Earnings call transcript Q3 2022

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Operator

Good morning, ladies and gentlemen, and welcome to the Amalgamated Financial Corporation Fourth Quarter 2022 Earnings Conference Call.

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

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

As a reminder, this conference call is being recorded.

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

Jason Darby

Thank participation in operator, and earnings good your appreciate We everyone. our morning call. you, fourth XXXX quarter

Executive is President With Sims Officer. Chief today me Priscilla and Brown,

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

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

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

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

call turn now Priscilla. the me Let to over

Priscilla Sims Brown

will the thoughts next will strategic fourth provide Growth interest an results. review morning, provide quarter our appreciate plan made on Good Jason financial today. I our then in-depth morning, strategy leg and progress and Good time have We your everyone. Jason. my journey. our the you, we Thank an of of on update on For This your

confident accomplished about feel culminating of With that the next record quarter I we've XXXX in concluded execute what earnings, we leg. and our good can consecutive third

full Before we Starting earnings discussing we some share. another spend and of reported reported year results. like while the quarterly per of earnings core I'd future per off, $X.XX share, quarter plans, to at $X.XX time on record

earnings we the or For X.X% the quarter XX% the of net year. loan year. increasing grew our growth XX.X% we delivered year $X.XX. increased to was the quarter for Also, share as to the to And per $X.X nearly over to $XXX $XX million $XX or XXXX, over billion compared full million million interest income linked million and $XXX XX%

our have I commitment have our over to often efforts balance months and about against to quality credit credit we condition XX the future spoken ago sheet risk. undertaken better beginning

million quality course declined as $XX Over assets $XXX nonaccrual of improved million. equally X.X% $XXX by as of and greatly the the loans loans criticized total important, or year, credit or or classified million to decreased to XX.X%

beginning we set target the XXXX, X% of return of on At assets. a average a macro

industry our modest increase represented performance. peer comparison XX% target an this as previous from a While year

X.XX% and points our end profile and on assets the has improved basis return XX the improved earnings profitability our return bank by Given average markedly to power, expanded XXXX. of year

communicated political million million Before expected to the due The congressional of now our low quarter to deposits elections. both our were of political and billion moment deposits are deposits fourth trends quarter our the and to over [Indiscernible] we very call as deposit previous pleased I'd political as leaving cycle discussion, points during cycles. the year was Congress. grew largely the our third approximately the by evidenced by end highly decreased that the quarter balance $XXX both this have metrics. take maturities our during following to and interesting results estimate discuss at like $XXX Average $X.X was a election competitive, runoff high thin to our during of deposit that $X.X our margin the grown our high billion, We

With deposits started through already election build political early have contested in January. another phase, to its presidential highly already

steadily political We during we million. I the year deposit non-political our some Also deposits throughout expect to by $XXX pipeline. wins our grow by had quarter, approximately and encouraged am nice the deposit

be aligned be we the we Although differentiated base, in including believe and a rate franchise environment, competitive protracted our our XXXX mission based sensitive deposit deposit expect higher thesis to political, will more a on gathering advantage. rate and

ago, risk most our the accelerate second improve strength loan our we for of fundamentals prudently first to are society. a precipice of on earnings managing core set our the a were improved U.S. growing the year improvement, financial performance. as positive on financial described combination and institution. profile for impact banking targets a we credit retention were us and bank of The us positions Underlying strategies the that Over century on of our exposure country deposit profitability, strategy and these growth focus the being leg environment execution, a changing our of lending economic success and our as in fundamentals well

its XXX celebrate cannot inspired be next we centennial. by first years, As more place have propel great we the I this full bank to in team our into

In should sustainability built and for been including six risk over grow, team. teams we where The management opportunity credit segments we estate, the to last results has a our not our have expansion of of lending The real quarters in continue market the see the and sustainable net a deliver impacted by is to lending platform achieve be will priority management particular, believe to the by will believe in it profit. less we cyclical be holds or States United emissions which $X we XXXX. factors. trillion opportunity, market to This zero significant lending that significant opportunity economic invested where for is need estimated

sector, in underwriting projects the solar storage and as bankers sustainability are geothermal loans commercial experts for biodiesel energy, Our across projects. and such

rolling XXXX. business under the in take business customer of customers drive to in year that also the Banking last Assert will the we Trust that Chief with unified the Trust anticipate effect negotiated We our better that our needed will results. provide confident fee increases focus our I'm

across customer asset digital we see services strategy, services and customers our our Similar Trust our trust to management customers. substantial growth banking to to in our and banking

As tremendous digital consumer on We we calls, focused to and year reach tie our our our business opportunity reimagined customers a will see be business transformation. a executing this previous commercial members. on mentioned commercial through to their into

and enhance well customer commercial For the we are both their consumer meet aligned services large business competitive are be we're instance, to that need we products and non-profit, naturally a for doing members if with and who our Amalgamated. their attract experience and successful, To want offer donors to as customers. needs, as with

XXXX. lending first choices remain expenses we those quarter. have date, efforts a recognize strategy, we need requirement combination through make To make expect rate during be with marketing And constant we to quarter for digital conducted both will in investments expense an and expect selection on our fourth were and to funded returns. of for with a through we The profitability discipline digital with reflected plan. the RFP as a to We made these case in our the timely the

Growth its next For of centennial and I leg am into the moving excited our Good Amalgamated strategy. next

always and to encourage this of dialogue I and the of this our I our paired better strategy. the continued we a I Our be employees, the resilience to discussion responsibility understand supportive have bank around our financial issues expect our with mission. are year, performance that to social core importance consistent Americans positions taken and majority customers of understanding sensible with our and will believe views. a mission, a build our shows Ultimately, of

Jason. to over call the turn me let Now

Jason Darby

Net share a $XX.X quarter fourth compared million XXXX. XXXX million provision and for Thank you, $X.X the $X.X $X.XX taxable million third share million in $X.XX of for an fourth income related The $X.X quarter for of primarily expense, Priscilla. decrease losses $X.X in decrease $X.X income result diluted was change recognition million to a XXXX a per for million elective decrease was expense the increase loan million income income per the by income. or in decrease offset non-interest million quarter of to or diluted net in a of a in a interest $XX.X $X.X in decrease and record tax a non-interest

diluted the the quarter share of or equity Beginning XXXX. credits on investments for the the were equity for these accounting the solar investments, of of the excluding related way metrics compared depreciation associated to helpful $X.XX XXXX or exclusions accelerated $X.X for Because the per third depreciation and fourth solar is XXXX. tax in believe quarter non share $X.XX to or of we tax million to GAAP fourth tax was of investments, Core historical impact excluding income, slide quarter income $XX.X impact dollars with a five, performance. statement current million volatility of timing diluted million for evaluate measure, net $XX.X our a accelerated

a $X.X brokered to fourth deposits million the primarily to time including million seven, issued Turning approximately given to balances the have deposits of billion, strategically Through third reduce XXXX, decline quarter the the elections decrease $XXX were was approximately increased congressional conclusion slide XX, of at deposits $XXX.X decline million from XX, in of XXXX. costs. spot expected of December quarter XXXX. $XXX political due deposits, fundings in The of in by the to XXXX January billion, $X.X

of XX, increase to quarter ending Non-interest in in environment XX of for deposits point response and previous of December basis XXXX, in XX% fourth deposits to repricing due represent competitive cost of XX% the deposits XXXX, our to the bearing the average quarter from more basis average contributing XX markets. deposits a deposits of our the quarter an actions for points ended

customers by XXXX, million decrease linked of $XXX.X quarter a held a December as basis. Deposits $XXX.X politically XX, were of on active million

to the are November. point political balances deposit cycle of we predict, our natural low election are on As trends previous our as noted difficult but at concluded the call, in

deposit political through we the begin quarter $X.X XXXX. XX, expect of first January XXXX of to experienced million in political have rebuilding We inflows deposits and

$X.X net million primarily and and increase loans a an XXXX. decrease to receivable, by continue in real $XXX.X and reduce in a Turning consumer or a increase X.X% $XX.X at loans, decrease asset loans, commercial residential million to is allowance estate December loans development construction loans and exposure. in $X.X commercial other in loans increase decrease by in billion, million XX, $XXX.X compared that Total $X.X multifamily industrial offset loans increase of increase million million were slide $X.X and costs XXXX loans and driven million we to as class $XX.X deferred million and of in XX, XX. fees land The a in and September

$XX.X was third yield loans, to X.XX% compared on the had as our million we of X.XX% in the of criticized improve. loans payoffs credit to bank's quality XXXX. quarter, of the continued or During The classified total quarter

XXXX, of average asset quarter quarter XX, net basis mix, The increase which substantially our in balances in by an was relation call, quarter X.XX% increased loan communicated slide for term of the fourth margin interest to the that during rates On funding political by in margin continued yield as of in X.X% would in particularly offset driven bearing increase third our was improved third and from of interest deposits. XXXX. X the growth expected costs points fourth was borrowings decline This elevate quarter in increase liabilities, our we borrowings. the short

business GAAP the points and XXXX an quarter the $X.X on nonperforming for penalties investments, for was income, Trust on third of points lower X XXXX. the solar to loss sale income loan the slightly compared non-interest of was excluding of to quarter interest $X.X quarter beneficiary fees, non fourth quarter the basis onetime to equity the income million basis primarily impact for XXXX $X.X tax of of fourth sale million contributed of fees and held compared OREO the a by of decrease mostly increased a offset life third Department of XXXX. a margin property, $X.X a The our X million million earned bank-owned and $X.X insurance. to Prepayment Core loans, on in disposition measure, million related net in loss banking

related quarter by million increased quarter third fourth offset a of recruiting million a a expense, from noninterest the was in $X.X expenses decrease decrease million primarily driven measure, by advertising non the fees, promotion This of other million increase services. and expense GAAP was XXXX of $X.X $X.X a $XX.X XXXX. and to in for Core professional

strategy as modestly Looking embark the Growth of earlier expect to in next on forward, as noninterest expense our we Good discussed our call. leg we For rise Priscilla the

million primarily XX, with Moving assets a was $XX.X million residential and assets assets criticized end nonperforming $XX.X for decrease nonperforming to of X.XX% or in million at by decrease million held related loans. payoffs of driven the compared million restructured $XX.X totaled slide $X.X The of basis. quarter XX, December of $XX.X XXXX, and classified on sale total or sale linked of X.X% a period loans

XX, of there of $X.X allowance XX, XXXXand to to $X.X million $XXX.X we of September from declined to ratio At was for XX, loan XXXX, to allowance X.XX% ratio of due loans, $XX.X allowance December increased nonaccrual a which The XXXX. specific or million was basis. allowance XX, XXXX, specific linked at The loan X% $X.X Our XX, total million had for a a XXX% primarily at X.X% losses was loans impaired of $XX criticized $XX.X for to loans $X.X to XX, allowance million higher million December $XX.X December compared impaired XXXX, assets million December loans, million was at September The of at million on million balances. made. XXXX. which quarter at

for balances, charge loan sold increased higher subsequently previous increases offs in losses $X.X to loans of specific solar loan quarter nonperforming quarter The in $X.X million for compared the the Adjusted, primarily loan were for to quarter. XXXX certain offs expense was in quarter loans. million our that $X.X in in related related for to current current in million XXXX transferred the provision the decrease sale totaled and the quarter consumer related fourth fourth of XXXX. elevated in provision reserves charge for by third million to our Provision and held the of $X.X quarter losses in

shares common not the tax common stock slide fourth our our repurchase million quarter equity solar core core capacity our under remaining to excluding the average have average share impact on along of and quarter XX.X%, respectively XX.X% tangible and return repurchase Moving XX, during program. million We did $XX equity XXXX. were of on the return equity of of and for $XX fourth

of per share. we $X.XX Additionally, have declared quarterly a dividend

our support position and remains to capital improved solid Our X.XX% quarter. initiatives during the to ongoing growth

Slide XX book value. common in related tangible shows change tangible a reconciliation the of and equity

the December, respectively. As fair its mark down basis the of the fourth each rate market first in reduced a XXXX. our rate quarter, the increases also with expected, to of interest and market point Fed the further point the volatility of Despite the at quarter. and from increases rising fourth rate the XX in through has consistent environment in resulted quarter of during quarter, November to change Fed the increase to Reserve fourth very continued messaged XX stepped interest in securities our the the increase which portfolio half value to and basis third meetings, Board The little rate tax cycle occur Federal the affected adjustment December

tangible as Increasing entirely non book was quarterly share, as a such, XXXX. $XX.XX to earnings. As almost December of related XXXX, $XX.XX value compared XX, September GAAP XX, to per measure, of

for conservative to of against X% and assets management the quarter reflecting quarter common the our previous pleased tangible balance tangible in position capital We sheet equity target from X.XX% of our are general with to also our X%. comparison

fluctuations Tier As mark capital changes have a from no impact X our to position. market reminder, on

paired we talent made to the XXXX commercial to anticipate with trajectory our increased continues of based our sequential the segment, fourth our in growth in spending focus funding in exceeded the X% Following our quarter growth needed. estate on and expectations sustainability by demand lending to growth, moderate That where real our approximately for mainly increase said, lending in quarter, projects loan our led and third investments loan portfolios. fiscal X% mission we net to as aligned the

for to solid As to avoid the from overall liquidity balance borrowing XXXX, relative capital industry and implemented to expense access that we've our uncertainty which exists relative managing to conservative outlook management, sheet to closely actions correlate losses. realized an pivots the position, capacity current

full of XXXX, million to we pretax includes, to Turning of pre year curve million are interest provision ex slide economic XXXX, further XX, net to $XXX and $XXX half $XXX which million initiating the considering earnings uncertainty income for core $XXX in forward and of the first solar increases guidance the million. suggesting rate

As the net sensitivity asset to rates, raise to Fed from the generally speaking, continues interest income our interest benefit reduces.

in of an increase basis $X.X increase a basis $X.X Going net million rates million if approximate interest short and forward, a point in XX approximately we term XX term short rates income parallel annual estimate by from decline points. only increased

growth last Reserve to We're loan the expansion year. We're taking higher net cost the raised as a course Federal the loans view of rates yielding loan loans high has income of recession as portfolio over by also borrowings towards margin and cautious and expect continuing our reducing while lower given the the we with older, on interest economy focused optimizing yielding improve replace our risk over yields, modest year. aggressively the

net That to first deposit quarter as the to said, million recognize decline our to income political the we to in interest of outflow. of offset borrowings anticipate we approximately $XX used impact the XXXX $XX million

know attract we pressure cost at borrowings to to drive opportunity will funding throughout be and upward That year which earnings. repaying we more our drive to and on need significant to will we deposits costs. a said, believe cost we continue forward, maintain Looking this lower is still competitive high be the will deposits,

results, profitability designed which we are segment and bank's our Priscilla demonstrates of while and third our strategic bank consecutive focused of returns. the grow pleased noted, As the the with quarter to initiatives record lending sustainability resilience improving

line the with to operator Operator? for And to the like ask up open that, questions. I'd any

Operator

you. Thank

first question-and-answer conducting proceed session. with Morgan. Instructions] Our question J.P. [Operator comes with question. line the will Lee of Janet from We be now Please your a

Janet Lee

to your the gave XX% you third interest beta with off Are guys still NII deposit start to $XXX you Hello? quarter? want bearing $XXX I that in guidance that guys million. morning. million good assuming Hi, of

Jason Darby

on beta incremental XX% rises. rate any a have We

think the So it's kind across when blended how out, modeling we of the to on really basis, makes taking not as it sense. forward Fed increases on rate, about it XX% based we're a portfolio we're but if any that entire

rate As last basis the into and very -- was we're you've very, points only the November of I'm projecting XXX seen first recently that deposit kind and February as December, stable we in low. XX% our remain the paid beyond, and that the in hikes happened probably sorry, of rises, January more And rate but meeting we of factoring first the over think points when -- in base overall basis those XXX our relatively of previous funds the that on performance cost deposit rise. numbers, should think of in

Janet Lee

Okay.

So just I make correctly. understand this sure to

So deposit if said? bearing mean, look lower you in at than to the cycle it, of I betas, to going through Is we terms the that it is interest what cycle date, be XX%?

Jason Darby

That's just on right implied then say that increases funds an I the beta. I on But forward. that in we're interest -- bearing the I'm our there saying, XXX XX% we've kind what year, think deposits. I Fed rate remain Fed where the trying is, we've point been of benefit think as look to projecting basis the points coming cost is and increases in to going that a rise. blended entire from as the are received at of stable sorry, I'm than from taking the I'm And December portfolio hikes seen basis other incremental XX our we're in should that a we've XX% November, a overall now first of across as current What number think going I'm not model. the the

rate So any on hikes. interest and a XX% it's bearing nothing really on retrospective kind beta prospective of

Janet Lee

pieces of Got right. like, pay All a it. the down. I there's think lot debt Okay. And moving with,

in XXXX And so a after of it's from NIM? XXXX. of in down trajectory first How to starting assuming should are we NIM trajectory directionally the So the terms margin you XQ XXXX, then stabilized level, XQ step quarter? of about a the think assume in fair NIM through

Jason Darby

fourth the There the way take effect QX modeling as that out repricings way in we're did near if the borrowings -- franchise exactly be quarter and in effect about at deposits that's of stabilize. QX, the the through we had think remainder thinking the of think calculation margin look a than compression to And about to really we I and end our our hold the also pay as in could the the should do of the margin it. more the it little margin we're of deposit borrowings the throughout year, drive bit full now. the we've to gathering then that we right able we're ability down favorably to expect of impact deposit

Janet Lee

period growth in your I on give deposit you're sheet around prospect average XXXX XXXX. your balance think Okay. you if end more being there's a to should mean, deposit on balance, how versus about Can an But basis. expecting just And I on at seeing for lot how of growth, in trends know seasonality us like, That's just color that growth, trends deposit you deposit deposit helpful. around it a growth the we XXXX? look you're X% year full XXXX.

Jason Darby

Yes.

conservative we're higher tighten view be a realistic market a continued very take and environment the I we're in in trying think on that environment. the deposit to the and rate relative the growth expecting has liquidity throughout to protracted as We're competitive Fed. the year deposit to

and elections. It's to we projections year. assuming X% of on is more look would we generally in QX, approach. pace leading So And QX our to as political probably to we're build particularly grow at rapid start opportunity hard deposits the of as deposits into speaking, a to the would throughout XXXX think I get that average QX, the as basis to a a sort conservative what see showing an expect accelerating lot a up it, we about at

it we're how Janet. now, that's So thinking right generally about

Janet Lee

Okay.

a average for basis X% deposits? year So full on

Jason Darby

That's yes. model, our conservative

Janet Lee

that here, going coming doing see down, solar like math offs and in basis loss that credit. the the consumer ratio the loan from you mentioned which think call. I little previous are be you quarter, January. were credit balance, looks CECL XX to from I'm you it working I charge portfolio? want basis shift getting to XXX about up looking point your net if on that I Okay. charge X.X% is your started some at bit of to know fourth I'm It's loans with all rough risk guys offs in to should on adoption point good range NPLs a in your comfortable on this solar How

So you I just assume you there's that continued think And expectation with guys do loss some up this us that -- expect have guys sort in pick rates on have done of you portfolio. the you that? help segment? about Can

Jason Darby

Yes, absolutely, have where solar The thinking charge offs were consumer to they ticked be. up originally going bit we from too. a were

a than I said, now. That bit just portfolio and arrangements built thresholds fashion of loss got that were a that bit anticipating. faster some think think a protections still in little in remain bit right a of as place. rates seen we our have originally we some we're the under of little stress I into we've that in We've of with higher more accelerated little a have

most the charge coming of those kick some So of offs you're in. seeing protections before are in that

is XXX annualized like bit something on to than whether that ratio gets little forward. for of governor But feel charge a So tough little an going higher a on us bit we little a of kind it to is a is I off be basis project. moving there's that it X%, think

purchases the first year, space the one, portfolio. least any opportunity the to minor be Number we're solar But credit going really solar right I more things we're some think maybe to offering But what for -- doing. at tighten in think more throughout we've additional things. seen sorry, box requiring half really the that we're first now -- adding now, us of in on consumer I'm not is really this importantly, we're I the that an for there's that two up

what things loans solar With very, the the regard very, they terms are services that in getting charge close attention individual things to right that sure collection to we're working put going offer on this of with And on all other of a we're the books, in fact we're offs. already that very the potentially delinquent. now that providers to make consumer would and are governor benefit paying

on a right been CECL. into we've point it's your model now. CECL, to To factored doing We've component what obviously, significant that of

would of on about adoption we and coverage lay the ratio, we'll yet. overall we're is In our talk structure the retained related that but entire do it see do our obviously impact terms what have how team that through not capital of audit we since out, a But quite to increase control through to not we significant embedded ready in build a have it earnings, when would solar. probably component an have our ALLL,

Janet Lee

Thanks great. for taking my questions. Okay,

Jason Darby

Thank you, Janet.

Operator

Piper question from will come with proceed line with the of next Our Alex Please question. Twerdahl your Stanley.

Alex Twerdahl

Hey, good morning.

Jason Darby

Alex. morning, Good Hi.

Alex Twerdahl

teams or those ask of early loan curious guys those I to if wanted I about growth. XXXX. I'm teams you just XXXX, know did of as end a lot hiring the at to you've hired Year? are fruit of in kind if to New early and now hanging additional fully the expand there speed of that the loan people is portfolio kind up or low

Priscilla Sims Brown

that fourth ahead back in And second a We've growth talked quarter the robust XXXX. -- materialized of that relationships calls banker right. at developed plan. through quarter securing pipeline and the about took a originations and first to both place third loan had Alex, prior our that of Yes, is which we too, initiatives into as this banker due and earnings hiring you're those pace on

climate products. function quarter, so at book was supportive a unique increase we In of primarily biggest nearly an of our $XXX.X the in with $XX.X book portfolio our million $XX the resi finance or our C&I at also retail And had million, commercial drivers million. the And were multifamily.

zero trillion, and expertise those looking on got we've $X in still continue We of nice the coming our a the very areas. with the valued book that now, net some these bankers brought you'll like sector When multifamily way areas skills around you've both existing and think So opportunities that's quarter. and at a on got that and was also in unique it's of see to both that pipeline sustainability. nice we

really kind And so loans, quite have the that on we're want book. to to bring but seeing we And this also the in on in be the bring opportunity see additional we to choosy quality the environment. opportunity of

Alex Twerdahl

you that of Great. be new next off where kind exactly of think aren't help and today think the those overall are on about yields loan we couple of be the could indexes sustainability could when loan, And since probably to repricing what What would a going spreads or of the that pricing yield might think like. over or then sort C&I maybe lot us of loan I what look familiar about quarters? loan

Jason Darby

Yes.

So think I more a -- maybe little yields. let's focus bit the on the

think sustainability they're to and They now, the they're of a right profitability of around back coming the able in in to spreads wide call depends on to between share X% we good It it fairly range. get get those. to a some of for think the you being little move terms sort detail criteria, be underwriting X% into. But bit generally bit, specifics. some I'd bit But in general, little us that I are might the I X%. that now, might need way. Alex. be I a return to types coming to deals on break speaking, down -- upper because to say easier have I'd to it, on on right It in X.XX% easier have little

Alex Twerdahl

are guys a kind bit, Okay. just you pretty looking asset of sensitive. And forward little then

some that steps rates. of rate interest I'm has forward to now this enjoyed try just income now, cuts up going the you're end at next of baked possibility down number to them, really point a seeing in of early rates the net or into kind curve of curious towards what the taking year for year? You lift the shield And

Jason Darby

I great year. we've question. the a fixed that's those think reposition kind sales doing cases, been into taking Yes, of security losses mean, certain that I and proceeds we've in been been rates. throughout -- We've

XX:XX example, fixed blend in for between more portion to the a our portfolio, trying down particularly floating. to overall securities, of So mix and of

in the the that of the as If rate built lending sort to then But and into I portfolio. to side you interest floating from important in much declines. been we we've the entered the and put higher hedges the overall the thing cash were been really on from mixing has we think portfolio kind slowly of down the -- migration more securities year recall, from

we're lending more $XXX this is book lending we in book, loans. -- million rate. that the and to XX% we So fixed net The up book XX% of the year more almost grow grow the roughly

to So would to neutral sense. from And right rate terms a ourselves interest if in this we're protect at probably I ourselves, of pretty that of I to characterize [Indiscernible] really would we're now sort point. an close doing think sensitivity down lot

Alex Twerdahl

for you taking Thank questions. my Great.

Priscilla Sims Brown

Thank you.

Operator

[Operator Instructions] line Our next question proceed comes question. from Chris KBW. Please with of your the with O'Connell

Priscilla Sims Brown

morning, Good Chris.

Jason Darby

Chris. Hey,

Chris O'Connell

Good Priscilla. morning, good Jason. morning, Hey,

hoping of was kind of little year? bit of being rate kind you a more the a business bearing to next is pricing dig to And and us how commentary give bearing? much bit deposit little sensitivity some noninterest how I subject sort political what and noninterest sensitive remain be you deposit next much in for expect longer of a So term the rate breakdown might to into around Could of year.

Jason Darby

of have sort a Normally now, Right from say interest noninterest DDA been bearing we almost point shifting right over from been interest probably I'm bearing from to remaining bearing model and Chris. at of XX% of past bearing. year or I at the and that time. XX% at from $XXX exact That towards direction. sort operating sorry, DDA subject Thanks, about time potentially think we're has moving And Yes. in this we two-thirds we've about being the now, an a bearing number -- opposite one-third to million to in -- about interest here as position. would sorry, $XXX the it is the that interest bearing roughly way is we million how noninterest

So that's have now into the for cost DDA we fund that right risk our of baked sort of mix adjustments.

deposits. we it's to But of don't happen some it's We market sort will compensation. those think We be this in for building going require think of think in political of form pricing. more general, of in, of the what top year is will terms come year a because

value that be for of course these even the deposits phase. compensation bank of form they'll year, that because it's I benefit mission But think line building bearing. some terms that are come be over the if these of in a much very will in to when there'll for still has they required on proposition deposits this interest there's likely be

it then placed the be move and it into their campaigns those more election, requirement As serviced to we expect bank. way for more terms accounts would typically a execute of we to less next year, be become the want pricing we for think naturally in by much XXXX just and ability a on and transactional year there up deposits style I to heading

Chris O'Connell

it. Got

of So rates pretty from general modest it high term that in pressure term? the sounds the near still velocity insulated those longer given deposits they're like

Jason Darby

that's a characterization. think fair I

Priscilla Sims Brown

totally say insulated. it's you And not partially insulated, would

Jason Darby

yes. Yes,

Priscilla Sims Brown

focus market. basis You than don't first in have lead to is to we expect points, be a other environment words, think in rate on might In the to this would to go -- unusual to rates we that greater we XXX going had have but

Chris O'Connell

And mentioned success for deposits? clients guys the or pipeline clients kind sustainability potentially gathering. success you of some or of the are the from of SRO there Maybe deposit of categories of types the for deposits -- of that and some broader having political you political outside rest outside success just some recently

Jason Darby

Yes.

we think it been we them new and or $XX QX attraction. on update I CDs. mission the issued were update lending them it's been And doing January [Multiple end So so broker real been there's accounts And things, But Speakers] we've where a been have is we're really the prior. customer others of these leaves the our of the been thought some -- we still estate million which $XXX that up in pipeline our as million a aligned across of does wins. some philanthropic talking and through gave one that of even and million things based towards driven think bit spread $XXX very after of delta, that They've then we're of some deposits relationship looked on kind good are all of that interesting little customers, XX, an granted union based

Priscilla Sims Brown

Yes, where see look the we for at that as continue They've you're not to That's pipeline today. profits. right. been that's going

Chris O'Connell

material of those Great. that and segment how fee And just on of when take and fees, fees? you're of on Trust is that or business? do having update side the kind And any the adjustments that XXXX on those the increase hold other success kind

Priscilla Sims Brown

Why don't what's with happening. just I generally start

numbers. the might You

to adjustments the through of some actual… -- and cost costs to those pass Those are And beginning also meaning, adjustments, through have you're starting So our on related of and through. you come adjustments the fee XXXX custody. the in see of maybe

Jason Darby

business. process going out It's us in that evolutionary for a There's business. to be of Yes. results to a I be to going it's think Trust an of opportunity lot drive the staged But approach.

Trust just contributions in as partners have existing that time, there. that the the sort working benefit It's see statement. about to products we've our we'll been that it to year think to of based you to really incremental It's then some things anything impact really income don't income we are already number current accommodate to kind where as over on. should of over it think the through noninterest I pension But don't the Chris. finished line will $XX.X overall it interest And margin of noninterest we now not book or new or able hoping. the income, we're year, I be business. of going additional baseline improving income I at think embedded and on think with to our fee the and how It's to continue an you as think can do to relative the business. pertains of based I we'll But of from have it exact be I course a that runs million XXXX. are right ratio for focus be trust to significant the quote a

Chris O'Connell

Understood. Appreciate my the color. questions. Thanks for taking

Jason Darby

Welcome.

Operator

queue. There remarks. are Priscilla call Sims questions further Brown in to the I'd to the like hand no for back closing

Priscilla Sims Brown

with anniversary. for Okay. year, all. in and great on one particular, your Well, the XXXth thanks bank for to our participation. calls as with We in optimism rest next your of our we the and the interest to look Thanks this questions you we you and thank thank week. listening for thanks But as of forward enthusiasm forward one for today go you for day through your follow-up go most

Operator

teleconference. today's conclude you does this gentlemen, Thank your and for Ladies participation.

day. wonderful this disconnect your time may You lines at have and a

Amalgamated Financial (AMAL) 26 Jan 232022 Q3 Earnings call transcript