Blue Foundry Bancorp (BLFY, Financial) released its Q3 2023 earnings report on October 25, 2023. The company reported a net loss of $1.4 million, or $0.06 per diluted common share, for the three months ended September 30, 2023. This is compared to a net loss of $1.8 million, or $0.08 per diluted common share, for the three months ended June 30, 2023, and net income of $1.2 million for the three months ended September 30, 2022.
Financial Highlights
Despite the net loss, the company's President and Chief Executive Officer, James D. Nesci, commented that Blue Foundry remains well capitalized with credit quality at historically stable levels. He also noted that the company has strong on-balance sheet liquidity and access to multiple sources of liquidity.
Key financial highlights for the third quarter of 2023 include a decrease in non-interest expense by $574 thousand, or 4.4%, primarily driven by lower compensation and benefits expenses. The company also reported a release of provision for credit losses of $717 thousand due to the impact of the change in forecast on the loan portfolio, coupled with a decline in portfolio balances and unused lines.
Income Statement Summary
Interest income for the quarter was $20.2 million, an increase of $408 thousand, or 2.1%, compared to the prior quarter. However, interest expense for the quarter was $10.3 million, an increase of $1.4 million, or 16.2%, compared to the prior quarter. This resulted in a decrease in net interest margin by 23 basis points from the prior quarter to 1.94%.
Balance Sheet Summary
As of September 30, 2023, deposits totaled $1.25 billion, a decrease of $35.8 million, or 2.77%, from December 31, 2022. The company's strategy is to focus on attracting the full banking relationship of small- to medium-sized businesses through an extensive suite of deposit products. However, the rate environment in the northern New Jersey market has intensified competition for deposits.
The company continues to diversify its lending franchise by focusing on growing the commercial portfolio. During the first nine months of 2023, total loans increased by $25.9 million primarily due to growth within the Company’s non-residential real estate, construction and commercial and industrial portfolios.
Share Repurchase
Blue Foundry Bancorp (BLFY, Financial) also reported that it repurchased 298,210 shares at a weighted average cost of $9.51 per share during the third quarter of 2023.
Despite the net loss reported for the third quarter, Blue Foundry Bancorp (BLFY, Financial) remains well-capitalized and continues to implement strategies to improve its financial performance.
