NEW YORK, April 30, 2020 (GLOBE NEWSWIRE) — Amalgamated Bank (Nasdaq: AMAL) (“Amalgamated”) today announced financial results for the first quarter ended March 31, 2020. 
First Quarter 2020 HighlightsNet income of $9.5 million, or $0.30 per diluted share, compared to $10.8 million, or $0.33 per diluted share, for the first quarter of 2019Core net income (non-GAAP)¹ of $9.2 million, or $0.29 per diluted share, compared to $10.7 million, or $0.33 per diluted share, for the first quarter of 2019Deposit growth of $435.6 million, or 37.5% annualized, compared to a balance of $4.6 billion on December 31, 2019Loan growth of $76.2 million, or 8.9% annualized, compared to a balance of $3.4 billion on December 31, 2019Cost of deposits was 0.33%, compared to 0.36% for the fourth quarter of 2019 and 0.31% for the first quarter of 2019Net interest margin was 3.46%, compared to 3.43% for the fourth quarter of 2019 and 3.65% for the first quarter of 2019Tier 1 Leverage, Common Equity Tier 1, and Total Risk-Based capital ratios were 8.47%, 12.74%, and 13.96%, respectively, at March 31, 2020Total nonperforming assets were $65.6 million or 1.14% of total assets as of March 31, 2020, compared to $66.7 million or 1.25% of total assets at December 31, 2019 and $56.6 million, or 1.15% of total assets at March 31, 2019Keith Mestrich, President and Chief Executive Officer of Amalgamated Bank, commented, “As COVID-19 continues to severely impact New York City and our nation, our first priority has been the safety of our employees and the customers that we serve.  We have moved quickly to ensure the integrity of our operations as we transition to this new normal with a majority of our employees now working from home.  Our staff is seamlessly handling transactions and making new loans in this environment and I am very proud of their unwavering commitment to our customers during this unprecedented time.  I am also very proud of the financial support that we have been able to provide to those who need it most through our recently created Frontline Workers Fund offering direct assistance to those battling the pandemic on the frontlines as well as the launch of the Families and Workers Fund, in partnership with a consortium of foundations, whose goal is to provide financial resources to vulnerable working families across the country.”Mr. Mestrich continued, “All of this would not be possible without the strategic transformation that Amalgamated has under gone over the last six years where we have re-instilled a disciplined credit culture, de-risked our balance sheet through the planned runoff of our indirect C&I portfolio while developing a stable, low-cost core deposit franchise.  Amalgamated is well positioned with a strong capital base to weather the challenges ahead as a result of COVID-19 as we continue to build upon our reputation as ‘America’s socially responsible bank’ and support those who share our mission and values.  Our first quarter results further demonstrate the Bank’s financial strength and strong positioning as we delivered record pre-tax, pre-provision income growth of 30%, as compared to 4Q19, and achieved a core efficiency ratio of 59.44%.  Looking forward, we understand that the future is uncertain, and we intend to opportunistically manage our non-interest expenses to ensure we maintain our financial flexibility and ensure the long-term success of the Bank.”_______________
¹ 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 Customer and Community Support Update
Amalgamated’s primary concern during the COVID-19 pandemic is for the health and wellbeing of the Company’s employees, customers, and communities. Amalgamated is committed to providing support to those who are affected by the unprecedented challenges that the country is facing.Updates on Amalgamated Bank’s Response to the COVID-19 Pandemic:More than 90% of all employees are currently in a work from home status. We are committed to the physical, emotional and financial health of our team and have no plans to lay-off our employees during this uncertain time. Launched Frontline Workers Fund with Amalgamated Foundation to provide financial support to critical workers on the frontlines of the COVID-19 pandemic. All but two branches are closed in NYC, with the open locations practicing social distancing. The Washington DC branch is open 9:00 am to 2:00 pm on Wednesdays. The San Francisco branch is closed until further notice.  All personnel has been retained in order to proactively reach out to customers to help them during this time.All customers have been encouraged to continue conducting their business online and to reach out to the customer care team with questions.Branch ATM vestibules remain open, in addition to 40,000 Allpoint ATMs.Fee waivers for non-sufficient funds, overdrafts, ATM fees, and deposit CD breakage.All customers notified of our COVID-19 response. The Bank has built a priority communication hub for all clients to provide up-to-date information and resources.More than 850 referrals of CARES Paycheck Protection Plan (PPP) to Newtek, our SBA partner.Remote commercial servicing of loans, deposits, credit underwriting, origination operations.Working with commercial clients on loan deferral requests to help with the business disruption.We are offering a three month loan deferral program for our customers and as of Friday April 24th, $300 million of loan balances are under deferral.Working with existing clients in the nonprofit, union, philanthropy, and impact segments to determine their credit needs and to provide assistance where possible.Results of Operations, Quarter Ended March 31, 2020Net income for the first quarter of 2020 is $9.5 million, or $0.30 per diluted share, compared to $12.0 million, or $0.37 per diluted share, for the fourth quarter of 2019 and $10.8 million, or $0.33 per diluted share, for the first quarter of 2019.  The $1.3 million decrease in net income for the first quarter of 2020, compared to the first quarter of 2019, is primarily due to a $6.4 million increase in provision for loan losses and a $0.8 million increase in expenses, partially offset by a $3.9 million increase in net interest income and a $1.7 million increase in non-interest income.Core net income (non-GAAP) for the first quarter of 2020 is $9.2 million, or $0.29 per diluted share, compared to $12.6 million or $0.39 per diluted share, for the fourth quarter of 2019 and $10.7 million, or $0.33 per diluted share, for the first quarter of 2019.  Core net income for the first quarter of 2020 excludes $1.9 million of non-interest income related to the sale of an owned branch and gains on the sale of securities, $1.4 million in expense related to the closure of two branches, and other adjustments including the tax effect of such adjustments.Net interest income is $44.7 million for the first quarter of 2020, compared to $42.3 million for the fourth quarter of 2019 and $40.8 million for the first quarter of 2019.  The year-over-year increase is primarily attributable to an increase in average net loans of $239.8 million, an increase in average securities of $319.1 million and a decrease in average Federal Home Loan Bank advances of $322.1 million.  These impacts are partially offset by an increase in average interest bearing deposits of $206.5 million.Net interest margin is 3.46% for the first quarter of 2020, an increase of three basis points from 3.43% in the fourth quarter of 2019 and a decrease of 19 basis points from 3.65% in the first quarter of 2019.  The accretion of the loan mark from the loans we acquired in our New Resource Bank acquisition contributes four basis points to our net interest margin in the first quarter of 2020, compared to five basis points in both the fourth and first quarters of 2019.  Prepayment penalties earned through loan income contributes $0.8 million, or six basis points, to our net interest margin in the first quarter of 2020, compared to two basis points in both the fourth and first quarters of 2019.Provisions for loan losses totals an expense of $8.6 million in the first quarter of 2020 compared to $0.1 million in the fourth quarter of 2019 and $2.2 million for the first quarter of 2019.  The provision expense in the first quarter of 2020 is primarily driven by a $3.4 million increase in our allowance for loan losses on two loans in our indirect C&I portfolio previously classified as restructured loans that were negatively impacted by the coronavirus pandemic and a $3.0 million increase in qualitative factors tied to economic activity as a result of the coronavirus pandemic.Non-interest income is $9.1 million in the first quarter of 2020 compared to $7.8 million in the fourth quarter of 2019, and $7.4 million in the first quarter of 2019. The $1.7 million increase in the first quarter of 2020, compared to the like period in 2019, is primarily due to a $1.4 million gain on the sale of an owned branch, and a $0.5 million increase in deposit account fees due to higher accounts and balances, partially offset by a $0.6 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 for the first quarter of 2020 is $32.3 million, a decrease of $1.2 million from the fourth quarter of 2019, and an increase of $0.8 million from the first quarter of 2019.  The increase compared to the first quarter of 2019 was primarily due to a $1.4 million charge for closing two branches in the first quarter of 2020 which was recognized in occupancy and depreciation expense, partially offset by a $0.5 million decrease in data processing expense due to contract renegotiations with vendors.We have a provision for income tax expense of $3.4 million for the first quarter of 2020, compared to a provision of $4.4 million for the fourth quarter of 2019 and a provision of $3.7 million for the first quarter of 2019.  Our effective tax rate for the first quarter of 2020 was 26.3%, compared to 25.7% for the first quarter of 2019.Financial ConditionTotal assets are $5.8 billion at March 31, 2020, compared to $5.3 billion at December 31, 2019. The increase of $426.6 million is driven primarily by a $210.6 million increase in investment securities, a $140.2 million increase in cash and cash equivalents, and a $76.2 million increase in loans receivable, net.Total loans, net at March 31, 2020 are $3.5 billion, an increase of $76.2 million, or 8.9% annualized, compared to December 31, 2019.  Loan growth in the first quarter of 2020 is primarily driven by a $58.0 million increase in C&I loans due to purchases of government guaranteed loans and draw requests on lines of credit, a $50.3 million increase in residential first liens, and a $26.1 million increase in consumer residential solar loans.  These increases are partially offset by a $53.2 million decrease in commercial real-estate and multifamily loans.Deposits at March 31, 2020 are $5.1 billion, an increase of $435.6 million, or 37.5% annualized, as compared to $4.6 billion as of December 31, 2019. Deposits held by politically-active customers, such as campaigns, PACs and state and national party committees are $774.8 million as of March 31, 2020, an increase of $196.2 million compared to $578.6 million as of December 31, 2019.  Noninterest-bearing deposits represent 47.7% of average deposits and 47.7% of ending deposits for the three months ended March 31, 2020, contributing to an average cost of deposits of 0.33% in the first quarter of 2020, a three basis point decrease from the linked quarter.Nonperforming assets total $65.6 million, or 1.14% of period end total assets at March 31, 2020, a decrease of $1.1 million, compared with $66.7 million, or 1.25% of period end total assets at December 31, 2019.  The decrease in nonperforming assets at March 31, 2020 compared to the year-ended December 31, 2019 is primarily driven by a $7.4 million decrease in accruing restructured loans, partially offset by a $3.4 million increase in loans 90 days past due and accruing related to delays in renewing loans.The allowance for loan losses increased $8.5 million to $42.3 million at March 31, 2020 from $33.8 million at December 31, 2019, primarily due to increases in the specific reserves for two indirect C&I loans and an increase in qualitative factors related to the coronavirus pandemic.  At March 31, 2020, we had $60.2 million of impaired loans for which a specific allowance of $11.5 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 is 1.19% at March 31, 2020 and 0.98% at December 31, 2019.CapitalAs of March 31, 2020, our Tier 1 Leverage Capital Ratio is 8.47%, Common Equity Tier 1 Capital Ratio was 12.74%, and Total Risk-Based Capital Ratio was 13.96%, compared to 8.90%, 13.01%, and 14.01%, respectively, as of December 31, 2019. Stockholders’ equity at March 31, 2020 was $473.3 million, compared to $490.5 million at December 31, 2019.  The decrease in stockholders’ equity is primarily driven by a $17.9 million decrease in accumulated other comprehensive income due to the mark to market on our securities portfolio, a $7.0 million decrease due to share repurchases, and a $2.5 million quarterly dividend.  These decreases were partially offset by $9.5 million of net income.Our tangible book value per share is $14.64 as of March 31, 2020 compared to $14.93 as of December 31, 2019 and $13.68 as of March 31, 2019. Conference Call
As previously announced, Amalgamated Bank will host a conference call to discuss its first quarter 2020 results today, April 30, 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 First 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 13701389. The telephonic replay will be available until 11:59 pm (Eastern Time) on May 7, 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 March 31, 2020, our total assets were $5.8 billion, total net loans were $3.5 billion, and total deposits were $5.1 billion. Additionally, as of March 31, 2020, the trust business held $31.0 billion in assets under custody and $11.6 billion in assets under management.Non-GAAP Financial MeasuresThis 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 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.Media Contact:
Kaye Verville
The Levinson Group
[email protected]
202-244-1785Investor Contact:
Jamie Lillis
Solebury Trout
[email protected]
800-895-4172
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Reconciliation of GAAP to Non-GAAP Financial Measures
The information provided below presents a reconciliation of each of our non-GAAP financial measures to the most directly comparable GAAP financial measure. 

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