Blue Foundry Bancorp (BLFY, Financial) released its 8-K filing on October 23, 2024, reporting a net loss of $4.0 million, or $0.19 per diluted share, for the third quarter of 2024. This result was worse than the analyst estimate of a $0.18 loss per share. The company's revenue for the quarter was $21.5 million, surpassing the estimated $19.96 million.
Company Overview
Blue Foundry Bancorp is a full-service bank that originates various types of loans, including residential, multi-family, and commercial real estate mortgages. The bank attracts deposits from the public and invests in securities, deriving revenue primarily from interest on loans and investments.
Performance and Challenges
The third quarter results highlight ongoing challenges for Blue Foundry Bancorp, primarily driven by increased interest expenses. Interest expense rose by 6.2% from the previous quarter to $12.4 million, outpacing the 1.1% increase in interest income. This led to a decrease in net interest margin by 14 basis points to 1.82%. The company's net interest income fell to $9.1 million from $9.6 million in the previous quarter.
Financial Achievements
Despite the net loss, Blue Foundry Bancorp reported several positive developments. The bank's deposits increased by $7.5 million to $1.32 billion, and there was a notable improvement in credit quality, with non-performing loans decreasing by 17%. The allowance for credit losses now covers non-performing loans by over 2.5 times, reflecting a robust credit position.
James D. Nesci, President and CEO, stated, “The Company continues to maintain its strong capital position and access to liquidity. We executed on our share repurchase program and increased our tangible book value to $14.74 per share.”
Key Financial Metrics
Blue Foundry Bancorp's total loans decreased by $9.7 million during the first nine months of 2024, with significant growth in the construction and commercial real estate portfolios. The bank's tangible book value per share increased to $14.74, and the tangible equity to tangible assets ratio stood at 16.50%.
| Metric | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Net Interest Income | $9.1 million | $9.6 million | $9.9 million |
| Net Interest Margin | 1.82% | 1.96% | 1.94% |
| Non-Performing Loans | $5.1 million | $6.2 million | $6.1 million |
Analysis
The results indicate that while Blue Foundry Bancorp is facing challenges with rising interest expenses, it is making strides in improving its credit quality and maintaining a strong capital position. The bank's focus on growing its commercial portfolio and managing credit risk effectively could position it well for future growth, despite the current financial setbacks.
Investors and stakeholders will be keen to see how Blue Foundry Bancorp navigates the competitive banking environment and manages its interest rate exposure in the coming quarters.
Explore the complete 8-K earnings release (here) from Blue Foundry Bancorp for further details.
