Amalgamated Financial Corp. (AMAL) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call shows strong financial performance, with record-breaking deposits, increased net income, and a rise in net interest margin. The guidance is optimistic, with raised earnings and net interest income forecasts. The dividend increase and share buybacks are positive for shareholders. While there are concerns about rising expenses and asset quality, the overall sentiment is positive due to strong financial metrics, optimistic guidance, and shareholder return initiatives. The Q&A section reinforced growth in key areas like the PACE portfolio, though some management responses lacked detail.
Key Financial Performance
Core earnings per diluted share $0.99, consistent earnings power, enabling consistent, growing returns on tangible common equity.
New deposits Nearly $1 billion, record-breaking quarter, surpassing the previous record set in Q2 2020.
On-balance sheet deposits Grew $179 million to $7.9 billion, reflecting strong deposit gathering.
Off-balance sheet deposits Increased $789 million to $1.1 billion, showcasing growth in deposit segments.
Political deposits Increased $287 million to $1.7 billion, driven by fundraising ahead of midterm elections.
Not-for-profit deposits Grew $388 million, demonstrating strong growth in this customer segment.
Social and Philanthropy deposits Grew $122 million, reflecting growth in this segment.
Climate and Sustainability deposits Grew $77 million, showing growth in this segment.
Loans Increased $167 million or 3.5% to $4.9 billion, with growth in multifamily, CRE, and C&I portfolios.
PACE portfolio Total assessments grew $38 million or 3% to $1.3 billion, with $27 million growth in C-PACE.
Net income $26.6 million or $0.88 per diluted share, with core net income at $30 million or $0.99 per diluted share.
Net interest income Grew 1.8% to $77.9 million, exceeding guidance range.
Net interest margin Increased 6 basis points to 3.66%, driven by a decline in cost of funds.
Core noninterest income $10.1 million, reflecting steady improvement driven by trust income and banking fees.
Core expense $44.9 million, aligning with the annual target of $170 million.
Core efficiency ratio 51.13%, indicating efficient operations.
Tangible book value per share Rose $0.87 or 3.4%, reflecting strong performance.
Tier 1 leverage 9.36%, indicating strong capital position.
Capital returned to shareholders $8.7 million in buybacks and $0.14 quarterly dividend, with a $0.03 dividend increase to $0.17.
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Operating Highlights
Deposit Growth: Generated nearly $1 billion in new deposits, with on-balance sheet deposits growing $179 million to $7.9 billion and off-balance sheet deposits increasing $789 million to $1.1 billion. Political deposits grew $287 million to $1.7 billion, and all customer segments experienced deposit growth.
Loan Growth: Loans increased by $167 million (3.5%) to $4.9 billion, with growth mode portfolios (multifamily, CRE, and C&I) increasing by 7% or $218 million. PACE portfolio assessments grew $38 million (3%) to $1.3 billion.
Geographic Expansion: Expanded reach on the West Coast, supported by the addition of several C&I experts.
Net Interest Margin: Increased by 6 basis points to 3.66%, driven by a 16 basis point decline in cost of funds.
Efficiency Ratio: Core efficiency ratio was 51.13%, with core expenses aligning with the annual target of $170 million.
Revenue Diversification: Core noninterest income reached $10.1 million, representing 11.4% of core revenue, progressing towards the 85-15 revenue diversification objective.
Asset Growth: Bank assets grew from $6 billion to nearly $9 billion over 4.5 years, with plans to cross $10 billion in assets.
Profitability and Mission Alignment: Focused on profitability tied to mission purpose, with a strong capital base and asset quality.
Technology Investment: Planned 18% growth in technology spending for 2026 to scale the business.
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Risk or Challenges
Credit Turbulence: There were some credit turbulence during the quarter, including a marked-for-sale nonaccrual multifamily asset identified in Q3, contributing to an elevated charge-off ratio and increased provision expense. Additionally, a borrower in the D.C. market showed stress related to the rapid rehousing program restructuring, resulting in increased reserves of $1.9 million and a $7.5 million increase in nonaccrual multifamily loans.
Economic and Regulatory Environment: The U.S. banking sector has faced extraordinary challenges, including the fastest rate hike environment in 60 years, the longest inverted yield curve in 40 years, and the largest Fed-driven liquidity drain on record. These factors have transformed credit demand and risk, posing ongoing challenges for the bank.
Expense Management: Expenses ticked up during the quarter, largely due to noncore severance costs in the residential lending unit. While core expenses were in line with targets, rising expenses could impact profitability if not managed effectively.
Asset Quality: Asset quality metrics remain solid overall, but there were increases in criticized or classified assets, particularly in the multifamily segment. This could pose risks if not adequately managed.
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Guidance & Outlook
Net Interest Income Growth: The company projects net interest income to grow by 10% to 11% in 2026, reaching $327 million to $331 million.
Core Pre-Tax Pre-Provision Earnings: Expected to grow by 9% to 10% in 2026, reaching $180 million to $183 million.
Core Return on Average Assets: Targeted growth to 1.35% in 2026.
Core Return on Tangible Common Equity: Projected growth to 15% in 2026.
Balance Sheet Growth: Expected growth of approximately 5% in 2026.
Expense Discipline Targets: Plans to achieve core positive operating leverage of 3% to 4%, with technology spending growth of about 18% and annual core operating expenses increasing to $188 million.
Quarterly Net Loan Growth: Anticipated growth of 1.5% to 2% per quarter in 2026, building on momentum from late 2025.
First Quarter 2026 Projections: Net interest income is estimated to increase to $79 million to $81 million, with net interest margin expected to rise due to increased yields from late 2025 loan growth.
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Shareholder Return Plan
Quarterly Dividend: $0.14 per share
Dividend Increase: Announced a $0.03 increase to $0.17 per share based on confident outlook for 2026 earnings
Share Buybacks: $8.7 million worth of shares repurchased
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Key Q&A
Q:What is the outlook for the provision in 2026 and the effective tax rate for the new year?
A:The provision outlook for 2026 is expected to be roughly the same as 2025, with a slight potential improvement. The effective tax rate (ETR) is targeted at 26.5%, with potential upside as more tax credits are built up throughout the year.
Q:What are the expectations for political deposits over the next few quarters?
A:Political deposits are expected to grow through the election cycle, with a 20% quarter-over-quarter growth trend. The peak is anticipated to occur about a month before the election, consistent with prior cycles.
Q:What drove the strong multifamily growth this quarter, and was it concentrated in New York City?
A:The strong multifamily growth was geographically diversified, with slightly under half of it coming from outside New York City. This reflects good geographic representation and a strong pipeline for future growth.
Q:What are the current commercial loan yields and the mix of fixed versus floating loans?
A:Commercial loan yields are in the 5.9% to 6% range for C&I loans and 5.70% for multifamily and CRE loans. Older real estate loans are being repriced from 4.30%, and the PACE portfolio yields are in the high 6% to close to 7% range.
Q:What is the outlook for the PACE portfolio and its growth potential?
A:The PACE portfolio has strong growth potential with no concentration restrictions. The bank is focusing on increasing the percentage of commercial PACE (C-PACE) to residential PACE (resi-PACE), with 75% of recent originations coming from C-PACE. The bank plans to trade down traditional securities to fund C-PACE growth.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the mix of fixed versus floating loans in the commercial loan yields discussion, and their response on political deposits lacked precise projections beyond general trends.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Amalgamated Bank
Amalgamated asset
Amalgamated share
Amalgamated shine
Bank potential
Bank today
Coast PACE
Deposit gathering
Fed liquidity
Investor Relations
Loans mode
Philanthropy Climate
Priscilla Sims
Priscilla book
Relations website
Slide reminder
Social Philanthropy
acceleration addition
achievement Amalgamated
adherence expectation
advancer mission
advantage posse
asset investment
asset price
bank builder
bank challenge
bank phase
banking condition
banking partner
behavior credit
book Amalgamated
people
record
AMAL Transcript
Amalgamated Financial Corp. (AMAL) Q4 2025 Earnings Call Transcript
Positive1-22
The earnings call shows strong financial performance, with record-breaking deposits, increased net income, and a rise in net interest margin. The guidance is optimistic, with raised earnings and net interest income forecasts. The dividend increase and share buybacks are positive for shareholders. While there are concerns about rising expenses and asset quality, the overall sentiment is positive due to strong financial metrics, optimistic guidance, and shareholder return initiatives. The Q&A section reinforced growth in key areas like the PACE portfolio, though some management responses lacked detail.
Amalgamated Financial Corp. (AMAL) Q3 2025 Earnings Call Transcript
Positive10-23
The earnings call shows strong financial performance, with NII and net interest margin exceeding guidance, and an increase in tangible book value per share. The Q&A section highlights management's confidence in handling potential risks, such as rent freezes and federal funding for green projects. Despite higher expenses, the outlook remains stable. The positive financial metrics and optimistic management responses suggest a positive stock price reaction.
Amalgamated Financial Corp. (AMAL) Q2 2025 Earnings Call Transcript
Positive7-24
The earnings call reveals strong financial performance with EPS and NII growth, share repurchases, and solid deposit growth. The Q&A provides confidence in organic expansion and stable provisioning, despite vague answers on syndicated credit resolution. The balance of buybacks and dividends is positive, and the NIM outlook is stable. Overall, the financial health and strategic growth plans indicate a positive sentiment.
Amalgamated Financial Corp. (NASDAQ:AMAL) Q1 2025 Earnings Call Transcript
Unknown4-26
The earnings call presents mixed signals: strong earnings per share and a steady dividend suggest stability, but concerns about nonperforming assets and market uncertainties pose risks. While the share repurchase program is positive, the lack of clear guidance on political risks and operational cost increases tempers optimism. The Q&A reflects management's inability to fully address concerns, leading to a balanced outlook. Given the absence of a market cap, the reaction is likely neutral, with stock price movement expected within the -2% to 2% range.
AMAL Slides
AMAL Report
Frequently Asked Questions
Where does this earnings call transcript come from?
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Why do some answers appear as “Unclear” or “Inaudible”?
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Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
