Amalgamated Financial (AMAL) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Net income for Q1 2025 was $25 million or$0.81 per diluted share, while core net income was $27.1 million or$0.88 per diluted share, reflecting the sustainability of earnings [24][25] - Core earnings per share was $0.88, supported by net interest income of$70.6 million, which was within the guidance range [12][24] - The tangible book value per share increased by 4% to $23.51, while core revenue per diluted share decreased by$0.10 to $2.57 [26] - The CET1 ratio improved by 43 basis points to 14.32$7 million to $4.6 billion, driven by increases in multifamily and commercial industrial loans [38] - Political deposits grew by$103 million or 11% to $1.1 billion, consistent with historical patterns post-election [15][32] - Core non-interest income decreased to$9.1 million from $9.5 million, primarily due to lower commercial banking fees [42] Market Data and Key Metrics Changes - Total deposits increased by$446 million to $7.6 billion, with on-balance sheet deposits rising by 3.2$40 million share repurchase program was authorized, indicating a commitment to returning capital to shareholders [30][68] - The company is expanding its commercial PACE franchise, expecting C-PACE originations to ramp up to $15 to$20 million per quarter in the latter half of the year [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue growth and margin expansion for the remainder of the year, despite modest declines in core earnings and revenue [13][14] - The company anticipates C&I loan growth to remain muted in Q2, with reacceleration expected in the latter half of the year [18] - Management highlighted the importance of maintaining a strong credit profile and higher liquidity levels due to potential impacts from federal funding reductions [17][18] Other Important Information - The company is planning a move to a new headquarters in New York City by mid-2026, aimed at attracting and retaining top talent [21][22] - Nonperforming assets totaled 33.9 million, representing an increase driven by commercial industrial nonaccrual loans [46] Q&A Session Summary Question: Details on the 8.3 million loan that went on nonaccrual - Management indicated that the loan is in the solar sector and has sufficient collateral value, allowing them to maintain reserve coverage [54][56] Question: Impact of funding for clean energy projects - Management confirmed that there is no observed decline in funding for clean energy projects, with a strong pipeline continuing [58][60] Question: Concerns about political challenges affecting the bank - Management emphasized their focus on core business growth and maintaining strong capital and liquidity to navigate potential challenges [64][66] Question: Update on the political deposit franchise outlook - Management reported strong deposit performance with 11% growth in political deposits, consistent with historical trends [77][78] Question: Utilization of off-balance sheet strategies - Management explained that off-balance sheet strategies will be used as appropriate to manage balance sheet growth and maintain net interest income [84][86] Question: Expectations for expenses and digital transformation projects - Management confirmed that expenses are expected to ramp up throughout the year, with a focus on digital transformation and hiring plans [91][92] Question: Tangible impacts from the new administration - Management stated that they have not seen tangible impacts on lending or deposits but are closely monitoring potential risks [96][99]