Blue Foundry Bancorp Q4 FY2024 earnings call

• Jim Nesci mentioned loans increased by $32M predominantly in commercial portfolios, deposits grew $25M with core growth including 17% increase in non-interest bearing accounts. They maintained tangible book value and strong capital/credit quality. Are focused on becoming more commercially oriented, with strategic plan to attract small to medium sized business relationships, having industry leading frictionless products. Funded $59M of loans during the quarter yielding ~7.5%, executed LOIs over $60M for commercial credits at ~7.7%. Repurchased 481,000 shares at $10.49. - Kelly Pecoraro detailed net interest income increase, expense improvement, provision for credit losses release. Balance sheet saw gross loans up $32.5M, available for sale securities up $6.2M, deposits up $24.7M, borrowings down $9M. Asset quality remained strong with non-performing assets and loans relatively flat.

For the fourth quarter, the net loss was $2.7 million, improving from $4 million in the prior quarter. Net interest income increased by $386,000, leading to a seven basis point improvement in net interest margin. Interest income expanded $253,000 while interest expense declined $133,000. Gross loans increased by $32.5 million predominantly in owner occupied commercial real estate, commercial industrial, and multifamily loans. Deposits grew by $24.7 million, with $18.6 million growth in core accounts. Non-performing assets declined modestly with non-performing assets to assets and non-performing loans to loans remaining relatively flat at 25 basis points and 33 basis points respectively. The absolute terms show a net loss of $2.7M, loans up $32.5M, deposits up $24.7M. Revenue contribution isn't explicitly broken down by product segment but key areas are loans and deposits.

• Expect net interest margin to improve as loans close at current rates and deposits reprice lower. Anticipate high single-digit loan growth in 2025. Operating expenses expected to be in mid to high $13M range in 2025. Variable compensation tied to loan growth, deposit growth, net interest margin. Share repurchases to continue as a good use of capital.

• Potential impact of interest rate changes on net interest margin. Construction portfolio could be a headwind for loan yields as it may reprice lower if prime rate goes down. Concentration risk in multifamily space is being watched.

Q: Justin Crowley asked about loan growth in 1 - 4 family and multifamily and pipeline activity.

A: Kelly Pecoraro said strategic focus is on commercial book, residential decline intentional, pipeline improved with $60M of commercial loans with LOIs.

Q: Chris O'Connell inquired about spot margin, loan growth magnitude, expense guide, variable compensation metrics, construction portfolio yields, and share repurchases.

A: Kelly Pecoraro provided details on margin, loan growth expectation, expense range, variable compensation tied to growth metrics, construction portfolio yields, and stated share repurchases to continue as good use of capital