Earnings call transcript: Blue Foundry Bancorp beats Q1 2025 EPS forecast
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Overview
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.
Key Financial Performance
Net Loss $2,700,000 (13¢ per diluted share), similar to the prior quarter.
Net Interest Income Increased by $1,300,000 or 13.4%, driven by a 27 basis point expansion in net interest margin.
Interest Income Rose by $928,000 primarily due to loan growth.
Interest Expense Declined by $343,000 reflecting lower deposit costs that more than offset the impact of 3% deposit growth.
Yield on Loans Increased by 15 basis points to 4.72%.
Yield on Total Interest Earning Assets Improved by 14 basis points to 4.51%.
Cost of Funds Declined by 8 basis points to 2.85%.
Cost of Interest Bearing Deposits Decreased by 15 basis points to 2.75%.
Cost of Borrowings Rose by 13 basis points to 3.39%.
Noninterest Expense Increased by $748,000 driven by higher compensation and benefits.
Provision for Credit Losses Recorded a provision of $201,000 for the quarter, attributable to loan growth and shift in loan category.
Gross Loans Increased by $42,200,000 during the quarter.
Deposits Increased by $43,900,000 or 3.2%.
Core Deposit Count Growth Grew by $24,400,000 or 3.8%.
Nonperforming Assets Increased by $619,000 due to a slight rise in non-accrual loans.
Allowance for Credit Losses to Total Loans Decreased by 2 basis points to 81 basis points.
Tangible Book Value per Share Increased to $14.81, up 7¢ from the prior quarter.
Share Repurchases Repurchased 464,000 shares at a weighted average price of $9.52.
Tangible Equity to Tangible Common Assets At 15.6%, among the highest in the industry.
Liquidity Position $413,000,000 in untapped borrowing capacity and an additional $28,000,000 in liquidity from unencumbered available for sale securities and unrestricted cash.
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Operating Highlights
Loan Production: Loan production totaled $90,000,000 during the quarter at a weighted average yield of approximately 7.1%. This included $33,000,000 in commercial real estate loans, $9,000,000 in residential mortgages, and $7,000,000 in construction loans.
Credit Enhanced Consumer Loans: Purchased $35,000,000 in credit enhanced consumer loans at attractive yields, primarily targeting professional borrowers.
Deposit Growth: Achieved $44,000,000 in deposit growth, with a 14 basis point reduction in the cost of deposits.
Core Deposit Growth: Core deposit count grew by $24,400,000 or 3.8%, fueled by full banking relationships with commercial customers.
Net Interest Margin: Expanded net interest margin by 27 basis points, contributing to a 13.4% increase in net interest income.
Share Repurchases: Repurchased 464,000 shares at a weighted average price of $9.52, enhancing shareholder value.
Portfolio Diversification: Emphasizing asset classes that deliver higher yield and better risk-adjusted returns, particularly in commercial real estate and construction lending.
Loan Pipeline: Maintained a healthy loan pipeline with executed letters of intent totaling more than $40,000,000 primarily in commercial lending.
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Risk or Challenges
Net Loss: The company reported a net loss of $2,700,000 for the quarter, indicating potential financial instability.
Non-Interest Expense Increase: Non-interest expenses increased by $748,000, driven by higher compensation and benefits, which could impact profitability.
Provision for Credit Losses: A provision for credit losses of $201,000 was recorded, indicating potential risks associated with loan growth and shifts in loan categories.
Non-Performing Assets: Non-performing assets increased by $619,000, reflecting a slight rise in non-accrual loans, which could signal credit quality concerns.
Economic Factors: The company’s allowance for credit losses is based on economic scenarios, indicating sensitivity to economic conditions that could affect loan performance.
Competitive Pressures: The bank is focusing on deepening client engagement in a competitive market, highlighting the challenges posed by competition for deposits and loans.
Regulatory Issues: The company mentioned the need to maintain strong credit quality and comply with regulations, which could pose operational challenges.
Liquidity Risks: While liquidity is currently robust, the reliance on brokered deposits and the potential for interest rate changes could impact future liquidity.
Market Volatility: The management acknowledged that extreme market volatility could affect their buyback strategy and capital deployment.
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Guidance & Outlook
Strategic Priorities for 2025: Focus on driving loan growth and higher yielding asset classes, maintaining strong credit quality, and diversifying low-cost funding sources.
Loan Growth: Achieved 3% loan growth during the quarter with a weighted average yield of approximately 7.1%.
Deposit Growth: Reported $44,000,000 in deposit growth with a 14 basis point reduction in cost of deposits.
Net Interest Margin Expansion: Achieved a 27 basis point expansion in net interest margin.
Portfolio Diversification: Emphasizing asset classes that deliver higher yield and better risk-adjusted returns.
Share Repurchases: Repurchased 464,000 shares at a weighted average price of $9.52.
Loan Pipeline: Healthy loan pipeline with executed letters of intent totaling more than $40,000,000.
Future Margin Expectations: Expect additional margin expansion of 5 to 10 basis points in the second quarter.
Operating Expense Outlook: Expect operating expenses to remain in the high $13,000,000 to low $14,000,000 range.
Loan Maturities and Repricing: Approximately $220,000,000 in loans maturing or repricing within 2025, with expected yield pickup.
Long-term Margin Projections: Potential for margin expansion as lower yielding assets reprice in 2026.
Share Buyback Program: Expect to continue executing the share buyback program while being mindful of capital deployment.
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Shareholder Return Plan
Share Repurchase Program: During the quarter, BlueFoundry Bancorp repurchased 464,000 shares at a weighted average price of $9.52, which is a significant discount to tangible book value. These repurchases are aimed at enhancing shareholder value.
Tangible Book Value: Tangible book value per share increased to $14.81, up 7¢ from the prior quarter, supported by share repurchases.
Future Buyback Plans: The company plans to continue executing its share buyback program, mindful of capital deployment, as it believes the buyback is effectively increasing tangible book value per share.
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Key Q&A
Q:Can you provide the margin for the quarter on a spot basis or for the month of March?
A:I don’t have the spot in front of me right now, but we expect some additional expansion as we head into the second quarter, probably about five to 10 basis points.
Q:How much in loan maturities and resets do you have through the end of the year, and what is the yield pickup if those loans reprice?
A:We have about $220,000,000 maturing or repricing within 2025, with a yield just shy of 7%. The majority of the pickup will come from multifamily loans repricing in 2026 and 2027.
Q:Is there much room left to lower rates on the CD book?
A:We see some room to pull those rates down as they shift into core deposits.
Q:Can you provide details on the unsecured consumer loans you purchased?
A:These loans are to professionals with a yield around 7% and come with credit reserves.
Q:What is the level of reserves for the unsecured consumer loans?
A:They come on with a 3% reserve level.
Q:What is the current offering rate for CDs?
A:Our current rate for a three-month CD is $4.20.
Q:What is the expense outlook for the year?
A:We will have additional bankers coming on to help with organic loan growth.
Q:What is the longer-term expense growth rate?
A:The compensation number moves higher over time due to inflation and additional hires.
Q:Where do you think the margin can get to in the back end of the year?
A:We expect some expansion, primarily in the second quarter, tapering as we normalize.
Q:What is the baseline assumption for the share buyback program?
A:We can expect to continue executing on the share buyback program.
Q:What scenarios could change the pace of the buyback?
A:Extreme volatility or good opportunities on the loan side could change the pace.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer regarding the spot margin for the quarter and the specific details on the loan maturities and resets.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Bancorp comp
Bancorp loan
Bancorp opportunity
BlueFoundry Bancorp
CD
CEO BlueFoundry
Crowley loan
Officer BlueFoundry
Pecoraro Chief
construction
consumer
credit enhancement
credit reserve
cut
debt
deposit side
fed
loan Pecoraro
loan purchase
loan yield
loss rate
margin expansion
number inflation
pace buyback
repricing
reserve level
return
room rate
scenario
spot
technology
term
transition
yield credit
yield pickup
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.
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Why do some answers appear as “Unclear” or “Inaudible”?
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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.
