Amalgamated Financial Corp.

Greetings, ladies and gentlemen, and welcome to the Amalgamated Financial Corporation fourth quarter and full year 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 fourth 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 investor section of our website for an extended period of time. Additionally, a slide deck to complement today's discussion is also available on the investor 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 statements or information. Investors should refer to slide 2 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 measure 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 today. This morning, I will take a few highlights of our fourth quarter 2021 results, as well as provide an update on our strategic plan designed to deliver sustained and profitable organic growth, the early signs of which can be seen in our results this quarter. Jason will then provide an update on our pending acquisition of Amalgamated Bank of Chicago and conclude with a more in-depth review of our fourth quarter financial results. To start, our early results clearly highlight the potential that exists within Amalgamated as we execute on our strategic plan. Along these lines, there are four key points that I would like you to take away from this morning's call. First, we delivered a 6.2% net loan growth, not including PACE assessments, compared to the linked quarter as our early focus on driving loan growth during the second half of 21 has started to take hold. Second, we recruited a talented and experienced leader for our commercial real estate business to manage our team and lending platform, protect our existing book of business, improve credit quality, and gain new share. Third, we grew deposits 2% from the linked quarter while our political deposit franchise held steady at $1 billion, which exceeded our expectations given the natural contraction that we typically experience following an election. Our cost of deposits also held steady at nine basis points. Fourth, we took important and necessary steps that began as early as in the second half of 2021 to further improve the credit quality of our loan portfolio. As a result, during the quarter, we saw our non-accrual loans declined by $17.3 million to $28.2 million or 85 basis points of total loans. And we saw our classified or criticized assets improved by $79.9 million. While I'm pleased with our results, I know that there is much more work left to accomplish. As I outlined in our third quarter call, we've established a four-pillar strategy, which is designed to accelerate growth, expand our profitability, and improve our returns. This strategy is focused on First, building our business through our mission. Second, focusing on customer segments that share our values and where we can take market share. Third, developing and expanding our product offerings to grow our lending platform and our trust business. And fourth, improving the management of our data and technology to drive better efficiencies and effectiveness. On today's call, I would like to focus on our third pillar, and specifically our efforts to grow our lending platform as we strive to enhance the franchise value of Amalgamated and fund future development projects through profitability. A clear opportunity is to service our customers from a lending perspective. In connection, as we demonstrate continued success and growth in our baseline lending platform, I also see more opportunities to expand sections of our lending platform into our markets where we have traditionally only focused on deposit gathering. Boston is a terrific example, as we originally entered this market with a main focus gathering deposits, but we believe we can build a commercial real estate lending platform and drive loan volume there. To be successful, we need to attract bankers and underwriters with proven acumen and results in the CRE market. And to that end, I'm very pleased to report that we have recruited a seasoned producer and a leader for our commercial real estate and multifamily banking team. Additionally, this leader was also able to bring over a key team member, greatly improving the ability to make an immediate impact. As the largest asset class on our balance sheet at year end, this is a key focus for us and one that we intend to return to pre-pandemic origination levels in the year ahead. We've also repositioned our existing lending talent in order for them to use their valuable expertise across our New York City, Boston, D.C., San Francisco, and soon-to-be Chicago footprint. We see commercial and consumer solar, sustainability project finance, and commercial pace as segments we are expertly knowledgeable and highly competitive in, and we plan to aggressively add to our talent base in these segments during 2022. Additional segments where we are building expertise is in CDFI, not-for-profit, and social advocacy. We are becoming increasingly confident in the strides we're making to expand our lending platform and see high single-digit loan growth, not including the impact of ABOC, as achievable in the year ahead. Importantly, our growth is increasingly focused on entering new sustainable markets and taking share, which presents an open-ended growth opportunity that is less subject to economic or cyclical decline. As we redeploy our liquidity into organic loans, we will continue to see margins improve and earnings power accelerate. We're also continuing with connecting our consumer and trust business in our commercial banking business to better serve our customers across offerings. We are acutely focused on addressing the revenue and profitability of our trust business over the next year as we ramp our ESG-oriented responsive fund products and address the fee structure in our core pension fund business. To conclude, we ended the year strongly and we are well positioned to accelerate growth and profitability into the year ahead. We have shown meaningful organic loan growth for the first time since the second quarter of 2020 and are optimistic that growth will continue in 2022. I am very pleased that we were able to attract a talented lending team to Amalgamated, which demonstrates the unique opportunity we offer in the market. We have a brand and a reach in our socially responsible markets, which rivals the big banks, within an institution where people can lead and make a real impact. This is very appealing, and we established Amalgamated as an employer of choice in the major markets where we do business. Our immediate focus in 22 is is to add experienced bankers and underwriters who can help us grow our platform and accelerate growth in our focused markets and segments. Lastly, our acquisition of the Amalgamated Bank of Chicago will provide market expansion into the Midwest while offering significant revenue and cost synergies when the deal closes in the next few months. We expect the transaction to close early in the second quarter, which is a bit later than our earlier aspirations. That said, we have been working closely with the ABOC team to prepare for the integration once the deal closes, and we're very pleased with the receptivity from ABOC employees to the potential for a combined bank once we merge. Let me now turn the call over to Jason.