Amalgamated Financial (NASDAQ:AMAL) executives highlighted strong deposit gathering, net interest margin expansion, and accelerating loan growth during the company’s fourth-quarter 2025 earnings call, while also outlining guidance targets that emphasize continued balance sheet growth and improving profitability in 2026.
Fourth-quarter results highlighted by deposit and loan growth
President and CEO Priscilla Sims Brown said the company finished 2025 with “another excellent quarter,” pointing to core earnings of $0.99 per diluted share. CFO Jason Darby reported GAAP net income of $26.6 million, or $0.88 per diluted share, and core net income of $30.0 million, or $0.99 per diluted share.
On-balance sheet deposits increased $179 million to $7.9 billion, while off-balance sheet deposits rose $789 million to $1.1 billion. Political deposits increased $287 million to $1.7 billion, which management attributed to increasing fundraising activity heading into November’s midterm elections and growing market share in that segment.
Brown also said all customer segments posted deposit growth during the quarter, including:
- Not-for-profit deposits up $388 million
- Social and philanthropy deposits up $122 million
- Climate and sustainability deposits up $77 million
On the lending side, Brown reported loans increased $167 million, or 3.5%, to $4.9 billion. Loans in the company’s “growth mode” portfolios—multifamily, commercial real estate, and C&I—rose 7%, or $218 million, accelerating from growth rates in the prior two quarters. Brown said the bank has benefited from adding C&I specialists and expects additional growth in 2026 as it expands reach on the West Coast.
Margin expansion and revenue mix progress
Darby said net interest income increased 1.8% to $77.9 million, exceeding the high end of the bank’s guidance range. Net interest margin expanded six basis points to 3.66%, which Darby said was driven by a 16-basis-point decline in the cost of funds as the bank benefited from recent Federal Reserve rate cuts.
Core non-interest income was $10.1 million, continuing what Darby described as steady improvement over the past four quarters. He said the increase was driven primarily by trust income and banking fees, and that core non-interest income represented 11.4% of core revenue, reflecting progress toward the bank’s stated 85/15 revenue diversification objective.
On loan pricing and future margin drivers, Darby told analysts that “bring-on rates” were roughly 5.9% to 6% for C&I and around 5.70% for multifamily. He also highlighted the benefit of repricing older real estate loans, noting some are “coming off this year” in the 4.30% range. The company’s PACE portfolio was cited as another yield lever, with Darby referencing rates in the high 6% to near 7% range.
PACE portfolio acceleration and balance sheet positioning
Brown said the PACE portfolio accelerated in the quarter, with total assessments growing $38 million, or 3%, to $1.3 billion. The quarter included more than $27 million of growth in C-PACE, supported by an originator partnership discussed in the prior quarter.
In Q&A, Darby said the bank has “lots of room” to add C-PACE and described risk-adjusted returns as “excellent.” He also suggested C-PACE could become a way to “trade down” the traditional securities portfolio over time. He referenced a shift during the quarter in which the bank reduced traditional securities by about $200 million to fund loan growth and C-PACE activity, and said he expects further repositioning in 2026.
Chief Banking Officer Sam Brown said the quarter showed progress toward increasing the mix of commercial PACE relative to residential PACE, noting that about three quarters of PACE originations in the quarter came from the commercial side. He added that the $27 million in commercial PACE growth is viewed as a baseline the bank would like to sustain.
Expenses, capital returns, and tax credit presentation change
Darby said expenses were up modestly, primarily due to non-core severance costs in the residential lending unit. Core expenses of $44.9 million were “right in line” with an annual target of $170 million, and he cited a core efficiency ratio of 51.13%.
The quarter included a $41.9 million sale of performing residential loans with sub-3% coupons, which resulted in a $3.8 million pre-tax loss. Darby said the difference between GAAP and core earnings per share was “almost entirely” due to that transaction.
Results were also supported by a $1.5 million tax credit. Darby said the bank has adopted a new approach that runs credits through the tax provision rather than non-interest income, and that credits recognized under the new method will be considered core. He said the aim is to reduce non-core adjustments and make results easier to understand.
Darby said tangible book value per share rose $0.87, or 3.4%, and tier one leverage was 9.36%. The company returned capital through $8.7 million of buybacks and a $0.14 quarterly dividend, and announced a dividend increase to $0.17 based on its outlook for 2026.
Credit update and 2026 guidance focused on growth
Management described overall asset quality as solid, though Darby noted “some credit turbulence” in the quarter. The bank marked for sale a non-accrual multifamily asset identified in the third quarter, which contributed to a higher charge-off ratio and added about $0.8 million to provision expense.
Darby also cited stress in the Washington, D.C. market tied to Rapid Rehousing Program restructuring, which led to increased reserves of $1.9 million and a $7.5 million increase in non-accrual multifamily loans. He said the company is working with the borrower to restructure portions of the portfolio and believes the bank is “adequately reserved” on the non-accruing loans. He added that exposure beyond that relationship is low, with all other related loans graded pass at quarter end.
Looking ahead, Darby said the provision outlook for 2026 is expected to be roughly in line with 2025 levels, with potential for slight improvement, citing continued charge-off activity in the consumer solar portfolio and a conservative provisioning posture. He said provision expense is expected to remain manageable relative to earnings progress.
For 2026, the bank guided to:
- Net interest income of $327 million to $331 million (about 10% to 11% growth)
- Core pre-tax, pre-provision earnings of $180 million to $183 million (about 9% to 10% growth)
- Core return on average assets target of 1.35%
- Core return on tangible common equity target of 15%
- Balance sheet growth of approximately 5%
- Quarterly net loan growth of 1.5% to 2%
- Annual core OpEx of $188 million, including technology spend growth of about 18%
For the first quarter of 2026, Darby said the company expects net interest income of $79 million to $81 million, based on an average balance sheet size of about $8.7 billion, and expects net interest margin to rise from the fourth quarter due primarily to higher yields from loan growth that came on late in the quarter.
In closing remarks, Priscilla Sims Brown said Amalgamated has delivered consistent performance through a difficult banking environment and believes the company is positioned for sustainable growth, supported by a values-aligned deposit franchise, liquidity and capital strength, and multiple earnings levers.
About Amalgamated Financial (NASDAQ:AMAL)
Amalgamated Financial Corp. (NASDAQ: AMAL) is the bank holding company for Amalgamated Bank, a fully insured commercial bank with a historic mission of serving labor unions, progressive non-profits and mission-driven organizations. Founded in 1923 by the Amalgamated Clothing Workers of America, Amalgamated Bank has grown into a national institution offering a broad suite of banking services, including deposit accounts, commercial and consumer lending, cash management, and treasury solutions tailored to organizations with social responsibility or union affiliations.
In addition to core banking, Amalgamated Financial provides wealth management and trust services, retirement plan consulting and impact investing strategies.
