Amalgamated Financial Corp.

Good morning, ladies and gentlemen, and welcome to the Amalgamated Financial Corporation Second Quarter 2021 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions with instructions to follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the call over to Mr. Jason Darby, Chief Financial Officer. Please go ahead, sir.

Thank you, Operator, and good morning, everyone. We appreciate your participation in our second quarter 2021 earnings call. With me today is Priscilla Sims Brown, President and Chief Executive Officer. As a reminder, a telephonic replay of this call will be available on the Investors section of our website for an extended period of time. Additionally, a slide deck to complement today's discussion is also available on the Investors section of our website. Before we begin, let me remind everyone that this call may contain certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We caution investors that actual results may differ from the expectations indicated or implied by any such forward-looking information or statements. Investors should refer to slides two and three of our earnings slide deck as well as our 2020 10-K filed on March 15, 2021 for a list of risk factors that could cause actual results to differ materially from those indicated or implied by such statements. Additionally, during today's call, we will discuss certain non-GAAP measures, which we believe are useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. A reconciliation of these non-GAAP measures to the most comparable GAAP measures can be found in our earnings release as well as on our website. Let me now turn the call over to Priscilla.

Thank you, Jason, and good morning, everyone. We appreciate your time and interest. I would first like to thank Jason and his experienced team who have been invaluable in bringing me up to speed since I joined Amalgamated in early June. My initial excitement in joining the company has only been heightened by witnessing the team's dedication to our mission and their commitment to excellence. I'd also like to take a moment to acknowledge the terrific foundational work performed by Keith and the previous management team in assembling a strong and deep Senior Leadership Team, improving the credit profile of the loan portfolio, reducing the expense structure, broadening our deposit gathering capabilities, and expanding into mission-aligned products, which continue to be an important growth driver for the company. An example would be residential and now commercial PACE assessments. This strong foundation can be seen in our second quarter results, where our deposit franchise grew 13% annualized to $5.9 billion on a linked quarter basis, while maintaining one of the industry's lower cost of funds at 10 basis points. Our political franchise remains strong and stable and experienced steady growth following last year's election, rising almost $100 million to $791.3 million as compared to the first quarter. And our underwriting and credit management has positioned the company to not only weather the recent dislocation from the pandemic, but also to position us to explore a range of mission aligned options as we focus on organic growth, which I will touch a bit more on in a moment. A continued challenge to our growth has been the tepid demand for loans that we in the industry have faced. combined with a low interest rate environment that is flush with liquidity. This has resulted in an elevated level of prepayments, which in turn has pressured both our loan portfolio and our earnings through the first six months of this year. While we are seeing a slowing of prepayments combined with continued strength in both residential and commercial pace assessments, we are cautious on loan growth through the second half of 2021. As a result, we are revising our full-year pre-tax, pre-provision earnings guidance this morning, which Jason will discuss in more detail after my commentary. We believe, however, that we are in a good position from which to build as we think about the next chapter in Amalgamated's 100-year history. I have observed that we have a strong back brand amongst those who know us well. Our clients, who are game changers in social responsibility, are fiercely loyal to us. We intend to build on that loyalty by leaning into our mission as America's socially responsible bank. Growth at Amalgamated is a key priority, and I've been working diligently with our leadership team to comprehensively evaluate the way we do business and determine opportunities that will deliver sustained and profitable long-term growth as we strive to maximize the franchise value of this company. Over my more than 30-year career in the U.S. and abroad, I've held a variety of roles in the insurance, banking, and financial services sectors. And I am thrilled with the opportunity to lead Amalgamated, building on the company's history and its commitment to social and environmental responsibility. Having been in my position for two months, I would like to share six key observations with you as the leadership team and I put together a plan to optimize the many opportunities that we have in front of us. First, I am impressed with Amalgamated as the company was first to embrace the concept of banking for good, never wavering from their century-long mission of empowering organizations and individuals to advance positive social change. What has changed is the economic and social landscape over the last two years as companies and organizations are increasingly seeking socially responsible ways to run their businesses while increasing their franchise value. This is a story that is resonating with an increasing number of firms that are seeking a bank that shares not only their financial goals, but also wants to partner with them to support their mission and their values. Amalgamated's mission is one that needs to be better told in a world that is increasingly receptive to hearing it. Second, we really need to expand and grow the Amalgamated brand as it will help us gain share and drive business. I believe companies are going to be increasingly evaluated by who they do business with, including their banking partners, which uniquely positions Amalgamated to succeed. As part of this, we are planning to effectively build our brand in the market, as well as utilize technology to improve our marketing to attract new customers. Third, we have a terrific team of bankers who have created relationships and established themselves as experts in their segments. and I believe there are opportunities to further expand our platform. As I have met some of our key customers, I've learned that our brand resonates with those who do business with us. We can service them more from a lending perspective as well as deliver new avenues and products. I see more opportunities to thoughtfully expand our lending platform with products which fit our core mission and which will deliver strong risk-adjusted returns. PACE assessments are a good example where we can redeploy liquidity and earn attractive returns while at the same time funding projects that improve the environment. Fourth, I've been impressed with the company's underwriting and credit management practices. As we explore opportunities to grow the bank, we will maintain our underwriting discipline and ensure that we continue to earn appropriate risk-adjusted returns on any new business that we enter. Credit quality will always be at the core of any growth strategy we pursue. Fifth, we will continue to evaluate geographic expansion through both organic opportunities like our commercial banking office in Boston and through M&A like our successful acquisition of New Resource Bank in San Francisco. Lastly, we will remain prudent stewards of capital and recognize the value of our shares. To that end, we have been actively buying back shares, having repurchased approximately 154,000 shares for $2.5 million of common stock under our $10 million share repurchase authorization during the second quarter. As you can see, I'm excited with the many opportunities that we have to profitably grow the bank and expand our platform. To achieve this, we will need to make investments into people, products, I will continue to rely on metrics and goals to ensure that the investments we make meet our return hurdles and expand the franchise value of the company, as well as ultimately translate to improved growth and profitability while remaining steadfastly true to the environmental and social governance that we've set as America's socially responsible bank. To conclude, I would like to thank our board of directors for giving me the opportunity to lead Amalgamated and our senior management team who have worked diligently to help assist me in this exciting transition. Amalgamated is a much-needed institution with a unique societal and environmental mission, and I'm very excited for the bank's future. We will continue to evaluate and determine how to optimize our brand and the ways in which we do business. including deepening our high-value client relationships, expanding our customer base, accelerating organic loan growth, and exploring M&A opportunities. I am looking forward to providing more details on our plan in our third quarter call. Now I'd like to turn the call over to Jason who will review our second quarter results in greater detail.