[Management View]
Amalgamated Financial's management expressed confidence in meeting full-year 2025 targets, reaffirming guidance for pretax, pre-provision earnings and net interest income. Strategic priorities include expansion in California, highlighted by new senior banking hires and targeted growth in multifamily, CRE, and C&I portfolios. The integrated digital monetization platform is on track for launch next quarter, expected to improve efficiency and revenue per share.

[Outlook]
Management reaffirmed full-year 2025 guidance for core pretax, pre-provision earnings of $159 million to $163 million and net interest income of $293 million to $297 million. Third-quarter outlook projects balance sheet growth to approximately $8.6 billion, with net interest income guidance at $74 million to $76 million and net interest margin expected to stay near flat.

[Financial Performance]
Net income for Q2 2025 was $26 million, or $0.84 per diluted share (GAAP), and core net income was $27 million, or $0.88 per share (non-GAAP). Net interest income grew by 3.3% to $72.9 million, and net interest margin held steady at 3.55%. On-balance sheet deposits increased by $321 million to $7.7 billion, excluding temporary balances, deposits grew by $208.9 million to $7.6 billion. Loan growth was balanced at over $60 million across multifamily, CRE, and C&I portfolios.

[Q&A Highlights]
Question 1: Priscilla, first question I had, I heard your comments around the expansion in California. And I guess I was curious, is it likely that expansion will be all organic or do you envision some M&A potentially playing a role in that or maybe some combination of the two?

Answer: Well, we're not making an M&A announcement on this call, Mark. I would say that we see significant opportunity organically. In fact, in California, a good portion of our business today on the books, excuse me, is in the LA area. So adding one banker there and the ability to expand there seems logical. We also have currently in our San Francisco office, bankers who do work in the East Bay and we're looking at organic expansion into the East Bay in a bigger way. So those are some of the activities we have underway. Anything else will evolve over time as appropriate.

Question 2: Jason, I heard your comments on that syndicated C&I credit. I guess I was curious what industry it's in, maybe some sense of how long you think the resolution might take and any other, you know, color you could share with us would be helpful.

Answer: Yeah. Absolutely. And again, it's part of our commercial solar portfolio, but it is to an originator of consumer solar renewable fixtures, if you will. And the distribution of those loans is broadly throughout the United States. So there's quite a bit of collateral value that's out there relative to this provider of credit. The industry in general from a consumer point of view has had some stress. You've seen that flow through in our numbers, and this originator is obviously having an impact as a result of that. Now from the standpoint of a resolution, it's difficult to say right now. I think we took a haircut on our collateral value assessment at the end of the second quarter based on some new events that have come up. What I can share is the lending group is actively working on sourcing credit bids to facilitate an orderly transition and keep all the remaining servicing intact. There have been some developments that have called into question the bid process and what some of the excess cash would end up being, which is why we drove that reserve. But where we are right now is trying to figure out a way where all parties can recognize that the interest or the best interest of everybody is to have the originator remain intact and have the servicing continue. And so those are ongoing active negotiations that are happening as we speak, literally. And probably we'll have more information over the coming weeks. But with regard to the probability of outcome, it's a little too early to say other than we'll come back and remind that there is good collateral there. And that the bid process, we think, is going to be the most likely outcome once it gets back on track from a negotiation perspective.

Question 3: Is it fair to expect that provisioning may run at a slightly higher level than what we've seen recently? Given some of the pressures and things like multifamily or the green energy space? Do you feel like you know, it's it's gonna be necessary to run at a little bit higher level?

Answer: We really take that quarter by quarter and almost loan by loan from an assessment of provisioning. And I think the reflection of our provision decisions this quarter is pretty indicative of how we feel about the overall portfolios right now. I think in our multifamily and our CRE portfolios, we've been through a large portion of the maturities that would have driven us to have to really raise provision rates at this time. And we feel good about how we preserve for that at the moment. On the C&I side, we actually had pulled out the specific reserve a bit of a decline in coverage ratio went from about 129 to 123. On the overall C&I portfolio, which includes the renewables. And that's just our best show for you as our view of the credit quality of the portfolio. And looking forward, there's some new things that are coming up. Obviously, there's some potential pressure from the mayoral change in the New York City market. And there's some other things that we're keeping our eye on relative to the budget bill and how that might affect our pipeline and portfolio going forward. But we'll always be very transparent, Mark, that the coverage ratios in quarter will be the best indicator of where we see things trending. And what I can say right now is we feel very comfortable with the portfolio as it is. There's always a possibility it could increase in the future, but right now, we feel pretty good about how we've reserved for the portfolio as of the quarter.

Question 4: One on NIM and the NIM outlook. I mean your deposit base is so strong and tough to get a lot of leverage now there. But in terms of the loan yields and stronger EOP balance, just trying to figure out what the loan yields coming on are towards the end of the quarter and kind of build that into our outlook.

Answer: Yep. Certainly. I'll take that, and maybe Stan can pop in on the Outlook for productivity. But on the bring-ons, we were really in the high five to 6% range on the CRE and multifamily. We came in about six, 70% on C&I. And our PACE portfolio was about 7%. So decent bring-ons, I think, the upcoming quarter on the multifamily CRA maybe. 30 basis points higher, bring-on opportunity. And maybe 15 basis points or so higher on the C&I's. I think pace would be relatively similar, around 7%. Although opportunistically, it could get a little bit higher depending on certain types of deals. So I think on the asset side, there's good opportunity for lift. When we gave our guidance for the margin for Q3, and we're saying it's remaining flat, I think there's a couple of things that's driving that. The first is that there's a bit of an outsize in our securities portfolio and we try to maintain structural credit integrity. So we're not going high, high up on the yield there. So as we have a little bit more of that volume, coming through, and going for reset, we're gonna end up dragging some of the gain we'll have in the loan yield in the third quarter. So we think that's just going have a neutralizing effect for the most part on the asset yields. And to your point, we think the cost of funds is going be pretty stable, and we're not really modeling a tremendous amount of benefit from any type of rate reduction on cost of funds going forward because we just are assuming a higher I'm sorry, a lower beta on that. Now going forward to Q4, though, that's where we think there's going to be an opportunity for margin expansion because we'll eventually see a flip into probably more DDA from IBA as the political deposits continue to ramp up. And so when we get towards the end of the third quarter and into the fourth, we hope that there'll be a little bit of a shift there. That'll put a little bit of reduction of pressure on the cost of funds side. And then as we continue to trade out of the securities portfolio to fund new loan originations, that's where we think we're going to get that asset yield pick up because the loan yields will sort of run the table, and the securities won't drag as much.

Question 5: Maybe a little bit color of the run rate for next quarter expenses. It sounds like you're going to tick up a little bit based on what you said in the full-year guide.

Answer: Yeah. The expenses, I do think we're going to pick up to the extent that it's 3 and a half million or so more than the 40.4 we came in. I don't exactly know. I'm really happy with the levers that we were able to pull and the discipline that we showed in this quarter to be able to create some room in our expense profile for the back half of the year. Do know we're gonna have added compensation expenses Priscilla mentioned before all the new producer bankers that we've hired. Obviously, there'll be a call to that, but we're excited about the revenue capabilities that they'll bring into the following year. Then this digital transformation process that we've been undergoing for the better part of a year, and there's a decent amount of accumulated balance expenses that are going to start to roll through. That's gonna also have a revenue benefit. But what we're seeing right now is keeping the $170 million target for the end of the year I think we'll be starting to look ratably between the two quarters if we're going to hit that $1.70. But, David, I think the other thing is if there's room for us to surprise on the pretax pre-provision guidance we're given, it will be on a betterment of expenses through the back half of the year.

Question 6: Just on the capital. Appreciate your comments about being opportunistic on the buybacks. So just maybe a little bit thought on the dividend and maybe you know, the longer term you know, thoughts on a, a dividend payout ratio.

Answer: So I always try to be wrapped in my comments about the overall payout rate between the buyback and the dividend. And we've targeted 20% to 25%. But the other thing that I target is generally a two to two and a half percent yield. And the reason why I think of it that way is because we still view Amalgamated very much as a growth stock. And so we don't wanna be over-indexed on the yield. But what I do point to is we've been moving up the dividend scale more frequently than we have in the past. If we went back to when we IPOed, we were really every two years doing roughly a 2¢ dividend increase. Last year, we moved to one year on a $0.02 dividend increase. And I would think we'll continue pace in that way and potentially be able to increase the penny or so that we've talked about maybe more than 2¢ going forward, but I don't have an exact target for you yet. Other than that we're very conscious of the actual dividend yield and needing to be a little bit higher up on the scale there.

[Sentiment Analysis]
The tone of analysts was inquisitive and supportive, focusing on strategic expansion, provisioning, and capital management. Management's responses were confident and detailed, emphasizing organic growth, robust provisioning, and strategic capital returns.

[Quarterly Comparison]
| Metric | Q2 2025 | Q1 2025 | YoY Change |
|-------------------------------|---------------|---------------|----------------|
| Net Income | $26 million | $25 million | +4% |
| Core Net Income | $27 million | $26 million | +3.8% |
| Net Interest Income | $72.9 million | $70.6 million | +3.3% |
| Net Interest Margin | 3.55% | 3.52% | +0.03% |
| On-Balance Sheet Deposits | $7.7 billion | $7.4 billion | +4.3% |
| Loan Growth | $60.8 million | $58 million | +4.8% |
| Tangible Book Value per Share | $24.33 | $23.51 | +3.5% |
| CET1 Ratio | 14.13% | 14.28% | -0.15% |

[Risks and Concerns]
Nonperforming assets increased to $35.2 million, driven by residential nonaccrual loans. Exposure to consumer solar loan portfolio stress remains, with 7.26% reserve coverage. Criticized and classified loans rose to $97.8 million, driven by downgrades in C&I and multifamily loans. Syndicated C&I credit under review may require further reserves.

[Final Takeaway]
Amalgamated Financial demonstrated robust performance in Q2 2025, with solid net income growth and strategic deposit and loan growth. Management's focus on organic expansion, particularly in California, and the upcoming digital platform launch are expected to drive future growth. Despite some portfolio stress, the company maintains strong provisioning and capital management, positioning it well for continued success. The recognition by American Banker underscores its strong performance trajectory and market positioning.