Amalgamated Financial Corp

Previous wording

The following is a discussion of our consolidated financial condition as of September 30, 2024, as compared to December 31, 2023, and our results of operations for the three and nine month periods ended September 30, 2024 and September 30, 2023. The purpose of this discussion is to focus on information about our financial condition and results of operations which is not otherwise apparent from our consolidated financial statements and is intended to provide insight into our results of operations and financial condition. This discussion and analysis is best read in conjunction with our unaudited consolidated financial statements and related notes as well as the financial and statistical data appearing elsewhere in this report and our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”), filed with the Securities and Exchange Commission on March 7, 2024. Historical results of operations and the percentage relationships among any amounts included, and any trends that may appear, may not indicate results of operations for any future periods.

Current wording

The following is a discussion of our consolidated financial condition as of March 31, 2025, as compared to December 31, 2024, and our results of operations for the three month periods ended March 31, 2025 and March 31, 2024. The purpose of this discussion is to focus on information about our financial condition and results of operations which is not otherwise apparent from our consolidated financial statements and is intended to provide insight into our results of operations and financial condition. This discussion and analysis is best read in conjunction with our unaudited consolidated financial statements and related notes as well as the financial and statistical data appearing elsewhere in this report and our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”), filed with the Securities and Exchange Commission on March 6, 2025. Historical results of operations and the percentage relationships among any amounts included, and any trends that may appear, may not indicate results of operations for any future periods.

Previous wording

The Company was formed on August 25, 2020 to serve as the holding company for the Bank, effective March 1, 2021 when the Company acquired the common stock of the Bank. The Bank was formed in 1923 as Amalgamated Bank of New York by the Amalgamated Clothing Workers of America, one of the country’s oldest labor unions. Although we are no longer majority union-owned, The Amalgamated Clothing Workers of America’s successor, Workers United, an affiliate of the Service Employees International Union that represents workers in the textile, distribution, food service and gaming industries, remains a significant stockholder, holding approximately 40% of our equity as of September 30, 2024. As of September 30, 2024, our total assets were $8.41 billion, our total loans, net of allowance for credit losses were $4.49 billion, our total deposits were $7.59 billion, and our stockholders' equity was $698.3 million. As of September 30, 2024, our trust business held $35.43 billion in assets under custody and $14.55 billion in assets under management.

Current wording

The Company was formed on August 25, 2020 to serve as the holding company for the Bank, effective March 1, 2021 when the Company acquired the common stock of the Bank. The Bank was formed in 1923 as Amalgamated Bank of New York by the Amalgamated Clothing Workers of America, one of the country’s oldest labor unions. Although we are no longer majority union-owned, The Amalgamated Clothing Workers of America’s successor, Workers United, an affiliate of the Service Employees International Union that represents workers in the textile, distribution, food service and gaming industries, remains a significant stockholder, holding approximately 37% of our equity as of March 31, 2025. As of March 31, 2025, our total assets were $8.29 billion, our total loans, net of allowance for credit losses were $4.62 billion, our total deposits were $7.41 billion, and our stockholders' equity was $736.0 million. As of March 31, 2025, our trust business held $35.71 billion in assets under custody and $14.23 billion in assets under management.

Previous wording

Other than the addition of accounting policies related to derivatives, there have been no significant changes to our significant accounting policies, or the estimates made pursuant to those policies as described in our 2023 Annual Report.

Current wording

There have been no significant changes to our significant accounting policies, or the estimates made pursuant to those policies as described in our 2024 Annual Report.

Previous wording

On January 1, 2023, we adopted the CECL Standard, which requires that loans held for investment be accounted for under the current expected credit losses model. The allowance for credit losses is established and maintained through a provision for credit losses based on expected losses inherent in our loan portfolio. Management evaluates the adequacy of the allowance on a quarterly basis, and additions to the allowance are charged to expense and subsequent changes (favorable and unfavorable) in expected credit losses are recognized immediately in net income as a credit loss expense or a reversal of credit loss expense. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed, expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Current wording

The allowance for credit losses is established and maintained through a provision for credit losses based on expected losses inherent in our loan portfolio. Management evaluates the adequacy of the allowance on a quarterly basis, and additions to the allowance are charged to expense and subsequent changes (favorable and unfavorable) in expected credit losses are recognized immediately in net income as a credit loss expense or a reversal of credit loss expense. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed, expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Previous wording

For segments that rely on a peer group to develop baseline loss rates, statistical regression is utilized to relate historical macro-economic variables to historical credit loss experience of a peer group of banks. These models are then utilized to forecast future expected credit losses based on expected future behavior of the same macro-economic variables. Adjustments to the quantitative results are made using qualitative factors. These factors include: (1) borrowers' financial condition; (2) borrowers' ability to pay; (3) nature and volume of financial assets; (4) value of the underlying collateral; (5) lending policies and procedures; (6) quality of the loan review system; (7) the experience, ability, and depth of staff; (8) regulatory and legal environment; (9) changes in market conditions; and (10) changes in economic conditions.

Current wording

For segments that rely on a peer group to develop baseline loss rates, statistical regression is utilized to relate historical macro-economic variables to historical credit loss experience of a peer group of banks. These models are then utilized to forecast future expected credit losses based on expected future behavior of the same macro-economic variables. Adjustments to the quantitative results are made using qualitative factors. These factors include: (1) borrowers' financial condition; (2) borrowers' ability to pay;

Previous wording

On November 27, 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. A public entity should apply the amendments retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company does not expect an impact of this standard on the consolidated financial statements and related disclosures.

Current wording

On November 27, 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. A public entity should apply the amendments retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. This ASU is effective for the year ended December 31, 2024 and for interim reporting periods beginning with the quarter ended March 31, 2025. Early adoption is permitted. The Company does not expect an impact of this standard on the consolidated financial statements and related disclosures.

Previous wording

Our results of operations depend substantially on net interest income, which is the difference between interest income on interest-earning assets, consisting primarily of interest income on loans, investment securities and other short-term investments and interest expense on interest-bearing liabilities, consisting primarily of interest expense for deposits and borrowings. Our results of operations are also dependent on non-interest income, consisting primarily of income from Trust Department fees, service charges on deposit accounts, net gains on sales of investment securities and income from bank-owned life insurance (“BOLI”). Other factors contributing to our results of operations include our provisions for credit losses, income taxes, and non-interest expenses, such as salaries and employee benefits, occupancy and depreciation expenses, professional fees, data processing fees and other miscellaneous operating costs.

Current wording

Our results of operations depend substantially on net interest income, which is the difference between interest income on interest-earning assets, consisting primarily of interest income on loans, investment securities and other short-term investments and interest expense on interest-bearing liabilities, consisting primarily of interest expense for deposits and borrowings. Our results of operations are also dependent on non-interest income, consisting primarily of income from Trust Department fees, service charges on deposit accounts, net gains on sales of investment securities and income from bank-owned life insurance (“BOLI”). Other factors contributing to our results of operations include our provisions for credit losses, income taxes, and non-interest expenses, such as salaries and employee benefits, occupancy and depreciation expenses, professional fees, technology fees and other miscellaneous operating costs.

Previous wording

Net income for the nine months ended September 30, 2024 was $81.9 million, or $2.65 per diluted share, compared to $65.3 million, or $2.12 per diluted share, for the same period in 2023. The $16.6 million increase was primarily due to a $17.7 increase in interest income on loans, a $14.8 million increase in interest income on securities, a $8.5 million increase in non-interest income primarily due to an increase in service charges on deposit accounts, a $4.3 million decrease in the provision for credit losses, and a $4.2 million increase in interest income from interest-bearing deposits in banks, offset by a $21.3 million increase in interest expense, $6.4 million increase in income tax expense, and a $5.1 million increase in non-interest expense.

Current wording

Net income for the first quarter of 2025 was$25.0 million, or $0.81 per diluted share, compared to$27.2 million, or $0.89 per diluted share, for the first quarter of 2024. The$2.2 million decrease was primarily due to a$3.8 million decrease in non-interest income, a $3.5 million increase in non-interest expense, and a$1.2 million increase in interest expense, offset by a$3.8 million increase in interest and dividend income, a$1.6 million decrease in income tax expense, and a$1.0 million decrease in provision for credit losses.

Previous wording

(2)Includes prepayment penalty income in 3Q2024 and 3Q2023 of $0 and $0 thousand, respectively.

Current wording

(2)Includes prepayment penalty income in 1Q2025 and 1Q2024 of $0 and $18 thousand, respectively.

Previous wording

Net interest income was$72.1 million for the third quarter of 2024, compared to$63.7 million for the third quarter of 2023. The$8.4 million increase, or 13.2% increase from the third quarter of 2023 was primarily attributable to higher yields on and average balances in interest-earning assets coupled with lower average balances in interest-bearing liabilities and higher average balances in demand and transaction deposits, partially offset by higher costs.

Current wording

Net interest income was$70.6 million for the first quarter of 2025, compared to$68.0 million for the first quarter of 2024. The$2.6 million increase, or 3.8% increase from the first quarter of 2024 was primarily attributable to higher yields and average balances on interest-earning assets, partially offset by higher costs and average balances on interest-bearing liabilities.

Previous wording

Net interest spread was 1.90% for the three months ended September 30, 2024, compared to 2.20% for the same period in 2023, a decrease of 30 basis points. Our net interest margin was 3.51% for the third quarter of 2024, an increase of 22 basis points from 3.29% in the third quarter of 2023. This was largely due to increases in yields and average balances on interest-bearing assets, offset by increases in cost of funds on interest-bearing liabilities.

Current wording

Net interest spread was 2.41% for the three months ended March 31, 2025, compared to 2.24% for the same period in 2024, an increase of 17 basis points. Our net interest margin was 3.55% for the first quarter of 2025, an increase of 6 basis points from 3.49% in the first quarter of 2024. This was largely due to increases in yields and average balances on interest-bearing assets, partially offset by an increase in total cost of funds.

Previous wording

The yield on average earning assets was 5.01% for the three months ended September 30, 2024, compared to 4.70% for the same period in 2023, an increase of 31 basis points. This increase was driven primarily by the current rate environment resulting in increased yields across securities and loan portfolios.

Current wording

The yield on average earning assets was 5.06% for the three months ended March 31, 2025, compared to 4.97% for the same period in 2024, an increase of 9 basis points. This increase was driven primarily by the current rate environment resulting in increased yields across securities and loan portfolios.

Previous wording

The average rate on interest-bearing liabilities was 3.11% for the three months ended September 30, 2024, an increase of 61 basis points from the same period in 2023, which was primarily due to the rising rate environment that led to an increase in interest expense paid for deposits, particularly in savings, NOW, money market deposits and time deposits. Non-interest-bearing deposits represented 49.1% of average deposits for the three months ended September 30, 2024, compared to 42.2% for the three months ended September 30, 2023.

Current wording

The average rate on interest-bearing liabilities was 2.65% for the three months ended March 31, 2025, a decrease of 8 basis points from the same period in 2024, which was primarily due to a decrease in interest expense paid for deposits, particularly in savings, NOW, money market deposits and time deposits. Non-interest-bearing deposits represented 39.3% of average deposits for the three months ended March 31, 2025, compared to 44.2% for the three months ended March 31, 2024.

Previous wording

On January 1, 2023, we adopted the CECL standard for calculating the allowance for credit losses and the provision for credit losses. We establish an allowance for credit losses through a provision for credit losses charged as an expense in our Consolidated Statements of Income. For further discussion of the methodology under the CECL standard, refer to Note 1 to the Consolidated Financial Statements in Item 1 of this Form 10-Q.

Current wording

We establish an allowance for credit losses through a provision for credit losses charged as an expense in our Consolidated Statements of Income.

Previous wording

Non-interest income was$8.9 million for the third quarter of 2024, compared to$6.8 million for the third quarter in 2023. The increase of $2.2 million in thethird quarter of 2024 compared to the corresponding quarter in 2023 was primarily due to a $9.4 million increase in service charges on deposit accounts primarily due to increases in ICS One-Way Sell income, partially offset by a $4.2 million increase in losses on sale of loans and changes in fair value on loans held-for-sale and a $1.5 million increase in losses on sale of securities, and a decrease in income from equity investments of $1.4 million. Our Trust Department fees were $3.7 million in the third quarter of 2024, and $3.7 million in the same period in 2023.

Current wording

Non-interest income was$6.4 million for the first quarter of 2025, compared to$10.2 million for the first quarter in 2024. The decrease of $3.8 million in thefirst quarter of 2025 compared to the corresponding quarter in 2024 was primarily due to a $4.6 million decrease in income from equity investments and a $2.7 million decrease in service charges on deposit accounts primarily due to decreases in Insured Cash Sweep ("ICS") One-Way Sell income, offset by a $2.1 million decrease in losses on sale of securities, a $0.8 million increase in gain on sale of loans and changes in fair value on loans held-for-sale, a $0.3 million increase in trust department fees and a $0.2 million increase in other income. Our Trust Department fees were $4.2 million in the first quarter of 2025, and $3.9 million in the same period in 2024.

Previous wording

Non-interest expense includes compensation and employee benefits, occupancy and depreciation expense, professional fees (including legal, accounting and other professional services), data processing, office maintenance and depreciation, amortization of intangible assets, advertising and promotion, federal deposit insurance premiums, and other expenses. The following table presents non-interest expense for the periods indicated:

Current wording

Non-interest expense includes compensation and employee benefits, occupancy and depreciation expense, professional fees (including legal, accounting and other professional services), technology, office maintenance and depreciation, amortization of intangible assets, advertising and promotion, federal deposit insurance premiums, and other expenses. The following table presents non-interest expense for the periods indicated:

Previous wording

Non-interest expense for the third quarter of 2024 was $41.0 million, an increase of $3.6 million from $37.3 million for the third quarter of 2023. The increase was driven by a $2.4 million increase in compensation and benefits expense related to an expected increase in compensation due to increased headcount and corporate incentive payments, and a $0.5 million increase in data processing, a $0.4 million increase in other expenses, a $0.4 million increase in professional fees and a $0.2 million increase in advertising and promotion expense. This was partially offset by a $0.3 million decrease in federal deposit insurance premiums expense.

Current wording

Non-interest expense for the first quarter of 2025 was $41.7 million, an increase of $3.5 million from $38.2 million for the first quarter of 2024. The increase was driven by a $2.4 million increase in professional fees and $1.0 million increase in compensation and benefits expense related to an expected increase in compensation due to increased headcount and corporate incentive payments, and a $1.0 million increase in technology expense, a $0.4 million increase in occupancy and depreciation expense and a $0.1 million increase in other expenses, partially offset by a $1.2 million decrease in advertising and promotion expense and a $0.2 million decrease in federal deposit insurance premiums expense.

Previous wording

We had a provision for income tax expense of$10.3 million for the third quarter of 2024, compared to$8.8 million for the third quarter of 2023. Our effective tax rate for the third quarter of 2024 was 26.9% compared to 28.4% for the third quarter of 2023.

Current wording

We had a provision for income tax expense of$9.7 million for the first quarter of 2025, compared to$11.3 million for the first quarter of 2024. Our effective tax rate for the first quarter of 2025 was 28.0% compared to 29.2% for the first quarter of 2024.

Previous wording

Our total assets were $8.41 billion at September 30, 2024, compared to $7.97 billion at December 31, 2023. Notable changes within individual balance sheet line items include a $582.6 million increase in deposits, a $199.0 million increase in securities, a $58.6 million increase in cash, a $24.9 million increase in resell agreements, a $140.8 million increase in loans receivable, net, and a $236.5 million decrease in borrowings.

Current wording

Our total assets were $8.29 billion at March 31, 2025, compared to $8.26 billion at December 31, 2024. Notable changes within individual balance sheet line items include a $231.5 million increase in deposits, a $65.1 million increase in securities, a $17.9 million increase in resell agreements, a $7.0 million increase in loans receivable, net, a $5.0 million increase in cash, and a $244.7 million decrease in borrowings.

Previous wording

At September 30, 2024 and December 31, 2023, we had available for sale securities of $1.77 billion and $1.48 billion, respectively.

Current wording

At March 31, 2025 and December 31, 2024, we had available for sale securities of $1.71 billion and $1.63 billion, respectively.

Previous wording

At September 30, 2024, our held-to-maturity securities portfolio primarily consisted of PACE assessments, tax-exempt municipal securities, GSE commercial and residential certificates and other debt. We carry these securities at amortized cost. We had held-to-maturity securities of $1.61 billion at September 30, 2024, and $1.70 billion at December 31, 2023.

Current wording

Our held-to-maturity securities portfolio primarily consisted of PACE assessments, tax-exempt municipal securities, GSE commercial and residential certificates and other debt. We carry these securities at amortized cost. We had held-to-maturity securities of $1.57 billion at March 31, 2025, and $1.59 billion at December 31, 2024.

Previous wording

During the nine months ended September 30, 2024 we purchased a total of $793.4 million securities consisting of both available for sale and held-to-maturity and sold available for sale securities resulting in proceeds of $271.0 million and a net realized loss of $8.7 million. During the nine months ended September 30, 2023 we purchased a total of $280.6 million securities consisting of both available for sale and held-to-maturity and sold available for sale securities resulting in proceeds of $250.0 million and a net realized loss of $5.1 million.

Current wording

During the three months ended March 31, 2025 we purchased a total of $161.8 million securities consisting of both available for sale and held-to-maturity, and sold available for sale securities resulting in proceeds of $16.1 million and a net realized loss of $0.7 million as part of normal and ongoing balance sheet management.

Previous wording

Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. Accrued interest receivable on held-to-maturity debt securities totaled $17.8 million at September 30, 2024 and $22.5 million at December 31, 2023, and is excluded from the estimate of credit losses, as accrued interest receivable is reversed for securities placed on nonaccrual status. The allowance for credit losses for held-to-maturity securities at September 30, 2024 was $0.7 million compared to $0.7 million at December 31, 2023. The provision for credit losses for held-to-maturity securities was a recovery of $18.0 thousand and $31.0 thousand for the three and nine months ended September 30, 2024, compared to an expense of $18 thousand and $83 thousand for the three and nine months ended September 30, 2023, respectively.

Current wording

Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. Accrued interest receivable on held-to-maturity debt securities totaled $19.2 million at March 31, 2025 and $27.0 million at December 31, 2024, and is excluded from the estimate of credit losses, as accrued interest receivable is reversed for securities placed on nonaccrual status. The allowance for credit losses for held-to-maturity securities at March 31, 2025 was $0.7 million compared to $0.7 million at December 31, 2024. The provision for credit losses for held-to-maturity securities was a recovery of $3.0 thousand for the three months ended March 31, 2025, compared to a recovery of $11.0 thousand for the three months ended March 31, 2024.

Previous wording

Accrued interest receivable on available-for-sale debt securities totaled $14.0 million at September 30, 2024 and $12.6 million at December 31, 2023, and is excluded from the estimate of credit losses, as accrued interest receivable is reversed for securities placed on nonaccrual status.

Current wording

Accrued interest receivable on available-for-sale debt securities totaled $12.0 million at March 31, 2025 and $11.7 million at December 31, 2024, and is excluded from the estimate of credit losses, as accrued interest receivable is reversed for securities placed on nonaccrual status.

Previous wording

Our securities portfolio primarily consists of high quality investments in mortgage-backed securities to government sponsored entities and other asset-backed securities and PACE assessments. All non-agency securities, composed of non-agency commercial mortgage-backed securities, collateralized loan obligations, non-agency mortgage-backed securities, and asset-backed securities, are senior tranche and approximately 86% carry AAA credit ratings and 14% carry A credit ratings or higher. Approximately 50% of this portfolio is classified as “available for sale.”

Current wording

Our securities portfolio primarily consists of high quality investments in mortgage-backed securities to government sponsored entities and other asset-backed securities and PACE assessments. All non-agency securities, composed of non-agency commercial mortgage-backed securities, collateralized loan obligations, non-agency mortgage-backed securities, and asset-backed securities, are senior tranche and approximately 82% carry AAA credit ratings and 18% carry A credit ratings or higher. Approximately 77% of this portfolio is classified as “available for sale.”

Previous wording

Lending related income is the most important component of our net interest income and is the main driver of our results of operations. Total loans, net of deferred origination fees and allowance for credit losses, were $4.49 billion as of September 30, 2024 compared to $4.35 billion as of December 31, 2023. Within our commercial loan portfolio, our primary focus has been on C&I, multifamily and CRE lending. Within our retail loan portfolio, our primary focus has been on residential 1-4 family (1st lien) mortgages. We intend to focus any organic growth in our loan portfolio on these lending areas as part of our strategic plan.

Current wording

Lending related income is the most important component of our net interest income and is the main driver of our results of operations. Total loans, net of deferred origination fees and costs, and allowance for credit losses, were $4.62 billion as of March 31, 2025 compared to $4.61 billion as of December 31, 2024. Within our commercial loan portfolio, our primary focus has been on C&I, multifamily and CRE lending. We intend to focus any organic growth in our loan portfolio on these lending areas as part of our strategic plan.

Previous wording

Our commercial loan portfolio comprised 61.3% of our total loan portfolio at September 30, 2024 and 57.5% of our total loan portfolio at December 31, 2023. The major categories of our commercial loan portfolio are discussed below:

Current wording

Our commercial loan portfolio comprised 63.8% of our total loan portfolio at March 31, 2025 and 63.3% of our total loan portfolio at December 31, 2024. The major categories of our commercial loan portfolio are discussed below:

Previous wording

C&I. Our C&I loans are generally made to small and medium-sized manufacturers and wholesale, retail and service-based businesses to provide either working capital or to finance major capital expenditures. In addition, our C&I portfolio includes commercial solar financings; for many of these we are the sole lender, while for some others we are either the lead bank or are a participant in a syndicated credit facility led by another institution. The primary source of repayment for C&I loans is generally operating cash flows of the business or project. We also seek to minimize risks related to these loans by requiring such loans to be collateralized by various business assets (including inventory, equipment, accounts receivable, and the assignment of contracts that generate cash flow). The average size of our C&I loans at September 30, 2024 by exposure was $4.0 million with a median size of $0.7 million. Our lending strategy focuses on developing full customer relationships including deposits, cash management, and lending. The businesses that we focus on are generally mission aligned with our core values, including organic and natural products, sustainable companies, clean energy, nonprofits, and B Corporations TM.

Current wording

C&I. Our C&I loans are generally made to small and medium-sized manufacturers and wholesale, retail and service-based businesses to provide either working capital or to finance major capital expenditures. In addition, our C&I portfolio includes commercial solar financings; for many of these we are the sole lender, while for some others we are either the lead bank or are a participant in a syndicated credit facility led by another institution. The primary source of repayment for C&I loans is generally operating cash flows of the business or project. We also seek to minimize risks related to these loans by requiring such loans to be collateralized by various business assets (including inventory, equipment, accounts receivable, and the assignment of contracts that generate cash flow). The average size of our C&I loans at March 31, 2025 by exposure was $4.4 million with a median size of $1.1 million. Our lending strategy focuses on developing full customer relationships including deposits, cash management, and lending. The businesses that we focus on are generally mission aligned with our core values, including organic and natural products, sustainable companies, clean energy, nonprofits, and B Corporations TM.

Previous wording

Our C&I loans totaled $1.06 billion at September 30, 2024, which comprised 23.3% of our total loan portfolio. During the nine months ended September 30, 2024, the C&I loan portfolio increased by 4.7% from $1.01 billion at December 31, 2023.

Current wording

Our C&I loans totaled $1.18 billion at March 31, 2025, which comprised 25.3% of our total loan portfolio. During the three months ended March 31, 2025, the C&I loan portfolio increased by 0.7% from $1.18 billion at December 31, 2024.

Previous wording

Multifamily. Our multifamily loans are generally used to purchase or refinance apartment buildings of five units or more, which collateralize the loan, in major metropolitan areas within our markets. Multifamily loans have 67% of their exposure in New York City. Our multifamily loans have been underwritten under stringent guidelines on loan-to-value and debt service coverage ratios that are designed to mitigate credit and concentration risk in this loan category. The average current LTV of our multifamily loans is approximately 53%.

Current wording

Multifamily. Our multifamily loans are generally used to purchase or refinance apartment buildings of five units or more, which collateralize the loan, in major metropolitan areas within our markets. Multifamily loans have 69% of their exposure in New York City. Our multifamily loans have been underwritten under stringent guidelines on loan-to-value and debt service coverage ratios that are designed to mitigate credit and concentration risk in this loan category. The average current LTV of our multifamily loans is approximately 54%.

Previous wording

Our multifamily loans totaled $1.29 billion at September 30, 2024, which comprised 28.4% of our total loan portfolio. During the nine months ended September 30, 2024, the multifamily loan portfolio increased by 12.5% from $1.15 billion at December 31, 2023.

Current wording

Our multifamily loans totaled $1.37 billion at March 31, 2025, which comprised 29.4% of our total loan portfolio. During the three months ended March 31, 2025, the multifamily loan portfolio increased by 1.5% from $1.35 billion at December 31, 2024.

Previous wording

CRE. Our CRE loans are used to purchase or refinance office buildings, retail centers, industrial facilities, medical facilities and mixed-used buildings. Our CRE loans totaled $415.1 million at September 30, 2024, which comprised 9.1% of our total loan portfolio. During the nine months ended September 30, 2024, the CRE loan portfolio increased by 17.4% from $353.4 million at December 31, 2023.

Current wording

Our CRE loans totaled $409.0 million at March 31, 2025, which comprised 8.7% of our total loan portfolio. During the three months ended March 31, 2025, the CRE loan portfolio decreased by 0.6% from $411.4 million at December 31, 2024.

Previous wording

Our retail loan portfolio comprised 38.7% of our total loan portfolio at September 30, 2024 and 42.5% of our loan portfolio at December 31, 2023. The major categories of our retail loan portfolio are discussed below.

Current wording

Our retail loan portfolio comprised 36.2% of our total loan portfolio at March 31, 2025 and 36.7% of our loan portfolio at December 31, 2024. The major categories of our retail loan portfolio are discussed below.

Previous wording

Residential real estate lending. Our residential 1-4 family mortgage loans are residential mortgages that are primarily secured by single-family homes, which can be owner occupied or investor owned. Our residential real estate lending portfolio is 99% first mortgage loans and 1% second mortgage loans. These loans are either originated by our loan officers or purchased from other originators with the servicing generally retained by such originators. As of September 30, 2024, approximately 80% of our residential 1-4 family mortgage loans were either originated by our loan officers or were acquired in our acquisition of New Resource Bank, and 20% were purchased or acquired. Our residential real estate lending loans totaled $1.35 billion at September 30, 2024, which comprised 76.7% of our retail loan portfolio and 29.7% of our total loan portfolio. As of September 30, 2024, our residential real estate lending loans decreased by 5.3% from $1.43 billion at December 31, 2023.

Current wording

Residential real estate lending. Our residential 1-4 family mortgage loans are residential mortgages that are primarily secured by single-family homes, which can be owner occupied or investor owned. Our residential real estate lending portfolio is 99% first mortgage loans and 1% second mortgage loans. These loans are either originated by our loan officers or purchased from other originators with the servicing generally retained by such originators. As of March 31, 2025, approximately 80% of our residential 1-4 family mortgage loans were either originated by our loan officers or were acquired in our acquisition of New Resource Bank, and 20% were purchased. Our residential real estate lending loans totaled $1.30 billion at March 31, 2025, which comprised 77.0% of our retail loan portfolio and 27.9% of our total loan portfolio. As of March 31, 2025, our residential real estate lending loans decreased by 0.7% from $1.31 billion at December 31, 2024.

Previous wording

Consumer solar. Our consumer solar portfolio is comprised of purchased residential solar loans, secured by Uniform Commercial Code financing statements. Our consumer solar loans totaled $374.5 million at September 30, 2024, which comprised 8.2% of our total loan portfolio, compared to $408.3 million, or 9.3% of our total loan portfolio, at December 31, 2023.

Current wording

Consumer solar. Our consumer solar portfolio is comprised of purchased residential solar loans, secured by Uniform Commercial Code financing statements. Our consumer solar loans totaled $356.6 million at March 31, 2025, which comprised 7.6% of our total loan portfolio, compared to $365.5 million, or 7.8% of our total loan portfolio, at December 31, 2024.

Previous wording

Consumer and other. Our consumer and other portfolio is comprised of purchased student loans, unsecured consumer loans and overdraft lines. Our consumer and other loans totaled $36.0 million at September 30, 2024, which comprised 0.8% of our total loan portfolio, compared to $41.3 million, or 0.9% of our total loan portfolio, at December 31, 2023.

Current wording

Consumer and other. Our consumer and other portfolio is comprised of purchased student loans, unsecured consumer loans and overdraft lines. Our consumer and other loans totaled $32.1 million at March 31, 2025, which comprised 0.7% of our total loan portfolio, compared to $34.6 million, or 0.8% of our total loan portfolio, at December 31, 2024.

Previous wording

We maintain the allowance at a level we believe is sufficient to absorb current expected credit losses in our loan portfolio. For further discussion of the adoption of and methodology under the CECL standard, refer to refer to Note 1 to the Consolidated Financial Statements in Item 1 of this Form 10-Q.

Current wording

We maintain the allowance at a level we believe is sufficient to absorb current expected credit losses in our loan portfolio.

Previous wording

The following tables presents, by loan type, the changes in the allowance for credit losses for the three and nine months ended September 30, 2024 and September 30, 2023:

Current wording

The following tables presents, by loan type, the changes in the allowance for credit losses for the three months ended March 31, 2025 and March 31, 2024:

Previous wording

During the quarter, the allowance for credit losses on loans decreased$1.9 million to$61.5 million at September 30, 2024 from$63.4 millionat June 30, 2024. The ratio of allowance to total loans was 1.35% at September 30, 2024 and 1.42% at June 30, 2024.

Current wording

During the quarter, the allowance for credit losses on loans decreased$2.4 million to$57.7 million at March 31, 2025 from$60.1 millionat December 31, 2024. The ratio of allowance to total loans was 1.23% at March 31, 2025 and 1.29% at December 31, 2024.

Previous wording

Nonperforming assets totaled $28.6 million, or 0.34% of period-end total assets at September 30, 2024, an decrease of $5.6 million, compared with $34.2 million, or 0.43% of period-end total assets at December 31, 2023. The decrease in non-performing assets at September 30, 2024 compared to December 31, 2023 assets was primarily driven by a $6.1 million decrease in commercial and industrial nonaccrual loans offset by a $0.5 million increase in retail nonaccrual loans.

Current wording

Nonperforming assets totaled $33.9 million, or 0.41% of period-end total assets at March 31, 2025, an increase of $8.0 million, compared with $25.9 million, or 0.31% of period-end total assets at December 31, 2024. The increase in non-performing assets at March 31, 2025 compared to December 31, 2024 assets was primarily driven by a $11.8 million increase in commercial and industrial nonaccrual loans offset by a $3.9 million decrease in held for sale nonaccrual loans.