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• Too Big to Ignore: The Merger Between Amalgamated and New Resource Bank

November 12 2018
November 12 2018

Confluence was pleased to host an online conversation between Keith Mestrich, CEO of Amalgamated Bank, and Mark Finser of New Resource Bank. Amalgamated and New Resource recently merged to become the largest values-aligned bank in the country.

Moderated by the Hewlitt Foundation’s Marilyn Waite, the discussion focused on the recent merger and Amalgamated’s IPO. But the timing – election day – wasn’t lost on the participants: It felt appropriate to feature a bank that refers to itself as “the bank of the progressive party” just as voters cast ballots across the country.

It was a theme that would reemerge throughout the conversation. Impact investors want to leverage their assets to do good in the world. But Waite, Mestrich and Finser argued that one’s responsibility doesn’t – or at least shouldn’t – stop at the investment portfolio.

“Where your money sleeps at night is extremely important,” Waite told participants. She shared some startling numbers to prove it: Bank deposits total $100 trillion globally, with $13 trillion alone in the U.S. Those are significant assets.

How those assets are deployed is vitally important, and Waite explained why.

Since 2016, she said, JP Morgan Chase has increased its links to coal by a factor of 21, and quadrupled its links to tar sands – effectively doubling down on two of the greatest culprits in climate change. And Chase is not alone in its bad behavior: In recent years, Wells Fargo has preyed on African-American and Latino communities with outrageous high-cost loans.

These are not isolated incidents; in mainstream banks, “social responsibility” is usually a marketing term, said Mestrich and Finser, not a core value – and it shows. That’s why choosing a values-aligned bank is a critical piece of impact investing, Waite says.

Unfortunately, says Mestrich, values-based banks have traditionally “lacked the size to have a meaningful impact on the banking industry.” But the merger, while it doesn’t create a bank on the order of Wells Fargo or Bank of America, means that Amalgamated now has nationwide reach in three important cities: New York, Washington, and San Francisco.

That, according Mestrich, is a game-changer. Amalgamated now has close to $5 billion in commercial assets, and it offers a full array of treasury management products. “We now have enough size, enough on the balance sheet,” says Mestrich, “to bring in larger customers and make more meaningful loans to do meaningful projects.” And he says the merger is just the first step.

Two banks with value at their core

Both New Resource Bank and Amalgamated started life with ethics at the core of their business models, though their concerns and origins were very different.

Amalgamated is a 95-year-old bank that got its start in New York in 1923, serving workers of the Amalgamated Clothing Workers of America Union. Garment manufacturing was the main industry in New York City at the time, but banks were geared towards serving only the well-to-do.

Amalgamated changed that with a series of innovations to help ordinary workers, including offering the first free savings accounts and the first unsecured small loan products. The bank even helped pioneer remittances, to aid immigrant workers who were sending money back to support families struggling in war-ravaged Europe.

New Resource Bank has a very different history.  In existence for just 12 years, Finser said the bank was founded in 2006 to address concerns around climate change. The founders wanted to “figure out how to have money move towards clean, renewable energy” while also supporting sustainable agriculture, nonprofits, and B Corps. “It’s been quite a journey – it’s hard to be a small bank,” he laughed.

Due to the acquisition and IPO, Finser went from working at a small regional bank to working at a national bank traded on the Nasdaq within a matter of months. Finser admitted that he “hasn’t always felt big is better. But to be a player and have impact, size is required.” Too often, he says, in the impact space, only high-net-worth individuals can participate. “With Amalgamated, we could bank the full spectrum.”

Mestrich did sound one note of caution: Now that Amalgamated is public, the bank must not forget all its non-shareholding stakeholders. “How do we make sure we raise the right kind of capital,” he asked, “while remembering who we are?”

The answer is moderation, and not allowing the perfect to be the enemy of the good. Every impact organization, said Finser, is building a bridge between what one would like and what reality is. “The perfect doesn’t really exist.”

Challenges and opportunities ahead

Both men conceded that individuals seeking to move their money into a values-aligned bank will face challenges.

“The largest financial institutions have made it very hard for organizations to move banking relationships,” said Mestrich. “Online banking is great, but the relationships are sticky and complicated to move. We need to challenge that.”

Still, they insist that the move is worth it, particularly now.

The conversation predictably circled back to election day. “Should banking be political,” Waite asked, “especially when politics are so polarized?”


New Resource Bank had originally committed to non-partisanship.  But “in the current structure,” Finser said, a bank “can’t be neutral. You have to stand for what is right, and join together with others.”

Mestric agreed, citing Parkland as an example. In the aftermath of the massacre, three banks, including Amalgamated, said “they’d do everything in their power to not do business with certain types of gun dealers.”

Bank of America and Citibank ultimately had to temper that commitment, however; Amalgamated didn’t. That is values-aligned banking at its strongest.

“Amalgamated’s customer base is aligned on a set of social principles,” said Mestrich. “It’s okay to lose customers who don’t share those convictions.”

Making the move

Waite asked Mestrich and Finser how impact investors can best support values-aligned banks. “Should we be opening checking, savings, CDs, etc.?”

“All of the above,” laughed Mestrich. “Direct investment in the bank would be fabulous,” he said, because investors will triple or quadruple their impact over time.

“For those who want to do impact investing,” added Finser, “moving their liquid cash to a bank like Amalgamated is an easy way to get started.”

But how, Waite asked, can we change the behavior and practices of non-values-aligned banks?

Finser was quick with an answer: “Be so successful that everyone wants to copy us. Show the opportunity.” Mestrich concurred.


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