EX-99.1 2 earningsrelease-q12022.htm EX-99.1 Document
Exhibit 99.1

FOR IMMEDIATE RELEASE

Blue Foundry Bancorp Reports First Quarter 2022 Results

RUTHERFORD, NJ, April 27, 2022 — Blue Foundry Bancorp (NASDAQ:BLFY) (the “Company”), the holding company for Blue Foundry Bank (the “Bank”), today reported net income of $553,000, or $0.02 per diluted common share, for the three months ended March 31, 2022 compared to a net loss of $745,000 for the three months ended March 31, 2021.

"We continued to make excellent progress on our strategic initiatives during a solid first quarter” said James D. Nesci, president and chief executive officer. “We were successful in deploying meaningful liquidity as we grew our lending and investment portfolios while asset quality remained strong.”

Highlights for the first quarter of 2022:
•Gross loans grew by $64.1 million, or 5.1%, compared to the linked quarter, excluding Paycheck Protection Program (“PPP”) loans, led by commercial real estate products.
•Core deposits increased $64.8 million, or 8.4%, compared to the linked quarter, led by a $62.3 million increase in interest checking. Core deposits now represent 65.3% of total deposits, compared to 50.6% a year ago.
•Realized a $1.0 million or 7.2% sequential improvement in adjusted non-interest expense due to lower professional services, marketing and occupancy.
•Net interest income of $11.9 million, an increase of $2.3 million, or 24.4%, compared to the prior year period.
•$952,000 recovery of provision drove a decline in reserves compared to the prior quarter, resulting in an allowance coverage of 1.00%.
•Net interest margin of 2.62%, a 54 basis point increase from the prior year quarter.
•The rising interest rate environment led to a decline of $10.1 million in accumulated other comprehensive income. The net unrealized gains/loss position of the Company’s available-for-sale investment portfolio deteriorated by $15.7 million, partially offset by $5.6 million of gains on cash flow hedges.

Lending Franchise

The Company continues to diversify its loan portfolio by focusing on growth within commercial real estate and commercial and industrial lending. During the first quarter of 2022, the Company produced substantial originations within its multifamily and non-residential portfolios. This resulted in gross loan growth of $55.0 million during the three months ended March 31, 2022, despite elevated pay downs.

 March 31, 2022 December 31, 2021
(In thousands)
Residential one-to-four family$579,083 $560,976 
Multifamily517,037 515,240 
Non-residential187,310 141,561 
Construction and land18,613 23,419 
Junior liens18,071 18,464 
Commercial and industrial16,201 21,563 
Consumer and other37 87 
Total gross loans1,336,352 1,281,310 
Deferred fees, costs, premiums and discounts, net5,134 6,299 
Total loans1,341,486 1,287,609 
Allowance for loan losses(13,465)(14,425)
Loans receivable, net$1,328,021 $1,273,184 

The commercial and industrial portfolio includes PPP loans, net of deferred fees, totaling $8.1 million at March 31, 2022 and $16.8 million at December 31, 2021.
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Retail Banking Franchise

The Company’s funding strategy centers on building and retaining the primary banking relationships with customers who live and work within the Company’s geographic footprint as well as promoting technologies that make banking easy and convenient for all current and prospective customers. Additionally, a focus on attracting the full banking relationship of small to medium sized businesses through an extensive suite of lending and low-cost deposit products continues to support core deposit growth. As of March 31, 2022, core deposits totaled $838.1 million.

 March 31, 2022 December 31, 2021
(In thousands)
Non-interest bearing deposits$45,143 $44,894 
NOW and demand accounts425,766 363,419 
Savings367,177 364,932 
Core deposits838,086 773,245 
Time deposits444,936 473,795 
Total deposits$1,283,022 $1,247,040 

Consolidated Financial Performance:    

Quarterly net interest income compared to the first quarter of 2021:
•Net interest income was $11.9 million, an increase of $2.3 million.
•Net interest margin increased by 54 basis points to 2.62%.
•Yield on average interest-earning assets decreased five basis points to 2.98% while the cost of average interest-bearing deposits decreased 57 basis points to 0.29%.
•An increase of $139.0 million in average core deposits coupled with a $245.1 million decrease of mostly high-cost average time deposits drove a 56 basis point improvement in the cost of deposits and a 58 basis point improvement in the cost of funds.

Quarterly provision for loan losses:
•A $952,000 recovery of provision for loan losses was recorded for the quarter driven by significant pay downs within the construction and land portfolio coupled with a generally improving economic environment. This recovery contributed to a $960,000 decrease in the allowance for loan losses.
•The allowance for loan losses represented 1.00% of total loans compared to 1.13% at December 31, 2021 and 1.25% at March 31, 2021. The allowance for loan losses was 128.5% of non-performing loans compared to 120.4% at December 31, 2021 and 130.4% at March 31, 2021.

Quarterly non-interest expense compared to the first quarter 2021:
•Non-interest expense was $13.2 million, an increase of $847,000. This primarily reflects an increase of $903,000 in compensation as the Company continues to hire and retain talent at competitive rates in the current market.

Quarterly income tax expense compared to the first quarter of 2021:
•Income tax expense was $49,000 compared to an income tax benefit of $551,000 for the prior year quarter. The increase was driven by the $1.9 million improvement in pre-tax income.

Cash and cash equivalents:
•Cash and cash equivalents decreased $91.9 million compared to the linked quarter as the Company deployed cash into loans and invested in primarily high quality liquid securities.




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Securities available-for-sale:
•Securities available-for-sale increased $50.7 million to $375.6 million as the Company invested primarily in residential mortgage-backed securities as interest rates rose.
•The rising rate environment contributed to a decline of $15.8 million in the net unrealized gains/loss position of the portfolio.

Gross loans:
•Gross loans held for investment increased $55.0 million to $1.34 billion. Excluding PPP, gross loans increased by $64.1 million.
•Compared to the linked quarter, non-residential loans increased $45.7 million and residential loans increased $18.1 million.
•Organic loan originations totaled $101.6 million, including originations of $48.2 million in non residential loans and $36.5 million in multifamily loans. In addition, $45.8 million of conforming residential mortgages in the Bank’s geographic footprint were purchased during the quarter.

Deposits and borrowings:
•Deposits totaled $1.28 billion, an increase of $36.0 million since December 31, 2021. Core deposits represented 65.3% of total deposits compared to 62.0% at December 31, 2021 and 50.6% at March 31, 2021.
•Borrowing remained flat at $185.5 million.

Asset quality:
•Non-performing loans totaled $10.5 million, or 0.78% of total loans compared to $12.0 million, or 0.94% of total loans at December 31, 2021, and $12.4 million, or 0.95% of total loans at March 31, 2021.

Capital:
•Shareholders’ equity decreased by $9.3 million to $420.2 million. The rising rate environment adversely impacted the Company’s investment portfolio, driving a $10.1 million decline in accumulated other comprehensive income. Quarterly net income partially offset this decline.
•Tangible equity to tangible assets was 21.68% and tangible common equity per shares outstanding was $14.72.
•The Bank’s capital ratios remain above the FDIC’s “well capitalized” standards.



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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 presence in Bergen, Essex, Hudson, Morris, Passaic and Somerset counties, Blue Foundry Bank is a full-service, progressive 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 first quarter 2022 earnings announcement will be held today, Wednesday, April 27, 2022 at 11:00 a.m. (EDT). To listen to the live call, please dial 1-844-200-6205 (toll free), 1-646-904-5544 (local) or +1-929-526-1599 (international) and use access code 856694. The webcast (audio only) will be available on 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


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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: conditions related to the global coronavirus pandemic that has and will continue to pose risks and could harm our business and results of operations; 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 loan 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; 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; 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.
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BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Statements of Financial Condition
March 31, 2022 (Unaudited) and December 31, 2021
(Dollars in thousands)

 March 31, 2022 December 31, 2021
(In thousands)
ASSETS
Cash and cash equivalents
$101,562 $193,446 
Securities available for sale, at fair value375,614 324,892 
Securities held to maturity (fair value of $27,993
  at March 31, 2022 and $22,849 at December 31, 2021)
29,838 23,281 
Restricted stock, at cost10,182 10,182 
Loans receivable, net of allowance of $13,465 at March 31, 2022 and $14,425 at December 31, 2021
1,328,021 1,273,184 
Interest and dividends receivable5,780 5,372 
Premises and equipment, net28,130 28,126 
Right-of-use assets24,811 25,457 
Bank owned life insurance21,776 21,662 
Other assets12,441 8,609 
Total assets$1,938,155 $1,914,211 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits$1,283,022 $1,247,040 
Advances from the Federal Home Loan Bank185,500 185,500 
Advances by borrowers for taxes and insurance9,840 9,582 
Lease liabilities26,083 26,696 
Other liabilities13,496 15,922 
Total liabilities1,517,941 1,484,740 
Shareholders’ equity
Common stock $0.01 par value; 70,000,000 shares
     authorized; 28,522,500 shares issued and outstanding
285 285 
Additional paid-in capital282,100 282,006 
Retained earnings170,010 169,457 
Unallocated common shares held by ESOP(21,677)(21,905)
Accumulated other comprehensive loss(10,504)(372)
Total shareholders’ equity 420,214 429,471 
Total liabilities and shareholders’ equity$1,938,155 $1,914,211 




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BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Statements of Operations
(Dollars in Thousands) (Unaudited)
Three months ended
March 31,
20222021
(In thousands)
Interest income:
Loans$11,656 $12,262 
Taxable investment income1,817 1,545 
Non-taxable investment income121 135 
Total interest income13,594 13,942 
Interest expense:
Deposits882 2,818 
Borrowed funds773 1,525 
Total interest expense1,655 4,343 
Net interest income11,939 9,599 
Recovery of provision for loan losses(952)(808)
Net interest income after recovery of provision for loan losses12,891 10,407 
Non-interest income:
Fees and service charges800 526 
Gain on premises and equipment1 — 
Other126 140 
Total other income927 666 
Non-interest expense:
Compensation and employee benefits6,924 6,021 
Occupancy and equipment1,881 1,953 
Loss on assets held for sale— 21 
Data processing1,478 1,767 
Advertising519 470 
Professional services1,291 1,397 
Directors fees136 140 
Recovery of provision for commitments and letters of credit(170)(231)
Federal deposit insurance78 125 
Other1,079 706 
Total operating expenses13,216 12,369 
Income (loss) before income tax expense (benefit)602 (1,296)
Income tax expense (benefit)49 (551)
Net income (loss)$553 $(745)
Basic and diluted earnings per share$0.02 n/a
Weighted average shares outstanding26,343,508 n/a
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BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Financial Highlights
(Dollars in thousands except for share data) (Unaudited)

Three months ended
March 31,
2022		December 31,
2021		September 30,
2021		June 30,
2021		March 31,
2021
Performance Ratios (%):
Return (loss) on average assets0.12 (3.97)(2.77)(0.19)(0.16)
Return (loss) on average equity0.52 (17.36)(15.15)(1.97)(1.47)
Interest rate spread (1)
2.50 2.50 1.96 1.84 1.96 
Net interest margin (2)
2.62 2.63 2.15 1.99 2.08 
Efficiency ratio (non-GAAP) (3)
104.0 110.6 105.6 116.6 122.5 
Average interest-earning liabilities to average interest-bearing liabilities131.8 132.0 133.4 119.9 140.9 
Tangible equity to tangible assets (4)
21.68 22.42 22.14 7.94 10.43 
Book value per share (5)
14.73 15.06 15.72 N/AN/A
Tangible book value per share (6)
14.72 15.04 15.70 N/AN/A
Asset Quality:
Non-performing loans$10,482 $11,983 $12,463 $12,466 $12,385 
Real estate owned, net$— $— $624 $624 $623 
Non-performing assets$10,482 $11,983 $13,087 $13,090 $13,008 
Allowance for loan losses to total loans (%)1.00 1.13 1.22 1.24 1.25 
Allowance for loan losses to non-performing loans (%)128.5 120.4 122.3 125.1 130.4 
Non-performing loans to total loans (%)0.78 0.94 1.00 0.99 0.95 
Non-performing assets to total assets (%)0.54 0.63 0.65 0.51 0.66 
Net charge-offs to average outstanding loans during the period (%)— %— %— %— %— %

(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 $419.8 million, which excludes intangible assets ($452 thousand of capitalized software). Tangible assets equal $1.94 billion and excludes intangible assets.
(5) Per share metrics computed using 28,522,500.00 total shares outstanding.
(6) Tangible book value equals the Company’s tangible equity of $419.8 million divided by outstanding shares of 28,522,500.







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BLUE FOUNDRY BANCORP AND SUBSIDIARY
Analysis of Net Interest Income
(Dollars in Thousands) (Unaudited)


Three Months Ended March 31,
20222021
 Average Balance  Interest  Average
Yield/Cost 		 Average Balance  Interest  Average
Yield/Cost
(Dollar in thousands)
Assets:
Loans (1)
$1,280,678 $11,656 3.69 %$1,291,713 $12,262 3.85 %
Mortgage-backed securities171,912 722 1.70 %138,060 678 1.99 %
Other investment securities198,736 1,020 2.08 %122,698 727 2.40 %
FHLB stock9,942 116 4.73 %16,465 210 5.17 %
Cash and cash equivalents188,706 80 0.17 %300,100 65 0.09 %
   Total interest-bearing assets1,849,974 13,594 2.98 %1,869,036 13,942 3.03 %
   Non-interest earning assets77,445 75,946 
       Total assets$1,927,419 $1,944,982 
Liabilities and shareholders' equity:
NOW, savings, and money market deposits760,369 235 0.13 %623,192 305 0.20 %
Time deposits458,109 647 0.57 %703,160 2,513 1.45 %
    Interest-bearing deposits1,218,478 882 0.29 %1,326,352 2,818 0.86 %
FHLB advances185,500 773 1.69 %324,789 1,525 1.90 %
   Total interest-bearing liabilities1,403,978 1,655 0.48 %1,651,141 4,343 1.07 %
Non-interest bearing deposits42,402 40,575 
Non-interest bearing other48,273 47,621 
   Total liabilities1,494,653 1,739,337 
Total shareholders' equity432,766 205,645 
Total liabilities and shareholders' equity$1,927,419 $1,944,982 
Net interest income$11,939 $9,599 
Net interest rate spread (2)
2.50 %1.96 %
Net interest margin (3)
2.62 %2.08 %
(1) Average loan balances are net of deferred loan fees and costs, and premiums and discounts, and includes 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.



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BLUE FOUNDRY BANCORP AND SUBSIDIARY
Adjusted Pre-Provision Net Revenue (Non-GAAP)
(Dollars in Thousands) (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 (benefits) while pre-provision net revenue does not.
Three months ended
March 31,
2022		December 31,
2021		September 30,
2021		June 30,
2021		March 31,
2021
(Dollars in thousands)
Pre-provision net revenue (PPNR) and efficiency ratio, as adjusted:
Net interest income11,939 12,336 11,104 9,909 9,599 
Other income927 704 489 621 666 
Operating expenses, as reported13,216 17,380 33,118 11,802 12,369 
Less: Prepayment fees— 754 1,401 — — 
Less: Loss on pension withdrawal— 1,974 9,232 — — 
Less: Charitable contribution— — 9,000 — — 
Less: Provision for commitments and letters of credit(170)148 1,245 (473)(231)
Less: Loss on assets held for sale— 83 — — 21 
Operating expenses, as adjusted13,386 14,421 12,240 12,275 12,579 
Pre-provision net revenue (loss), as adjusted$(520)$(1,381)$(647)$(1,746)$(2,314)
Efficiency ratio, as adjusted104.0 %110.6 %105.6 %116.6 %122.5 %
Core deposits:
Total deposits1,283,022 1,247,040 1,265,617 2,008,068 1,385,829 
Less: time deposits444,936 473,795 521,510 639,043 684,429 
Less: conversion deposits (1)
— — — 630,094 — 
Core deposits838,086 773,245 744,107 738,931 701,400 
Core deposits to total deposits65.3 %62.0 %58.8 %53.6 %50.6 %
Tangible equity:
Shareholders’ equity (2) (3)
420,214 429,472 448,235 204,913 205,453 
Less: intangible assets452 437 354 251 — 
Tangible equity419,762 429,035 447,881 204,662 205,453 
Tangible book value per share:
Tangible equity419,762 429,035 447,881 N/AN/A
Shares outstanding28,522,500 28,522,500 28,522,500 N/AN/A
Tangible book value per share14.72 15.04 15.70 N/AN/A
(1) Conversion deposits represent deposits held in advance of the initial public offering. Given their temporary nature, they are removed from the core deposit ratio.
(2) The Company recorded a deferred tax assets valuation allowance of $16.8 million as of December 31, 2021.
(3) Accumulated other comprehensive income (AOCI) declined by $10.1 million in 1Q’22, largely a result of the rising rate environment.
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