Blue Foundry Bancorp Reports Second Quarter 2023 Results

Source: Nasdaq GlobeNewswire / 26 Jul 2023 07:15:01 America/Chicago

RUTHERFORD, N.J., July 26, 2023 (GLOBE NEWSWIRE) -- Blue Foundry Bancorp (NASDAQ:BLFY) (the “Company”), the holding company for Blue Foundry Bank (the “Bank”), today reported a net loss of $1.8 million, or $0.08 per diluted common share, for the three months ended June 30, 2023, compared to net loss of $1.2 million, or $0.05 per diluted common share, for the three months ended March 31, 2023, and net income of $40 thousand for the three months ended June 30, 2022.

“Blue Foundry continues to maintain its strong capital position and access to liquidity, as well as a diversified deposit base and a low percentage of uninsured deposits to customers,” said James D. Nesci, President and Chief Executive Officer.

He continued, “Our second quarter performance largely reflects the impact that the inverted yield curve and the highly competitive rate environment in northern New Jersey has had on our funding base. Despite this, we are seeing our investments in technology lead to productivity saves through lower operating expenses. We also remain active in lending markets, focusing on the organic origination of commercial loans with strong credit metrics.”

Highlights for the second quarter of 2023:

Deposits increased $22.7 million, or 1.8%, compared to the prior quarter.
Non-interest expense decreased $689 thousand or 5.1% sequentially, primarily driven by lower compensation and benefits expenses.
Uninsured deposits to third-party customers totaled approximately 14% of total deposits as of June 30, 2023.
Interest income for the quarter was $19.8 million, an increase of $933 thousand, or 5.0%, compared to the prior quarter.
Interest expense for the quarter was $8.9 million, an increase of $2.0 million, or 28.6%, compared to the prior quarter.
Net interest margin decreased 25 basis points from the prior quarter to 2.17%.
Tangible book value per share was $14.35.
1,892,060 shares were repurchased at a weighted average cost of $9.68.

Lending Franchise

The Company continues to diversify its lending franchise by focusing on growing the commercial portfolio. During the first half of 2023, total loans increased by $36.6 million primarily due to growth within the Company’s non-residential real estate, construction, multifamily and commercial and industrial portfolios.

The details of the loan portfolio are below:

	June 30,		March 31,		December 31,		September 30,		June 30,
	2023		2023		2022		2022		2022
	(In thousands)
Residential one-to-four family	$	580,396	$	592,809	$	597,254	$	594,795	$	593,563
Multifamily		696,956		695,207		690,690		680,181		580,060
Non-residential real estate		237,247		239,844		216,061		185,147		211,429
Construction and land		36,032		28,141		17,799		12,792		20,762
Junior liens		21,338		19,644		18,631		16,778		16,537
Commercial and industrial		9,743		10,357		4,653		4,705		5,875
Consumer and other		33		58		39		39		47
Total loans		1,581,745		1,586,060		1,545,127		1,494,437		1,428,273
Less: Allowance for credit losses		14,413		14,153		13,400		13,600		14,050
Loans receivable, net	$	1,567,332	$	1,571,907	$	1,531,727	$	1,480,837	$	1,414,223

Retail Banking Franchise

As of June 30, 2023, deposits totaled $1.27 billion, an increase of $22.7 million, or 1.8%, from March 31, 2023. While the Company continues to focus on attracting the full banking relationship of small- to medium-sized businesses through an extensive suite of deposit products, the rate environment in the northern New Jersey market has intensified competition for deposits. The reduction of $75.5 million in core deposits was more than offset by an increase of $98.2 million in time deposits, including $50.0 million of brokered deposits.

The details of deposits are below:

	June 30,		March 31,		December 31,		September 30,		June 30,
	2023		2023		2022		2022		2022
	(In thousands)
Non-interest bearing deposits	$	26,067	$	32,518	$	37,907	$	48,097	$	43,655
NOW and demand accounts		404,407		427,281		410,937		396,873		464,157
Savings		315,713		361,871		423,758		455,979		358,166
Core deposits		746,187		821,670		872,602		900,949		865,978
Time deposits		521,074		422,911		416,260		365,548		430,696
Total deposits	$	1,267,261	$	1,244,581	$	1,288,862	$	1,266,497	$	1,296,674

Financial Performance Overview:

Second quarter of 2023 compared to the second quarter of 2022

Net interest income compared to the second quarter of 2022:

Net interest income was $10.9 million in the three months ended June 30, 2023 compared to $13.2 million in same period in 2022 due to increases in rates paid on interest-bearing liabilities.
Net interest margin decreased by 66 basis points to 2.17%.
Yield on average interest-earning assets increased 74 basis points to 3.93%, while the cost of average interest-bearing liabilities increased 170 basis points to 2.18%.
Average loans increased by $213.7 million and average interest-bearing liabilities increased by $208.3 million.

Non-interest expense compared to the second quarter of 2022:

Non-interest expense was $13.0 million, a decrease of $159 thousand excluding the provision for commitments and letters of credit, driven by a decrease of $272 thousand in advertising, a decrease of $212 thousand in professional services and a decrease of $69 thousand in compensation and benefits expenses, partially offset by an increase of $210 thousand in occupancy and equipment, an increase of $142 thousand in data processing and an increase of $132 thousand in FDIC assessment.
Since the adoption of the current expected credit loss (CECL) methodology on January 1, 2023, the provision for commitments and letters of credit is recorded in the provision for credit losses. This expense was previously recorded in non-interest expense. During the second quarter of 2022, the Company recorded a $108 thousand release of its provision for commitments and letters of credit.

Income tax expense compared to the second quarter of 2022:

The Company did not record a tax benefit for the loss incurred during the current quarter due to the full valuation allowance required on its deferred tax assets. The prior year quarter effective tax rate of 7.0% was a result of the taxable income produced during the prior year quarter, partially offset by the ability to utilize a portion of the net operating losses that were fully reserved.
The Company’s current tax position reflects the previously established full valuation allowance on its deferred tax assets. At June 30, 2023, the valuation allowance on deferred tax assets was $22.1 million.

Six months ended June 30, 2023 compared to the six months ended June 30, 2022

Net interest income compared to the six months ended June 30, 2022:

Net interest income was $22.8 million, a decrease of $2.3 million.
Net interest margin decreased by 43 basis points to 2.29%.
Yield on average interest-earning assets increased 78 basis points to 3.87% while the cost of average interest-bearing deposits increased 125 basis points to 1.55%.
Average loans increased by $243.0 million and average interest-bearing deposits decreased by $15.7 million.

Non-interest expense compared to the six months ended June 30, 2022:

Non-interest expense was $26.6 million, an increase of $112 thousand excluding the provision of commitments and letters of credit, driven by an increase of $718 thousand in compensation and benefits costs, $311 thousand in occupancy and equipment costs and $265 thousand in data processing expense, partially offset by decreases of $719 thousand in advertising and $523 thousand in fees for professional services.
The Company recorded a $278 thousand release of its provision for commitments and letters of credit in the first half of 2022.

Income tax expense compared to the six months ended June 30, 2022:

The Company did not record a tax benefit for the loss incurred during the six months ended June 30, 2023 due to the full valuation allowance required on its deferred tax assets. The six months ended June 30, 2022 effective tax rate of 8.1% was a result of the taxable income produced during the prior year period, partially offset by the ability to utilize a portion of the net operating losses that were fully reserved.
The Company’s current tax position reflects the previously established full valuation allowance on its deferred tax assets. At June 30, 2023, the valuation allowance on deferred tax assets was $22.1 million.

Balance Sheet Summary:

June 30, 2023 compared to December 31, 2022

Cash and cash equivalents:

Cash and cash equivalents increased $4.6 million compared to December 31, 2022.

Securities available-for-sale:

Securities available-for-sale decreased $13.3 million to $300.9 million due to amortization and payoffs.
Unrealized losses improved slightly to a net loss of $35.9 million.

Total loans:

Total loans held for investment increased $36.6 million to $1.58 billion.
Non-residential real estate loans increased $21.2 million, construction and land loans increased $18.2 million, commercial and industrial increased $5.1 million and multifamily loans increased $6.3 million.

Deposits:

Deposits totaled $1.27 billion, a decrease of $21.6 million from December 31, 2022, largely the result of the competitive rate environment.
Core deposits represented 58.9% of total deposits, compared to 67.7% at December 31, 2022 and 66.8% at June 30, 2022.
Uninsured and uncollateralized deposits to third party customers were $172.5 million, or 14% of total deposits, at the end of the second quarter.

Borrowings:

FHLB borrowings increased by $89.0 million to $399.5 million to support loan growth and replace deposit attrition.
During the first quarter of 2023, the Company executed $100 million of hedges on interest rates with maturities ranging from three to five years. The Company’s hedging program aims to reduce the Company’s sensitivity to interest rate by locking in spread.
As of June 30, 2023, the Company had $363.0 million of additional borrowing capacity at FHLB and $32.5 million of other unsecured lines of credit.

Capital:

Shareholders’ equity decreased by $27.2 million to $366.5 million. The decrease was primarily driven by the $27.4 million cost of shares repurchased and a $3.1 million reduction in retained earnings, partially offset by stock-based compensation activity.
Tangible equity to tangible assets was 17.59% and tangible common equity per share outstanding was $14.35.
The Bank’s capital ratios remain above the FDIC’s “well capitalized” standards.

Asset quality:

As of June 30, 2023, the Allowance for Credit Losses as a percentage of gross loans was 0.91%.
The Company recorded a net provision for credit losses of $143 thousand for the quarter ended June 30, 2023, driven by an increase in the allowance for loans, partially offset by a decrease in the allowance for commitments.
Non-performing loans totaled $7.7 million, or 0.49% of total loans compared to $7.8 million, or 0.50% of total loans at December 31, 2022, and $10.0 million, or 0.70% of total loans at June 30, 2022.
Net charge-offs were $13 thousand for the quarter ended June 30, 2023 and $17 thousand for the six months ended June 30, 2023.

About Blue Foundry

Blue Foundry Bancorp is the holding company for Blue Foundry Bank, a place where things are made, purpose is formed, and ideas are crafted. Headquartered in Rutherford NJ, with a presence in Bergen, Essex, Hudson, Morris, Passaic, Somerset and Union counties, Blue Foundry Bank is a full-service, innovative bank serving the doers, movers, and shakers in our communities. We offer individuals and businesses alike the tailored products and services they need to build their futures. With a rich history dating back more than 145 years, Blue Foundry Bank has a longstanding commitment to its customers and communities. To learn more about Blue Foundry Bank visit BlueFoundryBank.com or call (888) 931-BLUE. Member FDIC.

Conference Call Information

A conference call covering Blue Foundry’s second quarter 2023 earnings announcement will be held today, Wednesday, July 26, 2023 at 11:00 a.m. (EDT). To listen to the live call, please dial 1-833-470-1428 (toll free) or +1-404-975-4839 (international) and use access code 445457. The webcast (audio only) will be available on ir.bluefoundrybank.com. The conference call will be recorded and will be available on the Company’s website for one month.

Contact:
James D. Nesci
President and Chief Executive Officer
BlueFoundryBank.com
jnesci@bluefoundrybank.com
201-972-8900

Forward Looking Statements

Certain statements contained herein are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements, which are based on certain current assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target” and similar expressions.

Forward-looking statements are based on current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: inflation and changes in the interest rate environment that reduce our margins and yields, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make; general economic conditions, either nationally or in our market areas, that are worse than expected; changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; our ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in our market area; our ability to implement and change our business strategies; competition among depository and other financial institutions; the effects of the recent turmoil in the banking industry (including the failures of two financial institutions); adverse changes in the securities or secondary mortgage markets; changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, capital requirements and insurance premiums; changes in monetary or fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; changes in the quality or composition of our loan or investment portfolios; technological changes that may be more difficult or expensive than expected; a failure or breach of our operational or security systems or infrastructure, including cyber-attacks; the inability of third party providers to perform as expected; our ability to manage market risk, credit risk and operational risk in the current economic environment; our ability to enter new markets successfully and capitalize on growth opportunities; our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related there to; changes in consumer spending, borrowing and savings habits; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board; our ability to retain key employees; the ability of the U.S. Government to manage federal debt limits; and changes in the financial condition, results of operations or future prospects of issuers of securities that we own.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. Except as required by applicable law or regulation, we do not undertake, and we specifically disclaim any obligation, to release publicly the results of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Statements of Financial Condition
	June 30, 2023		March 31, 2023		December 31, 2022
	(unaudited)		(unaudited)
	(Dollars in Thousands)
ASSETS
Cash and cash equivalents	$	45,759	$	57,621	$	41,182
Securities available-for-sale, at fair value		300,923		309,083		314,248
Securities held to maturity		33,445		33,472		33,705
Other investments		20,420		21,070		16,069
Loans held-for-sale		2,497		2,552		—
Loans, net		1,567,332		1,571,907		1,531,727
Interest and dividends receivable		7,285		7,375		6,893
Premises and equipment, net		31,519		30,839		29,825
Right-of-use assets		26,594		26,320		25,906
Bank owned life insurance		21,802		21,688		21,576
Other assets		22,938		19,128		22,207
Total assets	$	2,080,514	$	2,101,055	$	2,043,338

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits	$	1,267,261	$	1,244,581	$	1,288,862
Advances from the Federal Home Loan Bank		399,500		422,500		310,500
Advances by borrowers for taxes and insurance		9,862		9,695		9,302
Lease liabilities		28,130		27,799		27,324
Other liabilities		9,227		10,787		13,632
Total liabilities		1,713,980		1,715,362		1,649,620

Shareholders’ equity		366,534		385,693		393,718
Total liabilities and shareholders’ equity	$	2,080,514	$	2,101,055	$	2,043,338

BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Statements of Operations
(Dollars in Thousands Except Per Share Data) (Unaudited)
	Three months ended									Six months ended
	June 30, 2023			March 31, 2023			June 30, 2022			June 30, 2023			June 30, 2022
	(Dollars in thousands)
Interest income:
Loans	$	16,481		$	15,569		$	12,444		$	32,050		$	24,100
Taxable investment income		3,172			3,152			2,320			6,324			4,137
Non-taxable investment income		112			111			114			223			235
Total interest income		19,765			18,832			14,878			38,597			28,472
Interest expense:
Deposits		5,173			4,154			950			9,327			1,832
Borrowed funds		3,686			2,737			766			6,423			1,539
Total interest expense		8,859			6,891			1,716			15,750			3,371
Net interest income		10,906			11,941			13,162			22,847			25,101
Provision for (release of) credit losses		143			(23	)		594			120			(358	)
Net interest income after provision for (release of) credit losses		10,763			11,964			12,568			22,727			25,459
Non-interest income:
Fees and service charges		280			262			365			542			1,165
Gain on securities, net		—			—			14			—			14
Gain on sale of loans		24			135			—			159			—
Other income		76			87			115			163			242
Total non-interest income		380			484			494			864			1,421
Non-interest expense:
Compensation and employee benefits		7,065			7,847			7,134			14,912			14,194
Occupancy and equipment		2,124			1,982			1,914			4,106			3,795
Data processing		1,535			1,601			1,393			3,136			2,871
Advertising		77			72			349			149			868
Professional services		764			980			976			1,744			2,267
Release of provision for commitments and letters of credit		—			—			(108	)		—			(278	)
Federal deposit insurance		231			105			99			336			177
Other		1,172			1,070			1,262			2,242			2,341
Total non-interest expense		12,968			13,657			13,019			26,625			26,235
(Loss) income before income tax expense		(1,825	)		(1,209	)		43			(3,034	)		645
Income tax expense		—			—			3			—			52
Net (loss) income	$	(1,825	)	$	(1,209	)	$	40		$	(3,034	)	$	593
Basic (loss) earnings per share	$	(0.08	)	$	(0.05	)	$	—		$	(0.13	)	$	0.02
Diluted (loss) earnings per share	$	(0.08	)	$	(0.05	)	$	—		$	(0.13	)	$	0.02
Weighted average shares outstanding-basic and diluted (1)		24,249,714			25,374,653			26,366,324			24,131,017			26,354,979

(1) The assumed vesting of outstanding restricted stock units had an antidilutive effect on diluted earnings per share due to the Company’s net loss for the 2023 periods. There were no equity awards to cause dilution in the 2022 periods.

BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Financial Highlights
(Dollars in Thousands Except Per Share Data) (Unaudited)
	Three months ended
	June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022		June 30, 2022
Performance Ratios (%):
(Loss) return on average assets		(0.35	)		(0.24	)		0.11			0.25		0.01
(Loss) return on average equity		(1.95	)		(1.25	)		0.56			1.20		0.04
Interest rate spread⁽¹⁾		1.75			2.05			2.35			2.68		2.71
Net interest margin⁽²⁾		2.17			2.42			2.62			2.84		2.83
Efficiency ratio (non-GAAP)⁽³⁾		114.90			109.92			97.76			92.37		96.13
Average interest-earning assets to average interest-bearing liabilities		130.77			126.39			128.30			130.30		131.52
Tangible equity to tangible assets ⁽⁴⁾		17.59			18.33			19.24			19.72		20.97
Book value per share⁽⁵⁾	$	14.38		$	14.08		$	14.30		$	14.11	$	14.46
Tangible book value per share⁽⁵⁾	$	14.35		$	14.06		$	14.28		$	14.09	$	14.43

Asset Quality:
Non-performing loans	$	7,736		$	7,481		$	7,767		$	8,409	$	9,998
Real estate owned, net		—			—			—			—		—
Non-performing assets	$	7,736		$	7,481		$	7,767		$	8,409	$	9,998
Allowance for credit losses to total loans (%)		0.91			0.89			0.87			0.91		0.98
Allowance for credit losses to non-performing loans (%)		186.31			189.18			172.52			161.73		140.53
Non-performing loans to total loans (%)		0.49			0.47			0.50			0.56		0.70
Non-performing assets to total assets (%)		0.37			0.36			0.38			0.42		0.51
Net charge-offs to average outstanding loans during the period (%)		—			—			(0.01	)		0.01		—

(1) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(2) Net interest margin represents net interest income divided by average interest-earning assets.
(3) Efficiency ratio represents adjusted non-interest expense divided by the sum of net interest income plus non-interest income.
(4) Tangible equity equals $365.8 million, which exclude intangible assets ($730 thousand of capitalized software). Tangible assets equal $2.08 billion and exclude intangible assets.
(5) June 30, 2023 per share metrics computed using 25,493,422 total shares outstanding.

BLUE FOUNDRY BANCORP AND SUBSIDIARY
Analysis of Net Interest Income
(Dollars in Thousands) (Unaudited)
	Three Months Ended,
	June 30, 2023						March 31, 2023						June 30, 2022
	Average Balance		Interest		Average Yield/Cost		Average Balance		Interest		Average Yield/Cost		Average Balance		Interest		Average Yield/Cost
	(Dollars in thousands)
Assets:
Loans ⁽¹⁾	$	1,583,057	$	16,481	4.18	%	$	1,553,118	$	15,569	4.07	%	$	1,369,389	$	12,444	3.64	%
Mortgage-backed securities		174,398		967	2.22	%		179,604		982	2.22	%		205,387		1,066	2.08	%
Other investment securities		198,588		1,505	3.04	%		199,069		1,512	3.08	%		208,958		1,144	2.20	%
FHLB stock		22,832		342	6.00	%		20,141		308	6.20	%		10,121		116	4.60	%
Cash and cash equivalents		40,614		470	4.64	%		46,530		461	4.02	%		74,242		108	0.58	%
Total interest-earning assets		2,019,489		19,765	3.93	%		1,998,462		18,832	3.82	%		1,868,097		14,878	3.19	%
Non-interest earning assets		56,280						55,942						68,003
Total assets	$	2,075,769					$	2,054,404					$	1,936,100
Liabilities and shareholders' equity:
NOW, savings, and money market deposits	$	754,048		2,217	1.18	%	$	805,392		2,010	1.01	%	$	800,918		312	0.16	%
Time deposits		442,547		2,956	2.68	%		416,238		2,144	2.09	%		431,813		638	0.59	%
Interest-bearing deposits		1,196,595		5,173	1.73	%		1,221,630		4,154	1.38	%		1,232,731		950	0.29	%
FHLB advances		432,137		3,686	3.42	%		359,511		2,737	3.09	%		187,698		766	1.64	%
Total interest-bearing liabilities		1,628,732		8,859	2.18	%		1,581,141		6,891	1.77	%		1,420,429		1,716	0.48	%
Non-interest bearing deposits		26,914						34,879						48,763
Non-interest bearing other		44,240						44,850						46,688
Total liabilities		1,699,886						1,660,870						1,515,880
Total shareholders' equity		375,883						393,534						420,220
Total liabilities and shareholders' equity	$	2,075,769					$	2,054,404					$	1,936,100
Net interest income			$	10,906					$	11,941					$	13,162
Net interest rate spread ⁽²⁾					1.75	%					2.05	%					2.71	%
Net interest margin ⁽³⁾					2.17	%					2.42	%					2.83	%

(1) Average loan balances are net of deferred loan fees and costs, and premiums and discounts, and include non-accrual loans.
(2) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(3) Net interest margin represents net interest income divided by average interest-earning assets.

BLUE FOUNDRY BANCORP AND SUBSIDIARY
Analysis of Net Interest Income
(Dollars in Thousands) (Unaudited)
	Six Months Ended June 30,
		2023						2022
	Average Balance		Interest		Average Yield/Cost		Average Balance		Interest		Average Yield/Cost
	(Dollars in thousands)
Assets:
Loans ⁽¹⁾	$	1,568,170	$	32,050	4.12	%	$	1,325,134	$	24,100	3.67	%
Mortgage-backed securities		176,987		1,949	2.22	%		188,742		1,788	1.91	%
Other investment securities		198,827		3,017	3.06	%		203,756		2,164	2.14	%
FHLB stock		21,494		649	6.09	%		10,032		232	4.66	%
Cash and cash equivalents		43,556		932	4.31	%		131,158		188	0.29	%
Total interest-earning assets		2,009,034		38,597	3.87	%		1,858,822		28,472	3.09	%
Non-interest earning assets		56,112						72,945
Total assets	$	2,065,146					$	1,931,767
Liabilities and shareholders' equity:
NOW, savings, and money market deposits		780,362		4,227	1.09	%		780,609		548	0.14	%
Time deposits		429,465		5,100	2.39	%		444,889		1,284	0.58	%
Interest-bearing deposits		1,209,827		9,327	1.55	%		1,225,498		1,832	0.30	%
FHLB advances		396,025		6,423	3.27	%		186,605		1,539	1.66	%
Total interest-bearing liabilities		1,605,852		15,750	1.98	%		1,412,103		3,371	0.48	%
Non-interest bearing deposits		30,091						46,213
Non-interest bearing other		44,543						47,482
Total liabilities		1,680,486						1,505,798
Total shareholders' equity		384,660						425,969
Total liabilities and shareholders' equity	$	2,065,146					$	1,931,767
Net interest income			$	22,847					$	25,101
Net interest rate spread ⁽²⁾					1.89	%					2.62	%
Net interest margin ⁽³⁾					2.29	%					2.72	%

BLUE FOUNDRY BANCORP AND SUBSIDIARY

Adjusted Pre-Provision Net Revenue (Non-GAAP)

(Unaudited)

This press release contains certain supplemental financial information, described in the table below, which has been determined by methods other than U.S. Generally Accepted Accounting Principles ("GAAP") that management uses in its analysis of Blue Foundry's performance. Management believes these non-GAAP financial measures provide information useful to investors in understanding Blue Foundry's financial results. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and Blue Foundry strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

Net income, as presented in the Consolidated Statements of Operations, includes the provision for loan losses, provision for commitments and letters of credit, and income tax expense, while pre-provision net revenue does not.

	Three months ended
	June 30, 2023			March 31, 2023					December 31, 2022			September 30, 2022			June 30, 2022
	(Dollars in thousands, except per share data)
Pre-provision net revenue (PPNR) and efficiency ratio, as adjusted:
Net interest income	$	10,906		$	11,941				$	12,927		$	13,815		$	13,162
Other income		380			484					444			799			494
Operating expenses, as reported		12,968			13,657					12,869			13,669			13,019
Less: Provision for commitments and letters of credit		—			—					(203	)		170			(108	)
Operating expenses, as adjusted		12,968			13,657					13,072			13,499			13,127
Pre-provision net (loss) revenue, as adjusted	$	(1,682	)	$	(1,232	)			$	299		$	1,115		$	529
Efficiency ratio, as adjusted		114.9	%		109.9	%				97.8	%		92.4	%		96.1	%

Core deposits:
Total deposits	$	1,267,261		$	1,244,581				$	1,288,862		$	1,266,497		$	1,296,674
Less: time deposits		521,074			422,911					416,260			365,548			430,696
Core deposits	$	746,187		$	821,670				$	872,602		$	900,949		$	865,978
Core deposits to total deposits		58.9	%		66.0	%				67.7	%		71.1	%		66.8	%

Tangible equity:
Shareholders’ equity	$	366,534		$	385,693				$	393,718		$	397,338		$	412,293
Less: intangible assets		730			781					798			760			630
Tangible equity	$	365,804		$	384,912				$	392,920		$	396,578		$	411,663

Tangible book value per share:
Tangible equity	$	365,804		$	384,912		$	—	$	392,920		$	396,578		$	411,663
Shares outstanding		25,493,422			27,385,482					27,523,219			28,155,292			28,522,500
Tangible book value per share	$	14.35		$	14.06				$	14.28		$	14.09			14.43

Blue Foundry Bancorp Reports Second Quarter 2023 Results

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