AMAL - Earnings call transcript Q4 2019 | Amalgamated Financial Corp.

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Operator

Good morning, ladies and gentlemen. And welcome to the Amalgamated Bank Fourth Quarter and Full Year 2019 Earnings Conference Call.

During today's presentation, all parties will be in a listen-only mode.

Following the presentation, the conference will be opened for questions with instructions to follow at that time.

As a reminder, this conference call is being recorded.

to call like to now would turn over the Mr. I Chief Financial LaBenne, Officer. Drew sir. Please go ahead,

Drew LaBenne

Thank good year operator, President our With you, and today and fourth participation appreciate me quarter in Chief your Executive and Keith full is XXXX Officer. call. morning, earnings Mestrich, everyone. We

will time. our a for Web As call an a the on extended replay telephonic available reminder, of site Investors this period of be section of

section also a our slide complement to on Web of Additionally, Investors today's discussion site. available the is deck

we as begin, or indicated our FDIC remind differ factors that the we our investors XX, cause of me to and materially other deck, implied or Investors the slide such periodic forward-looking on let may actual Act indicated contain implied everyone forward-looking caution statements. that to from two with expectations to refer by XX-K should of call slide Before statements time actual by such March that well of that or results certain Private meaning statements. of results risk constitute Reform filed a We this Securities may Litigation statements information from list differ time XXXX, as that XXXX. reports the within could earnings those XXXX for file the from

in our in release, well with considered during Web The comparable measure these measures be our presentation most non-GAAP prepared earnings discuss site. we we additional GAAP in of or as accordance certain found be to for evaluating GAAP. U.S. should will useful substitute on reconciliation A results as today's can not in performance. the our call, believe of Additionally, non-GAAP as measures, are which information a this isolation

to I'll point, call the this At Keith. over turn

Keith Mestrich

and turning call today. Thank you, results quarter to everyone. the back bank of before Drew our to grow high-level and morning, more results good financial appreciate morning, the discuss the attention We fourth detail. an strategy Drew, to provide update the our will time I This discuss and your and over in

of full six quarter today. are to XXXX there the focus fourth the that key and start, of To highlights I would on like year

First, of this the best institution the in a performance billion results the XX-year team great the achieving financial with of XXXX. $X bank in in and I am entire history asset past thrilled the Amalgamated propelling mark

I'm also more our show the motivated and which bank year historic the forward. are very with do coming happy to These our quarterly in organization earnings potential earnings, and going even achievements year. the full have entire

that note no our team Second, XXXX. move loan made I assets quarter growing to changes their to given hold. PACE assets in made the been structure, that in but the with we our the I'm achieved success fourth in our the securities portfolio would thrilled that to we decision

of delivered we addition million X% result, of on growth a As $XXX PACE in top the loan annual assets.

Taken for which to as together, you especially we sheet. our exceeded achieved that our portfolio the full year XXXX, derisk consider we the portfolio balance grew runoff XX% expectations, C&I our continue in substantial indirect when our

market the and past positioned which in key year. sustainable sector, our and mission the have to lending a this in a in for values differentiator driver remain success us Amalgamated's critical growth was

for are XXXX. continued as we growth poised we importantly, enter More

and be again growth healthy a as that the XXXX. experience year franchise our Third, through deposit has to full we enjoys to proved quarter continue competitive Amalgamated of advantage fourth

fund deposit noninterest for positioning strategic long-term strong our and the broad and in having a growth based, The percentage our quarter expansion and expanded and remains full core achieved cost of nonprofit, deposit bearing labor was political us. the differentiator in nicely philanthropic sectors. relationships year success the This in to

which new business represent slightly with exciting readiness to XXXX, trust department, stocks associated in and for accelerate the to that ahead. invest primarily in was we in opportunities we expense started that opportunities elevated given we noninterest see growth quarter the in bank our the Fourth, expect the initiatives

initiatives We these more in will discuss detail in a moment.

C&I Fifth, exception very credit we that indirect credit one stable of moved remains previously to nonaccrual. modified with the

of by only approximately portfolio we course XXXX, million remains the reduced indirect the million the $XX Over C&I and in portfolio. $XXX

recent upon lastly, including announce we this every continue are to day work And hard to socially quarter, And proud reputation responsible launch the to build America's as our bank. accomplishments our ESG continued Departmental support that of build inclusive with sustainable board and advocacy additional efforts disclosures related oversight, Responsibility Social committee our help of a Corporate Cross more making ESG policy world. and

ESG more socially consumers where they solid investment We a stakeholders. that responsible are will broad a company, of our important believe set and hold as this themselves do especially the with accountable demanding business long-term be a in era, to that positioning and more companies,

Turning energy to of the our energy witnessed we portfolio, growth position strengthening the well renewable and nice in space. continued in quarter, as residential our as efficiency

A category it's that alignment, the mission Towards we assets returns for in like million the the the $XXX.X end of relatively of we assessments. portfolio. added quarter, and credit PACE strength its the approximately favorable in

in more of these the presentation. slide We assets provided on have details nine

saw bank. assets business that PACE. most commercial like categories our with as also the socially Again, as additional activity we alignment responsible as of for mission positioning We safety in overall solar commercial the well returns and and America's

investing post our our lending to We resource we bank, acquisition million. commitment $XXX of doubled pleased to that also are to and impact announce new

This achieved ahead goal months initiative past schedule. delivering a our eight this of was two-year goal upon December

deposits million the continues achieving full to XXXX. deliver of year-end adjusting deposit quarter, after or unique year XX% Our during XX.X% and short-term the XX% and the for growth at annualized franchise for $XXX

At to record our particularly which our we political greatly the power and have achieved of am the by a brand and high totaled over encouraged the quarter political as bankers candidates is success million, strength I as the in of major deposits committees. we our continue course Amalgamated. XXXX deposit market, expanded share take both that of $XXX.X end, for our political share

further who has progress our quarter, presence. fourth good in experienced very California, where our banker Francisco in an opportunity reach to our to made franchise, have an political grow office hired our expanding we the order we San expand In in

political broad our we other Office this on based We labor franchise, brought relationships focus a experienced verticals. a deposit growth in month and new Regional to Western key hired union our also our in our banker relationship in deposit West. Beyond the

also new We region. in region, unions lending increase in open unions saw with a our in to our in major labor nice our Mid-Atlantic Northeast relationships

CDFI in is team we to a of organizations, XXXX, starting those focus end an they And the towards banking and lender excellent environmental new community saw We non-profit the bear Our the building fruit. relationships LGBTQ adding groups, hired year organizations, and on with relationships year, development groups. growing, had relationships women's community. with to

robust adding in management In lending relationships, we the with we their with the innovative are our Management poised to well through year, future. XXXX partnerships, endowment began presence with to and solidify opportunities discuss managers really cash philanthropies Investment

our a XXXX, all and strong ahead all is start. teams our to Looking pipeline in are off of deposit strong, to three regions

we as new to those As plan Angeles to in relationships commercial this last on see and adding I we year markets later in open well. offices expect us Boston our call, announced and Los

basis of funds point in up points points steady held from Our one fourth deposit year basis down XX and quarter, the quarter. costs XXXX quarter at the basis of ago from XX the third relatively

funds of earnest remain before again political it to fundraising in - itself repeat it Looking past I and will spent quarters I prologue, the relatively previous campaign election. declining begin and stable seen expect as part expect campaign through in quarter forward, funding the fully If to cycle fully second latter of is first we third get would in and expect the towards our be deposits the should XXXX. elections the the

Our the City result noninterest branches of the of million the of $X.X related non-core department quarter, XXXX. expenses quarter the to related with of $XX.X of previously was as linked expenses $X.X a expense primarily and in New York mentioned stocks our work. And closing an two million the for in to costs from trust associated acceleration increase million, consisting

an We on of we effectively currently the opportunity our expand believe our are of investment exploring our spending the our grow ways management are been the and note, have that expand potential funds deliver to the platform that have offerings. example business is the trust Of to and growth bank. undertaking trust that we to study to investment more

our is based with relationship During business. Invesco the to on become we to announced quarter, a investment opportunities our This management agreement for mission expand investments. sub-adviser our for responsible socially

ESG passive equity, Given and benefit depth providing focused income Invesco's clients leadership and investment and from Invesco's our of believe capabilities. breadth alternative We the will fixed mission and products.

I I income, to value are prolonged, focused capability custody on interest the this personally set of our investment vibrant trust of the with as improving greatly franchise I the business, important of offerings transformation is the of We think through expanded the can serious in very extremely non-interest am core low coupling our believe and can a our that offering. commitment increase perhaps and bank's that be enhanced investment custody something environment. current delivery

year our the as product as ahead, offerings. opportunity to to geographic we see reach, well expand also our Looking an

estimate to the market And large continue share we individuals and billion the choice the deposit is see. States. our Given banking opportunity mission. opportunity values commercial to that be that in of for continues and we strong Amalgamated who $XX a United there partner companies

XXXX. offices not effort. our and continue To as earlier, with forward will we tap market support commercial I Angeles to be open branches in bankers as large in into commercial We're securing opening currently and and recruiting office banking referenced Los we Boston move this to to strategy space, this

capital quarterly dividend our are will in return increase also continue of approval We with per pleased to XX% to a and our to $X.XX shareholders board's share.

maintain maximizing our remain strategy we will on value as a disciplined we as shareholders. allocation for Importantly, remain capital focused

I we past positioned grow has the To the our achieved franchise made with very and year. our XXXX have team are am this conclude, entering the for strides future. well pleased progress to that we prudently

started where to as America's in be responsible market. to recognized more proved XXXX become Additionally, widely socially the a bank our year reputation

notable many see. I'm that for given several in I would thank America very excited with with their I hard recognized, employees Euromoney's our best awards, all best of were the year corporate California. we to Forbes social As for And ahead, like in bank North bank and the responsibility opportunities work. including

more like Now I'd Drew financial detailed review for of turn results. call to a our to the over

Drew LaBenne

operator before And back to the Keith. line fourth by reviewing and results quarter open begin questions. you, full to for Thank the our year turning I'll

$X.X in or of third Turning the the XXXX, six, were deposits million, billion from the quarter average XX.X% for quarter deposits while increased $X.X fourth annualized to slide the billion. quarter $XXX.X

As the XX% expected, cycle, increased related seasonality average election quarter, of to primarily due to from and average million $XX.X deposits deposits at year-end. non-interest-bearing prior now the represent

stable XX of at cost remains Our basis deposit funds relatively points.

at $XXX.X increased and such Deposits and party ending million packs, campaigns $XXX.X as national from XXXX, year state on million, at politically from customers XX, as active million committees outlined the September seven. slide $XX.X

election be mentioned, And The ahead haven't continues needs be of environment Presidential candidates. for source to majority deposit as our growth will we a the the continued be Keith to a year The democratic for race. franchise. supporting of of partner the business focus the

million, we $XXX.X while December following The ended loans. As slow with compared XXXX, of growth portfolio. annual seen through on of indirect year or billion growth on eight, or our runoff X.X% the as diligent achieved total delivered then slide loan and to $X.X C&I effort's XX, was

balance held to Additionally, approximately in to PACE of securities million, purchase $XXX.X are mentioned, residential portfolio assessments our inclusive increased in million now of as Keith is the which PACE reported which $XXX this we assessments, quarter. maturity

of like to important the as XXXX profile the our we growth credit Looking PACE portfolio in continue of assets to this an and yield beyond. and forward, driver see and

in earning of average lower market quarter impact XXXX, on as total rates and our assets market basis rates in points XX to on Yield fourth for lower driven decrease funds originations yield and on on a to loans the Due X.XX% X.XX%, quarter securities. compared was The new the to rate. the by Fed X.XX% compared same period of XXXX. loans loan was lower third the of

to Turning slide XX.

accretion NIM linked seven Fourth decrease third basis decrease Our quarter compared acquisition. a mark quarter points on to the decrease from from due points. net loan earning primarily the year-over-year NRB interest of in of the decrease the to and a NIM XX the quarter, five basis X.XX% basis quarter includes of margin of interest for was was yield points The assets.

same approximately Net $XX.X quarter and increase compares fourth $XX.X million XXXX quarter in the million, linked interest to million of which quarter $XX.X as income for was the million compared XXXX. to $X.X the of in

which the year interest prior. net million, $XXX.X For million to $XXX.X compares the income in was year

and million an million, non-interest from income $X.X with a the in XXXX. compared XXXX full increase of of $XXX,XXX Now the X.X% for income, the was on non-interest year to quarter third quarter the quarter for $XX.X income increase fourth million, to fourth XXXX XXXX. was of increasing slightly $X.X Non-interest of compared

in Keith has many already drivers the our the fourth quarter. of for increase hit expense on

year full ended remained a December X.X% a the relatively the year the For from expense decrease XXXX, of million, $XXX.X $XXX,XXX at XX, for our $XXX XXXX. flat or non-interest million

due temporary Occupancy also The some benefit projects. due workers primarily slight of XXXX. was in closures for $X.X and to branch compensation million increases depreciation decrease million, scheduled was and to of increased which special costs $X.X for in

IPO The of release XXXX, associated also increases decrease NRB in other off-balance were offset acquisition $X.X professional with lower by fees in of of expenses and there FDIC a provision. sheet the decrease and in expense $X.X million with was associated million

the strategic Boston Angeles. level moderate and As XXXX, we expansion investment trust head in into into a the Los continue business and will we of

inflationary on two These we in XXXX some normal expenses. secured offset always will by XXXX. are closures in savings increases and the there pressures the be have Additionally, early mostly branch

XXXX, branch average some of the rate quarter approximately million run expense quarters. the estimate at closures savings in in per variation with $XX approximately will run to million core We our We forecast expenses annually. $X

of slide an XXXX, XXXX, XX held portfolio quality December the to or compared Skipping compared a total throughout as million total the steady XX at our X.XX% from the and assets December decrease XXXX. of of XX, to non-performing quarter fourth as and quarter ahead million $X.X XX assets to of X.XX% credit $XX.X of September linked increase period $X.X as million,

quarter. loans by the approximately quarter, classified the in million and linked fourth compared Criticized decreased to $X

the The releasing an to non-accrual of a provision XXXX. XXXX an quarter in maturity to related total C&I movement from fourth provision to third portfolio loan the specific The partially was losses allowance our for in to due the hold by quarter in of which in driven expense $XX,XXX, of to of by quarter compares of loan expense PACE $XXX,XXX securities. increase reserves recovery moving indirect one to the primarily offset assets fourth

discussed return decrease Skipping for quarter the of tangible core to comparable tangible factors. of return was modest the the on XX.X% XX.X% equity for average to in X.X% respectively the third slide XXXX. XX, due quarter previously and quarter our common The and return in XXXX period the XXXX. for core linked in quarter X.X% and GAAP compares fourth equity The primarily on to were

to support growth. Lastly, we remain well capitalized future

in we To and terms are pleased positioning the with XXXX increasing of growing ourselves business results conclude, our profitability. for

slide to Turning XX.

year We have for outlined in XXXX change with our funds expectations target Fed for XXXX. This guidance yield XXXX. the assumes end a no curve

XX% are pre-provision better. core balance targeting million. We ratio growth; million sheet of pre-tax $XX targeting assuming XX% earnings a We're $XX to or efficiency we're of

questions. that open results today. Thank forward our ask look you again With any everyone We for to quarter to first time updating operator for on in April. the to line the I'd Operator? your like up

Operator

[Operator Instructions]

Thank you.

Our from first with proceed Sandler. Piper Twerdahl question. question your with comes Please Alex

AlexTwerdahl

guys. morning, good Hey,

might political then deposits. but kind into the early a you seems as have off those do where those approach election maybe kind would remind we on margin one, flow of two, to the what could for and actually when the be your like decline pretty in do and of level election, those the question it's then to Appreciate Drew, the expecting which Just year out? you implications think on obvious, deposits us first you the commentary and sense decline

DrewLaBenne

the outflows on timing that. or be So just on first sorry, what is the deposit question will those

AlexTwerdahl

getting Yes. quarter maybe year. -others are mean, XXXX the went in of the you we then I where And after that envision, down not fourth

DrewLaBenne

absolutely. Yes,

QX, we the the really, the happens. just it then if at to that and beginning we of timing where the very end outflow saw So, QX, of was cycle, back last look

no QX. impact almost on So,

number not there, going the think may out I election. who's into be still may and different, going that just very we're given cycle this or the candidates to on Democratic candidate lead of are the be unclear

KeithMestrich

and little to hard Yes, I think it's put a Alex, pin I specific a great in a it. try question; mean it's

Our to money down of spend being there's money some campaign raised election six-year that's the cycle don't zero. in campaign current for is right money all there, committees the senate not

dollars, to XXXX. up the on and a is. to can on substantially of to quarters on then think second in and middle that build I exactly number But of adequate first it hard should again that start sure cover several make runoff we where November. one to put that But specific hundred will it of pin million we remember the having liquidity books there the down go lands the are important any pretty real things

AlexTwerdahl

Okay, of doesn't pack thinking? money that Democratic the correct mean, matter in is kind raised carrying candidate. ticket. this specific it which of lot necessarily that's up mean, money money a I Am candidate the the winds by I really not I and

KeithMestrich

That's right.

In It's its dollars that the the overall political presidential money, the and raising. fact, political small the money its other money campaign are raising others that a raising money super just PACs is that committees DNC are money that it's portion are of - that in are election candidates the PACs dollars. like political that and

So, to exactly but lands it put it's and it again, where and in variable hard base mid-November. a in it

DrewLaBenne

deposits, in change plan, margin fundraising. it out, And goes when hopefully far the borrowings the as in nonpolitical, starts then impact fill political subject again, as our backfill outflow of cycle short-term then, that the both and as current with the is terms political back certainly to up will and with it

AlexTwerdahl

but expect position remind seemingly kind appreciate full coming be standpoint yield on NIM Okay. loans are in I year of and table your the the are curve you new may just And cuts the loans rate for income, street NIM now should kind kind how then how net price, commentary, a rates just can of your kind and of expect what from us of all the the a all into that books and guidance on the that deposit repricing? we and now - progress now how to factored you

DrewLaBenne

Yes.

that quarter. I lag last be a little from cut the, the next of a bit the coming may last that think on with or effect still bleeding So, cut, there into

in assets this coming on coming can terms on resi, the books. are the the I of will low are as threes far depend mix, multifamily, it mid of As but at really tell in, in you, all those books, point coming the to on that the yields kind

on as pressure be to far going there's think I asset asset as yields categories. So, those

think and we're able higher such that as I'm coming the of I soon assets lower about the and we as from to, other we'll a yields PACE yielding as assets as in help assets of PACE assuming to offset some but will as well it add more much more pressure the have books. as some sure talk that minute, those can on

deposit deposit had beta particular, our cycle. X% the costs cumulatively a With in beta, in up we

extensive So, going up go to a to is going to in because repricing not the down cycle, of and large down slow it not we're amount fast. going - see it's come

So, while much had more are some I repricing of there then side, think to betas that probably are deposit be the some higher options banks to some limited the uptrend of the going our cycle. on in

AlexTwerdahl

Okay.

drift just little raid So, on of saying way long last XXXX, of be there's additional based maybe stable, down the in early a cups? expect to you the from kind bit margin mostly through some a bleed of that that

DrewLaBenne

XXXX. going would there would that into pressure in It's be NIM - I say

a next I had think just points that will going you in I way. I me that see happened compression But NIM will think obviously year going - would kind from some well. couple it. rate than Let we have how see compression be forward. cuts more basis But NIM that it as QX can QX, into of put will it

Operator

Thank you.

proceed Barclays. from the of line next question. with Morton coming is Our Brian with question your Please

BrianMorton

we and then more was to guidance I guys. get us the conversely us morning, what drive the what could kind a bit end? drive guidance high of the on your and are that low the detail to end Good could little hoping of to XXXX factors

DrewLaBenne

levers we, I and put exceeding one that higher. sheet there balance asset that out would obviously be asset growth, think earnings and obviously growth think could overall XX% drive a growth for I the of target

is for income Fee another us. opportunity

some a get We work pace. spot space, grow management trust And at doing can there. just where our are could and in the comment asset faster so we I be expect, that a in then where we could

still department. our We trust off are one run from expecting that of fund

there already. factored But as that's a guidance pole fund be So, into that from will downward well. our

I then And expenses, looking finances. at we've think always we're -

actions think to this I'm to This a - actions took in we've continue I XXXX. look year, out we'll as We at - what's there sorry, lot opportunities at are year, we of taken what in lot of well. we'll look XXXX. in possible continue a are

KeithMestrich

leavers of help a higher space, will really know, have, we I really of us would I think that ranges pricing lot robust our the non-interest right into use that we as pipeline, add allowed we guide that guidance. we particularly the political And Drew of amount of something the keep, be to just vibrancy even modest robust, the as that borrowings see that borrowings minimization the of happen and downward space think you the on in now, will are Yes. the growth small I keep stays level will to until us that runoff in is the though very, the deposit don't bearing books very which pretty has as can long said,

BrianMorton

Okay.

question. one the you Just quick re any shares in quarter? purchase Did

DrewLaBenne

beginning which and much of no longer as pretty moved then the as last in XXX,XXX We price rapidly purchased we quarter. quarter. the Not repurchasing the really the little happened at shares market And over up were

BrianMorton

All in would how dollars right. to say? much whole you And that's

DrewLaBenne

I million was, think in that a it It $X about little a X.X million, somewhere under was range.

BrianMorton

Thanks. great. Okay,

really ever a and of into you doing adoption? Have question. kind of Cecil final impact timing looked the my move me Let

DrewLaBenne

process of is in for smoothly, obviously Cecil are next out QX part in know backend what timing going looking adopting our we is at quarter be to here. this who those Well, rolls with all how XXXX, banks evaluation

We're, investors about that to do talking trying our their I well after So, and timing. as the on I'm our we thoughts evaluation, we'll timing. understand think just to think

Operator

you. Thank

with Chris from comes Please with proceed question next your Our O'Connell KBW. question.

ChrisO'Connell

the on hoping of Joe, impact was drill C&I non-accrual? single impacts some do provision you down the from provision moving I have to then alternatively, alone exact PACE the the of So, classification on impact to the of this quarter. and

DrewLaBenne

Absolutely.

question. So, with a of was for PACE that sort a meeting

expand a So, bit. could little this upon I

did You was an various with PACE in with, this we put and between you is thinking the place the like for space that determine the constituencies that know, we appropriate work a in securities assets security asset that know to loans somewhat gray.

Because don't, have they municipalities, they moving them evaluation, the that the are bonded that They various appropriate. assessments trade in freely from But but we don't securities market. was Q after sips. to portfolio determined

had of, to allowance result assets on related a assets. the in that released QX on from PACE those the released we our allowance we and As that XXX,XXX sheet balance the

So, have now, that any provision it's we do note securities not to we against important have the for them.

there's You any they very but those. no against guess LTVs, provision longer assessment I assets or know, values, we are low think with very solid

KeithMestrich

on talks Island. Before Drew goes and one the about Scene

extra on little a piece. PACE very they're asset alone, or we this think add class. just me bullish on a commentary the security considered are Let we that Regardless if

We additional, asset quality the like relations both mission build us reputational business aspects helps it, very credit comes as that the that like of We alignment the yields. like and We deposit well. very, much. our very, public has the with that

servicing of the with set them driving to can them makes know, even them. to put be as but classification now, and frank with minds. impact was way, allowance We like you which our very have or the the with to better lack capacity fact the in any on security, little have we a that these we have the in that just we them And and the with this efficiency assets not no books

securities asset the we class. like So, loans,

have is continue talk as our competition this we growth loan We in will and to don't moving of more because are right assets will to opposed on ton an now. important we that about more growth frankly strategy be of we And one just that part forward. them bullish a why think

our So, we connection valuable here. feel be very, got some we've to like expertise very This franchise.

Drew to C&I And to turn back the loan. about talk

DrewLaBenne

C&I we're of about terms three in So, downgraded the that quarter. in the the you loans portfolio. that indirect portfolio. to had three whole, under of This as is a the outstanding loans million the with in talked And $XX in non-accrual that regards know, we one to just past in those portfolio which still some we've issues balances

on of $X.X million the on that in little one built $X.X performing specific million loan, loans better. we actually released We reserves started that other And a loan.

specific to net-net million reserves So, between on portfolio. indirect the C&I X.X in

ChrisO'Connell

provisioning it. reserves, to the And the will the a excluding I guess, Great, part the you. PACE the now toward then looking isn't forward preserved Got thank especially C&I where that toward indirect going actual forward. of loan going trend be really

DrewLaBenne

be put release on look we're back lower loans we no build small if trend leading you're continuing to Yes, been to your general downward, on normal that period is balance growth if everything top should the have probably a of but generally you have our improvements impacts trend has books. will then stays as it factors the today, the factor and to expand happening the then adverse allowance in loans the excluding that, we'll credit reserves of specific right most

ChrisO'Connell

Got it. reserved I guess is the C&I now. the you the know what book right loan excluding indirect

DrewLaBenne

want I get back but the didn't math, million I portfolio. don't it do you and to but to I quick on - it sitting X think wrong, it's specifics let that. about are do in get that the me

ChrisO'Connell

the partnership the growth seeing mentioned with deck. for targeted year, a that opportunities XX% in And balance Columbia solar Thanks. as it. sheet in I you well terms the you're think within of given next the space Got then the and PACE

how coming securities growth? or what, there, seeing you're opportunities the in Given between versus you that loans do see

DrewLaBenne

given think I at we'll to and assets the of year that But and risk securities market our think see I loans securities and in we growth Yes, weighted is forecast do as some to have all change well. opportunities next level relative returns the the time. subject than adjusted in it more of for those is heavily based on assessments to PACE it's available

ChrisO'Connell

I Got in whole. securities it, pace including what's know on kind of the a together there. sheet be the into the kind to was as the of meant securities PACE actual going the versus loans of coming just balance

DrewLaBenne

space some on opportunities multifamily That Yes, New perspective, an look both I the loans space at we'll in sheet, adding additional both will you do to and think the rent a York. books. under we post origination market if and are although have continue regulation, continues in be purchase our some reform we the continue pipeline adding in we balance pressure loans from residential standpoint putting right

we in And pleased will installation, be to solar be seeing quite deals continue of renewable continue is and another a to the solar oriented loans, commercial that lot non-PACE we C&I things opportunities will coming. with traditional other C&I energy then opportunities see bucket, and sector do to

the of space, last nice lender a other I part a on have in beginning in really we in of there, traditional this activities CDFIs quarter housing with opportunities feel loans. who And and referenced pipeline hire to is like very focused in development the thing the opportunity do working did and and the community those we affordable have C&I

bucket, if we everything energy well. in very lenders not new renewable a But community the the active So, sort just are you lot. PACE, as putting will, and we're our development like relying securities space in just that and on of

ChrisO'Connell

the Great, in quarter? thanks. timing you do but of any idea on the closures me, one branch And have just two this for last

DrewLaBenne

will branches been of at have end announced close both the February. they Yes,

think of last February. actually February I day

Operator

proceed from with line Please Morgan. of Steven Alexopoulos, JP with the your comes question question. next Our

StevenAlexopoulos

I first everyone. want up Hey, commentary. good on the NIM to follow morning,

on compression, yields, we pace given of cutting feds loan look a you the called at and rate run like loan potential the rates? yield if a basis, loan Drew So, if compression yields What's out. new not reasonable

DrewLaBenne

come and of going mix we again points were to Well, little that going the depend on that as the it's The the as HDM a bit prepayments XX well. well this of secured. caused PACE movement into quarter, yield as that in basis by compression had loan

elevated. SX, I think We in as that the obviously was there a cut had bit well. rate little

of less new than it on. depend coming But pace it be on I So, and should that. originations think will the speed

off mentioning worth have be, - probably we QX, what's coming couple in none. in for to thing a what I rates the they the they're coming more there A but prepayments, look QX lot books actually is not of is, on kind multifamily when same what think whereas were example is books. the at were actually the as there used of prepayments, other which

So, least as in at rolling though yields this it's off coming a of the yields not at we're point big and having trade multifamily in space, on. terms

sure was a for QX residential big know, quarter refi I'm mortgage, activity. big In was as a you it

curve, that was down. happens And that a it'll the the up activity so, seems mortgage bit sure have whenever you trend compression of pick if slowed end there, of to refinance at down yield I'm continue get But and there again. little long to rates back

KeithMestrich

rates, I Fed weeks. I basis last although add Steve, two the on points over has would treasuries just we've mean, been And, XX cut lost the right

So, two today. clean basis points it's

that the rate. it's, are of multi-families a that pegged at. loans, to we're So, tricky Because our thing particularly some looking

StevenAlexopoulos

Right.

XXX. I So, we to think the think for NIM XXXX, about was XXX guidance

You about of came more XXXX range, How of much a were lower that the like have pressure the NIM? you are XXXX. in thinking at than range? in but Sounds in end you range in could you

DrewLaBenne

guide, our if you that And guidance. about was original last think our Yes.

no our that think fair to original XXX probably still guidance cuts. I XXX. was And rate included

the the marketplace. in well I guidance given happened original what So, pretty think has we outperform

we're to on. Yes, give I going guidance many factors are on mean NIM there going because not so

to think I our expecting are we grow. NII

that probably we over will NIM expecting yield or banks think We the especially keeps past it in looking as are most week - our is starts the so. if I sector, but for to curve the compress, see

KeithMestrich

encouraging we about they and Just the to sure Drew's right them and earnings think on are NIM short more to to even team impact I'm make less may an point our I from about term. that make adverse perspective, urging an the make if earnings mean, have that in decisions good

portfolio - think and to So, do our and other that's balance opportunities front us we our and have to particularly both I wise securities that, for in issues us so. we of as look in that

StevenAlexopoulos

Right.

to understand now the being want make then I commentary PACE And sure Okay. around in just I loans securities.

going in now could being while digit sheet loans, growth So, you loan you digit without to you're do Do PACE securities? balance PACE growth. think double double

DrewLaBenne

growth little as to flippantly. That's certainly. to it's possible bit buy careful we think going this credit, do. We're I not very any say loan wanted going what I our We do. would - we that a to And, on and could we're to to do. way be continued we've

have we're mission going risk at And a large to the attractive portion same make aligned putting sure time assets least returns. adjusted we're at that of on

we to $XXX in in work XXXX What don't that we that XXXX. do was runoff So, think of this year also it's had have or had through I we XXXX, indirect C&I coming million possible.

our part that's a headwind, that's out So actually of in the for big XXXX. way most

KeithMestrich

said, And it it's just to sort have to long-term but sacrifice in long of books. not I on to had the credit any drive order be night going not we we do make going to that. could obvious just on put that growth, last lest we're when mean,

credit we're - and sure just do and that. standards not I'm would it going our have we're to deteriorated completely, not to going

principle are the given especially. think now important right an where I that's we in cycle

StevenAlexopoulos

Okay. drill estate the deeper book in real wanted playoffs quarter. And commercial the into this to

pure other So, are called banks of how loans loan repurchased one? participated quarter they that banks out had Phenomenon, previously whether this you're pay any as and New with had your growth they such downs. that York good

DrewLaBenne

in don't we have because That, maybe any participations really one that space.

the So, be would answer no.

StevenAlexopoulos

No.

expenses. assume in those forward finally, then up guidance LA. with I you quarter update when Boston where Can talk offices give and good an being us and running? about And that's there, and Thanks. you moving you $XX Okay. are with should per that per million the hiring expanding

KeithMestrich

to talking both lead are cities. in candidates we Yes,

desires I we're my are make look potential to in nice think a sure little LA. than I farther candidates And at. Boston array a get ahead in to of we

bit to imagine, take make to depending but second somebody up on quarter. just and should will Boston soon, would So, least offers pretty is want I be don't hopeful able I availability that Boston in at the we negotiating the but a opportunity, first be when little I'm running easily in

then our will some given little will But LA already. California a LA But get a have base and we're bit little developing. presence somebody is pipeline time that. to on model a somebody behind bank our in banker has executive this aggressively do really role junior and lead account an want a moving addition that. the get and each in who of also It deserves to to on take city, right things

that not we Again, space search opening and branches, so undergo don't things. a for stressing have commercial office to we have we're big

this And do quick. pretty so, to I'm looking

Operator

have time. at Thank questions additional no you. we this It appears

turn to back concluding comments. additional for the over management So, I'd to like floor any

Keith Mestrich

to a Thanks, taking operator. the well. with forward bearing XXXX taking I as look the time vibrant of We're just quarter first later. little happy about for I to day want to for time, thank we day quarter everybody everybody really the here. hop on a change us and appreciate pretty

in many of We will and the the talk days you. to see many of coming you of you end April. Thank at

Operator

Ladies for teleconference. and disconnect your may you today's and lines gentlemen, time. We concludes thank this at you participation your this

Keith Mestrich	President and Chief Executive Officer
Drew LaBenne	Senior Vice President and Chief Financial Officer
Alex Twerdahl	Sandler O'Neil
Brian Morton	Barclays
Chris O'Connell	Keefe Bruyette & Woods
Steven Alexopoulos	JPMorgan

Amalgamated Financial (AMAL) 31 Jan 202019 Q4 Earnings call transcript