8-K: Blue Foundry Bancorp Reports Net Loss for Fourth Quarter and Year-End 2024, but Sees Positive Loan and Deposit Growth

Blue Foundry Bancorp reported a net loss for both the fourth quarter and the full year 2024, but experienced growth in loans and deposits.

Summary

• Blue Foundry Bancorp reported a net loss of $11.9 million, or $0.55 per diluted share, for the year ended December 31, 2024, compared to a net loss of $7.4 million, or $0.31 per diluted share, for the previous year.
• For the fourth quarter of 2024, the company reported a net loss of $2.7 million, or $0.13 per diluted share, which is an improvement from the $4.0 million loss in the previous quarter.
• The company saw positive momentum in the fourth quarter with loans totaling $1.58 billion, an increase of $32.5 million from the prior quarter, and deposits increasing by $24.7 million to $1.34 billion.
• The net interest margin increased by seven basis points from the prior quarter to 1.89%.
• The company repurchased 480,851 shares at a weighted average price of $10.49 per share.
• Credit quality remained strong with non-performing loans to total loans at 0.33%.

Sentiment

Score: 4

Explanation: The document presents mixed results with positive loan and deposit growth offset by net losses and a decrease in net interest margin. The overall sentiment is slightly negative due to the losses.

Positives

• Loan growth was strong in the fourth quarter, increasing by $32.5 million.
• Deposits also saw positive growth, increasing by $24.7 million in the fourth quarter.
• The net interest margin improved by seven basis points in the fourth quarter.
• Credit quality remains strong with low charge-offs and non-performing loans at 0.33% of total loans.
• The company's allowance for credit losses covers non-performing loans by over 2.5 times.
• The company is diversifying its lending portfolio by focusing on higher-yielding commercial loans.
• The company was able to pay off short-term borrowings with deposit growth.

Negatives

• The company reported a net loss of $11.9 million for the full year 2024.
• The company reported a net loss of $2.7 million for the fourth quarter of 2024.
• Non-interest income decreased by $152 thousand compared to the fourth quarter of 2023.
• Non-interest expense increased by $338 thousand compared to the fourth quarter of 2023.
• The company did not record a tax benefit for the losses incurred due to a full valuation allowance on deferred tax assets.
• Shareholders equity decreased by $23.4 million due to share repurchases and the year-to-date loss.

Risks

• The company faces a competitive rate environment in its primary market, which could impact deposit costs.
• The company's full valuation allowance on deferred tax assets indicates potential challenges in generating future taxable income.
• The company's reliance on time deposits, which increased by $110.7 million, could lead to higher interest expenses if rates continue to rise.
• The company's exposure to uninsured deposits, which are 11% of total deposits, could pose a risk if there is a loss of confidence in the bank.
• The company's net interest margin decreased by 19 basis points for the year ended December 31, 2024.

Future Outlook

The company looks to carry the positive momentum in deposit and loan growth into 2025.

Management Comments

• We are very pleased with both the deposit and loan growth achieved in the fourth quarter and look to carry this positive momentum into 2025.
• Credit quality remained strong and we continue to experience very low charge-offs.

Industry Context

The company operates in the competitive northern New Jersey market, where there is strong competition for deposits. The company is focusing on attracting smallto medium-sized businesses through a suite of deposit products.

Comparison to Industry Standards

• The company's net interest margin of 1.89% is below the average for US banks which is around 3.2%.
• The company's non-performing loan ratio of 0.33% is better than the industry average which is around 1%.
• The company's loan growth of $32.5 million in the fourth quarter is a positive sign, but needs to be compared to peer banks to assess its relative performance.
• The company's deposit growth of $24.7 million in the fourth quarter is a positive sign, but needs to be compared to peer banks to assess its relative performance.
• The company's tangible book value per share of $14.74 is a key metric for valuation and should be compared to similar regional banks.

Stakeholder Impact

• Shareholders are negatively impacted by the net loss and decrease in shareholder equity.
• Employees may be impacted by the company's cost-cutting measures.
• Customers may benefit from the company's focus on attracting smallto medium-sized businesses.
• Creditors may be impacted by the company's financial performance.

Next Steps

• The company will hold a conference call on January 29, 2025, to discuss the financial results.
• The company aims to continue the positive momentum in deposit and loan growth into 2025.

Key Dates

Keywords

Blue Foundry Bancorp, Financial Results, Net Loss, Loan Growth, Deposit Growth, Net Interest Margin, Credit Quality, Share Repurchase, Commercial Loans, Non-Performing Loans