Blue Foundry Bancorp (BLFY) Q2 2024 earnings summary

Executive summary

• Net loss of $2.3 million for Q2 2024, improving from $2.8 million loss in Q1 2024 and compared to $1.8 million loss in Q2 2023; six-month net loss was $5.2 million versus $3.0 million prior year.

• Deposit growth continued, with commercial deposits up 9% year-to-date and consumer deposits up 6% through the branch network; total deposits increased 5.3% to $1.31 billion.

• Net interest margin expanded sequentially to 1.96% in Q2 2024, but down from 2.17% in Q2 2023, with net interest income at $9.6 million.

• Repurchased 386,352 shares at an average price of $8.84, enhancing shareholder value.

• Maintained strong capital position and access to liquidity.

Financial highlights

• Interest income for Q2 2024 was $21.3 million, up 7.7% year-over-year and 2.2% from Q1 2024; interest expense rose to $11.7 million.

• Net interest margin increased 4 basis points sequentially to 1.96%, but declined from 2.17% in Q2 2023.

• Non-interest income increased 41% year-over-year to $536 thousand, mainly from a gain on sale of real estate owned.

• Non-interest expense was $13.2 million, up $247 thousand year-over-year, mainly due to higher compensation and occupancy costs.

• No tax benefit recorded due to a full valuation allowance on deferred tax assets.

Outlook and guidance

• Net interest margin expected to remain stable for the rest of 2024, with potential moderate movement depending on rates and asset growth.

• No Fed rate cuts assumed until late Q4 2024 in margin guidance.

• Operating expenses for Q3 2024 projected in the mid- to high-$13 million range, with increases tied to compensation and hiring.

• Management remains focused on deposit growth and commercial loan portfolio diversification.

• Sufficient liquidity to meet loan origination and credit commitments, with available borrowing capacity of $360.5 million.