8-K: Blue Foundry Bancorp Reports Net Loss but Highlights Deposit and Loan Growth in Q1 2025

Blue Foundry Bancorp reported a net loss of $2.7 million for Q1 2025, but saw increases in deposits, loans, and net interest margin.

Summary

• Blue Foundry Bancorp reported a net loss of $2.7 million, or $0.13 per diluted common share, for the first quarter of 2025, which is consistent with the previous quarter and the same quarter last year.
• Net interest margin increased by 27 basis points from the linked quarter to 2.16%.
• Deposits increased by $43.9 million to $1.39 billion, and loans increased by $42.2 million to $1.63 billion compared to the linked quarter.
• The company repurchased 464,085 shares at a weighted average price of $9.52 per share.
• Uninsured deposits to third-party customers totaled approximately 11% of total deposits as of March 31, 2025.
• The allowance for credit losses on loans was 0.81% of gross loans.
• Non-performing loans totaled $5.7 million, or 0.35% of total loans.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the company reports a net loss, there are positive aspects such as deposit and loan growth, and an increase in net interest margin. The management's comments are also positive, indicating satisfaction with certain aspects of the performance.

Positives

• Net interest margin increased by 27 basis points to 2.16%.
• Deposits increased by $43.9 million to $1.39 billion.
• Loans increased by $42.2 million to $1.63 billion.
• Tangible book value increased to $14.81 per share.
• Credit quality remained strong with a non-performing asset to total asset ratio of 0.27%.
• The allowance for credit losses on loans at 81 basis points of the loan portfolio covers non-performing loans by 2.3 times.

Negatives

• The company reported a net loss of $2.7 million, or $0.13 per diluted common share, for the quarter.
• Non-interest expense increased $748 thousand primarily driven by an increase of $895 thousand in compensation and benefits expenses.
• Shareholders equity decreased $5.5 million to $326.7 million.
• The company did not record a tax benefit for the losses incurred due to the full valuation allowance required on its deferred tax assets.
• Non-performing loans increased to $5.7 million, or 0.35% of total loans.

Risks

• The company's forward-looking statements are subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond their control.
• Inflation and changes in the interest rate environment could reduce margins and yields.
• General economic conditions, including potential recessionary conditions, could impact the company's performance.
• Changes in laws or government regulations affecting financial institutions could have an adverse effect.
• Technological changes may be more difficult or expensive than expected.
• A failure or breach of operational or security systems, including cyber-attacks, could pose a risk.
• The company's ability to manage market risk, credit risk, and operational risk in the current economic environment is a risk factor.

Future Outlook

The document contains forward-looking statements regarding future plans, strategies, and expectations, which are subject to various uncertainties and risks.

Management Comments

• James D. Nesci, President and Chief Executive Officer, commented, 'We are pleased with the improvement experienced in yields on assets and cost of liabilities as both contributed to a 27 basis points increase in net interest margin.'
• Mr. Nesci also noted, 'Deposit growth continued in the first quarter, funding loan growth of $42 million.'

Industry Context

The company operates in the competitive northern New Jersey market, where there is strong competition for deposits.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards or comparable companies.
• However, it mentions that the Bank's capital ratios remain above the FDIC's well-capitalized standards.

Stakeholder Impact

• Shareholders: The net loss and decrease in shareholders' equity may negatively impact shareholder value.
• Customers: Deposit and loan growth could indicate improved services and availability of financial products.
• Employees: Increased compensation and benefits expenses could be a positive sign for employees.
• Communities: The company's commitment to serving the doers, movers, and shakers in the communities suggests a positive impact on local businesses and individuals.

Next Steps

• The company will continue to focus on diversifying its lending portfolio by growing its commercial portfolios.
• The company will continue to focus on attracting the full banking relationship of smallto medium-sized businesses through an extensive suite of deposit products.

Key Dates

Keywords

financial results, earnings, net loss, deposits, loans, net interest margin, share repurchase, credit quality, Blue Foundry Bancorp, BLFY