Amalgamated Financial Corp. Reports Third Quarter 2025 Financial Results; Rock Solid Balance Sheet; Margin Expands to 3.60%

Core Revenue per Share of $2.84 | Tangible Book Value per Share of $25.31

Amalgamated Financial Corp. (the "Company" or "Amalgamated") (NASDAQ:AMAL), the holding company for Amalgamated Bank (the "Bank"), today announced financial results for the third quarter ended September 30, 2025.

Third Quarter 2025 Highlights (on a linked quarter basis)

• Net income of $26.8 million, or $0.88 per diluted share, compared to $26.0 million, or $0.84 per diluted share.
• Core net income¹ of $27.6 million, or $0.91 per diluted share, compared to $27.0 million, or $0.88 per diluted share.

Deposits and Liquidity

• On-balance sheet deposits increased $36.7 million, or 0.5%, to $7.8 billion.
• On-balance sheet deposits increased $149.0 million, or 1.9%, excluding $112.3 million of temporary pension funding deposits received on the last day of the second quarter and withdrawn on the following day.
• Off-balance sheet deposits increased $223.6 million to $265.0 million.
• Political deposits increased $235.0 million, or 19%, to $1.4 billion, comprising both on and off-balance sheet deposits.
• Average cost of deposits increased 5 basis points to 167 basis points, where non-interest-bearing deposits comprised 37% of total deposits.

Margin and Assets

• Net interest margin increased 5 basis points to 3.60%.
• Net interest income grew $3.5 million, or 4.9%, to $76.4 million.
• Net loans receivable increased $77.0 million, or 1.7%, to $4.7 billion.
• Net loans in growth mode (commercial and industrial, commercial real estate, and multifamily) increased $99.2 million, or 3.3%.
• Total PACE assessments grew $27.4 million, or 2.3%, to $1.2 billion, including CPACE growth of $22.3 million.
• Multifamily and commercial real estate loan portfolios totaled $1.9 billion and had a concentration of 202% to total risk-based capital.
• Nonperforming assets decreased $12.2 million, or 34.6%, to $23.0 million or 0.26% of total assets.

Capital and Returns

• Tangible book value per share¹ increased $0.98, or 4.0%, to $25.31, and has increased $7.98, or 46.1%, since September 2021.
• Tier 1 leverage ratio was 9.18% and Common Equity Tier 1 ratio was 14.21%.
• Tangible common equity¹ ratio increased 19 basis points to 8.79% due to strong quarterly earnings.
• Core return on average tangible common equity¹ of 14.65% and core return on average assets¹ of 1.27%.

Share Repurchase

• Repurchased approximately 347,000 shares, or $10.4 million of common stock, through September 30, 2025, with $19.9 million in remaining capacity under the share repurchase program approved on March 10, 2025.
• Approximately 74,000 shares have been repurchased from October 1 through October 21, 2025.

Priscilla Sims Brown, President and Chief Executive Officer, commented, "What stands out to me this quarter is mainly that we keep delivering great results. And the quality and sustainability of our earnings allows us to handle problem situations with ease."

Third Quarter Earnings

Net income was $26.8 million, or $0.88 per diluted share, compared to $26.0 million, or $0.84 per diluted share, for the prior quarter. The $0.8 million increase during the quarter was primarily driven by a $3.5 million increase in net interest income and a $1.2 million increase in non-interest income. This was partially offset by a $3.0 million increase in non-interest expense and a $0.4 million increase in provision for credit losses compared to the linked quarter.

Core net income¹ was $27.6 million, or $0.91 per diluted share, compared to $27.0 million, or $0.88 per diluted share for the prior quarter. Excluded from core net income for the quarter, pre-tax, was $1.2 million of losses on the sale of securities, $0.4 million of ICS One-Way Sell fee income, and $0.3 million of severance costs. Excluded from core net income for the second quarter of 2025, pre-tax, was $1.0 million of losses on the sale of securities, $0.3 million of scheduled accelerated depreciation from solar tax equity investments, $0.1 million of ICS One-Way Sell fee income, and $0.1 million of severance costs.

Net interest income was $76.4 million, compared to $72.9 million for the prior quarter. Loan interest income increased $3.6 million and loan yields increased 17 basis points. Average loan balances increased $72.5 million, reflecting strong commercial loan originations that were offset by paydowns and payoffs on lower-yielding commercial and residential loans. Interest income on securities increased $2.0 million driven by an increase in the average balance of securities of $137.8 million despite a slight decline in securities yields of 5 basis points. Interest expense on total interest-bearing deposits increased $2.0 million, driven primarily by an increase in the average balance of total interest-bearing deposits of $215.7 million, while interest-bearing deposit costs increased by 2 basis points.

Net interest margin was 3.60%, an increase of 5 basis points from 3.55% in the prior quarter largely due to interest income generated from securities purchases and origination of higher-yielding commercial loans. This was partially offset by a higher average balance of interest-bearing deposits, which resulted in a slightly higher blended cost of funds. Additionally, income from prepayment penalties had no material impact on net interest margin in the current quarter, compared to a one basis point impact in the prior quarter.

Provision for credit losses was an expense of $5.3 million, compared to an expense of $4.9 million in the prior quarter. The increase in the third quarter was primarily due to the quick, successful, and final resolution of one syndicated commercial and industrial non-performing loan previously disclosed in the second quarter, as well as charge-offs on our consumer solar and business banking portfolios, and a reserve increase for one non-performing multifamily loan. This was partially offset by a reserve release in excess of the charge-off and resolution of one legacy commercial and industrial loan.

Non-interest income was $9.2 million, compared to $8.0 million in the prior quarter. Excluding all non-core income adjustments noted above, core non-interest income¹ was $10.0 million, compared to $9.3 million in the prior quarter. The increase was primarily related to higher commercial banking fees and higher BOLI income.

Non-interest expense was $43.6 million, an increase of $3.0 million from the prior quarter. Core non-interest expense¹ was $43.4 million, also an increase of $2.9 million from the prior quarter. This was mainly driven by a $2.2 million increase in employee compensation expense tied to incentives related to company performance, as well as a $0.5 million increase in technology spend due to the continued investment in the Bank's digital transformation development.

Provision for income tax expense was $9.9 million, compared to $9.5 million for the prior quarter. The effective tax rate was 27.0%, compared to 26.7% in the prior quarter. The California single-sales factor apportionment law was adopted during the prior quarter, which resulted in an increase in the California state tax rate. A discrete tax benefit was recognized during the second quarter for the remeasurement of deferred tax assets, reducing the quarterly effective tax rate. Adjusted, the current quarter effective tax rate was 27.0% compared to 27.3% for the prior quarter.

Balance Sheet Quarterly Summary

Total assets were $8.7 billion at September 30, 2025, a $61.6 million, or 1% increase compared to $8.6 billion at June 30, 2025. Total average assets were $8.6 billion, in line with the target asset size. Notable changes within individual balance sheet line items include a $39.1 million increase in securities and a $77.0 million increase in net loans receivable. For liabilities, on-balance sheet deposits increased by $36.7 million. However, average total deposits increased by $166.3 million, reflecting growth across all segments. Off-balance sheet deposits increased by $223.6 million in the quarter. Equity grew by $21.6 million.

Total net loans receivable at September 30, 2025 were $4.7 billion, an increase of $77.0 million, or 1.7% for the quarter. The balance increase in loans was primarily driven by a $77.1 million increase in commercial and industrial loans, a $47.9 million increase in multifamily loans, and a $25.9 million decrease in commercial real estate loans, identified as growth portfolios. This was partially offset by a $10.1 million decrease in consumer solar loans, and a $14.7 million decrease in residential loans, both identified as non-growth portfolios.

During the quarter, criticized or classified loans decreased $18.6 million, largely related to the final resolution of one $10.8 million syndicated commercial and industrial non-performing loan previously disclosed in the second quarter, the payoff of a $3.0 million long-lived, legacy non-performing commercial and industrial loan, and the payoff of one $2.9 million commercial real estate loan. The decrease was also related to charge-offs of business banking loans totaling $1.1 million, partially offset by downgrades of business banking loans totaling $0.5 million.

Total on-balance sheet deposits at September 30, 2025 were $7.8 billion, an increase of $36.7 million, or 0.5%, during the quarter. Including accounts held off-balance sheet, deposits held by politically active customers, such as campaigns, PACs, advocacy-based organizations, and state and national party committees were $1.4 billion as of September 30, 2025, an increase of $235.0 million during the quarter. Non-interest-bearing deposits represented 37% of average total deposits and 37% of ending total deposits for the quarter, contributing to an average cost of total deposits of 167 basis points. Super-core deposits¹ totaled approximately $4.3 billion, had a weighted average life of 18 years, and comprised 55% of total deposits. Total uninsured deposits were $4.1 billion, comprising 52% of total deposits, while total uninsured, non-supercore deposits were $2.1 billion, comprising approximately 28% of total deposits.

Nonperforming assets totaled $23.0 million, or 0.26% of period-end total assets at September 30, 2025, a decrease of $12.2 million, compared with $35.2 million, or 0.41% of period-end total assets on a linked quarter basis. The decrease in nonperforming assets was primarily driven by the resolution and charge-off of $12.3 million of nonperforming commercial and industrial loans mentioned above and a $0.1 million decrease in residential non-accrual loans, partially offset by one $2.8 million multifamily loan that went nonaccrual during the quarter.

During the quarter, the allowance for credit losses on loans decreased $2.5 million to $56.5 million. The ratio of allowance to total loans was 1.18%, a decrease of 7 basis points from 1.25% in the second quarter of 2025. This was due to a $2.3 million net reserve release related to the quick, successful, and final resolution of a non-performing syndicated commercial and industrial business loan to an originator of consumer loans for renewable energy efficiency improvements previously disclosed in the second quarter. There was a further $2.1 million reserve release related to the resolution of a legacy commercial and industrial credit, and an additional $0.6 million net reserve release related to business banking loan workout activity. This was partially offset by a $1.6 million increase in reserves related to one multifamily loan that went nonaccrual in the quarter, and a $0.2 million reserve increase for a non-performing construction loan. Lastly, there was an additional $0.7 million provision impact related to loan balance activity and the update of qualitative and quantitative assumptions in the CECL model.

Capital Quarterly Summary

As of September 30, 2025, the Common Equity Tier 1 Capital ratio was 14.21%, the Total Risk-Based Capital ratio was 16.41%, and the Tier 1 Leverage Capital ratio was 9.18%, compared to 14.13%, 16.43% and 9.22%, respectively, as of June 30, 2025. Stockholders' equity at September 30, 2025 was $775.6 million, an increase of $21.6 million during the quarter. The increase in stockholders' equity was primarily driven by $26.8 million of net income for the quarter and a $7.8 million improvement in accumulated other comprehensive loss due to the tax-effected mark-to-market adjustment on available for sale securities, offset by $10.4 million in share buybacks and $4.3 million in dividends paid at $0.14 per outstanding share.

Tangible book value per share¹ was $25.31 as of September 30, 2025 compared to $24.33 as of June 30, 2025. Tangible common equity¹ improved to 8.79% of tangible assets, compared to 8.60% as of June 30, 2025.

Conference Call

As previously announced, Amalgamated Financial Corp. will host a conference call to discuss its third quarter 2025 results today, October 23, 2025 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 2025 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 13755783. The telephonic replay will be available until October 30, 2025.

Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of the Company's website at https://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 the Company's website at https://ir.amalgamatedbank.com/.

About Amalgamated Financial Corp.

Amalgamated Financial Corp. is a Delaware public benefit corporation and a bank holding company engaged in commercial banking and financial services through its wholly-owned subsidiary, Amalgamated Bank. Amalgamated Bank is a New York-based full-service commercial bank and a chartered trust company with a combined network of 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, 2025, total assets were $8.7 billion, total net loans were $4.7 billion, and total deposits were $7.8 billion. Additionally, as of September 30, 2025, the trust business held $37.9 billion in assets under custody and $16.6 billion in assets under management.

Non-GAAP Financial Measures

This release (and the accompanying financial information and tables) refer to certain non-GAAP financial measures including, without limitation, "Core operating revenue," "Core non-interest expense," "Core non-interest income," "Core net income," "Tangible common equity," "Average tangible common equity," "Core return on average assets," "Core return on average tangible common equity," and "Core efficiency ratio."

Management utilizes this information to compare operating performance for September 30, 2025 versus certain periods in 2025 and 2024 and to prepare internal projections. The Company believes these non-GAAP financial measures facilitate making period-to-period comparisons and are meaningful indications of operating performance. In addition, because intangible assets such as goodwill and other discrete items unrelated to core business, which are excluded, vary extensively from company to company, the Company believe that the presentation of this information allows investors to more easily compare 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. The Company strongly encourages 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 the Company's website, amalgamatedbank.com.

Terminology

Certain terms used in this release are defined as follows:

"Core efficiency ratio" is defined as "Core non-interest expense" divided by "Core operating revenue." The Company believes 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 net income" is defined as net income after tax excluding gains and losses on sales of securities, ICS One-Way Sell fee income, changes in fair value on loans held-for-sale, gains on the sale of owned property, subdebt repurchase gain, costs related to branch closures, restructuring/severance costs, acquisition costs, tax credits and accelerated depreciation on solar equity investments, and taxes on notable pre-tax items. The Company believes the most directly comparable GAAP financial measure is net income.

"Core non-interest expense" is defined as total non-interest expense excluding costs related to branch closures, and restructuring/severance. The Company believes the most directly comparable GAAP financial measure is total non-interest expense.

"Core non-interest income" is defined as total non-interest income excluding gains and losses on sales of securities, ICS One-Way Sell fee income, changes in fair value on loans held-for-sale, gains on the sale of owned property, subdebt repurchase gain, and tax credits and accelerated depreciation on solar equity investments. The Company believes the most directly comparable GAAP financial measure is non-interest income.

"Core operating revenue" is defined as total net interest income plus "core non-interest income". The Company believes the most directly comparable GAAP financial measure is the total of net interest income and non-interest income.

"Core return on average assets" is defined as "Core net income" divided by average total assets. The Company believes 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." The Company believes 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.

"Super-core deposits" are defined as total deposits from commercial and consumer customers, with a relationship length of greater than 5 years. The Company believes the most directly comparable GAAP financial measure is total deposits.

"Tangible assets" are defined as total assets excluding, as applicable, goodwill and core deposit intangibles. The Company believes the most directly comparable GAAP financial measure is total assets.

"Tangible common equity", and "Tangible book value" are defined as stockholders' equity excluding, as applicable, minority interests, goodwill and core deposit intangibles. The Company believes that the most directly comparable GAAP financial measure is total stockholders' equity.

"Tangible common equity ratio" is "Tangible common equity" divided by "Tangible assets." The Company believes the most directly comparable performance ratio derived from GAAP financial measures is an equity ratio calculated by dividing average equity by average assets.

"Traditional securities" is defined as total investment securities excluding PACE assessments. The Company believes the most directly comparable GAAP financial measure is total investment securities.

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," "aspire," "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:

1. uncertain conditions in the banking industry and in national, regional and local economies in core markets, which may have an adverse impact on business, operations and financial performance;
2. deterioration in the financial condition of borrowers resulting in significant increases in credit losses and provisions for those losses;
3. deposit outflows and subsequent declines in liquidity caused by factors that could include lack of confidence in the banking system, a deterioration in market conditions or the financial condition of depositors;
4. changes in deposits, including an increase in uninsured deposits;
5. ability to maintain sufficient liquidity to meet deposit and debt obligations as they come due, which may require that the Company sell investment securities at a loss, negatively impacting net income, earnings and capital;
6. unfavorable conditions in the capital markets, which may cause declines in stock price and the value of investments;
7. negative economic and political conditions that adversely affect the general economy, housing prices, the real estate market, the job market, consumer confidence, the financial condition of borrowers and consumer spending habits, which may affect, among other things, the level of non-performing assets, charge-offs and provision expense;
8. fluctuations or unanticipated changes in the interest rate environment including changes in net interest margin or changes in the yield curve that affect investments, loans or deposits;
9. the general decline in the real estate and lending markets, particularly in commercial real estate in the Company's market areas, and the effects of the enactment of or changes to rent-control and other similar regulations on multi-family housing;
10. potential implementation by the current presidential administration of a regulatory reform agenda that is significantly different from that of the prior presidential administration, impacting the rule making, supervision, examination and enforcement of the banking regulation agencies;
11. changes in U.S. trade policies and other global political factors beyond the Company's control, including the imposition of tariffs, which raise economic uncertainty, potentially leading to slower growth and a decrease in loan demand;
12. the outcome of legal or regulatory proceedings that may be instituted against us;
13. inability to achieve organic loan and deposit growth and the composition of that growth;
14. composition of the Company's loan portfolio, including any concentration in industries or sectors that may experience unanticipated or anticipated adverse conditions greater than other industries or sectors in the national or local economies in which the Company operates;
15. inaccuracy of the assumptions and estimates the Company makes and policies that the Company implements in establishing the allowance for credit losses;
16. changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments;
17. any matter that would cause the Company to conclude that there was impairment of any asset, including intangible assets;
18. limitations on the ability to declare and pay dividends;
19. the impact of competition with other financial institutions, including pricing pressures and the resulting impact on results, including as a result of compression to net interest margin;
20. increased competition for experienced members of the workforce including executives in the banking industry;
21. a failure in or breach of 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;
22. increased regulatory scrutiny and exposure from the use of "big data" techniques, machine learning, and artificial intelligence;
23. a downgrade in the Company's credit rating;
24. "greenwashing claims" against the Company and environmental, social, and governance ("ESG") products and increased scrutiny and political opposition to ESG and diversity, equity, and inclusion ("DEI") practices;
25. any unanticipated or greater than anticipated adverse conditions (including the possibility of earthquakes, wildfires, and other natural disasters) affecting the markets in which the Company operates;
26. physical and transitional risks related to climate change as they impact the business and the businesses that the Company finances;
27. future repurchase of the Company's shares through the Company's common stock repurchase program; and
28. descriptions of assumptions underlying or relating to any of the foregoing.

Additional factors which could affect the forward-looking statements can be found in the Company's 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/. The Company 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.

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