Release Date: January 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Blue Foundry Bancorp (BLFY, Financial) reported an increase in loans by $32 million, predominantly in commercial portfolios.
- Deposits grew by $25 million, with a significant 17% increase in non-interest-bearing accounts.
- The company maintained tangible book value and strong capital and credit quality despite a net loss.
- Net interest income increased by $386,000, leading to a 7-basis point improvement in net interest margin.
- The company repurchased 481,000 shares at a weighted average share price of $10.49, enhancing shareholder value.
Negative Points
- Blue Foundry Bancorp (BLFY) reported a quarterly net loss of $2.7 million.
- The company experienced a quarterly pre-provision net loss of $3 million.
- The yield on construction loans decreased due to a reduction in the prime rate.
- Borrowing costs increased by 13 basis points to 3.26%.
- The company did not achieve all corporate goals, resulting in a lower payout of the annual cash incentive plan.
Q & A Highlights
Q: Can you provide insights on the loan growth strategy, particularly in the 1 to 4 and multifamily sectors?
A: We are focusing on growing our commercial book, particularly in commercial and industrial (C&I) and owner-occupied spaces. The decline in our residential book is intentional, albeit faster than expected. We are cautious about our concentration in the multifamily sector and are monitoring it closely. - Kelly Pecoraro, CFO
Q: How has the loan pipeline changed, and what are your expectations for the coming year?
A: The pipeline has improved since last quarter. We have about $60 million in commercial loans with letters of intent at a rate of around 7.5%. We expect this positive trend to continue. - Kelly Pecoraro, CFO
Q: What is your outlook on deposit cost progression and its impact on net interest margin?
A: We have seen improvements in deposit costs, currently at a 2.9% yield. We have $500 million in CDs maturing in the first half of the year, which we hope to reprice at lower rates, benefiting from the current rate environment. - Kelly Pecoraro, CFO
Q: What are your expectations for loan yield trends, considering current market conditions?
A: We anticipate loan yields to trend higher as new loans are issued at market rates, despite some challenges in the construction book due to potential prime rate decreases. - Kelly Pecoraro, CFO
Q: Can you discuss the expected pace of margin expansion and expense levels for 2025?
A: We expect a similar pace of margin expansion as seen in Q4, contingent on loan growth and deposit repricing. Operating expenses are projected to remain in the mid to high $13 million range throughout 2025, depending on variable compensation achievements. - Kelly Pecoraro, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
