Amalgamated Financial Corp. (AMAL): Business Model Canvas [11-2024 Updated]

Discover the innovative business model of Amalgamated Financial Corp. (AMAL), a leader in community-focused banking. With a strong emphasis on sustainable investments and personalized service, AMAL uniquely positions itself to serve small and medium-sized enterprises, non-profits, and residential borrowers. Explore how their strategic partnerships, diverse revenue streams, and commitment to community development drive their success in the financial sector.

Amalgamated Financial Corp. (AMAL) - Business Model: Key Partnerships

Collaborations with community banks

Amalgamated Financial Corp. has established collaborations with numerous community banks to enhance its service offerings and expand its market reach. As of September 30, 2024, the total deposits of Amalgamated Financial Corp. were approximately $7.59 billion, reflecting a growth from $7.01 billion at December 31, 2023, indicating a strong partnership network that bolsters their deposit base.

Partnerships with local businesses

The company has focused on building relationships with local businesses, particularly those in the sustainable and clean energy sectors. As of September 30, 2024, the commercial and industrial (C&I) loans reached $1.06 billion, which comprised 23.3% of the total loan portfolio. This represents a 4.7% increase from $1.01 billion at December 31, 2023.

Partnership Type	Total Loans (as of 09/30/2024)	Percentage of Total Loan Portfolio
Commercial and Industrial	$1.06 billion	23.3%
Multifamily Mortgages	$1.29 billion	28.4%
Commercial Real Estate	$415.1 million	9.1%

Alliances with non-profits and B Corporations

Amalgamated Financial Corp. actively partners with non-profit organizations and B Corporations to support community initiatives and sustainable business practices. The bank's lending strategy emphasizes developing relationships with clients who share similar values, which includes investing in projects that qualify for tax credits related to solar energy generation. As of September 30, 2024, the company had made tax credit investments totaling $7.764 million.

Relationships with government agencies

Amalgamated Financial Corp. maintains strategic relationships with various government agencies, which facilitate access to funding and support for community development projects. The Federal Home Loan Bank of New York (FHLBNY) is a critical partner, providing borrowing capacity of approximately $981.9 million as of September 30, 2024. Additionally, the bank has secured $4.8 million in advances from the FHLBNY.

Agency	Borrowing Capacity	Advances as of 09/30/2024
FHLBNY	$981.9 million	$4.8 million
Federal Reserve	Approx. $981.9 million	N/A

Amalgamated Financial Corp. (AMAL) - Business Model: Key Activities

Loan origination and underwriting

As of September 30, 2024, Amalgamated Financial Corp. reported total loans, net of deferred origination fees and allowance for credit losses, of $4.49 billion, compared to $4.35 billion at December 31, 2023. The loan portfolio is diversified with a primary focus on commercial and industrial (C&I), multifamily, and commercial real estate (CRE) lending.

The composition of the loan portfolio as of September 30, 2024, is as follows:

Loan Type	Amount (in thousands)	Percentage of Total Loans
Commercial and Industrial	$1,058,376	23.3%
Multifamily Mortgages	$1,291,380	28.4%
Commercial Real Estate Mortgages	$415,077	9.1%
Residential Real Estate Lending	$1,350,347	29.7%
Consumer Solar	$374,499	8.2%
Consumer and Other	$36,000	0.8%
Total Loans	$4,547,903	100%

Asset management and investment strategies

Amalgamated Financial Corp. focuses on a wide range of investment securities. As of September 30, 2024, the available for sale securities had a fair value of $1.21 billion and held-to-maturity securities with a fair value of $526.1 million. The majority of these securities are pledged to the Federal Home Loan Bank of New York (FHLBNY) to secure outstanding advances.

The investment portfolio includes:

Type of Security	Fair Value (in thousands)
GSE Residential CMOs	$480,615
Non-GSE Certificates & CMOs	$196,860
ABS	$627,635
Corporate	$120,741
Other	$3,888
Total Available for Sale	$1,429,739

Customer service and relationship management

Amalgamated Financial Corp. employs a relationship-based banking strategy, which has proven effective in growing core deposits. Total deposits as of September 30, 2024, amounted to $7.59 billion, an increase from $7.01 billion at December 31, 2023. The bank has a strong focus on serving politically active clients, with political deposits accounting for approximately $1.96 billion as of September 30, 2024.

The bank operates through:

• Three branches in New York City
• One branch in Washington, D.C.
• One branch in San Francisco

Risk assessment and compliance

Risk management is integral to the operations of Amalgamated Financial Corp. The provision for credit losses totaled an expense of $6.6 million for the nine months ended September 30, 2024, compared to $10.9 million for the same period in 2023. The provision for credit losses on loans was primarily driven by charge-offs on consumer solar and small business portfolios.

The following table outlines the provision for credit losses:

Period	Provision for Credit Losses (in thousands)
Three Months Ended September 30, 2024	$1,849
Three Months Ended September 30, 2023	$2,014
Nine Months Ended September 30, 2024	$6,598
Nine Months Ended September 30, 2023	$10,913

Amalgamated Financial Corp. (AMAL) - Business Model: Key Resources

Experienced banking professionals

Amalgamated Financial Corp. employs a team of experienced banking professionals, enhancing its operational capabilities and customer service. The bank's workforce is pivotal in maintaining relationships with clients and ensuring compliance with regulatory standards.

Diverse loan portfolio valued at $4.49 billion

As of September 30, 2024, Amalgamated Financial Corp. boasts a diverse loan portfolio valued at $4.49 billion. This portfolio includes various types of loans such as residential, commercial, and consumer loans, which help mitigate risk and enhance revenue generation.

Technology infrastructure for banking operations

The bank has invested significantly in its technology infrastructure to support banking operations. This includes online banking platforms, mobile applications, and data management systems that facilitate efficient customer transactions and enhance overall service delivery.

Strong capital base with Tier 1 capital of 12.98%

Amalgamated Financial Corp. maintains a strong capital base, with a Tier 1 capital ratio of 12.98% as of September 30, 2024. This robust capital position ensures that the bank meets regulatory requirements and supports its growth strategies.

Key Resource	Value/Details
Experienced banking professionals	Team of skilled professionals enhancing operations and customer service
Diverse loan portfolio	$4.49 billion
Technology infrastructure	Investment in online banking platforms, mobile apps, and data systems
Tier 1 capital ratio	12.98%

Amalgamated Financial Corp. (AMAL) - Business Model: Value Propositions

Tailored financial solutions for small and medium businesses

Amalgamated Financial Corp. focuses on providing customized financial solutions specifically designed for small and medium-sized enterprises (SMEs). As of September 30, 2024, total loans extended to SMEs accounted for approximately $2.79 billion, representing about 61.3% of the total loan portfolio. This segment includes commercial and industrial loans, multifamily mortgages, and commercial real estate mortgages.

Focus on sustainable and mission-driven investments

The bank emphasizes sustainable investments, aligning with its mission-driven approach. As of September 30, 2024, Amalgamated’s investment portfolio included $1.77 billion in available-for-sale securities, with a significant portion allocated to green and sustainable projects. These investments are intended to not only yield financial returns but also contribute positively to community and environmental sustainability.

Competitive interest rates on loans

Amalgamated Financial Corp. offers competitive interest rates on its loan products. As of September 30, 2024, the average yield on loans was 4.79%, which is competitive within the market. The bank's commitment to providing attractive rates is evident in the structured offerings across various loan types, including a 3.83% average rate on time deposits, enhancing their appeal to borrowers.

Commitment to community development

Community development is a core value for Amalgamated Financial Corp. The bank has pledged to allocate a portion of its resources toward initiatives that foster economic growth in underserved areas. As of September 30, 2024, total deposits reached $7.59 billion, with a significant contribution directed towards local community projects. This commitment is reflected in the bank's community reinvestment strategy and efforts to maintain relationships with local organizations.

Financial Metric	As of September 30, 2024	As of December 31, 2023	Change
Total Loans (SMEs)	$2.79 billion	$2.54 billion	+9.8%
Total Investment Securities	$1.77 billion	$1.48 billion	+19.6%
Average Loan Yield	4.79%	4.56%	+0.23%
Total Deposits	$7.59 billion	$7.01 billion	+8.3%

Amalgamated Financial Corp. (AMAL) - Business Model: Customer Relationships

Personalized customer service

Amalgamated Financial Corp. emphasizes personalized customer service, focusing on understanding individual client needs and providing tailored solutions. This is evident in their customer service approach, which includes dedicated relationship managers for clients. As of September 30, 2024, the company reported total deposits of $7.59 billion, reflecting a commitment to building strong relationships with customers through personalized banking services.

Long-term relationship building

The company aims to foster long-term relationships with its clients by engaging in community-oriented banking practices. This strategy has helped Amalgamated Financial Corp. attract approximately $1.96 billion in political deposits as of September 30, 2024. These deposits are primarily sourced from politically active customers, which illustrates the bank's niche in relationship-based banking.

Regular communication and updates

Amalgamated Financial Corp. maintains regular communication with clients through various channels, including newsletters, email updates, and personal outreach. This approach ensures that clients are informed about new products, services, and any changes that may affect their banking experience. The bank's dedication to transparency and communication is reflected in its customer satisfaction ratings, which are consistently above industry averages.

Support for community initiatives

Amalgamated Financial Corp. actively participates in and supports community initiatives. This is part of their mission-driven approach, which aims to align their banking practices with the values of their clients. The bank has invested in various community programs and initiatives, enhancing its reputation and client trust. As of September 30, 2024, the bank had set aside $1.8 million for community development projects aimed at supporting underserved communities.

Customer Relationship Strategy	Key Statistics
Personalized Customer Service	Total Deposits: $7.59 billion
Long-term Relationship Building	Political Deposits: $1.96 billion
Regular Communication	Customer Satisfaction: Above industry averages
Support for Community Initiatives	Investment in Community Projects: $1.8 million

Amalgamated Financial Corp. (AMAL) - Business Model: Channels

Direct sales through branches

Amalgamated Financial Corp. operates through a network of five branches located in New York City, Washington, D.C., and San Francisco. As of September 30, 2024, total deposits amounted to $7.59 billion, an increase from $7.01 billion at December 31, 2023. The bank's branches focus on relationship-based banking, serving both business and consumer clients, particularly politically active customers such as campaigns and PACs. Political deposits totaled approximately $1.96 billion as of September 30, 2024.

Online banking platform

Amalgamated's online banking platform facilitates customer access to a variety of banking services, including checking and savings accounts, loan applications, and investment management. The total number of active online banking users has grown by 15% year-over-year, reaching approximately 120,000 users as of September 30, 2024. The platform is designed to enhance user experience and customer engagement, contributing to an increase in online transactions which represented 45% of total banking transactions in 2024.

Mobile banking applications

The mobile banking application of Amalgamated Financial Corp. has seen significant adoption, with over 75,000 downloads recorded as of September 30, 2024. The app offers features such as mobile check deposit, fund transfers, and account management, enhancing customer convenience and driving engagement. Mobile banking transactions accounted for 35% of total customer transactions during the third quarter of 2024.

Community events and workshops

Amalgamated actively participates in community engagement through events and workshops aimed at financial literacy. In 2024, the bank hosted over 50 community events, reaching approximately 3,000 participants. These initiatives not only promote financial education but also strengthen community ties and enhance the bank's brand visibility. Feedback from participants indicated a 90% satisfaction rate with the workshops, further solidifying Amalgamated's commitment to community involvement.

Channel Type	Description	Key Metrics
Branches	Physical locations for banking services	Total deposits: $7.59 billion (Sept 30, 2024)
Online Banking	Web platform for banking services	Active users: 120,000 (15% growth)
Mobile Banking	Application for banking on-the-go	Downloads: 75,000; Transactions: 35% of total
Community Engagement	Events and workshops for financial literacy	Events: 50; Participants: 3,000; Satisfaction: 90%

Amalgamated Financial Corp. (AMAL) - Business Model: Customer Segments

Small to medium-sized enterprises

Amalgamated Financial Corp. focuses on providing financial services to small to medium-sized enterprises (SMEs) primarily in the manufacturing, retail, and service sectors. As of September 30, 2024, the Commercial and Industrial (C&I) loans portfolio amounted to $1.06 billion, representing 23.3% of the total loan portfolio.

Residential borrowers for mortgages

The residential mortgage portfolio is a significant component of Amalgamated's business model. The total residential real estate lending as of September 30, 2024, was $1.35 billion, accounting for 29.7% of the total loan portfolio. This segment is primarily composed of first mortgage loans, which constitute 99% of the residential lending.

Non-profit organizations

Amalgamated Financial Corp. actively serves non-profit organizations, focusing on mission-aligned clients. The company supports these organizations through tailored financial products, including loans that align with their operational and project financing needs. The non-profit sector is part of the broader Commercial and Industrial loans segment, which totaled $1.06 billion.

Sustainable and clean energy companies

Amalgamated is committed to supporting sustainable and clean energy initiatives. The Consumer Solar loan portfolio, which finances residential solar projects, totaled $374.5 million as of September 30, 2024, representing 8.2% of the total loan portfolio. This reflects the bank's focus on environmentally sustainable projects and companies aligned with its mission-driven approach.

Customer Segment	Loan Amount (as of Sep 30, 2024)	% of Total Loan Portfolio
Small to Medium-sized Enterprises	$1.06 billion	23.3%
Residential Borrowers for Mortgages	$1.35 billion	29.7%
Non-profit Organizations	Part of C&I Loans	N/A
Sustainable and Clean Energy Companies	$374.5 million	8.2%

Amalgamated Financial Corp. (AMAL) - Business Model: Cost Structure

Employee salaries and benefits

The total employee salaries and benefits for Amalgamated Financial Corp. for the nine months ended September 30, 2024, amounted to $30.5 million, an increase from $27.3 million in the same period of 2023. The stock-based compensation expense was reported at $3.954 million for the nine months ended September 30, 2024.

Operational costs for branches and technology

Operational costs associated with branches and technology were recorded at $12.6 million for the third quarter of 2024, up from $11.2 million in the third quarter of 2023. The amortization expense recognized on the core deposit intangible was $0.5 million for the nine months ended September 30, 2024.

Marketing and promotional expenses

Marketing and promotional expenses for Amalgamated Financial Corp. were reported at $2.1 million for the nine months ended September 30, 2024, compared to $1.8 million for the same period in 2023. This reflects an increase in efforts to enhance brand visibility and customer engagement.

Regulatory compliance costs

Regulatory compliance costs incurred by Amalgamated Financial Corp. were approximately $1.2 million for the third quarter of 2024, which is consistent with the costs incurred in the previous year. The company continues to invest in compliance systems to meet evolving regulatory requirements.

Cost Category	Q3 2024 (in millions)	Q3 2023 (in millions)	9M 2024 (in millions)	9M 2023 (in millions)
Employee Salaries and Benefits	10.2	9.1	30.5	27.3
Operational Costs	12.6	11.2	36.0	34.5
Marketing Expenses	2.1	1.8	6.0	5.5
Regulatory Compliance Costs	1.2	1.2	3.5	3.5

Amalgamated Financial Corp. (AMAL) - Business Model: Revenue Streams

Interest income from loans

As of September 30, 2024, Amalgamated Financial Corp. reported total loans of $4.49 billion, which generated significant interest income. For the third quarter of 2024, the net interest income was $72.1 million, an increase of 13.2% compared to $63.7 million in the same quarter of 2023. This growth was attributed to higher yields on interest-earning assets and increased average balances.

Service fees on deposit accounts

Service fees related to deposit accounts showed a strong increase, contributing to the non-interest income of the bank. For the nine months ended September 30, 2024, non-interest income increased by $8.5 million, largely due to increased service charges on deposit accounts.

Gains from investment securities

Amalgamated Financial Corp. maintained a robust investment securities portfolio, with available-for-sale securities valued at $1.77 billion and held-to-maturity securities valued at $1.61 billion as of September 30, 2024. This portfolio is designed to provide liquidity and yield returns, contributing to the overall revenue streams of the company.

Non-interest income from financial services

For the third quarter of 2024, non-interest income totaled $27.9 million, reflecting a significant contribution from various financial services offered by Amalgamated Financial Corp. This includes fees from asset management services and other financial advisory services.

Revenue Stream	Amount (as of September 30, 2024)	Comparison to Previous Year
Interest Income from Loans	$72.1 million	↑ 13.2% from Q3 2023
Service Fees on Deposit Accounts	$8.5 million increase in non-interest income	Not specified
Gains from Investment Securities	$1.77 billion (available-for-sale) + $1.61 billion (held-to-maturity)	Not specified
Non-Interest Income from Financial Services	$27.9 million	Not specified

Updated on 16 Nov 2024

Resources:

1. Amalgamated Financial Corp. (AMAL) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Amalgamated Financial Corp. (AMAL)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Amalgamated Financial Corp. (AMAL)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.