Amalgamated Financial Corp.

Good morning, ladies and gentlemen, and welcome to the Amalgamated Financial Second Quarter 2024 Earnings Call. During today's presentation, all parties will be in 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 earnings call. With me today is Priscilla Sims-Brown, our 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 on our earnings slide deck, as well as our 2023 10-K filed on March 7, 2024, 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-GAP 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. And let me now turn the call over to Priscilla.

Good morning, everyone, and thank you for joining us. Our second quarter financial results clearly demonstrate that Amalgamated is continuing its high performance across key metrics. We delivered outstanding deposit growth, strong returns, and a continuously growing sustainable earning space that will provide us with optionality as we look to further expand our franchise over the medium term. It was also nice to see the recent enthusiasm in our stock price for our shareholders. Clearly, our mission-based banking model is resonating with purpose-driven customers and impact investors alike more than ever as they increasingly become aware of and care about what their money is doing. During the quarter, we attended the Milken Institute Global Conference, the Sorensen Impact Summit, and several other conferences where we gave keynotes, participated in panels or fireside chats, as well as listened intently to insights from changemakers. We enjoy meetings like this where we get the opportunity to see firsthand just how effective people become when they learn more about the positive impact their deposits can have when placed with a responsible bank. It is also interesting to note that acceleration of private equity and product innovation in the social impact space is occurring. The top changemakers in global impact investing are mobilized and Amalgamated is at the forefront to meet actionable opportunities. It's worth taking a moment to recognize that strong and consistent financial performance leads to invitations to events like these and to recognitions. by being added to the 2024 Forbes list of best banks in each state. Our second quarter results drive this point home as our deposit franchise once again performed above peers with over $759 million in new deposits led by strength across our political, our union, and nonprofit customer segments. Our non-political deposits were strong again this quarter, as union deposits rose $258 million and nonprofit rose $240 million. This is a huge area of growth for us. There are over 30,000 unions in the U.S., and they are growing in number and size. As the largest bank for unions, we are excited about the runway. In the nonprofit segment, our effective execution has earned a strong name recognition and an extensive referral network. Our political deposit balances grew over 20% and into the quarter at $1.7 billion, well ahead of our prior peak of $1.3 billion achieved during the midterm elections in 2022. Looking forward, we expect our political deposits to begin exiting during the third quarter as campaigns increase their advertising spend. I also want to point out that we are witnessing increased enthusiasm among donors in response to headlines in the political space. These are unprecedented times with fundraising records being broken by the hour. I am humbled to note that Vice President Harris's paperwork filed with the Federal Election Commission to officially become a candidate for president listed Amalgamated Bank as the campaign's bank of record. Our current model shows that our political deposits will trough at approximately $700 million at the end of the year, modestly above the 2022 trough. In preparation for this, we moved another $600 million in deposits off balance sheet during the quarter and are now managing nearly $1.1 billion in off balance sheet deposits within our reciprocal network. At the end of the second quarter, our nonpolitical deposit growth has also been well ahead of our internal plan, which places us in a position to where we now think the most likely scenario is that we will not add any significant level of borrowing to our funding mix through year-end 24. Turning to the other side of our balance sheet, loan growth was healthy in the quarter and largely comprised of commercial real estate and multifamily loans, while our climate-related loan originations were muted by $87 million of commercial and industrial payoffs and paydowns during the quarter. Looking to the third quarter, we have approved several impact loan commitments in the first few weeks of July, and our sustainable lending pipeline looks promising for the second half of the year after showing modest growth in the second quarter. Looking ahead, the political landscape is rapidly changing. Things like the Greenhouse Gas Reduction Fund could see some restructuring, but we remind you that none of our 2024 projections assume any GGRF lending. Our conservative forecasting takes into account the fact that those dollars have not actually been transferred out of the government yet. Regardless, the world is mobilized to meet the climate finance needs, which will require an estimated $3 trillion of financing over the next 10 years for just the U.S. to reduce net emissions to zero by 2050. And GGRF is a small portion of this needed capital. We believe this investment will occur no matter the political landscape, and Amalgamated is well positioned to play a very important role as a provider of financing to these needed projects. As I mentioned earlier, Amalgamated is recognized as an industry leader in climate finance and positioned not only to take domestic share, but to have an international impact as well. We have spoken about our alliances with banks globally through the Net Zero Banking Alliance and the Global Alliance for Banking on Values, Recently, we've also partnered with the UK-based Green Finance Institute, who are pioneering a property-linked finance product that is much like PACE Financing here in the U.S. We see long-term opportunities to participate in climate-related projects globally, especially as the UK and other governments look to mobilize public decarbonization capital similar to the U.S.' 's GGRF. As you can see, we have a long runway ahead of us as we appropriately grow the bank. And our financial results prove that social responsible banking is not only good for customers and communities, but also good business, delivering value for our shareholders. Jason, over to you.