GlobeNewswire Inc | Oct 28, 2021 06:25AM EDT

October 28, 2021

NEW YORK, Oct. 28, 2021 (GLOBE NEWSWIRE) -- Amalgamated Financial Corp. (the Company or Amalgamated) (Nasdaq: AMAL), the holding company for Amalgamated Bank (the Bank), today announced financial results for the third quarter ended September30, 20211.

Third Quarter 2021 Highlights

-- Net income of $14.4 million, or $0.46 per diluted share, compared to $10.4 million, or $0.33 per diluted share, for the second quarter of 2021 and $12.5 million, or $0.40 per diluted share for the third quarter of 2020. -- Deposits increased $314.5 million to $6.2 billion on a linked quarter basis. -- Political deposits remained strong and stable at $1.0 billion as of September30, 2021, with $223.5 million growth on a linked quarter basis. -- Cost of deposits was 0.09%, down five basis points from the third quarter of 2020. -- PACE assessments grew $81.4 million to $627.2 million on a linked quarter basis, and grew $259.8 million on a year over year basis. Current quarter growth included $69.0 million of Commercial PACE assessments. -- Net loans including PACE assessments grew by $31.4 million, or 0.85%, on a linked quarter basis. Excluding the impact of our residential 1-4 first mortgage portfolio runoff, the growth was $83.7 million, or 3.20%. -- Net interest margin was 2.70%, compared to 2.75% for the second quarter of 2021 and 2.88% for the third quarter of 2020. -- Regulatory capital remains above bank well capitalized standards. -- Nonperforming assets improved to $67.8 million or 0.99% of total assets as of September30, 2021, compared to $71.0 million or 1.08% of total assets on a linked quarter basis. -- Announced plan to acquire Amalgamated Bank of Chicago (ABOC) in an all-cash transaction that will bring Amalgamateds asset size to greater than $7.6 billion, building on the largest socially responsible, mission-oriented bank in the United States.

Priscilla Sims Brown, President and Chief Executive Officer, commented, I am pleased with our third quarter results which position us to achieve our revised full year guidance as we delivered strong results across the dimensions of revenue, profitability, credit quality, and foundational growth drivers such as PACE assessments and deposits. I am also encouraged that we can generate sustained and profitable growth as we begin the implementation of our strategic initiatives. During the third quarter, we grew PACE assessments 15% to $627 million as compared to the second quarter of 2021, resulting in net growth in our combined lending and PACE portfolio. Importantly, the headwinds that we have experienced in our loan portfolio continued to diminish through the third quarter positioning the Bank for a return to organic loan growth in the year ahead. Our deposit franchise also continued its growth trajectory, gaining 5.3% from the previous quarter while our cost of deposits declined to 9 basis points, one of the lowest in the industry. Contributing to our low cost of funds was the strong growth in political deposits which increased by almost $250 million to $1 billion on a linked quarter basis.

Brown added, We have very recently launched a series of growth initiatives designed to fuel our loan and trust growth while staying true to our mission and solidifying our position as Americas Socially Responsible Bank. Our initiatives are focused on four pillars including the building of our business through our mission, improving our focus on and deepening insights of our core customers, developing and expanding our product expertise to grow our lending platform and trust businesses, and improving our data and technology. Also central to our growth initiatives is a disciplined M&A strategy where our recently announced acquisition of ABOC will allow us to expand into the third largest MSA in the U.S. as we offer larger-scale loans to a client base that has historically proven a need for them, cross-market our services to ABOCs customer base, and be able to reach new, untapped business in the greater Chicago and Midwestern markets.

___________________1 Effective March 1, 2021, the Company acquired all of the outstanding stock of the Bank in a reorganization effected under New York law and in accordance with the terms of a Plan of Acquisition dated September 4, 2020. In this release, unless the context indicates otherwise, references to we, us, and our refer to the Company and the Bank. However, if the discussion relates to a period before the effective date, the terms refer only to the Bank.

Results of Operations, Quarter Ended September30, 2021

Net income for the third quarter of 2021 was $14.4 million, or $0.46 per diluted share, compared to $10.4 million, or $0.33 per diluted share, for the second quarter of 2021 and $12.5 million, or $0.40 per diluted share, for the third quarter of 2020. The $4.0 million increase for the third quarter of 2021 was primarily due to a $2.3 million release of provision for loan losses compared to a $1.7 million provision expense in the preceding quarter, as well as $1.4 million increase in net interest income and a $1.4 million increase in non-interest income. These increases were partially offset by a $1.6 million increase in non-interest expense and a $1.1 million increase in income tax expense.

Core net income (non-GAAP)2 for the third quarter of 2021 was $14.4 million, or $0.46 per diluted share, compared to $10.2 million, or $0.32 per diluted share, for the second quarter of 2021 and $16.8 million, or $0.54 per diluted share, for the third quarter of 2020. Excluded from core net income for the third quarter of 2021 was $0.4 million of non-interest income gains on the sale of securities and $0.4 million of non-interest expenses related to ABOC, and for the second quarter of 2021 was $0.3 million of non-interest income gains on the sale of securities. Excluded from core net income for the third quarter of 2020 was $0.6 million of non-interest income gains on the sale of securities, $6.3 million in branch closure expenses, and other adjustments, including the tax effect of such adjustments.

Net interest income was $43.4 million for the third quarter of 2021, compared to $42.0 million for the second quarter of 2021 and $45.2 million for the third quarter of 2020. The $1.4 million increase from the preceding quarter reflected higher income on securities and lower interest expense on deposits, offset by a decrease in interest income as average loans decreased $75.2 million from the prepayment and paydowns of residential and commercial real estate loans. The $1.8 million decrease from the third quarter of 2020 was primarily attributable to a decrease in average loans of $481.6 million from the prepayment of residential and commercial loans and a 13 basis point decrease in yield due to lower yields on originations, partially offset by higher income on securities and lower interest expense on deposits.

Net interest margin was 2.70% for the third quarter of 2021, a decrease of five basis points from 2.75% in the second quarter of 2021, and a decrease of 18 basis points from 2.88% in the third quarter of 2020. The accretion of the loan mark from the loans acquired in the New Resource Bank acquisition contributed one basis point to our net interest margin in the third quarter of 2021, compared to two basis points in the second quarter of 2021 and third quarter of 2020. Prepayment penalties earned in loan income contributed one basis point to our net interest margin in the third quarter of 2021, compared to three basis points in the second quarter of 2021 and seven basis points in the third quarter of 2020.

Provision for loan losses totaled a recovery of $2.3 million for the third quarter of 2021 compared to an expense of $1.7 million in the second quarter of 2021 and an expense of $3.4 million for the third quarter of 2020, respectively. The recovery in the third quarter of 2021 was primarily driven by a decrease in allowance primarily driven by improvement in loss and qualitative factors, improved credit quality, and lower loan balances.

Non-interest income was $6.7 million for the third quarter of 2021, compared to $5.3 million in the second quarter of 2021 and $12.8 million for the third quarter in 2020. This increase of $1.4 million in the third quarter of 2021, compared to the preceding quarter, was primarily due to the expected decrease in equity method investment losses related to investments in solar initiatives. The decrease of $6.1 million in the third quarter of 2021 compared to the corresponding quarter in 2020 was primarily due to a loss of $0.5 million related to equity investments in solar initiatives in the third quarter of 2021 compared to a $4.3 million gain in the third quarter in 2020. The Company primarily recognized the benefit of the tax credits in 2020, the initial year of the equity investment. We expect minimal losses in equity method investments during the remainder of 2021. These impacts do not include any benefits of new solar equity investments that we may make in the future.

Non-interest expense for the third quarter of 2021 was $33.0 million, an increase of $1.6 million from the second quarter of 2021 and a decrease of $4.9 million from the third quarter of 2020. The increase of $1.6 million from the preceding quarter includes $0.4 million of ABOC related costs. The remaining difference was primarily due to a $1.2 million increase to data processing related to the full impact of our Trust Department outsourced operation, a $0.5 million increase to compensation and employee benefits, and a $0.4 million increase in reserves for unused loan commitments, partially offset by a $1.2 million decrease in professional services expense, net of ABOC related deal costs. The decrease of $4.9 million from the third quarter of 2020 is due to a decrease in occupancy and depreciation expenses related to branch closures in 2020.

Our provision for income tax expense was $4.9 million for the third quarter of 2021, compared to $3.8 million for the second quarter of 2021 and $4.3 million for the third quarter of 2020. Our effective tax rate for the third quarter of 2021 was 25.4%, compared to 26.9% for the second quarter of 2021 and 25.4% for the third quarter of 2020.

___________________2 Reconciliations of non-GAAP financial measures to the most comparable GAAP measure are set forth on the last page of the financial information accompanying this press release and may also be found on our website, www.amalgamatedbank.com.

Results of Operations, Nine Months Ended September30, 2021

Net income for the nine months ended September30, 2021 was $37.0 million, or $1.17 per average diluted share, compared to $32.4 million, or $1.04 per average diluted share, for same period in 2020. The $4.6 million increase was primarily due to a $3.9 million recovery of provision for loan loss compared to a $20.2 million provision for loan loss for the same period in 2020, as well as a $4.0 million decrease in non-interest expense. This recovery of provision was partially offset by a $14.6 million decrease in non-interest income and a $7.2 million decrease in net interest income.

Core net income (non-GAAP) for the nine months ended September30, 2021 was $37.6 million, or $1.19 per diluted share, compared to $36.5 million or $1.17 per diluted share, for the same period last year. Core net income for the first nine months of 2021 excludes severance costs, non-interest income gains on the sale of securities, and the tax effect of such adjustments.

Net interest income was $127.2 million for the nine months ended September30, 2021, compared to $134.4 million for the same period in 2020. This decrease of $7.2 million was primarily attributable to a decrease in average loans of $354.2 million and lower yields earned on interest bearing assets. These impacts are partially offset by an increase in average securities of $651.8 million, and a decrease in average rates paid on deposits.

Provision for loan losses totaled a recovery of $3.9 million for the nine months ended September30, 2021, compared to an expense of $20.2 million for the same period in 2020. The recovery for the nine months ended September30, 2021 was primarily driven by a release of allowance for loan loss due to improvement in loss rate and other qualitative factors, improved credit quality, and lower loan balances.

Non-interest income was $16.0 million for the nine months ended September30, 2021, compared to $30.6 million for the same period in 2020, a decrease of $14.6 million. This decrease is primarily due to the tax credits on equity investment projects being in a loss position compared to a gain position in the prior year, as well as a $1.4 million gain on the sale of a branch reported in other non-interest income in the prior year, and a $1.2 million decrease in Trust Department fees primarily attributed to the run-off of the ULTRA real estate fund, which ceased earning revenues in 2020.

Non-interest expense for the nine months ended September30, 2021 was $97.2 million, a decrease of $4.0 million from $101.2 million for the nine months ended September30, 2020. The decrease was primarily due to a $9.4 million decrease in occupancy and depreciation expense due to the branch closures in the prior year and lower rent expense in the current year, offset by a $2.0 million increase in professional fees mainly related to our holding company formation and chief executive officer search, a $2.7 million increase in data processing mainly related to the modernization of our Trust Department and increased transaction processing costs post COVID-19, and a $0.9 million increase in other expenses mainly related to insurance costs, reserves for unused loan commitments, and foreclosure recoveries that were recognized in the prior year.

We had income tax expense of $12.9 million for the nine months ended September30, 2021, compared to $11.1 million for the same period in 2020. Our effective tax rate was 25.8% for the nine months ended September30, 2021, compared to 25.5% for the same period in 2020.

Financial Condition

Total assets were $6.9 billion at September30, 2021, compared to $6.0 billion at December31, 2020. The increase of $0.9 billion was driven primarily by a $651.5 million increase in cash and cash equivalents and a $646.3 million increase in investment securities, of which $81.4 million was from PACE assessments, which was partially offset by a $359.8 million decrease in loans receivable, net.

Total loans, net at September30, 2021 were $3.1 billion, a decrease of $359.8 million, or 14.0% annualized, compared to December31, 2020. The decline in loans was primarily driven by a $205.8 million decrease in residential loans due to increased refinancing activity by existing customers, a $146.8 million decrease in commercial real estate and multifamily loans due to refinancing activity by existing customers and payoffs, and a $48.8 million decrease in C&I loans due to payoffs. As of September30, 2021, the Company had $16.7 million in loans remaining on a payment deferral program and still accruing interest, the majority of which represent two performing commercial loans requesting additional deferrals.

Deposits at September30, 2021 were $6.2 billion, an increase of $885.8 million, or 22.2% annualized, as compared to $5.3 billion as of December31, 2020. Deposits held by politically active customers, such as campaigns, PACs, advocacy-based organizations, and state and national party committees were $1.0 billion as of September30, 2021, an increase of $411.9 million compared to $602.8 million as of December31, 2020. Noninterest-bearing deposits represent 52% of average deposits and 51% of ending deposits for the quarter ended September30, 2021, contributing to an average cost of deposits of 0.09% in the third quarter of 2021, a one basis point decrease from the preceding quarter.

Nonperforming assets totaled $67.8 million, or 0.99% of period-end total assets at September30, 2021, a decrease of $14.4 million, compared with $82.2 million, or 1.38% of period-end total assets at December31, 2020. The decrease in non-performing assets at September30, 2021 compared to December31, 2020 was primarily driven by the payoff of $11.2 million of non-accruing construction loans and $3.5 million of multifamily loans, and the decrease of $1.4 million of loans 90 days past due and accruing, partially offset by an increase of $2.1 million of Troubled Debt Restructurings.

The allowance for loan losses decreased $5.7 million to $35.9 million at September30, 2021 from $41.6 million at December31, 2020, primarily due to decreases in loan balances. At September30, 2021, we had $67.5 million of impaired loans for which a specific allowance of $6.5 million was made, compared to $80.5 million of impaired loans at December31, 2020 for which a specific allowance of $6.2 million was made. The ratio of allowance to total loans was 1.15% at September30, 2021 and 1.19% at December31, 2020.

Capital

As of September30, 2021, our Common Equity Tier 1 Capital Ratio was 13.98%, Total Risk-Based Capital Ratio was 14.99%, and Tier-1 Leverage Capital Ratio was 7.85%, compared to 13.11%, 14.25% and 7.97%, respectively, as of December31, 2020. Stockholders equity at September30, 2021 was $556.4 million, compared to $535.8 million at December31, 2020. The increase in stockholders equity was driven by $37.0 million of net income, partially offset by a $5.8 million decrease in accumulated other comprehensive income due to the mark to market on our securities portfolio and $3.1 million decrease in additional paid-in capital.

Our tangible book value per share was $17.33 as of September30, 2021 compared to $16.66 as of December31, 2020.

Conference Call

As previously announced, Amalgamated Financial Corp. will host a conference call to discuss its third quarter 2021 results today, October 28th, 2021 at 11:00am (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 Financial Corp. Third Quarter 2021 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 13723559. The telephonic replay will be available until November 4, 2021.

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 Financial Corp.

Amalgamated Financial Corp. is a Delaware public benefit corporation and a bank holding company engaged in commercial banking and financial services through its wholly-owned subsidiary, Amalgamated Bank. Amalgamated Bank is a New York-based full-service commercial bank and a chartered trust company with a combined network of six branches in New York City, Washington D.C., San Francisco, and Boston. Amalgamated Bank 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 Bank provides commercial banking and trust services nationally and offers a full range of products and services to both commercial and retail customers. Amalgamated Bank is a proud member of the Global Alliance for Banking on Values and is a certified B Corporation. As of September30, 2021, our total assets were $6.9 billion, total net loans were $3.1 billion, and total deposits were $6.2 billion. Additionally, as of September30, 2021, our trust business held $39.5 billion in assets under custody and $16.1 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, Average 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 September30, 2021 versus certain periods in 2021 and 2020 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, acquisition 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 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, in the future, may and intend, as well as other similar words and expressions of the future, and in this release include statements about the losses in our equity method investments and our 2021 earnings guidance. 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) our inability to maintain the historical growth rate of the loan portfolio; (iv) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (v) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on our results, including as a result of compression to net interest margin; (vi) greater than anticipated adverse conditions in the national or local economies including in our core markets, including, but not limited to, the negative impacts and disruptions resulting from the outbreak of the novel coronavirus, or COVID-19, which may continue to have an adverse impact on our business, operations and performance, and could continue to have a negative impact on our credit portfolio, share price, borrowers, and on the economy as a whole, both domestically and globally; (vii) fluctuations or unanticipated changes in interest rates on loans or deposits or that affect the yield curve; (viii) the results of regulatory examinations; (ix) potential deterioration in real estate values; (x) changes in legislation, regulation, policies, or administrative practices, whether by judicial, governmental, or legislative action; (xi) the risk that the preliminary financial information reported herein and our current preliminary analysis will be different when our review is finalized; (xii) increased competition for experienced executives in the banking industry; and (xiii) risks related to our proposed acquisition of Amalgamated Bank of Chicago, including, among others, that the acquisition does not close when expected or at all because conditions to closing are not satisfied on a timely basis or at all, or that financial projections from the acquisition are not realized. Additional factors which could affect the forward-looking statements can be found in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the SEC and available on the SEC's website at https://www.sec.gov/. We disclaim 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.

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

Consolidated Statements of Income (unaudited)

Three Months Ended Nine Months Ended September June 30, September September 30, 30, 30,($ in thousands) 2021 2021 2020 2021 2020INTEREST AND DIVIDEND INCOMELoans $ 29,915 $ 30,156 $ 35,602 $ 91,180 $ 106,440 Securities 14,612 13,094 11,473 39,876 35,772 Federal HomeLoan Bank of New 43 41 56 132 190 York stockInterest-bearingdeposits in 230 131 152 451 631 banksTotal interestand dividend 44,800 43,422 47,283 131,639 143,033 incomeINTEREST EXPENSE Deposits 1,413 1,431 2,049 4,416 8,645 Borrowed funds ? ? ? ? 27 Total interest 1,413 1,431 2,049 4,416 8,672 expenseNET INTEREST 43,387 41,991 45,234 127,223 134,361 INCOMEProvision for(recovery of) (2,276 ) 1,682 3,394 (3,855 ) 20,202 loan lossesNet interestincome after 45,663 40,309 41,840 131,078 114,159 provision forloan lossesNON-INTEREST INCOMETrust Department 3,353 3,292 3,622 10,471 11,688 feesService chargeson deposit 2,466 2,296 2,130 6,941 6,391 accountsBank-owned life 539 531 1,227 1,858 2,722 insuranceGain (loss) onsale of 413 321 619 755 1,605 securitiesGain (loss) onsale of loans, 280 720 903 1,706 1,200 netGain (loss) onother real ? (407 ) (176 ) (407 ) (482 )estate owned,netEquity method (483 ) (1,555 ) 4,297 (5,720 ) 5,586 investmentsOther 134 129 154 424 1,855 Totalnon-interest 6,702 5,327 12,776 16,028 30,565 incomeNON-INTEREST EXPENSECompensation andemployee 17,482 16,964 17,547 52,485 52,338 benefitsOccupancy and 3,440 3,352 9,908 10,293 19,655 depreciationProfessional 2,348 3,211 2,202 9,219 7,173 feesData processing 4,521 3,322 2,916 10,848 8,157 Officemaintenance and 887 820 863 2,362 2,538 depreciationAmortization ofintangible 301 302 342 905 1,027 assetsAdvertising and 1,023 628 1,172 2,248 2,511 promotionOther 3,032 2,796 2,927 8,863 7,817 Totalnon-interest 33,034 31,395 37,877 97,223 101,216 expenseIncome before 19,331 14,241 16,739 49,883 43,508 income taxesIncome taxexpense 4,915 3,833 4,259 12,870 11,109 (benefit)Net income 14,416 10,408 12,480 37,013 32,399 Net incomeattributable to $ 14,416 $ 10,408 $ 12,480 $ 37,013 $ 32,399 AmalgamatedFinancial Corp.Earnings percommon share - $ 0.46 $ 0.33 $ 0.40 $ 1.19 $ 1.04 basicEarnings percommon share - $ 0.46 $ 0.33 $ 0.40 $ 1.17 $ 1.04 diluted

Consolidated Statements of Financial Condition

($ in thousands) September 30, December 31, 2021 2020Assets (unaudited) Cash and due from banks $ 8,488 $ 7,736 Interest-bearing deposits in banks 681,758 31,033 Total cash and cash equivalents 690,246 38,769 Securities: Available for sale, at fair value (amortized cost 1,955,502 1,539,862 of $1,936,830 and $1,513,409, respectively)Held-to-maturity (fair value of $727,161 and 725,076 494,449 $502,425, respectively)Loans held for sale 6,156 11,178 Loans receivable, net of deferred loan 3,123,329 3,488,895 origination costs (fees)Allowance for loan losses (35,863 ) (41,589 )Loans receivable, net 3,087,466 3,447,306 Resell agreements 130,434 154,779 Accrued interest and dividends receivable 23,337 23,970 Premises and equipment, net 12,447 12,977 Bank-owned life insurance 106,736 105,888 Right-of-use lease asset 34,819 36,104 Deferred tax asset 24,672 36,079 Goodwill 12,936 12,936 Other intangible assets 4,453 5,359 Equity investments 5,614 11,735 Other assets 39,871 47,240 Total assets $ 6,859,765 $ 5,978,631 Liabilities Deposits $ 6,224,506 $ 5,338,711 Operating leases 50,416 53,173 Other liabilities 28,453 50,926 Total liabilities 6,303,375 5,442,810 Commitments and contingencies ? ? Stockholders? equity Common stock, par value $.01 per share(70,000,000 shares authorized; 31,096,896 and 311 310 31,049,525 shares issued and outstanding,respectively)Additional paid-in capital 297,904 300,989 Retained earnings 246,665 217,213 Accumulated other comprehensive income (loss), 11,377 17,176 net of income taxesTotal Amalgamated Financial Corp. stockholders' 556,257 535,688 equityNoncontrolling interests 133 133 Total stockholders' equity 556,390 535,821 Total liabilities and stockholders? equity $ 6,859,765 $ 5,978,631

Select Financial Data

As of and for the As of and for the Three Months Ended Nine Months Ended September June 30, September September 30, 30, 30,(Shares in 2021 2021 2020 2021 2020thousands)SelectedFinancial Ratios and Other Data:Earnings Basic $ 0.46 $ 0.33 $ 0.40 1.19 1.04 Diluted 0.46 0.33 0.40 1.17 1.04 Core net income (non-GAAP)Basic $ 0.46 $ 0.33 $ 0.54 1.20 1.17 Diluted 0.46 0.32 0.54 1.19 1.17 Book value percommon share(excluding 17.89 17.64 16.82 17.89 16.82 minorityinterest)Tangible bookvalue per share 17.33 17.07 16.22 17.33 16.22 (non-GAAP)Common shares 31,097 31,074 31,050 31,097 31,050 outstandingWeighted averagecommon shares 31,094 31,136 31,050 31,216 31,161 outstanding,basicWeighted averagecommon shares 31,462 31,572 31,075 31,584 31,240 outstanding,diluted

Select Financial Data

As of and for the As of and for the Three Months Ended Nine Months Ended September June September September 30, 30, 30, 30, 2021 2021 2020 2021 2020Selected Performance Metrics:Return on average 0.86 % 0.65 % 0.76 % 0.77 % 0.72 %assetsCore return on average 0.86 % 0.64 % 1.03 % 0.78 % 0.81 %assets (non-GAAP)Return on average 10.29 % 7.62 % 9.62 % 9.02 % 8.62 %equityCore return on averagetangible common equity 10.62 % 7.70 % 13.44 % 9.46 % 10.11 %(non-GAAP)Average equity to 8.38 % 8.57 % 7.95 % 8.55 % 8.37 %average assetsTangible common equity 7.88 % 8.09 % 7.61 % 7.88 % 7.61 %to tangible assetsLoan yield 3.84 % 3.82 % 3.97 % 3.83 % 4.02 %Securities yield 2.19 % 2.15 % 2.24 % 2.17 % 2.66 %Deposit cost 0.09 % 0.10 % 0.14 % 0.10 % 0.21 %Net interest margin 2.70 % 2.75 % 2.88 % 2.77 % 3.13 %Efficiency ratio^ (1) 65.95 % 66.35 % 65.29 % 67.87 % 61.37 %Core efficiency ratio 65.71 % 66.80 % 54.84 % 67.19 % 57.24 %(non-GAAP)^ (1) Asset Quality Ratios: Nonaccrual loans to 1.46 % 1.64 % 1.41 % 1.46 % 1.41 %total loansNonperforming assets to 0.99 % 1.08 % 1.22 % 0.99 % 1.22 %total assetsAllowance for loanlosses to nonaccrual 78.83 % 73.20 % 94.59 % 78.83 % 94.59 %loansAllowance for loan 1.15 % 1.20 % 1.34 % 1.15 % 1.34 %losses to total loansAnnualized netcharge-offs -0.02 % 0.04 % 0.59 % 0.08 % 0.22 %(recoveries) to averageloans Capital Ratios: Tier 1 leverage capital 7.85 % 7.93 % 7.39 % 7.85 % 7.39 %ratioTier 1 risk-based 13.98 % 13.63 % 12.76 % 13.98 % 12.76 %capital ratioTotal risk-based 14.99 % 14.68 % 14.01 % 14.99 % 14.01 %capital ratioCommon equity tier 1 13.98 % 13.63 % 12.76 % 13.98 % 12.76 %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 September 30, 2021 At June 30, 2021 At September 30, 2020 % of % of % of Amount total Amount total Amount total loans loans loansCommercial portfolio:Commercial and $ 628,388 20.2 % $ 619,037 19.5 % $ 660,914 18.4 %industrialMultifamily 826,143 26.5 % 848,651 26.8 % 974,962 27.1 %Commercial real 346,996 11.1 % 351,707 11.1 % 388,757 10.8 %estateConstruction and 34,863 1.1 % 42,303 1.3 % 61,687 1.7 %land developmentTotal commercial 1,836,390 58.9 % 1,861,698 58.7 % 2,086,320 58.0 %portfolio Retail portfolio:Residential real 1,032,947 33.1 % 1,085,791 34.3 % 1,329,021 37.0 %estate lendingConsumer and 249,050 8.0 % 222,265 7.0 % 179,507 5.0 %otherTotal retail 1,281,997 41.1 % 1,308,056 41.3 % 1,508,528 42.0 %Total loans 3,118,387 100.0 % 3,169,754 100.0 % 3,594,848 100.0 % Net deferredloan origination 4,942 5,707 7,604 costs (fees)Allowance for (35,863 ) (38,012 ) (48,072 ) loan lossesTotal loans, net $ 3,087,466 $ 3,137,449 $ 3,554,380 Held-to-maturitysecurities portfolio:PACE assessments 627,195 86.5 % 545,795 87.4 % 367,393 83.3 %Other securities 97,881 13.5 % 79,031 12.6 % 73,556 16.7 %Totalheld-to-maturity $ 725,076 100.0 % $ 624,826 100.0 % $ 440,949 100.0 %securities

Net Interest Income Analysis

Three Months Ended September 30, 2021 June 30, 2021 September 30, 2020 Average Income / Yield Average Income / Yield Average Income / Yield(In thousands) Balance Expense / Balance Expense / Balance Expense / Rate Rate Rate Interest earning assets:Interest-bearing $ 632,526 $ 230 0.14 % $ 510,473 $ 131 0.10 % $ 632,268 $ 152 0.10 %deposits in banksSecurities and FHLB 2,659,803 14,655 2.19 % 2,447,241 13,135 2.15 % 2,045,231 11,529 2.24 %stockTotal loans, net^ (1) 3,087,744 29,915 3.84 % 3,162,896 30,156 3.82 % 3,569,313 35,602 3.97 %(2)Total interest 6,380,073 44,800 2.79 % 6,120,610 43,422 2.85 % 6,246,812 47,283 3.01 %earning assetsNon-interest earning assets:Cash and due from 8,464 7,545 9,239 banksOther assets 243,969 266,613 234,248 Total assets $ 6,632,506 $ 6,394,768 $ 6,490,299 Interest bearing liabilities:Savings, NOW and $ 2,641,719 $ 1,173 0.18 % $ 2,567,396 $ 1,174 0.18 % $ 2,376,701 $ 1,427 0.24 %money market depositsTime deposits 241,009 240 0.40 % 258,257 257 0.40 % 321,696 622 0.77 %Total interest 2,882,728 1,413 0.19 % 2,825,653 1,431 0.20 % 2,698,397 2,049 0.30 %bearing liabilitiesNon-interest bearing liabilities:Demand and 3,077,231 2,909,554 3,191,858 transaction depositsOther liabilities 116,790 111,795 84,138 Total liabilities 6,076,749 5,847,002 5,974,393 Stockholders' equity 555,757 547,766 515,906 Total liabilities and $ 6,632,506 $ 6,394,768 $ 6,490,299 stockholders' equity Net interest income / $ 43,387 2.60 % $ 41,991 2.65 % $ 45,234 2.71 %interest rate spreadNet interest earningassets / net interest $ 3,497,345 2.70 % $ 3,294,957 2.75 % $ 3,548,415 2.88 %margin Total Cost of 0.09 % 0.10 % 0.14 %Deposits

(1) Amounts are net of deferred origination costs (fees) and the allowance for loan losses(2) Includes prepayment penalty interest income in 3Q2021, 2Q2021, and 3Q2020 of $169, $504, and $1,110 respectively (in thousands)

Net Interest Income Analysis

Nine Months Ended September 30, 2021 September 30, 2020 Average Income / Yield Average Income / Yield(In thousands) Balance Expense / Balance Expense / Rate Rate Interest earning assets:Interest-bearingdeposits in $ 508,421 $ 451 0.12 % $ 395,029 $ 631 0.21 %banksSecurities and 2,460,946 40,008 2.17 % 1,809,188 35,962 2.66 %FHLB stockTotal loans, net 3,180,890 91,180 3.83 % 3,535,096 106,440 4.02 %^ (1)(2)Total interest 6,150,257 131,639 2.86 % 5,739,313 143,033 3.33 %earning assetsNon-interest earning assets:Cash and due 7,780 31,138 from banksOther assets 263,170 227,205 Total assets $ 6,421,207 $ 5,997,656 Interest bearing liabilities:Savings, NOW andmoney market $ 2,574,463 $ 3,568 0.19 % $ 2,278,267 $ 5,919 0.35 %depositsTime deposits 259,609 848 0.44 % 357,774 2,726 1.02 %Total deposits 2,834,072 4,416 0.21 % 2,636,041 8,645 0.44 %Federal HomeLoan Bank 165 ? 0.00 % 2,117 27 1.70 %advancesTotal interestbearing 2,834,237 4,416 0.21 % 2,638,158 8,672 0.44 %liabilitiesNon-interestbearing liabilities:Demand andtransaction 2,925,516 2,748,088 depositsOther 112,721 109,586 liabilitiesTotal 5,872,474 5,495,832 liabilitiesStockholders' 548,733 501,824 equityTotalliabilities and $ 6,421,207 $ 5,997,656 stockholders'equity Net interestincome / $ 127,223 2.65 % $ 134,361 2.89 %interest ratespreadNet interestearning assets / $ 3,316,020 2.77 % $ 3,101,155 3.13 %net interestmargin Total Cost of 0.10 % 0.21 %Deposits

(1) Amounts are net of deferred origination costs (fees) and the allowance for loan losses(2) Includes prepayment penalty interest income in September YTD 2021 and September YTD 2020 of $1,316 and $2,111 respectively (in thousands)

Deposit Portfolio Composition

(In thousands) September 30, June 30, 2021 September 30, 2021 2020 Non-interest bearing demand $ 3,189,155 $ 2,948,718 $ 3,357,715 deposit accountsNOW accounts 206,610 200,758 192,066 Money market deposit 2,241,914 2,136,719 1,853,373 accountsSavings accounts 364,568 371,047 339,516 Time deposits 222,259 252,750 278,330 Total deposits $ 6,224,506 $ 5,909,992 $ 6,021,000

Three Months Ended September 30, 2021 June 30, 2021 September 30, 2020 Average Average Average Average Average Average(In thousands) Balance Rate Balance Rate Balance Rate Paid Paid Paid Non-interestbearing demand $ 3,077,231 0.00 % $ 2,909,554 0.00 % $ 3,191,858 0.00 %depositaccountsNOW accounts 205,417 0.09 % 204,341 0.08 % 196,422 0.09 %Money marketdeposit 2,066,830 0.20 % 1,993,643 0.21 % 1,839,230 0.28 %accountsSavings 369,472 0.10 % 369,412 0.10 % 341,049 0.12 %accountsTime deposits 241,009 0.40 % 258,257 0.40 % 321,696 0.77 %Total deposits $ 5,959,959 0.09 % $ 5,735,207 0.10 % $ 5,890,255 0.14 %

Asset Quality

(In thousands) September June 30, September 30, 2021 2021 30, 2020Loans 90 days past due and accruing $ ? $ ? $ 9,522 Nonaccrual loans excluding held for sale 24,960 31,437 17,515 loans and restructured loansTroubled debt restructured loans - 20,534 20,494 33,306 nonaccrualTroubled debt restructured loans - 21,958 18,683 19,919 accruingOther real estate owned 307 307 306 Impaired securities 64 59 44 Total nonperforming assets $ 67,823 $ 70,980 $ 80,612 Nonaccrual loans: Commercial and industrial $ 13,709 $ 14,561 $ 25,785 Multifamily 6,079 10,266 ? Commercial real estate 4,023 4,066 3,500 Construction and land development ? ? 10,688 Total commercial portfolio 23,811 28,893 39,973 Residential real estate lending 20,797 22,320 9,750 Consumer and other 886 718 1,098 Total retail portfolio 21,683 23,038 10,848 Total nonaccrual loans $ 45,494 $ 51,931 $ 50,821 Nonaccrual loans to total loans 1.46 % 1.64 % 1.41 %Nonperforming assets to total assets 0.99 % 1.08 % 1.22 %Allowance for loan losses to nonaccrual 78.83 % 73.20 % 94.59 %loansAllowance for loan losses to total loans 1.15 % 1.20 % 1.34 %Annualized net charge-offs (recoveries) -0.02 % 0.04 % 0.59 %to average loans

Credit Quality

September 30, 2021($ in Pass Special Substandard Doubtful Totalthousands) MentionCommercialand $ 579,429 $ 22,655 $ 25,850 $ 454 $ 628,388 industrialMultifamily 696,898 83,851 42,221 3,173 826,143 Commercial 243,903 26,815 76,278 ? 346,996 real estateConstructionand land 27,387 ? 7,476 ? 34,863 developmentResidentialreal estate 1,011,856 294 20,797 ? 1,032,947 lendingConsumer and 248,164 ? 886 ? 249,050 otherTotal loans $ 2,807,637 $ 133,615 $ 173,508 $ 3,627 $ 3,118,387

June 30, 2021($ in Pass Special Substandard Doubtful Totalthousands) MentionCommercialand $ 568,878 $ 17,569 $ 32,133 $ 457 $ 619,037 industrialMultifamily 711,551 101,579 32,348 3,173 848,651 Commercial 234,018 45,236 72,453 ? 351,707 real estateConstructionand land 34,414 535 7,354 ? 42,303 developmentResidentialreal estate 1,063,176 295 22,320 ? 1,085,791 lendingConsumer and 221,835 ? 430 ? 222,265 otherTotal loans $ 2,833,872 $ 165,214 $ 167,038 $ 3,630 $ 3,169,754

September 30, 2020($ in Pass Special Substandard Doubtful Totalthousands) MentionCommercialand $ 608,099 $ 17,107 $ 35,244 $ 464 $ 660,914 industrialMultifamily 963,834 6,022 5,106 ? 974,962 Commercial 383,087 1,439 4,231 ? 388,757 real estateConstructionand land 40,531 10,468 10,688 ? 61,687 developmentResidentialreal estate 1,319,649 ? 9,372 ? 1,329,021 lendingConsumer and 178,409 ? 1,098 ? 179,507 otherTotal loans $ 3,493,609 $ 35,036 $ 65,739 $ 464 $ 3,594,848

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 As of and for the Three Months Ended Nine Months Ended(in September June 30, September September Septemberthousands) 30, 2021 30, 30, 30, 2021 2020 2021 2020Coreoperating revenueNet Interest $ 43,387 $ 41,991 $ 45,234 $ 127,223 $ 134,361 incomeNon-interest 6,702 5,327 12,776 16,028 30,565 incomeLess: Branchsale (gain) ? ? ? ? (1,394 )loss ^(1)Less:Securities (413 ) (321 ) (619 ) (755 ) (1,605 )(gain) lossCoreoperating $ 49,676 $ 46,997 $ 57,391 $ 142,496 $ 161,927 revenue(non-GAAP) Corenon-interest expenseNon-interest $ 33,034 $ 31,395 $ 37,877 $ 97,224 $ 101,216 expenseLess: Branchclosure ? ? (6,279 ) ? (8,330 )expense ^(2)Less:Severance ^ ? ? (125 ) (1,090 ) (201 )(3)Less: ABOC (392 ) ? ? (392 ) ? Corenon-interest $ 32,642 $ 31,395 $ 31,473 $ 95,742 $ 92,685 expense(non-GAAP) Core net incomeNet Income $ 14,416 $ 10,408 $ 12,480 $ 37,013 $ 32,399 (GAAP)Less: Branchsale (gain) ? ? ? ? (1,394 )loss ^(1)Less:Securities (413 ) (321 ) (619 ) (755 ) (1,605 )(gain) lossAdd: Branchclosure ? ? 6,279 ? 8,330 expense ^(2)Add:Severance ^ ? ? 125 1,090 201 (3)Add: ABOC 392 ? ? 392 ? Less: Tax on 5 86 (1,472 ) (188 ) (1,412 )notable itemsCore netincome 14,400 10,173 16,793 37,552 36,519 (non-GAAP) Tangible common equityStockholders' $ 556,390 $ 548,211 $ 522,497 $ 556,390 $ 522,497 Equity (GAAP)Less:Minority (133 ) (133 ) (133 ) (133 ) (133 )Interest(GAAP)Less:Goodwill (12,936 ) (12,936 ) (12,936 ) (12,936 ) (12,936 )(GAAP)Less: Coredeposit (4,453 ) (4,755 ) (5,701 ) (4,453 ) (5,701 )intangible(GAAP)Tangiblecommon equity $ 538,868 $ 530,387 $ 503,727 $ 538,868 $ 503,727 (non-GAAP) Averagetangible common equityAverageStockholders' $ 555,757 $ 547,766 $ 515,906 $ 548,733 $ 501,824 Equity (GAAP)Less:Minority (133 ) (133 ) (134 ) (133 ) (134 )Interest(GAAP)Less:Goodwill (12,936 ) (12,936 ) (12,936 ) (12,936 ) (12,936 )(GAAP)Less: Coredeposit (4,602 ) (4,903 ) (5,868 ) (4,900 ) (6,209 )intangible(GAAP)Averagetangible $ 538,086 $ 529,794 $ 496,968 $ 530,764 $ 482,545 common equity(non-GAAP) Core returnon average assetsCore netincome $ 14,400 $ 10,173 $ 16,793 $ 37,552 $ 36,519 (numerator)(non-GAAP)Divided:Total averageassets 6,632,506 6,394,768 6,490,299 6,421,208 5,997,656 (denominator)(GAAP)Core returnon average 0.86 % 0.64 % 1.03 % 0.78 % 0.81 %assets(non-GAAP) Core returnon average tangiblecommon equityCore netincome $ 14,400 $ 10,173 $ 16,793 $ 37,552 $ 36,519 (numerator)(non-GAAP)Divided:Averagetangible 538,086 529,794 496,968 530,764 482,545 common equity(denominator)(GAAP)Core returnon averagetangible 10.62 % 7.70 % 13.44 % 9.46 % 10.11 %common equity(non-GAAP) Coreefficiency ratioCorenon-interestexpense $ 32,642 $ 31,395 $ 31,473 $ 95,742 $ 92,685 (numerator)(non-GAAP)Coreoperatingrevenue 49,676 46,997 57,391 142,496 161,927 (denominator)(non-GAAP)Coreefficiency 65.71 % 66.80 % 54.84 % 67.19 % 57.24 %ratio(non-GAAP)

(1) Fixed Asset branch sale in March 2020(2) Occupancy and other expense related to closure of branches during our branch rationalization(3) Salary and COBRA reimbursement expense for positions eliminated