Blue Foundry Bancorp(US:BLFY)2022-07-27 20:35Financial Data and Key Metrics Changes - The company reported a net income of $40,000 for Q2 2022, with a pre-provision net revenue of $529,000, showing significant growth in core operating results [4][11] - Total loans reached $1.42 billion, an increase of $88 million or 6.6% quarter-over-quarter, marking the second consecutive quarter of over 4% loan growth [4][5] - Net interest margin expanded by 21 basis points to 2.83%, despite funding pressures from the rising rate environment [14] - Net interest income increased by $1.2 million or 10.2% to $13.2 million, while interest expense rose by $61,000 [15] Business Line Data and Key Metrics Changes - The lending team onboarded $175 million in new loans, with organic originations totaling $147 million, the largest quarterly originations in the company's history [5] - Core deposits grew by $28 million during the quarter, driven primarily by business accounts, which contributed $25 million to that growth [6] - The commercial real estate portfolio experienced strong growth, with originations of $140 million during the quarter [16] Market Data and Key Metrics Changes - The loan pipeline as of June 30 totaled $223 million with a weighted rate of 4.4%, indicating a robust near-term outlook for loan originations [5] - The company purchased $28 million of high-quality residential loans, down from $46 million in the previous quarter, indicating a selective approach to the purchase program [17] Company Strategy and Development Direction - The company is focused on small business customers and plans to open smaller branches (around 2,000 square feet) in densely populated areas, moving away from larger branches [36] - A share repurchase program was authorized for up to 2.8 million shares, reflecting a commitment to return capital to shareholders [9] Management's Comments on Operating Environment and Future Outlook - Management expressed a more conservative long-term outlook due to economic uncertainties, despite strong loan growth in the near term [5][30] - The company anticipates increased pressure on net interest margin in the upcoming quarters due to rising interest rates [34] Other Important Information - Tangible book value declined by $0.29 per share to $14.43, primarily due to a higher rate environment impacting the available-for-sale securities portfolio [11][12] - The bank's asset quality remains strong, with non-performing loans to total loans decreasing by 8 basis points to 70 basis points [18] Q&A Session Summary Question: Average duration of investment held for sale - The average duration is approximately 4 to 4.5 years for the held-for-sale portfolio [22] Question: Portion of the portfolio that is mortgage-backed - The mortgage-backed securities are included in the available-for-sale category, and while there is potential for extension, it is not projected to be material [25][27] Question: Longer-term outlook for loan growth - The loan pipeline is strong with about $220 million as of June 30, and while growth is expected to continue in Q3, guidance for Q4 is not yet provided [30] Question: Growth in multifamily and commercial real estate - All originations in the multifamily space are from the company's team, and the commercial real estate growth was also 100% direct [31] Question: Impact of PPP loans on net interest income - Approximately $170,000 of net interest income for the quarter was from PPP forgiveness, with a small remaining balance [33] Question: Expense management and future guidance - The company aims to maintain a quarterly run rate of $13.5 million in expenses moving forward [38]