Blue Foundry Bancorp (BLFY) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals mixed signals: while there is improvement in net loss and net interest margin, concerns about rising expenses and nonperforming loans persist. The Q&A highlights management's cautious stance on future guidance, and while there are positive developments like loan growth and share buybacks, the lack of clear future guidance tempers optimism. Given these factors, a neutral sentiment is appropriate, with the stock price likely to remain stable in the near term.
Key Financial Performance
Quarterly Net Loss $1.9 million, improved compared to the prior quarter's $2 million loss. Improvement driven by an increase in net interest income, partially offset by an increase in provision for credit losses and operating expenses.
Quarterly Pre-Provision Net Loss $1.3 million, improved compared to the prior quarter.
Deposits Increased by $77.1 million. Core deposits grew by $18.6 million, and broker deposits increased by $50 million. Growth supported loan growth and managed funding costs.
Loans Grew by $41.9 million. Commercial portfolio grew by $7.2 million, driven by $81.3 million in originations, offset by $66.8 million in payoffs. Consumer loan portfolio increased by $38 million, supported by purchases of unsecured consumer loans with credit reserves.
Net Interest Margin Expanded by 6 basis points to 2.34%, supported by a 9 basis point increase in asset yields and a 4 basis point reduction in the cost of liability.
Net Interest Income $12.2 million, up $551,000 from the prior quarter, representing an 11.8% annualized increase.
Tangible Book Value Per Share Increased to $15.14 per share. Over 837,000 shares repurchased at a weighted average price of $9.09 per share, below tangible book value.
Liquidity and Capital $423 million in borrowing capacity and $178 million in unencumbered securities. Tangible equity to tangible assets stood at 14.58%. Total nonperforming loans increased to $11.4 million from $6.3 million in the prior quarter.
Provision for Credit Loss $589,000, driven by deterioration in economic forecasts. Allowance for credit loss was 0.81% of gross loans, up 1 basis point from the prior quarter.
Non-Interest Expense Increased by $347,000 due to higher compensation and benefit expenses and higher professional services expenses.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Loan Growth: Loans grew by $41.9 million, driven by a $7.2 million increase in the commercial portfolio and a $38 million increase in the consumer loan portfolio. The commercial portfolio saw strong origination activity of $81.3 million, including $40 million in owner-occupied CRE and C&I loans, offset by $66.8 million in payoffs. The consumer loan portfolio growth was supported by purchases of unsecured consumer loans with credit reserves.
Deposit Growth: Deposits increased by $77.1 million, with core deposits growing by $18.6 million and broker deposits increasing by $50 million. Year-to-date, core deposits grew by over 10% and commercial deposits by over 17%.
Net Interest Margin Expansion: Net interest margin expanded by 6 basis points to 2.34%, supported by a 9 basis point increase in asset yields and a 4 basis point reduction in the cost of liabilities. Net interest income increased by $551,000 to $12.2 million.
Capital Management: Tangible book value per share increased to $15.14. The company repurchased over 837,000 shares at a weighted average price of $9.09 per share, below the tangible book value. Liquidity and capital remain strong, with $423 million in borrowing capacity and $178 million in unencumbered securities.
Portfolio Diversification: The company focused on diversifying its loan portfolio to enhance risk-adjusted returns, with a healthy loan pipeline of over $41 million in executed letters of intent, primarily in commercial lending, at anticipated weighted average rates of about 7%.
Economic Forecast Adjustments: The allowance for credit loss increased to 0.81% of gross loans, reflecting changes in economic forecasts. A $5.3 million multifamily loan was added to nonperforming loans, increasing total nonperforming loans to $11.4 million.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Net Loss: The company reported a net loss of $1.9 million for the third quarter, which, while an improvement from the prior quarter, still reflects ongoing financial challenges.
Provision for Credit Losses: The provision for credit losses increased to $589,000, driven by deteriorating economic forecasts, indicating potential future credit risks.
Nonperforming Loans: Nonperforming loans increased to $11.4 million, up from $6.3 million in the prior quarter, reflecting a rise in credit risk and potential challenges in loan recovery.
Operating Expenses: Non-interest expenses increased by $347,000, primarily due to higher compensation and professional services expenses, which could pressure profitability.
Economic Forecasts: Deterioration in economic forecasts has influenced credit loss provisions and could pose broader risks to financial performance.
Broker Deposits: The company increased broker deposits by $50 million to manage funding costs, which may expose it to higher interest rate risks if market conditions change.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Net Interest Margin: The company expects downward rate movements, which will benefit funding costs and anticipated repricing in the loan portfolio, leading to a favorable impact on net interest margin over time.
Loan Portfolio: The loan pipeline remains healthy with over $41 million in executed letters of intent, primarily in commercial lending, with anticipated weighted average rates of about 7%.
Capital and Liquidity: The company remains well-capitalized with robust capital and ample liquidity, positioning it for continued growth.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Share Repurchase: During the quarter, we repurchased over 837,000 shares at a weighted average price of $9.09 per share, well below our tangible book value. Since instituting share repurchases, we have repurchased 8.65 million shares.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Can you talk about how you've responded on the deposit side and your expectations for matching the Fed as rates continue to come down?
A:The company has taken advantage of broker deposits to manage funding costs and swapped them for lower rates. They are focusing on core deposit growth and deemphasizing CDs, aiming to lower deposit costs while being responsive to market conditions. Additionally, there is a shift from CDs to money market products.
Q:What benefit could you get from repricing CDs over the coming quarters in terms of magnitude and yield pickup?
A:The company has shortened the duration of CDs to 5 months, with most roll-offs expected in January and February. They anticipate benefits in 2026 from managing core deposits and lowering rates, but do not expect a significant pickup in Q4.
Q:What are your near or medium-term expectations for the margin, and how does multifamily repricing impact this?
A:The company expects margins to remain relatively flat in Q4, with repricing activity picking up in 2026. Approximately $45 million in sub-4% assets will reprice in the first half of 2026, and another $35-$40 million in sub-3.75% assets will reprice in the latter half. They anticipate a net interest margin pickup in 2026.
Q:Could the net interest margin pickup next year look like what you achieved this quarter?
A:The net interest margin pickup will depend on repricing and new product production, which are influenced by market conditions and strategic planning. It is difficult to predict exact outcomes at this time.
Q:Can you discuss opportunities in commercial loan growth and how the pipeline looks?
A:The company is deemphasizing multifamily loans unless strategically necessary and focusing on C&I loans to build full relationships, including deposits. The pipeline includes over $41 million in letters of intent with rates above 7%, with less than $6 million in multifamily loans.
Q:What is a reasonable level of expense growth to expect for the company in Q4 and 2026?
A:For Q4, expenses are expected to be in the high 13% to low 14% range, with some elevation due to compensation and professional services. The company is not prepared to provide guidance for 2026 as they are still working on strategic planning.
Q:Is 7%-8% still the range for the structured consumer loan portfolio?
A:Yes, the company confirms that 7%-8% is still the range for the structured consumer loan portfolio.
Q:How do you view buybacks given your strong capital position and trading below tangible book?
A:The company views buybacks as a good use of capital. They have 730,000 shares remaining under the current plan but do not expect to replicate the high buyback activity seen in the last quarter.
Q:Review of Unclear Management Responses
A:Management avoided providing specific guidance for 2026 expenses, citing ongoing strategic planning. They also did not provide a clear prediction for net interest margin pickup next year, stating it depends on market conditions and strategic initiatives.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Blue Foundry
CEO today
CI payoff
CRE CI
Capital book
Deposits Loans
Foundry rate
Instructions speaker
Liquidity capital
Loans interest
Officer review
activity owner
anticipated rate
approach core
asset capital
asset yield
capacity security
capital end
capital ratio
capital shareholder
consumer loan
core deposit
cost liability
creation Deposits
credit risk
date relationship
estate consumer
expansion estate
focus relationship
funding repricing
income capital
increase asset
lending anticipated
liability interest
liquidity focus
loan expansion
loss objective
margin basis
margin financials
margin progress
movement funding
BLFY Transcript
Blue Foundry Bancorp (BLFY) Q3 2025 Earnings Call Transcript
Unknown10-29
The earnings call reveals mixed signals: while there is improvement in net loss and net interest margin, concerns about rising expenses and nonperforming loans persist. The Q&A highlights management's cautious stance on future guidance, and while there are positive developments like loan growth and share buybacks, the lack of clear future guidance tempers optimism. Given these factors, a neutral sentiment is appropriate, with the stock price likely to remain stable in the near term.
Blue Foundry Bancorp (BLFY) Q2 2025 Earnings Call Transcript
Unknown7-30
The earnings call presents a mixed picture. Financial performance shows improvements in net interest income and loan growth, but there's a net loss and slight increase in nonperforming assets. The Q&A indicates limited net interest margin expansion in the near term and vague responses on profitability strategies, suggesting uncertainty. Positive aspects include tangible book value increase and disciplined capital management. Overall, the sentiment is balanced, leading to a neutral rating.
Blue Foundry Bancorp (BLFY) Q1 2025 Earnings Call Transcript
Unknown4-30
The earnings call reveals mixed signals: strong net interest income growth and share repurchases are positive, but the net loss and competitive pressures pose concerns. The Q&A section highlights potential margin expansion and continued share buybacks, but management's lack of clarity on certain metrics may worry investors. Overall, the positive and negative factors balance out, leading to a neutral sentiment.
Earnings call transcript: Blue Foundry Bancorp beats Q1 2025 EPS forecast
Unknown4-30
The earnings call presents a mixed picture: while there are positives like increased net interest income, share repurchases, and improved tangible book value, challenges such as a net loss, rising nonperforming assets, and potential regulatory and liquidity risks temper optimism. The Q&A reveals some avoidance in providing details, suggesting potential uncertainties. Overall, the neutral sentiment reflects balanced positive and negative factors, with no strong catalysts to drive significant stock price movement in either direction.
BLFY Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
