Amalgamated Financial Corp.

Good morning, ladies and gentlemen, and welcome to the Amalgamated Financial Corporation Third Quarter 2022 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 third quarter 2022 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 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 slides two and three of our earnings slide deck, as well as our 2021 10-K, filed on March 11, 2022, 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 the 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 provide an update on the success that we are achieving, executing on our growth for good strategic plan, highlighted by our second consecutive quarter of record earnings. Jason will then provide a more in-depth review of our third quarter financial results. Core tenants of our strategy are to accelerate loan growth and improve our profitability while managing our risk exposure prudently and growing our positive impact on society. Coming into this year, I've spoken often of our desire to be the most improved bank in the country for financial performance metrics. I am proud to say that our quarterly results demonstrate that we are firmly on the right path. In a short few months, Amalgamated will celebrate its centennial anniversary as a U.S. banking institution, and I couldn't be more inspired by the team we have in place to propel this great bank into its next centennial. Diving into our quarterly results, I have four key metrics to emphasize on today's call. First, we reported another record quarter of earnings of 74 cents per share, an increase of 11 cents per share or 17.5% from the previous quarter. While core earnings increased by an even greater 17.9% from the linked quarter. Second, We delivered 6.1% loan growth as compared to the linked quarter representing our fourth quarter in a row, nearly at or above 5% growth. Additionally, PACE assessments increased $115 million to $857 million as compared to the linked quarter, which when combined with our loan growth represents very strong asset growth in the quarter. Third, our average deposits increased by $191 million to $7.3 billion, reflecting a strong quarter for deposit attraction in an increasingly competitive deposit environment. And fourth, our strong loan growth combined with our low-cost deposits led to net interest margin expansion of 47 basis points to 3.5% in the quarter. The success that we are achieving is a result of the concerted steps that we took to expand our commercial banking team, adding experienced lenders and segments of the markets that fit with our core mission and values, including sustainability, workforce housing, economic justice, and community financing. These bankers are augmented by the hiring of portfolio managers and underwriters. We have also reorganized our banking teams on a national basis to unlock the substantial lending opportunities that we believe exist today, not only with new customers, but also current customers of the bank. Importantly, we have been judicious in our hiring to ensure that we are earning an appropriate return and utilizing our improving profits for further reinvestment in other areas of our business. While we are having strong success growing our loan portfolio, We are also in an advantageous competitive position given our low-cost deposit gathering franchise. Our deposit base is made up of a wide-ranging group of clients from all of our market segments who passionately share our views. We believe we have a durable competitive advantage and are confident we can continue raising deposits during the current liquidity tightening as a result of the Federal Reserve continuing to raise its benchmark interest rate to combat inflation. Through the first 300 basis points, the Fed rate increases. We are seeing benefits from both our decision to maintain our asset sensitivity and our improved loan growth that we have been delivering. This is driving significant margin expansion as our NIM improved to 3.5% in the third quarter, quite an improvement from the 2.75% at the second quarter of 2021 when I joined the bank. I am particularly proud of the improvement in our returns where our return on average assets has expanded to 1.15% from 0.65% in the 2021 second quarter, already exceeding our target of 1% by the end of the year. While we have accomplished a tremendous amount over a short period of time, we know there's much more to do as we position Amalgamated for the next leg of growth. I've spoken often about Amalgamated's history being among the first to embrace the concept of banking for goods while never wavering from our century-long mission of empowering organizations and individuals to advance positive change. Amalgamated has earned and lives its reputation as America's socially responsible bank. Sometimes I ponder the gravity of what being a bank for 100 years means. Supporting customers and communities through multiple periods of economic highs and lows, valuing and prioritizing the needs of working people without discrimination, and surviving and thriving in an ever-consolidating U.S. banking system. There are very few banks in the country that can say they're in the 100-year club, but charting our next centennial should be quite a ride. This is a nice segue to update you on our digital transformation journey that I introduced in our second quarter call. We see a tremendous opportunity to tie our commercial business into a reimagined consumer business and reach through our commercial customers to their members. For instance, if we're doing business with a large not-for-profit, we want to attract their members and donors who are naturally aligned with Amalgamated's mission. And while mission alignment is critically important, we must also offer products and services that are competitive and meet their needs. To do this, I'm very excited that we were able to recruit a highly capable executive from USAA Bank during the second quarter to lead the effort. We are well into the process of evaluating our products and delivery platform with a focus on gathering customers and selling our products digitally. We recognize that investments will need to be made, but as was the case with our lending strategy, we will make disciplined choices funded through profitability with a requirement for timely returns. We will also increase our investment in our brand and supportive issues that are consistent with the social responsibility of a bank and important to our employees, our customers, and the majority of Americans. I have consistently said that profitable growth is an outcome for us having a positive impact on issues that matter, and I'm proud of our accomplishments. Despite being 100 years old, we are still occasionally facing questions about what it means to be a values-led bank. We understand this and we encourage a sensible dialogue to build a better understanding of views. The step we took to support law enforcement through better reporting of potentially illegal firearm sales was understandably a sensitive topic. However, we continue to also stand with legal gun owners and fully support legal gun sale rights. While we aren't the only company to take common sense positions, I remind our investors that our customers care deeply about doing business with a bank that invests their deposits in line with these values. This strong customer intimacy is a true competitive advantage for us and one that is sustainable through various business cycles. Being a great and socially responsible bank is our number one priority. On business fundamentals such as earnings, credit quality, liquidity, and capital management, we believe we now compare favorably to our peers. I've been pleased with our stock performance during 2022, and I'm delighted for our shareholders who believe in us as a responsible investment. While there is economic uncertainty ahead, we remain cautiously optimistic as our bankers continue to expand Amalgamated into growing markets such as climate with significant growth potential that we believe are less subject to economic downturn. I am excited about moving Amalgamated into its next centennial and the next phase of our growth for good strategy. Let me now turn the call over to Jason.