AMAL Q1 2026 Earnings Call Summary

1Key Financial Results and Metrics:

Net Revenue: Increased by 9.7% to $93.4 million.

Net Income: Reported at $25.2 million or $0.84 per diluted share; core net income was $24.1 million or $0.80 per diluted share.

Net Interest Income: Up 3% to $80.2 million, with a net interest margin expansion of 9 basis points to 3.75%.

Deposits: On-balance sheet deposits grew by $229 million to $8.2 billion, with a notable increase in noninterest-bearing deposits to 41%.

Loan Growth: Net loans increased by approximately $66 million (1.3%), with strong performance in commercial real estate lending.

Credit Quality: Nonperforming assets rose to $99.3 million (1.08% of total assets) due to a specific borrower issue.

2Strategic Updates and Business Highlights:

Deposit Franchise: Continued strong performance, particularly in political, labor, and not-for-profit segments.

Core Deposit Growth: Super core deposits nearing 60% of total on-balance sheet deposits, indicating stable funding.

PACE Portfolio: Expanded to approximately $1.3 billion, with a focus on growth in CPACE financing.

Operational Efficiency: Core efficiency ratio improved to 49.55%, reflecting disciplined cost management.

3Forward Guidance and Outlook:

Net Interest Income Target: Raised to $333 million for the year, with expectations of $81 million to $83 million in Q2.

Balance Sheet Growth: Revised annual growth target to approximately 8%, up from 5%.

Core Pretax Preprovision Earnings: Target increased to $183 million, supported by strong deposit gathering and loan growth.

4Bad News, Challenges, or Points of Concern:

Credit Quality Issues: An incremental $9.2 million provision was taken due to a single borrower multifamily relationship moving to nonaccrual, impacting earnings per share by $0.23.

Nonperforming Loans: Increased due to the aforementioned borrower, with total criticized and classified loans rising by $51.6 million.

Potential Margin Compression: Expected slight decline in net interest margin in Q2 due to balance sheet growth and nonaccrual impacts.

5Notable Q&A Insights:

Credit Concerns: Management emphasized that the issues with the multifamily borrower are isolated and not indicative of broader portfolio weaknesses. They are actively pursuing resolution options.

Political Deposits: Growth in political deposits is expected to follow historical trends as the midterm elections approach, with a strong diversified deposit base contributing to stability.

Loan Growth Strategy: Continued focus on multifamily and C&I loans, with expectations of balanced growth across portfolios. Management remains optimistic about maintaining strong risk metrics.

Fee Income Outlook: Anticipated steady growth in fee income, with expectations of $9.8 million to $10 million per quarter, driven by commercial banking and trust-related revenues. This summary captures the essential elements from the earnings call, highlighting both the strengths and challenges faced by Amalgamated Financial Corporation in Q1 2026.