BLFY - Earnings call transcript Q4 2024

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Operator

Good morning, and welcome to Blue Foundry Bancorp's Fourth 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.

James Nesci

this of Thank fourth a I'm morning, us Financial loss update results quarterly you, everyone. Thank quarter $XX company's value who provide an we net increase the XX% in core loss Pecoraro, you a and able were good operations. Earlier both grew operator, will million net financial commercial increased quarterly for in of pre-provision tangible a loss, Officer, discuss on credit Kelly for and capital quarter million, $X million, morning, portfolios. by joined our call. in reported strong. to earnings $X.X our Chief maintain Loans detail. noninterest-bearing we fourth million. I and quality majority the $XX joining and our our after came remain including by of accounts. which predominantly book Despite in growth net Deposits the

Additionally, our the current well environment. remains balance for positioned sheet

team forth by our intent banking the as on I attracting assets oriented yield marketplace. interest-earning improvement more transformation of my our relationship set plan to the becoming in well commercially institution, management encouraged in small- [indiscernible]. Continuing have our a of as into the interest cost businesses strategic are our full and on We medium-sized

loans products quarter, a relationships achieving $XX industry-leading approximately we're on relationships during of portion focused frictionless with compensation has and communities All their yielding aligned objectives. We the our within current Our we the funded X.X%. employees deepening of bank our million developing new strategic serve. and have

for intent credits totaling have approximately yield commercial We predominantly X.X%. a letters over $XX of of million executed

to while rate, disciplined and in standards. underwriting Given we balance all over growth our deliver demonstrated sheet our remaining the coming quarters, poultry continued high income interest expect

date, we improve average at a value Tangible To weighted have book of cost remained a a at shares million shares per we continues During price to at $XX.XX the shares X.X XXX,XXX shareholder share share at this quarter. quarter, weighted price average repurchased $XX.XX this value. Repurchasing $XX.XX. of repurchased flat

our holding equity XX.X%. Blue with capital liquidity for the tangible unencumbered end robust fourth call common provided answer X.Xx and well and larger unrestricted be I'd levels assets our to industry, turn strongest Kelly? depositor. bank your sale low that continues than among single had uncollateralized million balances. With $XXX tangible untapped the liquidity the in company to then and operate the that, XX% banking deposits to At to over concentration is to which Our of $XXX borrowing customers, to is are made Foundry and risk capacity and of our quarter, uninsured cash we with any delighted deposit liquidity. in capitalized of the will questions. we like another to of securities only and This available Kelly million represent remained

Kelly Pecoraro

was declined driven basis decrease income for expanded expenses $XXX,XXX, to of income improvement interest increase compared leading interest interest increased $XXX,XXX. Thank build by Jim, release net was Net credit net $X a the and in a prior to by the income Interest for net and The compared quarter everyone. in margin. losses a an loss to quarter. X $X.X million $XXX,XXX improvement provision while million good prior quarter. point interest during expense of the loss a a you, fourth net morning, This in in

offset X.XX%. to on X.XX% Cost XX originations all to yield lower-than-projected decrease to reprice interest-earning current in prime our rates the points borrowing XX points we close while expect on the assets points the The the due and loans by by driven construction decreased basis margin points The basis decreased of improve costs reduction X.XX% of at was interest X X net this to lower rate. quarter, expense as X X.XX%. Expenses yields loans from lower. Yield in compensation deposits basis the deposits improved as to partially basis variable on We X.XX%. loans by to to expenses. interest-bearing points funds by Compensation improved $XXX,XXX. was increased cost by basis improved improvement

As you of became year began accruals releasing earlier the we will probable. this remember, achievement when less goals compensation variable some

XX% to of Our The annual potential of approximately XX% payout has of is the all a plan did this goals payout not sort company XXX%. achieve target up cash incentive as year. planned to

to as expenses mid- merit we While and to accruals operating are high impact range continue raises to we expect to million considerations contracts. reset realized achievement discipline, normal return bonus to the other $XX inflationary expense promote XXX%

forecast had we the scenarios of this our construction $XXX,XXX loan as our slight provision for of quarter, [indiscernible] growth at losses. of The for for to the quarter. as last losses for were in in of loans much the the portfolio loans. lease unused that credit well fourth the allowance economic quarter on and For the commitments a a release was release of line commitment The in majority duration as this allowance end contributed credit

had in securities. the to small for held allowance release a credit maturity on also We losses

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

quarter, Only loan Gross sheet. the to multifamily the loans. space New City. approximately during by to extent, and commercial and industrial and not on lesser and is loans in our million commercial of balance in owner-occupied predominantly estate office increased in a portfolio $XX.X X% Moving York real

by treasuries, million as securities million X.X of customer a time on and yields, portfolio million the million. savings We loan accounts offset grew saw decreased $XX.X partially growth $XX.X growth we of million $XX.X as million was categories. million. million growth of grew across maturing by $X.X with of deposit with of $XX all security $XX.X This million $XX unrealized at deposits Our in a $X.X loss by Time available-for-sale lower-yielding promotional funded $XX.X accounts amortization the with million. Borrowings of purchase deposits. duration accounts deposits million. current grew deterioration replace hand. grew increase cash and driven million the core of $X position. Deposits deposits in years, million and increased company a broker $X.X grew $X.X by Noninterest-bearing Checking $X.X

asset basis nonperforming remains remained basis loans strong at environment. loans Finally, and declined improvement points, modestly nonperforming due quality in to the nonaccrual respectively. and slight current Both a assets flat XX to Nonperforming relatively XX points to loans. assets in assets

take as of that, happy with nonperforming ratios questions. flat Our and allowance XXX% well total Jim coverage your loans at basis loans. And I remained are to to relatively points XX and

Operator

[Operator Instructions].

from question of Crowley line Justin Piper with first the comes Our Sandler.

James Nesci

the will Just to expectation That areas have on X years and commentary now. X your then off start wanted couple on looking on been bucket forward? kind growth. of that multifamily been Is a drag be the net have case that for the that, continue X of growth the loan to to past

Kelly Pecoraro

Yes.

I had think somewhat from at residential owner-occupied believe we book, we're as well concentration space. than C&I we a although looking has In a book the The in large strategic Justin, as been really have growing quicker both envisioned. decline we multifamily, intentional, perspective, there. commercial in our

on the limits watching space. multifamily we're our So concentration

Justin Crowley

that. remember the you new maybe pipeline. Okay. on I broader head following things Got But if stood up not curious just it. maybe and $XX and pick can't where starting last then thoughts election? certainty that just the through million you just where And you stands to as activity I'm sure the quarter. mentioned we perhaps your see shared year if more

Kelly Pecoraro

pull-through from where has improved Yes. had think mentioned, I those the of we of commitments as And we at see pipeline some the did on definitely end last we quarter. that were QX. we

we and around. of out a intent mentioned we remarks, Jim letters rate about his that loans have $XX in As of million at had commercial

we So improvement some to seeing pipeline for in the and continue. are look that

James Nesci

get what on Got to And just margin, about rates sense that how XXX cost And Okay. the able XQ so much is course thinking been in How the the basis you're cut to of have to over lower of far and then out you margin? deposit it. Fed. extent move the progression falling for a reflected I'm points the year. looking

Kelly Pecoraro

in been as There's So I that repricing. deposit on to yield improvement we on X.X% did think Justin, book. see mentioned, pressures costs, we

been down on somewhat that into We prices short. half. first the have intentionally bring have CD -- cost able do million $X.X down $X.X We've to million our coming probably kept or book. We $XXX billion,

we So look trend pricing can hope that we for and that rates get with as benefits lower.

Justin Crowley

of reset off $X.X do that coming that will at. that have on and that's And Okay. where the you rate billion,

Kelly Pecoraro

Yes.

So we million. $XXX quarter first -- the on is probably the around currently rate

a looking now promotional we're X% So our right there we that yielding have out rate is CD. --

little a well. that, in around -- we're improvement bit So as yield we're million that a the half second of can $XXX looking the that second so those then and quarter, as seeing reprice to some And lower hope probably the realize on reprice.

James Nesci

with And input where higher That's that coming the repricing? book helpful. or regardless All X combined cut whether then expectation another back on to that as the on Is that, asset move with of get given continues mid-X around is loan average right. level. yields a side we margin another just as new just the far production

Kelly Pecoraro

Yes.

book. do the well, the the are market at challenges we and as are lower that of at rates, There to as anticipate our rates. I on have higher on book coming trend think construction we amortization some things though

lower fair if see So being rate think to I while prime those slows improvement reprice [indiscernible]. down, asset construction as will will other it's classes are we say,

Operator

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

Christopher O'Connell

the on the guys spot wanted quarter. market was Just at wondering if the December the had of to follow discussion. end I you margin for handy up

Kelly Pecoraro

million higher, million, end think at margin quarter, of bit like I $XXX a perspective we million. the $XXX around $XXX were a the from little

Christopher O'Connell

on sheet, side that on of it the put seems sure on on sense any over moving dynamics right see of guys a here margin. lot in you it I depends much over you the the expansion how are now the that loan But to of the just of given on course the year. of And could magnitude Great. growth able direction course are XXXX. the Okay. balance the mean, like And portfolio things the I'm

Kelly Pecoraro

some we of well course, high think at as at to we the as probably looking in growth pipeline. have as loan we're grow. single-digit XXXX, coming maturities looking this I given look at where point. We're

met we it. that So

Christopher O'Connell

over than pace course can of do at a think that forward? Or or Okay. And lower that the achieve a bit expansion year expect think do it you're is the the to higher you similar fourth of in going you you the saw margin, little what like quarter? kind rate you going

Kelly Pecoraro

point, deposits also dependent the I upon ability anticipating we're lower. the a Again, lines reprice similar of credit timing putting at pace. this those it's think and all to

Christopher O'Connell

for level expense $XX back good the you after for that, expectation holds to do the guide the of the then XXXX to remainder growth a Or is And as expect thereafter. mid-to-high Okay. QX? range, million see that pretty

Kelly Pecoraro

Yes.

I across think we're XXXX. we looking and range Again, how things compensation throughout variable at at attaining out seeing go the that quarters. but million where and the that's year, we're our $XX we're mid-to-high achievement for look as

Christopher O'Connell

guess And compensation variable -- the hit like XXXX what on metrics there is XXX%. Okay. the as then far for specific as I to like are that goes,

Kelly Pecoraro

align our sheet net to the committee that in the interest So we and mindful growth balance iris and growth loan compensation and growing way. our to also really low-cost has our goal deposit Board really -- deposit growth, agreed a growth margin to

Christopher O'Connell

off what you being yields coming And the on loan Like what really the then mentioned And Okay. here on the only new portfolio that origination there? portfolio? the are headwind are yields. potentially construction yields the

Kelly Pecoraro

plus yields either points the the XXX within XX range. applying basis points basis portfolio is to So are on that

see as around pipeline of million upon right is rate So on. some it's now, construction is. those where we right and $XX are coming maturing the book dependent prime

have some So we pipeline. the construction in of the

James Nesci

pays book that up, is If look pipeline board. construction finished We've that, comes got A construction it. is on loans. recycle way loan new project the one of good off. think I at a gets to constantly that

Christopher O'Connell

Got it. of the that pace XXXX the a then of kind fair progress over And on can that similar from at it a to course assume share is here. repurchases,

Kelly Pecoraro

think we of repurchases, these share at a capital good look use levels. we it's as think I Yes, at

be again, market, at the forward. capital So in use best move active looking to the of as continue we we'll always

Operator

back call you Nesci Thank the closing for to comments. questions. for turn Jim your I now will over

James Nesci

updating We'd forward everybody operator. we and to Thanks you, much. quarter. today, to next Thank look like for participating so you thank

Operator

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

Blue Foundry Bancorp (BLFY) 29 Jan 252024 Q4 Earnings call transcript