BLFY - Earnings call transcript Q2 2022

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Operator

Good morning, and welcome to Blue Foundry Bancorp's Second Quarter 2022 Earnings Call. My name is Melissa, and I will be your conference operator today. Comments made during today's call may include forward-looking statements, which are based on management's current expectations and are 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. earnings reconciliations today's measures. these to refer release of for non-GAAP Please

session. turn a being and there speakers’ question-and-answer is this CEO, will will [Operator a As event the Jim recorded. Nesci. reminder, to the over call Instructions] After be I president now remarks

James Nesci

opening results. Investors have Thank Good Officer, made and by income to our by newly May, leverage to and Chief $XXX,XXX. Financial morning, Earlier of where her $XX,XXX welcome quarter experiences we we from comes guide our second Bank, knowledge revenue time I you, call. the the leadership, excited a we share Today, progress net Executive core have our net we Since and her this from to and second first Pecoraro. the of company's Kelly was morning, am operator. remarks, reported will Kelly us Kelly Accounting pre-provision earnings benefited Chief a early encouraged I'm Kelly's financial Blue everyone, Vice results. to operating joined are she few for appointed in in arrival help Foundry. President and After Officer. quarter

second in During loan growth billion, of franchises. total the loans quarter prior This more represents we up grew the consecutive quarter. than the both we portfolio had by of $XX XX, X.X% we our growth This quarter, lending retail $X.XX June our and significant X%. At reported million loan is from quarter-over-quarter.

from record production the largest commercial Blue achieved quarter. of in loans real the million, multifamily originations onboarded strong Foundry's growth Organic and totaled in million team $XXX originations $XXX came new lending history. This estate. Our quarterly during

XX. with the near-term, remains as pipeline June a of robust million loan Our of rate X.X% weighted $XXX totaling in

business healthy strong, year, Deposit later with in our is to the economic longer-term expect with continue our especially conservative. growth but quarter, this remains customers. given We third outlook originations uncertainties more

retain retail by exploring $XX initiatives $XX quarter. is growth. our customers, deposits Business core grew team and million to accounts our the drove constantly that team clients. of attract million retail Our serve during best new To

relaunched of to services to the opened implementation our branch located in suite modern, and partnered foreign branches the accounts, May. simplified, We During online historic open branch of We've conscious company center business financial technology our efficient environmentally to Hoboken to with for an our with we we a initiate a district customers allow business user-friendly and management our opening cash mobile application quarter, exemplifies enhanced product architecturally wires. town. interface. initiate This vision in inviting the in XXth channel

of The impact that strategy second successful execution franchise. quarter had the positive on already our the our evidenced has

Kelly, anniversary blackout Additionally, program a and I'd to your Directors our shareholders X.X be capital allows XX% begin up initial repurchase July that, XX to Board a turn program of economically to answer or us marked then share the And of repurchase our return manner, plan to authorized feel we we'd public of concludes. this and shares. week, to million an questions. With We call the to to plan our last one-year once that offering. like rational in period execution delighted of over strongly

Kelly Pecoraro

equally am morning, team the their in thrilled at joined alongside history. work management inviting juncture excited future. and you, to Thank extensive Jim the guide through help its Jim, good I as bright such Foundry pivotal and everyone. I'm a to Blue and to company have And

of the quarter of at the revenue positive $XXX,XXX net pre-provision income. by for million, was quarter. an Income of highlighted were improvement net quarter, to the results $X $XX,XXX compared financial Our linked for

available-for-sale $X.XX XXXX, Breaking securities had reflected income. reduction tax September this believe reflected items first down for temporary valuation deferred unrealized declined primarily the we on which to higher rate XX, a $X.XX decline going public, entire on in $X.XX offset that The share. comprehensive is partially is our due was AOCI has book assets. primarily $X.XX tangible value value book from However, tangible rate Since portfolio, allowance to per per it due temporary our be quarter related XX% other in of by declined the is $XX.XX. to and which or environment, the nature. quarter share swap to established reported further, the in $X.XX negative our losses interest to position, impact after is

intend we we profitability, our While able of adjustments, be sell principal held to established of majority securities And the Therefore, do the those we expect previously allowance. the reversing sale, not to securities. received. to sustained continue mark-to-market value as receive majority requiring payments currently expect of the securities with to valuation are for are as the available full

Throughout cash excess versus the to deployed the million points earlier. successfully rising balances quarter, million basis we as pressure growth loan interest $X.X X.XX%, During quarter, funding our net quarter-over-quarter. trailing interest substantial through loan expanded Jim the highlighted XX.X% from the or XX margin $XX.X Net quarter environment. increased despite rate the income to grew

increased interest the of our prior funds expense compared quarter, cost points. XX at remained to While basis flat $XX,XXX,

or expenses, time to in continue which In commitments our $XX.X grew manage We off. from excluding the by loans, variable million, drove continue shift have of professional liability impact and Gross services million of and regards resulted within X.X% closely for a $XX.X the expenses provision or our decline sequentially. to mix in letters our sequential $XXX,XXX benefited PPP, decline. we to advertising credit, to expenses, excluding X.X% of the deposits a operating as run

by of experienced driven growth Our quarter, portfolios estate $XXX in commercial originations million. the strong real

in Fannie purchased to our bank in million of high-quality purchases which originated During principal compared loans of quarter. also residential the $XX million quarter, $XX the standards, the to previous market, were Mae

in We will supplement to use the purchase residential the selectively near-term originations. program

loans as securities demand remains fund provide to positioned that to Our portfolio well used cash will high. flow is supplemental be

scheduled by maturities, adjustments. During due mark-to-market and portfolio pay the declined quarter, the $XX.X downs calls, to million

quality loans non-performing remains total asset basis basis X to points strong XX decreased to loans as points. Our

XX During loans to points. the points allowance basis basis to X quarter, our total decreased

increased to However, to quarter. XXX.X% allowance non-accrual our the XXX.X% prior from loans

As a operating adopt model I with we incurred by required happy and to take CECL date. your are loss that, reminder, the Jim to the currently And are under track on implementation are questions. and

Operator

Thank you. Ross RLH first [Operator from Instructions] will take question our Investors. today We Haberman of

Ross Haberman

held for the first That's having morning. or Two discuss Thanks question, sale? your you my please. for your duration Thank Good the maturity questions, could call. average investment of you. average

Kelly Pecoraro

This years, Kelly Pecoraro. is and on four our is around years right Ross. X.X Sure, maturity health average The duration portfolio.

Ross Haberman

you. is they could that portfolio lot, four bit if four have quite extending, have been And a what further you portion And backs? of and years? years, the do a the that mortgage beyond Thank extend

Kelly Pecoraro

I'm me Give breakout on the for just the portfolio. backs moment. the in mortgage health and a looking maturity

So they're sale. available all in our for

Ross Haberman

four is, that for being could of extending? guess in tax that you end of that could years I or that question the X% sale? because have held X%, And -- is And up the amount mortgage

Kelly Pecoraro

As rate environment, think at the we the investments. these look extension I interest seeing that are we're short-lived

be potential projecting a this it to point. very for at there's material extension, we're but not So

Ross Haberman

for the mortgage the the that's the backs Again, years is those and four that. the average are clarify want held-for-sale to held-for-sale? -- I just in

Kelly Pecoraro

Yes.

so remove they are mortgage-backed held-for-sale, yes. securities, they are to Now available-for-sale,

Ross Haberman

Okay, okay. you much. very Thank

Operator

Compass Laurie, We'll Point. please go take ahead. our next Hunsicker Laurie question of today from

Laurie Hunsicker

to And comments how remarks Hoping annualized welcome. you the in you that, we just for Good I very And question then Thanks. as referenced, that the Kelly, loan [Technical back, morning. the overall quantify can we Hi. Difficulty] should look to very, that go talked help that? about thinking XX% made longer-term when X% you we next growth. too. Obviously, Can another Great. year? about that related have as you to be outlook Jim, prepared us

Kelly Pecoraro

of it's $XXX any very and happy is much loan the as be in guidance QX. QX. as really X/XX, hope If at here will to we I'm me. our went So look in not to QX. that at Thank provide the to QX pipeline Kelly. continue on Blue look this believe prepared you we Laurie, it about have market. in at into strong strong We're continue pipeline We welcoming at we for believe million point be we as Foundry. to very as growth We demonstrated

Laurie Hunsicker

just down a little bit into And buckets here. your drilling then okay. Okay,

the own team your that? sitting in book that thing. on huge What annualized. are $XXX multifamily at that are how that Or booked? purchased? question participating the growth -- that that? in And same million, in XX% Was quarter, then any you growth Your originating? was you of XX% same is Or Was huge getting CRE, annualized, that

Kelly Pecoraro

risk flow crushing product. portfolio. we're is think are hard space, multifamily the They've It the in really in working So product all it from been good our at looking a and our that diversifies market. cash We team. multifamily the originations as

as it that we of saw growth direct terms was In CRE, our within portfolio. XXX%

Laurie Hunsicker

of office? us mean, are growth? previously categories? starting know you office. can But are if you know, And retail, just office sit you note guys in higher the restaurant, what's I Okay. the categories Or you those adding any categories hotter of in hotel, and of Or and de that where I said remind terms exposure add sort I today? -- in of to minimis you to within of hotter

Kelly Pecoraro

office X/XX of as book. Really, X% no. of our commercial our So at sat portfolio, Laurie,

in about have the that. all we have don't in really, So They're concerns million exposure performing. about $XX office. really We

this quarter, pre-growth did and one to with. that and a we quality that grade very were investment large you was tenants comfortable was at have If our that with retail anchored look credit space borrowers

Laurie Hunsicker

income Okay, of to almost strong okay. have much your interest PPP million very, your that And over the done. forgiveness? switching the very Net margin, then was within just income, how PPP of interest you Do statement. $XX,XXX loans and net obviously, are

Kelly Pecoraro

is quarter, the $XXX,XXX small on the the interest that the that for on was was income. PPP. that's about fees what's PPP in very net book. $XX,XXX a in the in It remaining So are book it included remaining

Laurie Hunsicker

right. All Okay, okay.

So on versus X, your X that points margin works. basis

expansion. to quarters? be next look And should cost thinking about So margin two tremendous, like on it down. core out as side, we margin deposits you're obviously, funding we holding How your the to here really the looks

Kelly Pecoraro

pressure into responsible on So do in we as increase increased for margin that within notice, down. you cost that know, us the in third we the continued excess that as CDs, keeping responsible cash of Laurie, with quarter partially move the And then we we was the and were on will interest quarter, deploy us, the also for you funds fourth to shift anticipate having our I balance our able sheet had rates. the think,

Laurie Hunsicker

we Great, branch added, on And there? us and expenses, look then on how thinking about the was should any any comments expense grow the to Thanks. Jim, as can how you're also, forward? side, then we give novo both core okay. going branch be you XXth obviously, Okay, framework plans de maybe

James Nesci

take I'll the first. branch maybe So question de novo

We funded. continue growth. really that experience loan to Obviously, has strong to be

Our customer, business plan, smaller we business keep stay which focused we'll small our on branches. building

the not dense large probably feet in size lots are branches business. We'll highly future. filled with I our in our keep and think yesteryear small populated X,XXX less of of square areas

As that to find be bank. we we customer We're to funds for in and provide the provide good a to our of customer, call, to that able low-cost mentioned us. service earlier really they back lot

when So placed. look lot We're strategic it's rents, at demographic very look to We branches I trying five we a but strategically possible not We branches really studies. as a of a grow We be couple to branch. location. it's at as try a of new think well. by few year, look picking at working and

what to that's can Kelly. branches, turn give you back I'll it So on but the I

Kelly Pecoraro

line. Jim. led then conscious of a of pleased expense our with our reduction decline were to services, Laurie, in in We use to very terms the keep trying lot expense the of quarter. very spend, forward, Thanks, move we're we in which about within Yes, that professional as

that looking within we're perspective. I from run rate million quarterly $XX.X as expense forward, look an think we spend at staying

Laurie Hunsicker

does exclusive quarter? And that? Okay. that to of fourth expense, $XX.X which guide, Or does in the plan that presumably include start that the million is going benefit is

Kelly Pecoraro

for rate that So proxy, includes currently, expense Currently, would in have approved, been the awards no. had the we disclosed. what quarter if based upon our disclosed that the

Laurie Hunsicker

Okay, taking I’ll questions. my great. buyback. Love Thanks ssing leave it the there. for

James Nesci

for today. the your Thanks I Laurie questions. time appreciate, advice for

Operator

back hand remarks. now Kelly I'll any for concluding Laurie. your for and you Jim to Thank

James Nesci

of all employees we gathering. And our Thank the know and you, like of deposit effort be leave, to really been all been all an operator. acknowledged, I'd quarter. fun of I It's lot growth call a have to before the work It's busy. hard forth to today. of the and I should their listening goal interesting a tremendous loan put employees thank

to And all appreciate us, support. much. shareholders, So your for we thank you our very and thanks sticking with of

to news next with reporting to We look Thanks some will again. great forward you you. quarter more online and back be

Operator

you. today. call Thank This the concludes

You may now your disconnect lines.

Blue Foundry Bancorp (BLFY) 27 Jul 222022 Q2 Earnings call transcript