Amalgamated Financial (US:AMAL)2022-04-30 13:20Financial Data and Key Metrics Changes - Net income for Q1 2022 was $14.2 million or $0.45 per diluted share, down from $15.9 million or $0.50 per diluted share in Q4 2021, but up from $12.2 million or $0.39 per diluted share in Q1 2021 [12] - Net interest income increased by 2.8%, reflecting the earnings power of the asset-sensitive balance sheet [8] - Non-interest income for Q1 2022 was $7.4 million, down from $12.4 million in the previous quarter [18] Business Line Data and Key Metrics Changes - Net loan growth was 4.8% excluding pace assessments and 6.5% including pace assessments, indicating solid momentum in core loan growth [7] - Deposits increased by 9.7% to $7 billion from the previous quarter, with political deposits rising to $1.1 billion [8][15] - Loans totaled $3.4 billion, an increase of $158 million compared to the end of Q4 2021, driven by residential and consumer loans [16] Market Data and Key Metrics Changes - Non-interest-bearing deposits represented 53% of average deposits, contributing to a stable average cost of deposits at 9 basis points [15] - The yield on total loans was 3.85%, a slight decrease from 4.01% in Q4 2021 [17] - The net interest margin was 2.76%, down from 2.77% in the previous quarter [18] Company Strategy and Development Direction - The company is focused on a "growth-for-good" strategy, emphasizing organic loan growth and expanding its lending platform [6][9] - The strategic plan includes enhancing customer insights and efficiency while maintaining a commitment to environmental and social responsibility [10][11] - The company aims to achieve high-single-digit loan growth and improve efficiency ratios, targeting around 65% [31][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in loan growth prospects, particularly in residential and consumer segments, while being cautious about commercial growth [26][28] - The rising interest rate environment is expected to benefit net interest income, with guidance for core pre-tax, pre-provision earnings of $97 million to $105 million for 2022 [24][25] - Management remains focused on maintaining strong asset quality while pursuing organic growth opportunities [67] Other Important Information - The company repurchased $2.8 million of common stock under its $40 million share repurchase program and maintained its dividend at $0.08 per share [21] - Non-performing assets totaled $61.1 million, representing 0.80% of total assets, with an increase in non-performing assets attributed to a multi-loan troubled debt restructuring [20] Q&A Session Summary Question: Clarity on loan growth outlook and targets - Management indicated strong prospects for loan growth, with residential and consumer loans being key drivers, while commercial growth is expected to improve as new bankers come online [26][27] Question: Differences between PACE loans and consumer solar loans - PACE loans are tied to tax positions for repayment, while consumer solar loans are more akin to unsecured loans [29][30] Question: Efficiency ratio and expense initiatives - Management confirmed a disciplined approach to expenses, indicating that increased revenues from rising rates will not lead to proportional increases in spending [31][32] Question: New banker hires and areas of focus - Six new bankers were hired, focusing on various areas including CDFI and climate-related expertise [38][40] Question: Update on the ABOC deal and regulatory expenses - Management stated that no additional regulatory expenses are anticipated beyond what was already planned, despite the withdrawal of the ABOC deal [65][66] Question: Deposit growth expectations amid Fed's QT - Management expressed confidence in the stickiness of deposits, suggesting that the bank is somewhat insulated from typical runoff risks [72][74]