Amalgamated Financial Corp, New York, NY (AMAL)

Unionized Banking at its Best

Posting the January 2024 Timyan Bank Alert™ Review of AmeriServ Financial got me looking into unionized banks as a class. 

The Big Aha for me? There's both room and reason for Unionized Banking in America, and it can be done well. 

Unionized banks are a rarity in the US –– it takes a special banker to even know what to do with them, and those bankers are even more rare than the banks in this niche. 

 

Although there were 50 or so before the Great Depression, only six of 4,458 community banks left in the US today are unionized. Among them, Amalgamated is the top performer, and it owes its success to the good fortune of having been led by a non-traditional banker — Keith Mestrich.

Were AmeriServ or any other of the country’s unionized banks to engage Mestrich in any capacity, I would Follow The Leader and seriously consider buying shares in that entity.

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Disclosure: As of this posting, I do not own any shares of AMAL.

Prospective Buyers	As attractive as the Amalgamated franchise is from a fundamentals standpoint, I don't see any acquisitive bankers in the area who'd be open to moving into unionized banking.
Financial Snapshot †as of 12/31/2023	Total assets: $8B† Tangible book value per share:    $18.74† NPAs to assets: 0.4%† Price to book: 125% Market cap: $730M Dividend yield: 1.7% Trailing 12-month ROA: 1.15%† Trailing 12-month ROE: 17.1%†
Luminaries	Keith Mestrich, Former CEO Lynne P. Fox, Chair Priscilla Sims Brown, President and CEO
Gold Stars	Most of the Gold Stars that apply to Amalgamated now are attributable to Keith Mestrich, whom the bank hired in 2012. (Amalgamated had lost money in 4 of the prior 5 years.) Despite being a “newbie” in the field, Mestrich managed the fundamentals of “normal” banking expertly, by: Closing most of Amalgamated's 32 unprofitable consumer branches in New York, Hiring talented bankers, Bringing in needed low-cost deposit customers, Cleaning up poor credit, and  Introducing efficiencies in every corner of the bank. Mestrich even grew Amalgamated's value via effective acquisition by: Leading Amalgamated's purchase of the underperforming New Resource Bank in San Francisco, and turned it around, too.  If you bought NWBN shares when the February 2014 Timyan Bank Alert™ Review of New Resource Bank and/or NRBC shares after our February 2017 Updated Review of New Resource Bank were posted, you have Mestrich to thank for the 281% and/or 194% bumps in value of those shares to what they're worth now in AMAL stock. Even more impressive to me are the ways Mestrich brought unique value to the Amalgamated franchise and community by: Embracing unions and unionization instead of fighting them;  Building on the bank’s history serving diverse populations, including immigrants; and,  Inventing profitable products and services for the union marketplace.  In my perfect world, Amalgamated would scale the Mestrich game!  Roll up some other unionized banks, bring Amalgamated's innovative products and superior service to their uniquely shared markets, and ring out their inefficiencies.
Sources	Amalgamated Bank website Q4 2023 Earnings Presentation January 2017 Rise FinTech podcast Confidential interviews with analysts and shareholders