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Amalgamated Bank Reports Second Quarter 2020 Financial Results

Amalgamated Bank
·31 mins read

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)¹ 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.

____________________________________

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 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:

% of

Exited

 

6/30/20

7/25/20

6/20/20

Portfolio

Deferral

Multifamily

$

972

$

178

$

218

18

%

$

39

CRE + Construction

469

111

122

24

%

12

C&I

618

39

39

6

%

-

Residential

1,433

90

122

6

%

33

Consumer & Student

188

10

11

6

%

1

Total

$

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 December 31, 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 December 31, 2019.

Conference Call
As 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 Verville
The Levinson Group
kaye@mollylevinson.com
202-244-1785

Investor Contact :
Jamie Lillis
Solebury Trout
shareholderrelations@amalgamatedbank.com
800-895-4172


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 INCOME

 

 

 

 

 

 

 

 

 

Loans

$

35,225

 

 

$

35,612

 

 

$

35,559

 

 

$

70,837

 

 

$

70,855

 

Securities

 

11,746

 

 

 

12,554

 

 

 

10,524

 

 

 

24,299

 

 

 

20,398

 

Federal Home Loan Bank of New York stock

 

66

 

 

 

69

 

 

 

191

 

 

 

135

 

 

 

501

 

Interest-bearing deposits in banks

 

83

 

 

 

396

 

 

 

254

 

 

 

479

 

 

 

548

 

 

 

 

 

 

 

 

 

 

 

Total interest and dividend income

 

47,120

 

 

 

48,631

 

 

 

46,528

 

 

 

95,750

 

 

 

92,302

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

Deposits

 

2,681

 

 

 

3,915

 

 

 

3,499

 

 

 

6,596

 

 

 

6,444

 

Borrowed funds

 

-

 

 

 

27

 

 

 

1,173

 

 

 

27

 

 

 

3,229

 

 

 

 

 

 

 

 

 

 

 

Total interest expense

 

2,681

 

 

 

3,942

 

 

 

4,672

 

 

 

6,623

 

 

 

9,673

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME

 

44,439

 

 

 

44,689

 

 

 

41,856

 

 

 

89,127

 

 

 

82,629

 

Provision for (recovery of) loan losses

 

8,221

 

 

 

8,588

 

 

 

2,127

 

 

 

16,808

 

 

 

4,312

 

 

 

 

 

 

 

 

 

 

 

Net interest income after provision for loan losses

 

36,218

 

 

 

36,101

 

 

 

39,729

 

 

 

72,319

 

 

 

78,317

 

 

 

 

 

 

 

 

 

 

 

NON-INTEREST INCOME

 

 

 

 

 

 

 

 

 

Trust Department fees

 

3,980

 

 

 

4,085

 

 

 

4,508

 

 

 

8,066

 

 

 

9,229

 

Service charges on deposit accounts

 

1,850

 

 

 

2,411

 

 

 

2,068

 

 

 

4,261

 

 

 

3,939

 

Bank-owned life insurance

 

1,111

 

 

 

384

 

 

 

408

 

 

 

1,495

 

 

 

828

 

Gain (loss) on sale of investment securities available for sale, net

 

486

 

 

 

499

 

 

 

(377

)

 

 

985

 

 

 

(85

)

Gain (loss) on other real estate owned, net

 

(283

)

 

 

(23

)

 

 

(315

)

 

 

(306

)

 

 

(564

)

Equity method investments

 

1,289

 

 

 

-

 

 

 

-

 

 

 

1,289

 

 

 

-

 

Other

 

238

 

 

 

1,762

 

 

 

57

 

 

 

1,999

 

 

 

419

 

 

 

 

 

 

 

 

 

 

 

Total non-interest income

 

8,671

 

 

 

9,118

 

 

 

6,349

 

 

 

17,789

 

 

 

13,766

 

 

 

 

 

 

 

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

Compensation and employee benefits, net

 

17,334

 

 

 

17,458

 

 

 

16,992

 

 

 

34,792

 

 

 

34,422

 

Occupancy and depreciation

 

4,241

 

 

 

5,506

 

 

 

4,145

 

 

 

9,747

 

 

 

8,417

 

Professional fees

 

1,988

 

 

 

2,983

 

 

 

2,401

 

 

 

4,971

 

 

 

5,566

 

Data processing

 

2,977

 

 

 

2,264

 

 

 

2,729

 

 

 

5,241

 

 

 

5,478

 

Office maintenance and depreciation

 

818

 

 

 

856

 

 

 

830

 

 

 

1,675

 

 

 

1,716

 

Amortization of intangible assets

 

342

 

 

 

342

 

 

 

298

 

 

 

685

 

 

 

687

 

Advertising and promotion

 

672

 

 

 

667

 

 

 

692

 

 

 

1,339

 

 

 

1,313

 

Other

 

2,696

 

 

 

2,194

 

 

 

2,915

 

 

 

4,889

 

 

 

4,851

 

 

 

 

 

 

 

 

 

 

 

Total non-interest expense

 

31,068

 

 

 

32,270

 

 

 

31,002

 

 

 

63,339

 

 

 

62,450

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

13,821

 

 

 

12,949

 

 

 

15,076

 

 

 

26,769

 

 

 

29,633

 

Income tax expense (benefit)

 

3,447

 

 

 

3,404

 

 

 

3,891

 

 

 

6,850

 

 

 

7,634

 

 

 

 

 

 

 

 

 

 

 

Net income

 

10,374

 

 

 

9,545

 

 

 

11,185

 

 

 

19,919

 

 

 

21,999

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Amalgamated Bank and subsidiaries

$

10,374

 

 

$

9,545

 

 

$

11,185

 

 

$

19,919

 

 

$

21,999

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - basic

$

0.33

 

 

$

0.30

 

 

$

0.35

 

 

$

0.64

 

 

$

0.69

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - diluted

$

0.33

 

 

$

0.30

 

 

$

0.35

 

 

$

0.64

 

 

$

0.68

 


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 of $1,562,033 and $1,217,087, respectively)

 

1,575,175

 

 

 

1,224,770

 

Held-to-maturity (fair value of $382,830 and $292,837, respectively)

 

370,498

 

 

 

292,704

 

 

 

 

 

Loans receivable, net of deferred loan origination costs (fees)

 

3,687,992

 

 

 

3,472,614

 

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 and

 

 

 

31,523,442 shares issued and outstanding, respectively)

 

310

 

 

 

315

 

Additional paid-in capital

 

299,997

 

 

 

305,738

 

Retained earnings

 

195,991

 

 

 

181,132

 

Accumulated other comprehensive income (loss), net of income taxes

 

7,270

 

 

 

3,225

 

Total 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
Months Ended

 

As of and for the Six
Months Ended

 

June 30,

 

March 31,

 

June 30,

 

June 30,

 

 

2020

 

 

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

Selected Financial Ratios and Other Data

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

 

Basic

$

0.33

 

 

$

0.30

 

 

$

0.35

 

 

$

0.64

 

 

$

0.69

 

Diluted

 

0.33

 

 

 

0.30

 

 

 

0.35

 

 

 

0.64

 

 

 

0.68

 

Core Earnings 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 value per common share

 

16.22

 

 

 

15.26

 

 

 

14.89

 

 

 

16.22

 

 

 

14.89

 

(excluding minority interest)

 

 

 

 

 

 

 

 

 

Tangible book value per share (non-GAAP)

 

15.61

 

 

 

14.64

 

 

 

14.25

 

 

 

15.61

 

 

 

14.25

 

Common shares outstanding

 

31,049,525

 

 

 

31,000,299

 

 

 

31,886,669

 

 

 

31,049,525

 

 

 

31,886,669

 

Weighted average common shares

 

31,022,517

 

 

 

31,410,848

 

 

 

31,824,930

 

 

 

31,216,683

 

 

 

31,798,405

 

outstanding, basic

 

 

 

 

 

 

 

 

 

Weighted average common shares

 

31,034,666

 

 

 

31,805,901

 

 

 

32,237,116

 

 

 

31,345,192

 

 

 

32,279,342

 

outstanding, diluted

 

 

 

 

 

 

 

 

 


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

 

 

 

 

 

 

 

 

 

 

Selected Performance Metrics:

 

 

 

 

 

 

 

 

 

Return on average assets

0.69

%

 

0.71

%

 

0.92

%

 

0.70

%

 

0.92

%

Core return on average assets (non-GAAP)

0.70

%

 

0.68

%

 

0.96

%

 

0.69

%

 

0.93

%

Return on average equity

8.56

%

 

7.65

%

 

9.65

%

 

8.10

%

 

9.73

%

Core return on average tangible common equity (non-GAAP)

9.07

%

 

7.66

%

 

10.45

%

 

8.35

%

 

10.32

%

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 (non-GAAP) (1)

57.68

%

 

59.44

%

 

63.50

%

 

58.56

%

 

64.45

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Ratios:

 

 

 

 

 

 

 

 

 

Nonaccrual loans to total loans

1.24

%

 

0.96

%

 

0.49

%

 

1.24

%

 

0.49

%

Nonperforming assets to total assets

1.15

%

 

1.14

%

 

1.50

%

 

1.15

%

 

1.50

%

Allowance for loan losses to nonaccrual loans

109

%

 

125

%

 

209

%

 

109

%

 

209

%

Allowance for loan losses to total loans

1.36

%

 

1.19

%

 

1.01

%

 

1.36

%

 

1.01

%

Net charge-offs (recoveries) to average loans

0.06

%

 

0.01

%

 

-0.01

%

 

0.04

%

 

0.49

%

 

 

 

 

 

 

 

 

 

 

Capital Ratios:

 

 

 

 

 

 

 

 

 

Tier 1 leverage capital ratio

7.69

%

 

8.47

%

 

9.04

%

 

7.69

%

 

9.04

%

Tier 1 risk-based capital ratio

12.29

%

 

12.74

%

 

13.57

%

 

12.29

%

 

13.57

%

Total risk-based capital ratio

13.54

%

 

13.96

%

 

14.67

%

 

13.54

%

 

14.67

%

Common equity tier 1 capital ratio

12.29

%

 

12.74

%

 

13.57

%

 

12.29

%

 

13.57

%

 

 

 

 

 

 

 

 

 

 

(1) Efficiency ratio is calculated by dividing total non-interest expense by the 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

 

Amount

 

% of total loans

 

Amount

 

% of total loans

 

Amount

 

% of total loans

Commercial portfolio:

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

$

617,579

 

 

16.8

%

 

$

532,351

 

 

15.0

%

 

$

424,319

 

 

12.8

%

Multifamily

 

972,129

 

 

26.4

%

 

 

936,350

 

 

26.4

%

 

 

925,747

 

 

27.9

%

Commercial real estate

 

404,064

 

 

11.0

%

 

 

408,766

 

 

11.5

%

 

 

453,393

 

 

13.7

%

Construction and land development

 

65,259

 

 

1.8

%

 

 

65,706

 

 

1.9

%

 

 

58,696

 

 

1.7

%

Total commercial portfolio

 

2,059,031

 

 

56.0

%

 

 

1,943,173

 

 

54.8

%

 

 

1,862,155

 

 

56.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Retail portfolio:

 

 

 

 

 

 

 

 

 

 

 

Residential real estate lending

 

1,432,645

 

 

38.9

%

 

 

1,416,796

 

 

39.9

%

 

 

1,286,662

 

 

38.8

%

Consumer and other

 

187,980

 

 

5.1

%

 

 

189,152

 

 

5.3

%

 

 

168,201

 

 

5.1

%

Total 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 deferred loan origination fees (costs)

 

8,336

 

 

 

 

 

8,214

 

 

 

 

 

7,562

 

 

 

Allowance for loan losses

 

(50,010

)

 

 

 

 

(42,348

)

 

 

 

 

(33,630

)

 

 

Total loans, net

$

3,637,982

 

 

 

 

$

3,514,987

 

 

 

 

$

3,290,950

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-maturity securities 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

%

Total held-to-maturity securities

$

370,498

 

 

100.0

%

 

$

286,251

 

 

100.0

%

 

$

19,336

 

 

100.0

%


Net Interest Income Analysis

 

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

 

 

June 30, 2020

 

March 31, 2020

 

June 30, 2019

(In thousands)

 

Average
Balance

 

Income /
Expense

 

Yield /
Rate

 

Average
Balance

 

Income /
Expense

 

Yield /
Rate

 

Average
Balance

 

Income /
Expense

 

Yield /
Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits in banks

 

$

364,932

 

 

$

83

 

 

0.09

%

 

$

185,281

 

 ...

$396 0.86% $70,442 $254 1.45%Securities and FHLB stock 1,834,892 11,812 2.59% 1,544,848 12,623 3.29% 1,287,520 10,715 3.34%Total loans, net (1) 3,571,160 35,225 3.97% 3,464,438 35,612 4.13% 3,225,129 35,559 4.42%Total interest earning assets 5,770,984 47,120 3.28% 5,194,567 48,631 3.77% 4,583,091 46,528 4.07%Non-interest earning assets: Cash and due from banks 74,877 9,539 6,838 Other assets 224,531 222,757 264,046 Total assets $6,070,392 $5,426,863 $4,853,975 Interest bearing liabilities: Savings, NOW and money market deposits $2,313,772 $1,755 0.31% $2,143,247 $2,737 0.51% $1,857,715 $1,962 0.42%Time 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 Home Loan Bank advances - - 0.00% 6,374 27 1.70% 190,501 1,166 2.46%Other Borrowings - - 0.00% - - 0.00% 1,099 7 2.56%Total interest bearing liabilities 2,684,741 2,681 0.40% 2,530,674 3,942 0.63% 2,535,967 4,672 0.74%Non-interest bearing liabilities: Demand and transaction deposits 2,746,529 2,300,999 1,762,426 Other liabilities 151,591 93,309 90,680 Total liabilities 5,582,861 4,924,982 4,389,073 Stockholders' equity 487,531 501,881 464,902 Total liabilities and stockholders' equity $6,070,392 $5,426,863 $4,853,975 Net interest income / interest rate spread $44,439 2.88% $44,689 3.14% $41,856 3.33%Net interest earning assets / net interest margin $3,086,243 3.10% $2,663,893 3.46% $2,047,124 3.66% Total Cost of Deposits 0.20% 0.33% 0.34% (1) Amounts are net of deferred origination costs / (fees) and the allowance for loan losses* Net interest margin includes prepayment penalty income in 2Q20, 1Q20 and 2Q19 of $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 / Expense

Yield / Rate

Average Balance

Income / Expense

Yield / Rate

Interest earning assets:

Interest-bearing deposits in banks

$

275,107

$

479

0.35

%

$

71,861

$

548

1.54

%

Securities and FHLB stock

1,689,870

24,434

2.91

%

1,256,781

20,899

3.35

%

Total loans, net (1)

3,517,799

70,837

4.05

%

3,224,868

70,855

4.43

%

Total interest earning assets

5,482,776

95,750

3.51

%

4,553,510

92,302

4.09

%

Non-interest earning assets:

Cash and due from banks

42,208

8,404

Other assets

223,643

259,194

Total assets

$

5,748,627

$

4,821,108

Interest bearing liabilities:

Savings, NOW and money market deposits

$

2,228,509

$

4,492

0.41

%

$

1,867,478

$

3,829

0.41

%

Time 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 Home Loan Bank advances

3,187

27

1.70

%

259,108

3,213

2.50

%

Other Borrowings

-

-

0.00

%

1,215

16

2.66

%

Total interest bearing liabilities

2,607,707

6,623

0.51

%

2,591,469

9,673

0.75

%

Non-interest bearing liabilities:

Demand and transaction deposits

2,523,764

1,680,984

Other liabilities

122,450

92,921

Total liabilities

5,253,921

4,365,374

Stockholders' equity

494,706

455,734

Total liabilities and stockholders' equity

$

5,748,627

$

4,821,108

Net interest income / interest rate spread

$

89,127

3.00

%

$

82,629

3.33

%

Net interest earning assets / net interest margin

$

2,875,069

3.27

%

$

1,962,041

3.66

%

Total Cost of Deposits

0.26

%

0.32

%

(1) Amounts are net of deferred origination costs / (fees) and the allowance for loan losses

* Net interest margin includes prepayment penalty income in Jun YTD 2020 and Jun 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 demand deposit accounts

$

3,089,004

$

2,423,760

$

1,908,741

NOW accounts

198,653

234,268

216,834

Money market deposit accounts

1,876,540

1,708,818

1,239,387

Savings 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 Insured Cash 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

(In thousands)

Average
Balance

Average Rate
Paid

Average
Balance

Average Rate
Paid

Average
Balance

Average Rate
Paid

Noninterest-bearing demand deposit accounts

$

2,746,529

0.00

%

$

2,300,999

0.00

%

$

1,762,426

0.00

%

NOW accounts

237,279

0.17

%

231,707

0.40

%

220,516

0.47

%

Money market deposit accounts

1,741,466

0.36

%

1,587,242

0.60

%

1,298,033

0.41

%

Savings 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 accruing

$

-

$

3,856

$

13,939

Nonaccrual loans excluding held for sale loans and restructured loans

18,901

7,537

9,893

Nonaccrual loans held for sale

-

-

-

Troubled debt restructured loans - nonaccrual

26,776

26,435

6,221

Troubled debt restructured loans - accruing

28,031

26,968

43,277

Other 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 1st mortgages

11,106

9,173

6,330

Residential 1-4 family 2nd mortgages

729

884

1,267

Consumer 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 assets

1.15

%

1.14

%

1.50

%

Nonaccrual 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 nonaccrual loans

109

%

125

%

209

%


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.

As of and for the Three

As of and for the Six

Months Ended

Months Ended

(in thousands)

June 30,

March 31,

June 30,

June 30,

2020

2020

2019

2020

2019

Core operating revenue

Net interest income (GAAP)

$

44,439

$

44,689

$

41,856

$

89,127

$

82,629

Non-interest income (GAAP)

8,671

9,118

6,349

17,789

13,766

Less: Branch sale loss (gain)(1)

34

(1,428

)

-

(1,394

)

-

Less: Securities loss (gain)

(486

)

(499

)

377

(985

)

85

Core operating revenue (non-GAAP)

$

52,658

$

51,880

$

48,582

$

104,537

$

96,480

Core non-interest expenses

Non-interest expense (GAAP)

$

31,068

$

32,270

$

31,002

$

63,339

$

62,450

Less: Branch closure expense(2)

(695

)

(1,432

)

-

(2,051

)

-

Less: Severance (3)

-

-

(154

)

(76

)

(271

)

Core non-interest expense (non-GAAP)

$

30,373

$

30,838

$

30,848

$

61,212

$

62,179

Core net income

Net Income (GAAP)

$

10,374

$

9,545

$

11,185

$

19,919

$

21,999

Less: Branch sale (gain)(1)

34

(1,428

)

-

(1,394

)

-

Less: Securities loss (gain)

(486

)

(499

)

377

(985

)

85

Add: Branch closure expense(2)

695

1,432

-

2,051

-

Add: Severance (3)

-

-

154

76

271

Less: Tax on notable items

(61

)

130

(137

)

65

(92

)

Core net income (non-GAAP)

$

10,556

$

9,180

$

11,579

$

19,731

$

22,264

Tangible common equity

Stockholders' Equity (GAAP)

$

503,702

$

473,269

$

474,944

$

503,702

$

474,944

Less: Minority Interest (GAAP)

(134

)

(134

)

(134

)

(134

)

(134

)

Less: Goodwill (GAAP)

(12,936

)

(12,936

)

(12,936

)

(12,936

)

(12,936

)

Less: Core deposit intangible (GAAP)

(6,043

)

(6,386

)

(7,415

)

(6,043

)

(7,415

)

Tangible common equity (non-GAAP)

$

484,589

$

453,813

$

454,458

$

484,589

$

454,458

Average tangible common equity

Average Stockholders' Equity (GAAP)

$

487,531

$

501,881

$

464,902

$

494,706

$

455,734

Less: Minority Interest (GAAP)

(134

)

(134

)

(134

)

(134

)

(134

)

Less: Goodwill (GAAP)

(12,936

)

(12,936

)

(12,936

)

(12,936

)

(12,936

)

Less: Core deposit intangible (GAAP)

(6,210

)

(6,552

)

(7,575

)

(6,381

)

(7,738

)

Average tangible common equity (non-GAAP)

$

468,250

$

482,258

$

444,256

$

475,254

$

434,925

Core return on average assets

Core net income (numerator) (non-GAAP)

10,556

9,180

11,579

19,731

22,264

Divided: Total average assets (denominator) (GAAP)

6,070,392

5,426,863

4,853,975

5,748,627

4,821,107

Core return on average assets (non-GAAP)

0.70

%

0.68

%

0.96

%

0.69

%

0.93

%

Core return on average tangible common equity

Core net income (numerator) (non-GAAP)

10,556

9,180

11,579

19,731

22,264

Divided: Average tangible common equity (denominator) (non-GAAP)

468,250

482,258

444,256

475,254

434,925

Core return on average tangible common equity (non-GAAP)

9.07

%

7.66

%

10.45

%

8.35

%

10.32

%

Core efficiency ratio

Core non-interest expense (numerator) (non-GAAP)

30,373

30,838

30,848

61,212

62,179

Core operating revenue (denominator) (non-GAAP)

52,658

51,880

48,582

104,537

96,480

Core efficiency ratio (non-GAAP)

57.68

%

59.44

%

63.50

%

58.56

%

64.45

%

(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