Blue Foundry Bancorp ((BLFY)) has held its Q1 earnings call. Read on for the main highlights of the call.
The recent earnings call for Blue Foundry Bancorp presented a mixed sentiment, reflecting both achievements and challenges faced by the company. While the bank reported positive developments in loan and deposit growth, net interest margin expansion, and share repurchases, it also faced a net loss and increased non-interest expenses. Liquidity remains strong, but there was a slight rise in non-performing assets, painting a complex picture for stakeholders.
Loan and Deposit Growth
During the quarter, Blue Foundry Bancorp achieved a 3% growth in loans and a $44 million increase in deposits. The yield on the loan portfolio improved by 15 basis points, while the cost of deposits decreased by 14 basis points, marking a positive trend in the bank’s core operations.
Net Interest Margin Expansion
The bank’s net interest margin expanded by 27 basis points, resulting in a $1.3 million or 13.4% improvement in net interest income. This expansion underscores the bank’s effective management of interest-earning assets and liabilities.
Tangible Book Value Per Share Increase
Blue Foundry Bancorp reported an increase in tangible book value per share to $14.81, up $0.07 from the previous quarter. This increase reflects the bank’s efforts to enhance shareholder value through strategic financial management.
Strong Liquidity Position
The bank maintains a robust liquidity position with $413 million in untapped borrowing capacity and an additional $208 million in liquidity from unencumbered available-for-sale securities and unrestricted cash. This strong liquidity foundation supports the bank’s operational stability.
Share Repurchases
The company repurchased 464,000 shares at a weighted average price of $9.52, demonstrating its commitment to enhancing shareholder value and confidence in its long-term prospects.
Net Loss for the Quarter
Despite these achievements, Blue Foundry Bancorp reported a net loss of $2.7 million, or $0.13 per diluted share. This loss was primarily attributed to increased non-interest expenses and provisions related to loan growth.
Increase in Non-Interest Expense
Non-interest expenses rose by $748,000, driven by higher compensation and benefits, including merit-based salary adjustments and the reset of variable compensation accruals, impacting the bank’s overall profitability.
Slight Rise in Non-Performing Assets
There was a slight increase in non-performing assets by $619,000, with the ratio of non-performing loans to total loans increasing by 2 basis points to 35 basis points, indicating a minor deterioration in asset quality.
Forward-Looking Guidance
Looking ahead, Blue Foundry Bancorp outlined its strategic focus on sustainable earnings growth through robust asset quality and portfolio diversification. The bank aims to maintain its strong liquidity position and well-capitalized status, with a tangible equity to tangible common assets ratio of 15.6%. The guidance also highlighted continued efforts in loan and deposit growth, with a focus on maintaining a competitive net interest margin.
In summary, Blue Foundry Bancorp’s earnings call highlighted a mix of positive developments and challenges. While the bank achieved growth in key areas such as loans, deposits, and net interest margin, it also faced a net loss and increased expenses. The company’s strong liquidity position and strategic focus on sustainable growth provide a solid foundation for future performance, despite the current challenges.