BLFY - Earnings call transcript Q1 2024

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Operator

Good morning, and welcome to Blue Foundries Bancorp's First Quarter 2024 Earnings Call. 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. Please refer to today's earnings release for reconciliations of these non-GAAP measures.

event recorded. this reminder, a is being As [Operator President and now turn over to the call CEO, Instructions] I will Jim Nesci. Please go ahead.

James Nesci

Good call. quarter in by then Kelly Thank first financial to provide Kelly results operator. morning, discuss update, welcome going and you, and strategic to Pecoraro. quarter I'm earnings Chief the I detail. our joined will a am Financial Officer, everyone, our company's first

[indiscernible] our We Foundry and is focus continue executing delivering Blue leverage to on all asset and to capital stakeholders. for ability deposit Paramount strong growth. position success fund value our of company's to the to

The promising first step right direction. a quarter in was the

in we XXX was deposits execution strategic the points. a the $XX million. our resulted our grew loan-to-deposit ratio reduction driven quarter, basis in by by This growth of During and by initiatives

deposit allow Continued of and interest expand appropriate earning while generate assets to amount maintaining an leverage. will revenue us growth

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

and see we as through We move expect up pick commercial credits XXXX. to production

in are all As of underwriting product disciplined strong credits always, our we loan for offerings.

committed to good stewards continue of capital. being are We

tangible repurchases XXX,XXX with book program, increase by repurchased during repurchase of Under approved shares a our tangible another is a repurchase These X than program of that Board our with at to our $XX.XX. share in a to ] trading use discounted per credit [ AOCI Our along at an share coupled these we stock, first the book $X.XX our $X.XX quarter, many believe we weighted is at years. value, peers, repurchases levels of less the value quarter. capital. In improvement [indiscernible] helped average price

March March company concentration for a banking Tangible deposits of any Our remained $XX risk the [in] Foundry single in depositor. with percentage deposits At unrestricted. capital the is to customer highest capitalized untapped quarter uncollateralized and continues of securities low million [indiscernible] XX% [ at and sheet, the the uninsured and of accounts [indiscernible] We operate equity XX. end had of million tangible $XXX was we industry. liquidity. total million in as another assets of had provided XX. Blue cash and to of available-for-sale on unencumbered well [ $XXX deposits. our million with first common levels approximately ] bank borrowing to from the $XX which This company's ] million $XX capacity the balance

over like then be Kelly? X.Xx answer uninsured uncollateralized the turn coverage call Kelly, available to that, our our to we and and I'd your Additionally, to would questions. deposits customers. With to delighted

Kelly Pecoraro

by Thank to the first driven in in you, net [indiscernible] interest net release increase and was loss million prior of guided which compared $X.X The was quarter. losses a by an the provision This the margin expenses, morning, for improvement good for credit loss to net $X.X quarter. during everyone. an was million in last and Jim, a improvement

in Our current quality remain to strong continues asset the environment.

to improvement we forecasted credit model of credit economic used our release the losses. quarter, for the provision $XXX,XXX, a had of losses During drivers driven to

and in occurred basin derived balance the adverse held-to-maturity off on of greater for credit allowance majority waiting X all release Our quantitative [indiscernible] loss securities. categories: sheet the commitments from and our measures forecast. places allowance loans, is methodology our

total a to to low, nonaccrual While X to basis loans remained credit, basis single XX nonperforming assets assets due increasing increased business small $XXX,XXX points points.

interest income to in to XXX% total to the on X [indiscernible] basis interest XX points increased from on of for $XXX,XXX basis ability loans over to to increased points allowance to loans XX the XX all basis decrease nonaccrual growth points environment. Yields interest income X.XX%. decreased margin. by margin loans. due leading given Net X.XX% $XXX,XXX. generate expense credit asset macroeconomic the depending points net next in experience increased our $XXX,XXX loans pressure nonaccrual Our We to couple credit basis decrease losses rate XXX% losses slight the may and yield increase to X.XX%. on an loans in for allowance by due increased basis XX by on allowance interest loans. interest in current quarter and assets and X on Cost And increased funds expanded activity to Interest the allowance basis to earning to our prior decreased of point points expansion quarters the

in costs cost decreased in deposit XX X.XX%. $XXX,XXX, This higher-cost by points short-term we by Expenses increased XX off paid increasing deposits driven benefits. basis competitive interest-bearing pricing. points primarily as the to wholesale compensation to basis remain and to of continue borrowing borrowings. resulted We Conversely, X.XX%

benefits a in bonus targets our performance resetting and compensation increased While of XXXX, variable as quarter. count compensation new result for remained stable the [indiscernible] throughout head

second our the for of to base, million expect in we $XX optimize mid- expense high continue operating We to be explore and to quarter to the range. XXXX opportunities expenses

by funding. on during the and as payoffs amortization balance sheet. Gross the loans outpaced quarter million Moving $X.X to declined new loan

portfolio less a $XX [ portfolio X-point our has years. million a is reminder, X% of loan is and New City. space in or York As Debt ] duration in none office than securities of

million paydowns, the of by Deposits this by million $XX.X portfolio a during X.X% quarter. As during scheduled maturities, was the calls result or $XX.X increased and reduced quarter.

able and $XXX,XXX. allow were wholesale deposits grow This time million partially by staff to as we grow deposits offset to by mature. $XX.X frontline Our approximately core retail was growth deposits

an our of medium-sized customers. businesses. Our focus offer products business full banking the remains on to small- attracting suite low-cost deposit of relationship extensive to We

or commercial million balances increased the $X.X quarter, XX%. During account

and $XX portfolios, questions. cost result and from Jim we deposit that, the our were down to higher As with are cash take a of able borrowings. And to pay short-term loan and of securities happy flow I your growth strong million

Operator

[Operator Our Piper Crowley with is question Instructions] first Justin from Sandler.

Justin Crowley

in the quarter. some Just see inflection wanted start on off to the to margin

we But NIM balance a just in was think unpack just of what current more idea versus could I rates looking longer, if what the saw about quarter? ahead face lower pressure you for would, of commentary higher I As your wondering on drives be -- little you sheet, perhaps the course, a as helpful.

Kelly Pecoraro

Justin, good morning. you, and Thank

look, pleased NIM. were with quarter's we in very as So we the expansion

in We portfolio. are mindful our

of that $XXX about will million have time reprice. deposits We

currently, reset they're rates. given at the current about price And So in level deposit [ rate. a the pressure XXX on probably ] higher the that pricing will given market, to

So higher. deposit depending that, to we go even see on some upon pressure costs could

Justin Crowley

quarter generation And having going Okay. that to how able rely reduce but to versus just that about as off start That's as a you Obviously, Got more thinking forward you. funding on deposit channels. year, the quarter. deposit helpful. obviously, side, far good to the wholesale then in gathering you're are

it's Obviously, so. environment, Just the curious competitive your there. thoughts

James Nesci

Justin, this is Jim.

possible. in side on shaping are as the as on much bushes, the working people out the We surrounding all ourselves putting commercial small business marketplace and forward our

I think as we forward. strong lead funding. to to hope The we're deposit organic growth keep wholesale us growth going we have much what organic going as is products better driving possible a towards that opposed margin and as on to to

Justin Crowley

pickup once but to reserves terms early you you then in But It just you that. a are able what it of with any look were the in some appreciate small the nonperformers. at And quite quarter. on the it, touched again. world book obviously, any credit, when But And release I looks clean mentioned you stress, in your of on you just we hood seeing at of if seems all? more live CECL. signs under in Okay.

Kelly Pecoraro

Yes.

of our are pleased we with nonperforming. level Justin,

right forward do some we we that's to on did at we've now are performing. concerning that nonperforming look what There's pick nothing up, books. besides While disclosed of point some this resolution our

So metrics. pleased with the credit

underwriting We that strong well. and served have us has

Justin Crowley

then we the still my desire there we I to done buybacks. versus where on quarter, on where got the just is where activity But saw capital then during obligatory think based is stay Okay. question stand? stock And levels the now. what guess just active And

any roughly there kind size the sheet get to there's shrink continues stay curious, balance at room updated of more least Just where to in it thoughts or if in is. active even possibly

James Nesci

believe Kelly, and The Board in buyback. strongly all we and I

I But believe do buyback, the buybacks, it see in believe where Directors in believe price that I they further we given comments know buybacks. that remain think we we us, any works have of the are of Board the the time. there's this today. and you'll active don't at shares

Operator

O'Connell Chris question KBW. is with from next Our

Christopher O'Connell

of So you want where on and to loan I guys are just year terms of and off in XXXX. how start the for the full doing the is about reaching growth thinking pipeline

Kelly Pecoraro

Right Chris. [ ],

we we being really, the there that's as couple our portfolio loans, very quarter. we're had of Competition for assets Jim slight in a And are, this that loan our putting on saw, books. as you in things. reduction a noted, selective but So

C&I and line we shift, the multifamily -- our real and other the at estate commercial in residential pleased look gross our and reduction we So are with the item.

as our pipeline, are assets the focus we those So in on. while on about now in we're our looking put be to asset looking And million -- to pipeline those sit that those we $XX at we're classes [indiscernible] right prudent

Christopher O'Connell

yield what's And pipeline? in this

Kelly Pecoraro

the right ] X.X just is X.X in [ yields pipeline The [ ]. around

Christopher O'Connell

quarters Great. And NIM sense absent any of see the pressure, looking with at as where as any next couple to level the the could you're bottoming? you rate of change impacts,

Kelly Pecoraro

of But and we we we dependent to some repricing, higher-yielding from mindful, of them repricing level both the book. able us the and benefited very replace deposits. our to I think being put where don't our with upon the deposit being gather I bottom. higher It's we being had borrowing have tumor costs assets. as able mentioned, are a down on [indiscernible] Quarterly, with

[indiscernible] that is So

Christopher O'Connell

$XXX them are Where million? the those where to? see do And CDs, you repricing

Kelly Pecoraro

our Right ]. about and now, XXX [ out at about the rates on ] there promotional [ they're are XXX books current

Christopher O'Connell

curve [indiscernible] that strategically And that thinking, see the of the you thinking incentive toward more [ mean, then That's movement Do think to any and pace are just there? quarters? Great. you targets guys you positive, or Okay. about the need pathway probably next yield of you is broadly there kind What's do how helpful. I ] few course the the change? happening

James Nesci

Chris, that financials to always and or The any side, for be the The can profitable expense company we So continue strategic improve expenses to Kelly goal reduce more cut start become and its to finish. I'll shareholders. the continue and is I'll or about. let look for to for we

salaries our our and whenever and We of consolidate benefits. possible, mindful continue very vendors staffing to

when over the But has So sufficient. done as accomplished. XX, indicate, that's to I NIM XX lot [indiscernible] over the a us being years, become X think course a you and difficult a the you curve, last produce it's look last of for as thing at more the liability the there's been much company moments,

of more loans asset lead those things commercial and a asked on was look focused also will for type I the onto retail We That's all to a higher We organic the think, That's industrial books. question focus. profitability. more get And time the we're greater in you about. continue compensation, strategy. think to deposits. to The

the them to haul. lead employee Foundry talk focused tied frequently. greater are Bank long to things metrics Our profitability at on that That Blue these We items. in is every about

has this We in employee company. have invested town halls, every

top So know I of appreciate yes, it. the anything but add Kelly to to question, all it's if us. mind don't wants for I

Kelly Pecoraro

in No, Jim, covered off targets compensate relative we profitability. looking strategic on those initiatives as I think, those to look you to and and we're

Christopher O'Connell

you on those into don't where significant year side lines, numbers get projects that anything out the you cut and as think don't around is hard anything expense I quite XXXX. or there you that have costs? you Any along out -- you've any And mean, through mapped can maybe the

James Nesci

-- I be time. don't you single that have a I on I guidance to I any know and, right in better trying at would every of thank two, any, don't as day. have topic. we're any tell but event lean it's possible as any don't this now additional guidance create

Operator

further no have at questions We time. this

for pass any the call the to I'll back team management remarks. So closing

James Nesci

And operator. who quarter. to you your Bank. everyone Thank day. speaking in We next a to Foundry listening Blue Have look is very interest today. to much you, Thank again great forward the for in you

Operator

call. today's concludes participation. you your all for That Thank

now may line. You your disconnect

Blue Foundry Bancorp (BLFY) 24 Apr 242024 Q1 Earnings call transcript