GlobeNewswire Inc | Jul 28, 2020 06:25AM EDT

July 28, 2020

NEW YORK, July 28, 2020 (GLOBE NEWSWIRE) -- Amalgamated Bank (Nasdaq: AMAL) (Amalgamated) today announced financial results for the second quarter ended June 30, 2020.

Second Quarter 2020 Highlights

-- Net income of $10.4 million, or $0.33 per diluted share, compared to $9.5 million, or $0.30 per diluted share, for the second quarter of 2019 -- Core net income (non-GAAP)of $10.6 million, or $0.34 per diluted share, compared to $9.2 million, or $0.29 per diluted share, for the second quarter of 2019 -- Deposit growth of $793.8 million, or 62.9% annualized, to approximately $5.9 billion compared to a balance of $5.1 billion on March 31, 2020 -- Loan growth of $123.0 million, or 14.1% annualized, from a balance of $3.5 billion on March 31, 2020 -- PACE assessment growth of $68.1 million, or 106.7% annualized, from a balance of $255.3 million on March 31, 2020 -- Cost of deposits was 0.20%, compared to 0.33% for the first quarter of 2020 and 0.34% for the second quarter of 2019 -- Net interest margin was 3.10%, compared to 3.46% for the first quarter of 2020 and 3.66% for the second quarter of 2019 -- Common Equity Tier 1, Total Risk-Based, and Tier 1 Leverage capital ratios were 12.29%, 13.54%, and 7.69%, respectively, at June 30, 2020 -- Total nonperforming assets were $74.3 million or 1.15% of total assets as of June 30, 2020, compared to $65.6 million or 1.14% of total assets at March 31, 2020 and $73.9 million, or 1.50% of total assets at June 30, 2019

Keith Mestrich, President and Chief Executive Officer of Amalgamated Bank, commented, For almost 100 years, Amalgamated Bank has stood with companies, organizations and individuals that have led the charge to make a more just and sustainable world. Social responsibility is embedded in Amalgamateds history, policies, products, programs, operations and culture. Now more than ever, we need to act boldly in addressing the racism embedded in our society, including the private sector. As a result, and after long conversations both inside and outside of the Bank, we have outlined a series of near-term commitments and actions intended to drive tangible results over time. It will take time to drive meaningful change and we are committed to keeping this at the forefront of our work.

Mr. Mestrich, continued, We have always believed that a Bank can do good in the world while also delivering profitable growth. Our second quarter results not only validate this view but further emphasize the value that we provide to our core customer base as can be seen in our average deposit growth of $606 million during the quarter, or 50.5% on an annualized basis. Additionally, we have nearly doubled our West Coast deposits since acquiring New Resource two years ago. On the asset side of the balance sheet, we continue to grow our PACE portfolio, having effectively added $68 million in PACE securities during the quarter. While the pandemic has negatively affected the cities where we have physical locations, our customer base has a geographic diversity that, along with our conservative underwriting, should benefit the performance of our loan portfolio. Lastly, the pandemic has allowed the Bank to benefit from higher levels of digital adoption, effectively obliging our customers to utilize our technology when the ability for in-person banking was not an option. This successful transition to online banking allowed us to close several of the Banks branches earlier than anticipated. We expect to realize a one-time, non-core expense increase of approximately $6 million in the third quarter as we exit the branches, however, moving forward, beginning in 2021, our non-interest expense is expected to benefit by approximately $4 million annually.

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Reconciliations of non-GAAP financial measures to the most comparable GAAP measure are set forth on the last two pages of the financial information accompanying this press release and may also be found on our website, www.amalgamatedbank.com.

COVID-19 Update

Amalgamateds primary concern during the COVID-19 pandemic is for the health and wellbeing of the Companys employees, customers, and communities. Our employees continue to manage from a work from home environment, and our operations continue to perform well, effectively transitioning many customers to our digital platform, allowing for further consolidation of our branch network.

We have offered payment deferrals as an option for our consumer and commercial borrowers who are experiencing financial stress as a result of COVID-19 impacts. As of the week ending July 25, 2020, we have provided payment deferrals on the following amount of loan balances.

Total Loans Deferrals as % of Exited of: 6/30/20 7/25/20 6/20/20 Portfolio DeferralMultifamily $ 972 $ 178 $ 218 18 % $ 39CRE + Construction 469 111 122 24 % 12C&I 618 39 39 6 % -Residential 1,433 90 122 6 % 33Consumer & Student 188 10 11 6 % 1Total $ 3,680 $ 428 $ 512 12 % $ 84

Results of Operations, Quarter Ended June 30, 2020

Net income for the second quarter of 2020 was $10.4 million, or $0.33 per diluted share, compared to $9.5 million, or $0.30 per diluted share, for the first quarter of 2020 and $11.2 million, or $0.35 per diluted share, for the second quarter of 2019. The $0.8 million decrease in net income for the second quarter of 2020, compared to the second quarter of 2019, was primarily due to a $6.1 million increase in provision for loan losses, partially offset by a $2.6 million increase in net interest income and a $2.3 million increase in non-interest income.

Core net income (non-GAAP) for the second quarter of 2020 was $10.6 million, or $0.34 per diluted share, compared to $9.2 million, or $0.29 per diluted share, for the first quarter of 2020 and $11.6 million, or $0.36 per diluted share, for the second quarter of 2019. Core net income for the second quarter of 2020 excludes $0.5 million of non-interest income gains on the sale of securities, $0.7 million in expense related to the closure of six branches, and other adjustments, including the tax effect of such adjustments.

Net interest income was $44.4 million for the second quarter of 2020, compared to $44.7 million for the first quarter of 2020 and $41.9 million for the second quarter of 2019. The $2.5 million year-over-year increase was primarily attributable to a decrease in interest expense due to a decrease in borrowings and deposit rate paid, and an increase in average securities and loans of $509.5 million and $383.9 million, respectively with lower yields. These impacts were partially offset by an increase in average interest-bearing deposits of $340.4 million.

Net interest margin was 3.10% for the second quarter of 2020, a decrease of 36 basis points from 3.46% in the first quarter of 2020, and a decrease of 56 basis points from 3.66% in the second quarter of 2019. The accretion of the loan mark from the loans we acquired in our New Resource Bank acquisition contributed three basis points to our net interest margin in the second quarter of 2020, compared to four and six basis points in the first quarter of 2020 and the second quarter of 2019, respectively. Prepayment penalties earned through loan income contributed $0.2 million, or two basis points, to our net interest margin in the second quarter of 2020, compared to six and three basis points in the first quarter of 2020 and the second quarter of 2019, respectively.

Provisions for loan loss expense totaled $8.2 million in the second quarter of 2020 compared to $8.6 million in the first quarter of 2020 and $2.1 million for the second quarter of 2019. The provision expense in the second quarter of 2020 was primarily driven by a $3.2 million increase in allowance related to payment deferrals in our loan portfolio, a $2.7 million increase in specific reserves related to one hotel which was downgraded to non-accrual, and $1.5 million related to downgrades to the risk rating of loans, primarily construction loans.

Non-interest income was $8.7 million in the second quarter of 2020 compared to $9.1 million in the first quarter of 2020, and $6.3 million in the second quarter of 2019. The $2.3 million increase in the second quarter of 2020, compared to the like period in 2019, was primarily due to $1.3 million tax credit on an equity investment in a solar project, a $0.5 million gain on the sale of securities compared to a loss of $0.4 million in the comparable quarter of 2019, and a $0.7 million increase in Bank-owned life insurance income due to the receipt of a death benefit payout. These increases were partially offset by a $0.5 million decrease in Trust Department fees primarily related to the decrease in revenue from a real estate fund which is liquidating assets.

Non-interest expense was $31.1 million in the second quarter of 2020 compared to $32.3 million in the first quarter of 2020, and $31.0 million in the second quarter of 2019. Expenses in the second quarter of 2020 were relatively unchanged compared to the same period in 2019. The $1.2 million decrease in the second quarter of 2020 compared to the linked quarter was primarily due to a $1.3 million decrease in branch closure expense in occupancy and depreciation and a $1.0 million decrease in professional fees from external audit, subadvisors and consultants. These decreases were partially offset by an increase in data processing and other expenses of $0.7 million and $0.5 million, respectively.

Our provision for income tax expense was $3.4 million for the second quarter of 2020, compared to a provision of $3.4 million for the first quarter of 2020 and a provision of $3.9 million for the second quarter of 2019. Our effective tax rate for the second quarter of 2020 was 24.9%, compared to 26.3% for the first quarter of 2020 and 25.8% for the second quarter of 2019.

Results of Operations, Six Months Ended June 30, 2020

Net income for the six months ended June 30, 2020 of $19.9 million, or $0.64 per diluted share, compared to $22.0 million, or $0.68 per diluted share, for same period in 2019. The $2.1 million decrease was primarily due to a $12.5 million increase in the provision for loan losses and a $0.9 million increase in non-interest expense, partially offset by a $6.5 million increase in net interest income and a $4.0 million increase in non-interest income.

Core net income (non-GAAP) for the six months ended June 30, 2020 of $19.7 million, or $0.63 per diluted share, compared to $22.3 million or $0.69 per diluted share, for the same period last year. Core net income for the first six months of 2020 exclude branch closure expenses and the gain on sale of a closed branch, gains on the sale of securities, severance, and the tax effect of such adjustments.

Net interest income was $89.1 million for the six months ended June 30, 2020, an increase of $6.5 million from the same period in 2019. This increase was primarily attributable to a decrease in interest expense due to a decrease in borrowings and deposit rate paid, and an increase in average securities and loans of $433.1 million and $292.9 million, respectively with lower yields. These impacts were partially offset by an increase in average interest-bearing deposits of $273.4 million.

Provisions for loan loss expense totaled $16.8 million for the six months ended June 30, 2020, an increase of $12.5 million compared to $4.3 million in the same period of 2019. The provision expense in the six months ended June 30, 2020 was primarily driven by a $6.2 million increase in COVID-19 qualitative factors tied to economic factors and payment deferrals in our loan portfolio, a $6.1 million increase in specific reserves related to indirect C&I and hotel loans, and other factors.

Non-interest income was $17.8 million for the six months ended June 30, 2020 compared to $13.8 million for the same period in 2019. The $4.0 million increase for the six months ended June 30, 2020, compared to the like period in 2019, was primarily due to a $1.4 million gain on the sale of a closed branch included in other non-interest income, a $1.3 million tax credit on an equity investment in a solar project, a $1.0 million gain on the sale of securities, and a $0.7 million increase in Bank-owned life insurance income due to the receipt of a death benefit payout. These increases were partially offset by a $1.2 million decrease in Trust Department fees primarily related to the decrease in revenue from a real estate fund which is liquidating assets.

Non-interest expense was $63.3 million for the six months ended June 30, 2020 compared to $62.5 million for the same period in 2019. The $0.9 million increase in expenses for the six months ended June 30, 2020 compared to the same period in 2019 was primarily due to the $1.3 million increase in branch closure expense in occupancy and depreciation, partially offset by a $0.6 million decrease in professional fees.

We had income tax expense of $6.9 million for the six months ended June 30, 2020, compared to $7.6 million for the same period in 2019. The $0.8 million decrease in income tax expense was primarily due to a decrease in pre-tax earnings of $2.9 million in the six months ended June 30, 2020, compared to the same period in 2019. Our effective tax rate was 25.6% for the six months ended June 30, 2020, compared to 25.8% for the same period in 2019.

Financial Condition

Total assets were $6.5 billion at June 30, 2020, compared to $5.3 billion at December 31, 2019. The increase of $1.1 billion was driven primarily by a $465.4 million increase in cash and cash equivalents, a $428.2 million increase in investment securities, and a $199.2 million increase in loans receivable, net. In the second quarter of 2020, the Bank also made a $2.7 million investment in a solar project with federal tax benefits and added $45.6 million of reverse repurchase agreements backed by Government Guaranteed loans.

Total loans, net at June 30, 2020 were $3.6 billion, an increase of $199.2 million, or 11.7% annualized, compared to December 31, 2019. Loan growth in the first six months of 2020 was primarily driven by a $143.2 million increase in C&I loans including $80.7 million of government guaranteed and Paycheck Protection Program loans, a $69.4 million increase in residential first liens, and a $41.9 million increase in consumer residential solar loans. These increases were partially offset by a $19.1 million decrease in commercial real estate and multifamily loans.

Deposits at June 30, 2020 were $5.9 billion, an increase of $1.2 billion, or 53.3% annualized, as compared to $4.6 billion as of December 31, 2019. Deposits held by politically active customers, such as campaigns, PACs, advocacy-based organizations, and state and national party committees were $1.1 billion as of June 30, 2020, an increase of $522.1 million compared to $578.6 million as of December 31, 2019. Noninterest-bearing deposits represent 49.2% of average deposits and 52.6% of ending deposits for the six months ended June 30, 2020, contributing to an average cost of deposits of 0.20% in the second quarter of 2020, a 13 basis point decrease from the linked quarter.

Nonperforming assets totaled $74.3 million, or 1.15% of period-end total assets at June 30, 2020, an increase of $7.6 million, compared with $66.7 million, or 1.25% of period end total assets at December 31, 2019. The increase in nonperforming assets at June 30, 2020 compared to the year-ended December 31, 2019 was primarily driven by a $14.7 million increase in non-accruing loans, including a $10.2 million hotel loan.

The allowance for loan losses increased $16.2 million to $50.0 million at June 30, 2020 from $33.8 million at December 31, 2019, primarily due to increases in the specific reserves for indirect C&I and hotel loans and an increase in allowance related to the coronavirus pandemic. At June 30, 2020, we had $70.3 million of impaired loans for which a specific allowance of $14.5 million was made, compared to $65.4 million of impaired loans at December 31, 2019 for which a specific allowance of $7.5 million was made. The ratio of allowance to total loans was 1.36% at June 30, 2020 and 0.98% at December 31, 2019.

Capital

As of June 30, 2020, our Common Equity Tier 1 Capital Ratio was 12.29%, Total Risk-Based Capital Ratio was 13.54%, and Tier-1 Leverage Capital Ratio was 7.69%, compared to 13.01%, 14.01% and 8.90%, respectively, as of December31, 2019. Stockholders equity at June 30, 2020 was $503.7 million, compared to $490.5 million at December 31, 2019. The increase in stockholders equity was driven by $19.9 million of net income and a $4.0 million increase in accumulated other comprehensive income due to the mark to market on our securities portfolio, offset by a $7.0 million decrease due to share repurchases and a $5.0 million decrease due to dividends to shareholders.

Our tangible book value per share was $15.61 as of June 30, 2020 compared to $14.93 as of December31, 2019.

Conference CallAs previously announced, Amalgamated Bank will host a conference call to discuss its second quarter 2020 results today, July 28, 2020 at 10:00am (Eastern Time). The conference call can be accessed by dialing 1-877-407-9716 (domestic) or 1-201-493-6779 (international) and asking for the Amalgamated Bank Second Quarter 2020 Earnings Call. A telephonic replay will be available approximately two hours after the call and can be accessed by dialing 1-844-512-2921, or for international callers 1-412-317-6671 and providing the access code 13706036. The telephonic replay will be available until 11:59 pm (Eastern Time) on August 4, 2020.

Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of our website at http://ir.amalgamatedbank.com/. The online replay will remain available for a limited time beginning immediately following the call.

The presentation materials for the call can be accessed on the investor relations section of our website at http://ir.amalgamatedbank.com/.

About Amalgamated Bank

Amalgamated Bank is a New York-based full-service commercial bank and a chartered trust company with a combined network of 11 branches in New York City, Washington D.C., and San Francisco. Amalgamated was formed in 1923 as Amalgamated Bank of New York by the Amalgamated Clothing Workers of America, one of the country's oldest labor unions. Amalgamated provides commercial banking and trust services nationally and offers a full range of products and services to both commercial and retail customers. Amalgamated is a proud member of the Global Alliance for Banking on Values and is a certified B Corporation. As of June 30, 2020, our total assets were $6.5 billion, total net loans were $3.6 billion, and total deposits were $5.9 billion. Additionally, as of June 30, 2020, the trust business held $32.0 billion in assets under custody and $13.3 billion in assets under management.

Non-GAAP Financial Measures

This release (and the accompanying financial information and tables) refers to certain non-GAAP financial measures including, without limitation, Core operating revenue, Core non-interest expense, Core net income, Tangible common equity, Core return on average assets, Core return on average tangible common equity, and Core efficiency ratio.

Our management utilizes this information to compare our operating performance for 2020 versus certain periods in 2019 and to prepare internal projections. We believe these non-GAAP financial measures facilitate making period-to-period comparisons and are meaningful indications of our operating performance. In addition, because intangible assets such as goodwill and other discrete items unrelated to our core business, which are excluded, vary extensively from company to company, we believe that the presentation of this information allows investors to more easily compare our results to those of other companies.

The presentation of non-GAAP financial information, however, is not intended to be considered in isolation or as a substitute for GAAP financial measures. We strongly encourage readers to review the GAAP financial measures included in this release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this release with other companies non-GAAP financial measures having the same or similar names. Reconciliations of non-GAAP financial disclosures to comparable GAAP measures found in this release are set forth in the final pages of this release and also may be viewed on our website, amalgamatedbank.com.

Terminology

Certain terms used in this release are defined as follows:

Core operating revenue is defined as total net interest income plus non-interest income excluding gains and losses on sales of securities and gains on the sale of owned property. We believe the most directly comparable GAAP financial measure is the total of net interest income and non-interest income.

Core non-interest expense is defined as total non-interest expense excluding costs related to branch closures and restructuring/severance costs. We believe the most directly comparable GAAP financial measure is total non-interest expense.

Core net income is defined as net income after tax excluding gains and losses on sales of securities, gains on the sale of owned property, costs related to branch closures, restructuring/severance costs, and taxes on notable pre-tax items. We believe the most directly comparable GAAP financial measure is net income.

Tangible common equity and Tangible book value and are defined as stockholders equity excluding, as applicable, minority interests, preferred stock, goodwill and core deposit intangibles. We believe that the most directly comparable GAAP financial measure is total stockholders equity.

Core return on average assets is defined as Core net income divided by average total assets. We believe the most directly comparable performance ratio derived from GAAP financial measures is return on average assets calculated by dividing net income by average total assets.

Core return on average tangible common equity is defined as Core net income divided by Average tangible common equity. We believe the most directly comparable performance ratio derived from GAAP financial measures is return on average equity calculated by dividing net income by average total stockholders equity.

Core efficiency ratio is defined as Core non-interest expense divided by Core operating revenue. We believe the most directly comparable performance ratio derived from GAAP financial measures is an efficiency ratio calculated by dividing total non-interest expense by the sum of net interest income and total non-interest income.

Forward-Looking Statements

Statements included in this release that are not historical in nature are intended to be, and are hereby identified as, forward-looking statements within the meaning of the Private Securities Litigation Reform Act, Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally can be identified through the use of forward-looking terminology such as may, will, anticipate, should, would, believe, contemplate, expect, estimate, continue, may and intend, as well as other similar words and expressions of the future, and in this press release include statements about expected performance of our loan portfolio and payment deferrals, and the expected charges and anticipated future expense savings resulting from branch closures. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors, any or all of which could cause actual results to differ materially from the results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: (i) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses; (ii) continuation of the historically low short-term interest rate environment; (iii) the inability of Amalgamated Bank to maintain the historical growth rate of its loan portfolio; (iv) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (v) effectiveness of Amalgamated Banks asset management activities in improving, resolving or liquidating lower-quality assets; (vi) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on Amalgamated Banks results, including as a result of compression to net interest margin; (vii) greater than anticipated adverse conditions in the national or local economies including in Amalgamated Banks core markets, including, but not limited to, the negative impacts and disruptions resulting from the recent outbreak of the novel coronavirus, or COVID-19, which may have an adverse impact on our business, operations and performance, and could have a negative impact on our credit portfolio, share price, borrowers, and on the economy as a whole, both domestically and globally (viii) fluctuations or unanticipated changes in interest rates on loans or deposits or that affect the yield curve; (ix) the results of regulatory examinations; (x) potential deterioration in real estate values; (xi) changes in legislation, regulation, policies, or administrative practices, whether by judicial, governmental, or legislative action, including, but not limited to, the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act; and (xi) the risk that the preliminary financial information reported herein and our current preliminary analysis will be different when our review is finalized. Additional factors which could affect the forward-looking statements can be found in Amalgamateds Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the FDIC and available on the FDIC's website at https://efr.fdic.gov/fcxweb/efr/index.html. Amalgamated Bank disclaims any obligation to update or revise any forward-looking statements contained in this release, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by law.

Media Contact:Kaye VervilleThe Levinson Groupkaye@mollylevinson.com202-244-1785

Investor ContactJamie LillisSolebury Troutshareholderrelations@amalgamatedbank.com800-895-4172

Consolidated Statements of Income (Unaudited)(Dollars in thousands, except for per share amount)

Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2020 2020 2019 2020 2019 INTEREST AND DIVIDEND INCOMELoans $ 35,225 $ 35,612 $ 35,559 $ 70,837 $ 70,855 Securities 11,746 12,554 10,524 24,299 20,398 Federal HomeLoan Bank of New 66 69 191 135 501 York stockInterest-bearingdeposits in 83 396 254 479 548 banks Total interestand dividend 47,120 48,631 46,528 95,750 92,302 income INTEREST EXPENSE Deposits 2,681 3,915 3,499 6,596 6,444 Borrowed funds - 27 1,173 27 3,229 Total interest 2,681 3,942 4,672 6,623 9,673 expense NET INTEREST 44,439 44,689 41,856 89,127 82,629 INCOMEProvision for(recovery of) 8,221 8,588 2,127 16,808 4,312 loan losses Net interestincome after 36,218 36,101 39,729 72,319 78,317 provision forloan losses NON-INTEREST INCOMETrust Department 3,980 4,085 4,508 8,066 9,229 feesService chargeson deposit 1,850 2,411 2,068 4,261 3,939 accountsBank-owned life 1,111 384 408 1,495 828 insuranceGain (loss) onsale ofinvestment 486 499 (377 ) 985 (85 )securitiesavailable forsale, netGain (loss) onother real (283 ) (23 ) (315 ) (306 ) (564 )estate owned,netEquity method 1,289 - - 1,289 - investmentsOther 238 1,762 57 1,999 419 Totalnon-interest 8,671 9,118 6,349 17,789 13,766 income NON-INTEREST EXPENSECompensation andemployee 17,334 17,458 16,992 34,792 34,422 benefits, netOccupancy and 4,241 5,506 4,145 9,747 8,417 depreciationProfessional 1,988 2,983 2,401 4,971 5,566 feesData processing 2,977 2,264 2,729 5,241 5,478 Officemaintenance and 818 856 830 1,675 1,716 depreciationAmortization ofintangible 342 342 298 685 687 assetsAdvertising and 672 667 692 1,339 1,313 promotionOther 2,696 2,194 2,915 4,889 4,851 Totalnon-interest 31,068 32,270 31,002 63,339 62,450 expense Income before 13,821 12,949 15,076 26,769 29,633 income taxesIncome taxexpense 3,447 3,404 3,891 6,850 7,634 (benefit) Net income 10,374 9,545 11,185 19,919 21,999 Net incomeattributable to - - - - - noncontrollinginterests Net incomeattributable to $ 10,374 $ 9,545 $ 11,185 $ 19,919 $ 21,999 Amalgamated Bankand subsidiaries Earnings percommon share - $ 0.33 $ 0.30 $ 0.35 $ 0.64 $ 0.69 basic Earnings percommon share - $ 0.33 $ 0.30 $ 0.35 $ 0.64 $ 0.68 diluted

Consolidated Statements of Financial Condition (Unaudited)(Dollars in thousands)

June 30, December 31, 2020 2019 Assets (Unaudited) Cash and due from banks $ 9,209 $ 7,596 Interest-bearing deposits in banks 578,752 114,942 Total cash and cash equivalents 587,961 122,538 Securities: Available for sale, at fair value (amortized cost 1,575,175 1,224,770 of $1,562,033 and $1,217,087, respectively)Held-to-maturity (fair value of $382,830 and 370,498 292,704 $292,837, respectively) Loans receivable, net of deferred loan 3,687,992 3,472,614 origination costs (fees)Allowance for loan losses (50,010 ) (33,847 )Loans receivable, net 3,637,982 3,438,767 Resell agreements 45,653 - Accrued interest and dividends receivable 21,836 19,088 Premises and equipment, net 16,180 17,778 Bank-owned life insurance 80,694 80,714 Right-of-use lease asset 42,758 47,299 Deferred tax asset 34,251 31,441 Goodwill and other intangible assets 18,980 19,665 Other assets 38,376 30,574 Total assets $ 6,470,344 $ 5,325,338 Liabilities Deposits $ 5,870,319 $ 4,640,982 Borrowed funds - 75,000 Operating leases 56,842 62,404 Other liabilities 39,481 56,408 Total liabilities 5,966,642 4,834,794 Commitments and contingencies - - Stockholders? equity Common stock, par value $.01 per share (70,000,000 shares authorized; 31,049,525 and31,523,442 shares issued and outstanding, 310 315 respectively)Additional paid-in capital 299,997 305,738 Retained earnings 195,991 181,132 Accumulated other comprehensive income (loss), 7,270 3,225 net of income taxesTotal Amalgamated Bank stockholders' equity 503,568 490,410 Noncontrolling interests 134 134 Total stockholders' equity 503,702 490,544 Total liabilities and stockholders? equity $ 6,470,344 $ 5,325,338

Select Financial Data

As of and for the Three As of and for the Six Months Ended Months Ended June 30, March 31, June 30, June 30, 2020 2020 2019 2020 2019 SelectedFinancial Ratios andOther DataEarnings per shareBasic $ 0.33 $ 0.30 $ 0.35 $ 0.64 $ 0.69 Diluted 0.33 0.30 0.35 0.64 0.68 CoreEarnings per share(non-GAAP)Basic $ 0.34 $ 0.29 $ 0.36 $ 0.63 $ 0.70 Diluted 0.34 0.29 0.36 0.63 0.69 Book valueper common 16.22 15.26 14.89 16.22 14.89 share(excludingminority interest)Tangiblebook value 15.61 14.64 14.25 15.61 14.25 per share(non-GAAP)Commonshares 31,049,525 31,000,299 31,886,669 31,049,525 31,886,669 outstandingWeightedaverage 31,022,517 31,410,848 31,824,930 31,216,683 31,798,405 commonsharesoutstanding, basicWeightedaverage 31,034,666 31,805,901 32,237,116 31,345,192 32,279,342 commonsharesoutstanding, diluted

Select Financial Data

As of and for the Three As of and for the Six Months Ended Months Ended June March June June 30, 30, 31, 30, 2020 2020 2019 2020 2019 Selected Performance Metrics:Return on average assets 0.69 % 0.71 % 0.92 % 0.70 % 0.92 %Core return on average 0.70 % 0.68 % 0.96 % 0.69 % 0.93 %assets (non-GAAP)Return on average equity 8.56 % 7.65 % 9.65 % 8.10 % 9.73 %Core return on averagetangible common equity 9.07 % 7.66 % 10.45 % 8.35 % 10.32 %(non-GAAP)Loan yield 3.97 % 4.13 % 4.42 % 4.05 % 4.43 %Securities yield 2.59 % 3.29 % 3.34 % 2.91 % 3.35 %Deposit cost 0.20 % 0.33 % 0.34 % 0.26 % 0.32 %Net interest margin 3.10 % 3.46 % 3.66 % 3.27 % 3.66 %Efficiency ratio ^(1) 58.50 % 59.97 % 64.31 % 59.24 % 64.79 %Core efficiency ratio 57.68 % 59.44 % 63.50 % 58.56 % 64.45 %(non-GAAP) ^(1) Asset Quality Ratios: Nonaccrual loans to total 1.24 % 0.96 % 0.49 % 1.24 % 0.49 %loansNonperforming assets to 1.15 % 1.14 % 1.50 % 1.15 % 1.50 %total assetsAllowance for loan losses 109 % 125 % 209 % 109 % 209 %to nonaccrual loansAllowance for loan losses 1.36 % 1.19 % 1.01 % 1.36 % 1.01 %to total loansNet charge-offs(recoveries) to average 0.06 % 0.01 % -0.01 % 0.04 % 0.49 %loans Capital Ratios: Tier 1 leverage capital 7.69 % 8.47 % 9.04 % 7.69 % 9.04 %ratioTier 1 risk-based capital 12.29 % 12.74 % 13.57 % 12.29 % 13.57 %ratioTotal risk-based capital 13.54 % 13.96 % 14.67 % 13.54 % 14.67 %ratioCommon equity tier 1 12.29 % 12.74 % 13.57 % 12.29 % 13.57 %capital ratio (1) Efficiency ratio is calculated by dividing total non-interest expense bythe sum of net interest income and total non-interest income

Loan and Held-to-Maturity Securities Portfolio Composition

(In thousands) At June 30, 2020 At March 31, 2020 At June 30, 2019 % of % of % of Amount total Amount total Amount total loans loans loansCommercial portfolio:Commercial and $ 617,579 16.8 % $ 532,351 15.0 % $ 424,319 12.8 %industrialMultifamily 972,129 26.4 % 936,350 26.4 % 925,747 27.9 %Commercial real 404,064 11.0 % 408,766 11.5 % 453,393 13.7 %estateConstruction and 65,259 1.8 % 65,706 1.9 % 58,696 1.7 %land developmentTotal commercial 2,059,031 56.0 % 1,943,173 54.8 % 1,862,155 56.1 %portfolio Retail portfolio:Residential real 1,432,645 38.9 % 1,416,796 39.9 % 1,286,662 38.8 %estate lendingConsumer and 187,980 5.1 % 189,152 5.3 % 168,201 5.1 %otherTotal retail 1,620,625 44.0 % 1,605,948 45.2 % 1,454,863 43.9 %Total loans 3,679,656 100.0 % 3,549,121 100.0 % 3,317,018 100.0 % Net deferredloan origination 8,336 8,214 7,562 fees (costs)Allowance for (50,010 ) (42,348 ) (33,630 ) loan lossesTotal loans, net $ 3,637,982 $ 3,514,987 $ 3,290,950 Held-to-maturitysecurities portfolio:PACE assessments $ 323,391 87.3 % $ 255,298 89.2 % $ - 0.0 %Other securities 47,107 12.7 % 30,953 10.8 % 19,336 100.0 %Totalheld-to-maturity $ 370,498 100.0 % $ 286,251 100.0 % $ 19,336 100.0 %securities

Net Interest Income Analysis

Three Months Ended Three Months Ended Three Months Ended June 30, 2020 March 31, 2020 June 30, 2019 Average Income / Yield Average Income / Yield Average Income / Yield(In thousands) Balance Expense / Balance Expense / Balance Expense / Rate Rate Rate Interest earning assets:Interest-bearingdeposits in $ 364,932 $ 83 0.09 % $ 185,281 $ 396 0.86 % $ 70,442 $ 254 1.45 %banksSecurities and 1,834,892 11,812 2.59 % 1,544,848 12,623 3.29 % 1,287,520 10,715 3.34 %FHLB stockTotal loans, net 3,571,160 35,225 3.97 % 3,464,438 35,612 4.13 % 3,225,129 35,559 4.42 %^(1)Total interest 5,770,984 47,120 3.28 % 5,194,567 48,631 3.77 % 4,583,091 46,528 4.07 %earning assetsNon-interest earning assets:Cash and due 74,877 9,539 6,838 from banksOther assets 224,531 222,757 264,046 Total assets $ 6,070,392 $ 5,426,863 $ 4,853,975 Interest bearing liabilities:Savings, NOW andmoney market $ 2,313,772 $ 1,755 0.31 % $ 2,143,247 $ 2,737 0.51 % $ 1,857,715 $ 1,962 0.42 %depositsTime deposits 370,969 926 1.00 % 381,053 1,178 1.24 % 486,652 1,537 1.27 %Total deposits 2,684,741 2,681 0.40 % 2,524,300 3,915 0.62 % 2,344,367 3,499 0.60 %Federal HomeLoan Bank - - 0.00 % 6,374 27 1.70 % 190,501 1,166 2.46 %advancesOther Borrowings - - 0.00 % - - 0.00 % 1,099 7 2.56 %Total interestbearing 2,684,741 2,681 0.40 % 2,530,674 3,942 0.63 % 2,535,967 4,672 0.74 %liabilitiesNon-interestbearing liabilities:Demand andtransaction 2,746,529 2,300,999 1,762,426 depositsOther 151,591 93,309 90,680 liabilitiesTotal 5,582,861 4,924,982 4,389,073 liabilitiesStockholders' 487,531 501,881 464,902 equityTotalliabilities and $ 6,070,392 $ 5,426,863 $ 4,853,975 stockholders'equity Net interestincome / $ 44,439 2.88 % $ 44,689 3.14 % $ 41,856 3.33 %interest ratespreadNet interestearning assets / $ 3,086,243 3.10 % $ 2,663,893 3.46 % $ 2,047,124 3.66 %net interestmargin Total Cost of 0.20 % 0.33 % 0.34 %Deposits ^(1) Amounts are net of deferred origination costs / (fees) and the allowancefor loan losses* Net interest margin includes prepayment penalty income in 2Q20, 1Q20 and 2Q19of $239,190, $761,568 and $320,633 respectively



Net Interest Income Analysis

Six Months Ended Six Months Ended June 30, 2020 June 30, 2019(In thousands) Average Balance Income / Yield Average Balance Income / Yield Expense / Rate Expense / Rate Interest earning assets:Interest-bearingdeposits in $ 275,107 $ 479 0.35 % $ 71,861 $ 548 1.54 %banksSecurities and 1,689,870 24,434 2.91 % 1,256,781 20,899 3.35 %FHLB stockTotal loans, net 3,517,799 70,837 4.05 % 3,224,868 70,855 4.43 %^(1)Total interest 5,482,776 95,750 3.51 % 4,553,510 92,302 4.09 %earning assetsNon-interest earning assets:Cash and due 42,208 8,404 from banksOther assets 223,643 259,194 Total assets $ 5,748,627 $ 4,821,108 Interest bearing liabilities:Savings, NOW andmoney market $ 2,228,509 $ 4,492 0.41 % $ 1,867,478 $ 3,829 0.41 %depositsTime deposits 376,011 2,104 1.13 % 463,668 2,615 1.14 %Total deposits 2,604,520 6,596 0.51 % 2,331,146 6,444 0.56 %Federal HomeLoan Bank 3,187 27 1.70 % 259,108 3,213 2.50 %advancesOther Borrowings - - 0.00 % 1,215 16 2.66 %Total interestbearing 2,607,707 6,623 0.51 % 2,591,469 9,673 0.75 %liabilitiesNon-interestbearing liabilities:Demand andtransaction 2,523,764 1,680,984 depositsOther 122,450 92,921 liabilitiesTotal 5,253,921 4,365,374 liabilitiesStockholders' 494,706 455,734 equityTotalliabilities and $ 5,748,627 $ 4,821,108 stockholders'equity Net interestincome / $ 89,127 3.00 % $ 82,629 3.33 %interest ratespreadNet interestearning assets / $ 2,875,069 3.27 % $ 1,962,041 3.66 %net interestmargin Total Cost of 0.26 % 0.32 %Deposits ^(1) Amounts are net of deferred origination costs / (fees) and the allowancefor loan losses* Net interest margin includes prepayment penalty income in Jun YTD 2020 andJun YTD 2019 of $1,000,758 and $626,038 respectively



Deposit Portfolio Composition

(in thousands) June 30, 2020 March 31, 2020 June 30, 2019 Noninterest-bearing $ 3,089,004 $ 2,423,760 $ 1,908,741 demand deposit accountsNOW accounts 198,653 234,268 216,834 Money market deposit 1,876,540 1,708,818 1,239,387 accountsSavings accounts 342,477 329,583 340,258 Time deposits 363,645 380,128 411,250 Brokered CD - - 19,991 Total deposits $ 5,870,319 $ 5,076,557 $ 4,136,462 * Total deposit balance as of June 30, 2020 excludes off balance sheet InsuredCash Sweep (ICS) balance of $90.9 million

Three Months Ended Three Months Ended Three Months Ended June 30, 2020 March 31, 2020 June 30, 2019 Average Average Average Average Average Average(In thousands) Balance Rate Balance Rate Balance Rate Paid Paid Paid Noninterest-bearingdemand deposit $ 2,746,529 0.00 % $ 2,300,999 0.00 % $ 1,762,426 0.00 %accountsNOW accounts 237,279 0.17 % 231,707 0.40 % 220,516 0.47 %Money market 1,741,466 0.36 % 1,587,242 0.60 % 1,298,033 0.41 %deposit accountsSavings accounts 335,027 0.12 % 324,298 0.18 % 339,165 0.22 %Time deposits 370,969 0.99 % 381,053 1.23 % 424,848 1.25 %Brokered CD - 0.00 % - 0.00 % 61,804 2.45 %Total deposits $ 5,431,270 0.20 % $ 4,825,299 0.33 % $ 4,106,792 0.34 %

Asset Quality

June 30, March 31, June 30,(In thousands) 2020 2020 2019 Loans 90 days past due and $ - $ 3,856 $ 13,939 accruingNonaccrual loans excluding heldfor sale loans and restructured 18,901 7,537 9,893 loansNonaccrual loans held for sale - - - Troubled debt restructured loans - 26,776 26,435 6,221 nonaccrualTroubled debt restructured loans - 28,031 26,968 43,277 accruingOther real estate owned 503 786 526 Impaired securities 46 64 88 Total nonperforming assets $ 74,257 $ 65,646 $ 73,944 Nonaccrual loans: Commercial and industrial $ 15,742 $ 15,949 $ 4,180 Multifamily - - - Commercial real estate 13,768 3,634 3,832 Construction and land development 3,652 3,652 - Total commercial portfolio 33,162 23,235 8,012 Residential 1-4 family 1^st 11,106 9,173 6,330 mortgagesResidential 1-4 family 2^nd 729 884 1,267 mortgagesConsumer and other 680 680 505 Total retail portfolio 12,515 10,737 8,102 Total nonaccrual loans $ 45,677 $ 33,972 $ 16,114 Nonperforming assets to total 1.15 % 1.14 % 1.50 %assetsNonaccrual assets to total assets 0.71 % 0.60 % 0.34 %Nonaccrual loans to total loans 1.24 % 0.96 % 0.49 %Allowance for loan losses to 109 % 125 % 209 %nonaccrual loans

Reconciliation of GAAP to Non-GAAP Financial MeasuresThe information provided below presents a reconciliation of each of our non-GAAP financial measures to the most directly comparable GAAP financial measure.

As of and for the Three As of and for the Six Months Ended Months Ended(in June 30, March 31, June 30, June 30,thousands) 2020 2020 2019 2020 2019 Coreoperating revenueNet interest $ 44,439 $ 44,689 $ 41,856 $ 89,127 $ 82,629 income (GAAP)Non-interest 8,671 9,118 6,349 17,789 13,766 income (GAAP)Less: Branchsale loss 34 (1,428 ) - (1,394 ) - (gain)^(1)Less:Securities (486 ) (499 ) 377 (985 ) 85 loss (gain)Coreoperating $ 52,658 $ 51,880 $ 48,582 $ 104,537 $ 96,480 revenue(non-GAAP) Corenon-interest expensesNon-interestexpense $ 31,068 $ 32,270 $ 31,002 $ 63,339 $ 62,450 (GAAP)Less: Branchclosure (695 ) (1,432 ) - (2,051 ) - expense^(2)Less:Severance ^ - - (154 ) (76 ) (271 )(3)Corenon-interest $ 30,373 $ 30,838 $ 30,848 $ 61,212 $ 62,179 expense(non-GAAP) Core net incomeNet Income $ 10,374 $ 9,545 $ 11,185 $ 19,919 $ 21,999 (GAAP)Less: Branchsale (gain)^ 34 (1,428 ) - (1,394 ) - (1)Less:Securities (486 ) (499 ) 377 (985 ) 85 loss (gain)Add: Branchclosure 695 1,432 - 2,051 - expense^(2)Add:Severance ^ - - 154 76 271 (3)Less: Tax on (61 ) 130 (137 ) 65 (92 )notable itemsCore netincome $ 10,556 $ 9,180 $ 11,579 $ 19,731 $ 22,264 (non-GAAP) Tangible common equityStockholders' $ 503,702 $ 473,269 $ 474,944 $ 503,702 $ 474,944 Equity (GAAP)Less:Minority (134 ) (134 ) (134 ) (134 ) (134 )Interest(GAAP)Less:Goodwill (12,936 ) (12,936 ) (12,936 ) (12,936 ) (12,936 )(GAAP)Less: Coredeposit (6,043 ) (6,386 ) (7,415 ) (6,043 ) (7,415 )intangible(GAAP)Tangiblecommon equity $ 484,589 $ 453,813 $ 454,458 $ 484,589 $ 454,458 (non-GAAP) Averagetangible common equityAverageStockholders' $ 487,531 $ 501,881 $ 464,902 $ 494,706 $ 455,734 Equity (GAAP)Less:Minority (134 ) (134 ) (134 ) (134 ) (134 )Interest(GAAP)Less:Goodwill (12,936 ) (12,936 ) (12,936 ) (12,936 ) (12,936 )(GAAP)Less: Coredeposit (6,210 ) (6,552 ) (7,575 ) (6,381 ) (7,738 )intangible(GAAP)Averagetangible $ 468,250 $ 482,258 $ 444,256 $ 475,254 $ 434,925 common equity(non-GAAP) Core returnon average assetsCore netincome 10,556 9,180 11,579 19,731 22,264 (numerator)(non-GAAP)Divided:Total averageassets 6,070,392 5,426,863 4,853,975 5,748,627 4,821,107 (denominator)(GAAP)Core returnon average 0.70 % 0.68 % 0.96 % 0.69 % 0.93 %assets(non-GAAP) Core returnon average tangiblecommon equityCore netincome 10,556 9,180 11,579 19,731 22,264 (numerator)(non-GAAP)Divided:Averagetangible 468,250 482,258 444,256 475,254 434,925 common equity(denominator)(non-GAAP)Core returnon averagetangible 9.07 % 7.66 % 10.45 % 8.35 % 10.32 %common equity(non-GAAP) Coreefficiency ratioCorenon-interestexpense 30,373 30,838 30,848 61,212 62,179 (numerator)(non-GAAP)Coreoperatingrevenue 52,658 51,880 48,582 104,537 96,480 (denominator)(non-GAAP)Coreefficiency 57.68 % 59.44 % 63.50 % 58.56 % 64.45 %ratio(non-GAAP) (1) Fixed Asset branch sale in March 2020(2) Occupancy and other expense related to closure of branches during ourbranch rationalization(3) Salary and COBRA reimbursement expense for positions eliminated