Amalgamated Financial Announces Strong Dividend Growth

Amalgamated Financial's Quarterly Dividend Increase Announcement

Amalgamated Financial Corp. (NASDAQ: AMAL), the parent company of Amalgamated Bank, has recently shared exciting news regarding an increase in its quarterly dividend. The board of directors approved a notable hike of $0.02 per common share, resulting in an impressive 17% rise, making the new dividend $0.14. This change is significant as it highlights the company’s commitment to rewarding shareholders. The new dividend is set to be payable in late February 2025, benefiting those on record by mid-February.

A Pattern of Consistent Dividend Growth

This increase marks the company’s third consecutive year of dividend growth, showcasing a remarkable 20% rise in dividends over the past year alone. As investors look for reliable income from their investments, a current dividend yield of 1.3% makes Amalgamated Financial an appealing choice in today’s market.

The Financial Backbone of Amalgamated Bank

Operating as a Delaware public benefit corporation, Amalgamated Financial functions as a bank holding entity, offering diverse commercial banking and financial services through its subsidiary, Amalgamated Bank. Established in 1923 with roots connecting to the Amalgamated Clothing Workers of America, the bank has expanded to include branches across various states, including major cities like New York City, Washington D.C., and San Francisco, thus building a strong geographical presence.

Robust Financial Performance

Amalgamated Financial has shown impressive growth metrics recently, boasting a total asset portfolio of $8.4 billion and net loans totaling $4.5 billion. The bank brings in substantial deposits, amassing a total of $7.6 billion. Additionally, its trust operations manage over $35 billion in assets under custody, indicating the company’s strong market position and trust among clients.

Commitment to Values and Sustainability

Amalgamated Bank maintains robust financial health, with a commendable return on equity of 17% and a conservative debt-to-equity ratio of just 0.13. Engaged in the Global Alliance for Banking on Values, the bank is not just about numbers; it emphasizes ethical practices and social responsibility, reaffirming its commitment to serving both commercial and retail sectors.

The Future of Dividend Payments

While the recent announcement is promising, it is crucial for investors to remember that future dividend payments will be decided at the discretion of the Board of Directors. The company’s ongoing financial performance will serve as a guiding factor in these decisions, keeping in mind the interests of its shareholders.

Recent Developments and Achievements

Moreover, Amalgamated Financial has successfully extended its contract with the Office & Professional Employees International Union until mid-2026. This new pact provides annual wage increases of 3.5% and introduces improved healthcare benefits for employees, underpinning the bank's solid operational framework and strong performance. The bank reported a revenue growth trajectory of 12.8%, further demonstrating its stability.

Impressive Earnings Report

In its latest earnings report, Amalgamated Bank announced a net income of $27.9 million, alongside a core net income of $28 million. The surge in deposits, now totaling $7.6 billion, reflects the bank's strength, particularly driven by growth in ethical, philanthropic, and sustainable funds. Additionally, a slight increase of 2.7% in loans signifies confidence and growth in lending activities.

Market Response and Future Outlook

Following these robust earnings, financial analysts at Piper Sandler have raised their price target for Amalgamated Bank from $39 to $42, maintaining an Overweight rating. Furthermore, the bank has demonstrated improved financial metrics, including a Tier 1 leverage ratio of 8.63%. Despite expectations of increasing expenses in the fourth quarter, Amalgamated Bank remains steadfast in its growth strategy, especially in sustainable banking.

Frequently Asked Questions

What is the recent dividend increase by Amalgamated Financial?

The quarterly dividend has increased by 17%, bringing it to $0.14 per share.

When will the new dividend be effective?

The new dividend will be payable on February 27, 2025, to shareholders on record as of February 11, 2025.

What has been the trend of dividends for Amalgamated Financial?

This increase marks the third consecutive year the company has raised its dividend payouts.

How has Amalgamated Financial performed financially?

As of the latest reports, the company has total assets of $8.4 billion, net loans of $4.5 billion, and strong revenue growth.

What sustainability initiatives does Amalgamated Bank support?

Amalgamated Bank is part of the Global Alliance for Banking on Values, emphasizing ethical and sustainable practices in its operations.

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