Blue Foundry Bancorp (BLFY) Q3 2024 earnings summary

Executive summary

• Reported a Q3 2024 net loss of $4.0 million, compared to $2.3 million in Q2 2024 and $1.4 million in Q3 2023, with a nine-month net loss of $9.2 million versus $4.5 million prior year.

• Tangible book value per share increased to $14.74, and capital and credit quality remain strong.

• Deposits grew 5.9% year-to-date, rising to $1.32 billion, with loans up $3.6 million from the prior quarter.

• Commercial loan pipeline is healthy, supporting a positive outlook for Q4 and the next year.

• Shareholders' equity declined 4.6% year-to-date, primarily due to share repurchases and net loss.

Financial highlights

• Net interest income for Q3 2024 was $9.1 million, down from $9.6 million in Q2 2024 and $9.9 million in Q3 2023, with margin compression due to higher funding costs.

• Net interest margin decreased to 1.82% from 1.96% in Q2 2024 and 1.94% in Q3 2023; net interest rate spread was 1.29%.

• Interest income rose 6.7% year-over-year, but interest expense increased 21% due to higher deposit and borrowing costs.

• Non-interest expense increased to $13.3 million, driven by higher compensation, professional services, and occupancy costs.

• No tax benefit recorded for losses due to a full valuation allowance on deferred tax assets ($22.2 million at quarter-end).

Outlook and guidance

• Management expects net interest margin improvement in Q4 as loans close and deposit rates reprice lower.

• Operating expenses for Q4 anticipated in the mid- to high-$13 million range.

• Sufficient liquidity to meet loan origination and credit line commitments, with available borrowing capacity of $255.7 million and strong capital ratios.

• Certificates of deposit maturing within one year total $689.3 million; most relationships expected to be retained.

• Focus remains on commercial portfolio growth, deposit gathering, and maintaining credit quality and capital strength.