Amalgamated Financial Corp. (AMAL) stands among the best impact-focused banking stocks for 2025, operating as America’s largest B-Corporation with a unique focus on progressive organizations, political campaigns, and socially responsible lending.
Banking stocks with strong environmental and social governance credentials are poised to gain momentum from the growing sustainable finance megatrend.
AMAL has positioned itself at the forefront of mission-driven banking practices while delivering consistent returns for investors focused on values-aligned investing.
The New York-based financial institution operates with a clear social mission, serving progressive political organizations, advocacy groups, labor unions, and environmentally conscious businesses across the United States.
Unlike traditional banks, AMAL delivers exceptional ESG performance with measurable impact across multiple sustainability dimensions, with climate action as an area of particular focus.
The bank achieved B-Corp recertification in 2023 with a score of 155.3, almost double the qualifying threshold. AMAL’s funding to climate initiatives totalled more than $2 billion in 2023, representing over 39% of its lending portfolio, with nearly 70% of lending portfolios classified as high-impact and 100% mission-aligned.
The bank achieved an industry-leading emissions intensity of just 14.7 tons of CO2e per million dollars invested while supporting clean energy projects that resulted in 243,010 tons of avoided emissions.
AMAL earned an “A” rating on Arjuna Capital’s Racial and Gender Pay Scorecard , the highest score in the financial sector, and received a perfect score on the Human Rights Campaign Foundation’s Corporate Index.
The Bull Case of Investing in AMAL Stock
AMAL delivered solid second quarter results with core earnings per share of $0.88, demonstrating the power and sustainability of its earnings model.
CEO Priscilla Sims Brown emphasized the bank’s competitive positioning: “We now compete amongst some of the best run banks in the country in terms of performance and results.”
This performance was validated by American Banker, which ranked Amalgamated Bank #38 out of 338 banks in the $2 billion to $10 billion asset range, making it the #1 most improved bank in the top 100, moving up nearly 50 spots in one year.
The bank achieved balanced growth across key metrics. On-balance sheet deposit growth totaled $209 million in Q2, excluding $112 million of temporary pension funding deposits.
Political deposits were particularly strong, increasing $137 million or 13% to $1.2 billion as fundraising accelerates toward midterm elections just 15 months away. The not-for-profit segment also contributed over $100 million in deposit growth.
Loan growth was balanced at over $60 million across multifamily, commercial real estate, and C&I portfolios, driving approximately 2% growth in core lending segments. This occurred despite higher early payoffs and paydowns, which the bank expects to slow in Q3.
Strategic West Coast Expansion
AMAL is executing an aggressive expansion strategy, targeting California’s large growth opportunities for both loans and deposits. The bank has recruited experienced West Coast bankers to lead this initiative:
Brian Choi joined as Western Regional Director with 25 years of California banking experience, most recently as Vice President of Lending Strategy and Sales at First Republic Bank.
Ken Gaitan joined as senior relationship manager for commercial real estate in the West, bringing over 25 years of CRE lending experience and focusing on Bay Area growth.
Ken Edens joined as Director of Climate and C&I Lending with over 20 years of West Coast experience, most recently leading East West Bank’s project finance practice in renewable energy.
This expansion reflects AMAL’s flexible business model and multiple growth levers. The bank has grown its loan portfolio at a 10% compound annual growth rate from $3.1 billion to $4.7 billion over the last three years, while its PACE portfolio grew at over 22% compound annual growth rate to $1.2 billion.
Digital Transformation and Infrastructure Investments
AMAL is investing in infrastructure critical for scalable growth. The bank’s new data-first, fully integrated digital monetization platform will launch in Q3, designed to drive improved productivity, provide holistic customer views, and deliver improved revenue growth.
CFO Jason Darby noted the bank is “carefully managing our investment spend to ensure we maintain core efficiency ratio at an outer band of approximately 52%.” This modernization roadmap prepares Amalgamated for eventual growth through the $10 billion asset mark.
Financial Performance and Capital Management
Key Q2 highlights for AMAL stock include:
- Net income of $26 million or $0.84 per diluted share
- Core net income of $27 million or $0.88 per diluted share
- Net interest income grew 3.3% to the middle of the guidance range
- Net interest margin held steady at 3.55%
- Tangible book value per share increased $0.82 to $24.33
The bank executed its largest share repurchase in history, buying back approximately 327,000 shares worth $9.7 million. The Board authorized a $0.14 per share dividend and maintains over $30 million in authorized buyback capacity.
AMAL stock targets a quarterly payout ratio of at least 20-25% through dividends and repurchases, though it may opportunistically exceed this target based on market conditions.
Nonperforming assets totaled $35.2 million or 0.41% of total assets. The allowance for credit losses increased to $59 million or 1.25% of total loans. One commercial solar loan required $2.3 million in additional reserves due to industry stress, but management views this as isolated and not reflective of the broader renewable energy portfolio.
Is AMAL Stock Undervalued?
AMAL maintained full-year 2025 guidance of core pretax pre-provision earnings of $159-163 million and net interest income of $293-297 million. For Q3, the bank targets modest balance sheet growth to approximately $8.6 billion with net interest income ranging $74-76 million.
The bank expects political deposit momentum to continue building toward the 2026 midterm elections, while its specialized focus on mission-aligned customers provides natural switching costs and relationship stability.
Analysts targeting AMAL stock forecast adjusted earnings per share to expand from $3.48 in 2024 to $4.15 in 2026. Today, AMAL stock trades at a forward price-to-earnings multiple of 7.6x, below its historical average of 9.5x. If the bank stock reverts to its historical average, it could be priced at $39 in early 2026, indicating an upside potential of over 30% from current levels.
As we can see above, AMAL stock has a Ziggma score of 91 and is rated relatively high in terms of valuation.
The average AMAL stock price target is $36.5, which is 28% higher than the current target price.
FAQs
Is AMAL stock a good ESG investment? AMAL offers unique exposure to progressive banking and sustainable finance markets through its B-Corporation structure and mission-driven approach.
What makes AMAL different from traditional banks?
AMAL focuses specifically on progressive organizations, political campaigns, and environmentally conscious businesses, creating a counter-positioning strategy versus mainstream banks.
How has AMAL’s deposit base grown? The bank’s not-for-profit deposits have grown from $285 million in 2020 to $1.5 billion by Q2, demonstrating strong franchise momentum.
What is AMAL’s efficiency ratio? AMAL maintains an efficiency ratio of approximately 52%, indicating effective cost management and operational efficiency.
Does AMAL pay a dividend? Yes, AMAL stock is forecast to increase its annual dividend per share from $0.44 in 2024 to $0.53 in 2025.