Blue Foundry Bancorp (BLFY) 23 Oct 242024 Q3 Earnings call transcript

Good morning, and welcome to Blue Foundry Bancorp's Third Quarter 2024 Earnings Call. Comments made during today's call may include forward-looking statements, which are based on management's current expectations, subject to uncertainty and changes in circumstances. Blue Foundry encourages all participants to refer to the full disclaimer contained in this morning's earnings release, which has been posted to the Investor Relations page on bluefoundrybank.com.

During the call, management will refer to non-GAAP measures, which exclude certain items from reported results. Please refer to today's earnings release for reconciliations of these GAAP non-GAAP measures.

event recorded. this reminder, a is being As

call Your the there call. be muted turn will Jim and duration of for the the now After will a session. line to Nesci. question-and-answer President CEO, will be I over the speakers' remarks,

our loss in by will operator, for results our this loss $X quarter growth, while morning, book we increased after Officer, Pecoraro, loans good who reported a Chief credit million. were the and an our joining and $X.X call. capital million. company's update financial earnings a quarterly you, by operations. everyone. net Thank Financial tangible remains quarter net Thank able pre-provision for $X.X per million I strong. deliver and of provide Earlier I grew value quarterly discuss share third you detail Deposits morning, us third am quality $X.X million joined on Kelly of We to

outlook the positive a have for and we fourth for next both Additionally, year. the quarter

deepening and current and our recent time products, quarters. sheet healthy sustained the serve. in With We and have positive our developing how relationships rate growth we loan point basis on Federal we loan coming deliver will to industry-leading within communities continue believe impact based any our subsequent net the Reserve's have relationships a new expect consumer-friendly position cuts the on interest commercial the we we we income. on balance XX rate to focus Further, a pipeline

in our banking small- to full medium-sized relationship businesses are dedicated we Specifically, of attracting the market. to

deposits our increase network in X% has us and our deposits. resulted successes in ratio. has reduce have on commercial year, loan-to-deposit improved delivered this deposits an in So wholesale X% reliance strategy XX% our far to These by allowed consumer a increase branch and this

more originating building real commercial pipeline. institution, been estate commercially to Given we our a oriented have while loans our strategy become selective in

We in yields across attractive of expansion at strong commercial disciplined remain income should of continues Our yield. pipeline this our offerings. drive an interest credits to underwriting our loan in and credits product expand, loan all and

shares During average $XX.XX. at a the repurchased we of quarter, price XXX,XXX weighted

book shares to increased Repurchasing to share value. $X.XX by Tangible continue levels per $XX.XX. improve value shareholder at these

we sale holding Our as capital strongest deposits borrowing risk Blue quarter, Tangible in among million and unencumbered balances. This capacity, XX. remain unrestricted available Xx of was to untapped continues well liquidity. bank to that of uninsured represents assets equity At our liquidity depositor. are deposit September is low XX.X% with to banking levels tangible capitalized XX% another concentration the which cash common customers, and any of are a uncollateralized $XXX the third our and the with only to robust operate Foundry industry. $XXX had of million in liquidity end than and for the securities larger and provided single

the With delighted over your to be like we'd and then Kelly, questions. Kelly? that, I'd answer to turn to call

loss the loss credit good of by was $X to a release This compared change $X.X in quarter was the compared and you, losses Thank net to prior in everyone. during for Jim, million provision quarter. net a build for morning, prior the million quarter. the The a third driven

interest in increase the by expense. Additionally, in income outpaced the increase was interest

million $XX During of commercial originated of we quarter, the lines credit.

of of by increase for end in at increased $XX.X unfunded and $XX the the the Our losses. million, unused lines million the credit commitments This $XXX,XXX drove quarter. we had provision of credit

baseline allowance majority of the credit quantitative and forecast. weighting for and from loss reminder, is places measures, our greater derived a the our methodology As allowance on adverse

assets reduction assets million and in loans. a This X nonaccrual declined to basis current a resulted in strong due to the environment. point reduction loans. remains total total in in in to nonperforming quality loans Nonperforming X improvement basis $X.X by nonperforming point Asset assets

amounts while improvement and ] points, in to Net loans loans interest XX income reduction nonaccrual by margin. to loans. at XXX% net the to the bonds but expanded $XXX,XXX. [ decreased flat basis basis remained $XXX,XXX, total Our increased interest leading a nonaccrual $XXX,XXX quarter to interest increased XXX% XX to Interest prior income in our due from point expense

as all assets X our margin by net expect and basis X decreased contracted and on basis by points interest reprice on deposits loans to We improve loans interest to earning we Yield of basis lower. Borrowing XX X.XX% XX points X%. close basis points basis to X.XX%. increased interest increased of deposits as Cost borrowings increased at X.XX%. funds X.XX% rates to lower X points costs interest-bearing to mature. points to The longer-dated cost yields

the slightly as longer-term In lock increased attractive at balances addition, funding took in company action to borrowing rates.

data flat was lower salaries small were substantially by quarter. Compensation to lower variable expense accruals. This offset quarter, this processing Expenses expenses. other items compensation and in by prior was and in professional and driven increases services idiosyncratic

we discipline promote for fourth quarter the We be XXXX $XX high continue and range. operating expense million expect to of to expenses in to the mid

balance by Moving the $X.X sheet. Gross during loans on increased the million to quarter.

X% is in none As City. office and York our in is a loan reminder, state portfolio only New of approximately

partially This amortization million Our to unrealized or million a years securities variable by decrease duration position. sale of the $X.X was for of $XX decreased with driven offset million. loss improvement an X.X XX% $X by

reduction grow customer by was deposits and in offset to staff decrease collateral deposit million received the for a deposits held from the $X.X frontline by Our as position. This swap $XX.X in million. was for our wholesale cash resulting able growth

funding And to term happy to that, I of and are Borrowings increased in Jim with attractive take by $X your questions. company ahead levels. million as lock at rates loan the borrowed anticipated

in common capitalized as the capital low Foundry that concentration levels and well Blue Tangible risk robust to liquidity strongest depositor. XX.X% banking XX. operate are a Company the any among with September of remains continues was tangible to to industry, with equity assets single

Instructions] [Operator

Sandler. with Justin Crowley Piper Our today question first comes from

morning. Good

the loan yields down start on inputs, were of the which the just at quarter. on specifically, to wanted then some NIM even in And the quarter. looking for Just like

curious Just dynamic? that drove what

it on what funding loan yields some on Justin, place the are at coming loan NIM yes, do that morning taking the saw of the Good the we products. in, has of if with our for to timing look we quarter,

more lot As life and loan. the we fundings take become are of those of the like, look place to a don't over commercial diversify immediately and done

So that's on the loan front.

higher-priced deposits drove had cut, some some to of some sure that the see other I'm On higher in individual of components we quarter levels our earlier block in the did in for the the NIM we Fed decrease quarter, the our rate of repricing anticipation. the of CDs. in with

our our high we that rate -- rate at was were offering quarter, During CD the X.XX%.

did we that. that to some see So repricing product, drove which

much but think a environment? pull the to rates being on here, of to, I I move that rates further promotional I lower not might just loan-to-deposit then to able sure And specifically about had like, looking competitive just at be decreases, XXX things I'm we how considering how as XXX that hit suppose, you curious just lowering you and CD forward, get deposit was that next. alluded continue the far as about rate to rates, as month to But ratio from guess, compared that

Yes.

CD. at And the our this with the to looking look our rate did impact lower we just we week, We'll on competitive teams. down to So the we environment, see offering our are and we're frequently trying core being cognizant shift back customers move which perspective, funding of products, also that rates a ratio. an from loan-to-deposit has to that pace. gives ability our at a that, us different But to into XXX

then just gears a shifting And I guess little. helpful. That's

us purchases provide a else loan exactly the consumer of the in lending average specifically FICO sure of? some or As type And be of far to sense I'm not FICO, as like what scores the on I you guess, able anything can that you're relevant? give of whatever might quarter, if consists participation,

quarter. consumer are they that to So and during we at, of write-offs, we enhancements have a We They participating might average on pool have a from they and in credits looked were that have our had did team the credit FICO, at underwritten an an that at that. attractive perspective, advantage rate. opportunity but loan credit don't strongly do look the take

So we took that of advantage opportunity.

And that a the but back purchases, at? would so continue look extent to be that just we've seen growth? forward to I is what tool you to resi going be that that would the to guess consumer, something Just that before, supplement

at will that comes in market. I opportunities that take the that look a credit look all every as comfortable if that's rates, at something think has with as us. we're we opportunity take a before will And the appropriate well we

the stock run perhaps in got get quarter? goes here my this see trading to you but done where then be below to that pace share activity liquidity? in the at quarter. active And Or buyback nice even more just with considering room it there was a Understood. Could sustainably repurchases is now question, the

you're rules as are the to on we aware, Justin, So beholden SEC buybacks.

as average bought the based a we're all of control much can we basis. buying how those day. we is So don't -- upon maximum us as much on that are It's we available in the trading buying to that's daily metrics volume,

with Chris The next O'Connell KBW. question comes from

loan to same? Just at about to on the origination then are what the quarter, on looking wanted now? last just pipelines, start Maybe off side. are Or the they the relative are they yields how And up? just coming are

Yes.

commercial we're where we're transitioning like. than little Again, bit balance QX. or more pipeline were we the is seeing stronger So we to a remember, sheet the where ended

of fundings immediate. are those some So

So will at of dependent the pipeline Again, stood $XX needs be at on fundings million of rates X.X%. over borrower. just the the around the

begins guys side it. comfortable I cap the of going that forward, now just you the Got assuming on are there you higher? side, want up Is things, growth pick base. funding that the of on half over here kind from to of at? CDs, are that level a bringing deposit loan this Or think, And to

happening really depends what's the preference. and It on in consumer marketplace

go. and out part or and in at we have the bit believe a just cycle I few time savings then of it's I moving out. a to the our this saw moving customers And start ago, money start and built we that's got cycle, savings having built that like we it. little product product, And We've will So level then a see the up where how savings that's control down least a rate more into customers a products higher again, future and last get we moving into higher variable over think marketplace CDs back market and years will that pricing.

deposit a drop CD and down then in the rate is obviously side, And the attractive positive. on the

For yet? portion the if interest-bearing on rates remainder And you of that guys moved deposit the so, that of portion book? the of have maybe book, what

meet We've bit. a moved We it frequently. little

it meets do. products to begin that pricing the move pricing to an Our teams we don't regularly. ALCO in team core high very have down, really opportunity of where there's with. and pricing And Most

repricing So become to the pickup it's Loan and our really CD you the starts it borrowings come to as more of in constructive. with price, Federal Home I down institutional Bank and start book the they think see

And maybe do or as far as the a have as the X/XX or most margin? today whatever you recent guys date spot is, margin, of

coming What in NIM of the a say the don't XXX% the in quarter the as provide book. well quarter on ] deposit well low fourth loan to in, fourth improvement taking later we're normally in activities is range we shift for as spot actions based So [ fundings in costs the the our margin. upon seeing I as we're some can as quarter,

XX of we're here. That's kind you will we think guys helpful. any if much of point getting look per type benefit basis and where cut situation of to cuts sense And And on how guys a move margin basis? out the you normal a more as

those Fed. commercial utilizing for the from core it's It's would That's waiting economy, The right? a at normal. more lines. fast what how the we're see have drop and bank describe shift to well I based rates it on. as CDs looking and is tend as from the products way improve. bank can I -- curve we're then to mean our we customers the gets what positioned But The in that's results to back start

make trying be to we'll to I for sure our and we're trying -- position. think our customers. shareholders. We're So additional value that's we're to there to show able

interest-bearing the cutting it. mean, deposit around the for data And the Got do guys total either I you have assumptions cycle? or

being cycle, dependent and the our Jim market as the For as and will those the customers coming be needs it competition looking -- we're upon meeting to in mentioned, responsive as well.

need to we we'll we'll look, and but pricing So sheet the appropriately. balance fund be

would data, the customer a has add, I very much not What but so customer loyal base been our bank. base to

savings with us long will us with from into for they and money will markets move into different They've bank shifted and we been a shift, So I us to believe historically as then they with with continue the stay products time. accounts. to high-rate CDs they've very

Great. And for me. last one

quarters you Just mature? how do have is of and of the turnover portfolio couple of to much guys next the set CD

So TD the the a fourth we looking have brokered from million, and about $XXX portfolio CD at we're reprice consumer kept in quarter. short base, will

I CV. you just [indiscernible] It been quickly we our special look keep at months, special, X-month think it. rather X that when building about it's burns off so

questions. We have no further

I everybody Thanks, our appreciate earnings again look and great us day. forward quarter. We joining speaking to a after third call. have today to for quarter the you fourth

disconnect you Thank us call, you, our joining for may lines. and now today. everyone, concludes This your