Amalgamated Financial Corp.AMAL
Amalgamated Financial Corp. Fair Value Disclosure
FAIR VALUE OF FINANCIAL INSTRUMENTS
(1) Appraisals of collateral are obtained from independent appraisers which includes unobservable inputs such as adjustments such as capitalization rates, vacancy rates, and other assumptions. Appraisals are adjusted for estimated costs to sell of 10%.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assumptions are developed based on prioritizing information within a fair value hierarchy that gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. A description of the disclosure hierarchy and the types of financial instruments recorded at fair value that management believes would generally qualify for each category are as follows:
Level 1 - Valuations are based on quoted prices in active markets for identical assets or liabilities. Accordingly, valuation of these assets and liabilities does not entail a significant degree of judgment. Examples include most U.S. Government securities and exchange-traded equity securities.
Level 2 - Valuations are based on either quoted prices in markets that are not considered to be active or significant inputs to the methodology that are observable, either directly or indirectly. Financial instruments in this level would generally include mortgage-related securities and other debt issued by GSEs, non-GSE mortgage-related securities, corporate debt, certain redeemable fund investments and certain trust preferred securities.
Level 3 - Valuations are based on inputs to the methodology that are unobservable and significant to the fair value measurement. These inputs reflect management’s own judgments about the assumptions that market participants would use in pricing the assets and liabilities.
Assets Measured at Fair Value on a Recurring Basis
Available for sale securities
The Company’s available for sale securities are reported at fair value. Investments in fixed income securities are generally valued based on evaluations provided by an independent pricing service. These evaluations represent an exit price or their opinion as to what a buyer would pay for a security, typically in an institutional round lot position, in a current sale. The pricing service utilizes evaluated pricing techniques that vary by asset class and incorporate available market information and, because many fixed income securities do not trade on a daily basis, applies available information through processes such as benchmark curves, benchmarking of available securities, sector groupings and matrix pricing. Model processes, such as option adjusted spread models, are used to value securities that have prepayment features. In those limited cases where pricing service evaluations are not available for a fixed income security, such as PACE assessments, management will typically value those instruments using observable market inputs in a discounted cash flow analysis.
Derivatives
Derivatives represent interest rate option contracts and interest rate swaps and estimated fair values are based on valuation models using observable market data as of the measurement date.
The following summarizes those financial instruments measured at fair value on a recurring basis in the Consolidated Statements of Financial Condition as of the dates indicated, categorized by the relevant class of investment and level of the fair value hierarchy:
| December 31, 2025 | |||||||||||||||||||||||
| (In thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||
| Available for sale securities: | |||||||||||||||||||||||
| Traditional securities: | |||||||||||||||||||||||
| GSE certificates & CMOs | $ | — | $ | 567,070 | $ | — | $ | 567,070 | |||||||||||||||
| Non-GSE certificates & CMOs | — | 273,232 | — | 273,232 | |||||||||||||||||||
| ABS | — | 629,168 | — | 629,168 | |||||||||||||||||||
| Corporate | — | 95,504 | — | 95,504 | |||||||||||||||||||
| Other | 8,048 | 7,027 | — | 15,075 | |||||||||||||||||||
| PACE assessments: | |||||||||||||||||||||||
| Residential PACE assessments | — | — | 203,502 | 203,502 | |||||||||||||||||||
| Other assets - Cash flow hedges | — | 1,754 | — | 1,754 | |||||||||||||||||||
| Total assets carried at fair value | $ | 8,048 | $ | 1,573,755 | $ | 203,502 | $ | 1,785,305 | |||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| (In thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Financial Assets: | |||||||||||||||||||||||
| Available for sale securities: | |||||||||||||||||||||||
| Traditional securities: | |||||||||||||||||||||||
| GSE certificates & CMOs | $ | — | $ | 508,158 | $ | — | $ | 508,158 | |||||||||||||||
| Non-GSE certificates & CMOs | — | 214,175 | — | 214,175 | |||||||||||||||||||
| ABS | — | 652,334 | — | 652,334 | |||||||||||||||||||
| Corporate | — | 98,315 | — | 98,315 | |||||||||||||||||||
| Other | 200 | 3,865 | — | 4,065 | |||||||||||||||||||
| PACE assessments: | |||||||||||||||||||||||
| Residential PACE assessments | — | — | 152,011 | 152,011 | |||||||||||||||||||
| Other assets - Cash flow hedges | — | 2,168 | — | 2,168 | |||||||||||||||||||
| Total assets carried at fair value | $ | 200 | $ | 1,479,015 | $ | 152,011 | $ | 1,631,226 | |||||||||||||||
During the years ended December 31, 2025 and 2024, there were no transfers of financial instruments between Level 1 and Level
2.
The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2025 and 2024:
Residential PACE Assessments | |||||||||||
| 2025 | 2024 | ||||||||||
(In thousands) | |||||||||||
Balance of recurring Level 3 assets at January 1 | $ | 152,011 | $ | 53,303 | |||||||
Amortization included in interest income in net income | (687) | (157) | |||||||||
Change in unrealized holding gains/losses included in other comprehensive income | 1,672 | 1,387 | |||||||||
Purchases | 69,180 | 111,670 | |||||||||
| Sales | — | (6,284) | |||||||||
Principal paydowns | (18,674) | (7,908) | |||||||||
Balance of recurring Level 3 assets at December 31 | $ | 203,502 | $ | 152,011 | |||||||
The fair value of the Company's PACE assessments are determined internally by calculating discounted cash flows using expected conditional prepayment rates, market spreads, and the Treasury yield curve. Qualitative assessments from recent commentary from dealers or investors or issuers, information revealed from secondary market trades of clean energy senior asset-backed securities, and volatility in the marketplace are reviewed and incorporated into the calculations.
The following table presents quantitative information about recurring Level 3 fair value measurements at December 31, 2025:
| December 31, 2025 | ||||||||||||||||||||||||||
Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average) | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
| Residential PACE assessments | $ | 203,502 | Discounted cash flow | Conditional prepayment rate | 7.0% - 26.0% (20.2%) | |||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||
Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average) | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
| Residential PACE assessments | $ | 152,011 | Discounted cash flow | Conditional prepayment rate | 7.0% - 25.0% (18.9%) | |||||||||||||||||||||
The significant unobservable input used in the fair value measurement of the Company's residential PACE assessments is conditional prepayment rate. Significant increases/(decreases) in this input in isolation would have results in a modestly higher/(lower) fair value measurement. Unobservable inputs were weighted by the relative fair value of the instruments.
Assets Measured at Fair Value on a Non-recurring Basis
Certain financial assets are measured at fair value on a non-recurring basis. That is, they are subject to fair value adjustments in certain circumstances.
Collateral-dependent loans
Fair values for individually analyzed collateral-dependent loans are based on the fair value of the collateral based on an appraised values, net book value per the borrower’s financial statements, aging reports, or by reference to market activity, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation and management’s expertise and knowledge of the borrower and its business.
| December 31, 2025 | |||||||||||||||||||||||||||||||||||
| (In thousands) | Carrying Value | Level 1 | Level 2 | Level 3 | Estimated Fair Value | Valuation Technique | |||||||||||||||||||||||||||||
| Individually analyzed loans | $ | 9,253 | $ | — | $ | — | $ | 9,253 | $ | 9,253 | Appraisals of Collateral (1) | ||||||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||||||||
| (In thousands) | Carrying Value | Level 1 | Level 2 | Level 3 | Estimated Fair Value | Valuation Technique | |||||||||||||||||||||||||||||
| Individually analyzed loans | $ | 1,052 | $ | — | $ | — | $ | 1,052 | $ | 1,052 | Appraisals of Collateral (1) | ||||||||||||||||||||||||
(1) Appraisals of collateral are obtained from independent appraisers which includes unobservable inputs such as adjustments such as capitalization rates, vacancy rates, and other assumptions. Appraisals are adjusted for estimated costs to sell of 10%.
Financial Instruments Not Measured at Fair Value
A description of the methods, factors and significant assumptions utilized in estimating the fair values for significant categories of financial instruments not measured at fair value follows:
Held-to-maturity securities – Investments in fixed income securities are generally valued based on evaluations provided by an independent pricing service. These evaluations represent an exit price or their opinion as to what a buyer would pay for a security, typically in an institutional round lot position, in a current sale. The pricing service utilizes evaluated pricing techniques that vary by asset class and incorporate available market information and, because many fixed income securities do not trade on a daily basis, applies available information through processes such as benchmark curves, benchmarking of available securities, sector groupings and matrix pricing. Model processes, such as option adjusted spread models, are used to value securities that have prepayment features. In those limited cases where pricing service evaluations are not available for a fixed income security, such as PACE assessments, management will typically value those instruments using observable market inputs in a discounted cash flow analysis. Held-to-maturity securities, with the exception of PACE securities which are categorized as Level 3, are generally categorized as Level 2.
Loans held for sale – Loans held for sale are carried at the lower of cost or fair value. The fair value of loans held for sale is determined using the price we expect to receive for the loans based on commitments received from third party investors. Loans held on our balance sheet greater than 90 days are evaluated to determine if a valuation allowance is required to adjust for a decline in fair value below the carrying amount, and then subject to quarterly evaluation going forward. Loans held for sale are generally categorized as Level 3.
Loans receivable – Loans are valued using a present value technique that incorporates management’s assumptions as to what a market participant would assume given the attributes of the loans. The observable U.S. Treasury yield curve is a significant input to the valuation. Assumptions, including prepayment speeds and credit spreads, are based on observable market data where possible or alternatively are based on terms currently offered on loans to borrowers of similar credit quality. The methods used to estimate the fair value of loans are extremely sensitive to the assumptions and estimates used. While management has attempted to use assumptions and estimates that best reflect the Company’s loan portfolio and current market conditions, a greater degree of
subjectivity is inherent in these values than in those determined in active markets. Loans would generally be categorized as Level 3.
Resell agreements – Resell agreements are carried at fair value, as these are short term agreements. All existing trades are done at the current rate for new trades, so there is no market value adjustment. The agreements are generally categorized as Level 3, as we have limited market information.
Deposits – Deposits without a defined maturity date are valued at the amount payable on demand, and are categorized as Level 2. Certificates of deposit, which are categorized as Level 2, are valued using a present value technique that incorporates current rates offered by the Company for certificates of comparable remaining maturity.
FHLBNY Advances – FHLBNY advances are valued using a present value technique that incorporates current rates offered by the FHLBNY for advances of comparable remaining maturity. FHLBNY advances are categorized as Level 2.
Subordinated debt – Bank issued subordinated debt is valued based on recent trades for similar issues and or values provided by firms that transact in our bonds. Subordinated debt is categorized as Level 2.
Other – The Company holds or issues other financial instruments for which management considers the carrying value to approximate fair value. Such items include cash and cash equivalents, accrued interest receivable and payable. Many of these items are short term in nature with minimal risk characteristics.
For those financial instruments that are not recorded at fair value in the consolidated statements of financial condition, but are measured at fair value for disclosure purposes, management follows the same fair value measurement principles and guidance as for instruments recorded at fair value.
There are significant limitations in estimating the fair value of financial instruments for which an active market does not exist. Due to the degree of management judgment that is often required, such estimates tend to be subjective, sensitive to changes in assumptions and imprecise. Such estimates are made as of a point in time and are impacted by then-current observable market conditions; also such estimates do not give consideration to transaction costs or tax effects if estimated unrealized gains or losses were to become realized in the future. Because of inherent uncertainties of valuation, the estimated fair value may differ significantly from the value that would have been used had a ready market for the investment existed and the difference could be material. Lastly, consideration is not given to nonfinancial instruments, including various intangible assets, which could represent substantial value. Fair value estimates are not necessarily representative of the Company’s total enterprise value.
The following table summarizes the financial statement basis and estimated fair values for significant categories of financial instruments:
| December 31, 2025 | |||||||||||||||||||||||||||||
| Carrying Value | Level 1 | Level 2 | Level 3 | Estimated Fair Value | |||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 291,217 | $ | 291,217 | $ | — | $ | — | $ | 291,217 | |||||||||||||||||||
| Held-to-maturity securities | 1,554,015 | — | 449,414 | 990,558 | 1,439,972 | ||||||||||||||||||||||||
| Loans held for sale | 2,814 | — | — | 2,814 | 2,814 | ||||||||||||||||||||||||
| Loans receivable, net | 4,899,687 | — | — | 4,742,463 | 4,742,463 | ||||||||||||||||||||||||
| Resell agreements | 48,662 | — | — | 48,662 | 48,662 | ||||||||||||||||||||||||
| Accrued interest receivable | 65,128 | 124 | 11,912 | 53,092 | 65,128 | ||||||||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||||||||
| Deposits payable on demand | $ | 7,746,044 | $ | — | $ | 7,746,044 | $ | — | $ | 7,746,044 | |||||||||||||||||||
| Time deposits | 203,197 | — | 203,170 | — | 203,170 | ||||||||||||||||||||||||
| FHLBNY advances | 5,760 | — | 5,666 | — | 5,666 | ||||||||||||||||||||||||
| Subordinated debt, net | 63,787 | — | 61,013 | — | 61,013 | ||||||||||||||||||||||||
| Accrued interest payable | 2,407 | — | 2,407 | — | 2,407 | ||||||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||
| (In thousands) | Carrying Value | Level 1 | Level 2 | Level 3 | Estimated Fair Value | ||||||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 60,749 | $ | 60,749 | $ | — | $ | — | $ | 60,749 | |||||||||||||||||||
| Held-to-maturity securities | 1,586,205 | — | 499,564 | 933,156 | 1,432,720 | ||||||||||||||||||||||||
| Loans held for sale | 37,593 | — | — | 37,593 | 37,593 | ||||||||||||||||||||||||
| Loans receivable, net | 4,612,838 | — | — | 4,352,266 | 4,352,266 | ||||||||||||||||||||||||
| Resell agreements | 23,741 | — | — | 23,741 | 23,741 | ||||||||||||||||||||||||
| Accrued interest receivable | 61,172 | 44 | 11,781 | 49,347 | 61,172 | ||||||||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||||||||
| Deposits payable on demand | 6,941,390 | — | 6,941,390 | — | 6,941,390 | ||||||||||||||||||||||||
| Time deposits and CDs | 239,215 | — | 238,788 | — | 238,788 | ||||||||||||||||||||||||
| FHLBNY advances | 250,706 | — | 250,709 | — | 250,709 | ||||||||||||||||||||||||
| Subordinated debt, net | 63,703 | — | 57,651 | — | 57,651 | ||||||||||||||||||||||||
| Accrued interest payable | 2,356 | — | 2,356 | — | 2,356 | ||||||||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 5, 2026 | Showing above |
| 2024 | Mar 6, 2025 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.