With its recent deal announcement, Amalgamated Bank is deepening its focus on sustainability and gaining a foothold in San Francisco's progressive market, an executive said.
The New York-based company is planning to buy New Resource Bancorp in an all-stock deal valued at about $58.5 million. The deal pushes Amalgamated's total assets closer to $5 billion. Both companies are certified B Corporations and prioritize lending to people and organizations with similar values. They are also two of 10 U.S. financial institutions certified by the Global Alliance for Banking on Values.
"We think it makes good business sense, and we think it makes good social sense as well," Amalgamated President and CEO Keith Mestrich said in an interview.
He said the company is interested in bolstering assets and tacking on new geographies. While Mestrich does not have a specific asset threshold in mind, he said Amalgamated is "not content" being a $5 billion bank.
Amalgamated currently has 13 branches in New York and Washington, D.C. The deal will add one location in San Francisco, a community that has "similar characteristics," he said.
Mestrich said Amalgamated will likely take time to fully digest the New Resource deal. But he said there are "other progressive communities" that the company would eventually like to be in, such as Chicago, Boston, Seattle and Los Angeles.
In an emailed statement, New Resource President and CEO Vince Siciliano wrote that the deal will create the largest values-based bank in the nation. "We will now be able to scale sustainable banking in new ways, to confront the serious climate and social inequities of our time and restore the financial system to its proper role in support of people and the planet," he wrote.
Historically, Amalgamated has focused on providing banking services to labor unions and their members. Over the last five years, its focus has broadened to "be a bank for the progressive movement," Mestrich said.
Mestrich said that in the wake of the 2008 financial crisis, many feel there is a "better way to do banking that isn't focused solely on the bottom line, but is focused on being able to give back to our communities."
Being a values-driven bank is also a smart business decision, he said, because it allows the company to differentiate itself from competitors. He said of the thousands of banks in the U.S., "a lot of them look like each other."
According to Amalgamated's website, it aims to support progressive people and organizations. The website touts its support of women's rights and the LGBTQ community. It also states that "not a dime goes to climate change deniers." The deal will likely enhance Amalgamated's focus on environmental causes. New Resource states that its goal is to have a loan portfolio that is 100% invested in "organizations that are advancing sustainability."
Mestrich said the deal is a win-win for both companies.
"We bring a consumer banking capacity that they don't have, and we bring our $45 billion trust business to the table to be able to provide investment management services for their clients," Mestrich said. "From New Resource, not only do we get a great geographic presence that we haven't had yet, but we also get some real lending capability to be able to provide loans to standard businesses, B Corporations, [and] renewable energy."
"Industries that we would like to focus on in the past, now we have the expertise to do that really well," he added.
In an online statement, Siciliano said New Resource has had other merger opportunities over the years, but none that made sense strategically. Mark Finser, New Resource's chairman, will join Amalgamated's board. And the existing board of directors will become a national strategic advisory committee, which he said will allow New Resource to "retain influence on Amalgamated's strategic vision."