Amalgamated CEO Keith Mestrich to leave bank in January
Amalgamated Bank in New York is looking for its next president and CEO.
The $6.6 billion-asset bank said in a press release Wednesday that Keith Mestrich plans to step down on Jan. 31. Amalgamated plans to conduct a national search to identify the successor for Mestrich, who has led the bank since August 2014.
Lynne Fox, the bank's chairman, will lead the CEO search and will become interim president and CEO if a successor has not been named by Mestrich’s departure date.
Amalgamated also said it expects to report third-quarter profit of $12 million to $13 million. The bank earned $10.4 million in the second quarter ending.
The third-quarter results will include a $6.4 million charge tied to Amalgamated’s closure of six branches earlier this year. While the bank did not provide a detailed breakout of its asset quality, it said that coronavirus-related deferrals would show improvement, though nonaccrual loans will rise by about $8 million from a quarter earlier.
Amalgamated had about $3.6 billion of assets when Mestrich, who had been the bank's chief of staff, was named CEO. Mestrich, who was 53 when the bank filed its proxy statement in mid-March, helped the bank return to profitability following the 2008 financial crisis.
The bank has reported 24 straight quarterly profits. It earned $47 million last year and $20 million in the first half of 2020.
Under his leadership, Amalgamated conducted an initial public offering and acquired the $364 million-asset New Resource Bank in San Francisco in 2018. It opened a loan production office in Boston in March. Plans to enter the Los Angeles market have been delayed by the pandemic.
When Mestrich took the reins in 2014, Amalgamated operated a branch in Washington, “but it was about 95% New York,” he said in an interview.
Amalgamated announced plans last month to form a holding company, which it said would help it raise and deploy capital more effectively.
"Given all that we accomplished, there could not be a better time for me to turn over the reins and pursue the next chapter in my career," Mestrich said. While he has not plotted his next career move, Mestrich did not rule out a return to banking.
“Financial services is a big industry with lots of opportunities and potential things to do,” Mestrich said. “It can be a real force for good.”
Mestrich, who will serve as a special adviser to the board for six months after stepping down, “leaves the bank with a deep and capable leadership team, and, as shown by preliminary [third-quarter] earnings … in a position of strength,” Alex Twerdahl, an analyst at Piper Sandler, said in a client note.
“The institution is bigger than one person,” Mestrich said. “We really have built a great team here.”
Mestrich “was not a traditional banker when he was named CEO in 2014, but he was the ideal executive for the bank to achieve what the board believed needed to get done in order to position the Company for the future,” Fox said in the bank's release.
Amalgamated took its name from the Amalgamated Clothing Workers of America, which founded the bank in 1923. It was New York’s first labor bank and for many years the nation's biggest union-owned bank. Unions, including Workers United, still maintain a significant ownership stake.
Fox is Workers United’s international president.