EX-99.1 2 a202209earningsrelease.htm EX-99.1

Amalgamated Financial Corp. Reports Record Third Quarter 2022 Financial Results

NEW YORK, October 27, 2022 – (Globe Newswire) -- Amalgamated Financial Corp. (the “Company” or “Amalgamated”) (Nasdaq: AMAL), the holding company for Amalgamated Bank (the “Bank”), today announced record financial results for the third quarter ended September 30, 2022.

Third Quarter 2022 Highlights

•Record earnings of $22.9 million, or $0.74 per diluted share, compared to $19.6 million, or $0.63 per diluted share, on a linked quarter basis.

•Excluding the impact of solar tax equity investments, core net income was $24.8 million, or $0.80 per diluted share, as compared to $20.9 million, or $0.67 per diluted share, on a linked quarter basis.

•Average deposits increased by $191.1 million, or 2.7%, to $7.3 billion, on a linked quarter basis.

•Industry leading average cost of deposits of 14 basis points, where non-interest bearing deposits comprised 54% of total deposits.

•Loans receivable, net of allowance and deferred fees and costs, increased $220.2 million, or 6.1%, to $3.8 billion, on a linked quarter basis

•PACE assessments grew $114.6 million to $856.7 million on a linked quarter basis, comprised of an $8.7 million increase in commercial and $105.9 million increase in residential.

•Net interest income grew $11.1 million, or 19.6%, to $67.6 million compared to $56.5 million, while net interest margin grew by 47 basis points to 3.50%, compared to 3.03%, each on a linked quarter basis.

•Nonaccrual loans improved to $19.8 million or 0.51% of total loans, compared to $24.4 million or 0.67% of total loans on a linked quarter basis.

•Credit quality improved with criticized loans declining $22.8 million, or 16.8%, to $113.0 million, on a linked quarter basis.

•Regulatory capital remains above bank “well capitalized” standards.

“I am proud to say that the momentum we have established in the last year demonstrates that our ‘Growth For Good’ strategy is working, as we reported record earnings for a second consecutive quarter” said Priscilla Sims Brown, President and CEO. “We are progressing well toward our aspiration of achieving the most improved financial performance in U.S. banking, just as Amalgamated will celebrate its 100th anniversary in a few short months. I could not be more inspired by the team we have in place to propel this great bank into its next centennial.”

Third Quarter Earnings

Net income for the third quarter of 2022 was a record $22.9 million, or $0.74 per diluted share, compared to $19.6 million, or $0.63 per diluted share, for the second quarter of 2022. The $3.3 million increase for the third quarter of 2022 compared to the preceding quarter was primarily driven by an $11.1 million increase in net interest income, partially offset by a $2.5 million increase in provision for loan losses, a $2.2 million decrease in non-interest income, a $2.0 million increase in non-interest expense, and a $1.2 million increase in income tax expense related to our increased pre-tax income.

Core net income excluding the impact of solar tax equity investments (non-GAAP)1 for the third quarter of 2022 was $24.8 million, or $0.80 per diluted share, compared to $20.9 million, or $0.67 per diluted share, for the second quarter of 2022. Excluded from core net income for the third quarter of 2022 was $1.8 million of losses on sales of securities, $0.6 million of gains on subordinated debt repurchases, and $1.3 million of accelerated depreciation from our solar tax equity investments. Excluded from the second quarter of 2022 was $0.6 million of losses on the sale of securities, $0.3 million of non-interest one-time expenses, and $0.9 million of tax credits on solar tax equity investments in the second quarter of 2022.

[1] 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.

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Presentation excluding the temporary effect of the tax credits and accelerated depreciation of solar tax equity investments reduces the financial statement volatility associated with these investments.

Net interest income was $67.6 million for the third quarter of 2022, compared to $56.5 million for the second quarter of 2022. The $11.1 million increase from the preceding quarter mainly reflected higher interest income on securities of $6.4 million driven by a $78.9 million increase in average securities and a 64 basis point increase in securities yield. Loan interest income increased $4.5 million driven by a $189.5 million increase in average loan balances and a 25 basis point increase in loan yields. Total interest income was offset slightly by higher interest expense driven by a 13 basis point increase in deposit costs. These increases in yields and costs are primarily due to the rising interest rate environment.

Net interest margin was 3.50% for the third quarter of 2022, an increase of 47 basis points from 3.03% in the second quarter of 2022. The margin increase compared to the preceding quarter was driven by large increases on floating rate yields from interest-earning assets, partially offset by increases in costs on interest-bearing liabilities. Prepayment penalties earned in loan income contributed four basis points to our net interest margin in the third quarter of 2022, compared to two basis points in the second quarter of 2022.

Provision for loan losses totaled $5.4 million for the third quarter of 2022 compared to $2.9 million in the second quarter of 2022. The increase in the provision expense on a linked quarter basis is primarily driven by higher loan balances, an increase in qualitative factors, and $1.6 million in charge-offs related to nonperforming loans that were transferred to held for sale.

Core non-interest income excluding the impact of solar tax equity investments (non-GAAP)1 was $7.5 million for the third quarter of 2022, compared to $8.7 million in the second quarter of 2022. The decrease of $1.2 million was primarily related to losses on sale of nonperforming loans held for sale.

Core non-interest expense (non-GAAP)1 for the third quarter of 2022 was $36.3 million, an increase of $2.3 million from the second quarter of 2022. This was primarily driven by a $1.5 million expected increase in compensation and employee benefits and a $0.4 million increase in professional fees.

Our provision for income tax expense was $8.1 million for the third quarter of 2022, compared to $6.9 million for the second quarter of 2022. The increase is based on a higher pre-tax income. Our effective tax rate for the third quarter of 2022 was 26.0%, compared to 25.9% for the second quarter of 2022.

Balance Sheet Quarterly Summary

Total assets were $7.9 billion at September 30, 2022, compared to $7.9 billion at June 30, 2022. Notable changes within individual balance sheet line items include a $222.9 million increase in loans receivable, net of allowance and deferred fees and costs, offset by a reduction in cash of $266.3 million, a $33.1 million decrease in resell agreements, and a $31.3 million decrease in investment securities.

Total loans receivable, net of allowance and deferred fees and costs at September 30, 2022 were $3.8 billion, an increase of $220.2 million, or 6.1%, compared to June 30, 2022. The increase in loans is primarily driven by a $95.9 million increase in residential loans, a $61.7 million increase in commercial and industrial loans, a $41.4 million increase in our consumer and other loans due to solar loan originations, and a $31.3 million increase in multifamily loans, offset by a $4.3 million decrease in construction and land loans, and a $3.0 million decrease in the commercial real estate portfolio as we selectively de-risk our exposure in metropolitan areas. Our continued focus on credit quality improvement in the commercial portfolio resulted in $16.9 million of payoffs of criticized or classified loans.

Deposits at September 30, 2022 were $7.2 billion, a decrease of $130.9 million, or 1.8%, as compared to $7.3 billion as of June 30, 2022. Total deposits year to date have increased $804.0 million, or 12.6%. Deposits held by politically active

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customers, such as campaigns, PACs, advocacy-based organizations, and state and national party committees were $1.2 billion as of September 30, 2022, a decrease of $123.7 million on a linked quarter basis. Accelerated runoff of political deposits is anticipated in the fourth quarter related to the conclusion of the congressional elections.

Noninterest-bearing deposits represent 56% of average deposits and 54% of ending deposits for the quarter ended September 30, 2022, contributing to an average cost of deposits of 14 basis points in the third quarter of 2022.

Nonperforming assets totaled $54.3 million, or 0.69% of period-end total assets at September 30, 2022, a decrease of $11.0 million, compared with $65.3 million, or 0.82% on a linked quarter basis. The decrease in non-performing assets was primarily driven by a $5.7 million paydown on one commercial and industrial loan, as well as $3.9 million in residential loans that were sold.

The allowance for loan losses increased $2.6 million to $42.1 million at September 30, 2022 from $39.5 million at June 30, 2022, primarily due to increases in loan balances and an increase in qualitative factors. At September 30, 2022, we had $38.2 million of impaired loans for which there was a specific allowance of $5.2 million, compared to $60.1 million of impaired loans at June 30, 2022 for which there was a specific allowance of $6.1 million. The ratio of allowance to total loans was 1.09% at September 30, 2022 and 1.08% at June 30, 2022. The ratio of allowance to nonaccrual loans improved to 212.51% at September 30, 2022.

Capital Quarterly Summary

As of September 30, 2022, our Common Equity Tier 1 Capital Ratio was 11.91%, Total Risk-Based Capital Ratio was 14.43%, and Tier-1 Leverage Capital Ratio was 7.16%, compared to 11.75%, 14.41%, and 7.08%, respectively, as of June 30, 2022. Stockholders’ equity at September 30, 2022 was $487.7 million, compared to $498.0 million at June 30, 2022. The decrease in stockholders’ equity was primarily driven by a $29.7 million increase in accumulated other comprehensive loss due to the tax effected mark-to-market on our securities portfolio, partially offset by $22.9 million of net income for the quarter.

Our tangible book value per share was $15.37 as of September 30, 2022 compared to $15.69 as of June 30, 2022, primarily as a result of a $29.7 million decline from the previous quarter in the tax effected mark-to-market adjustment for the fair value of our available-for-sale securities portfolio. The mark-to-market adjustment had no impact on our Tier 1 Capital Ratio or other risk based ratios. Tangible common equity was 6.00% of tangible assets, compared to 6.07% as of June 30, 2022.

Conference Call

As previously announced, Amalgamated Financial Corp. will host a conference call to discuss its third quarter 2022 results today, October 27th, 2022 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 2022 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 13731490. The telephonic replay will be available until November 3, 2022.

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/.

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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 five branches across New York City, Washington D.C., and San Francisco, and a commercial office in 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 September 30, 2022, our total assets were $7.9 billion, total net loans were $3.8 billion, and total deposits were $7.2 billion. Additionally, as of September 30, 2022, our trust business held $37.6 billion in assets under custody and $12.5 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 operating revenue excluding solar tax impact,” “Core non-interest expense,” “Core net income,” “Core net income excluding solar tax impact,” “Tangible common equity,” “Average tangible common equity,” “Core return on average assets,” “Core return on average assets excluding solar tax impact,” “Core return on average tangible common equity,” “Core return on average tangible common equity excluding solar tax impact,” “Core efficiency ratio,” and “Core efficiency ratio excluding solar tax impact.”

Our management utilizes this information to compare our operating performance for September 30, 2022 versus certain periods in 2022 and 2021 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 “core non-interest income”, defined as 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 operating revenue excluding solar tax impact” is defined as total net interest income plus non-interest income excluding gains and losses on sales of securities, gains on the sale of owned property, and tax credits and depreciation on

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solar equity investments. 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, restructuring/severance, and acquisitions. 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.

“Core net income excluding solar tax impact” 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, tax credits and depreciation on solar equity investments, 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 assets excluding solar tax impact” is defined as “Core net income excluding solar tax impact” 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 return on average tangible common equity excluding solar tax impact” is defined as “Core net income excluding solar tax impact” 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.

“Core efficiency ratio excluding solar tax impact” is defined as “Core non-interest expense” divided by “Core operating revenue excluding solar tax impact.” 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.

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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. 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) continued fluctuation of the 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, which may have an adverse impact on our business, operations and performance, and could have a negative impact on our credit portfolio, share price, and borrowers; (vii) fluctuations or unanticipated changes in interest rates on loans or deposits or that affect the yield curve; (viii) any matter that would cause us to conclude that there was impairment of any asset, including intangible assets; (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; (xii) the risk that the preliminary financial information reported herein and our current preliminary analysis will be different when our review is finalized; (xiii) increased competition for experienced executives in the banking industry; (xiv) a failure in or breach of our operational or security systems or infrastructure, or those of third party vendors or other service providers, including as a result of unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; and (xv) the outcome of any legal proceedings that may be instituted against us in connection with the termination of the merger agreement with Amalgamated Bank of Chicago. 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 Contact:

Jamie Lillis

Solebury Trout

shareholderrelations@amalgamatedbank.com

800-895-4172

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Consolidated Statements of Income (unaudited)

			Three Months Ended																		Nine Months Ended
			September 30,						June 30,						September 30,						September 30,
($ in thousands)			2022						2022						2021						2022						2021
INTEREST AND DIVIDEND INCOME
Loans			$	38,264					$	33,766					$	29,915					$	103,157					$	91,180
Securities			31,580						24,352						14,655						75,087						40,008
Interest-bearing deposits in banks			971						551						230						1,701						451
Total interest and dividend income			70,815						58,669						44,800						179,945						131,639
INTEREST EXPENSE
Deposits			2,491						1,481						1,413						5,374						4,416
Borrowed funds			696						690						—						2,077						—
Total interest expense			3,187						2,171						1,413						7,451						4,416
NET INTEREST INCOME			67,628						56,498						43,387						172,494						127,223
Provision for (recovery of) loan losses			5,363						2,912						(2,276)						10,568						(3,855)
Net interest income after provision for loan losses			62,265						53,586						45,663						161,926						131,078
NON-INTEREST INCOME
Trust Department fees			3,872						3,479						3,353						10,842						10,471
Service charges on deposit accounts			2,735						2,826						2,466						8,008						6,941
Bank-owned life insurance			785						1,283						539						2,882						1,858
Gain (loss) on sale of securities			(1,844)						(582)						413						(2,264)						755
Gain (loss) on sale of loans, net			(367)						492						280						(32)						1,706
Gain (loss) on other real estate owned, net			—						—						—						—						(407)
Equity method investments			(1,151)						(638)						(483)						(1,357)						(5,720)
Other			973						386						134						1,592						424
Total non-interest income			5,003						7,246						6,702						19,671						16,028
NON-INTEREST EXPENSE
Compensation and employee benefits			19,527						18,046						17,482						55,242						52,485
Occupancy and depreciation			3,481						3,457						3,440						10,378						10,293
Professional fees			3,173						2,745						2,348						8,733						9,219
Data processing			4,149						4,327						4,521						13,660						10,848
Office maintenance and depreciation			807						784						887						2,316						2,362
Amortization of intangible assets			262						261						301						785						905
Advertising and promotion			795						761						1,023						2,410						2,248
Other			4,064						3,965						3,032						11,477						8,863
Total non-interest expense			36,258						34,346						33,034						105,001						97,223
Income before income taxes			31,010						26,486						19,331						76,596						49,883
Income tax expense (benefit)			8,066						6,873						4,915						19,874						12,870
Net income			$	22,944					$	19,613					$	14,416					$	56,722					$	37,013
Earnings per common share - basic			$	0.75					$	0.64					$	0.46					$	1.84					$	1.19
Earnings per common share - diluted			$	0.74					$	0.63					$	0.46					$	1.82					$	1.17

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Consolidated Statements of Financial Condition

($ in thousands)			September 30, 2022						December 31, 2021
Assets			(unaudited)
Cash and due from banks			$	3,404					$	8,622
Interest-bearing deposits in banks			62,819						321,863
Total cash and cash equivalents			66,223						330,485
Securities:
Available for sale, at fair value (amortized cost of $2,087,187 and $2,103,049, respectively)			1,957,486						2,113,410
Held-to-maturity (fair value of $1,369,383 and $849,704, respectively)			1,492,423						843,569
Loans held for sale			17,916						3,279
Loans receivable, net of deferred loan origination costs (fees)			3,871,290						3,312,224
Allowance for loan losses			(42,122)						(35,866)
Loans receivable, net			3,829,168						3,276,358
Resell agreements			192,834						229,018
Accrued interest and dividends receivable			34,767						28,820
Premises and equipment, net			10,539						11,735
Bank-owned life insurance			105,915						107,266
Right-of-use lease asset			29,991						33,115
Deferred tax asset			64,046						26,719
Goodwill			12,936						12,936
Other intangible assets			3,366						4,151
Equity investments			7,683						6,856
Other assets			42,924						50,159
Total assets			$	7,868,217					$	7,077,876
Liabilities
Deposits			$	7,160,307					$	6,356,255
Subordinated debt			77,679						83,831
Borrowed funds			75,000						—
Operating leases			43,229						48,160
Other liabilities			24,264						25,755
Total liabilities			7,380,479						6,514,001
Stockholders’ equity
Common stock, par value $.01 per share (70,000,000 shares authorized; 30,672,303 and 31,130,143 shares issued and outstanding, respectively)			307						311
Additional paid-in capital			286,431						297,975
Retained earnings			308,743						260,047
Accumulated other comprehensive income (loss), net of income taxes			(107,876)						5,409
Total Amalgamated Financial Corp. stockholders' equity			487,605						563,742
Noncontrolling interests			133						133
Total stockholders' equity			487,738						563,875
Total liabilities and stockholders’ equity			$	7,868,217					$	7,077,876

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Select Financial Data

			As of and for the																		As of and for the
			Three Months Ended																		Nine Months Ended
			September 30,						June 30,						September 30,						September 30,
(Shares in thousands)			2022						2022						2021						2022						2021
Selected Financial Ratios and Other Data:
Earnings per share
Basic			$	0.75					$	0.64					$	0.46					$	1.84					$	1.19
Diluted			0.74						0.63						0.46						1.82						1.17
Core net income (non-GAAP)
Basic			$	0.78					$	0.66					$	0.46					$	1.90					$	1.20
Diluted			0.77						0.65						0.46						1.87						1.19
Core net income excluding solar tax impact (non-GAAP)
Basic			$	0.81					$	0.68					$	0.48					$	1.95					$	1.36
Diluted			0.80						0.67						0.48						1.92						1.34
Book value per common share (excluding minority interest)			$	15.90					$	16.23					$	17.89					$	15.90					$	17.89
Tangible book value per share (non-GAAP)			$	15.37					$	15.69					$	17.33					$	15.37					$	17.33
Common shares outstanding			30,672						30,684						31,097						30,672						31,097
Weighted average common shares outstanding, basic			30,673						30,818						31,094						30,864						31,216
Weighted average common shares outstanding, diluted			31,032						31,189						31,462						31,223						31,584

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Select Financial Data

			As of and for the																		As of and for the
			Three Months Ended																		Nine Months Ended
			September 30,						June 30,						September 30,						September 30,
			2022						2022						2021						2022						2021
Selected Performance Metrics:
Return on average assets			1.15		%				1.01		%				0.86		%				0.98		%				0.77		%
Core return on average assets (non-GAAP)			1.19		%				1.05		%				0.86		%				1.02		%				0.78		%
Core return on average assets excluding solar tax impact (non-GAAP)			1.24		%				1.08		%				0.90		%				1.04		%				0.88		%
Return on average equity			17.79		%				15.20		%				10.29		%				14.32		%				9.02		%
Core return on average tangible common equity (non-GAAP)			19.11		%				16.25		%				10.62		%				15.25		%				9.46		%
Core return on average tangible common equity excluding solar tax impact (non-GAAP)			19.88		%				16.76		%				11.05		%				15.65		%				10.65		%
Average equity to average assets			6.44		%				6.67		%				8.38		%				6.88		%				8.55		%
Tangible common equity to tangible assets			6.00		%				6.07		%				7.88		%				6.00		%				7.88		%
Loan yield			4.11		%				3.86		%				3.84		%				3.95		%				3.83		%
Securities yield			3.35		%				2.66		%				2.19		%				2.82		%				2.17		%
Deposit cost			0.14		%				0.08		%				0.09		%				0.10		%				0.10		%
Net interest margin			3.50		%				3.03		%				2.70		%				3.11		%				2.77		%
Efficiency ratio (1)			49.92		%				53.88		%				65.95		%				54.64		%				67.87		%
Core efficiency ratio (non-GAAP)			49.09		%				52.90		%				65.71		%				53.80		%				67.19		%
Core efficiency ratio excluding solar tax impact (non-GAAP)			48.24		%				52.20		%				64.67		%				53.22		%				64.30		%
Asset Quality Ratios:
Nonaccrual loans to total loans			0.51		%				0.67		%				1.46		%				0.51		%				1.46		%
Nonperforming assets to total assets			0.69		%				0.82		%				0.99		%				0.69		%				0.99		%
Allowance for loan losses to nonaccrual loans			212.51		%				161.81		%				78.83		%				212.51		%				78.83		%
Allowance for loan losses to total loans			1.09		%				1.08		%				1.15		%				1.09		%				1.15		%
Annualized net charge-offs (recoveries) to average loans			0.29		%				0.11		%				-0.02		%				0.16		%				0.08		%
Capital Ratios:
Tier 1 leverage capital ratio			7.16		%				7.08		%				7.85		%				7.16		%				7.85		%
Tier 1 risk-based capital ratio			11.91		%				11.75		%				13.98		%				11.91		%				13.98		%
Total risk-based capital ratio			14.43		%				14.41		%				14.99		%				14.43		%				14.99		%
Common equity tier 1 capital ratio			11.91		%				11.75		%				13.98		%				11.91		%				13.98		%
(1) Efficiency ratio is calculated by dividing total non-interest expense by the sum of net interest income and total non-interest income

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Loan and Held-to-Maturity Securities Portfolio Composition

(In thousands)			At September 30, 2022												At June 30, 2022												At September 30, 2021
			Amount						% of total loans						Amount						% of total loans						Amount						% of total loans
Commercial portfolio:
Commercial and industrial			$	805,087					20.8%						$	743,403					20.4		%				$	628,388					20.2%
Multifamily			884,790						22.9%						853,514						23.4		%				826,143						26.5%
Commercial real estate			338,002						8.7%						340,987						9.4		%				346,996						11.1%
Construction and land development			38,946						1.0%						43,212						1.2		%				34,863						1.1%
Total commercial portfolio			2,066,825						53.4%						1,981,116						54.4		%				1,836,390						58.9%
Retail portfolio:
Residential real estate lending			1,332,010						34.5%						1,236,088						33.9		%				1,032,947						33.1%
Consumer and other			467,793						12.1%						426,394						11.7		%				249,050						8.0%
Total retail			1,799,803						46.6%						1,662,482						45.6		%				1,281,997						41.1%
Total loans held for investment			3,866,628						100.0%						3,643,598						100.0		%				3,118,387						100.0%
Net deferred loan origination costs (fees)			4,662												4,806												4,942
Allowance for loan losses			(42,122)												(39,477)												(35,863)
Total loans, net			$	3,829,168											$	3,608,927											$	3,087,466
Held-to-maturity securities portfolio:
PACE assessments			$	856,701					57.4%						$	742,146					53.9%						$	627,195					86.5%
Other securities			635,722						42.6%						633,520						46.1%						97,881						13.5%
Total held-to-maturity securities			$	1,492,423					100.0%						$	1,375,666					100.0%						$	725,076					100.0%

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Net Interest Income Analysis

			Three Months Ended
			September 30, 2022																		June 30, 2022																		September 30, 2021
(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			$	222,071					$	971					1.73		%				$	305,134					$	551					0.72		%				$	632,526					$	230					0.14		%
Securities			3,522,863						29,735						3.35		%				3,443,987						23,308						2.71		%				2,545,703						14,192						2.21		%
Resell agreements			232,956						1,845						3.14		%				231,468						1,044						1.81		%				114,100						463						1.61		%
Total loans, net (1)(2)			3,693,688						38,264						4.11		%				3,504,223						33,766						3.86		%				3,087,744						29,915						3.84		%
Total interest earning assets			7,671,578						70,815						3.66		%				7,484,812						58,669						3.14		%				6,380,073						44,800						2.79		%
Non-interest earning assets:
Cash and due from banks			4,783																		9,296																		8,464
Other assets			265,736																		266,186																		243,969
Total assets			$	7,942,097																	$	7,760,294																	$	6,632,506
Interest bearing liabilities:
Savings, NOW and money market deposits			$	3,031,402					$	2,329					0.30		%				$	3,030,788					$	1,332					0.18		%				$	2,641,719					$	1,173					0.18		%
Time deposits			184,476						162						0.35		%				192,181						149						0.31		%				241,009						240						0.40		%
Total deposits			3,215,878						2,491						0.31		%				3,222,969						1,481						0.18		%				2,882,728						1,413						0.19		%
Other borrowings			85,323						696						3.24		%				83,886						690						3.30		%				—						—						0.00		%
Total interest bearing liabilities			3,301,201						3,187						0.38		%				3,306,855						2,171						0.26		%				2,882,728						1,413						0.19		%
Non-interest bearing liabilities:
Demand and transaction deposits			4,053,953																		3,855,735																		3,077,231
Other liabilities			75,143																		80,274																		116,790
Total liabilities			7,430,297																		7,242,864																		6,076,749
Stockholders' equity			511,800																		517,430																		555,757
Total liabilities and stockholders' equity			$	7,942,097																	$	7,760,294																	$	6,632,506
Net interest income / interest rate spread									$	67,628					3.28		%										$	56,498					2.88		%										$	43,387					2.60		%
Net interest earning assets / net interest margin			$	4,370,377											3.50		%				$	4,177,957											3.03		%				$	3,497,345											2.70		%
Total Cost of Deposits															0.14		%																0.08		%																0.09		%

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

(2) Includes prepayment penalty interest income in 3Q2022, 2Q2022, and 3Q2021 of $800, $379, and $169, respectively (in thousands)

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Net Interest Income Analysis

			Nine Months Ended
			September 30, 2022																		September 30, 2021
(In thousands)			Average Balance			Income / Expense									Yield / Rate						Average Balance			Income / Expense									Yield / Rate
Interest earning assets:
Interest-bearing deposits in banks			$	316,288					$	1,701					0.72		%				$	508,421					$	451					0.12		%
Securities			3,387,707						71,477						2.82		%				2,321,979						38,643						2.23		%
Resell agreements			227,932						3,610						2.12		%				138,967						1,365						1.31		%
Total loans, net (1)(2)			3,493,405						103,157						3.95		%				3,180,890						91,180						3.83		%
Total interest earning assets			7,425,332						179,945						3.24		%				6,150,257						131,639						2.86		%
Non-interest earning assets:
Cash and due from banks			7,752																		7,780
Other assets			267,315																		263,170
Total assets			$	7,700,399																	$	6,421,207
Interest bearing liabilities:
Savings, NOW and money market deposits			$	2,986,588					$	4,908					0.22		%				$	2,574,463					$	3,568					0.19		%
Time deposits			191,944						466						0.32		%				259,609						848						0.44		%
Total deposits			3,178,532						5,374						0.23		%				2,834,072						4,416						0.21		%
Other borrowings			84,604						2,077						3.28		%				165						—						0.00		%
Total interest bearing liabilities			3,263,136						7,451						0.31		%				2,834,237						4,416						0.21		%
Non-interest bearing liabilities:
Demand and transaction deposits			3,821,571																		2,925,516
Other liabilities			85,996																		112,721
Total liabilities			7,170,703																		5,872,474
Stockholders' equity			529,696																		548,733
Total liabilities and stockholders' equity			$	7,700,399																	$	6,421,207
Net interest income / interest rate spread									$	172,494					2.93		%										$	127,223					2.65		%
Net interest earning assets / net interest margin			$	4,162,196											3.11		%				$	3,316,020											2.77		%
Total Cost of Deposits															0.10		%																0.10		%

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

(2) Includes prepayment penalty interest income in September YTD 2022 and September YTD 2021 of $1.6 million and $1.3 million, respectively

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Deposit Portfolio Composition

(In thousands)			September 30, 2022						June 30, 2022						September 30, 2021
Non-interest bearing demand deposit accounts			$	3,839,155					$	3,965,907					$	3,189,155
NOW accounts			204,473						208,795						206,610
Money market deposit accounts			2,549,024						2,540,657						2,241,914
Savings accounts			384,644						388,185						364,568
Time deposits			183,011						187,623						222,259
Total deposits			$	7,160,307					$	7,291,167					$	6,224,506

			Three Months Ended
			September 30, 2022												June 30, 2022												September 30, 2021
(In thousands)			Average Balance						Average Rate Paid						Average Balance						Average Rate Paid						Average Balance						Average Rate Paid
Non-interest bearing demand deposit accounts			$4,053,953						0.00		%				$3,855,735						0.00		%				$3,077,231						0.00		%
NOW accounts			210,972						0.19		%				211,007						0.09		%				205,417						0.09		%
Money market deposit accounts			2,437,920						0.33		%				2,431,571						0.19		%				2,066,830						0.20		%
Savings accounts			382,510						0.19		%				388,210						0.11		%				369,472						0.10		%
Time deposits			184,476						0.35		%				192,181						0.31		%				241,009						0.40		%
Total deposits			$	7,269,831					0.14		%				$	7,078,704					0.08		%				$	5,959,959					0.09		%

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Asset Quality

(In thousands)			September 30, 2022						June 30, 2022						September 30, 2021
Loans 90 days past due and accruing			$	—					$	—					$	—
Nonaccrual loans held for sale			5,858						4,841						—
Troubled debt restructured loans - accruing loans held for sale			10,179						—						—
Nonaccrual loans excluding held for sale loans and restructured loans			7,499						8,109						24,960
Troubled debt restructured loans - nonaccrual			12,322						16,288						20,534
Troubled debt restructured loans - accruing			18,396						35,683						21,958
Other real estate owned			—						307						307
Impaired securities			37						56						64
Total nonperforming assets			$	54,291					$	65,284					$	67,823
Nonaccrual loans:
Commercial and industrial			$	9,356					$	9,550					$	13,709
Multifamily			3,494						3,494						6,079
Commercial real estate			4,914						3,931						4,023
Construction and land development			—						5,053						—
Total commercial portfolio			17,764						22,028						23,811
Residential real estate lending			675						898						20,797
Consumer and other			1,382						1,471						886
Total retail portfolio			2,057						2,369						21,683
Total nonaccrual loans			$	19,821					$	24,397					$	45,494
Nonaccrual loans to total loans			0.51		%				0.67		%				1.46		%
Nonperforming assets to total assets			0.69		%				0.82		%				0.99		%
Allowance for loan losses to nonaccrual loans			212.51		%				161.81		%				78.83		%
Allowance for loan losses to total loans			1.09		%				1.08		%				1.15		%
Annualized net charge-offs (recoveries) to average loans			0.29		%				0.11		%				-0.02		%

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Credit Quality

			September 30, 2022
($ in thousands)			Pass						Special Mention						Substandard						Doubtful						Total
Commercial and industrial			$	778,331					$	7,797					$	17,213					$	1,746					$	805,087
Multifamily			842,685						23,866						18,239						—						884,790
Commercial real estate			298,374						20,948						18,680						—						338,002
Construction and land development			36,522						—						2,424						—						38,946
Residential real estate lending			1,331,335						—						675						—						1,332,010
Consumer and other			466,411						—						1,382						—						467,793
Total loans			$	3,753,658					$	52,611					$	58,613					$	1,746					$	3,866,628

			June 30, 2022
($ in thousands)			Pass						Special Mention						Substandard						Doubtful						Total
Commercial and industrial			$	710,534					$	7,923					$	24,946					$	—					$	743,403
Multifamily			800,167						25,433						27,914						—						853,514
Commercial real estate			301,243						20,966						18,778						—						340,987
Construction and land development			35,736						—						7,476						—						43,212
Residential real estate lending			1,235,190						—						898						—						1,236,088
Consumer and other			424,923						—						1,471						—						426,394
Total loans			$	3,507,793					$	54,322					$	81,483					$	—					$	3,643,598

			September 30, 2021
($ in thousands)			Pass						Special Mention						Substandard						Doubtful						Total
Commercial and industrial			$	579,429					$	22,655					$	25,850					$	454					$	628,388
Multifamily			696,898						83,851						42,221						3,173						826,143
Commercial real estate			243,903						26,815						76,278						—						346,996
Construction and land development			27,387						—						7,476						—						34,863
Residential real estate lending			1,011,856						294						20,797						—						1,032,947
Consumer and other			248,164						—						886						—						249,050
Total loans			$	2,807,637					$	133,615					$	173,508					$	3,627					$	3,118,387

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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.

			As of and for the																		As of and for the
			Three Months Ended																		Nine Months Ended
(in thousands)			September 30, 2022						June 30, 2022						September 30, 2021						September 30, 2022						September 30, 2021
Core operating revenue
Net Interest income (GAAP)			$	67,628					$	56,498					$	43,387					$	172,494					$	127,223
Non-interest income			5,003						7,246						6,702						19,671						16,028
Less: Securities (gain) loss			1,844						582						(413)						2,264						(755)
Less: Subdebt repurchase (gain) loss			(617)						—						—						(617)						—
Core operating revenue (non-GAAP)			73,858						64,326						49,676						193,812						142,496
Add: Tax (credits) depreciation on solar investments			1,306						862						796						2,105						6,393
Core operating revenue excluding solar tax impact (non-GAAP)			75,164						65,188						50,472						195,917						148,889
Core non-interest expense
Non-interest expense (GAAP)			$	36,258					$	34,346					$	33,034					$	105,001					$	97,224
Less: Other one-time expenses(1)			—						(316)						(392)						(738)						(1,482)
Core non-interest expense (non-GAAP)			36,258						34,030						32,642						104,263						95,742
Core net income
Net Income (GAAP)			$	22,944					$	19,613					$	14,416					$	56,722					$	37,013
Less: Securities (gain) loss			1,844						582						(413)						2,264						(755)
Less: Subdebt repurchase (gain) loss			(617)						—						—						(617)						—
Add: Other one-time expenses			—						316						392						738						1,482
Less: Tax on notable items			(319)						(233)						5						(619)						(188)
Core net income (non-GAAP)			23,852						20,278						14,400						58,488						37,552
Add: Tax (credits) depreciation on solar investments			1,306						862						796						2,105						6,393
Add: Tax effect of solar income			(340)						(224)						(202)						(546)						(1,649)
Core net income excluding solar tax impact (non-GAAP)			24,818						20,916						14,994						60,047						42,296
Tangible common equity
Stockholders' equity (GAAP)			$	487,738					$	498,041					$	556,390					$	487,738					$	556,390
Less: Minority interest			(133)						(133)						(133)						(133)						(133)
Less: Goodwill			(12,936)						(12,936)						(12,936)						(12,936)						(12,936)
Less: Core deposit intangible			(3,366)						(3,628)						(4,453)						(3,366)						(4,453)
Tangible common equity (non-GAAP)			471,303						481,344						538,868						471,303						538,868
Average tangible common equity
Average stockholders' equity (GAAP)			$	511,800					$	517,430					$	555,757					$	529,696					$	548,733
Less: Minority interest			(133)						(133)						(133)						(133)						(133)
Less: Goodwill			(12,936)						(12,936)						(12,936)						(12,936)						(12,936)
Less: Core deposit intangible			(3,494)						(3,755)						(4,602)						(3,754)						(4,900)
Average tangible common equity (non-GAAP)			495,237						500,606						538,086						512,873						530,764
Core return on average assets
Denominator: Total average assets			7,942,097						7,760,294						6,632,506						7,700,399						6,421,208
Core return on average assets (non-GAAP)			1.19%						1.05%						0.86%						1.02%						0.78%
Core return on average assets excluding solar tax impact (non-GAAP)			1.24%						1.08%						0.90%						1.04%						0.88%
Core return on average tangible common equity
Denominator: Average tangible common equity			495,237						500,606						538,086						512,873						530,764
Core return on average tangible common equity (non-GAAP)			19.11%						16.25%						10.62%						15.25%						9.46%
Core return on average tangible common equity excluding solar tax impact (non-GAAP)			19.88%						16.76%						11.05%						15.65%						10.65%
Core efficiency ratio
Numerator: Core non-interest expense (non-GAAP)			$	36,258					$	34,030					$	32,642					$	104,263					$	95,742
Core efficiency ratio (non-GAAP)			49.09%						52.90%						65.71%						53.80%						67.19%
Core efficiency ratio excluding solar tax impact (non-GAAP)			48.24%						52.20%						64.67%						53.22%						64.30%

(1) Salary and COBRA reimbursement expense for positions eliminated, plus expenses related to the termination of the merger agreement with Amalgamated Bank of Chicago

17