• Blue Foundry Bancorp Reports Third Quarter 2023 Results

    Source: Nasdaq GlobeNewswire / 25 Oct 2023 08:15:01   America/New_York

    RUTHERFORD, N.J., Oct. 25, 2023 (GLOBE NEWSWIRE) -- Blue Foundry Bancorp (NASDAQ:BLFY) (the “Company”), the holding company for Blue Foundry Bank (the “Bank”), today reported a net loss of $1.4 million, or $0.06 per diluted common share, for the three months ended September 30, 2023, compared to net loss of $1.8 million, or $0.08 per diluted common share, for the three months ended June 30, 2023, and net income of $1.2 million for the three months ended September 30, 2022.

    James D. Nesci, President and Chief Executive Officer, commented, “Blue Foundry remains well capitalized with credit quality at historically stable levels. In addition to strong on-balance sheet liquidity, we have access to multiple sources of liquidity.”

    He continued, “We have also been pleased with the resourcefulness of our management team and employees in managing expenses. This has helped offset some of the pressure on net interest income we are experiencing as the current rate environment continues to adversely affect our margin.”

    Highlights for the third quarter of 2023:

    • Non-interest expense decreased $574 thousand, or 4.4%, sequentially, primarily driven by lower compensation and benefits expenses.
    • Release of provision for credit losses of $717 thousand due to the impact of the change in forecast on the loan portfolio, coupled with a decline in portfolio balances and unused lines.
    • Uninsured deposits to third-party customers totaled approximately 10% of total deposits as of September 30, 2023.
    • Interest income for the quarter was $20.2 million, an increase of $408 thousand, or 2.1%, compared to the prior quarter.
    • Interest expense for the quarter was $10.3 million, an increase of $1.4 million, or 16.2%, compared to the prior quarter.
    • Net interest margin decreased 23 basis points from the prior quarter to 1.94%.
    • The Company executed $50 million of hedges on interest rates to reduce the Company’s sensitivity to interest rate by locking in spread.
    • Tangible book value per share was $14.24.
    • 298,210 shares were repurchased at a weighted average cost of $9.51 per share.

    Lending Franchise

    The Company continues to diversify its lending franchise by focusing on growing the commercial portfolio. During the first nine months of 2023, total loans increased by $25.9 million primarily due to growth within the Company’s non-residential real estate, construction and commercial and industrial portfolios.

    The details of the loan portfolio are below:

      September 30,
    2023    		 June 30,
    2023    		 March 31,
    2023    		 December 31,
    2022
      (In thousands)
    Residential one-to-four family $567,384 $580,396 $592,809 $597,254
    Multifamily  689,966  696,956  695,207  690,690
    Non-residential real estate  236,325  237,247  239,844  216,061
    Construction and land  45,064  36,032  28,141  17,799
    Junior liens  22,297  21,338  19,644  18,631
    Commercial and industrial  9,904  9,743  10,357  4,653
    Consumer and other  50  33  58  39
    Total loans  1,570,990  1,581,745  1,586,060  1,545,127
    Less: Allowance for credit losses  13,872  14,413  14,153  13,400
    Loans receivable, net $1,557,118 $1,567,332 $1,571,907 $1,531,727
     

    Retail Banking Franchise

    As of September 30, 2023, deposits totaled $1.25 billion, a decrease of $35.8 million, or 2.77%, from December 31, 2022. The Company’s strategy is to focus on attracting the full banking relationship of small- to medium-sized businesses through an extensive suite of deposit products; however, the rate environment in the northern New Jersey market has intensified competition for deposits. The reduction of $191.9 million in core deposits was partially offset by an increase of $156.1 million in time deposits.

    The details of deposits are below:

      September 30,
    2023    		 June 30,
    2023    		 March 31,
    2023    		 December 31,
    2022
      (In thousands)
    Non-interest bearing deposits $23,787 $26,067 $32,518 $37,907
    NOW and demand accounts  378,268  404,407  427,281  410,937
    Savings  278,665  315,713  361,871  423,758
    Core deposits  680,720  746,187  821,670  872,602
    Time deposits  572,384  521,074  422,911  416,260
    Total deposits $1,253,104 $1,267,261 $1,244,581 $1,288,862
     

    Financial Performance Overview:

    Third quarter of 2023 compared to the third quarter of 2022

    Net interest income compared to the third quarter of 2022:

    • Net interest income was $9.9 million in the three months ended September 30, 2023 compared to $13.8 million in same period in 2022 due to increases in rates paid on interest-bearing liabilities.
    • Net interest margin decreased by 90 basis points to 1.94%.
    • Yield on average interest-earning assets increased 60 basis points to 3.97%, while the cost of average interest-bearing liabilities increased 201 basis points to 2.49%.
    • Average loans increased by $112.1 million and average interest-bearing liabilities increased by $157.2 million.

    Non-interest expense compared to the third quarter of 2022:

    • Non-interest expense was $12.4 million, a decrease of $1.1 million excluding the provision for commitments and letters of credit, driven by a decrease of $793 thousand in compensation and benefits expenses, a decrease of $366 thousand in professional services, a decrease of $168 thousand in other operating expenses and a decrease of $86 thousand in data processing partially offset by an increase of $183 thousand in occupancy and equipment and an increase of $165 thousand in FDIC assessment.
    • Since the adoption of the current expected credit loss (CECL) methodology on January 1, 2023, the provision for commitments and letters of credit is recorded in the provision for credit losses. This expense was previously recorded in non-interest expense. During the third quarter of 2022, the Company recorded a $170 thousand provision for commitments and letters of credit.

    Income tax expense compared to the third quarter of 2022:

    • The Company did not record a tax benefit for the loss incurred during the current quarter due to the full valuation allowance required on its deferred tax assets. The prior year quarter effective tax rate of 9.0% was a result of the taxable income produced during the prior year quarter, partially offset by the ability to utilize a portion of the net operating losses that were fully reserved.
    • The Company’s current tax position reflects the previously established full valuation allowance on its deferred tax assets. At September 30, 2023, the valuation allowance on deferred tax assets was $23.1 million.

    Nine months ended September 30, 2023 compared to the nine months ended September 30, 2022

    Net interest income compared to the nine months ended September 30, 2022:

    • Net interest income was $32.7 million, a decrease of $6.2 million.
    • Net interest margin decreased 58 basis points to 2.18%.
    • Yield on average interest-earning assets increased 73 basis points to 3.91% while the cost of average interest-bearing liabilities increased 160 basis points to 2.15%.
    • Average loans increased by $198.9 million and average interest-bearing deposits decreased by $5.2 million.
    • Average borrowings increased by $190.0 million.
    • The Company executed $150 million of hedges on interest rates with maturities ranging from three to five years. The Company’s hedging program aims to reduce the Company’s sensitivity to interest rate by locking in spread.

    Non-interest expense compared to the nine months ended September 30, 2022:

    • Non-interest expense was $39.0 million, a decrease of $993 thousand excluding the provision for commitments and letters of credit, driven by decreases of $889 thousand in fees for professional services and $759 thousand in advertising, partially offset by increases of $494 thousand in occupancy and equipment costs, $324 thousand in FDIC assessment and $179 thousand in data processing expense.
    • The Company recorded a $108 thousand provision for commitments and letters of credit in the first nine months of 2022.

    Income tax expense compared to the nine months ended September 30, 2022:

    • The Company did not record a tax benefit for the loss incurred during the nine months ended September 30, 2023 due to the full valuation allowance required on its deferred tax assets. The effective tax rate for the nine months ended September 30, 2022 of 8.7% was a result of the taxable income produced during the prior year period, partially offset by the ability to utilize a portion of the net operating losses that were fully reserved.
    • The Company’s current tax position reflects the previously established full valuation allowance on its deferred tax assets. At September 30, 2023, the valuation allowance on deferred tax assets was $23.1 million.

    Balance Sheet Summary:

    September 30, 2023 compared to December 31, 2022

    Cash and cash equivalents:

    • Cash and cash equivalents increased $11.2 million compared to December 31, 2022.

    Securities available-for-sale:

    • Securities available-for-sale decreased $30.6 million to $283.6 million due to amortization and payoffs.
    • Unrealized losses increased $5.9 million to $41.9 million.

    Total loans:

    • Total loans held for investment increased $25.9 million to $1.57 billion.
    • Construction and land loans increased $27.3 million, non-residential real estate loans increased $20.3 million and commercial and industrial loans increased $5.3 million.
    • A residential loan totaling $593 thousand was transferred to other real estate owned.

    Deposits:

    • Deposits totaled $1.25 billion, a decrease of $35.8 million from December 31, 2022, largely the result of the competitive rate environment.
    • Core deposits (defined as non-interest bearing checking, NOW and demand accounts and savings accounts) represented 54.3% of total deposits, compared to 67.7% at December 31, 2022 and 71.1% at September 30, 2022.
    • Brokered deposits totaled $125.0 million at September 30, 2023, an increase of $50.0 million from December 31, 2022.
    • Uninsured and uncollateralized deposits to third party customers were $127.3 million, or 10% of total deposits, at the end of the third quarter.

    Borrowings:

    • FHLB borrowings increased by $92.0 million to $402.5 million to support loan growth and replace deposit attrition.
    • As of September 30, 2023, the Company had $336.6 million of additional borrowing capacity at the FHLB and $32.5 million of other unsecured lines of credit.

    Capital:

    • Shareholders’ equity decreased by $34.6 million to $359.1 million. The decrease was primarily driven by the repurchase of shares at a cost of $30.5 million.
    • In addition, the net loss of $4.5 million and the $2.4 million reduction in accumulated other comprehensive income was partially offset by stock-based compensation activity.
    • Tangible equity to tangible assets was 17.07% and tangible common equity per share outstanding was $14.24.
    • The Bank’s capital ratios remain above the FDIC’s “well capitalized” standards.

    Asset quality:

    • As of September 30, 2023, the Allowance for Credit Losses as a percentage of gross loans was 0.88%.
    • The Company recorded a net release of provision for credit losses of $717 thousand for the quarter ended September 30, 2023, driven by decreases in the allowance for loans and in the allowance for commitments.
    • Non-performing loans totaled $6.1 million, or 0.39% of total loans compared to $7.8 million, or 0.50% of total loans at December 31, 2022, and $8.4 million, or 0.56% of total loans at September 30, 2022.
    • Net charge-offs were $26 thousand for the quarter ended September 30, 2023 and $43 thousand for the nine months ended September 30, 2023.
    • Ratio of non-performing loans to allowance for credit losses on loans was 225.97% at September 30, 2023 compared to 172.52% at December 31, 2022 and 161.73% at September 30, 2022.

    About Blue Foundry

    Blue Foundry Bancorp is the holding company for Blue Foundry Bank, a place where things are made, purpose is formed, and ideas are crafted. Headquartered in Rutherford NJ, with a presence in Bergen, Essex, Hudson, Morris, Passaic, Somerset and Union counties, Blue Foundry Bank is a full-service, innovative bank serving the doers, movers, and shakers in our communities. We offer individuals and businesses alike the tailored products and services they need to build their futures. With a rich history dating back more than 145 years, Blue Foundry Bank has a longstanding commitment to its customers and communities. To learn more about Blue Foundry Bank visit BlueFoundryBank.com or call (888) 931-BLUE. Member FDIC.

    Conference Call Information

    A conference call covering Blue Foundry’s third quarter 2023 earnings announcement will be held today, Wednesday, October 25, 2023 at 11:00 a.m. (EDT). To listen to the live call, please dial 1-833-470-1428 (toll free) or +1-404-975-4839 (international) and use access code 849840. The webcast (audio only) will be available on ir.bluefoundrybank.com. The conference call will be recorded and will be available on the Company’s website for one month.

    Contact:
    James D. Nesci
    President and Chief Executive Officer
    BlueFoundryBank.com
    jnesci@bluefoundrybank.com
    201-972-8900

    Forward Looking Statements

    Certain statements contained herein are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements, which are based on certain current assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target” and similar expressions.

    Forward-looking statements are based on current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: inflation and changes in the interest rate environment that reduce our margins and yields, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make; general economic conditions, either nationally or in our market areas, that are worse than expected; changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; our ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in our market area; our ability to implement and change our business strategies; competition among depository and other financial institutions; the effects of the recent turmoil in the banking industry (including the failures of two financial institutions); adverse changes in the securities or secondary mortgage markets; changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, capital requirements and insurance premiums; changes in monetary or fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; changes in the quality or composition of our loan or investment portfolios; technological changes that may be more difficult or expensive than expected; a failure or breach of our operational or security systems or infrastructure, including cyber-attacks; the inability of third party providers to perform as expected; our ability to manage market risk, credit risk and operational risk in the current economic environment; our ability to enter new markets successfully and capitalize on growth opportunities; our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related there to; changes in consumer spending, borrowing and savings habits; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board; our ability to retain key employees; the current or anticipated impact of military conflict, terrorism or other geopolitical events; the impact of potential government shutdown; the ability of the U.S. Government to manage federal debt limits; and changes in the financial condition, results of operations or future prospects of issuers of securities that we own.

    Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. Except as required by applicable law or regulation, we do not undertake, and we specifically disclaim any obligation, to release publicly the results of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.


    BLUE FOUNDRY BANCORP AND SUBSIDIARY
    Consolidated Statements of Financial Condition
     
      September 30,
    2023    		 June 30,
    2023    		 March 31,
    2023    		 December 31,
    2022
      (unaudited) (unaudited) (unaudited)  
      (Dollars in Thousands)
    ASSETS        
    Cash and cash equivalents $52,407 $45,759 $57,621 $41,182
    Securities available-for-sale, at fair value  283,649  300,923  309,083  314,248
    Securities held to maturity  33,298  33,445  33,472  33,705
    Other investments  20,515  20,420  21,070  16,069
    Loans held-for-sale  2,435  2,497  2,552  —
    Loans, net  1,557,118  1,567,332  1,571,907  1,531,727
    Real estate owned, net  593  —  —  —
    Interest and dividends receivable  7,787  7,285  7,375  6,893
    Premises and equipment, net  32,031  31,519  30,839  29,825
    Right-of-use assets  25,885  26,594  26,320  25,906
    Bank owned life insurance  21,919  21,802  21,688  21,576
    Other assets  22,939  22,938  19,128  22,207
    Total assets $2,060,576 $2,080,514 $2,101,055 $2,043,338
             
    LIABILITIES AND SHAREHOLDERS’ EQUITY      
    Liabilities        
    Deposits $1,253,104 $1,267,261 $1,244,581 $1,288,862
    Advances from the Federal Home Loan Bank  402,500  399,500  422,500  310,500
    Advances by borrowers for taxes and insurance  9,615  9,862  9,695  9,302
    Lease liabilities  27,466  28,130  27,799  27,324
    Other liabilities  8,742  9,227  10,787  13,632
    Total liabilities  1,701,427  1,713,980  1,715,362  1,649,620
             
    Shareholders’ equity  359,149  366,534  385,693  393,718
    Total liabilities and shareholders’ equity $2,060,576 $2,080,514 $2,101,055 $2,043,338
     


    BLUE FOUNDRY BANCORP AND SUBSIDIARY
    Consolidated Statements of Operations
    (Dollars in Thousands Except Per Share Data) (Unaudited)
     
      Three months ended Nine months ended
      September 30,
    2023    		 June 30,
    2023    		 September 30,
    2022    		 September 30,
    2023    		 September 30,
    2022
      (Dollars in thousands)
    Interest income:          
    Loans $16,728  $16,481  $13,692  $48,778  $37,792 
    Taxable investment income  3,339   3,172   2,571   9,663   6,708 
    Non-taxable investment income  106   112   109   329   344 
    Total interest income  20,173   19,765   16,372   58,770   44,844 
    Interest expense:          
    Deposits  7,034   5,173   1,424   16,361   3,256 
    Borrowed funds  3,263   3,686   1,133   9,686   2,672 
    Total interest expense  10,297   8,859   2,557   26,047   5,928 
    Net interest income  9,876   10,906   13,815   32,723   38,916 
    Provision for (release of) credit losses  (717)  143   (419)  (597)  (777)
    Net interest income after provision for (release of) credit losses  10,593   10,763   14,234   33,320   39,693 
    Non-interest income:          
    Fees and service charges  291   280   650   833   1,815 
    Gain on securities, net  —   —   —   —   14 
    Gain on sale of loans  —   24   —   159   — 
    Other income  78   76   149   241   391 
    Total non-interest income  369   380   799   1,233   2,220 
    Non-interest expense:          
    Compensation and employee benefits  6,640   7,065   7,433   21,552   21,627 
    Occupancy and equipment  2,104   2,124   1,921   6,210   5,716 
    Data processing  1,473   1,535   1,559   4,609   4,430 
    Advertising  85   77   125   234   993 
    Professional services  646   764   1,012   2,390   3,279 
    Provision (release of provision) for commitments and letters of credit  —   —   170   —   (108)
    Federal deposit insurance  263   231   98   599   275 
    Other  1,183   1,172   1,351   3,425   3,692 
    Total non-interest expense  12,394   12,968   13,669   39,019   39,904 
    (Loss) income before income tax expense  (1,432)  (1,825)  1,364   (4,466)  2,009 
    Income tax expense  —   —   123   —   175 
    Net (loss) income $(1,432) $(1,825) $1,241  $(4,466) $1,834 
    Basic (loss) earnings per share $(0.06) $(0.08) $0.05  $(0.18) $0.07 
    Diluted (loss) earnings per share $(0.06) $(0.08) $0.05  $(0.18) $0.07 
    Weighted average shares outstanding-basic  23,278,490   24,249,714   26,128,851   24,289,599   26,278,775 
    Weighted average shares outstanding-diluted  23,278,490   24,249,714   26,246,039   24,289,599   26,318,267 

    (1) The assumed vesting of outstanding restricted stock units had an antidilutive effect on diluted earnings per share due to the Company’s net loss for the 2023 periods.


    BLUE FOUNDRY BANCORP AND SUBSIDIARY
    Consolidated Financial Highlights
    (Dollars in Thousands Except Per Share Data) (Unaudited)
     
      Three months ended
      September 30,
    2023    		 June 30,
    2023    		 March 31,
    2023    		 December 31,
    2022    		 September 30,
    2022
    Performance Ratios (%):          
    (Loss) return on average assets  (0.27)  (0.35)  (0.24)  0.11   0.25
    (Loss) return on average equity  (1.55)  (1.95)  (1.25)  0.56   1.20
    Interest rate spread (1)  1.48   1.75   2.05   2.35   2.68
    Net interest margin (2)  1.94   2.17   2.42   2.62   2.84
    Efficiency ratio (non-GAAP) (3)  120.98   114.90   109.92   97.76   92.37
    Average interest-earning assets to average interest-bearing liabilities  123.05   130.77   126.39   128.30   130.30
    Tangible equity to tangible assets (4)  17.07   17.59   18.33   19.24   19.72
    Book value per share (5) $14.27  $14.38  $14.08  $14.30  $14.11
    Tangible book value per share (5) $14.24  $14.35  $14.06  $14.28  $14.09
               
    Asset Quality:          
    Non-performing loans $6,139  $7,736  $7,481  $7,767  $8,409
    Real estate owned, net  593   —   —   —   —
    Non-performing assets $6,732  $7,736  $7,481  $7,767  $8,409
    Allowance for credit losses to total loans (%)  0.88   0.91   0.89   0.87   0.91
    Allowance for credit losses to non-performing loans (%)  225.97   186.31   189.18   172.52   161.73
    Non-performing loans to total loans (%)  0.39   0.49   0.47   0.50   0.56
    Non-performing assets to total assets (%)  0.33   0.37   0.36   0.38   0.42
    Net charge-offs to average outstanding loans during the period (%)  0.01   —   —   (0.01)  0.01

    (1) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
    (2) Net interest margin represents net interest income divided by average interest-earning assets.
    (3) Efficiency ratio represents adjusted non-interest expense divided by the sum of net interest income plus non-interest income.
    (4) Tangible equity equals $358.5 million, which excludes intangible assets ($644 thousand of capitalized software). Tangible assets equal $2.10 billion and exclude intangible assets.
    (5) September 30, 2023 per share metrics computed using 25,174,412 total shares outstanding.


    BLUE FOUNDRY BANCORP AND SUBSIDIARY
    Analysis of Net Interest Income
    (Dollars in Thousands) (Unaudited)
     
      Three Months Ended,
      September 30, 2023 June 30, 2023 September 30, 2022
      Average Balance Interest Average
    Yield/Cost    		 Average Balance Interest Average
    Yield/Cost    		 Average Balance Interest Average
    Yield/Cost
      (Dollars in thousands)
    Assets:                  
    Loans (1) $1,577,173 $16,728 4.21% $1,583,057 $16,481 4.18% $1,465,114 $13,692 3.71%
    Mortgage-backed securities  170,326  840 1.96%  174,398  967 2.22%  197,406  1,055 2.12%
    Other investment securities  194,953  1,507 3.07%  198,588  1,505 3.04%  204,506  1,230 2.39%
    FHLB stock  21,047  456 8.60%  22,832  342 6.00%  13,141  139 4.20%
    Cash and cash equivalents  51,884  642 4.91%  40,614  470 4.64%  49,163  256 2.07%
    Total interest-earning assets  2,015,383  20,173 3.97%  2,019,489  19,765 3.93%  1,929,330  16,372 3.37%
    Non-interest earning assets  58,042      56,280      61,264    
    Total assets $2,073,425     $2,075,769     $1,990,594    
    Liabilities and shareholders' equity:                  
    NOW, savings, and money market deposits $684,228  2,123 1.23% $754,048  2,217 1.18% $831,191  759 0.36%
    Time deposits  558,252  4,911 3.49%  442,547  2,956 2.68%  405,823  665 0.65%
    Interest-bearing deposits  1,242,480  7,034 2.25%  1,196,595  5,173 1.73%  1,237,014  1,424 0.46%
    FHLB advances  395,359  3,263 3.27%  432,137  3,686 3.42%  243,647  1,133 1.84%
    Total interest-bearing liabilities  1,637,839  10,297 2.49%  1,628,732  8,859 2.18%  1,480,661  2,557 0.69%
    Non-interest bearing deposits  25,540      26,914      49,869    
    Non-interest bearing other  44,628      44,240      48,103    
    Total liabilities  1,708,007      1,699,886      1,578,633    
    Total shareholders' equity  365,418      375,883      411,961    
    Total liabilities and shareholders' equity $2,073,425     $2,075,769     $1,990,594    
    Net interest income   $9,876     $10,906     $13,815  
    Net interest rate spread (2)     1.48%     1.75%     2.68%
    Net interest margin (3)     1.94%     2.17%     2.84%

    (1) Average loan balances are net of deferred loan fees and costs, and premiums and discounts, and include non-accrual loans.
    (2) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
    (3) Net interest margin represents net interest income divided by average interest-earning assets.


    BLUE FOUNDRY BANCORP AND SUBSIDIARY
    Analysis of Net Interest Income
    (Dollars in Thousands) (Unaudited)
     
      Nine Months Ended September 30,
       2023   2022 
      Average Balance Interest Average
    Yield/Cost    		 Average Balance Interest Average
    Yield/Cost
      (Dollars in thousands)
    Assets:            
    Loans (1) $1,571,204 $48,778 4.15% $1,372,306 $37,792 3.68%
    Mortgage-backed securities  174,742  2,789 2.13%  191,662  2,842 1.98%
    Other investment securities  197,522  4,523 3.06%  204,009  3,395 2.22%
    FHLB stock  21,343  1,106 6.93%  11,080  371 4.48%
    Cash and cash equivalents  46,363  1,574 4.54%  103,526  444 0.57%
    Total interest-earning assets  2,011,174  58,770 3.91%  1,882,583  44,844 3.18%
    Non-interest earning assets  56,762      69,008    
    Total assets $2,067,936     $1,951,591    
    Liabilities and shareholders' equity:            
    NOW, savings, and money market deposits $753,419 $6,350 1.13% $799,762 $1,323 0.22%
    Time deposits  472,866  10,011 2.83%  431,724  1,933 0.60%
    Interest-bearing deposits  1,226,285  16,361 1.78%  1,231,486  3,256 0.35%
    FHLB advances  395,800  9,686 3.27%  205,828  2,672 1.74%
    Total interest-bearing liabilities  1,622,085  26,047 2.15%  1,437,314  5,928 0.55%
    Non-interest bearing deposits  23,092      45,338    
    Non-interest bearing other  44,572      47,691    
    Total liabilities  1,689,749      1,530,343    
    Total shareholders' equity  378,187      421,248    
    Total liabilities and shareholders' equity $2,067,936     $1,951,591    
    Net interest income   $32,723     $38,916  
    Net interest rate spread (2)     1.76%     2.64%
    Net interest margin (3)     2.18%     2.76%

    (1) Average loan balances are net of deferred loan fees and costs, and premiums and discounts, and include non-accrual loans.
    (2) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
    (3) Net interest margin represents net interest income divided by average interest-earning assets.


    BLUE FOUNDRY BANCORP AND SUBSIDIARY
    Adjusted Pre-Provision Net Revenue (Non-GAAP)
    (Unaudited)

    This press release contains certain supplemental financial information, described in the table below, which has been determined by methods other than U.S. Generally Accepted Accounting Principles ("GAAP") that management uses in its analysis of Blue Foundry's performance. Management believes these non-GAAP financial measures provide information useful to investors in understanding Blue Foundry's financial results. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and Blue Foundry strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

    Net income, as presented in the Consolidated Statements of Operations, includes the provision for credit losses (in the 2023 periods), provision for loan losses and provision for commitments and letters of credit (in the 2022 periods) and income tax expense, while pre-provision net revenue does not.

      Three months ended
      September 30,
    2023    		 June 30,
    2023    		 March 31,
    2023    		 December 31,
    2022    		 September 30,
    2022
      (Dollars in thousands, except per share data)
    Pre-provision net revenue and efficiency ratio, as adjusted:        
    Net interest income $9,876  $10,906  $11,941  $12,927  $13,815 
    Other income  369   380   484   444   799 
    Operating expenses, as reported  12,394   12,968   13,657   12,869   13,669 
    Less: Provision for commitments and letters of credit  —   —   —   (203)  170 
    Operating expenses, as adjusted  12,394   12,968   13,657   13,072   13,499 
    Pre-provision net (loss) revenue, as adjusted $(2,149) $(1,682) $(1,232) $299  $1,115 
    Efficiency ratio, as adjusted  121.0%  114.9%  109.9%  97.8%  92.4%
               
    Core deposits:          
    Total deposits $1,253,104  $1,267,261  $1,244,581  $1,288,862  $1,266,497 
    Less: time deposits  572,384   521,074   422,911   416,260   365,548 
    Core deposits $680,720  $746,187  $821,670  $872,602  $900,949 
    Core deposits to total deposits  54.3%  58.9%  66.0%  67.7%  71.1%
               
    Tangible equity:          
    Shareholders’ equity $359,149  $366,534  $385,693  $393,718  $397,338 
    Less: intangible assets  644   730   781   798   760 
    Tangible equity $358,505  $365,804  $384,912  $392,920  $396,578 
               
    Tangible book value per share:          
    Tangible equity $358,505  $365,804  $384,912  $392,920  $396,578 
    Shares outstanding  25,174,412   25,493,422   27,385,482   27,523,219   28,155,292 
    Tangible book value per share $14.24  $14.35  $14.06  $14.28   14.09 


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