Earnings call transcript Q1 2023

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Operator

Good morning, ladies and gentlemen, and welcome to the Amalgamated Financial Corporation First Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

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

Jason Darby

good and Operator, you, morning, everyone. Thank your call. appreciate participation in earnings XXXX quarter first our We today Priscilla me With is Executive and Officer. Chief Sims Brown, President

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

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

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

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

over Let to turn me Priscilla. now the call

Priscilla Sims Brown

our in that Bank of following release conversation. has to Valley you, last for class and and happened certainly, markets your all consuming lot your March earnings time Jason. the Silicon Signature XX interest and We since Well, Good turmoil a the has been Bank appreciate market days. XX Thank today. early has The ensued everyone. morning, last

a means was understand to help occasion. by so as each for impressed stability our bank's with been of bank already strong our employees, time are This investment to rise engaging investors the and actually entire the connection choice. this We them financial of customers I've to invaluable their of stakeholders. reinforcing ability

before, we believe asset we reaffirm our the able with rate have publicly team manage unique Bank just high management among are and top for executive U.S. I've have position size, confidence. continued partners As our also in the total of and in truly Amalgamated success. under trust us traded place and banks situations difficult our yet that total is engage XXX mentioned right billion through $X assets, to at team and to I to directly customers

Our customers directly were the and to with they strengthen able to the witnessed themselves of banker bring their see executive extension we which only value served management them. to bank, as long-standing ties the also have an relationship

at a we few our comes turned when old we stakeholders the that's club. employees It's steward a are reminding that money. are friends us, In to in of the XXXX. at time there XXX-year-old our forefront to of are Having birthday and that XXX irony, discussion. our and of strange partners, history bit birthday centennial that very are all a stability on banking stakeholders us banks that quite before we not our run closures, lost are conservatively a fond were good same also XX, of on customers' or of that XXX bank We the our the March financial years institution our

with week have ballot anniversary ringing by employees We XX over NASDAQ our here been the our just years. this past celebrated centennial who for

themselves. of XXXX York workers families services periods seen search has immigrant We reminded their many this last celebration, were by and come During Bank that provide better order New City to while banking founded basic for Amalgamated life turbulent we've the century, to time. textile was out stronger in over in I in every in a

years, XXX for successful for the have means we communities our what's doing we serve. that right what's banking customers doing demonstrated and right For

advocate policy, voice Ultimately, committed community been the creates our responsible change share existing while customers for have it's our impacts resonate it that public with using to mission who kind our increased and that access financial to our attract positively our the employees. We vision. our and customers continuing of to belief system to as customers, values the new

first that Our mission. quarter validate results, again,

We as demonstrate million results GAAP And of to or deliver Good our X.X%. loans as PACE diluted grew our share. our X.X%. diluted strategy fact, or We customer $X.XX In earnings of strength and share well by our per portfolio grew For $XX.X earnings by $XX.X per resiliency selectively $X.XX relationships. Growth were of the million core of the able also,

income $XX.X net $XX a X of our expectations increase X.XX%. basis which and $XX to point Additionally, we to expansion that million basis million, of net interest in yields XX our exceeded margin our interest point delivered led a loan to in million

deposit in upcoming in a our quarter the a our runs Jason bank was still will still there conversation the because bit, bank on The and to well put, this competitive the headwinds for the discuss driver banking failures bank. first in that advantage continues in a in we understandable can model that mission-based clearly primary is industry the is the we is demonstrate that it doing that talk of prove earnings hold strong. that strength Simply While good. susceptibility quarter early results do Recently, March. expect we by been about the financial occurred there's granularity, much market to

deposit understand our to nevertheless, While to we believe strategy other be help address funding primary you factors I'd failures attributed key to like share better those insights can decisions, some our and composition. granularity business or

strong in differentiator constituent organic a deposits. us, and it gather segmenting customer Our growth recruiting experienced to true has deposit for bankers franchise focused and is base since our XXXX

We deposit our then today, $X.X growth have XX.X%. aligned core $X.X billion annual grown a from billion of to base mission compound rate

not-for-profit labor, businesses key our world. and common and is What of in what does individuals, are that they political. money the their have organizations they X all efficacy, are change in segments customers care in about Our social philanthropy, makers. They the sustainability,

for of that and banked have our decades, heritage. comprised us with values deposit franchise shared customers is our union Our given

billion deposits super-core To In Those introducing duration account of excess X illustrate deposit fact, of in further we of our union-related a our designation segments core labor deposits are that customers. with are are granularity, deposits. core $X from our are in years.

top quality. Most core our that deposit these again, super-core is Our our is of XX.X XX.X% $X.X base deposits. billion life say deposits our This and contributes the average totaled weighted of with years. thinking defines of or XX.X is I'll deposits to susceptibility stickiness years. total deposits, type on any repeatedly the country, When significantly, about insulated to XXX-year-old bank as something been XX pride, the we Amalgamated runs is and believe having bank ranking deposit this confidence say tested in throughout terms history. can a as of in

and money obvious, is our liquidity our by safeguarded capital. the our Stating customers'

We have to having our chase urge long been were to sensitivity low, sacrifice balance carefully yield asset maintained liquidity. resisting sheet, our and managing while rates

with the our benefit quickly, real substantially and in metrics. when a securities discipline that return be shareholders delighted to proved to portfolio I form to of Our of improved tailwind performance was much rates rose

portfolio and sensitivity, our past our portfolio. the grown our securities as loan few we also we asset quarters, Over selectively been have we've reduced significantly have reducing

only Importantly, years X.X duration our for securities at sale had quarter available portfolio an of end. effective

another million resulting and borrowing X-day unpledged from $X.X liquidity. the immediate quarter of $XXX capacity billion with two first $X.X cash of ended billion capacity day in We of total and securities,

earlier. those that two immediate Our total of deposits liquidity uninsured XXX% that covers covered about XX% more don't importantly, day of the total category into our liquidity our super-core deposits. spoke Perhaps I fit

a position in a has run bank has long conservatively that values-based client relationships. with market differentiated Amalgamated been as the tenured

America's is wavered never early organizations bank this are is benefits in next increasingly as Good individuals to have Amalgamated leg how change money invested. we mission socially and This the of of seeing our still We from pursue of Growth strategy. benefit the care their innings as position responsible the and For societal our is being and

the and as the pivot is our recognize adapt able industry, facing headwinds We needed. and to to presently strategy

given of we customers ease transaction to to maintain opportunity and the digital a the business will tie technology. our consumer PACE see our with explore We re-imagined of also accommodate business commercial needs continue transformation, into to a

and expense the be We make with need for disciplined funded choices was closely profitability are the made, requirement are timely we managing watching to but case economy. carefully through Investments a still as base with our will our lending returns. strategy,

I [Technical will to Difficulty] now the over turn call

Jason Darby

in XXXX $X.X tax offset compared to million Thank you, first related note $X.X of senior Bank provision of Valley Silicon $XX.X decrease $X.X a fourth or Bank loss $X.X expense the non-interest the increase $X.X XXXX. in and the excludes result Priscilla. or XXXX note senior $X.XX share a sale per for which expense, a held, of to primarily million sale. $XX.X Net portion a first a increase increase the for share the million in income in Silicon expense, diluted related loss quarter million million a million non-interest of income, the for was we per quarter $X.X the a Valley $X.XX diluted million to quarter million income by of of The was increase

investments excluding exclusions investments, for depreciation current no associated XXXX. to is and performance. with impact tax statement investments timing way we or equity net the income, solar quarter income non-GAAP accounting excluding metrics, for historical our the impact solar of credits Because to of were believe the accelerated measure. Core of there these equity related tax the X, are Slide the tax a first evaluate helpful on Beginning volatility of

or million quarter diluted per was $X.XX $X.XX $XX.X the quarter compared For or diluted the million first XXXX share share $XX.X of to XXXX. for of per fourth

XXXX, core Slide modest yield million. Total by X% April an $XXX.X to fourth related CDs decreased $XX declined customer XX, billion, client XXXX, and deposits a billion, million excluding million new of billion. core March of and X. deposits XX, total quarter primarily Deposits acquisition. deposits, $XXX $X.X XXXX, to the in decreased pension to timing, brokered by Through $X customer $X.X while at diversification $X.X approximately million by or insurance Turning for to increase deposits slowed were decreased

the and of deposits impacted shift of deposits basis XXXX, quarter first average in of of by cost an XX XX% XX, points previous negatively borrowings basis the the point broker numbers of XX a XX% from average quarter ending to as deposits. XXXX, to represent deposits the ended increase deposits quarter March contributing were for Non-interest-bearing of

Our the quarter. basis basis cost CDs, funds, XX was points, up points XX of excluding brokered previous from

comprised Slide of our is high-quality mission at granular consumer and a billion customers, with level, deposit X, $X.X deposits. to Moving base of long-tenured totaling relationships more commercial aligned

As displays were deposits uninsured deposits. our $X.X super-core deposit uniquely segments. we view total mentioned, Priscilla customer or important the as billion which insight impact of total end, to At base, this our quarter XX%

XX% to with approximately super-core of uninsured approximately of coverage were total liquidity billion, $X.X XXX%. XX% deposits remaining Excluding deposits of deposits uninsured immediate

in As capacity million our significant consistent unpledged have prior with cash borrowing innings in bank capacity we Priscilla billion total We of and and and and from post mentioned liquidity. the securities, resiliency of base X-day resulting quarters, stability $X.X seizures. immediate believe demonstrated maintained liquidity $XXX deposit has X.X of of core early X-day with

Looking consistent core the segment balances conclusion our the political of X, past for the of were on noted which showed impact by the segment quarter deposits to elections. with at in the balances, with congressional all run Page off fourth exception quarters expected of XXXX several

by politically Slide of were of linked-quarter an million deposits million $XXX.X a on customers held increase as to XX, $XX.X XX, basis. March Turning active

to call, we the rebuild XXXX previous expect of political our on in seasonality. flows the pattern of following first deposit noted typical quarter As

$XX.X Additionally, XX, political experienced XXXX. through inflows deposit April million incremental we've of

throughout We the expect political of anticipation presidential in increase deposit into and XXXX next inflows election. to XXXX

securities $XXX.X the primarily offset net investment reduced $XX.X and to rate Jumping million PACE in our $XXX sensitivity our ahead book result of to as protect PACE streams. represented growth. earnings we past Floating value quarters end million asset and quarter securities have XX, in sales reduce assessment total assessments that million XX% ratio a and our paydowns, the Slides traditional securities, in portfolio of during million the strategic XX excluding several of continually quarter, at over decreased $XX.X by as

in for portfolio loss available positions our securities X.X% balance. unrealized of the $XXX total Our was million sale portfolio or

conservative our Importantly, our years, decisions. AFS portfolio duration reflecting was only X.X investment

an XX. a $X.X XXXX, to compared real Turning receivable, increase December loans to the increase loans of commercial a by The XX, million increase billion, loan XX, deferred and residential multifamily primarily X.X% by $XX.X we XXXX. an in Slide decrease in million our loans and in decrease $X.X was loans, a of offset driven as costs in $XX.X $X.X in March million continue estate reduce portfolio our net to million Total were portfolio or million at increase consumer fees and exposure. $XX.X

criticized loans quality bank's million as we focus payoffs During to we or of $X.X had continue of credit improving of the portfolio. the quarter, the on classified commercial

yield was X.XX% to the in The total of loans compared XXXX. in X.XX% fourth our quarter

a As office-only Of the moment has ago, an LTV been of $XX.X exception commercial have end, X At with portfolio grade several in past are million exposure we past average noted approximately across a the quarters. for credits, estate we portfolio been had credits XX%. our of de-risking special mentions. X quarter all with the X real

of of loan retain of deposits. penalties were basis focus in balances particularly increase yields to XXXX margin prepayment fourth X.XX% liabilities, X.XX% margin increase and of in assets, certificates average in by net fourth the quarter first compared driven brokered quarter was amid of growth in the contribution The the interest higher by of in to quarter the interest-earning earned net points in offset to XX, rates XXXX. interest average was of from XXXX, for loan interest-bearing increased X balances Slide basis our of and an No continued XXXX. quarter increases margin interest-bearing first deposits On income with point X

solar given a non-interest XXXX non-GAAP of from in to was The fourth increase non-performing to $X.X million in increase of benefit XXXX of the a during Core impact million, of quarter to sale measure increase quarter sale tax and the payments, for was $X.X primarily costs loans investments of the million for million $XX.X compared and during on Core income, the $X.X for quarter XXXX. increase quarter. XXXX. insurance fourth in personnel incentive $X.X of of corporate fourth XXXX. of of non-interest related the million This losses quarter million taxes, of non-GAAP first primarily an benefits expected quarter an compensation comprised held the expense, first are measure, payroll incurred was of employee the $X.X was excluding costs mainly the temporary timing due equity

costs processing mainly Additionally, fourth and refunds data the collected professional of as sales to a result services audit tax from year-end increased carryover of increased in work related quarter XXXX.

certain recognized quarter's last quarter. approximately to releases accrual million call, effect the our and anticipated fourth to As non-interest noted on we to $XX million $XX.XX refunds expense to rise in counter the of

XXXX, result senior of of by non-performing quarter XXXX, linked first multifamily $XX.X million loan assets basis. period in Moving a million assets at totaled X increase a Bank compared to with $X.X Slide XX. Non-performing in an the of non-accrual and increase million million end $XX.X of of quarter or was charge-off total on or the Silicon note a assets XX, March X.XX% loan. $XX.X X.XX% a on construction Valley offset The placed

increased Our million linked-quarter assets X% or $XXX.X criticized $X.X basis. to million on a

allowance credit exposures. expected XXXX, increased securities establishing credit was the loans for On credit on sheet losses for loss for credit current which CECL for adopted, the on allowance off-balance and and the January X, methodology losses

portfolio. on December quarter, losses for to to from allowance million standard recognize effect, March on consumer $XX.X day attributed the by million of allowance the XXXX. X for adoption $XX.X loans losses to The increased our $XX loans cumulative During XX, at increased primarily credit CECL solar initial million the $XX.X XXXX, XX, million the the at credit

X credit to million cumulative paid commercial losses was for the $X.X residential allowance effect The securities. to and on attributed securities recognize held-to-maturity day primarily

XXXX, X.XX% for to to impact ratio to The standard. day and XX, loans CECL March was total $X.X on at sheet XXXX. exposures XX, The December adopting loans million XXX.XX% of ratio losses of increased recognize non-accrual the loan XXXX. Additionally, expected at X.XX% XX, of allowance X at the allowance allowance was off-balance cumulative was credit by the March

quarter Provision $X.X of losses totaled compared the million quarter $X XXXX. credit for million of fourth first the for to XXXX in

additional solar note $X.X $X.X the growth CECL allowance. portfolio charge-off our expense SIVB forecast changes During loan. provision driven calculate the and of new for the standard, used to senior charge-offs, provision quarter, to a an $X.X in multifamily the by items, and losses on these for charge primarily a million the million bank the credit was under recognized million economic related Adjusted of impairment

$XX.X to tangible and solar equity, return repurchase Continuing of and equity average common capacity our were XX.X% the million core on impact excluding XX, Slide program. stock our core million under tax for during of quarter have return equity average million share on repurchased the XX.X%, remaining respectively, quarter of common first and our XXXX. $XX We the of first $X.X

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

based judiciously on volatility. banking managing the we capital state economic our current are As the and position sector previously noted, of

held equity the standard. Our of is our CECL our given stronger adoption we Tier position capital weightings, X risk of considering common steady than believe noteworthy at impact X.XX%, capital of lower which that is and our ratio peers our the

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

the each to of its end May committee further rate As of to and basis or interest meetings. increase by XXXX, in we by reductions reduced Federal increase XX February increases with incur XXXX. the a first early at Reserve quarter Board declaring Currently, XXXX March of the the expected, rate cycle of interest increases pace occur continued point of in though potential rate anticipate the its

our compared to of accumulated a our of $XX.X to in million portfolio, our an quarterly result mark-to-market prior the effective improved tax measure, a other $XX.X tangible and non-GAAP XXXX, comprehensive quarter. as million per on as $XX.XX As value March XX, book to share, earnings loss due improvement the in securities $XX.XX

for X.XX% practice the of X.XX% conservative of remind quarter to X% in set quarter, that reflecting second common we publicly our the pleased to also a We common quarter remain sheet. safeguarding previous of general investors of assets comparison tangible continued We balance minimum equity from with the back tangible our our equity tangible in XXXX.

we the growth our loan net portfolios. anticipated quarter provided growth to for in commercial led XXXX, moderate outlook On X% sequential to by call, our mainly fourth X% to approximately

remain growth first the with loans and of in our target in Growth we to PACE for met be expect loan approximately generally to X% to expected reductions unchanged the remainder X% net XXXX. are quarter, rate run funded During an and securities. X% at

impact pre-provision Turning income of million, of interest $XXX net guidance million recent Core events, considers pre-tax to XXXX forward rate of full and as $XXX have we the the of consideration to Slide In to and effect updated growth solar follows: XXXX. our million excluding the million of remainder XX. earnings, year $XXX the which of reduced for deposit curve $XXX

approximately rates, million annual Going beta XX reflecting interest and forward, point deposit an assumptions mix. in decrease for $X.X we increase income net changes a in interest parallel estimate in basis higher

we do near-term margin to basis XX growing sheet To focused potential and remain leverage continues. our our capital compress We and net expect in XX managing points as costs conclude, deposit by on on minimizing pressure position, expenses. balance borrowings interest to the

net XXXX. approximately of the result, we to million million second our quarter income interest to in anticipate $XX a $XX to As decline

strategy. forward, deposits our will continue borrowings we Good order reduce to our liquidity providing Looking attract to Growth remain For work maintain and to in support to we as while competitive

differentiation the the the Our customers our of and bank results communities. share with this quarter that as well we mission-based demonstrate strength as

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

Operator

Alex Our Piper from Instructions] Sandler. with Twerdahl [Operator comes question first

Alexander Twerdahl

the and you bit thoughts if of you March non-interest-bearing all that's wake on and that's And updated the over color a the at course the little the parts we specifically you give just saw deposit over with what First of something couple if other the then what of in the quarter? betas, hoping some on in of off, could the to happened changes months? accelerated last sort saw kind something respect the could re-shifting, of you Or during quarter us decline the moving hoping of give given banks? sort that I more deposits saw us and was

Jason Darby

a accelerate and that spoke in to to happy that we seen question you. some our some the around discussion we in you. the of meaning the when bank to their did that take bases. interest-bearing, of a at the of DDA and March. had standing Alex. last shift for shift for little in that to starting to we've to the We modeling in fourth The guidance I'm quarter customers post had we quite product we've reciprocal more acceleration ready even bit were make in were to demand product early on when interest-bearing seizures insurance XXXX, occurred for we part in looking been of a deposit offered us, that non-interest-bearing moment time, sort see they as had The bank, our Sure, available XXXX

acceleration we that's that related into So fair some be to think a been in we that we that it's our the able accommodate But seeking. the that customers insurance of think time, there, have business, same at way. was something to there amount and modeling to important contribution really

To assumptions your and -- haven't question on saying are increase, that think our been increasing with each of that increasing changed mode Fed we beta, thinking. are I betas anyway consistently we've

for and quarter or not But I now foreseeable prior. factoring certain any either deposit re-pricing in what on this upcoming was our What focus XX% think the the deposits sure consumer customer excluding thing around in course, on customers this for for defensive tune think being and that is, we're for saw with thinking at as the CD well. that making to some This we with re-pricings I of rate need think, mid-XX% to is, in we've really we're are betas last quarter really quarter done of of future. our in we deposit might and interest-bearing as important fourth us XX% being range -- interest-bearing on thinking of point. occur, portfolio beta XX% the increases any that

Alexander Twerdahl

that, recession, and and causes. donate into managing needs what into -- business and to various about thinking relying model you we you're Okay. eager of thing go guys to maybe recession, contributions happen? prepare that being see rely it? if that the people how if how maybe are if like go to stepping bank just thinking some some And just to kind of less things then back, think I'm just of a sort bank about you donations the we on -- -- curious, and the kind of that a do about And for how you constituencies shift

Priscilla Sims Brown

That's segments. maybe question. think could specifically quarters you And in understand those is some a good what I of do we more future help

will that than You others. affected some more see are

grown You will also see deposits. that certainly way is tried contribute pretty lot to There campaigns, what we on to are they like. not only for over but deposits example, cyclical which time. in the have which these talking sense to the about of donor-based the period that we charitable we've organizations the the give elections also of typically. organizations. complement a you organizations And actually are is recessions are we that see If and dependent, have nature do -- those that receive will in back a look that money, one a They good another that for past,

specific we So vulnerable find segment event a way. and that extremely specific ourselves don't a to feeling

Alexander Twerdahl

included just Okay. us if just was you loan in already was construction more into [Indiscernible]? a and That's that could little non-performing quarter on this for bit me, color helpful. then that that went question give hoping I And final

Jason Darby

the to a end mention That -- special the not mention. actually, had It it make special was that Yes. mention of was at as previous been quarter. its a -- way about special in did loan the thinking we

are structured a So we bit it of quarter. There's is A move feel The good funding this requirements -- little million. one maybe the line non-accrual time. view bit A is pretty part little our B, was is repayment. full into with -- good point, realize a some to B timing over don't deal or this and it take my of to a about performing. versus a about cycle, the actually about we take up overall may a deal pretty Ultimately, probably an still in our It Alex, financial working $X.X little X that the in opportunities part A The that. a We time, at in the There and But problems had that view collectability will through. this it entity. still part. move with partnership although the for government reporting with another. always for parts. we're it's That's related, time, feel

Operator

from with question J.P. Janet Lee next Our Morgan. comes

Janet Lee

Congrats year few questions. deposits. with on I want a your I have just XXXth anniversary. I start to, guess,

led So brokered as recent slow that Was acquisition. higher deposits, for outside the pointed excluding mentioned the looking core of in Or by of some to driven pace you new this factors client What events you towards part elsewhere March? CDs, customer of for weighted is the more that customers decline to bank? in slower it yields of acquisition?

Jason Darby

answer. Janet, thanks in for that question. and jump I'll

at Signature way, yield, we sheet have feel offset like did good about. take although bit in new that A events still of longer and going get a growth. of the income reasonably but new that's the had little terms customer remains we more, about get to slowing seeking around we unfolded. a investment that of folks of pipeline with little was little of like, Deposits some in treasury good announcements. of we bank it deposit there probably start and what took relationships conversations beginning we SVB originally the thought obviously wins the those through we little of in bit But a for in future wins We alternative. some quarter. than back going pretty the and But the the sort We to arm moving there. bit reason our sort A to centered during see by a felt year move acquisitions direction. good post seen balance banking had really, a quarter, our our some wasn't come feel non-interest it's pipeline seeking those sort people slowed looks lot pickup quarters of of yield, think our customer customers and I in pause management really probably in new a of terms as off

we think was In exception their whatever that certain bank matched was we fiduciary were. with that fact, the necessary key competitive anybody customers We thought up into I on for was and coming that for new. did what pricing needs them we found pricing think

Priscilla Sims Brown

thing that the a year, at new rate customers look of do is our as And I'll that good. into given comparable commercial paused that add the we we albeit the are the had years. to coming course we sound one, projections at that's bank only pipeline, to prior fact and over the The expect we've a that

Janet Lee

Okay. of outlook, says, Great. deposit believe -- think outlook growth. about guidance in outlook about your up updated reduced how for well, NII for actually excluding And a was the CDs? side. I growth, we average deposit Like excluding it the corporates deposit conservative on quarter, X% Last adding should brokered terms balances

Jason Darby

Right.

in still the mentioned, But the and with through presidential. and as reason that for us we're there'll the jumpstart well, earlier. And the growth is customer in we over the average feel us pause, working of year. to way, thinking on versus start X% still number better yes, be for the say, us space I the deposit we to political of a as of would attraction, the that reforecast range announcements will been course of Priscilla that certainly, is, year. the We excluding for CDs. okay about There's some growth, think brokered has for same as fundraising that talked think about. X% opportunity an for given there to somewhere occur we to a pipeline I'd mentioned probably the the mentioned new deposit some be So and Priscilla X% hopefully it's that probably about end the regard

Janet Lee

Right.

brokered you And -- by I CDs, excluding is CDs so have sorry, million that April. X% reduced in that know brokered guys already $XXX

the of balance like So to your as next How bit CD elevated customer that CD near balances get broker longer term? lower couple in little liquidity? is a those brokered over maintain a maintain plan Or more it to about for broker to we of quarters? little you think you want the do should balances the CDs deposits

Jason Darby

to on deposit you the yes, balances. So number was yes, based ex-brokered growth quoted clarify, I to

to of we just try bit timing some with source CD yes, moment. short-term that we'll and us. terms really of borrowings, way balance We brokered maintain pricing a that think is little CD, but I brokered course, I of do need the of liquidity sheet in more that hundred brokered limit become brokers expensive. market appropriate In our changes balances related good a that's think the are our think do million, for to down the a the use couple a unless,

XX March the a of for to short-term think can see mix as sort you funding brokered think benchmark like we'd results relative any and I deposits of to how our So borrowings. with total

liability total the last finished kind pointed out of total guidance from we to to view, in of of our the And which good our where also, the revised the I you point in assets a try the as think neutral composition. where sheet neutral to our give from balance is we idea we'll ought finished of to quarter, sheet terms balance how that funding keep year. side basically of we a manage is indication

Janet Lee

And effect, amount to $XX reserve loan it. walk segment $XX was CECL you that your day consumer through reserves out for million? and your solar dollar million. on ratio coverage reserve is that build what X assumed Got Can of portfolio of for quarter the the in specific which

Jason Darby

the about the way quarters. bit CECL think the end this to be too consumer going filled in up I that portfolio. to don't relates solar at But fairly really much so be We year, more it expect the solar is best to was the but the the consumer year, had not consumer previous of build adopting really XXXX we that within the in doing the our we CECL majority of fairly, of to We had a primary we basket that portion attached consumer. were -- the of knew characterize build solar and CECL to XXXX. spoken

a kind that ratios we've think XXXX, life we we're we've build. talked of have that throughout before. the seen about average I side, charge-offs particular of What a hopeful further and Solar at need portfolio, is and charge-off sort it when the look this for to indicates of the

from a to reserve come benefits time those, into down of have and put benefit protections that We're starting we CECL bit those. been we're actually starting have structures. built model. of have hopeful some of some the these the that bit We to meet the and rates a see will charge-off over in that therefore, from We're little the forth

So kind characterize impact consumer to that's the -- CECL would best relative I think that's the way solar. I of

Janet Lee

Okay.

sort that that in ratio like however, net of portfolio. but you multiply recent the reserve CECL it? right obviously by consumer long that solar was basically, So duration of that Is guys about specific quarters, to the total charge-off think the way have experienced we that the to then assume the can

Jason Darby

from helps a solar of point or portfolio. being sharing similar from think point residential X view characteristics duration similar of those it view, to to If a our as so. think of I we consumer X

again, more you a take but that I the good And sort look X take that over charge-off and duration, charge-off at just modeling. in has X implied gives taken you which But style them charge-off sense. could to the property seen wouldn't life, bit a hopefully, of a recent So it of rates lower little of a give style is family the yes, the rate. you looks that we've or longer we a duration, of rate, a quarters, how history rate that like indication a think against if we've

Operator

KBW. next question with O'Connell Chris The from Instructions] is [Operator

Christopher O’Connell

off on to hoping expenses. start was I the

run towards the I million you're they down rate for correct? if remainder think, Is should of I that be million the to right, trending $XX.XX $XX year. heard

Jason Darby

Yes.

And that also thought to to in forward. we to had a my $XX rate what in on run quarter. we'd $XX.XX So commentary going been be the was million comparison a I making previous that referring was quarterly million I've

optically expenses that refunds bit able the our some in we're lower recognize think little some as quarter. tax were releases to fourth and a accrual I a of sales result

million an particular million. run this quarter a to some in going rate forward good So of because quarterly an about bit quarter on a last still little think $XX is it kind $XX And I timing. of normalized average of basis. uptick saw We

There what it quarter and compensation probably on third some with March, related would elevated occurred a a in expense like of payroll which some items, basis. bit that on was a from normal one look payroll a tax less other payroll our little saw

temporary the are brought had in and saw to little now think and be in are forward. we of quarter. we also had temporary it. that But have think in flowed a as expense benefit going I increases bit There's that then more a normalized hires through can personnel But areas premium those terms seeing support of we coming business a the expense of back some pressure. we largely question in expense about permanent couple need number quarters to no we that

$XX I holding Priscilla, that and million so Priscilla add that's don't know, that I there? if but a And something focused challenge, be anything you want will are on. to

Priscilla Sims Brown

I say No, think strategy. the we've in as certainly for good But heard as those will across said key as growth in things into invest investments not long you about before, we've you areas introduced business. -- business. for you've the been us it not talking We to build that be we to will think are These surprising there well. the the are

you'll discrete Well, expenses, of you increases, in offsets. won't so business. occurring net the offsets And other parts incremental see increases see the in you'll of see

Christopher O’Connell

And of portfolio XXXX? of held on LTVs the the then and special are much And coming during Got what the maybe over the how it. office office That's portfolio, for due is can then on go helpful. kind the mention? you X just reserves

Jason Darby

Yes, Sure. sure.

better. -- put understand the I additional help think information some to everybody So in deck we a little bit our

isn't that on properties, still those paying. are On because are there the reserve there the a still fact LTVs that mention, they particular X special mainly specific of strong and the

have you, I can get I relative we pretty for overall Chris, quote to as reserve back coverage, solid in think exact the carry. think on reserve that. it's I don't coverage I our to you total an But and

you about or about pick coverage credits think that If GAAP CECL in it, disaggregate But in it's portfolio out strip total classes. impact, little But XX%. we LTV can $XXX you when office hopefully XXX% kind everything somewhere that of profile million. total the around I of the we're $XX a down up risk important to the is down asset group I kind for is appropriately think XXX% a distributed that million of reserve we're across report is to of the on of the portfolio. overall take number The and investment-related bit CRE only

speaking, each the assume. that the good portfolio with itself, -- think year. And associated pretty collateral to feel of have terms portion look about sorry, of then -- that's I that's the the is generally matures where XX% at we So I'd of the maturity, office in portfolio reasonable that XX% number portfolio. that's specifically about to but with

Christopher O’Connell

mature Got know either do mentions of you it. year? if the And two special this

Jason Darby

they're Neither the in not do that, I know long but maturity table.

Christopher O’Connell

relationships add offset declining pulling on to you to year, be basis. as a you some looking over Great. for what or as the you relatively far I But might areas versus kind it's are to supposed the and know of reward on go on and be And areas back loan then remainder that that? risk see demand of of subdued good could that the net growth if good

Jason Darby

Absolutely. sure. Yes,

pay expect for sustainability payoff, we've of before less commercial that were I see think in to product, expect a that of with solar-based there, estate also climate-related regardable residential all wasn't occurred downs consumer our with we decent solar, we couple We'll also we had loans in loss. loan a our some which Almost We quarter. With to as growth lot a have the we up mentioned and alternatives by real little C&I. lending the a a mainly in it probably high particularly. We that multifamily, PACE much be multifamily consumer the growth do of and filled for portfolios, our C&I, residential CRE, of show did I'm segment I throughout We'll impact-related do which misleading. we didn't have year. less rest C&I, Janet, that's really during late we the quarter, level, originations about and of kind the sorry, really sort in basket do and particularly lending. think $XX our of led said C&I I growth in in our to to had terrific this regard the but was one million and

going X% growth think X% our continue to and that, sequential contribute for quarters. upcoming that So business the to I is target to able be to to generate

in to Francisco to on see multifamily bolster hopefully And that start hopeful that team think multifamily only of will lot our market respectively, really lending I York we also side a the out see in we And New not generating continue some we're to for the strong, origination on as really the the business. Boston is new real side, in is relationship-based some development bankers, some areas, we've place San and the estate those Chris. within the year market but built

Christopher O’Connell

have Great. That be you yields what current loans? would on if the are great And -- origination too.

Jason Darby

Sure.

probably it's total well. that the think kind estate give then -- me X%. want X.X% of right it's And to that in we range around as now X.XX%, around again, -- think one obviously, we're I the And range. on it's -- in real mid-Xs X.X%, the about range. in moment. PACE, The the in in somewhere up CRE, Just kind of bring C&I, X.XX%

Christopher O’Connell

it Great. pure loans, sounds year but are guys be to resi be some book to the there lowering of going pace will know securities And over fund the you course growth. I the like help

basis, rest net-net growing guess, a see declining those I over combined or factors course the the you how of think I year? of do the

Jason Darby

Yes.

So PACE. let's target-wise, through think of go I just our kind

I got on $XX left capacity PFG. about think arrangement of flow we've with million our

CPACE number, downs per million sometimes pay some maybe offset of but of about the That in think probably duration pay be downs. running The the are on it's our is associated a in there, little timing because bit in about million will somewhere of by $XX some depending appropriate probably do $XX quarter, in higher, it's sometimes bit more, about $XX probably less PACE. million mainly payments. little an I origination deals. a quarter with quarter the a those lower a

growth see but CPACE some. don't lot I in of So a probably

the continue $XX And portfolio month million continue amortizing to but let sell portfolio that we'll exact AFS between in have when about then to amortize. and PACE. ends portfolio securities up it think point. securities you think to also total What an number will you with do securities our at decline also of still a I I ultimately we'll don't overall on And securities at net-net, factor reduce a But to be the there, from exposure, HTM. It's funding. I pools for traditional then the some in that

is, this year. of how way a level kind science be of the view assets point little more we bit really and at total art the I we're think of and sheet from to bit a I look of looking manage balance keep that a throughout the mix will little

Christopher O’Connell

for the And the Great. funding are from there relative brokered rates CDs, what borrowings? alternative seeing to you guys for the

Jason Darby

of spreads. were basis seeing end saw XX in a point the the earlier earlier attractive spread XX brokered -- XXXX. some We about really getting towards early and think market rate then our point basis into PACE we really on. started We XXXX I accelerated on,

spread that think has been tightening bit. I a

a I brokered on answer just doing a empirical mixing those benefit FHLBs and day, of maintain where pick also X kind that as deliver look of of between We've composition, really, CDs. pricing brokers I think on take whole the end level at but really the the years process. good have obviously, the to we're We're you between we a And a And at make brokerage, of do interest. are eye the at looking well. funding close don't close longer-term. some some we're great want we're little of very the bit how throughout able we done to on NII but between the rates kind the for shorter-term taking short-term a and sure

Christopher O’Connell

on or considering a me. one balance tepid forward last sheet repurchases all growth? utilizing as Are going for fairly And builds share thinking Great. guys you about at TC

Jason Darby

Yes.

XX,XXX we shares. worth and $X.X the around did did are first little million in about quarter. somewhere bit We or a We

under announced still or million million We previously $XX program. have of availability $XX our so

attractive in at us, trading, stock is the It's this is our more least where bit by probably option opinion, and of a an point. stock number think an we of it's as for So certainly Chris. other quite becomes the at undervalued it a well. And more with obviously, banks --

dividend to repurchases flowing I'm can to on and sure overall growing see what And kind of levels a capital we're continuing to focused I I is afford will a balance we the balance earnings, ratio maintain continuing year. that our our the think maintain and it capital to capital. is continuing the be very bit level. and whatever TCE throughout very, between want improve through leverage here to mark make of through do capital. a always

Operator

call closing At you. to time, Thank Sims comments. over the like Brown to Priscilla for this I would turn

Priscilla Sims Brown

and interest you with Thank appreciate thank you. today. we'll and conversation offline Thank of that all well. your and We know that, all some be continuing questions, your you time of you we for the for as

could mission-aligned we is an grateful good do, also not is well. something shareholders for in your for and future that to be bank what place our feel more capital and the Amalgamated, And holds business, excited also that's that We thing to the with it hold important not the right only I customers. we're market our services by providing and that customers. but our the that for as understanding

responsibility. But other of defense and of now, longer as as sort We that hope shareholders our cycle short-term be we well the credit seen conservative in. have growing in currently talked protection have I term important the really continue for things headwinds, and focused other also that as business. that our the several to we the feel the focus the our we're want it's that and think we and to for just this are about of We on of book TCE era alignment on really well mention stakeholders. you quarters

that we continue asset have. businesses investment among generally. longer-term a goals on from focus on and communities tailwinds the to from we of X out more that and community So ready from return we as cycle, this that focus many net the come benefit management the corporations these to come stand to continued the benefit in and And

We you in for talking time future well. thanks forward as again the So look to your to today.

Operator

concludes today's This you. Thank conference.

may You disconnect Thank time. for at lines your your of this your the you day. Enjoy participation. rest

Amalgamated Financial (AMAL) 27 Apr 232023 Q1 Earnings call transcript