Amalgamated Financial Reports Strong Q3 2024 Results

Amalgamated Financial (Ticker: AF) has reported strong third-quarter results for 2024, showcasing significant growth in both deposits and loans. The company's net income reached $27.9 million, or $0.90 per diluted share, while core net income stood at $28 million, or $0.91 per diluted share. Total deposits climbed to $7.6 billion, bolstered by increases in political and sustainable funds.

Loan growth was highlighted at 2.7%, focusing on commercial, industrial, and sustainable lending. The Tier 1 leverage ratio improved to 8.63%, and the company's share price saw a slight rise to $2.62. Amalgamated Financial revised its full-year guidance upward and remains positive about its growth opportunities, especially in sustainable banking.

Key Takeaways

• Net income of $27.9 million and core net income of $28 million for Q3 2024.
• Increased deposits totaling $311 million, driven by political, social, and sustainable funds.
• Loan growth of 2.7% with a balanced mix across sectors.
• Focus on sustainable lending to support U.S. net-zero emissions by 2050.
• Improved Tier 1 leverage ratio at 8.63%, aiming for 9% soon.
• Revised guidance for core pretax pre-provision earnings and net interest income for FY 2024.

Company Outlook

• Amalgamated Financial anticipates stable mortgage charge-off rates, with potential for improvement as interest rates decline.
• Expected tapering of political deposit outflows towards year-end, with no planned reliance on wholesale funding.
• Aiming for an $8.35 billion balance sheet size by year-end.

Bearish Highlights

• Share repurchases likely on hold until achieving a Tier 1 leverage ratio of 9%.
• Estimated elevated expenses in the fourth quarter, including one-time costs.

Bullish Highlights

• Strong loan pipeline growth of 1% to 2% with robust yields, especially in commercial and industrial sectors.
• Expected origination yields ranging from 6.25% to 8%.

Misses

• No specific misses reported during the earnings call.

Q&A Highlights

• Discussed financial outlook, operational strategies, and Tier 1 leverage ratio goals.
• An Investor Day is scheduled for December 3rd to provide further updates.
• Plans to reveal return of capital strategy in Q4.

Amalgamated Financial's performance in Q3 2024 underscores its dedication to growth and sustainability. Executives CFO Jason Darby and CEO Priscilla Sims Brown emphasized strategic focus on maturing below-market loans and seeking higher yields, while aiming to support the transition to a net-zero emissions economy in the U.S. Further details will be presented at the upcoming Investor Day.

InvestingPro Insights

Amalgamated Financial's impressive Q3 results align with InvestingPro data, showing a market capitalization of $1.04 billion and a P/E ratio of 10.41, indicating reasonable valuation compared to industry peers. The bank has exhibited a 12.39% revenue increase over the past twelve months and a 16.65% increase in the recent quarter. A 41.1% price total return over the last six months reflects strong investor confidence in its growth strategy.

Full Transcript – Q3 2024 Earnings Call

Operator: Good morning, everyone. Welcome to the Amalgamated Financial Q3 2024 Earnings Call. All parties will be in listen-only mode until the Q&A. This call is being recorded. Now, I turn the call over to CFO Jason Darby.

Jason Darby: Thank you. Good morning, everyone. We appreciate your participation. Our third-quarter results confirm that Amalgamated is well-positioned for sustainable earnings growth. Our strong deposit and loan growth during the quarter showcases this.

Priscilla Sims Brown: Thank you for joining us. Our results highlight Amalgamated's unique position as we focus on sustainable banking across various sectors. Our new tagline, "Bank on Impact," reflects how we align with our customers' values while delivering strong performance.

… (the rest of the transcript continues with detailed financial discussions).

Operator: Thank you for your participation. This concludes today’s teleconference. You may disconnect your lines at this time.