Amalgamated Financial (US:AMAL)2020-11-01 08:42Financial Data and Key Metrics Changes - Average deposits grew by $459 million during the quarter to $5.9 billion compared to the second quarter [12] - Total loans were $3.6 billion, a decrease from $3.7 billion at the end of the second quarter [21] - Net interest income for the third quarter was $45.2 million, an increase from $44.4 million in the linked quarter [23] - Non-interest income for the third quarter was $12.8 million, increasing from $8.7 million in the second quarter [25] - Non-performing assets totaled $80.6 million or 1.22% of total assets, an increase from $66.7 million at the end of 2019 [29] Business Line Data and Key Metrics Changes - Political deposits increased to $1.2 billion, up from $578 million at the end of 2019 [20] - Loan deferrals declined to $201 million, or 6% of the loan portfolio, down from 13% at the end of the second quarter [13][22] - The bank closed six branches, resulting in a one-time expense of $6.4 million, but expects annual expense benefits of approximately $4 million [15][27] Market Data and Key Metrics Changes - Average non-interest bearing deposits increased by $445 million from the prior quarter, representing 54% of average deposits at quarter end [19] - The cost of deposits decreased to 14 basis points, down from 20 basis points at the end of the second quarter [19] Company Strategy and Development Direction - The company continues to prioritize investments for growth and shareholder value, with a focus on organic growth opportunities [16][44] - The bank aims to maintain its position as a socially responsible institution, emphasizing its commitment to sustainability and social issues [9][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the bank's operational execution despite the challenging environment due to COVID-19 [12] - The bank is cautious about potential impacts from a second wave of COVID-related shutdowns but remains committed to monitoring its loan portfolio [13] Other Important Information - The bank received its first rating from Kroll, rated BBB+/BBB for senior and subordinated debt, indicating the strength of its franchise [16] - The bank's core return on tangible average common equity was 13.4% for the third quarter, compared to 11.4% for the same period in 2019 [30] Q&A Session Summary Question: What qualities is the board looking for in the new CEO? - The board is seeking a candidate with deep experience in banking and the ability to connect with the bank's niche market [34] Question: Can you clarify the projections for solar credit income? - The $1.8 million forecast is for a specific project stream, and additional projects will increase this number [36] Question: How much of the NIM pressure can be recovered? - There is potential to recover some of the 31 basis points of NIM pressure, but challenges remain due to low rates [40] Question: What are the capital priorities moving forward? - The first priority for capital is organic growth, with discussions on dividends occurring quarterly [42][44] Question: What is the outlook for PACE growth opportunities? - The bank expects to continue originating PACE assessments and sees strong opportunities for loan growth in renewable energy [48]