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Amalgamated Financial Corp. (AMAL)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 EPS beat coupled with margin expansion and raised guidance. Diluted EPS was $0.88 and core EPS $0.91; vs S&P Global consensus of $0.875, EPS was a beat, while “revenue” missed S&P’s measure (actual $80.3M vs $83.3M estimate) as definitions differ for banks (company core operating revenue was $86.4M). Net interest margin (NIM) rose 5 bps to 3.60% and net interest income (NII) grew 4.9% q/q to $76.4M . EPS/revenue consensus from S&P Global; see asterisk note below.*
  • Guidance raised: FY25 core pre-tax pre-provision (PTPP) lifted to $164–$165M (from $159–$163M) and FY25 NII tightened to $295–$296M; Q4 NII guided to $75–$76M with NIM “near flat” as Fed cuts pressure loan yields .
  • Balance sheet and deposit franchise stayed resilient: political deposits +$235M to $1.4B, non-interest-bearing deposits 37% of totals, and super-core deposits ~$4.3B (55% of deposits); ACL/Loans 1.18% and NPA/Assets down to 0.26% after resolving a stressed C&I loan .
  • Capital return remained active (347K shares repurchased YTD Q3; $0.14 dividend declared Oct 21) with CET1 14.21% and TCE ratio 8.79%; TBV/share grew 4% q/q to $25.31 .

What Went Well and What Went Wrong

What Went Well

  • Deposit and loan momentum: “We just keep taking market share” with >$415M in new deposit generation; growth portfolios (C&I/CRE/Multifamily) +$99.2M (+3.3% q/q) and CPACE +8% drove total assessments +$27.4M .
  • Margin and earnings quality: NIM +5 bps to 3.60% and NII +$3.5M to $76.4M; core revenue/share rose to $2.84, underpinned by higher net interest income and buybacks .
  • Credit clarity: Final resolution of the $10.8M syndicated C&I issue, with NPA/Assets down to 0.26%; management emphasized “early in disclosure and decisive in our resolution” .

What Went Wrong

  • Higher credit costs and charge-offs: Provision rose to $5.3M; annualized net charge-offs increased to 0.81% (including a $5.4M C&I charge-off and $1.5M legacy leveraged loan charge-off), with continued stress in consumer solar .
  • Deposit costs edged higher: Total deposit cost up 5 bps to 1.67%; interest-bearing costs +2 bps, reflecting higher average balances of interest-bearing deposits .
  • S&P revenue miss vs consensus: Using S&P’s revenue construct, Q3 actual of $80.3M fell short of $83.3M consensus, despite company-reported core operating revenue of $86.4M; highlights definitional differences for bank “revenue.” S&P Global estimates; see asterisk note below.*

Financial Results

P&L and EPS vs Prior Periods and S&P Global Estimates

MetricQ3 2024Q2 2025Q3 2025
Net Interest Income ($M)72.1 72.9 76.4
Non-Interest Income ($M)8.9 8.0 9.2
GAAP Diluted EPS ($)0.90 0.84 0.88
Core EPS ($)0.91 0.88 0.91
Provision for Credit Losses ($M)1.85 4.89 5.30
Non-Interest Expense ($M)41.0 40.6 43.6
Net Income ($M)27.9 26.0 26.8
Consensus vs Actual (S&P Global)Q3 2025 EstimateQ3 2025 Actual
Primary EPS ($)0.875*0.91*
Revenue ($M)83.325*80.307*
# EPS Estimates2*—
# Revenue Estimates1*—

Asterisk note: Consensus/actual values marked with * are retrieved from S&P Global; S&P’s revenue methodology for banks may differ from company-reported operating revenue.

Margins and Efficiency

MetricQ3 2024Q2 2025Q3 2025
Net Interest Margin (%)3.51 3.55 3.60
Loan Yield (%)4.79 5.05 5.22
Deposit Cost (%)1.58 1.62 1.67
Efficiency Ratio (%)50.54 50.14 50.95
Core Efficiency Ratio (%)50.35 49.21 50.17

Balance Sheet and Credit KPIs

MetricQ3 2024Q2 2025Q3 2025
Loans, Net ($B)4.49 4.66 4.73
Total Deposits ($B)7.59 7.73 7.77
Non-Interest-Bearing Deposits (% of Total)50% avg (3.72/7.58) 38% avg 37% avg
Political Deposits ($B, on+off)1.2 1.2 1.4
NPA / Assets (%)0.34 0.41 0.26
ACL / Loans (%)1.35 1.25 1.18
CET1 (%)13.82 14.13 14.21
TCE Ratio (%)8.14 8.60 8.79
TBV / Share ($)22.29 24.33 25.31

Segment/Portfolio Mix (Loans Held for Investment)

Portfolio ($M)Q2 2025Q3 2025
Commercial & Industrial1,196.8 1,273.9
Multifamily1,406.2 1,454.1
Commercial Real Estate422.1 396.2
Construction & Land20.3 22.6
Residential RE Lending1,292.0 1,277.4
Consumer Solar345.6 335.5
Consumer & Other31.3 29.1
Total Loans HFI4,714.3 4,788.8

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Core PTPP ($M)FY 2025159–163 164–165 Raised
Net Interest Income ($M)FY 2025293–297 295–296 Tightened (midpoint higher)
Net Interest Income ($M)Q4 2025—75–76 New
Net Interest MarginQ4 2025—Near flat vs Q3 New
Avg Balance Sheet Size ($B)Q4 2025—~8.65 New
Rate Sensitivity (ΔNII)FY 2025-$1.9M per 25 bps beyond curve -$2.2M per 25 bps beyond curve Lower sensitivity
Operating Expenses ($M)FY 2025~170 (outer band) ~170 (potential upside) Maintained
DividendRecurring$0.14 declared Q2 $0.14 declared Oct 21 (payable Nov 20) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Digital modernizationQ2: Platform to go live in Q3; OpEx planned, core efficiency outer band ~52% Platform went live; +$0.5M tech spend; productivity benefits cited Execution progressing; early benefits
Political deposits seasonalityQ1–Q2: Political deposits building toward elections Political deposits +$235M to $1.4B; expect further ramp into election cycle Strengthening tailwind
NIM and rate outlookQ2: Flat NIM in Q3; later potential expansion Q3 NIM +5 bps; Q4 NIM near flat; Fed cuts modeled 50 bps in Q4 Stable despite rate-cut headwinds
Credit qualityQ2: Specific C&I reserve; consumer solar stress; criticized loans rose C&I problem resolved; NPA/Assets down to 0.26%; net charge-offs elevated (0.81%) with solar/business banking contributions Mixed: better NPA, higher NCOs
NYC rent-stabilized MFQ2: Watching policy debate Comfortable near-term; more disclosure; low expected impact in 18–24 months Monitoring; low near-term risk
Renewable/CPACEQ2: Pipeline accelerated to meet policy timelines CPACE +8%; $250M FASTPACE commitment announced Oct 22 to scale C-PACE Accelerating originations
Regulatory/debanking narrativeQ2: Resilience noted “Bank first”; strong risk management; deposit growth across segments Stable posture

Management Commentary

  • CEO: “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.”
  • CEO on deposits and growth: “We just keep taking market share… driving over $415 million of new deposit generation… Loans grew by $99 million across our growth mode portfolios… CPACE over 8% growth.”
  • CFO on guidance and P&L: “We are raising our full-year 2025 core pre-tax pre-provision earnings guidance to $164 to $165 million, and tightening our 2025 net interest income guidance to $295 to $296 million… We target Q4 net interest income to range between $75 and $76 million.”
  • CBO on renewables: Existing financed projects are in the ground with funding streams “locked in”; pre-development projects without funding carry risk but are not on-balance sheet .
  • CFO on expenses: OpEx run-rate similar to Q3; still targeting ~$170M for 2025 with potential upside from discipline despite digital investments and incentive accruals .

Q&A Highlights

  • Credit reserve detail: $1.9M specific reserve tied to an appraised multifamily asset moving to nonaccrual; reserve reflects updated LTV; coverage ratios adjust with emerging risks .
  • NYC rent policy risk: Management does not foresee material impact in 18–24 months; views broader policy toolkit (zoning, PPPs, conversions) and sees potential upside if housing supply expands .
  • DOE funding headlines vs portfolio risk: Management emphasized funded, operating projects; pre-dev projects at risk are not present in portfolio .
  • Expenses: Q4 expected similar to Q3; room to beat $170M OpEx target depending on year-end items .
  • Asset yields: Q3 loan yield benefited ~9 bps from one-time recapture; Q4 bring-on yields expected ~25–50 bps lower with cuts; PACE yields near ~7% remain supportive .

Estimates Context

  • EPS beat: Primary EPS $0.91 vs $0.875 consensus for Q3 2025; Q4 2025 EPS consensus $0.905; FY25 $3.55; FY26 $3.95.*
  • Revenue miss on S&P’s measure: Q3 2025 “revenue” $80.3M vs $83.3M consensus, noting that S&P’s revenue methodology for banks can differ from company’s operating revenue ($86.4M core operating revenue).*
  • Targets: Consensus target price ~$32 (2 estimates); recommendation distribution sparse.*
    Implications: Analysts may lift PTPP/EPS near-term on higher NIM/NII and raised guidance, but may temper revenue forecasts and NIM trajectory for Q4 given modeled Fed cuts and lower bring-on yields.*

Asterisk note: All consensus values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Guidance upgrade with disciplined cost control is the quarter’s key catalyst; near-term narrative should focus on sustained margin resilience and NII delivery despite anticipated rate cuts .
  • Deposit franchise remains a differentiator heading into the political cycle; mix and cost management help anchor funding costs as seasonality intensifies .
  • Credit cleanup progressed (NPA/Assets 0.26%), but watch consumer solar and small business books; elevated NCOs (0.81%) likely moderate as small business runoff continues .
  • Capital return is active (buybacks + dividend) with strong CET1/TCE and rising TBV/share, providing downside support .
  • CPACE/scalable climate finance is a structural growth wedge (FASTPACE $250M commitment) that can support yield profile even as traditional loan yields compress .
  • Q4 setup: NIM “near flat,” Q4 NII $75–$76M; asset yields to compress with rate cuts; watch deposit mix (DDA) improvement as political balances ramp .
  • Medium-term: Digital modernization now live, targeting positive operating leverage and improved productivity; OpEx discipline suggests potential beats vs $170M full-year target if year-end items are benign .

Appendix: Additional Data Points

  • Dividend: $0.14 per share declared Oct 21, payable Nov 20, 2025 .
  • Share repurchases: ~347K shares ($10.4M) through Sept 30; ~74K more repurchased Oct 1–21 .