Earnings call transcript Q2 2023

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Operator

Good morning, ladies and gentlemen, and welcome to the Amalgamated Financial Corporation Second Quarter 2023 Earnings Conference Call.

During today's presentation, all parties will be in 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

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

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

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

forward-looking caution certain statements remind me everyone this statements let or the that forward-looking any contain Securities differ of constitute actual implied the begin, Reform we Before such indicated may information Private within call that the of investors meaning Act may statements. expectations or results by from Litigation XXXX. that We

as Xth, XXXX filed those by could materially Investors should refer indicated for to XXXX cause differ implied slide risk deck as on actual XX-K well two factors March from list or earnings of of a to that statements. results our such our

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

Priscilla. over the to turn now me Let call

Priscilla Sims Brown

today. Thank you, Jason. Good appreciate and everyone. morning time We your interest

to normal a deposits, longer credit March, banking more. metropolitan that are interest Now, concerns, for occurred few the new higher in a early environment, return have to rates, that things events competition for office months from out and fierce begun we the

sheet our quickly to balance strength. business a on We've building we modified flexibility the agility Demonstrating capital. of been a a growth flat pivoted our and centered strategy, of strategy and position operating from

balance preparing sheet still deposits political to portfolio election our as funded as from presidential accommodate the earnest. our of mainly securities Loan in growth runoff next growing expected, is is begins cycle

activity for inflation sector, headline has in medium uniquely banking into to very exciting economy the earnings reason to positions nagging banking time win. simple are resilient, and improved, sector. quite bank yet investors At has back and large starting believe been I model have there's data the Amalgamated, it's us move line, in The our Despite optimism. as proved differentiated a

to being our Given potential. together you've like to material financial for lending weeks, franchise, that talking three information our our our and spend deposit almost segment, our time Those success. had future two about keys earnings our I'd continued

Our deposit franchise and features an funds decades, industry-leading our values given heritage. banked and customers us for have shared cost of that with union

introduced more and our strength of customer designation into in last order quarter deposits, transparency relationships, a super-core longevity called to the our provide base. deposit Given we

super-core on XX with deposits of XXX about deposit come customers from over of are and represent Amalgamated When thinking bank's been from of relationships Our customer our $X.X billion for end with second approximately incredible than the loyal our have that bank a earned than cumulatively XX% deposits stability, super-core at for banking. more core These years us one deposits five an advantage, quarter. the more relationship-based average. years or years

our our to on is uniquely We advantage developing demands Another ability the our apart. execute customers ago. political which understand deposit sophisticated base finance most for professionals nearly political began sets decade of Amalgamate the the of a franchise, we us and campaign banking needs

elections experienced following and leading with election major last quarter's trend the again this its up near November. election political the to cycles deposits mid-term balances normally decline a an We and Our rise in conclusion. once

during the candidates have cycles greatly presidential announcing by in to the an now are accumulation election phase, quarter. onset boosted run of likened national As we their in, attentions

to is quarter, the a begins cycle which anticipate for the inflow into next bank. powerful to political seen driver have momentum. year gain strong year, inflows our of and we deposits We through Through politically-active these as from second election the continue of a balance customers the

of higher is of Our the accounts life in current rise into deposits as to our helps franchise and rate services, DDA a balance they deposits non-interest-bearing for political big investment funds largely customers' moved us flexibility mitigate and treasury where sheet contributor costs environment. yields cycle, their as in are the deposit in off seek this given some add our

Overall, the quite the uninsured is deposit non-interest-bearing we market in our accomplishment all are reducing and deposits mitigating our backdrop. while given current an maintaining which balances, rise funding costs,

much to bank. Shifting has an the our spent to which acceleration yields. banking last driven important This to and notable provided two a expansion of the the discussing over growth years, our time the of has lending segment. loan loan earnings We power team lift

goal around where market that believe the zero industry, growing through economic $X The This area initiatives grow will estimated XXXX. which achieve This the emissions sustainable one years given cycles, opportunity, address have to climate change. by of spend time and for a importance, I momentum on to it is investment the we a necessary to is the is the would US net we urgency, more today trillion at a significant of lending. are XX over like next is

efficiency, lending a sustainable relationships We renewable storage, with battery across to in few. energy, energy bankers PACE, have experienced and deeply name customer

leads But earnings around experts team Our and sustainable our drive lending underwrite significant recognized have dialogue prudently help and opportunities. into industry the financing source technologies. sophistication the to importantly, potential. includes we will future leaders more thought This directly emerging

a in It's loans we sustainable sheet, to replace older we still balance over demonstrate innings. as going mix as in an we are lending, powerful our and lending shift lower strategy that is in expertise sheet we turning to drive higher with remember its yielding early our balance important yielding our sustainable are to As just securities continue lows.

should lift in a roll-off loans sheet as XX XX and securities and multifamily experience yielding months, next strong our the result, margins over lower a balance yields, and earnings. As we to

next net already margin and over rates interest Paired Fed with expand maintain year the earnings a is to strong as for income normalize to stream, rate. with our lower our and opportunity margin encouraging around ability well-protected great interest terminal X% grow

and York issues for our we To about. hosted Values we running conclude, Annual Alliance leading In on care bank Global New Banking on are April, Meeting we in the City.

and investors, to development. XXX Over bankers, sustainable finance of spanning customers a choosing environmental people providers discuss attended, to international social range economic, and deliver impact software

grows, presence area our so As of in business. this our

what and serve. the we're shareholders, for In results customers, communities notice. starting We are glad people are the for responsible America's we bank, to that and results socially are end matters,

growth many quarter second demonstrate as years opportunity our of come. well Our to the to for the clearly significant possess results strength as customer we drive earnings that relationships,

me over back now the to turn second to provide Jason financial results. Let of a call review quarter our

Jason Darby

or income the share, or $XX.X XXXX quarter of for of the per diluted million $X.XX Net for to Priscilla. quarter compared $XX.X million XXXX. first was second you, Thank diluted $X.XX per share

$X.X increase in expense, offset in in second a income million by increase increase quarter million is a million result provision primarily decrease $X.X net million the non-interest income, decrease $X.X for $X.X of in in a expense, decrease million of million tax a a mostly XXXX income, The and non-interest $X.X expense. interest a $X.X

historical associated accounting and Because tax five. way investments these equity on the of tax quarter evaluate timing of slide statement our is impact XXXX. investments, volatility income Beginning to for to were helpful metrics the current related believe or accelerated with we the There solar performance. depreciation no excluding second for of the exclusions credits a

Core net income, solar a excluding the tax of equity investments, impact measure. non-GAAP

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

strong decrease $XXX.X of at $X.X XXXX, brokered million from billion, Deposits unchanged XXXX, stable and base. at deposit deposits, CDs a $X.X seven. remained slide while of quarter the XX, to demonstrating Turning billion, essentially excluding were June first a

deposits decreased the XXst, billion, July political to the we in million CDs approximately previously in includes deposit which million importantly outflows by utilized experienced total brokered replace fourth $XXX $XXX quarter year. to last decline $X.X Through that a have XXXX,

by have $XX total deposits CDs, brokered Excluding million. increased

ended CDs, base. continue up deposits of again, the previous our basis quarter, XX from and attractively points, average non-interest-bearing cost of an deposits to brokered price our for customer deposits to of represented to XXth, Contributing average the we as XX basis points deposits of June Excluding retain XX% quarter XX% ending XXXX. deposits

cost XX of including the in brokered XXX total deposits, point basis previous was quarter. points a the basis CDs XXXX, Our quarter from of increase second

Moving base $X.X quality super-core to totaled billion. our slide eight, high deposit

customer important displays uniquely our base deposit insight into segments. impact super-core Our

of At quarter first an improvement deposits, or billion $X.X the end, XX% $X.X were XX% XXXX. or of uninsured during from total quarter billion deposits total

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

cash maintained of securities, capacity billion and day significant Consistent borrowing from immediate two-day billion we quarters, of with with $X.X prior $XXX.X liquidity. resulting have capacity two of in total $X.X million liquidity unpledged and

our Our excluding Again, liquidity an in super-core, deposits, XXX% our our our liquidity quarter. uninsured deposits covers deposits. increase XX% prior from of uninsured the XX% of covers uninsured of

core continues the seizures. full resiliency quarter during bank first to recent Turning slide following the show deposit nine, base our to and stability

flows and nice and up, balance have election into Importantly, through quarter we begun the our the July. have a as gears second cycle accumulating political seen acceleration next

million June million active on linked-quarter a on a held of basis. by look Taking $XXX.X politically closer XX, an slide $XXX.X deposits of XXXX, XX, customers increase were as

As flows rebuild following to of noted, typical we seasonality. political XXXX, the pattern in the of quarter expected deposit second

million Additionally, XXXX. inflow we've of July XXst, $XX.X deposit experienced through incremental political

million quarter, $XX.X $XX.X primarily and of traditional in strategic to assessment the ahead XX, our slides book sales Jumping XX $XX.X $XX result pace paydowns, the portfolio by net value growth. in securities offset as during investment million securities in a million decreased and million of

represented protect excluding modestly a PACE have assessments decline that we of Floating quarters quarter, X% ratio the total prior at past several quarter, our the stream. rate end earnings the over XX% reduced the to as of from securities,

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

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

XXXX, in our XX, slide loans, an X.X% $XX.X multifamily by sustainability $XX.X construction loans the increase $X.X increase portfolio, increase June $X.X million increase fees and portfolio. of in and real or decrease increase primarily net a in in driven million to $X.X driven $X in commercial a loans estate our of loan total residential a $X.X XXXX. Turning loans, $XX.X billion, to million in offset million million loans, and costs This and deferred compared industrial March million loan at receivable decrease a million and XXth, commercial an a by XXst, consumer decrease were segment, climate loans, in by was

the of of loan, a $X.X focus in commercial continue on estate including payoff we improving improvement quarter, the credit office-related $X.X During quality criticized to the million a we had bank's million loans, classified or as real portfolio. on

The loans. of charge-offs of decline rate X.XX% yield on in was to to total first or compared X.XX% was loans higher loan consumer mainly payoffs solar yield the our The the quarter XXXX. attributed

Our six exception office-only exposures average the of estate with XX%. has real quarter that mention. a commercial past LTV all million end, six one have $XX we in of Of portfolio for are been had At several quarters. de-risking been past credits, approximately grade we the portfolio an the special across credits with

current a quarter. million returned purposes the quarter non-performing that second was documentation real Additionally, end estate $X.X of status the the to at commercial loan first for considered was in

quarter margin net income first interest-bearing loan XX, climate to first interest-bearing brokered continue expected now of our of XX our deposit continued points from sectors. rates No higher second particularly legacy money quarter savings particularly for were of focus or quarter X.XX% On we was garnered a decrease on in of balances largely slide XXXX. due increased second and and by and at The to of average sustainability was X.XX% within XXXX, compression retention, the prepayment growth, in liabilities, attractive basis premium earned loan to the partially interest the yields deposits, CDs penalties as segment, market a XXXX. which traditional offset in margin

XXXX, the the income, of the excluding in of equity first solar investments $X.X second tax core to of measure, quarter for On million $X.X compared non-GAAP quarter page non-interest are was XXXX. impact million XX,

on The treasury increased income of million deposit related investments, seeking for pricing. increase from higher yields was trust certain to equity $X.X clients department and fees primarily investments alternative to fees

costs incentive call, and first payments, payroll the as as decrease line due was incurred and corporate of the of This decrease a employee non-interest insurance the first million second personnel measure, expected was primarily On the in non-interest million, quarter of and in on temporary well with to quarter's benefit benefits, non-GAAP $X.X timing XXXX provided for range expense, from and compensation of a core during last taxes page of XX, $XX.X quarter quarter $X.X the XXXX. costs million XXXX. was a given expense

for and quarter, insurance and expense depository processing fees. advertising Additionally, by decreased the during reserves data offset professional FDIC increased expense increased

Going forward for our anticipate non-interest expense of to remainder trend we the XXXX, similarly.

XX, slide assets non-performing at period-end decrease June totaled million, of basis. with $XX.X million on $X.X assets of compared to X.XX% total XX, million, Moving linked-quarter or XXXX, X.XX% $XX.X a a or

non-performing assets second the Silicon quarter million estate loan non-accrual quarter. brought was Valley the in was result Bank subsequently real the note was which that senior on decrease in The in of commercial first was placed in a $X.X second the quarter, sold and a that current

were additional an substantially that million loan for commercial off on during million reserved quarter status. the retail $X.X a Additionally, in charged XXXX, which quarter, loans placed the by was second of non-accrual was $X.X offset in

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

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

quarter, million an with XXXX, June to March of flat from increase credit million million the at XXXX. $XX.X loans at allowance XXth, $XX.X the losses XXst, During remained essentially on for $X.X

of XXth, of XXth, and ratio allowance XXXX. was total The was June at ratio X.XX% allowance The loans XXX.XX% X.XX% XXst, March non-accrual June to at to XXXX. at loans XXXX,

mainly quarter was to credit the losses note XXXX in the during XXXX. in $X compared decrease mentioned second attributable second million senior Provision million the in quarter provision The which was sold $X.X on the impairment first for previously charge of to the for quarter, prior SIVB totaled the of subsequently quarter.

for return on tangible average Continuing solar return common to respectively, second XXXX. and on equity tax the and core core XX.X%, XX.X% slide XX, excluding were quarter of our equity equity, of the average impact

second during We repurchased and repurchase stock million the million $X.X $XX.X million $XX of share quarter of capacity program. our our remaining common have under

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

environment previously manage state we continue closely banking economic volatility. our the in wake of capital the and As based to noted, upon current the position of sector the

compared ratio on by a XX, shown X.XX% driven As as Tier result, leverage linked-quarter, X earnings. as to XX points strong to our our improved basis slide and the capital quarterly primarily

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

again in points and meeting, Reserve Federal unchanged May, rates rates raised its XX basis at Board basis As yesterday. XX expected, held points June the raised rates

rate one more XX Our point XXXX. though basis to expectation for least occur this longer is year, for higher increase at remaining reductions with potential during interest

our $XX.XX June increase per activity, of $XX.XX affected offset of quarter share, as in As tax the measure, value result a as mark-to-market a million non-GAAP tangible well quarterly share quarter. million earnings, to the our adjustment, $X.X prior book compared as by previous AFS repurchase as XXth, improved the XXXX, partially to a $XX.X from in

from comparison X% been pleased second common tangible X.XX% to to XXXX, have with we below remain in that minimum target. of tangible equity back X.XX% We quarter remind a investors of the equity we We set also the previous our general the and of in publicly tangible for that common quarter assets never quarter.

the loan bit During X%. of quarter, we of was second growth which our anticipated below X% achieved X.X%, a to net target

However, relationship we our reflective and lending. selectivity is of for believe desire this

the during environment, nearly of a Additionally, advantage took pace origination X% quarter. our portfolio growing strong assessment we

funded As by are pace a reminder, to assessments reductions growth in primarily loans expected and securities. be in

year slide follows. the our have Turning XXXX uncertainty banking maintained degree guidance that economic difficult. we makes as XX, industry projections But more to high and of note we full

of the interest migration considers positive $XXX the of to remainder for $XXX Core the and and the XXXX. to million curve million million, to forward rate of ex-solar million, $XXX earnings pre-tax effect pre-provision interest-bearing income which of net $XXX

increase an interest Going forward, for we decrease interest income net estimate a approximate million point parallel $X.X annual in rates. basis XX in

interest expect pressure by focus potential points our the leverage, compress as five on funds points and to basis We capital of curtailing managing on near-term, conclude, position, our to XX our basis our sheet continues. To do growing remains cost net equally in borrowings expenses. balance and approximately margin

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

protect to attract our liquidity we our growth Looking to to forward, reduce existing deposits strategy. good to support borrowings continue will provide and new work and deposits for

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

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

Operator

Thank you.

[Operator be session. now question-and-answer will We Instructions] conducting a

is question our Twerdahl Alex Piper with with And Sandler. you. question. first Thank Please from proceed your

Alex Twerdahl

morning. good Hey

Priscilla Sims Brown

Good morning Alex.

Jason Darby

Good morning.

Alex Twerdahl

on if to alluded spending us really public bit doing? Is hone prepared types that the you little you little Maybe what's loans remarks, first about and to of a your could a that of want in sort I spending driving sector this give guys more spending trillion bit $X and in of or you private that? Priscilla. what are

lending your recently your sustainable -- that with big lending make than sure part associated it's things doing you to that Obviously, of been spending? fair model, of get sort the kind you've been specific that but has of of a opportunities share more

Priscilla Sims Brown

opportunity Thanks what bringing getting do. for really from goal US topic, up. to mathematical The will in it's to for of the We do number stated zero of we to just by and the research achieve that Yes. companies XXXX. comes just take net on it a calculation continuing see external the what

far as beyond in not to but this you very already. We're lot area done a we've know, looking that, expand quite

really of bankers, team business. world, portfolio on country's as -- managers and of certainly but the this who some these We on topics, understand our have underwriters well expert the as one the most engaged

continue it. to do opportunity real more So, we to a see of

Jason Darby

add been going our through up to how model. already I'll closely that. And lines It staffing we've Yes. Alex to

mentioned, through again, -- public public of a I research. think Priscilla the is external as spend through And private. combination

But from space, point that's of least leading does what the the we the banker in the things areas of that space. to investment being are battery Those go view, energy of at Amalgamated efficiency a first, think. probably sort well and where terms electrification space is mainly going in

that been we aligned talked segments. bunch. have have already bankers And along those a We that about

Our us that to position great been expertise win. to area, our sources. will there and to have think referral our to really ability give ability good ability first in a have We have

think opportunity asset particular move as on over And years margins as before, be we these sheet turn a to us and for are about good to we've our we balance the classes go really think talked there's these and classes, going good asset into that by. the and quarters

Priscilla Sims Brown

that the good other to a get mentioned, thing of about by going only well. all the direction. a is, about And third to country I'll third give have step right of -- as a way I us this obviously, to add that in is goal the us is only as IRA should the a But accounts, only

point, make So, to and it Jason's happen. to be is will private required it that public

Alex Twerdahl

it. sort in which the you over off, as can XX shift the mix it Got And the of a impact about well, might you little that coming talk to actually how and alluded we is shift pace that mix bit yields loan of then could see some maybe months. next more multifamily that to expect

Jason Darby

power sort of Yes, and bank's hidden I or the that's the bank's earnings of potential. sheet think a balance unlock

of her an older a sheet. it's As out still balance Priscilla bit pointed comments, in

got we've reasons obviously, its relatively throughout still past. discussed our early the to innings. this start nice modified rest in And approach of a is throughout for in growth the year last year. strategy we've We lending Our it

deals that's and are assets that'll the on residential in margin the the books commercial of sort that the to and those, X% that think come you climate/sustainability the low of spread if some side, again, on in about deals X.XX%, in But ability having the and play our low still earlier multifamily of in price out continue will the off to space range. the

and excited get good next of early that There's into really us pretty we part we see yield and about expansion this, here asset out benefit think probably as to time margin again, for from a spent balance it hope the into we for greatly going year. opportunity to a we're And next that, as preparing out the that lot pretty we sheet we the of year. for is get

Alex Twerdahl

my taking great. Thanks Okay, for questions.

Jason Darby

Alex. Thanks

Operator

Thank you.

is question Janet JPMorgan. next with with Lee Our your from question. proceed Please

Janet Lee

morning. Good

Jason Darby

Janet. Hi

Janet Lee

of of can us. conventional I is Hi. On about comparisons that remix can today that give you rolling-off? sense data see, loans that if yields originate are loans versus provide different that time, lending sustainable us you over there favorable just of you want that part sort for to types a any

Jason Darby

within I I X% opportunities. mean climate think, again, or I the classes assets type before, yield said think, X.XX%, -- that as we're again, and I sustainability seeing, asset the of

multifamily more If commercial range. you in side, look in loans at dated of X% those are range, some still the some of our the X.X%

some there So, spread opportunity Janet. is there, good a find to

But you, had XXXX have sat really specific of up way in all hadn't loan we can of through growth. on And about really again don't growth the XXXX. of age, than I neutral a kind the from just nature balance through book the think you other XXXX the I terms for quote mean, we've sheet. any loan

And that strategy. earnest then pick arrived when our started lending in to and again up Priscilla back developed we we

it we the the types have ready in So, a a to and are roll-off sense of sustainability are that the section. still type of for opportunities books our in you of that bit little assets climate gives

Janet Lee

back And $X.X helpful. sensitivity terms million comment. in to going of NII that's your Okay, your

So, net point side if the benefit the view. income lowers rates, would interest of you sensitivity asset on Fed your from

Jason Darby

going pretty in it's right we're to -- I think mean I now. position so. neutral a

So, the I in benefit immediate to is be term. going the don't think anything significant

over think cost would probably as it. not rate benefit we the the Fed as drop are I goes funds of But time, rapidly going to from absolutely down.

the benefit forward. stream. time. kind adding we've as going right of over so situation we see new good a right? pretty I the protecting decline, And of job far decline rates static should streams our done well-protected to earnings as not earnings So, a benefit should some And bank the theory, in rates But anything now, think We've books. in got

Janet Lee

outflows that guess, deposits the is know non-interest-bearing we're see your XX% to it where scenario say your of down your a you with dip total And to absent to fair deposits? but deposit the trough continue seasonality go I below deposits. nearing and could Okay. political tough for Do it's non-interest-bearing

Jason Darby

predict environment interesting type going it's that always question. hard an of in what's I to That's forward. going suppose scenario, happen rate there's the to

of that at we only churn having on the quarter in mix of kind point view. a looking current decline had a the Just and percentage us from about non-interest-bearing point by

not below end XX% this point again, because of time, it's of a I the the to is of but bit a of think kind impact flow being have a saw a in XX% But We're which XX% year at a reasonable nice this we deposits, landing the political prediction. spot the quarter. by a guess dependent little is really upon lot

And stay continue for to end now, year. for time, could we're longer, drop. over targeting at rates time, that we the ratio higher the if XX% But the right of and same see between XX%

Janet Lee

doing as can question, around term? you your us more helpful. as near for share value? Are the to plan is the it last accretive that over around thoughts book Or you your what's plan All My long give repurchases? That's right. to intermediate buyback

Jason Darby

Yes, really stood with repurchase our out we've authorization. I think always

our a the really, But an capital we our important against value where opportunities is to base. we I it grow of when attractive. price that becomes Janet, is of book tangible accretive calculus. stated Obviously, paired desire to for look feel value think continue function part

to level so think to look a optionality ability there'll growth to capital going really we some and provide continue that think create leverage achieve for can our be the to I repurchase amount of that appropriate base, for between always we a balance bank is this forward. that we ratio So, building

Janet Lee

leverage target for you? the ratio What's

Jason Darby

minimum on by that We middle Number build election season be at want any the but around think next sure leverage deposit for the the to a unnecessary year. will it's of say end next continue see also to year. somewhere is we capital two-fold. a I get that why base nearing. year by like make of level, drag And want I at the the a as us that have appropriate political of X% showing that reason presidential at consolidated X.X% be level and we're into not we to peak the into gathering as to one, type to I'd

Janet Lee

questions. for Got my it. Thanks taking

Priscilla Sims Brown

you. Thank

Operator

Thank you. O'Connell with next proceed Please Our [Operator Instructions] is KBW. with question question. Chris from your

Chris O'Connell

morning. Hey good

Priscilla Sims Brown

morning. Good

Chris O'Connell

Hey.

Just securities wanted the balance and portfolio. sheet start to on the

AFS book And down was maybe of was given more quarter-over-quarter. million the the I little expecting a the short a think about $XX of bit I reduction, duration book.

think I mentioned, about as quarter, there that $XX in outflows month And is of last expected. portfolio per million

reason why quarter? a kept this bit little up larger that any Just was

Jason Darby

put more to question. Great into this a Great Yes. to particular want our quarter. of with that we observation. move have purchases to be Really, for one asset PACE available class. sale bit We in able little flexibility

$XX So that million. as was the was about first purchase that we've ever classified available for it sale,

traditional, to get the but Chris, exclude kind And terminology the trying we're PACE. portfolio, securities traditional make sure really pay actual we on of would that's this probably because the down at, difference, which

had $XX flow the the decline million, look you talked if pretty quarters. previous have excluding did should actually at track close we about to that in So, mark AFS, about traditional a cash we of which

Chris O'Connell

go-forward are it. about the Okay, makes sense. how traditional securities on portfolio? balances the That got how And a basis, PACE versus back And move thinking the much you half year in of those portfolio? the

Jason Darby

still us. efficient residencies improved. the homes It's their rate benefited has they're staying environment, market. the of improvement We given in nice current And kind in attractive in think for I a And opportunities people because think really opposite class has we credit secure, move the also greatly are directions. energy from consolidation a asset PACE bit a highly for returns. is going Yes, to great

access more has for opportunity great. to So us provider flow got is and our origination the

you I'm sorry, the you'll continue the is in the -- in think saw million that quarter, million, possibly somewhere that this same possibly first that same we're in a I -- rate PACE see which type as move quarter of $XX current to in So, at range. of $XX about net

to an looking using that to the any going We're cash that regard particular to flow from to the add come portfolio portfolio, to to position. we're traditional growth. see with non-agency or not the We're going continue be agency But positions in down. fund

is $XX you way the just moment I ago third a I about million terms run good of that the fourth a in quoted think and quarter that a rate. for between to the think

an a PACE. funding our securities. between But to the opposite do again, origination expect side little and on source for traditional continue moving linear bit So, be that primary PACE down we of to run direction and

Chris O'Connell

the it multifamily helpful. That's And book I about the are it. got down, driver talking running far but quarter. as it growth this as biggest Okay, guys you was goes, know

Just break of the maybe decision on segments grow you down is kind various if multifamily. to the where pipeline lending just and loan could

I guys about year you talking this $XXX up what think it's about over time. with or are the so rundown versus million

Jason Darby

Yes.

to I make want a quick clarification. So, maybe

the rundown not and de-risking in mainly think about our talked or specifically I we've portfolio multifamily. is commercial estate the traditional real

think has real of for of or it as we're the nature. office any I that commercial portfolio looking really things at the estate, type exposure

our we to some growth, spot think I the about for and where year. wanted having that multifamily, be that's drivers talked of see The we a one

net million I $XX in or think we did million multifamily. about $XX

we spot is that story a from I the into think of while of really M&T it the brought team that sweet over gets side right back. that good the

its impact continue to decent us on legacy allows the and mission largely we're And well. of originations Chris. to portfolio some able has these. us that strong had, assets also, a are over impact-oriented And returns turn The find to that we've and pretty housing, workforce it for as really for

a bit think our we're really to portfolio of commercial We degree. done a But I reducing portfolio. I to that on we've think large quarter. had what was trying really the side in this that real an the uptick little estate of focus -- And

simply asset talked not office-only the think I out class. we're of looking related totally before, for we We're just exposure. not

find lot deal if -- really type routes, But real own commercial unique come we we if that deposits of and of with. occupied do an of security, opportunity might for given us opportunity lot that it's a our an of find a some to estate union a strong has

in mostly really books. the that's hope your this be there's us to occurred think I I opportunities I for quarter. answered question. that to put able And on what

Chris O'Connell

yields And on, Yes, of origination kind what getting those? putting on you're multifamily you that definitely. are of the

Jason Darby

coming X.XX% now. X% They're to right in

a good tighter, out our in what sustainability C&I obviously, to allocation we're have and deals. alignment higher do deals space, yielding solid a could little So, good that multifamily getting capital trying than we're clip. mission the between It's balance we C&I and

think type be really I to selective making seeing us the putting But on sure what us you're take is and time, opportunity with an our of right basically for we're assets. from

Chris O'Connell

helpful? move I yields I on bit be would you down was Any think And half see factors that it. loan surprised, kind mean, yield guess, of into could Got quarter a just have if to specific a year, back move that? loan the driving And any basis. where I of quarter-over-quarter this you the look

Jason Darby

Yes, It for a not us great surprising continue. to we question. was that little going as that's think something well, is

some events the really occurred portfolio. consumer that there's think within I discrete solar

discount a being accretions of as that it. we which I going yield how something that piece portfolios, predictable think of in quarter, kind first run of see can election to but it's the bit not of the in forward, our another be an you these going accounting on blip That's some first change little lowered the way. terms made we

I that then the the to had, payoffs yielding those really the related related the were little down that consumer was solar charge-offs And or to some a of second higher bit. we've clipped think yield loans the

only we blip as that is in in-quarter not figure from continuing really our as far So, really mind, yield our see a it's erosion an event projections.

on of that asset other we average had portfolio All up classes yield. were our the in

So, in quarter. yields asset with one sense the out the balancing -- work of the the kind another can a for balancing how get effect the or of you

to where I'm And should at erosion. there to continued we're not be in a see we right Chris, but able I manner, now, think more and forward, yield be expansion going expansion controlled yield expecting

Chris O'Connell

down about lastly, of going just -- a got guys look couple charge-offs quarter's were if the from it. Any Okay, feeling any And somewhat continue moving how the downturn past you like It into of looks bit pace. that a as to consumer then outlook credit are forward? solar forward?

relative seeing year, the And office. and as to any or mentioned next payer you're then a including year in know mature just a of what your outlook portfolio over -- half? you the But inside things forward I items, a the just on few risk guys terms office return any update moving as these

Jason Darby

Absolutely.

group multifamily coming that Chris, I now. get X.X% they're So, from I our right your to on on -- my note was yields, and estimates, coming low in did X.XX% a just back a little and it's between

correct wanted So, little a moment just there. to a and myself wider margin. take bit I

think I solar, consumer times quarters for a and couple charge-offs this. -- the about asked in Janet On previous of

bank hold structuring I amount the for see that to governors incur. think what of credit to we the charge-offs is we're these limit the take of that starting is some needs to able put together and and the

recoveries providers. reaching loss with buyback original We're reaching providers. our We're with our provisions

like a line. stability I relative So, there we're decent to that feel spot in charge-off in

flow they're providers the As those been any the in very, working assets early we've cycle. know, and pretty bulk and standards, have very, that the you that credit quite very the original have new adding their it's on performing we're books from of new providers not tight well, any albeit of with

So, not but good feel trend at pretty about declining now. a declare ready forward going I stable point, looks to good saying right this

think out quarter. we the With quarter, office about previous exposure, real down down pointed is from our our million $XX to $XX it's estate regard release portfolio, the last in commercial million from to I in

still I we special in our had assets, well, of collectability which We as real of felt group mention estate good quarter portfolio. special payoff million think commercial classified our really nearly about our about $X we a talked last mention for one

set the is we work this We're mature time. still as about of and paying with maintain contact our with one the mention remaining, accruing and to an good that's regular pretty year. special feel borrower, that's So, next first there them at and status to ability of in classified six in quarter that

in really it's of still LTV then, that those nothing's so on portfolio, low or And changed really LTV. office-only characteristically, about XX% assets again,

and are performing, now. collateral right them So, of good are paying, value all all

So, on a XX relative on through coverage basis risk basis, anyway I think we're good. And allowance our then roughly we are of points those. carrying

an feel point in So, in risk to view, spot all-in relative office we we're real of particular. a estate good commercial from like

Chris O'Connell

had. all helpful. That’s for great. Okay, Thanks questions. That’s my taking I

Jason Darby

you. Thank Chris. Welcome

Operator

closing Chief questions no for the Thank further back Executive at would I over this time. like turn to comments. Officer, are Priscilla floor you. Brown There President and to

Priscilla Sims Brown

great Well, thank forward for to day. you look your thank the and your a you taking those company. you, operator, and We questions and offline for continued wish great questions all interest in

Operator

today's This conference. you. Thank concludes

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

Amalgamated Financial (AMAL) 27 Jul 232023 Q2 Earnings call transcript