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    AMAL
    Earnings call· Jun 2026(Q2 FY26)

    Amalgamated Financial Corp. AMAL

    Jul 23, 2026 Source

    Executive summary

    Amalgamated Financial Corp. Q2 FY26 — Record Earnings and Raised Full-Year Guidance

    Amalgamated Financial Corp. delivered record Q2 FY26 results, driven by a strong balance sheet, differentiated deposit franchise, and effective asset optimization. The company raised full-year NII and pre-tax pre-provision earnings guidance, reflecting confidence in its growth strategy and investments in technology and AI. Management anticipates balance sheet stability in the near term due to election cycle dynamics, with growth expected to restart in 2027.

    Highlights

    5

    • Achieved record net income of $34.8 million and core net income of $33.1 million.

    • Return on average assets exceeded 1.4% and return on tangible common equity exceeded 16%.

    • Core efficiency ratio remained below 50% at 49.15%, demonstrating strong operating leverage.

    • On-balance sheet deposits increased $280 million, or 3.4%, to a record $8.5 billion.

    • Total loans increased approximately $115 million, with commercial lending up $155 million, or 4.5%.

    Concerns

    3

    • Anticipates modest net interest margin (NIM) compression in Q4 FY26 due to deposit mix shifts and political deposit outflows.

    • Expenses are projected to increase to $49 million in Q3 and Q4 FY26, driven by planned costs for a new headquarters and technology investments.

    • Requires a disciplined approach to balance sheet growth in H2 FY26 to manage inevitable deposit outflows during the election cycle.

    Guidance & targets

    5
    CategoryTargetConfidence
    Net Interest Income
    $338M-$340M
    high materiality
    High
    Core Pre-Tax Pre-Provision Earnings
    $188M-$190M
    high materiality
    High
    Net Loan Growth
    closer to 2% sequential
    medium materiality
    Medium
    Total Operating Expenses
    $49M
    medium materiality
    Medium
    Balance Sheet Growth
    Restarting of the growth engine
    high materiality
    High

    Operational metrics

    18
    Net income
    $34.8M
    Q2 FY26

    Record net income.

    Core net income
    $33.1M
    Q2 FY26

    Core net income for the quarter.

    Return on average assets
    1.4%exceeded
    Q2 FY26

    Profitability metric.

    Revenue
    $98Mapproached $100M
    Q2 FY26

    Revenue for the quarter.

    Revenue per share
    $3.18exceeded $3
    Q2 FY26

    For the second consecutive quarter.

    Average deposit growth
    $461M
    Q2 FY26

    Combined with remarkably stable cost.

    Redeployed cash from non-growth loan portfolios
    $39M
    Q2 FY26

    Generated through planned runoff and redeployed into more optimized asset mix.

    Criticized and classified balances decline
    $9Mdeclined by
    Q2 FY26

    Improvement in credit quality.

    Pass rated loans
    97%
    Q2 FY26

    Represents approximately 97% of the total portfolio.

    New assets yield (blended)
    5.7%-6%
    Q2 FY26

    Yield on $250M of new assets brought on.

    Yield on new assets (after cost of funds)
    4.1%
    Q2 FY26

    Reflective of asset turnover philosophy.

    Off-balance sheet deposits
    $1Bover
    Q2 FY26

    Provides funding flexibility.

    AI-enabled tools adoption
    —
    Q2 FY26

    Expanding use across multiple business functions to support efficient and scalable long-term growth.

    Headquarters move planned costs
    —
    Q3 FY26

    Will largely be related to planned costs as the bank moves into a new facility.

    Balance sheet size target
    $9.6B
    Q3 FY26

    Target for assets, funded through excess liquidity.

    Off-balance sheet deposits at year-end
    Near zero
    FY26

    Expected if balance sheet is optimally managed to support political deposit outflows.

    Leverage at year-end
    Zero
    FY26

    Expected if balance sheet is optimally managed to support political deposit outflows.

    Average balance sheet growth
    Flat-ishunder 1% on an average basis in Q3 and in Q4
    H2 FY26

    In anticipation of deposit outflows at the end of the election cycle.

    Industry KPIs

    12
    MetricValueDetails
    Loans$115MUSD
    Deposits$8.5BUSD
    Rotce ROE16%%
    Cet1 ratio—
    Capital returns—
    Allowance reservesAppropriate
    Net interest income$338M-$340MUSD
    Net interest marginOutperformed
    Net charge offs npls$9MUSD
    Total operating expenses$49MUSD
    Provision for credit lossesNormalized
    Efficiency ratio operating leverage49.15%%

    Risks & headwinds

    4
    Political deposit outflowsH2 FY26, particularly Q4

    Not explicitly quantified, but implies significant impact on balance sheet management.

    Mitigation: Disciplined balance sheet approach, utilizing off-balance sheet liquidity, aiming for flat average balance sheet and near-zero off-balance sheet deposits/leverage by year-end.

    Modest Net Interest Margin (NIM) compressionQ4 FY26

    Modest compression

    Mitigation: Asset optimization, NII expected to remain stable to modestly upward despite NIM compression.

    Elevated operating expensesQ3 and Q4 FY26

    $49 million in Q3 and Q4 FY26

    Mitigation: Investments in technology, modernization, and talent are strategic for long-term scalability and efficiency, not growth at any cost.

    Previously discussed multifamily relationshipOngoing

    Not explicitly quantified as a new risk, but mentioned as actively managed.

    Mitigation: Reserve position appropriately reflects current conditions and risk assessments.

    What to watch in Q3 FY26

    5

    Net Loan Growth

    Q3 and Q4 FY26
    CurrentTotal loans up ~$115M, commercial lending up ~$155M (4.5%) in Q2 FY26
    TargetCloser to 2% sequential growth

    Why it matters

    Indicates continued asset deployment and NII generation, crucial for overall earnings growth.

    I think we're going to be closer to 2% for Q3 and Q4.

    Q&A highlights

    6

    Can you elaborate on the balance between loan originations and payoffs, and the expected trend for loan growth in the coming quarters?

    Management highlighted strong commercial loan production of $155 million and the redeployment of $39 million from lower-yielding assets. They expect sequential net loan growth to be closer to 2% for Q3 and Q4, with significant momentum building for 2027.

    “I think we're going to be closer to 2% for Q3 and Q4. And to Sam's point, I think the momentum that's starting to build from some of the investments we made previously should really play into the 2027 theme, which will continue a balance sheet expansion and responsible deployment of assets across a variety of classes.”

    asked by Justin Crowley · answered by Jason Darby

    2 min read6 chapters

    Detailed Narrative

    01

    Record Profitability and Efficiency

    Amalgamated Financial Corp. achieved record net income of $34.8 million and core net income of $33.1 million in Q2 FY26. Profitability metrics were strong, with Return on Average Assets exceeding 1.4% and Return on Tangible Common Equity over 16%. The core efficiency ratio remained below 50% at 49.15%, demonstrating the bank's scalability and increasing operating leverage from prior investments.

    02

    Deposit-Led Balance Sheet Growth

    The company's differentiated deposit franchise continued to drive growth, with on-balance sheet deposits increasing $280 million, or 3.4%, to a record $8.5 billion. This growth was notably fueled by political deposits, which rose approximately $212 million to $2.1 billion, alongside increases in labor, social, and philanthropy deposits. Off-balance sheet deposits also exceeded $1 billion, providing significant funding flexibility.

    03

    Asset Optimization and Loan Growth

    Amalgamated successfully optimized its asset side, deploying capital into higher-yielding assets. Total loans increased approximately $115 million during the quarter, with commercial lending growing by $155 million, or 4.5%. The bank also re-harvested $39 million from lower-yielding assets, redeploying this cash into a more optimized asset mix to further expand earnings power and operating leverage.

    04

    Strategic Investments for Future Growth

    The company continues to invest in its people, technology infrastructure, and AI-enabled tools across multiple business functions. These modernization initiatives are aimed at supporting efficient and scalable long-term growth, enhancing customer interaction, and maintaining competitiveness in a digital environment, positioning the bank for sustained performance beyond the current fiscal year.

    05

    Credit Quality and Risk Management

    Overall portfolio performance remained stable in Q2 FY26, with provision expense normalizing after prior quarter actions. Criticized and classified balances declined by approximately $9 million, and pass-rated loans continued to represent a strong 97% of the total portfolio. Management remains actively engaged in managing a previously discussed multifamily relationship, with reserves deemed appropriate.

    06

    Balance Sheet Management Ahead of Election Cycle

    Amalgamated targets $9.6 billion in assets by early Q3 FY26, funded by excess liquidity. The bank anticipates a flat-ish average balance sheet in the second half of 2026, with modest growth under 1% in Q3 and Q4, in preparation for expected political deposit outflows around the election cycle. The goal is to end the year with near-zero off-balance sheet deposits and leverage, with growth resuming in 2027.

    AI-generated summary of the company’s earnings call. Not investment advice.