On April 24, 2025, Amalgamated Financial Corp (AMAL, Financial) released its 8-K filing detailing the financial results for the first quarter ended March 31, 2025. The company, a full-service commercial bank and chartered trust company, reported a net income of $25.0 million, or $0.81 per diluted share, surpassing the analyst estimate of $0.80 per share. The company's revenue, however, fell short of the estimated $77.36 million, coming in at $70.6 million.
Performance and Challenges
Amalgamated Financial Corp (AMAL, Financial) demonstrated robust performance with a notable increase in total deposits by $445.9 million, reaching $7.6 billion. This growth was driven by a significant rise in political deposits, which increased by $102.7 million to $1.1 billion. Despite the positive deposit growth, the company faced challenges with a decrease in net interest income by $2.5 million, or 3.4%, to $70.6 million, primarily due to a higher average balance of interest-bearing deposits and a decrease in non-interest-bearing deposits.
Financial Achievements
The company's financial achievements include a strong net interest margin of 3.55% and a Common Equity Tier 1 Capital Ratio of 14.27%, reflecting a solid capital position. These metrics are crucial for banks as they indicate the company's ability to manage its capital efficiently and maintain financial stability. Additionally, the tangible common equity ratio improved to 8.73%, marking the tenth consecutive quarter of improvement.
Key Financial Metrics
Amalgamated Financial Corp (AMAL, Financial) reported a core net income of $27.1 million, or $0.88 per diluted share, slightly down from $28.0 million, or $0.90 per diluted share, in the previous quarter. The company's provision for credit losses decreased significantly to $0.6 million from $3.7 million in the prior quarter, indicating improved credit quality. Non-interest income increased to $6.4 million from $4.8 million, driven by higher trust fees.
Priscilla Sims Brown, President and Chief Executive Officer, commented, “All of our key earnings metrics came in strong and as expected, showing again that at Amalgamated, we do what we say we will. Our balance sheet boasts a low-risk asset profile including low commercial real-estate lending concentration, high levels of immediate and two-day liquidity, and return metrics near the top of our peer stack.”
Analysis and Conclusion
Amalgamated Financial Corp (AMAL, Financial) has shown resilience in its financial performance, with strong deposit growth and solid capital ratios. The company's ability to surpass EPS estimates highlights its effective management and strategic initiatives. However, the decrease in net interest income and the challenges in maintaining non-interest-bearing deposits may require attention to sustain growth. Overall, Amalgamated Financial Corp (AMAL) remains well-positioned in the banking sector with its robust capital structure and strategic focus on deposit growth.
Explore the complete 8-K earnings release (here) from Amalgamated Financial Corp for further details.
