NEW YORK and CHICAGO, Sept. 22, 2021 (GLOBE NEWSWIRE) — Amalgamated Financial Corp. (Nasdaq: AMAL), the holding company for Amalgamated Bank, America’s socially responsible bank, today announced it has entered into a definitive agreement to acquire Amalgamated Investments Company, the holding company for Amalgamated Bank of Chicago, for approximately $98.1 million, which includes an earnout of up to $1.1 million, in an all-cash transaction. Although the two entities have Amalgamated in the name, AMAL and ABOC are not currently affiliated.
ABOC has been dedicated to serving America’s working people since its founding in Chicago in 1922 by the Amalgamated Clothing Workers of America, the same union that founded AMAL. Building on its union heritage, ABOC will now gain access to a broader network to align with the niche segments that AMAL services, including nonprofits, political organizations, philanthropies, sustainability, and social enterprises. ABOC has an attractive, mission compatible customer base including more than 900 unions, total assets of $950 million, loans of $519 million and an industry leading deposit franchise with a total cost of deposits of 9bps on deposits of $836 million as of June 30, 2021. Additionally, as of June 30, 2021, ABOC’s trust business held approximately $13 billion in assets under custody, approximately $2.4 billion in assets under management, and also has an established Corporate Trust business with over $40 billion in assets under administration. Upon closing, the combined company will have approximately $7.6 billion in assets, $6.8 billion in deposits, $3.7 billion in loans, and $19.0 billion of trust assets under management and $52.2 billion of trust assets under custody.
AMAL was the first publicly traded, ESG-focused bank and this transaction expands its market footprint and builds on its position as the largest bank of its kind in the country. ABOC and AMAL are committed to supporting similar causes, and the combined company will be a powerful platform for growth and innovation. This move also comes at a time when responsible banking and personal financial services are more important than ever in furthering economic, social, racial, and environmental justice.
The combination will allow AMAL to expand its geographic presence, further strengthen its financial position and better serve socially responsible people and organizations. As a larger platform with an established Chicago base, the combined company can better serve clients with expanded capacity. The company will also further diversify its risk and capitalize on operational and administrative cost synergies, offering the opportunity to invest in talent, products, and technology to benefit the valued customers and communities it serves.
Lynne Fox, AMAL’s Chair of the Board of Directors said “Both institutions have been successful community staples for almost 100 years. Our new organization will enable us to build on that legacy, to expand America’s socially responsible bank, and to advance positive social change.”
“We are thrilled about joining forces with Amalgamated Bank of Chicago and bringing our shared commitment to socially responsible banking to serve customers in Chicago and the midwestern U.S.,” said Priscilla Sims Brown, AMAL’s President and CEO. “This acquisition aligns with our disciplined strategy of pursuing accretive opportunities that allow us to expand geographically, strengthen our financial resources and increase our customer base while leveraging our unique expertise in operating as an ESG-driven bank. We have long admired Amalgamated Bank of Chicago and are excited about this reunion of our once-related banks. Together, we have identified key areas of growth and opportunity that we’re ready to start collaborating on.”
“This transaction combines two like-minded organizations and strengthens our ability to meaningfully impact the banking system and wider society for the better,” said Robert M. Wrobel, ABOC’s Chairman and CEO. “It will enhance our ability to serve our customers and communities as well as create opportunities for our employees. I am incredibly proud of the business that the extraordinary Amalgamated Bank of Chicago team has built. I am confident that the partnership of the strong leadership teams and dedicated employees at both organizations will lead the business to even greater heights in service of our important goals for society and the planet.”
At the close of the transaction, which is targeted to occur by the end of the year, AMAL’s President and CEO, Priscilla Sims Brown, will lead the combined company, and ABOC’s current Chairman and CEO, Robert M. Wrobel, and its President, James T. Landenberger, will serve as transitional consultants to the combined company through December 31, 2022. Some members of ABOC’s current board will join a new advisory board that will be established after the closing, bringing together the strong leadership of both banks’ experienced local and national labor leaders.
Strategic Rationale
- Solidifies the combined bank as the largest mission-oriented bank in the United States with $7.6 billion in assets
- Provides entry to Chicago, the third largest MSA in the U.S. with $18 billion of target customer assets and significant, greenfield organic loan growth opportunities
- Adds new lending expertise with proven in-market operating performance
- Joining AMAL and ABOC’s asset management and custody businesses provides the opportunity to create a stronger, more profitable operating platform
- Adds to AMAL’s industry leading deposit franchise by adding ABOC’s $836 million of low-cost deposits, 62% of which are non-interest bearing
- Builds stronger team of union leadership with extensive experience in workers’ rights and labor movement, supporting and advocating for socially responsible people and organizations, unions and workers around the country
Attractive Financial Profile
Full economic benefits expected to be realized in 2023 assuming the deal closes in fourth quarter of 2021 include:
- Tangible book value per share dilution earn back of less than three years
- Significant improvement to AMAL’s financial metrics accretive to ROAA and ROATCE
- Significant cost save opportunities through the elimination of duplicative functions drives expected EPS accretion of 17.5%
- Redeployment of ABOC’s excess liquidity into earning assets with higher risk-adjusted returns
Approvals
The Boards of Directors of both companies have unanimously approved the transaction. The acquisition is targeted to close by the end of the year and is subject to customary closing conditions, including receipt of required regulatory approvals and approval by the shareholders of Amalgamated Investments Company.
Advisors
Keefe, Bruyette & Woods, A Stifel Company, served as financial advisor and Nelson Mullins Riley & Scarborough LLP served as legal counsel to Amalgamated Bank. Piper Sandler & Co. served as financial advisor and Hinshaw & Culbertson LLP served as legal counsel to Amalgamated Bank of Chicago.
About Amalgamated Bank
Amalgamated Bank (“Amalgamated” or the “Bank”), the wholly-owned banking subsidiary of Amalgamated Financial Corp. (Nasdaq: AMAL), is a mission-driven New York-based full-service commercial bank and a chartered trust company with a combined network of six branches in New York City, Washington D.C., San Francisco, and Boston. Amalgamated Bank provides commercial banking and trust services nationally and offers a full range of products and services to both commercial and retail customers. As of June 30, 2021, our total assets were $6.6 billion, total net loans were $3.1 billion, and total deposits were $5.9 billion. Additionally, as of June 30, 2021, our trust business held $39.2 billion in assets under custody and $16.6 billion in assets under management.
Since our founding in 1923, Amalgamated Bank has served as America’s socially responsible bank, empowering organizations and individuals to advance positive social change. Amalgamated Bank advocates alongside those working to make the world more just, compassionate, and sustainable. Amalgamated Bank is the country’s largest B Corp® bank and a proud member of the Global Alliance for Banking on Values. We don’t just have a mission, we are on a mission to advance economic, social, racial and environmental justice utilizing the tools of finance. For more information, please visit our website at www.amalgamatedbank.com.
About Amalgamated Bank of Chicago
Founded in 1922, Amalgamated Bank of Chicago is a full-service commercial and consumer banking institution serving the financial and trust needs of governmental units; various local, national and international unions and their members; corporations and commercial organizations; and individuals. As of June 30, 2021, Amalgamated Bank of Chicago’s assets were $950.1 million. More information can be found on our website: www.aboc.com.
