• Blue Foundry Bancorp Reports Third Quarter 2022 Results

    ソース: Nasdaq GlobeNewswire / 26 10 2022 08:15:01   America/New_York

    RUTHERFORD, N.J., Oct. 26, 2022 (GLOBE NEWSWIRE) -- Blue Foundry Bancorp (NASDAQ:BLFY) (the “Company”), the holding company for Blue Foundry Bank (the “Bank”), today reported net income of $1.2 million, or $0.05 per diluted common share, for the three months ended September 30, 2022, compared to $40 thousand, or $0.00 per diluted common share, for the three months ended June 30, 2022, and a net loss of $15.0 million for the three months ended September 30, 2021.

    Net income was $1.8 million, or $0.07 per diluted common share, for the nine months ended September 30, 2022 compared to a net loss of $16.7 million for the nine months ended September 30, 2021.

    Pre-provision net revenue was $1.1 million for the quarter, an increase of $586 thousand compared to the prior quarter, and an increase of $1.8 million compared to the prior year quarter.

    “Our third quarter performance reflects the positive momentum achieved through the execution of our strategic priorities,” said James D. Nesci, President and Chief Executive Officer. “Strong loan growth and core deposit growth coupled with a continued focus on expense management drove a significant improvement in operating results.”

    Highlights for the third quarter of 2022:

    • Gross loans grew by $68.1 million, or 4.8%, compared to the linked quarter, excluding Paycheck Protection Program (“PPP”) loans, led by commercial real estate products.
    • Loan originations totaled $171.6 million for the quarter, including originations of $130.1 million in multifamily loans, $28.6 million in construction loans, and $7.0 million in non-residential loans.
    • Core deposits increased $35.0 million, or 4.0%, compared to the linked quarter. Core deposits now represent 71% of total deposits, compared to 59% one year prior.
    • The Company recorded a release of provision for loan losses of $419,000 and a provision for commitments and letters of credit of $170,000.
    • Non-interest expense, excluding the provision for commitments and letters of credit, increased $372 thousand or 2.8% sequentially driven by expenses related to the stockholder-approved equity awards for directors, and one-time charges incurred for investor-related activities and an anticipated branch sale.
    • Net interest income for the quarter was $13.8 million, an increase of $653 thousand, or 5.0%, compared to the prior quarter, and an increase of $2.7 million, or 24.4%, compared to the prior year quarter.
    • Net interest margin was 2.84%, a one basis point increase compared to the prior quarter and a 69 basis point increase from the prior year quarter.
    • Accumulated other comprehensive income declined $8.8 million as the rising interest rate environment negatively impacted the fair value of the Company’s available-for-sale investment portfolio.
    • During the quarter, 667 thousand shares were repurchased at a weighted average cost of $11.67.
    • At our annual meeting, shareholders approved the 2022 Blue Foundry Bancorp Equity Incentive Plan. Accordingly, grants to directors were made on August 26, 2022. These grants cost approximately $320 thousand per quarter.
    • In October, the Board of Directors approved stock option grants for officers. These grants are expected to cost approximately $300 thousand per quarter.

    Lending Franchise

    The Company continues to diversify its lending franchise by focusing on growing the commercial portfolio. During the third quarter of 2022, gross loans increased by $66.6 million primarily due to strong growth within the Company’s multifamily portfolio.

    The details of the loan portfolio are below:

     September 30,
    2022    		 June 30,
    2022    		 March 31,
    2022    		 December 31, 2021
            
     (In thousands)
    Residential one-to-four family$591,728  $590,151  $579,083  $560,976 
    Multifamily 679,474   579,183   517,037   515,240 
    Non-residential real estate 185,450   211,683   187,310   141,561 
    Construction and land 12,981   21,010   18,613   23,419 
    Junior liens 16,653   16,421   18,071   18,464 
    Commercial and industrial (including PPP) 4,738   5,957   16,201   21,563 
    Consumer and other 39   47   37   87 
    Total gross loans 1,491,063   1,424,452   1,336,352   1,281,310 
    Deferred fees, costs, premiums and discounts, net 3,374   3,821   5,134   6,299 
    Total loans 1,494,437   1,428,273   1,341,486   1,287,609 
    Allowance for loan losses (13,600)  (14,050)  (13,465)  (14,425)
    Loans receivable, net$1,480,837  $1,414,223  $1,328,021  $1,273,184 

    The commercial and industrial portfolio includes PPP loans, net of deferred fees, which totaled $557 thousand at September 30, 2022, $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 September 30, 2022, core deposits totaled $900.9 million, an increase of $127.7 million or 16.5% 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 deposit products continues to support core deposit growth.

    The details of deposits are below:

     September 30,
    2022    		 June 30,
    2022    		 March 31,
    2022    		 December 31,
    2021
            
     (In thousands)
    Non-interest bearing deposits$59,636 $52,036 $45,143 $44,894
    NOW and demand accounts 385,334  455,776  425,766  363,419
    Savings 455,979  358,166  367,177  364,932
    Core deposits 900,949  865,978  838,086  773,245
            
    Time deposits 365,548  430,696  444,936  473,795
    Total deposits$1,266,497 $1,296,674 $1,283,022 $1,247,040

    Financial Performance Overview:        

    Third quarter of 2022 compared to the third quarter of 2021

    Net interest income compared to the third quarter of 2021:

    • Net interest income was $13.8 million, an increase of $2.7 million.
    • Net interest margin increased by 69 basis points to 2.84%.
    • Yield on average interest-earning assets increased 64 basis points to 3.37% while the cost of average interest-bearing deposits decreased six basis points to 0.46%, reflecting a shift to core deposits.
    • Average loans increased by $213.8 million and average interest-bearing deposits decreased by $31.0 million.

    Non-interest expense compared to the third quarter of 2021:

    • Non-interest expense was $13.7 million, a decrease of $19.4 million driven by the absence in the 2022 quarter of non-recurring expenses of: a $9.2 million loss on pension withdrawal, a $9.0 million charitable contribution, and $1.4 million in debt extinguishment costs.
    • Excluding non-recurring items, non-interest expense increased $184 thousand. An increase of $1.4 million in compensation and benefits costs and an increase of $137 thousand in fees for professional services due to higher audit and CECL implementation costs were partially offset by a lower provision for commitments and letters of credit of $1.1 million and a reduction of $478 thousand in advertising and $222 thousand in data processing.

    Income tax expense compared to the third quarter of 2021:

    • Income tax expense was $123 thousand compared to an income tax benefit of $6.2 million for the prior year quarter. This 9.0% effective tax rate for the quarter reflects the Company’s current tax position. The company had previously established a full valuation allowance on its deferred tax assets. The prior year quarter effective tax benefit rate of 29.3% reflects the Company’s tax position prior to the full valuation allowance.

    Nine months ended September 30, 2022 compared to the nine months ended September 30, 2021

    Net interest income compared to the nine months ended September 30, 2021:

    • Net interest income was $38.9 million, an increase of $8.3 million.
    • Net interest margin increased by 69 basis points to 2.76%.
    • Yield on average interest-earning assets increased 35 basis points to 3.18% while the cost of average interest-bearing deposits decreased 35 basis points to 0.35%, reflecting a shift to core deposits.
    • Average loans increased by $98.0 million and average interest-bearing deposits decreased by $80.8 million.

    Non-interest expense compared to the nine months ended September 30, 2021:

    • Non-interest expense was $39.9 million, a decrease of $17.4 million driven by the absence in the 2022 of non-recurring expenses of: a $9.2 million loss on pension withdrawal, a $9.0 million charitable contribution, and $1.4 million in debt extinguishment costs.
    • Excluding non-recurring items, non-interest expense increased $2.2 million. An increase of $2.9 million in compensation and benefits costs, $1.1 million in public company and investor-related expenses, and an increase of $460 thousand in fees for professional services due to higher audit and CECL implementation costs, were partially offset by a reduction of $1.0 million in data processing and $602 thousand in advertising, and a lower provision for commitments and letters of credit of $649 thousand.

    Income tax expense compared to the nine months ended September 30, 2021:

    • Income tax expense was $175 thousand compared to an income tax benefit of $6.5 million for the prior year period. The year-to-date effective tax rate of 8.7% reflects the Company’s current tax position. The company had previously established a full valuation allowance on its deferred tax assets. The effective tax benefit rate of 27.9% for the nine months ended September 30, 2021 reflects the Company’s tax position prior to the full valuation allowance.

    Balance Sheet Summary:

    September 30, 2022 compared to December 31, 2021

    Cash and cash equivalents:

    • Cash and cash equivalents decreased $136.1 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 decreased $3.6 million to $321.3 million as purchases of securities were more than offset by the fair value decline in the portfolio, as well as amortization and payoffs.
    • The rising rate environment contributed to a $39.7 million decline in the net unrealized position of the portfolio.

    Gross loans:

    • Gross loans held for investment increased $209.8 million to $1.49 billion. Excluding PPP, gross loans increased by $226.5 million.
    • Multifamily loans increased $164.2 million, non-residential real estate loans increased $43.9 million, and residential loans increased $30.8 million.
    • Originations totaled $420.0 million, including originations of $261.2 million in multifamily loans, $93.3 million in non-residential real estate loans, and $42.3 million in construction loans. In addition, $88.4 million of conforming residential mortgages in New Jersey were purchased during the period.

    Deposits and borrowings:

    • Deposits totaled $1.27 billion, an increase of $19.5 million since December 31, 2021. Core deposits represented 71.1% of total deposits, compared to 62.0% at December 31, 2021 and 58.8% at September 30, 2021.
    • FHLB borrowings increased by $110.0 million to $295.5 million to support loan growth.

    Capital:

    • Shareholders’ equity decreased by $32.1 million to $397.3 million. The decrease was primarily driven by a $27.2 million reduction in accumulated other comprehensive income reflecting the net impact that the interest rate environment had on the Company’s available-for-sale securities and the swap agreements used in our cash flow hedges partially offset by an increase of $1.7 million in retained earnings.
    • The Company repurchased $7.8 million of shares and allocated $3.5 million to fund the shareholder-approved equity grants.
    • Tangible equity to tangible assets was 19.72% and tangible common equity per share outstanding was $14.09.
    • The Bank’s capital ratios remain above the FDIC’s “well capitalized” standards.

    Asset quality:

    • Non-performing loans totaled $8.4 million, or 0.56% of total loans compared to $12.0 million, or 0.94% of total loans at December 31, 2021, and $12.5 million, or 1.00% of total loans at September 30, 2021.
    • The allowance for loan losses represented 0.91% of total loans compared to 1.13% at December 31, 2021 and 1.22% at September 30, 2021. The allowance for loan losses was 161.7% of non-performing loans compared to 120.4% at December 31, 2021 and 122.3% at September 30, 2021.
    • The Company recorded a net release of provision for loan losses of $419 thousand for the quarter ended September 30, 2022 and $777 thousand for the nine months ended September 30, 2022 driven by significant pay downs within the construction and land portfolio, partially offset by growth in our multifamily portfolio.
    • Net charge-offs were $31 thousand for the quarter ended September 30, 2022 and $48 thousand for the nine months ended 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 and Somerset 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 2022 earnings announcement will be held today, Wednesday, October 26, 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 206943. 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
    201-972-8900

    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: 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 Condition

     September 30, 2022 June 30, 2022 December 31, 2021
     (unaudited) (unaudited) (audited)
     (Dollars in Thousands)
    ASSETS     
    Cash and cash equivalents$57,324 $54,806 $193,446
    Securities available for sale, at fair value 321,320  352,183  324,892
    Securities held to maturity (fair value of $26,344, $26,928 and $22,849
    at September 30, 2022, June 30, 2022 and December 31, 2021, respectively)    		 30,749  29,794  23,281
    Other investments 15,432  11,337  10,182
    Loans, net 1,480,837  1,414,223  1,273,184
    Interest and dividends receivable 6,431  5,945  5,372
    Premises and equipment, net 29,992  30,684  28,126
    Right-of-use assets 25,537  24,163  25,457
    Bank owned life insurance 22,012  21,892  21,662
    Other assets 22,284  19,023  8,609
    Total assets$2,011,918 $1,964,050 $1,914,211
          
    LIABILITIES AND SHAREHOLDERS’ EQUITY     
    Liabilities     
    Deposits$1,266,497 $1,296,674 $1,247,040
    Advances from the Federal Home Loan Bank 295,500  205,500  185,500
    Advances by borrowers for taxes and insurance 10,926  10,126  9,582
    Lease liabilities 26,875  25,461  26,696
    Other liabilities 14,782  13,996  15,922
    Total liabilities 1,614,580  1,551,757  1,484,740
    Shareholders’ equity 397,338  412,293  429,471
    Total liabilities and shareholders’ equity$2,011,918 $1,964,050 $1,914,211



    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, 2022
    		 June 30, 2022
    		 September 30, 2021
    		 September 30, 2022
    		 September 30, 2021
         
              
     (Dollars in thousands)
    Interest income:         
    Loans$13,692  $12,444  $12,044  $37,792  $36,362 
    Taxable investment income 2,571   2,320   1,901   6,708   5,064 
    Non-taxable investment income 109   114   128   344   392 
    Total interest income 16,372   14,878   14,073   44,844   41,818 
    Interest expense:         
    Deposits 1,424   950   1,651   3,256   6,848 
    Borrowed funds 1,133   766   1,318   2,672   4,357 
    Total interest expense 2,557   1,716   2,969   5,928   11,205 
    Net interest income 13,815   13,162   11,104   38,916   30,613 
    (Release of) provision for loan losses (419)  594   (338)  (777)  (1,699)
    Net interest income after provision for loan losses 14,234   12,568   11,442   39,693   32,312 
    Non-interest income:         
    Fees and service charges 650   365   347   1,815   1,410 
    Gain on sales and calls of securities available for sale —   14   —   14   — 
    Other 149   115   142   391   365 
      Total other income 799   494   489   2,220   1,775 
    Non-interest expense:         
    Compensation and employee benefits 7,302   7,008   5,931   21,234   18,321 
    Loss on pension withdrawal —   —   9,232   —   9,232 
    Occupancy and equipment 1,921   1,914   1,853   5,716   5,849 
    Data processing 1,559   1,393   1,781   4,430   5,432 
    Debt extinguishment costs —   —   1,401   —   1,401 
    Advertising 125   349   603   993   1,595 
    Professional services 1,012   976   875   3,279   2,819 
    Directors fees 131   126   136   393   413 
    Provision (release of provision) for commitments and letters of credit 170   (108)  1,245   (108)  541 
    Federal deposit insurance 98   99   130   275   384 
    Contribution to Charitable Foundation —   —   9,000   —   9,000 
    Other 1,351   1,262   931   3,692   2,303 
      Total operating expenses 13,669   13,019   33,118   39,904   57,290 
    Income (loss) before income tax expense (benefit) 1,364   43   (21,187)  2,009   (23,203)
    Income tax expense (benefit) 123   3   (6,217)  175   (6,485)
    Net income (loss)$1,241  $40  $(14,970) $1,834  $(16,718)
    Basic and diluted earnings (loss) per share$0.05  $—  $(0.68) $0.07  n/a
    Weighted average shares outstanding-basic 26,128,851   26,366,324   21,979,861   26,278,775  n/a
    Weighted average shares outstanding-diluted 26,246,039   26,366,324   21,979,861   26,318,267  n/a



    BLUE FOUNDRY BANCORP AND SUBSIDIARY
    Consolidated Financial Highlights
    (Dollars in Thousands Except Per Share Data) (Unaudited)

     Three months ended
     September 30,
    2022    		 June 30,
    2022    		 March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021
    Performance Ratios (%):         
    Return (loss) on average assets 0.25  0.01  0.12  (3.97)  (2.77)
    Return (loss) on average equity 1.20  0.04  0.52  (17.36)  (15.15)
    Interest rate spread (1) 2.68  2.71  2.50  2.50   1.96 
    Net interest margin (2) 2.84  2.83  2.62  2.63   2.15 
    Efficiency ratio (non-GAAP) (3) 92.37  96.13  104.04  110.59   105.58 
    Average interest-earning assets to average interest-bearing liabilities 130.30  131.52  131.77  132.04   133.42 
    Tangible equity to tangible assets (4) 19.72  20.97  21.68  22.42   22.14 
    Book value per share (5)$14.11 $14.46 $14.73 $15.06  $15.72 
    Tangible book value per share (6)$14.09 $14.43 $14.72 $15.04  $15.70 
              
    Asset Quality:         
    Non-performing loans$8,409 $9,998 $10,482 $11,983  $12,463 
    Real estate owned, net$— $— $— $—  $624 
    Non-performing assets$8,409 $9,998 $10,482 $11,983  $13,087 
    Allowance for loan losses to total loans (%) 0.91  0.98  1.00  1.13   1.22 
    Allowance for loan losses to non-performing loans (%) 161.73  140.53  128.46  120.38   122.35 
    Non-performing loans to total loans (%) 0.56  0.70  0.78  0.94   1.00 
    Non-performing assets to total assets (%) 0.42  0.51  0.54  0.63   0.65 
    Net charge-offs to average outstanding loans during the period (%) 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 $396.6 million, which exclude intangible assets ($760 thousand of capitalized software).
    Tangible assets equal $2.01 billion and exclude intangible assets.
    (5) Per share metrics computed using 28,155,292 total shares outstanding.
    (6) Tangible book value equals the Company’s tangible equity of $396.6 million divided by outstanding shares of 28,155,292.



    BLUE FOUNDRY BANCORP AND SUBSIDIARY
    Analysis of Net Interest Income
    (Dollars in Thousands) (Unaudited)

     Three Months Ended,
     September 30, 2022 June 30, 2022 September 30, 2021
     Average Balance Interest Average
    Yield/Cost    		 Average Balance Interest Average
    Yield/Cost    		 Average Balance Interest Average
    Yield/Cost
                      
     (Dollars in thousands)
    Assets:                 
    Loans (1)$1,465,114 $13,692 3.71% $1,369,389 $12,444 3.64% $1,251,343 $12,044 3.86%
    Mortgage-backed securities 197,406  1,055 2.12%  205,387  1,066 2.08%  165,170  762 1.85%
    Other investment securities 204,506  1,230 2.39%  208,958  1,144 2.20%  163,393  871 2.14%
    FHLB stock 13,141  139 4.20%  10,121  116 4.60%  14,442  183 5.09%
    Cash and cash equivalents 49,163  256 2.07%  74,242  108 0.58%  473,797  213 0.18%
      Total interest-bearing assets 1,929,330  16,372 3.37%  1,868,097  14,878 3.19%  2,068,145  14,073 2.73%
      Non-interest earning assets 61,264      68,003      97,287    
        Total assets$1,990,594     $1,936,100     $2,165,432    
    Liabilities and shareholders' equity:                 
    NOW, savings, and money market deposits$831,191  759 0.36% $808,253  312 0.15% $687,470  242 0.14%
    Time deposits 405,823  665 0.65%  431,813  638 0.59%  580,499  1,409 0.97%
      Interest-bearing deposits 1,237,014  1,424 0.46%  1,240,066  950 0.31%  1,267,969  1,651 0.52%
    FHLB advances 243,647  1,133 1.84%  187,698  766 1.64%  282,153  1,318 1.87%
      Total interest-bearing liabilities 1,480,661  2,557 0.69%  1,427,763  1,716 0.48%  1,550,122  2,969 0.77%
    Non-interest bearing deposits 49,869      41,429      176,045    
    Non-interest bearing other 48,103      46,688      42,907    
      Total liabilities 1,578,633      1,515,880      1,769,074    
    Total shareholders' equity 411,961      420,220      396,358    
    Total liabilities and shareholders' equity$1,990,594     $1,936,100     $2,165,432    
    Net interest income  $13,815      13,162     $11,104  
    Net interest rate spread (2)    2.68%     2.71%     1.96%
    Net interest margin (3)    2.84%     2.83%     2.15%

    (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.

     Nine Months Ended September 30,
      2022   2021 
     Average Balance Interest Average
    Yield/Cost    		 Average Balance Interest Average
    Yield/Cost
                
     (Dollars in thousands)
    Assets:           
    Loans (1)$1,372,306 $37,792 3.68% $1,274,274 $36,362 3.82%
    Mortgage-backed securities 191,662  2,842 1.98%  153,031  2,201 1.92%
    Other investment securities 204,009  3,395 2.22%  139,909  2,324 2.22%
    FHLB stock 11,080  371 4.48%  15,662  585 5.00%
    Cash and cash equivalents 103,526  444 0.57%  394,656  346 0.12%
      Total interest-bearing assets 1,882,583  44,844 3.18%  1,977,532  41,818 2.83%
      Non-interest earning assets 69,008      84,360    
        Total assets$1,951,591     $2,061,892    
    Liabilities and shareholders' equity:           
    NOW, savings, and money market deposits 799,762  1,323 0.22%  663,581  835 0.17%
    Time deposits 431,724  1,933 0.60%  648,672  6,013 1.24%
      Interest-bearing deposits 1,231,486  3,256 0.35%  1,312,253  6,848 0.70%
    FHLB advances 205,828  2,672 1.74%  308,614  4,357 1.89%
      Total interest-bearing liabilities 1,437,314  5,928 0.55%  1,620,867  11,205 0.92%
    Non-interest bearing deposits 45,338      126,933    
    Non-interest bearing other 47,691      44,684    
      Total liabilities 1,530,343      1,792,484    
    Total shareholders' equity 421,248      269,408    
    Total liabilities and shareholders' equity$1,951,591     $2,061,892    
    Net interest income  $38,916     $30,613  
    Net interest rate spread (2)    2.64%     1.91%
    Net interest margin (3)    2.76%     2.07%

    (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
     September 30,
    2022    		 June 30,
    2022    		 March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021
              
     (Dollars in thousands)
    Pre-provision net revenue (PPNR) and efficiency ratio, as adjusted:         
    Net interest income$13,815  $13,162  $11,939  $12,336  $11,104 
    Other income 799   494   927   704   489 
    Operating expenses, as reported 13,669   13,019   13,216   17,380   33,118 
    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 170   (108)  (170)  148   1,245 
    Less: Loss on assets held for sale —   —   —   83   — 
    Operating expenses, as adjusted 13,499   13,127   13,386   14,421   12,240 
    Pre-provision net revenue (loss), as adjusted$1,115  $529  $(520) $(1,381) $(647)
    Efficiency ratio, as adjusted 92.4%  96.1%  104.0%  110.6%  105.6%
              
    Core deposits:         
    Total deposits$1,266,497  $1,296,674  $1,283,022  $1,247,040  $1,265,617 
    Less: time deposits 365,548   430,696   444,936   473,795   521,510 
    Core deposits$900,949  $865,978  $838,086  $773,245  $744,107 
    Core deposits to total deposits 71.1%  66.8%  65.3%  62.0%  58.8%
              
    Tangible equity:         
    Shareholders’ equity (1) (2)$397,338  $412,293  $420,214  $429,472  $448,235 
    Less: intangible assets 760   630   452   437   354 
    Tangible equity$396,578  $411,663  $419,762  $429,035  $447,881 
              
    Tangible book value per share:         
    Tangible equity$396,578  $411,663  $419,762  $429,035  $447,881 
    Shares outstanding 28,155,292   28,522,500   28,522,500   28,522,500   28,522,500 
    Tangible book value per share$14.09  $14.43  $14.72  $15.04   15.70 

    (1) The Company recorded a deferred tax asset valuation allowance of $16.8 million as of December 31, 2021.
    (2) Accumulated other comprehensive income (AOCI) declined by $32.1 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.


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