Amalgamated Posts Record Profit, Raises Guidance
Net interest income climbed 7.4% from the prior quarter to $86.1 million.
Amalgamated Financial Corp. (AMAL), the mission-driven commercial bank, reported record second-quarter net income as lending growth and a wider net interest margin lifted results.
Net income rose to $34.8 million, or $1.15 a diluted share, from $25.2 million, or $0.84 a share, in the first quarter. Profit a year earlier was $26.0 million, also $0.84 a share. Core net income reached a record $33.1 million, or $1.10 a diluted share, up from $24.1 million, or $0.80 a share, sequentially.
The earnings increase reflected stronger spread income and a return toward more typical credit costs. The provision for credit losses fell to $4.4 million from $13.5 million in the first quarter, when Amalgamated recorded $9.2 million of specific reserves tied to $78.0 million of multifamily loans to one borrower expected to default.
Net interest margin expanded three basis points from the prior quarter to 3.78%, helped by higher-yielding commercial originations and securities purchases. Loan yield rose to 5.21%, while total deposit cost held at 1.46%. Prepayment penalties added three basis points to the margin.
Net loans grew 2.3% during the quarter to $5.1 billion, led by multifamily and commercial-real-estate lending. Commercial loans increased 4.5% to $3.6 billion, while PACE assessments rose 3.1% to $1.3 billion. On-balance-sheet deposits climbed 3.4% to $8.5 billion as political deposits increased 11.4% to $2.1 billion, surpassing their peak during the 2024 presidential-election cycle.
Fee income and operating costs tempered the gain. Non-interest income declined to $12.3 million from $13.3 million sequentially, while non-interest expense increased to $47.3 million from $45.9 million as compensation, benefits and technology spending rose.
Amalgamated raised its financial guidance alongside the results, though it didn't provide revised ranges in the excerpt. The board also approved a new $40 million share-repurchase program in June.
Credit quality remained a constraint as nonperforming assets increased to $102.7 million, or 1.09% of assets, after a $5.3 million New York multifamily loan moved to nonaccrual status. Criticized or classified loans nonetheless declined $9.0 million, and tangible book value increased 3.3% sequentially to $27.47 a share.