Amalgamated Financial (US:AMAL)2021-08-01 10:32Financial Data and Key Metrics Changes - Net income for Q2 2021 was $10.4 million or $0.33 per diluted share, down from $12.2 million or $0.39 per diluted share in Q1 2021, and unchanged from Q2 2020 [18] - Total loans decreased to $3.1 billion, a decline of $85.4 million compared to Q1 2021, primarily due to a decrease in residential and commercial real estate loans [20] - Net interest margin was 2.75% for Q2 2021, down 10 basis points from Q1 2021 and 35 basis points from Q2 2020 [21] Business Line Data and Key Metrics Changes - Deposits grew to $5.9 billion, an increase of $190 million or 13.3% annualized compared to Q1 2021 [19] - Non-interest income was $5.3 million for Q2 2021, up from $4 million in Q1 2021 but down from $8.7 million in Q2 2020 [23] - The balance of PACE Assessments increased by $94.2 million to $545.8 million in Q2 2021 [20] Market Data and Key Metrics Changes - Deposits from politically active customers rose to $791.3 million, an increase of $99.6 million compared to Q1 2021 [19] - Non-performing assets totaled $71 million, or 1.08% of total assets, a decrease from $81 million or 1.27% in Q1 2021 [25] Company Strategy and Development Direction - The company aims to build on its strong brand and loyalty among socially responsible clients, focusing on organic growth and expanding its product offerings [10][12] - Plans include geographic expansion and potential M&A opportunities to enhance growth [15][51] - The company is committed to maintaining underwriting discipline while exploring new business opportunities [15] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding loan growth due to low demand and a low interest rate environment, but remains optimistic about economic expansion in the second half of 2021 [9][26] - The company revised its full-year pre-tax pre-provision earnings guidance to $66 to $72 million, reflecting challenges in the loan portfolio [26] Other Important Information - The company repurchased approximately 154,000 shares for $2.5 million under its $10 million share repurchase authorization during Q2 2021 [16] - The company is focused on optimizing its brand and deepening high-value client relationships [17] Q&A Session Summary Question: Importance of profitability in Amalgamated's strategy - Management emphasized that profitability is crucial and that the socially responsible model can coexist with growth [29][30] Question: Guidance for net interest income (NII) growth - Management indicated that NII growth is expected to be modest, driven by a strong pipeline and renewed business momentum [31][32] Question: Clarification on core pre-tax pre-provision income guidance - The revised guidance is primarily due to a flat loan book and no change in expense outlook [43][44] Question: Update on De Novo Expansion in Boston and LA - Management is optimistic about the Boston expansion and is evaluating other markets, including LA [48][49] Question: M&A strategy and tangible book value dilution - Management is actively considering M&A opportunities that align with their strategy while being prudent about capital deployment [50][52] Question: Concerns regarding specific reserves in the C&I portfolio - Management noted that the reserve buildup is related to two legacy loans, with no additional concerns at this time [63][64] Question: Addressing legacy credit issues - Management is focused on cleaning up non-performing assets and is actively evaluating options to improve the loan portfolio [72][74]