
   Total deposits$5,735,207 0.10 %$5,579,530 0.11 %$5,431,270 0.20 %








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Asset Quality

(In thousands)June 30, 2021March 31, 2021June 30, 2020
Loans 90 days past due and accruing $— $2,424 $— 
Nonaccrual loans excluding held for sale loans and restructured loans31,437 37,324 18,901 
Nonaccrual loans held for sale— — — 
Troubled debt restructured loans - nonaccrual20,494 20,578 26,776 
Troubled debt restructured loans - accruing18,683 17,656 28,031 
Other real estate owned 307 2,988 503 
Impaired securities59 61 46 
Total nonperforming assets$70,980 $81,031 $74,257 
Nonaccrual loans:
  Commercial and industrial $14,561 $12,347 $15,742 
  Multifamily 10,266 7,660 — 
  Commercial real estate 4,066 4,133 13,768 
  Construction and land development — 8,605 3,652 
    Total commercial portfolio28,893 32,745 33,162 
  Residential real estate lending22,320 24,300 11,835 
  Consumer and other 718 857 680 
    Total retail portfolio23,038 25,157 12,515 
  Total nonaccrual loans$51,931 $57,902 $45,677 
Nonaccrual loans to total loans1.64 %1.78 %1.24 %
Nonperforming assets to total assets1.08 %1.27 %1.15 %
Allowance for loan losses to nonaccrual loans73.20 %63.32 %109.49 %
Allowance for loan losses to total loans1.20 %1.13 %1.36 %
Annualized net charge-offs (recoveries) to average loans0.04 %0.20 %0.06 %








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Credit Quality
June 30, 2021
($ in thousands)PassSpecial MentionSubstandardDoubtfulTotal
Commercial and industrial$568,878 $17,569 $32,133 $457 $619,037 
Multifamily711,551 101,579 32,348 3,173 848,651 
Commercial real estate234,018 45,236 72,453 — 351,707 
Construction and land development34,414 535 7,354 — 42,303 
Residential real estate lending1,063,176 295 22,320 — 1,085,791 
Consumer and other221,835 — 430 — 222,265 
Total loans$2,833,872 $165,214 $167,038 $3,630 $3,169,754 
March 31, 2021
($ in thousands)PassSpecial MentionSubstandardDoubtfulTotal
Commercial and industrial$566,421 $17,622 $28,079 $459 $612,581 
Multifamily742,746 108,016 28,296 3,173 882,231 
Commercial real estate257,178 32,878 74,252 — 364,308 
Construction and land development33,971 7,691 8,605 — 50,267 
Residential real estate lending1,113,551 — 24,300 — 1,137,851 
Consumer and other205,594 — 857 — 206,451 
Total loans$2,919,461 $166,207 $164,389 $3,632 $3,253,689 

June 30, 2020
($ in thousands)PassSpecial MentionSubstandardDoubtfulTotal
Commercial and industrial$567,174 $15,493 $34,445 $467 $617,579 
Multifamily966,067 6,062 — — 972,129 
Commercial real estate388,170 1,439 14,455 — 404,064 
Construction and land development35,578 26,029 3,652 — 65,259 
Residential real estate lending1,421,785 — 10,860 — 1,432,645 
Consumer and other187,300 — 680 — 187,980 
Total loans$3,566,074 $49,023 $64,092 $467 $3,679,656 






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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 EndedSix Months Ended
(in thousands)June 30, 2021March 31, 2021June 30, 2020June 30, 2021June 30, 2020
Core operating revenue
Net Interest income$41,991 $41,844 $44,439 $83,836 $89,127 
Non-interest income5,327 4,000 8,671 9,327 17,789 
Less: Branch sale loss (gain) (1)
— — 34 — (1,394)
Less: Securities gain, net(321)(18)(486)(339)(985)
Core operating revenue$46,997 $45,826 $52,658 $92,824 $104,537 
Core non-interest expense
Non-interest expense$31,395 $32,793 $31,068 $64,189 $63,339 
Less: Branch closure expense (2)
— — (695)— (2,051)
Less: Severance (3)
— (1,090)— (1,090)(76)
Core non-interest expense$31,395 $31,703 $30,373 $63,099 $61,212 
Core net income
Net Income (GAAP)$10,408 $12,189 $10,374 $22,598 $19,919 
Less: Branch sale (gain) (1)
— — 34 — (1,394)
Less: Securities loss (gain)(321)(18)(486)(339)(985)
Add: Branch closure expense (2)
— — 695 — 2,051 
Add: Severance (3)
— 1,090 — 1,090 76 
Less: Tax on notable items 86 (271)(61)(196)64 
Core net income (non-GAAP)$10,173 $12,990 $10,556 $23,153 $19,731 
Tangible common equity
Stockholders' Equity (GAAP)$548,211 $540,222 $503,702 $548,211 $503,702 
Less: Minority Interest (GAAP)(133)(133)(134)(133)(134)
Less: Goodwill (GAAP)(12,936)(12,936)(12,936)(12,936)(12,936)
Less: Core deposit intangible (GAAP)(4,755)(5,057)(6,043)(4,755)(6,043)
Tangible common equity (non-GAAP)$530,387 $522,096 $484,589 $530,387 $484,589 
Average tangible common equity
Average Stockholders' Equity (GAAP)$547,766 $542,553 $487,531 $545,163 $494,706 
Less: Minority Interest (GAAP)(133)(133)(134)(133)(134)
Less: Goodwill (GAAP)(12,936)(12,936)(12,936)(12,936)(12,936)
Less: Core deposit intangible (GAAP)(4,903)(5,205)(6,211)(5,052)(6,382)
Average tangible common equity (non-GAAP)$529,794 $524,279 $468,250 $527,042 $475,254 
Core return on average assets
Core net income (numerator) (non-GAAP)10,173 12,990 10,556 23,153 19,731 
Divided: Total average assets (denominator) (GAAP)6,394,768 6,231,998 6,070,392 6,313,807 5,748,627 
Core return on average assets (non-GAAP)0.64%0.85%0.70%0.74%0.69%
Core return on average tangible common equity
Core net income (numerator) (non-GAAP)10,173 12,990 10,556 23,153 19,731 
Divided: Average tangible common equity (denominator) (GAAP)529,794 524,279 468,250 527,042 475,254 
Core return on average tangible common equity (non-GAAP)7.70%10.05%9.07%8.86%8.35%
Core efficiency ratio
Core non-interest expense (numerator)31,395 31,703 30,373 63,099 61,212 
Core operating revenue (denominator)46,997 45,826 52,658 92,824 104,537 
Core efficiency ratio66.80%69.18%57.68%67.98%58.56%

(1) Fixed Asset branch sale in March 2020
(2) Occupancy and other expense related to closure of branches during our branch rationalization
(3) Salary and COBRA reimbursement expense for positions eliminated


18
amal2q21earningsdeck-fin
amalgamatedbank.com Member FDIC Amalgamated Financial Corp. Second Quarter 2021 Earnings Presentation July 29, 2021

 
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 This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act, Section 21E of the Securities Exchange Act of 1934, as amended. any statement that does not describe historical or current facts is a forward-looking statement. These statements generally can be identified by forward-looking terminology, such as “plan,” “seek to,” “outlook,” “guidance,” “may,” “will,” “anticipate,” “should,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “initiatives,” and “intend,” as well as other similar words and expressions of the future. These forward-looking statements include, but are not limited to, our 2021 Guidance and, statements related to future loss/income (included 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: • negative economic and political conditions that adversely affect the general economy, housing prices, the real estate market, the job market, consumer confidence, the financial condition of our borrowers and consumer spending habits, which may affect, among other things, the level of non-performing assets, charge-offs and provision expense; • the rate of growth (or lack thereof) in the economy and employment levels, as well as general business and economic conditions, coupled with the risk that adverse conditions may be greater than anticipated in the markets that we serve; • the COVID-19 pandemic and its continuing effects on the economic and business environments in which we operate; • continuation of the historically low short-term interest rate environment; • fluctuations or unanticipated changes in interest rates on loans or deposits or that affect the yield curve; • our inability to maintain the historical growth rate of our loan portfolio; • changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments either as they currently exist or as they may be affected by conditions associated with the COVID-19 pandemic; • the impact of competition with other financial institutions, many of which are larger and have greater resources, and fintechs, as well as changes in the competitive environment; • our ability to meet heightened regulatory and supervisory requirements; • our ability to grow and retain low-cost core deposits and retain large, uninsured deposits; • any matter that would cause us to conclude that there was impairment of any asset, including intangible assets; • inability to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies, required capital maintenance levels or regulatory requests or directives; • risks associated with litigation, including the applicability of insurance coverage; • the risk of not achieving anticipated cost savings related to reduction in the number of branch locations and other expense areas; • 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, the risk of any of which could be exacerbated by employees and others working remotely as a result of the effects of the COVID-19 pandemic; • volatile credit and financial markets both domestic and foreign; • the risk that the preliminary financial information reported herein and our current preliminary analysis could be different when our review is finalized; and • unexpected challenges related to our executive officer transitions and/or retention. 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/. Forward-looking statements are based upon the current beliefs and expectations of management, and on information currently available to management. 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 contains certain non-GAAP financial measures including, without limitation, “Core Operating Revenue,” “Core Non-interest Expense,” “Tangible Common Equity,” “Average Tangible Common Equity,” “Core Efficiency Ratio,” “Core Net Income,” “Core ROAA,” and “Core ROATCE.” We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP. Specifically, we believe these non-GAAP financial measures (a) allow management and investors to better assess our performance by removing volatility that is associated with discrete items that are unrelated to our core business, and (b) enable a more complete understanding of factors and trends affecting our business. Non-GAAP financial measures, however, have inherent limitations, are not required to be uniformly applied, and are not audited. Accordingly, these non-GAAP financial measures should not be considered as substitutes for GAAP financial measures, and we strongly encourage investors to review the GAAP financial measures included in this presentation and not to place undue reliance on 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 presentation with other companies’ non-GAAP financial measures having the same or similar names. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. Reconciliations of non-GAAP financial disclosures to what we believe to be the most directly comparable GAAP measures found in this presentation are set forth in the final pages of this presentation and also may be viewed on the bank’s website, amalgamatedbank.com. You should assume that all numbers presented are unaudited unless otherwise noted.

 
2Q21 Highlights 4 (1) See non-GAAP disclosures on pages 21-22 (2) Pre-tax, pre-provision income is defined as net interest income plus non-interest income less non-interest expense INCOME STATEMENT • GAAP net income of $0.33 per diluted share; core net income of $0.32 per diluted share(1) • Pre-tax, pre-provision income(2) of $15.9 million compared to $13.1 million in 1Q21 • Core pre-tax, pre-provision income of $15.6 million compared to $14.1 million in 1Q21 • Efficiency ratio of 66.35% in 2Q21, compared to 71.53% in 1Q21 (1) o Efficiency ratio is unfavorably impacted 2 pct pts and 6 pct pts from equity method investments in solar initiatives in 2Q21 and 1Q21 respectively BALANCE SHEET • Deposits increased $189.9 million compared to 1Q21 primarily due to continued growth in political deposits and new relationships in core markets • Property Assessed Clean Energy (PACE) grew $94.2 million to $545.8 million in 2Q21 primarily from Commercial PACE • Loans decreased $85.4 million primarily due to existing customer refinancing, and C&I paydowns CAPITAL • Repurchased approximately 154,000 shares, or $2.5 million of common stock • Capital ratios remained strong with CET1 of 13.63% and Tier 1 Leverage of 7.93% • Tangible book value of $17.07 compared to $16.75 as of 1Q21

 
Priscilla Sims Brown – President and CEO 5 EARLY OBSERVATIONS • Significant opportunities to better tell the story of Amalgamated’s mission to an increasing market of receptive listeners • Expand and grow the Amalgamated brand to gain share and drive business • Develop opportunities to expand our lending platform into attractive segments which fit our core mission • Pair growth opportunities with continued emphasis on underwriting and credit management practices • Evaluate geographic expansion through both organic opportunities and/or M&A

 
26.4 50.1 68.0 86.7 58.4 2017 2018 2019 2020 Jun YTD Trends 6 KEY FINANCIAL TRENDS THROUGH 2Q21 ($ in millions) (1) Compounded Annual Growth Rate (“CAGR”) (2) Jun YTD 2021 Pre-tax Pre-Provision earnings are annualized (3) Pre-tax Pre-provision Earnings, excluding the impact of equity method investments for solar initiatives, was $79.3 million in 2020, and $69.3 million in 2021 annualized 8.4% CAGR(1) 18.8% CAGR(1) 22.0% CAGR(1) Pre-tax Pre-Provision Earnings(2)(3) Ending Deposits NPA / Total Assets Loans + PACE 3,439 3,447 3,137 264 421 546 2,780 3,211 3,703 3,868 3,683 2017 2018 2019 2020 2Q21 3,233 4,105 4,641 5,339 5,910 2017 2018 2019 2020 2Q21 2.20% 1.27% 1.25% 1.38% 1.08% 2017 2018 2019 2020 2Q21

 
Deposit Portfolio 7 TOTAL DEPOSITS ($ in millions) 2Q21 HIGHLIGHTS • Total ending deposits increased $189.9 million compared to 1Q21 due to post-election rebound in political deposits and new relationships in core markets • Total average deposits increased $155.7 million • $123.0 million of average non-interest bearing deposits increase primarily due to political deposits • Non-interest bearing deposits represented 50% of ending deposits in 2Q21, compared to 49% in 1Q21 $5,431 $5,890 $5,572 $5,580 $5,735 $5,870 $6,021 $5,339 $5,720 $5,910 2Q20 3Q20 4Q20 1Q21 2Q21 Average End of Period

 
8 HISTORICAL TREND ($ in millions) Political Deposits $85 $124 $156 $242 $321 $416 $398 $182 $271 $419 $511 $579 $775 $1,101 $1,212 $603 $692 $791 $824 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 7/23

 
Interest Earning Assets 9 INTEREST EARNING ASSETS OF $6.3B AS OF JUNE 30, 2021 We maintain a diverse, low risk profile of interest earning assets C&I, Consumer and Other $0.9 B Securities & IB Deposits $3.1 B Multifamily & Commercial Real Estate $1.2 B Residential $1.1 B • No fossil fuel exposure • $278mm of government guaranteed loans • $194mm residential solar loans with strong credit profiles • Predominantly NYC properties with low LTV • $848mm agency securities • $1,031mm of non-agency securities • $546mm of PACE securities with low LTV • All non-agency securities are top of the capital structure • $170mm of resell agreements and other • $539mm of cash deposits at Bank • 99% first lien mortgages • Low LTV • 81/19% originated to purchased portfolio $6.3 B as of 2Q21

 
Loans and Held-to-Maturity Securities 10 TOTAL LOANS AND PACE (HTM) ($ in millions) HELD-TO-MATURITY SECURITIES ($ in millions) • Total loans decreased $85.4 million, or -2.6% compared to 1Q21 due to continued prepayment activity and paydowns on commercial revolvers • 2Q21 Yield of 3.82%; a decrease of one basis point compared to 1Q21 and a decrease of 15 bps compared to 2Q20 • PACE securities of $545.8 million increased $94.2 million from $451.6 million in 1Q21 2Q21 HIGHLIGHTS $323 $367 $421 $452 $546 $47 $74 $73 $80 $79 $370 $441 $494 $531 $625 - 200 400 600 2Q20 3Q20 4Q20 1Q21 2Q21 PACE (HTM) Non PACE HTM $3,638 $3,554 $3,447 $3,223 $3,137 3.97% 3.97% 4.04% 3.83% 3.82% 1.00% 3.00% 5.00% 7.00% 1,500 2,000 2,500 3,000 3,500 2Q20 3Q20 4Q20 1Q21 2Q21 Total Loans, net Loan Yield

 
Investment Securities 11 SECURITIES – BOOK VALUE(1) ($ millions) (1) Securities book value excludes unrealized Available for Sale (AFS) gain / loss on sale (2) MBS/ABS does not include PACE assessments • Investment Securities totaled $2.4 billion book value for 2Q21 • Securities increased $225.6 million in 2Q21 compared to 1Q21 with continued mix shift toward non-agency partially from PACE assessment growth • Non-agency securities in 2Q21 include $545.8 million of PACE assessments, which are non-rated • 84.2% of all non-agency MBS/ABS securities are AAA rated and 99.97% are A rated or higher(2); all CLO’s are AAA rated • As of 2Q21 average subordination for the C&I CLOs is 42.8% 2Q21 HIGHLIGHTS $746 $728 $755 $889 $1,031 $323 $367 $421 $452 $546 $864 $829 $832 $858 $848$1,933 $1,924 $2,008 $2,199 $2,425 2.59% 2.24% 2.21% 2.18% 2.15% -1.00% 1.00% 3.00% 5.00% 7.00% 9.00% - 500 1,000 1,500 2,000 2,500 2Q20 3Q20 4Q20 1Q21 2Q21 Non-Agency PACE Agency Yield

 
Net Interest Income and Margin 12 NET INTEREST INCOME & MARGIN ($ millions) • Net interest income is $42.0 million, compared to $41.8 million in 1Q21 • 2Q21 NIM at 2.75%; a decrease of 10 bps and 35 bps, compared to 1Q21 and 2Q20, respectively • NIM is negatively impacted by approximately 19 bps due to the high-level of cash on the balance sheet • Loan prepayment penalties favorably impacted NIM by 3 bps in 2Q21, compared to 4 bps and 2 bps in 1Q21 and 2Q20, respectively 2Q21 HIGHLIGHTS $44.4 $45.2 $45.7 $41.8 $42.0 3.10% 2.88% 3.06% 2.85% 2.75% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 25.0 30.0 35.0 40.0 45.0 50.0 2Q20 3Q20 4Q20 1Q21 2Q21 Net Interest Income Net Interest Margin

 
$1.3 $4.3 $1.8 -$3.8 -$1.6 -$0.6 $0.4 (5.0) (3.0) (1.0) 1.0 3.0 5.0 7.0 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 Solar Tax-Equity Investments OVERVIEW OF SOLAR TAX EQUITY INVESTMENTS • Realization of tax benefits in the project life and subsequent write-down of investment creates volatility in the earnings stream • Current projects are expected to generate a slight loss in the next two quarters; net accretive profitable over the life of investment • We expect more tax-equity investment initiatives in the future (not shown in forecast below) PROJECTED NON-INTEREST INCOME TREND $ millions 13 Actual Forecast

 
$30.4 $31.5 $32.7 $31.7 $31.4$31.1 $37.9 $32.7 $32.8 $31.4 57.7% 54.8% 58.7% 69.2% 66.8% 58.5% 65.3% 58.7% 71.5% 66.4% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00% 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 2Q20 3Q20 4Q20 1Q21 2Q21 Core NIX NIX Core Eff Ratio Eff Ratio Non-Interest Expense and Efficiency 14 NON-INTEREST EXPENSE ($ millions) • Efficiency ratio of 66.4% for 2Q21 • Core efficiency ratio of 66.8% for 2Q21(1) • Non-interest expense for 2Q21 is $31.4 million • Non-interest expense for 2Q21 is $1.4 million lower compared to 1Q21 primarily due to a $1.1 million severance related to the modernization of our Trust Department in 1Q21 and lower professional service expenses • Efficiency ratio excluding equity method investments in solar initiatives is 64.1% for 2Q21 and 66.0% for 1Q21 2Q21 HIGHLIGHTS (1) See non-GAAP disclosures on pages 21-22

 
1.36% 1.34% 1.19% 1.13% 1.20% 2Q20 3Q20 4Q20 1Q21 2Q21 Allowance for Loan Losses 15 ALLOWANCE FOR LOAN LOSSES / TOTAL LOANS ALLOWANCE FOR LOAN LOSSES (ALLL) CHANGE FROM 4Q20 TO 2Q21 ($ millions) • Allowance for loan losses totals $38.0 million in 2Q21, or $1.3 million higher compared to 1Q21 primarily due to specific reserves • 2Q21 allowance is $3.6 million lower than 4Q20 due largely to lower loan balances and credit quality improvement 2Q21 HIGHLIGHTS 4Q20 Allowance $41.6 Loan balances (2.4) Changes in credit quality (1.9) Qualitative factors (0.6) 1Q21 Allowance $36.7 Specific reserves 1.4 Changes in credit quality 0.6 Charge-offs 0.3 Loan balances (1.0) 2Q21 Allowance $38.0

 
0.06% 0.59% 1.24% 0.20% 0.04% 2Q20 3Q20 4Q20 1Q21 2Q21 1.15% 1.22% 1.38% 1.27% 1.08% 2Q20 3Q20 4Q20 1Q21 2Q21 Credit Quality Portfolio 16 NPA / TOTAL ASSETS NCO / AVERAGE LOANS (1) (Quarter trend) 2Q21 HIGHLIGHTS • Nonperforming assets are $71.0 million as of 2Q21, compared to $81.0 million in 1Q21 • Net charge-offs of 0.04% in 2Q21 is 16 bps lower than 1Q21 due to $6.0 million in charge-offs in 1Q21 primarily related to hotel and construction loans • Pass rated loans are 89% of loan portfolio (1) Annualized LOAN CREDIT RISK RATINGS ($ millions) Pass Rated Special Mention Substandard / Doubtful Total Commercial and industrial 569 18 33 619 Multifamily 712 102 36 849 CRE and construction 268 46 80 394 Residential real estate 1,063 - 22 1,086 Consumer and other 222 - - 222 Total $ 2,834 $ 165 $ 171 $ 3,170

 
Returns 17 (1) See non-GAAP disclosures on pages 21-22 (2) ROATCE excluding equity method investments for solar initiatives is 8.3%, 10.9%, 9.7%, 12.3% and 8.6% for 2Q20, 3Q20, 4Q20, 1Q21 and 2Q21 respectively ROAE & CORE ROATCE (1)(2) 8.6% 9.6% 10.3% 9.1% 7.6% 9.1% 13.4% 10.7% 10.1% 7.7% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% 2Q20 3Q20 4Q20 1Q21 2Q21 ROAE CORE ROATCE

 
Capital 18 TIER 1 LEVERAGE RATIO COMMON EQUITY TIER 1 RATIO • Regulatory capital ratios remain strong • Tier 1 leverage ratio of 7.93% as of 2Q21 • Common Equity Tier 1 Capital of 13.63% • Tier 1 leverage ratio is 11 bps lower due to approximately $190 million in excess cash from strong deposit growth and 2bps lower due to cumulative effect of equity method investments for solar initiatives 2Q21 HIGHLIGHTS 7.69% 7.39% 7.97% 8.06% 7.93% 2Q20 3Q20 4Q20 1Q21 2Q21 12.32% 12.76% 13.11% 13.70% 13.63% 2Q20 3Q20 4Q20 1Q21 2Q21

 
2021 Guidance 19 2021 FINANCIAL OUTLOOK • Core Pre-tax pre-provision earnings of $66 million to $72 million • Excludes impact of solar tax equity income/(loss) and any future non-core items • Net Interest Income of $168 million to $174 million • No change in Fed rate targets

 
Appendix

 
Reconciliation of Non-GAAP Financials 21 As of and for the Three Months Ended As of and for the Six Months Ended (in thousands) June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Core operating revenue Net Interest income $ 41,991 $ 41,844 $ 44,439 $ 83,836 $ 89,127 Non-interest income 5,327 4,000 8,671 9,327 17,789 Less: Branch sale loss (gain) (1) - - 34 - (1,394) Less: Securities gain, net (321) (18) (486) (339) (985) Core operating revenue $ 46,997 $ 45,826 $ 52,658 $ 92,824 $ 104,537 Core non-interest expense Non-interest expense $ 31,395 $ 32,793 $ 31,068 $ 64,189 $ 63,339 Less: Branch closure expense (2) - - (695) - (2,051) Less: Severance (3) - (1,090) - (1,090) (76) Core non-interest expense $ 31,395 $ 31,703 $ 30,373 $ 63,099 $ 61,212 Core net income Net Income (GAAP) $ 10,408 $ 12,189 $ 10,374 $ 22,598 $ 19,919 Less: Branch sale (gain) (1) - - 34 - (1,394) Less: Securities loss (gain) (321) (18) (486) (339) (985) Add: Branch closure expense (2) - - 695 - 2,051 Add: Severance (3) - 1,090 - 1,090 76 Less: Tax on notable items 86 (271) (61) (196) 64 Core net income (non-GAAP) $ 10,173 $ 12,990 $ 10,556 $ 23,153 $ 19,731 (1) Fixed Asset branch sale in March 2020 (2) Occupancy and other expense related to closure of branches during our branch rationalization (3) Salary and COBRA expense reimbursement expense for positions eliminated

 
Reconciliation of Non-GAAP Financials 22 As of and for the Three Months Ended As of and for the Six Months Ended (in thousands) June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Tangible common equity Stockholders' Equity (GAAP) $ 548,211 $ 540,222 $ 503,702 $ 548,211 $ 503,702 Less: Minority Interest (GAAP) (133) (133) (134) (133) (134) Less: Goodwill (GAAP) (12,936) (12,936) (12,936) (12,936) (12,936) Less: Core deposit intangible (GAAP) (4,755) (5,057) (6,043) (4,755) (6,043) Tangible common equity (non-GAAP) $ 530,387 $ 522,096 $ 484,589 $ 530,387 $ 484,589 Average tangible common equity Average Stockholders' Equity (GAAP) $ 547,766 $ 542,553 $ 487,531 $ 545,163 $ 494,706 Less: Minority Interest (GAAP) (133) (133) (134) (133) (134) Less: Goodwill (GAAP) (12,936) (12,936) (12,936) (12,936) (12,936) Less: Core deposit intangible (GAAP) (4,903) (5,205) (6,211) (5,052) (6,382) Average tangible common equity (non-GAAP) $ 529,794 $ 524,279 $ 468,250 $ 527,042 $ 475,254 Core return on average assets Core net income (numerator) (non-GAAP) 10,173 12,990 10,556 23,153 19,731 Divided: Total average assets (denominator) (GAAP) 6,394,768 6,231,998 6,070,392 6,313,807 5,748,627 Core return on average assets (non-GAAP) 0.64% 0.85% 0.70% 0.74% 0.69% Core return on average tangible common equity Core net income (numerator) (non-GAAP) 10,173 12,990 10,556 23,153 19,731 Divided: Average tangible common equity (denominator) (GAAP) 529,794 524,279 468,250 527,042 475,254 Core return on average tangible common equity (non-GAAP) 7.70% 10.05% 9.07% 8.86% 8.35%

 
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