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Blue Foundry Bancorp Reports Second Quarter 2022 Results
ソース: Nasdaq GlobeNewswire / 27 7 2022 08:15:01 America/New_York
RUTHERFORD, N.J., July 27, 2022 (GLOBE NEWSWIRE) -- Blue Foundry Bancorp (NASDAQ:BLFY)(the “Company”), the holding company for Blue Foundry Bank (the “Bank”), today reported second quarter financial results highlighted by record loan growth. Gross loans grew by $94.3 million, or 7.1%, compared to the linked quarter, excluding Paycheck Protection Program (“PPP”) loans, led by commercial real estate products.
Net income was $40 thousand for the three months ended June 30, 2022 compared to $553 thousand for the three months ended March 31, 2022 and a net loss of $1.0 million for the three months ended June 30, 2021. Net income was $593 thousand for the six months ended June 30, 2022 compared to a net loss of $1.7 million for the six months ended June 30, 2021.
Additionally, pre-provision net revenue was $529 thousand, an increase of $1.0 million compared to the prior quarter, and an increase of $2.3 million compared to the prior year quarter.
James D. Nesci, president and chief executive officer commented, “This year has been a pivotal time in the Company’s history. On July 15th we celebrated the one year anniversary of our mutual-to stock conversion and on July 20th we announced the adoption of our first stock repurchase program.” He continued, “We are encouraged by the improvement in the results delivered for the second quarter. Strong production in both our lending and retail franchises led to profitability on an operating basis for the first time as a public company.”
Highlights for the second quarter of 2022:
- Organic loan originations totaled $147.0 million for the quarter, including originations of $94.6 million in multifamily loans and $36.7 million non-residential real estate loans. In addition, $27.6 million of conforming residential mortgages in New Jersey were purchased during the period.
- Core deposits increased $27.9 million, or 3.3%, compared to the linked quarter, led by a $25.0 million increase in business accounts. Core deposits now represent 66.8% of total deposits, compared to 53.6% a year prior.
- Non-interest expense, excluding the provision for commitments and letters of credit, improved $259 thousand or 1.9% sequentially due to lower professional services, advertising, and data processing expenses.
- Net interest income for the quarter was $13.2 million, an increase of $1.2 million, or 10.2%, compared to the prior quarter, and an increase of $3.3 million, or 32.8%, compared to the prior year quarter.
- Net interest margin expanded to 2.83%, a 21 basis point increase compared to the prior quarter and an 84 basis point increase from the prior year quarter.
- The rising interest rate environment negatively impacted the fair value of the Company’s available-for-sale investment portfolio leading to a temporary decline of $18.4 million in accumulated other comprehensive income during the six months ended June 30, 2022.
Lending Franchise
The Company continues to diversify its lending franchise by focusing on growing the commercial portfolio. During the second quarter of 2022, gross loans increased by $88.1 million primarily due to strong growth within the Company’s multifamily and non-residential portfolios.
Organic originations totaled $147.0 million for the quarter, including $94.6 million of originations in multifamily loans and $36.7 million in non-residential loans. In addition, $27.6 million in purchases of conforming residential loans in New Jersey contributed to the growth during the quarter.
The details of the loan portfolio is below:
June 30, 2022 March 31, 2022 December 31, 2021 (In thousands) Residential one-to-four family $ 590,151 $ 579,083 $ 560,976 Multifamily 579,183 517,037 515,240 Non-residential real estate 211,683 187,310 141,561 Construction and land 21,010 18,613 23,419 Junior liens 16,421 18,071 18,464 Commercial and industrial (including PPP) 5,957 16,201 21,563 Consumer and other 47 37 87 Total gross loans 1,424,452 1,336,352 1,281,310 Deferred fees, costs, premiums and discounts, net 3,821 5,134 6,299 Total loans 1,428,273 1,341,486 1,287,609 Allowance for loan losses (14,050 ) (13,465 ) (14,425 ) Loans receivable, net $ 1,414,223 $ 1,328,021 $ 1,273,184 The commercial and industrial portfolio includes PPP loans, net of deferred fees, totaling $2.0 million at June 30, 2022, $8.1 million at March 31, 2022, and $16.8 million at December 31, 2021.
Retail Banking Franchise
As of June 30, 2022, core deposits totaled $866.0 million, an increase of $92.7 million or 12.0% from December 31, 2021. The Company’s focus on attracting the full banking relationship of small to medium sized businesses through an extensive suite of lending and low-cost deposit products continues to support core deposit growth.
The details of deposits are below:
June 30, 2022 March 31, 2022 December 31, 2021 (In thousands) Non-interest bearing deposits $ 52,036 $ 45,143 $ 44,894 NOW and demand accounts 455,776 425,766 363,419 Savings 358,166 367,177 364,932 Core deposits 865,978 838,086 773,245 Time deposits 430,696 444,936 473,795 Total deposits $ 1,296,674 $ 1,283,022 $ 1,247,040 Financial Performance Overview:
Second quarter of 2022 compared to the second quarter of 2021
Net interest income compared to the second quarter of 2021:
- Net interest income was $13.2 million, an increase of $3.3 million.
- Net interest margin increased by 84 basis points to 2.83%.
- Yield on average interest-earning assets increased 42 basis points to 3.19% while the cost of average interest-bearing deposits decreased 40 basis points to 0.31%.
- An increase of $120.7 million in average interest-bearing core deposits coupled with a $231.9 million decrease of higher cost average time deposits drove a 33 basis point improvement in the cost of deposits and a 39 basis point improvement in the cost of funds.
Non-interest expense compared to the second quarter of 2021:
- Non-interest expense was $13.0 million, an increase of $1.2 million. This primarily reflects an increase of $639 thousand in compensation and benefits costs, an increase of $430 thousand in fees for professional services due to higher audit and CECL implementation costs, and a lower recovery in the provision for commitments and letters of credit of $365 thousand.
Income tax expense compared to the second quarter of 2021:
- Income tax expense was $3 thousand compared to an income tax expense of $283 thousand for the prior year quarter.
Six months ended June 30, 2022 compared to the six months ended June 30, 2021
Net interest income compared to the six months ended June 30, 2021:
- Net interest income was $25.1 million, an increase of $5.6 million.
- Net interest margin increased by 69 basis points to 2.72%.
- Yield on average interest-earning assets increased 20 basis points to 3.09% while the cost of average interest-bearing deposits decreased 48 basis points to 0.30%.
- An increase of $116.3 million in average interest-bearing core deposits coupled with a $238.4 million decrease in higher cost average time deposits drove a 44 basis point improvement in the cost of deposits and a 47 basis point improvement in the cost of funds.
Non-interest expense compared to the six months ended June 30, 2021:
- Non-interest expense was $26.2 million, an increase of $2.1 million. This primarily reflects an increase of $1.5 million in compensation and benefits costs.
Income tax expense compared to the six months ended June 30, 2021:
- Income tax expense was $52 thousand compared to an income tax benefit of $268 thousand for the prior year period. The increase was driven by the $2.7 million increase in pre-tax income.
Balance Sheet Summary:
June 30, 2022 compared to December 31, 2021
Cash and cash equivalents:
- Cash and cash equivalents decreased $138.6 million compared to December 31, 2021 as the Company deployed cash primarily into higher yielding loans and securities.
Securities available-for-sale:
- Securities available-for-sale increased $27.3 million to $352.2 million as the Company invested primarily in residential mortgage-backed securities as interest rates rose.
- The rising rate environment contributed to a decline of $26.6 million in the net unrealized position of the portfolio.
Gross loans:
- Gross loans held for investment increased $143.1 million to $1.42 billion. Excluding PPP, gross loans increased by $158.4 million.
- Non-residential real estate loans increased $70.1 million, multifamily loans increased $63.9 million, and residential loans increased $29.2 million.
- Organic originations totaled $248.5 million, including originations of $131.1 million in multifamily loans and $86.3 million non-residential real estate loans. In addition, $73.4 million of conforming residential mortgages in New Jersey were purchased during the period.
Deposits and borrowings:
- Deposits totaled $1.30 billion, an increase of $49.6 million since December 31, 2021. Core deposits represented 66.8% of total deposits, compared to 62.0% at December 31, 2021 and 53.6% at June 30, 2021.
- FHLB borrowings increased by $20.0 million to $205.5 million.
Capital:
- Shareholders’ equity decreased by $17.2 million to $412.3 million. The decrease was primarily driven by an $18.4 million reduction in accumulated other comprehensive income reflecting the net impact that the current interest rate environment had on the Company’s available-for-sale securities and the swaps agreements used in our cash flow hedges. The decrease was partially offset by net income of $593 thousand for the six months ended June 30, 2022.
- Tangible equity to tangible assets was 20.97% and tangible common equity per share outstanding was $14.43.
- The Bank’s capital ratios remain above the FDIC’s “well capitalized” standards.
Asset quality:
- Non-performing loans totaled $10.0 million, or 0.70% of total loans compared to $12.0 million, or 0.94% of total loans at December 31, 2021, and $12.5 million, or 0.99% of total loans at June 30, 2021.
- The allowance for loan losses represented 0.98% of total loans compared to 1.13% at December 31, 2021 and 1.24% at June 30, 2021. The allowance for loan losses was 140.5% of non-performing loans compared to 120.4% at December 31, 2021 and 125.1% at June 30, 2021.
- The Company recorded a provision for loan losses of $594 thousand for the quarter ended June 30, 2022 driven by growth in the multifamily and non-residential portfolios and recorded a release of $358 thousand for the six months ended June 30, 2022 driven by significant pay downs within the construction and land portfolio, partially offset by growth in our multifamily and non-residential portfolios.
- Net charge-offs were $9 thousand for the quarter ended June 30, 2022 and $17 thousand for the six months ended June 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 presence in Bergen, Essex, Hudson, Morris, Passaic and Somerset counties, Blue Foundry Bank is a full-service, progressive 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 second quarter 2022 earnings announcement will be held today, Wednesday, July 27, 2022 at 11:00 a.m. (EDT). To listen to the live call, please dial 1-844-200-6205 (toll free), 1-646-904-5544 (local) or +1-929-526-1599 (international) and use access code 212089. The webcast (audio only) will be available on 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
201-972-8900Forward 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: conditions related to the global coronavirus pandemic that has and will continue to pose risks and could harm our business and results of operations; 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 loan 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; 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; 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 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 ConditionJune 30, 2022 March 31, 2022 December 31, 2021 (unaudited) (unaudited) (audited) (Dollars in Thousands) ASSETS Cash and cash equivalents $ 54,806 $ 101,562 $ 193,446 Securities available for sale, at fair value 352,183 375,614 324,892 Securities held to maturity (fair value of $26,928, $27,993 and $22,849
at June 30, 2022, March 31, 2022 and December 31, 2021, respectively)29,794 29,838 23,281 Other investments 11,337 10,182 10,182 Loans, net 1,414,223 1,328,021 1,273,184 Interest and dividends receivable 5,945 5,780 5,372 Premises and equipment, net 30,684 28,130 28,126 Right-of-use assets 24,163 24,811 25,457 Bank owned life insurance 21,892 21,776 21,662 Other assets 19,023 12,441 8,609 Total assets $ 1,964,050 $ 1,938,155 $ 1,914,211 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities Deposits $ 1,296,674 $ 1,283,022 $ 1,247,040 Advances from the Federal Home Loan Bank 205,500 185,500 185,500 Advances by borrowers for taxes and insurance 10,126 9,840 9,582 Lease liabilities 25,461 26,083 26,696 Other liabilities 13,996 13,496 15,922 Total liabilities 1,551,757 1,517,941 1,484,740 Shareholders’ equity Common stock $0.01 par value; 70,000,000 shares
authorized; 28,522,500 shares issued and outstanding285 285 285 Additional paid-in capital 282,154 282,100 282,006 Retained earnings 170,050 170,010 169,457 Unallocated common shares held by ESOP (21,449 ) (21,677 ) (21,905 ) Accumulated other comprehensive loss (18,747 ) (10,504 ) (372 ) Total shareholders’ equity 412,293 420,214 429,471 Total liabilities and shareholders’ equity $ 1,964,050 $ 1,938,155 $ 1,914,211 BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Statements of Operations
(Dollars in Thousands Except Per Share Data) (Unaudited)Three months ended Six months ended June 30,
2022March 31,
2022June 30,
2021June 30,
2022June 30,
2021(Dollars in thousands) Interest income: Loans $ 12,444 $ 11,656 $ 12,056 $ 24,100 $ 24,318 Taxable investment income 2,320 1,817 1,618 4,137 3,163 Non-taxable investment income 114 121 128 235 263 Total interest income 14,878 13,594 13,802 28,472 27,744 Interest expense: Deposits 950 882 2,379 1,832 5,197 Borrowed funds 766 773 1,515 1,539 3,039 Total interest expense 1,716 1,655 3,894 3,371 8,236 Net interest income 13,162 11,939 9,908 25,101 19,508 Provision (recovery of provision) for loan losses 594 (952 ) (553 ) (358 ) (1,361 ) Net interest income after provision for loan losses 12,568 12,891 10,461 25,459 20,869 Non-interest income: Fees and service charges 365 800 537 1,165 1,063 Gain on sales and calls of securities available for sale 14 — — 14 — Loss on premises and equipment — — (86 ) — (86 ) Other 115 127 169 242 310 Total other income 494 927 620 1,421 1,287 Non-interest expense: Compensation and employee benefits 7,008 6,924 6,369 13,932 12,391 Occupancy and equipment 1,914 1,881 2,043 3,795 3,996 Loss on assets held for sale — — — — 21 Data processing 1,393 1,478 1,885 2,871 3,652 Advertising 349 519 521 868 991 Professional services 976 1,291 546 2,267 1,943 Directors fees 126 136 136 262 277 Recovery of provision for commitments and letters of credit (108 ) (170 ) (473 ) (278 ) (704 ) Federal deposit insurance 99 78 129 177 254 Other 1,262 1,079 645 2,341 1,351 Total operating expenses 13,019 13,216 11,801 26,235 24,172 Income (loss) before income tax expense (benefit) 43 602 (720 ) 645 (2,016 ) Income tax expense (benefit) 3 49 283 52 (268 ) Net income (loss) $ 40 $ 553 $ (1,003 ) $ 593 $ (1,748 ) Basic and diluted earnings per share $ — $ 0.02 n/a $ 0.02 n/a Weighted average shares outstanding 26,366,324 26,343,508 n/a 26,354,979 n/a BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Financial Highlights
(Dollars in Thousands) (Unaudited)Three months ended June 30,
2022March 31,
2022December 31,
2021September 30,
2021June 30,
2021Performance Ratios (%): Return (loss) on average assets 0.01 0.12 (3.97 ) (2.77 ) (0.19 ) Return (loss) on average equity 0.04 0.52 (17.36 ) (15.15 ) (1.97 ) Interest rate spread(1) 2.71 2.50 2.50 1.96 1.84 Net interest margin(2) 2.83 2.62 2.63 2.15 1.99 Efficiency ratio (non-GAAP)(3) 96.13 104.04 110.59 105.58 116.58 Average interest-earning assets to average interest-bearing liabilities 131.52 131.77 132.04 133.42 119.87 Tangible equity to tangible assets(4) 20.97 21.68 22.42 22.14 7.92 Book value per share(5) $ 14.46 $ 14.73 $ 15.06 $ 15.72 n/a Tangible book value per share(6) $ 14.43 $ 14.72 $ 15.04 $ 15.70 n/a Asset Quality: Non-performing loans $ 9,998 $ 10,482 $ 11,983 $ 12,463 $ 12,466 Real estate owned, net $ — $ — $ — $ 624 $ 624 Non-performing assets $ 9,998 $ 10,482 $ 11,983 $ 13,087 $ 13,090 Allowance for loan losses to total loans (%) 0.98 1.00 1.13 1.22 1.24 Allowance for loan losses to non-performing loans (%) 140.53 128.46 120.38 122.35 125.08 Non-performing loans to total loans (%) 0.70 0.78 0.94 1.00 0.99 Non-performing assets to total assets (%) 0.51 0.54 0.63 0.65 0.51 Net charge-offs to average outstanding loans during the period (%) — % — % — % — % — % (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 $411.7 million, which exclude intangible assets ($630 thousand of capitalized software). Tangible assets equal $1.96 billion and exclude intangible assets. (5) Per share metrics computed using 28,522,500 total shares outstanding. (6) Tangible book value equals the Company’s tangible equity of $411.7 million divided by outstanding shares of 28,522,500. BLUE FOUNDRY BANCORP AND SUBSIDIARY
Analysis of Net Interest Income
(Dollars in Thousands) (Unaudited)Three Months Ended, June 30, 2022 March 31, 2022 June 30, 2021 Average
BalanceInterest Average
Yield/CostAverage
BalanceInterest Average
Yield/CostAverage
BalanceInterest Average
Yield/Cost(Dollars in thousands) Assets: Loans(1) $ 1,369,389 $ 12,444 3.64 % $ 1,280,678 $ 11,656 3.69 % $ 1,285,835 $ 12,056 3.76 % Mortgage-backed securities 205,387 1,066 2.08 % 171,912 722 1.70 % 155,566 761 1.96 % Other investment securities 208,958 1,144 2.20 % 198,736 1,020 2.08 % 132,949 726 2.19 % FHLB stock 10,121 116 4.60 % 9,942 116 4.73 % 16,102 192 4.79 % Cash and cash equivalents 74,242 108 0.58 % 188,706 80 0.17 % 408,162 67 0.07 % Total interest-bearing assets 1,868,097 14,878 3.19 % 1,849,974 13,594 2.98 % 1,998,614 13,802 2.77 % Non-interest earning assets 68,003 77,445 74,211 Total assets $ 1,936,100 $ 1,927,419 $ 2,072,825 Liabilities and shareholders' equity: NOW, savings, and money market deposits $ 800,918 312 0.16 % $ 760,369 235 0.13 % $ 680,262 289 0.17 % Time deposits 431,813 638 0.59 % 458,109 647 0.57 % 663,707 2,090 1.26 % Interest-bearing deposits 1,232,731 950 0.31 % 1,218,478 882 0.29 % 1,343,969 2,379 0.71 % FHLB advances 187,698 766 1.64 % 185,500 773 1.69 % 319,367 1,515 1.90 % Total interest-bearing liabilities 1,420,429 1,716 0.48 % 1,403,978 1,655 0.48 % 1,663,336 3,894 0.94 % Non-interest bearing deposits 48,763 42,402 161,804 Non-interest bearing other 46,688 48,273 43,569 Total liabilities 1,515,880 1,494,653 1,868,709 Total shareholders' equity 420,220 432,766 204,116 Total liabilities and shareholders' equity $ 1,936,100 $ 1,927,419 $ 2,072,825 Net interest income $ 13,162 11,939 $ 9,908 Net interest rate spread(2) 2.71 % 2.50 % 1.83 % Net interest margin(3) 2.83 % 2.62 % 1.99 % (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.Six Months Ended June 30, 2022 2021 Average
BalanceInterest Average
Yield/CostAverage
BalanceInterest Average
Yield/Cost(Dollars in thousands) Assets: Loans(1) $ 1,325,134 $ 24,100 3.67 % $ 1,291,048 $ 24,318 3.80 % Mortgage-backed securities 188,742 1,788 1.91 % 146,861 1,439 1.98 % Other investment securities 203,756 2,164 2.14 % 127,732 1,454 2.30 % FHLB stock 10,032 232 4.66 % 16,282 402 4.98 % Cash and cash equivalents 131,158 188 0.29 % 354,429 132 0.08 % Total interest-bearing assets 1,858,822 28,472 3.09 % 1,936,352 27,744 2.89 % Non-interest earning assets 72,945 72,912 Total assets $ 1,931,767 $ 2,009,264 Liabilities and shareholders' equity: NOW, savings, and money market deposits 780,609 548 0.14 % 664,293 593 0.18 % Time deposits 444,889 1,284 0.58 % 683,324 4,604 1.36 % Interest-bearing deposits 1,225,498 1,832 0.30 % 1,347,617 5,197 0.78 % FHLB advances 186,605 1,539 1.66 % 322,063 3,039 1.90 % Total interest-bearing liabilities 1,412,103 3,371 0.48 % 1,669,680 8,236 0.99 % Non-interest bearing deposits 46,213 89,116 Non-interest bearing other 47,482 45,588 Total liabilities 1,505,798 1,804,384 Total shareholders' equity 425,969 204,880 Total liabilities and shareholders' equity $ 1,931,767 $ 2,009,264 Net interest income $ 25,101 $ 19,508 Net interest rate spread(2) 2.62 % 1.88 % Net interest margin(3) 2.72 % 2.03 % (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)
(Dollars in Thousands Except Per Share Data) (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 loan losses, provision for commitments and letters of credit, and income tax expense while pre-provision net revenue does not.
Three months ended June 30,
2022March 31,
2022December 31,
2021September 30,
2021June 30,
2021(Dollars in thousands) Pre-provision net revenue (PPNR) and efficiency ratio, as adjusted: Net interest income $ 13,162 $ 11,939 $ 12,336 $ 11,104 $ 9,909 Other income 494 927 704 489 621 Operating expenses, as reported 13,019 13,216 17,380 33,118 11,802 Less: Fee on debt extinguishment — — 754 1,401 — Less: Loss on pension withdrawal — — 1,974 9,232 — Less: Charitable contribution — — — 9,000 — Less: Provision for commitments and letters of credit (108 ) (170 ) 148 1,245 (473 ) Less: Loss on assets held for sale — — 83 — — Operating expenses, as adjusted 13,127 13,386 14,421 12,240 12,275 Pre-provision net revenue (loss), as adjusted $ 529 $ (520 ) $ (1,381 ) $ (647 ) $ (1,746 ) Efficiency ratio, as adjusted 96.1 % 104.0 % 110.6 % 105.6 % 116.6 % Core deposits: Total deposits $ 1,296,674 $ 1,283,022 $ 1,247,040 $ 1,265,617 $ 2,008,068 Less: time deposits 430,696 444,936 473,795 521,510 639,043 Less: conversion deposits(1) — — — — 630,094 Core deposits $ 865,978 $ 838,086 $ 773,245 $ 744,107 $ 738,931 Core deposits to total deposits 66.8 % 65.3 % 62.0 % 58.8 % 53.6 % Tangible equity: Shareholders’ equity(2) (3) $ 412,293 $ 420,214 $ 429,472 $ 448,235 $ 204,913 Less: intangible assets 630 452 437 354 251 Tangible equity $ 411,663 $ 419,762 $ 429,035 $ 447,881 $ 204,662 Tangible book value per share: Tangible equity $ 411,663 $ 419,762 $ 429,035 $ 447,881 n/a Shares outstanding 28,522,500 28,522,500 28,522,500 28,522,500 n/a Tangible book value per share $ 14.43 $ 14.72 $ 15.04 $ 15.70 n/a (1) Conversion deposits represent deposits held in advance of the initial public offering. Given their temporary nature, they are removed from the core deposit ratio.
(2) The Company recorded a deferred tax asset valuation allowance of $16.8 million as of December 31, 2021.
(3) Accumulated other comprehensive income (AOCI) declined by $18.4 million in 2022, largely a result of the rising rate environment which negatively impacted the fair value of the Company’s available-for-sale investment portfolio