Blue Foundry Bancorp(BLFY) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Financial Highlights The company reported a net loss of $2.0 million and diluted loss per share of $0.10, while net interest margin expanded to 2.28% and total loans and deposits grew | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Loss | $2.0 million | $2.7 million | $2.3 million | | Diluted Loss Per Share | $0.10 | $0.13 | $0.11 | | Net Interest Margin | 2.28% | 2.16% | 1.96% | | Total Loans | $1.67 billion | $1.63 billion | $1.55 billion | | Total Deposits | $1.42 billion | $1.39 billion | $1.31 billion | - Management highlighted continued improvement driven by net interest margin expansion, stable expenses, and strong credit metrics, with margin expansion attributed to better asset yields and lower liability costs[3] - The company is executing a strategy to diversify its loan portfolio towards higher-yield assets and grow core deposits by focusing on full banking relationships with commercial customers[3] - During the quarter, the company repurchased 406,391 shares at a weighted average price of $9.42 per share and commenced a new stock repurchase program for up to 1,082,533 shares[6] Financial Performance Analysis This section analyzes the company's financial performance across quarterly and year-to-date periods, highlighting trends in net interest income, expenses, and profitability Second Quarter 2025 vs. First Quarter 2025 (QoQ) Net loss narrowed to $2.0 million from $2.7 million quarter-over-quarter, driven by a 12 basis point expansion in net interest margin to 2.28% due to improved asset yields and lower liability costs | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $11.6M | $10.7M | +$0.9M | | Net Interest Margin | 2.28% | 2.16% | +12 bps | | Yield on Avg. Earning Assets | 4.58% | 4.51% | +7 bps | | Cost of Avg. Interest-Bearing Liabilities | 2.76% | 2.89% | -13 bps | - Non-interest expense decreased by $90 thousand, primarily due to a $94 thousand reduction in seasonal occupancy and equipment costs from the first quarter[11] - No income tax benefit was recorded for the net loss due to a full valuation allowance on the company's deferred tax assets[15] Second Quarter 2025 vs. Second Quarter 2024 (YoY) Compared to the same period last year, net loss slightly decreased from $2.3 million to $2.0 million, bolstered by a $2.0 million increase in net interest income and a 32 basis point expansion in net interest margin, despite rising non-interest expenses | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $11.6M | $9.6M | +$2.0M | | Net Interest Margin | 2.28% | 1.96% | +32 bps | | Yield on Avg. Earning Assets | 4.58% | 4.37% | +21 bps | | Cost of Avg. Interest-Bearing Liabilities | 2.76% | 2.94% | -18 bps | - Non-interest expense increased by $324 thousand year-over-year, driven by rises in compensation and benefits ($185k), data processing ($133k), and advertising ($88k)[13] Six Months 2025 vs. Six Months 2024 (YTD) For the first six months of 2025, net interest income grew by $3.4 million to $22.4 million, with net interest margin increasing by 28 basis points to 2.22%, while non-interest income fell and non-interest expenses rose | Metric | 6 Months 2025 | 6 Months 2024 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $22.4M | $19.0M | +$3.4M | | Net Interest Margin | 2.22% | 1.94% | +28 bps | | Yield on Avg. Earning Assets | 4.55% | 4.30% | +25 bps | | Cost of Avg. Interest-Bearing Liabilities | 2.82% | 2.89% | -7 bps | - Non-interest income decreased by $188 thousand primarily because of gains on the sale of loans and REO property that occurred in the first half of 2024[14] - Non-interest expense for the six-month period rose by $711 thousand, mainly due to increases in compensation and benefits ($474k) and data processing ($233k)[21] Balance Sheet Analysis (as of June 30, 2025) This section analyzes the company's balance sheet, detailing changes in assets, liabilities, and capital, along with an assessment of asset quality Assets Total loans grew by $89.6 million in the first six months of 2025 to $1.67 billion, reflecting a strategic shift towards higher-yielding consumer and commercial loans, partially offset by a decrease in multifamily portfolio and securities | Loan Portfolio (in thousands) | June 30, 2025 | Dec 31, 2024 | Change YTD | | :--- | :--- | :--- | :--- | | Consumer and other | $83,706 | $7,211 | +$76,495 | | Commercial real estate | $293,179 | $259,633 | +$33,546 | | Construction | $97,207 | $85,546 | +$11,661 | | Multifamily | $633,849 | $671,116 | -$37,267 | | Total Loans | $1,673,036 | $1,583,482 | +$89,554 | - The company is actively diversifying its loan portfolio, purchasing $80.4 million in consumer loans and $25.5 million in residential loans during the first half of 2025[5][22] - Securities available-for-sale decreased by $12.8 million and securities held-to-maturity decreased by $4.0 million since year-end 2024 due to maturities, calls, and pay downs[17][18] Liabilities Total deposits increased by $73.0 million in the first half of 2025 to $1.42 billion, driven by growth in NOW and demand accounts and time deposits, including brokered deposits, with uninsured deposits at a low 12% | Deposit Portfolio (in thousands) | June 30, 2025 | Dec 31, 2024 | Change YTD | | :--- | :--- | :--- | :--- | | NOW and demand accounts | $431,485 | $369,554 | +$61,931 | | Time deposits | $730,778 | $707,339 | +$23,439 | | Savings | $228,897 | $240,426 | -$11,529 | | Total Deposits | $1,416,321 | $1,343,320 | +$73,001 | - Core deposits grew by $49.6 million year-to-date, representing 48.4% of total deposits, with the company's strategy focusing on attracting full banking relationships from small-to-medium-sized businesses[8][22] - FHLB borrowings increased slightly by $3.5 million to $343.0 million, while the company maintains significant additional borrowing capacity of $256.1 million at the FHLB and $110.3 million at the Federal Reserve Bank[22] Capital and Asset Quality Shareholders' equity declined by $10.9 million to $321.3 million since year-end, primarily due to $8.5 million in share repurchases, while capital ratios remain above 'well capitalized' standards and asset quality is strong with non-performing loans at 0.38% - The decrease in shareholders' equity was primarily driven by the repurchase of shares at a cost of $8.5 million and the year-to-date net loss[27] | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Non-performing loans / Total loans | 0.38% | 0.33% | | Allowance for credit losses / Gross loans | 0.80% | 0.83% | | Allowance / Non-performing loans | 211.81% | 254.02% | | Tangible book value per share | $14.87 | $14.74 | - The provision for credit losses was $463 thousand for the quarter, mainly driven by an increase in the provision for off-balance-sheet commitments and shifts in the loan portfolio composition[27] Consolidated Financial Statements This section presents the company's consolidated financial statements, including the balance sheet, income statement, key financial highlights, and a detailed analysis of net interest income Consolidated Statements of Financial Condition As of June 30, 2025, total assets were $2.13 billion, supported by $1.66 billion in net loans, with total liabilities at $1.81 billion mainly from $1.42 billion in deposits and $343 million in FHLB advances, and total shareholders' equity at $321.3 million Consolidated Balance Sheet (in thousands) | | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $2,127,504 | $2,060,683 | | Loans, net | $1,659,732 | $1,570,517 | | Securities (AFS & HTM) | $313,301 | $330,104 | | Cash and cash equivalents | $41,877 | $42,502 | | Total Liabilities | $1,806,204 | $1,728,485 | | Deposits | $1,416,321 | $1,343,320 | | FHLB Advances | $343,000 | $339,500 | | Shareholders' Equity | $321,300 | $332,198 | Consolidated Statements of Operations For Q2 2025, the company reported $11.6 million in net interest income, a $463 thousand provision for credit losses, and $13.5 million in non-interest expenses, resulting in a net loss of $2.0 million, or $0.10 per diluted share Consolidated Income Statement (in thousands) | | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $11,640 | $10,744 | $9,573 | | Provision for credit losses | $463 | $201 | ($762) | | Non-interest income | $405 | $394 | $536 | | Non-interest expense | $13,539 | $13,629 | $13,215 | | Net Loss | ($1,957) | ($2,692) | ($2,344) | | Diluted Loss Per Share | ($0.10) | ($0.13) | ($0.11) | Consolidated Financial Highlights This section presents key performance and asset quality ratios over the past five quarters, highlighting the steady improvement in net interest margin to 2.28% and strong asset quality with non-performing loans at 0.38% Performance Ratios (%) | Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net interest margin | 2.28 | 2.16 | 1.96 | | Efficiency ratio | 112.40 | 122.36 | 130.73 | | Loss on average assets | (0.37) | (0.53) | (0.47) | Asset Quality Ratios (%) | Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Non-performing loans to total loans | 0.38 | 0.35 | 0.40 | | Allowance for credit losses to total loans | 0.80 | 0.81 | 0.84 | Analysis of Net Interest Income This detailed analysis breaks down net interest income components, showing an average yield on interest-earning assets of 4.58% and an average cost of interest-bearing liabilities of 2.76% for Q2 2025, resulting in a net interest spread of 1.82% Quarterly Net Interest Margin Analysis | | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Avg. Yield on Earning Assets | 4.58% | 4.51% | 4.37% | | Avg. Yield on Loans | 4.80% | 4.72% | 4.56% | | Avg. Cost of Int-Bearing Liabilities | 2.76% | 2.89% | 2.94% | | Avg. Cost of Deposits | 2.62% | 2.75% | 2.90% | | Net Interest Rate Spread | 1.82% | 1.62% | 1.43% | | Net Interest Margin | 2.28% | 2.16% | 1.96% | Supplemental Information This section provides additional financial details, including reconciliations for non-GAAP financial measures such as tangible book value per share and core deposits Non-GAAP Financial Measures This section provides reconciliations for non-GAAP metrics, including tangible book value per share which increased to $14.87 and core deposits comprising 48.4% of total deposits, with a pre-provision net loss of $1.5 million for the quarter Tangible Book Value Per Share Calculation (in thousands) | | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Shareholders' equity | $321,300 | $326,663 | | Less: intangible assets | $134 | $189 | | Tangible equity | $321,166 | $326,474 | | Shares outstanding | 21,591,757 | 22,047,649 | | Tangible book value per share | $14.87 | $14.81 | - Core deposits, defined as total deposits less time deposits, were $685.5 million, representing 48.4% of total deposits as of June 30, 2025[49]