Amalgamated Financial (AMAL)2023-03-08 16:00Regulatory Environment - The company is subject to extensive regulation by federal and state agencies, which restricts activities such as dividend payments and mergers and acquisitions [269]. - Future dividend payments are subject to regulatory limitations and depend on the financial condition and profitability of the Bank [288]. - The company may face significant civil money penalties for noncompliance with the Bank Secrecy Act and anti-money laundering regulations [277]. - Noncompliance with fair lending laws could lead to material penalties and adversely impact the company's reputation and financial condition [279]. - The company may face increased litigation costs in difficult market conditions, which could adversely affect its financial condition and results of operations [280]. Financial Performance - Net income for the year ended December 31, 2022, was $81.5 million, or $2.61 per average diluted share, compared to $52.9 million, or $1.68 per average diluted share, for the same period in 2021, reflecting a $28.6 million increase primarily due to net interest income growth [335]. - Net interest income for the year ended December 31, 2022, was $239.8 million, an increase of $65.5 million from $174.3 million in 2021, driven by loan growth and higher average securities balances [340]. - Non-interest income decreased by $4.5 million, which also affected the overall financial performance [335]. - Total non-interest expense for 2022 was $140.6 million, an increase of $8.3 million from $132.3 million in 2021, mainly due to higher compensation and other expenses [352]. - The effective tax rate for the year ended December 31, 2022, was 24.7%, a slight decrease from 25.2% in 2021 [353]. Asset and Liability Management - Total assets as of December 31, 2022, were $7.73 billion, compared to $6.57 billion at the end of 2021, indicating significant growth in the asset base [339]. - Total liabilities increased to $7.21 billion as of December 31, 2022, from $6.02 billion in the previous year, reflecting the company's expansion strategy [339]. - Total loans, net of deferred origination fees and allowance for loan losses, increased to $4.06 billion as of December 31, 2022, up from $3.28 billion as of December 31, 2021, representing a growth of 23.7% [366]. - Total deposits increased to $6.60 billion, up from $6.36 billion at December 31, 2021, reflecting a growth of approximately 3.8% [396]. - The company reported a deferred tax asset of $62.5 million as of December 31, 2022, compared to $26.7 million at December 31, 2021, indicating a significant increase of 134.1% [395]. Loan Portfolio and Risk Management - The allowance for loan losses was $45.0 million as of December 31, 2022, compared to $35.9 million in 2021, indicating a proactive approach to risk management [370]. - The total loan charge-offs for the year 2022 were $8.396 million, compared to $8.988 million in 2021 [384]. - Nonperforming assets totaled $34.8 million, or 0.44% of total assets, at December 31, 2022, a decrease from $54.6 million, or 0.77% of total assets, at December 31, 2021 [392]. - The ratio of allowance to total loans was 1.10% at December 31, 2022, compared to 1.08% at December 31, 2021 [384]. - The provision for loan losses was $15.002 million in 2022, compared to a recovery of $287 thousand in 2021 [384]. Capital Structure - As of December 31, 2022, the total capital to risk-weighted assets ratio was 14.87%, with a total capital amount of $721,324,000 [415]. - The Tier 1 capital to risk-weighted assets ratio was 12.31%, with a Tier 1 capital amount of $597,022,000 [415]. - The common equity Tier 1 to risk-weighted assets ratio was 12.31%, with a common equity Tier 1 amount of $597,022,000 [415]. - The total capital to risk-weighted assets ratio for the bank was 14.75%, with a total capital amount of $715,458,000 [415]. - The bank's Tier 1 capital to risk-weighted assets ratio was 13.79%, with a Tier 1 capital amount of $668,864,000 [415]. Securities and Investments - Held-to-maturity securities increased to $1.54 billion at December 31, 2022, from $843.6 million at December 31, 2021, due to growth in mortgage-related securities [358]. - Available for sale securities decreased to $1.81 billion at December 31, 2022, from $2.11 billion in 2021, primarily due to strategic sales and transfers [357]. - The total securities portfolio is valued at $3,353,777,000 as of December 31, 2022 [360]. - The company anticipates full recovery of amortized cost for investment securities with unrealized losses by maturity, with $3.19 billion of such securities at fair value as of December 31, 2022 [359]. - The weighted average yield for held-to-maturity securities due after ten years is 4.2% [363].