Blue Foundry Bancorp Reports Second Quarter 2024 Results

Blue Foundry Bancorp (NASDAQ:BLFY)

(the “Company”), the holding company for Blue Foundry Bank (the “Bank”), today reported a net loss of $2.3 million, or $0.11 per diluted common share, for the three months ended June 30, 2024, compared to net loss of $2.8 million, or $0.13 per diluted common share, for the three months ended March 31, 2024, and a net loss of $1.8 million, or $0.08 per diluted common share, for the three months ended June 30, 2023.

James D. Nesci, President and Chief Executive Officer, commented, “Deposit growth continued in the second quarter despite the highly competitive environment in our market area. We remain focused on growing the commercial loan portfolios and saw increases in commercial real estate and construction lending.”

Mr. Nesci continued, “The Company continues to maintain its strong capital position and access to liquidity. We continued to repurchase shares and increased our tangible book value to $14.69 per share.”

Commenting on the recent appointment of John F. Kuntz to the Board of Directors, Mr. Nesci remarked, “We are delighted to welcome Mr. Kuntz to Blue Foundry’s Board of Directors. His years of combined legal and operational expertise leading financial institutions will be invaluable to the Company.”

Highlights for the second quarter of 2024:

• Deposits increased $20.0 million, or 1.55% compared to the prior quarter.
• Uninsured deposits to third-party customers totaled approximately 12% of total deposits as of June 30, 2024.
• Interest income for the quarter was $21.3 million, an increase of $450 thousand, or 2.2%, compared to the prior quarter.
• Interest expense for the quarter was $11.7 million, an increase of $294 thousand, or 2.6%, compared to the prior quarter.
• Net interest margin increased four basis points from the prior quarter to 1.96%.
• Release of provision for credit losses of $762 thousand due to the impact of the change in forecast on the loan portfolio, coupled with a decline in portfolio balances and unused lines of credit.
• Book value per share was $14.70 and tangible book value per share was $14.69. See the “Supplemental Information - Non-GAAP Financial Measures” tables below for additional information regarding our non-GAAP measures.
• 386,352 shares were repurchased under our share repurchase plans at a weighted average share price of $8.84 per share.

Loans

The Company continues to focus on diversifying its lending portfolio by growing its commercial portfolios. During the first six months of 2024, while total loans decreased by $13.3 million, the construction and commercial real estate portfolios increased by $11.5 million and $9.4 million, respectively. The residential and multifamily portfolios decreased by $24.5 million and $11.4 million, respectively.

The details of the loan portfolio are below:

		June 30,2024				March 31,2024				December 31,2023				September 30,2023				June 30,2023
		(In thousands)
Residential		$	526,453			$	540,427			$	550,929			$	567,384			$	580,396
Multifamily			671,185				671,011				682,564				689,966				696,956
Commercial real estate			241,867				244,207				232,505				236,325				237,247
Construction			71,882				63,052				60,414				45,064				36,032
Junior liens			23,653				22,052				22,503				22,297				21,338
Commercial and industrial			12,261				13,372				11,768				9,904				9,743
Consumer and other			83				56				47				50				33
Total loans			1,547,384				1,554,177				1,560,730				1,570,990				1,581,745
Less: Allowance for credit losses			13,027				13,749				14,154				13,872				14,413
Loans receivable, net		$	1,534,357			$	1,540,428			$	1,546,576			$	1,557,118			$	1,567,332

Deposits

As of June 30, 2024, deposits totaled $1.31 billion, an increase of $66.3 million, or 5.32%, from December 31, 2023, mostly due to the increases of $74.9 million in time deposits and $7.2 million in NOW and demand accounts, partially offset by decreases in non-interest bearing deposits and savings of $3.0 million and $12.8 million, respectively. The Company’s strategy is to focus on attracting the full banking relationship of small- to medium-sized businesses through an extensive suite of deposit products. While there is strong competition for deposits in the northern New Jersey market, we were able to increase customer deposits during the quarter. Brokered deposits remain unchanged since year end 2023.

The details of deposits are below:

		June 30,2024				March 31,2024				December 31,2023				September 30,2023				June 30,2023
		(In thousands)
Non-interest bearing deposits		$	24,733			$	25,342			$	27,739			$	23,787			$	26,067
NOW and demand accounts			368,386				373,172				361,139				378,268				404,407
Savings			246,559				250,298				259,402				278,665				315,713
Core deposits			639,678				648,812				648,280				680,720				746,187
Time deposits			671,478				642,372				596,624				572,384				521,074
Total deposits		$	1,311,156			$	1,291,184			$	1,244,904			$	1,253,104			$	1,267,261

Financial Performance Overview:

Second quarter of 2024 compared to the first quarter of 2024

Net interest income compared to the first quarter of 2024:

• Net interest income was approximately $9.6 million in the three months ended June 30, 2024 compared to $9.4 million in the first quarter of 2024 as the increase in interest received on interest-earning assets outpaced the increase in interest paid on interest-bearing liabilities.
• Net interest margin increased by four basis points to 1.96%.
• Yield on average interest-earning assets increased 12 basis points to 4.37%, while the cost of average interest-bearing liabilities increased eight basis points to 2.94%.
• Average interest-earning assets decreased by $9.4 million and average interest-bearing liabilities decreased by $4.8 million.

Non-interest income compared to the first quarter of 2024:

• Non-interest income increased $85 thousand due to a gain of $123 thousand on the sale of REO property during the quarter, partially offset by a reduction in service charge income.

Non-interest expense compared to the first quarter of 2024:

• Non-interest expense decreased $27 thousand primarily driven by decreases in professional fees and data processing expense of $107 thousand and $52 thousand, respectively, partially offset by an increase of $86 thousand in compensation and benefits expenses and an increase of $70 thousand in occupancy and equipment.

Income tax expense compared to the first quarter of 2024:

• The Company did not record a tax benefit for the losses incurred during the second quarter of 2024 and the first quarter of 2024 due to the full valuation allowance required on its deferred tax assets.
• The Company’s current tax position reflects the previously established full valuation allowance on its deferred tax assets. At June 30, 2024, the valuation allowance on deferred tax assets was $23.5 million.

Second quarter of 2024 compared to the second quarter of 2023

Net interest income compared to the second quarter of 2023:

• Net interest income was $9.6 million for the three months ended June 30, 2024 compared to $10.9 million for the same period in 2023. The decrease was largely due to increases in rates paid on interest-bearing liabilities.
• Net interest margin decreased by 21 basis points to 1.96%.
• Yield on average interest-earning assets increased 44 basis points to 4.37%, while the cost of average interest-bearing liabilities increased 76 basis points to 2.94%.
• Average interest-earning assets decreased by $57.6 million and average interest-bearing liabilities decreased by $24.3 million. Average FHLB advances decreased by $95.4 million, while average interest-bearing deposits increased by $71.1 million.

Non-interest income compared to the second quarter of 2023:

• Non-interest income increased $156 thousand due, in part, to a gain of $123 thousand on the sale of REO property during the quarter.

Non-interest expense compared to the second quarter of 2023:

• Non-interest expense was $13.2 million, an increase of $247 thousand driven by increases of $570 thousand and $138 thousand in compensation and benefits expenses and occupancy and equipment expenses, respectively, partially offset by decreases of $141 thousand in professional services and $200 thousand in data processing.

Income tax expense compared to the second quarter of 2023:

• The Company did not record a tax benefit for the losses incurred during the second quarters of 2024 and 2023 due to the full valuation allowance required on its deferred tax assets.
• The Company’s current tax position reflects the previously established full valuation allowance on its deferred tax assets. At June 30, 2024, the valuation allowance on deferred tax assets was $23.5 million.

Six Months Ended June 30, 2024 compared to the six months ended June 30, 2023

Net interest income compared to the six months ended June 30, 2023:

• Net interest income was $19.0 million, a decrease of $3.9 million.
• Net interest margin decreased 35 basis points to 1.94%.
• Yield on average interest-earning assets increased 43 basis points to 4.30% while the cost of average interest-bearing liabilities increased 91 basis points to 2.89%.
• Average interest-earning assets decreased by $42.5 million and average interest-bearing deposits increased by $41.7 million.
• Average borrowings decreased by $40.7 million.

Non-interest income compared to the six months ended June 30, 2023:

• Non-interest income increased $123 thousand due to the gain on the sale of REO property during the quarter.

Non-interest expense compared to the six months ended June 30, 2023:

• Non-interest expense was $26.5 million, a decrease of $168 thousand.
• Fees for professional services decreased by $391 thousand and data processing expense decreased by $414 thousand. These decreases were partially offset by increases of $348 thousand in occupancy and equipment costs and $272 thousand in compensation and benefits expense.

Income tax expense compared to the six months ended June 30, 2023:

• The Company did not record a tax benefit for the losses incurred during the six months ended June 30, 2024 and 2023 due to the full valuation allowance required on its deferred tax assets.
• The Company’s current tax position reflects the previously established full valuation allowance on its deferred tax assets. At June 30, 2024, the valuation allowance on deferred tax assets was $23.5 million.

Balance Sheet Summary:

June 30, 2024 compared to December 31, 2023

Cash and cash equivalents:

• Cash and cash equivalents increased $14.2 million to $60.3 million.

Securities available-for-sale:

• Securities available-for-sale increased $14.0 million to $297.8 million due to purchases partially offset by maturities and paydowns.
• Unrealized losses increased $748 thousand to $31.4 million.

Other investments:

• Other investments decreased $2.4 million due to a decrease in FHLB stock as a result of a reduction in FHLB borrowings.

Total loans:

• Total loans held for investment decreased $13.3 million to $1.55 billion.
• Residential loans and multifamily loans decreased $24.5 million and $11.4 million, respectively, partially offset by increases in construction loans of $11.5 million and in commercial real estate loans of $9.4 million, in line with our strategy to further diversify our loan portfolio.
• The Company sold its REO property during the second quarter at a gain of $123 thousand.

Deposits:

• Deposits totaled $1.31 billion, an increase of $66.3 million from December 31, 2023. This was largely the result of a $74.9 million increase in certificate of deposits.
• Core deposits (defined as non-interest bearing checking, NOW and demand accounts and savings accounts) represented 48.8% of total deposits, compared to 52.1% at December 31, 2023.
• Brokered deposits totaled $125.0 million at both June 30, 2024 and December 31, 2023.
• Uninsured and uncollateralized deposits to third-party customers were $150.9 million, or 12% of total deposits, at the end of the second quarter.

Borrowings:

• FHLB borrowings decreased $55.0 million to $342.5 million as deposit growth outpaced asset growth.
• As of June 30, 2024, the Company had $360.5 million of additional borrowing capacity at the FHLB and $33.1 million of other unsecured lines of credit.

Capital:

• Shareholders’ equity decreased $10.0 million to $345.6 million. The decrease was primarily driven by the repurchase of shares, including net shares, at a cost of $8.8 million and the year-to-date loss.
• Tangible equity to tangible assets was 16.88% and tangible common equity per share outstanding was $14.69. See the “Supplemental Information - Non-GAAP Financial Measures” tables below for additional information regarding our non-GAAP measures.
• The Bank’s capital ratios remain above the FDIC’s “well capitalized” standards.

Asset quality:

• As of June 30, 2024, the allowance for credit losses (“ACL”) on loans as a percentage of gross loans was 0.84%.
• The Company recorded a net release of provision for credit losses of $762 thousand and $1.3 million for the three and six months ended June 30, 2024, driven by decreases in all categories. For the second quarter of 2024, there was a release of $706 thousand in the ACL for loans, $49 thousand in the ACL for off-balance-sheet commitments and $7 thousand in the ACL for held-to-maturity securities. There was a release of $1.1 million in the ACL for loans, $170 thousand in the ACL for off-balance-sheet commitments and $25 thousand in the ACL for held-to-maturity securities for the six months ended June 30, 2024. The release was driven by improvements in the economic forecast for the key drivers of our model as well as decreases in off-balance-sheet commitments.
• Non-performing loans totaled $6.2 million, or 0.40% of total loans compared to $5.9 million, or 0.38% of total loans at December 31, 2023.
• Net charge-offs were $16 thousand for the quarter ended June 30, 2024.
• Ratio of allowance for credit losses on loans to non-performing loans was 209.84% at June 30, 2024 compared to 239.98% at December 31, 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, Middlesex, 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 2024 earnings announcement will be held today, Wednesday, July 24, 2024 at 11:00 a.m. (EDT). To listen to the live call, please dial 1-833-470-1428 (toll free) or [phone] (international) and use access code 057129. 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. NesciPresident and Chief Executive [e-mail]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 in 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; 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 current or anticipated impact of military conflict, terrorism or other geopolitical events; 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 SUBSIDIARYConsolidated Statements of Financial Condition
		June 30,2024				March 31,2024				December 31,2023
		(unaudited)				(unaudited)				(audited)
		(Dollars in Thousands)
ASSETS
Cash and cash equivalents		$	60,262			$	53,753			$	46,025
Securities available-for-sale, at fair value			297,790				265,191				283,766
Securities held to maturity			33,169				33,217				33,254
Other investments			17,942				17,908				20,346
Loans, net			1,534,357				1,540,428				1,546,576
Real estate owned, net			—				593				593
Interest and dividends receivable			7,882				8,001				7,595
Premises and equipment, net			30,858				31,696				32,475
Right-of-use assets			24,596				24,454				25,172
Bank owned life insurance			22,274				22,153				22,034
Other assets			16,322				30,393				27,127
Total assets		$	2,045,452			$	2,027,787			$	2,044,963
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits		$	1,311,156			$	1,291,184			$	1,244,904
Advances from the Federal Home Loan Bank			342,500				342,500				397,500
Advances by borrowers for taxes and insurance			9,875				9,368				8,929
Lease liabilities			26,243				26,081				26,777
Other liabilities			10,081				8,498				11,213
Total liabilities			1,699,855				1,677,631				1,689,323
Shareholders’ equity			345,597				350,156				355,640
Total liabilities and shareholders’ equity		$	2,045,452			$	2,027,787			$	2,044,963

BLUE FOUNDRY BANCORP AND SUBSIDIARYConsolidated Statements of Operations(Dollars in Thousands Except Per Share Data) (Unaudited)
		Three months ended												Six months ended
		June 30, 2024				March 31, 2024				June 30, 2023				June 30, 2024				June 30, 2023
		(Dollars in thousands)
Interest income:
Loans		$	17,570			$	17,192			$	16,481			$	34,762			$	32,050
Taxable investment income			3,686				3,614				3,172				7,300				6,324
Non-taxable investment income			36				36				112				72				223
Total interest income			21,292				20,842				19,765				42,134				38,597
Interest expense:
Deposits			9,132				8,413				5,173				17,545				9,327
Borrowed funds			2,587				3,012				3,686				5,599				6,423
Total interest expense			11,719				11,425				8,859				23,144				15,750
Net interest income			9,573				9,417				10,906				18,990				22,847
(Release of) provision for credit losses			(762	)			(535	)			143				(1,297	)			120
Net interest income after (release of) provision for credit losses			10,335				9,952				10,763				20,287				22,727
Non-interest income:
Fees and service charges			296				329				280				625				542
Gain on sale of loans			—				36				24				36				159
Other income			240				86				76				326				163
Total non-interest income			536				451				380				987				864
Non-interest expense:
Compensation and employee benefits			7,635				7,549				7,065				15,184				14,912
Occupancy and equipment			2,262				2,192				2,124				4,454				4,106
Data processing			1,335				1,387				1,535				2,722				3,136
Advertising			52				72				77				124				149
Professional services			623				730				764				1,353				1,744
Federal deposit insurance			194				199				231				393				336
Other			1,114				1,113				1,172				2,227				2,242
Total non-interest expense			13,215				13,242				12,968				26,457				26,625
Loss before income tax expense			(2,344	)			(2,839	)			(1,825	)			(5,183	)			(3,034	)
Income tax expense			—				—				—				—				—
Net loss		$	(2,344	)		$	(2,839	)		$	(1,825	)		$	(5,183	)		$	(3,034	)
Basic loss per share		$	(0.11	)		$	(0.13	)		$	(0.08	)		$	(0.24	)		$	(0.13	)
Diluted loss per share		$	(0.11	)		$	(0.13	)		$	(0.08	)		$	(0.24	)		$	(0.13	)
Weighted average shares outstanding
Basic			21,735,002				22,095,260				24,249,714				21,914,811				24,131,017
Diluted (1)			21,735,002				22,095,260				24,249,714				21,914,811				24,131,017

(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 2024 and 2023 periods.

BLUE FOUNDRY BANCORP AND SUBSIDIARYConsolidated Financial Highlights(Dollars in Thousands Except Per Share Data) (Unaudited)
		Three months ended
		June 30,2024				March 31,2024				December 31,2023				September 30,2023				June 30,2023
		(Dollars in thousands)
Performance Ratios (%):
Return on average assets			(0.47	)			(0.56	)			(0.57	)			(0.27	)			(0.35	)
Return on average equity			(2.71	)			(3.23	)			(3.25	)			(1.55	)			(1.95	)
Interest rate spread (1)			1.43				1.40				1.33				1.48				1.75
Net interest margin (2)			1.96				1.92				1.84				1.94				2.17
Efficiency ratio (3) (4)			130.73				134.19				128.41				120.98				114.90
Average interest-earning assets to average interest-bearing liabilities			122.28				122.50				122.93				123.05				130.77
Tangible equity to tangible assets (4)			16.88				17.25				17.37				17.07				17.59
Book value per share (5)		$	14.70			$	14.61			$	14.51			$	14.27			$	14.38
Tangible book value per share (4)(5)		$	14.69			$	14.60			$	14.49			$	14.24			$	14.35
Asset Quality:
Non-performing loans		$	6,208			$	6,691			$	5,898			$	6,139			$	7,736
Real estate owned, net			—				593				593				593				—
Non-performing assets		$	6,208			$	7,284			$	6,491			$	6,732			$	7,736
Allowance for credit losses to total loans (%)			0.84				0.88				0.91				0.88				0.91
Allowance for credit losses to non-performing loans (%)			209.84				205.48				239.98				225.97				186.31
Non-performing loans to total loans (%)			0.40				0.43				0.38				0.39				0.49
Non-performing assets to total assets (%)			0.30				0.36				0.32				0.33				0.37
Net charge-offs to average outstanding loans during the period (%)			—				—				—				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) See the “Supplemental Information - Non-GAAP Financial Measures” tables below for additional information regarding our non-GAAP measures.(5) June 30, 2024 per share metrics computed using 23,505,357 total shares outstanding.

BLUE FOUNDRY BANCORP AND SUBSIDIARYAnalysis of Net Interest Income(Dollars in Thousands) (Unaudited)
		Three Months Ended,
		June 30, 2024											March 31, 2024											June 30, 2023
		Average Balance				Interest				AverageYield/Cost			Average Balance				Interest				AverageYield/Cost			Average Balance				Interest				AverageYield/Cost
		(Dollars in thousands)
Assets:
Loans (1)		$	1,550,736			$	17,570			4.56	%		$	1,555,534			$	17,192			4.45	%		$	1,583,057			$	16,481			4.18	%
Mortgage-backed securities			167,219				960			2.31	%			160,349				876			2.20	%			174,398				967			2.22	%
Other investment securities			175,394				1,688			3.87	%			183,717				1,652			3.62	%			198,588				1,505			3.04	%
FHLB stock			17,223				447			10.44	%			20,123				492			9.83	%			22,832				342			6.00	%
Cash and cash equivalents			51,290				627			4.92	%			51,561				630			4.92	%			40,614				470			4.64	%
Total interest-earning assets			1,961,862				21,292			4.37	%			1,971,284				20,842			4.25	%			2,019,489				19,765			3.93	%
Non-interest earning assets			56,826											59,357											56,280
Total assets		$	2,018,688										$	2,030,641										$	2,075,769
Liabilities and shareholders' equity:
NOW, savings, and money market deposits		$	611,931				1,955			1.28	%		$	616,169				1,937			1.26	%		$	754,048				2,217			1.18	%
Time deposits			655,755				7,177			4.40	%			619,220				6,476			4.21	%			442,547				2,956			2.68	%
Interest-bearing deposits			1,267,686				9,132			2.90	%			1,235,389				8,413			2.74	%			1,196,595				5,173			1.73	%
FHLB advances			336,742				2,587			3.09	%			373,874				3,012			3.24	%			432,137				3,686			3.42	%
Total interest-bearing liabilities			1,604,428				11,719			2.94	%			1,609,263				11,425			2.86	%			1,628,732				8,859			2.18	%
Non-interest bearing deposits			25,076											26,491											26,914
Non-interest bearing other			41,061											41,569											44,240
Total liabilities			1,670,565											1,677,323											1,699,886
Total shareholders' equity			348,123											353,318											375,883
Total liabilities and shareholders' equity		$	2,018,688										$	2,030,641										$	2,075,769
Net interest income						$	9,573										$	9,417										$	10,906
Net interest rate spread (2)										1.43	%										1.39	%										1.75	%
Net interest margin (3)										1.96	%										1.92	%										2.17	%

(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 SUBSIDIARYAnalysis of Net Interest Income(Dollars in Thousands) (Unaudited)
		Six Months Ended June 30,
			2024											2023
		Average Balance				Interest				AverageYield/Cost			Average Balance				Interest				AverageYield/Cost
		(Dollars in thousands)
Assets:
Loans (1)		$	1,553,135			$	34,762			4.49	%		$	1,568,170			$	32,050			4.12	%
Mortgage-backed securities			163,784				1,836			2.25	%			176,987				1,949			2.22	%
Other investment securities			179,555				3,340			3.73	%			198,827				3,017			3.06	%
FHLB stock			18,673				939			10.08	%			21,494				649			6.09	%
Cash and cash equivalents			51,426				1,257			4.90	%			43,556				932			4.31	%
Total interest-earning assets			1,966,573				42,134			4.30	%			2,009,034				38,597			3.87	%
Non-interest earning assets			58,108											56,112
Total assets		$	2,024,681										$	2,065,146
Liabilities and shareholders' equity:
NOW, savings, and money market deposits		$	614,049			$	3,891			1.27	%		$	780,362			$	4,227			1.09	%
Time deposits			637,488				13,654			4.30	%			429,465				5,100			2.39	%
Interest-bearing deposits			1,251,537				17,545			2.81	%			1,209,827				9,327			1.55	%
FHLB advances			355,308				5,599			3.16	%			396,025				6,423			3.27	%
Total interest-bearing liabilities			1,606,845				23,144			2.89	%			1,605,852				15,750			1.98	%
Non-interest bearing deposits			25,786											30,091
Non-interest bearing other			41,314											44,543
Total liabilities			1,673,945											1,680,486
Total shareholders' equity			350,736											384,660
Total liabilities and shareholders' equity		$	2,024,681										$	2,065,146
Net interest income						$	18,990										$	22,847
Net interest rate spread (2)										1.41	%										1.89	%
Net interest margin (3)										1.94	%										2.29	%

(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 SUBSIDIARYSupplemental Information - Non-GAAP Financial Measures(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 credit losses and income tax expense, while pre-provision net revenue does not.

		Three months ended
		June 30, 2024				March 31, 2024				December 31, 2023				September 30,2023				June 30, 2023
		(Dollars in thousands, except per share data)
Pre-provision net revenue and efficiency ratio:
Net interest income		$	9,573			$	9,417			$	9,196			$	9,876			$	10,906
Other income			536				451				572				369				380
Total revenue			10,109				9,868				9,768				10,245				11,286
Operating expenses			13,215				13,242				12,543				12,394				12,968
Pre-provision net loss		$	(3,106	)		$	(3,374	)		$	(2,775	)		$	(2,149	)		$	(1,682	)
Efficiency ratio			130.7	%			134.2	%			128.4	%			121.0	%			114.9	%
Core deposits:
Total deposits		$	1,311,156			$	1,291,184			$	1,244,904			$	1,253,104			$	1,267,261
Less: time deposits			671,478				642,372				596,624				572,384				521,074
Core deposits		$	639,678			$	648,812			$	648,280			$	680,720			$	746,187
Core deposits to total deposits			48.8	%			50.2	%			52.1	%			54.3	%			58.9	%
Total assets		$	2,045,452			$	2,027,787			$	2,044,963			$	2,101,055			$	2,080,514
Less: intangible assets			386				473				557				644				730
Tangible assets		$	2,045,066			$	2,027,314			$	2,044,406			$	2,100,411			$	2,079,784
Tangible equity:
Shareholders’ equity		$	345,597			$	350,156			$	355,640			$	359,149			$	366,534
Less: intangible assets			386				473				557				644				730
Tangible equity		$	345,211			$	349,683			$	355,083			$	358,505			$	365,804
Tangible equity to tangible assets			16.88	%			17.25	%			17.37	%			17.07	%			17.59	%
Tangible book value per share:
Tangible equity		$	345,211			$	349,683			$	355,083			$	358,505			$	365,804
Shares outstanding			23,505,357				23,958,888				24,509,950				25,174,412				25,493,422
Tangible book value per share		$	14.69			$	14.60			$	14.49			$	14.24				14.35