AMAL Q2 Deep Dive: Deposit Growth, Loan Expansion, and California Market Push

Socially responsible bank Amalgamated Financial (NASDAQ:AMAL) met Wall Street’s revenue expectations in Q2 CY2025, with sales up 4.8% year on year to $82.18 million. Its non-GAAP profit of $0.88 per share was 1.1% above analysts’ consensus estimates.

Is now the time to buy AMAL? Find out in our full research report (it’s free).

StockStory’s Take

Amalgamated Financial’s second quarter was met with a significant negative market reaction, despite management highlighting steady deposit and loan growth as core drivers. CEO Priscilla Sims Brown emphasized that the bank’s commercial portfolios—particularly multifamily, commercial real estate, and commercial and industrial lending—supported results, while the consumer solar and residential portfolios continued to run off. The bank’s focus on expanding its lending platform, especially with experienced hires in California, was cited as a reason for optimism, yet investors appeared concerned about rising provisioning needs and the modest pace of loan growth relative to targets.

Looking to the remainder of the year, management is emphasizing market expansion in California, further digital transformation, and ongoing investments in revenue-generating talent as key priorities. The upcoming launch of a data-driven digital platform is expected to increase expenses in the second half, but management believes it will improve productivity and set up scalable growth. CFO Jason Darby noted, “We are maintaining our full year 2025 guidance,” and flagged that additional shifts in deposit mix and loan yields could influence near-term margins. The bank sees a healthy pipeline for new commercial relationships and expects political deposits to remain a growth driver into the next election cycle.

Key Insights from Management’s Remarks

Management attributed the quarter’s outcomes to balanced commercial loan growth, strong political and not-for-profit deposit inflows, and the continued strategic runoff of certain loan portfolios.

• Commercial portfolio expansion: The multifamily, commercial real estate (CRE), and commercial and industrial (C&I) segments led loan growth, with management noting that most new lending was booked late in the quarter, limiting immediate net interest income impact but setting up a stronger yield base for the second half.
• Deposit inflows from core segments: Political deposit balances increased alongside not-for-profit deposits, reflecting Amalgamated’s appeal among mission-driven clients. Political deposits in particular surged as election-related fundraising picked up, which management sees as a continuing trend through 2025.
• Strategic runoff of legacy portfolios: The consumer solar and residential loan segments continued to decline as planned, with management reiterating that these portfolios are in deliberate runoff mode to focus resources on higher-return commercial segments.
• California market expansion: Significant new executive hires with deep experience in California banking signal a push to grow loans and deposits in the state. Management described California as a “large growth opportunity” and has started recruiting additional talent for this purpose.
• Digital transformation investment: Amalgamated is preparing to launch a data-first digital platform in the third quarter, intended to improve customer insights and drive revenue growth. Management acknowledged that this initiative will temporarily increase expenses, but expects it to enhance efficiency and support long-term scalability.

Drivers of Future Performance

Management expects near-term performance to be shaped by commercial loan growth, digital transformation costs, and evolving deposit mix.

• California and West Coast growth: The newly hired Western Regional Director and additions to commercial and climate lending teams are expected to drive market penetration and expand both loans and deposits, particularly in California. Management sees the state as underpenetrated and a “logical” next step for organic growth.
• Digital platform implementation: The upcoming deployment of a fully integrated digital monetization platform will temporarily lift expenses in the second half but is intended to improve productivity and customer retention. Management believes this will support scalable growth and improve revenue per share as Amalgamated approaches the $10 billion asset threshold.
• Deposit mix and margin pressures: Continued growth in political deposits, which tend to be more interest-bearing, may impact net interest margin in the near term. Management expects margin expansion later in the year as deposit mix stabilizes and higher-yielding loans booked late in Q2 begin to contribute.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) progress on California market expansion and integration of newly hired senior bankers, (2) the impact and adoption rate of the new digital platform on both customer experience and operational efficiency, and (3) trends in deposit mix and net interest margin as political and not-for-profit deposits continue to grow. Additionally, the pace of runoff in legacy loan portfolios and resolution of stressed credits will be important to watch.

Amalgamated Financial currently trades at $31.12, down from $33.25 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).

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