Amalgamated Financial (AMAL)2025-03-06 21:21Financial Performance - Net income for the year ended December 31, 2024, was $106.4 million, or $3.44 per average diluted share, compared to $88.0 million, or $2.86 per average diluted share, for the same period in 2023, reflecting an increase of $18.4 million[339]. - Net interest income increased by $21.1 million, contributing significantly to the overall revenue growth[339]. - Non-interest income for the year ended December 31, 2024, was $33.2 million, an increase of $3.9 million or 13.3% from $29.3 million in 2023[354]. - Non-interest expenses increased by $8.6 million, which included higher salaries and operational costs[339]. - The provision for income tax expense was $39.2 million in 2024, with an effective tax rate of 26.9%, down from 29.5% in 2023[360]. Loan Portfolio - Total loans, net of deferred origination fees and allowance for credit losses, increased to $4.61 billion as of December 31, 2024, up from $4.35 billion in 2023, representing a growth of 6%[376]. - The commercial loan portfolio comprised 63.3% of the total loan portfolio as of December 31, 2024, up from 57.5% in 2023[380]. - C&I loans totaled $1.18 billion, accounting for 25.2% of the total loan portfolio, with a year-over-year increase of 16.3%[380]. - Multifamily loans reached $1.35 billion, representing 28.9% of the total loan portfolio, with a growth of 17.7% from the previous year[382]. - Residential real estate lending loans totaled $1.31 billion, comprising 28.1% of the total loan portfolio, but decreased by 7.9% from $1.43 billion in 2023[384]. Credit Quality - The estimated allowance for credit losses (ACL) totaled $60.1 million, representing approximately 1.29% of total loans, net[199]. - The provision for credit losses decreased by $4.4 million, indicating improved credit quality[339]. - The allowance for credit losses decreased by $5.6 million to $60.1 million at December 31, 2024, from $65.7 million at December 31, 2023, with a ratio of allowance to total loans at 1.29%[394]. - Nonperforming assets totaled $25.9 million, or 0.31% of total assets at December 31, 2024, a decrease of $8.3 million from $34.2 million, or 0.43% at December 31, 2023[401]. - Total loan charge-offs for the year ended December 31, 2024, were $17,850 thousand, compared to $16,058 thousand for the previous year[394]. Deposits and Liquidity - Total on-balance sheet deposits amounted to $7.18 billion as of December 31, 2024, with labor unions contributing $1.99 billion (28%) and political campaigns contributing $969.6 million (14%) to the total[235]. - Total deposits increased to $7.18 billion at December 31, 2024, up from $7.01 billion at December 31, 2023, indicating growth in core deposits[408]. - Uninsured deposits decreased to $3.71 billion at December 31, 2024, from $4.04 billion at December 31, 2023, driven by customers moving excess funds into reciprocal deposit products[412]. - The company had $2.74 billion in cash and borrowing capacity, providing total liquidity of $3.18 billion, covering 86% of total uninsured deposits[418]. - The company maintains sufficient liquidity to meet capital and debt service obligations for 12 months under adverse conditions without support from subsidiaries or access to wholesale markets[414]. Regulatory and Compliance Risks - The company faces liquidity risk, which is essential for funding depositors' needs, repaying borrowings, and meeting other obligations[232]. - Regulatory requirements may impose more stringent capital standards, potentially restricting business activities and affecting profitability[239]. - Non-compliance with laws and regulations could result in fines and damage to reputation, adversely affecting business operations[258]. - The Community Reinvestment Act regulations, effective April 1, 2024, will increase compliance obligations for the company[264]. - The final rule from the CFPB regarding residential PACE financing will become effective on March 1, 2026, potentially increasing compliance costs and risks[210]. Market and Economic Conditions - The Federal Open Market Committee (FOMC) maintained short-term interest rates at a range of 4.25% to 4.50% and projected only two interest rate cuts in 2025[192]. - The company may experience net interest margin compression if interest rates on interest-earning assets do not increase in tandem with interest-bearing liabilities[191]. - The trust and investment management business is vulnerable to economic and market conditions, which can lead to declines in performance and investment management fees[211]. - The banking industry is highly competitive, with technology lowering barriers to entry, necessitating innovation to meet customer needs[249]. - The CFPB's new rule on Personal Financial Data Rights could increase competition and adversely affect the company's market position[250]. Employee and Labor Relations - As of December 31, 2024, the company had 429 employees, with approximately 21% represented by collective bargaining agreements[231]. - A new collective bargaining agreement was entered into on November 29, 2024, providing for a 3.5% wage increase per annum until June 30, 2026[231]. - Compensation and employee benefits increased by $8.0 million in 2024, driven by increased headcount and corporate incentive payments[359]. Investment and Securities - As of December 31, 2024, the fair value of the investment securities portfolio was approximately $3.18 billion[194]. - Total securities amounted to $2.63 billion with an estimated yield of 4.7%[375]. - Approximately 86% of non-agency securities carry AAA credit ratings, indicating a high-quality investment portfolio[375]. - Available-for-sale securities amounted to $1.63 billion at December 31, 2024, compared to $1.48 billion in 2023[365]. - Held-to-maturity securities decreased to $1.59 billion at December 31, 2024, down from $1.70 billion in 2023[366].