Blue Foundry Bancorp Reports Third Quarter 2022 Results

RUTHERFORD, N.J., Oct. 26, 2022 (GLOBE NEWSWIRE) — Blue Foundry Bancorp (NASDAQ:BLFY) (the �Company”), the holding company for Blue Foundry Bank (the “Bank”), today reported net income of $1.2 million, or $0.05 per diluted common share, for the three months ended September 30, 2022, compared to $40 thousand, or $0.00 per diluted common share, for the three months ended June 30, 2022, and a net loss of $15.0 million for the three months ended September 30, 2021.

Net income was $1.8 million, or $0.07 per diluted common share, for the nine months ended September 30, 2022 compared to a net loss of $16.7 million for the nine months ended September 30, 2021.

Pre-provision net revenue was $1.1 million for the quarter, an increase of $586 thousand compared to the prior quarter, and an increase of $1.8 million compared to the prior year quarter.

“Our third quarter performance reflects the positive momentum achieved through the execution of our strategic priorities,” said James D. Nesci, President and Chief Executive Officer. “Strong loan growth and core deposit growth coupled with a continued focus on expense management drove a significant improvement in operating results.”

Highlights for the third quarter of 2022:

• Gross loans grew by $68.1 million, or 4.8%, compared to the linked quarter, excluding Paycheck Protection Program (“PPP”) loans, led by commercial real estate products.
• Loan originations totaled $171.6 million for the quarter, including originations of $130.1 million in multifamily loans, $28.6 million in construction loans, and $7.0 million in non-residential loans.
• Core deposits increased $35.0 million, or 4.0%, compared to the linked quarter. Core deposits now represent 71% of total deposits, compared to 59% one year prior.
• The Company recorded a release of provision for loan losses of $419,000 and a provision for commitments and letters of credit of $170,000.
• Non-interest expense, excluding the provision for commitments and letters of credit, increased $372 thousand or 2.8% sequentially driven by expenses related to the stockholder-approved equity awards for directors, and one-time charges incurred for investor-related activities and an anticipated branch sale.
• Net interest income for the quarter was $13.8 million, an increase of $653 thousand, or 5.0%, compared to the prior quarter, and an increase of $2.7 million, or 24.4%, compared to the prior year quarter.
• Net interest margin was 2.84%, a one basis point increase compared to the prior quarter and a 69 basis point increase from the prior year quarter.
• Accumulated other comprehensive income declined $8.8 million as the rising interest rate environment negatively impacted the fair value of the Company’s available-for-sale investment portfolio.
• During the quarter, 667 thousand shares were repurchased at a weighted average cost of $11.67.
• At our annual meeting, shareholders approved the 2022 Blue Foundry Bancorp Equity Incentive Plan. Accordingly, grants to directors were made on August 26, 2022. These grants cost approximately $320 thousand per quarter.
• In October, the Board of Directors approved stock option grants for officers. These grants are expected to cost approximately $300 thousand per quarter.

Lending Franchise

The Company continues to diversify its lending franchise by focusing on growing the commercial portfolio. During the third quarter of 2022, gross loans increased by $66.6 million primarily due to strong growth within the Company’s multifamily portfolio.

The details of the loan portfolio are below:

	September 30, 2022				June 30, 2022				March 31, 2022				December 31, 2021
	(In thousands)
Residential one-to-four family	$	591,728			$	590,151			$	579,083			$	560,976
Multifamily		679,474				579,183				517,037				515,240
Non-residential real estate		185,450				211,683				187,310				141,561
Construction and land		12,981				21,010				18,613				23,419
Junior liens		16,653				16,421				18,071				18,464
Commercial and industrial (including PPP)		4,738				5,957				16,201				21,563
Consumer and other		39				47				37				87
Total gross loans		1,491,063				1,424,452				1,336,352				1,281,310
Deferred fees, costs, premiums and discounts, net		3,374				3,821				5,134				6,299
Total loans		1,494,437				1,428,273				1,341,486				1,287,609
Allowance for loan losses		(13,600	)			(14,050	)			(13,465	)			(14,425	)
Loans receivable, net	$	1,480,837			$	1,414,223			$	1,328,021			$	1,273,184

The commercial and industrial portfolio includes PPP loans, net of deferred fees, which totaled $557 thousand at September 30, 2022, $2.0 million at June 30, 2022, $8.1 million at March 31, 2022, and $16.8 million at December 31, 2021.

Retail Banking Franchise

As of September 30, 2022, core deposits totaled $900.9 million, an increase of $127.7 million or 16.5% from December 31, 2021. The Company’s focus on attracting the full banking relationship of small- to medium-sized businesses through an extensive suite of deposit products continues to support core deposit growth.

The details of deposits are below:

	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021
	(In thousands)
Non-interest bearing deposits	$	59,636		$	52,036		$	45,143		$	44,894
NOW and demand accounts		385,334			455,776			425,766			363,419
Savings		455,979			358,166			367,177			364,932
Core deposits		900,949			865,978			838,086			773,245
Time deposits		365,548			430,696			444,936			473,795
Total deposits	$	1,266,497		$	1,296,674		$	1,283,022		$	1,247,040

Financial Performance Overview:        

Third quarter of 2022 compared to the third quarter of 2021

Net interest income compared to the third quarter of 2021:

• Net interest income was $13.8 million, an increase of $2.7 million.
• Net interest margin increased by 69 basis points to 2.84%.
• Yield on average interest-earning assets increased 64 basis points to 3.37% while the cost of average interest-bearing deposits decreased six basis points to 0.46%, reflecting a shift to core deposits.
• Average loans increased by $213.8 million and average interest-bearing deposits decreased by $31.0 million.

Non-interest expense compared to the third quarter of 2021:

• Non-interest expense was $13.7 million, a decrease of $19.4 million driven by the absence in the 2022 quarter of non-recurring expenses of: a $9.2 million loss on pension withdrawal, a $9.0 million charitable contribution, and $1.4 million in debt extinguishment costs.
• Excluding non-recurring items, non-interest expense increased $184 thousand. An increase of $1.4 million in compensation and benefits costs and an increase of $137 thousand in fees for professional services due to higher audit and CECL implementation costs were partially offset by a lower provision for commitments and letters of credit of $1.1 million and a reduction of $478 thousand in advertising and $222 thousand in data processing.

Income tax expense compared to the third quarter of 2021:

• Income tax expense was $123 thousand compared to an income tax benefit of $6.2 million for the prior year quarter. This 9.0% effective tax rate for the quarter reflects the Company’s current tax position. The company had previously established a full valuation allowance on its deferred tax assets. The prior year quarter effective tax benefit rate of 29.3% reflects the Company’s tax position prior to the full valuation allowance.

Nine months ended September 30, 2022 compared to the nine months ended September 30, 2021

Net interest income compared to the nine months ended September 30, 2021:

• Net interest income was $38.9 million, an increase of $8.3 million.
• Net interest margin increased by 69 basis points to 2.76%.
• Yield on average interest-earning assets increased 35 basis points to 3.18% while the cost of average interest-bearing deposits decreased 35 basis points to 0.35%, reflecting a shift to core deposits.
• Average loans increased by $98.0 million and average interest-bearing deposits decreased by $80.8 million.

Non-interest expense compared to the nine months ended September 30, 2021:

• Non-interest expense was $39.9 million, a decrease of $17.4 million driven by the absence in the 2022 of non-recurring expenses of: a $9.2 million loss on pension withdrawal, a $9.0 million charitable contribution, and $1.4 million in debt extinguishment costs.
• Excluding non-recurring items, non-interest expense increased $2.2 million. An increase of $2.9 million in compensation and benefits costs, $1.1 million in public company and investor-related expenses, and an increase of $460 thousand in fees for professional services due to higher audit and CECL implementation costs, were partially offset by a reduction of $1.0 million in data processing and $602 thousand in advertising, and a lower provision for commitments and letters of credit of $649 thousand.

Income tax expense compared to the nine months ended September 30, 2021:

• Income tax expense was $175 thousand compared to an income tax benefit of $6.5 million for the prior year period. The year-to-date effective tax rate of 8.7% reflects the Company’s current tax position. The company had previously established a full valuation allowance on its deferred tax assets. The effective tax benefit rate of 27.9% for the nine months ended September 30, 2021 reflects the Company’s tax position prior to the full valuation allowance.

Balance Sheet Summary:

September 30, 2022 compared to December 31, 2021

Cash and cash equivalents:

• Cash and cash equivalents decreased $136.1 million compared to December 31, 2021 as the Company deployed cash primarily into higher yielding loans and securities.

Securities available-for-sale:

• Securities available-for-sale decreased $3.6 million to $321.3 million as purchases of securities were more than offset by the fair value decline in the portfolio, as well as amortization and payoffs.
• The rising rate environment contributed to a $39.7 million decline in the net unrealized position of the portfolio.

Gross loans:

• Gross loans held for investment increased $209.8 million to $1.49 billion. Excluding PPP, gross loans increased by $226.5 million.
• Multifamily loans increased $164.2 million, non-residential real estate loans increased $43.9 million, and residential loans increased $30.8 million.
• Originations totaled $420.0 million, including originations of $261.2 million in multifamily loans, $93.3 million in non-residential real estate loans, and $42.3 million in construction loans. In addition, $88.4 million of conforming residential mortgages in New Jersey were purchased during the period.

Deposits and borrowings:

• Deposits totaled $1.27 billion, an increase of $19.5 million since December 31, 2021. Core deposits represented 71.1% of total deposits, compared to 62.0% at December 31, 2021 and 58.8% at September 30, 2021.
• FHLB borrowings increased by $110.0 million to $295.5 million to support loan growth.

Capital:

• Shareholders’ equity decreased by $32.1 million to $397.3 million. The decrease was primarily driven by a $27.2 million reduction in accumulated other comprehensive income reflecting the net impact that the interest rate environment had on the Company’s available-for-sale securities and the swap agreements used in our cash flow hedges partially offset by an increase of $1.7 million in retained earnings.
• The Company repurchased $7.8 million of shares and allocated $3.5 million to fund the shareholder-approved equity grants.
• Tangible equity to tangible assets was 19.72% and tangible common equity per share outstanding was $14.09.
• The Bank’s capital ratios remain above the FDIC’s “well capitalized” standards.

Asset quality:

• Non-performing loans totaled $8.4 million, or 0.56% of total loans compared to $12.0 million, or 0.94% of total loans at December 31, 2021, and $12.5 million, or 1.00% of total loans at September 30, 2021.
• The allowance for loan losses represented 0.91% of total loans compared to 1.13% at December 31, 2021 and 1.22% at September 30, 2021. The allowance for loan losses was 161.7% of non-performing loans compared to 120.4% at December 31, 2021 and 122.3% at September 30, 2021.
• The Company recorded a net release of provision for loan losses of $419 thousand for the quarter ended September 30, 2022 and $777 thousand for the nine months ended September 30, 2022 driven by significant pay downs within the construction and land portfolio, partially offset by growth in our multifamily portfolio.
• Net charge-offs were $31 thousand for the quarter ended September 30, 2022 and $48 thousand for the nine months ended September 30, 2022.

About Blue Foundry

Blue Foundry Bancorp is the holding company for Blue Foundry Bank, a place where things are made, purpose is formed, and ideas are crafted. Headquartered in Rutherford NJ, with a presence in Bergen, Essex, Hudson, Morris, Passaic and Somerset counties, Blue Foundry Bank is a full-service, innovative bank serving the doers, movers, and shakers in our communities. We offer individuals and businesses alike the tailored products and services they need to build their futures. With a rich history dating back more than 145 years, Blue Foundry Bank has a longstanding commitment to its customers and communities. To learn more about Blue Foundry Bank visit BlueFoundryBank.com or call (888) 931-BLUE. Member FDIC.

Conference Call Information

A conference call covering Blue Foundry’s third quarter 2022 earnings announcement will be held today, Wednesday, October 26, 2022 at 11:00 a.m. (EDT). To listen to the live call, please dial 1-844-200-6205 (toll free), 1-646-904-5544 (local) or +1-929-526-1599 (international) and use access code 206943. The webcast (audio only) will be available on BlueFoundryBank.com. The conference call will be recorded and will be available on the Company’s website for one month.

Contact:
James D. Nesci
President and Chief Executive Officer
BlueFoundryBank.com
jnesci@bluefoundrybank.com
201-972-8900

Forward Looking Statements

Certain statements contained herein are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements, which are based on certain current assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target” and similar expressions.

Forward-looking statements are based on current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: conditions related to the global coronavirus pandemic that has and will continue to pose risks and could harm our business and results of operations; general economic conditions, either nationally or in our market areas, that are worse than expected; changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; our ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in our market area; our ability to implement and change our business strategies; competition among depository and other financial institutions; inflation and changes in the interest rate environment that reduce our margins and yields, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make; adverse changes in the securities or secondary mortgage markets; changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, capital requirements and insurance premiums; changes in monetary or fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; changes in the quality or composition of our loan or investment portfolios; technological changes that may be more difficult or expensive than expected; a failure or breach of our operational or security systems or infrastructure, including cyber-attacks; the inability of third party providers to perform as expected; our ability to manage market risk, credit risk and operational risk in the current economic environment; our ability to enter new markets successfully and capitalize on growth opportunities; our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related there to; changes in consumer spending, borrowing and savings habits; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board; our ability to retain key employees; the ability of the U.S. Government to manage federal debt limits; and changes in the financial condition, results of operations or future prospects of issuers of securities that we own.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. Except as required by applicable law or regulation, we do not undertake, and we specifically disclaim any obligation, to release publicly the results of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Statements of Financial Condition

	September 30, 2022			June 30, 2022			December 31, 2021
	(unaudited)			(unaudited)			(audited)
	(Dollars in Thousands)
ASSETS
Cash and cash equivalents	$	57,324		$	54,806		$	193,446
Securities available for sale, at fair value		321,320			352,183			324,892
Securities held to maturity (fair value of $26,344, $26,928 and $22,849 at September 30, 2022, June 30, 2022 and December 31, 2021, respectively)		30,749			29,794			23,281
Other investments		15,432			11,337			10,182
Loans, net		1,480,837			1,414,223			1,273,184
Interest and dividends receivable		6,431			5,945			5,372
Premises and equipment, net		29,992			30,684			28,126
Right-of-use assets		25,537			24,163			25,457
Bank owned life insurance		22,012			21,892			21,662
Other assets		22,284			19,023			8,609
Total assets	$	2,011,918		$	1,964,050		$	1,914,211
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits	$	1,266,497		$	1,296,674		$	1,247,040
Advances from the Federal Home Loan Bank		295,500			205,500			185,500
Advances by borrowers for taxes and insurance		10,926			10,126			9,582
Lease liabilities		26,875			25,461			26,696
Other liabilities		14,782			13,996			15,922
Total liabilities		1,614,580			1,551,757			1,484,740
Shareholders’ equity		397,338			412,293			429,471
Total liabilities and shareholders’ equity	$	2,011,918		$	1,964,050		$	1,914,211

BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Statements of Operations
(Dollars in Thousands Except Per Share Data) (Unaudited)

	Three months ended												Nine months ended
	September 30, 2022				June 30, 2022				September 30, 2021				September 30, 2022				September 30, 2021
	(Dollars in thousands)
Interest income:
Loans	$	13,692			$	12,444			$	12,044			$	37,792			$	36,362
Taxable investment income		2,571				2,320				1,901				6,708				5,064
Non-taxable investment income		109				114				128				344				392
Total interest income		16,372				14,878				14,073				44,844				41,818
Interest expense:
Deposits		1,424				950				1,651				3,256				6,848
Borrowed funds		1,133				766				1,318				2,672				4,357
Total interest expense		2,557				1,716				2,969				5,928				11,205
Net interest income		13,815				13,162				11,104				38,916				30,613
(Release of) provision for loan losses		(419	)			594				(338	)			(777	)			(1,699	)
Net interest income after provision for loan losses		14,234				12,568				11,442				39,693				32,312
Non-interest income:
Fees and service charges		650				365				347				1,815				1,410
Gain on sales and calls of securities available for sale		—				14				—				14				—
Other		149				115				142				391				365
Total other income		799				494				489				2,220				1,775
Non-interest expense:
Compensation and employee benefits		7,302				7,008				5,931				21,234				18,321
Loss on pension withdrawal		—				—				9,232				—				9,232
Occupancy and equipment		1,921				1,914				1,853				5,716				5,849
Data processing		1,559				1,393				1,781				4,430				5,432
Debt extinguishment costs		—				—				1,401				—				1,401
Advertising		125				349				603				993				1,595
Professional services		1,012				976				875				3,279				2,819
Directors fees		131				126				136				393				413
Provision (release of provision) for commitments and letters of credit		170				(108	)			1,245				(108	)			541
Federal deposit insurance		98				99				130				275				384
Contribution to Charitable Foundation		—				—				9,000				—				9,000
Other		1,351				1,262				931				3,692				2,303
Total operating expenses		13,669				13,019				33,118				39,904				57,290
Income (loss) before income tax expense (benefit)		1,364				43				(21,187	)			2,009				(23,203	)
Income tax expense (benefit)		123				3				(6,217	)			175				(6,485	)
Net income (loss)	$	1,241			$	40			$	(14,970	)		$	1,834			$	(16,718	)
Basic and diluted earnings (loss) per share	$	0.05			$	—			$	(0.68	)		$	0.07			n/a
Weighted average shares outstanding-basic		26,128,851				26,366,324				21,979,861				26,278,775			n/a
Weighted average shares outstanding-diluted		26,246,039				26,366,324				21,979,861				26,318,267			n/a

BLUE FOUNDRY BANCORP AND SUBSIDIARY
Consolidated Financial Highlights
(Dollars in Thousands Except Per Share Data) (Unaudited)

	Three months ended
	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021				September 30, 2021
Performance Ratios (%):
Return (loss) on average assets		0.25			0.01			0.12			(3.97	)			(2.77	)
Return (loss) on average equity		1.20			0.04			0.52			(17.36	)			(15.15	)
Interest rate spread (1)		2.68			2.71			2.50			2.50				1.96
Net interest margin (2)		2.84			2.83			2.62			2.63				2.15
Efficiency ratio (non-GAAP) (3)		92.37			96.13			104.04			110.59				105.58
Average interest-earning assets to average interest-bearing liabilities		130.30			131.52			131.77			132.04				133.42
Tangible equity to tangible assets (4)		19.72			20.97			21.68			22.42				22.14
Book value per share (5)	$	14.11		$	14.46		$	14.73		$	15.06			$	15.72
Tangible book value per share (6)	$	14.09		$	14.43		$	14.72		$	15.04			$	15.70
Asset Quality:
Non-performing loans	$	8,409		$	9,998		$	10,482		$	11,983			$	12,463
Real estate owned, net	$	—		$	—		$	—		$	—			$	624
Non-performing assets	$	8,409		$	9,998		$	10,482		$	11,983			$	13,087
Allowance for loan losses to total loans (%)		0.91			0.98			1.00			1.13				1.22
Allowance for loan losses to non-performing loans (%)		161.73			140.53			128.46			120.38				122.35
Non-performing loans to total loans (%)		0.56			0.70			0.78			0.94				1.00
Non-performing assets to total assets (%)		0.42			0.51			0.54			0.63				0.65
Net charge-offs to average outstanding loans during the period (%)		0.01			—			—			—				—

(1) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(2) Net interest margin represents net interest income divided by average interest-earning assets.
(3) Efficiency ratio represents adjusted non-interest expense divided by the sum of net interest income plus non-interest income.
(4) Tangible equity equals $396.6 million, which exclude intangible assets ($760 thousand of capitalized software).
Tangible assets equal $2.01 billion and exclude intangible assets.
(5) Per share metrics computed using 28,155,292 total shares outstanding.
(6) Tangible book value equals the Company’s tangible equity of $396.6 million divided by outstanding shares of 28,155,292.

BLUE FOUNDRY BANCORP AND SUBSIDIARY
Analysis of Net Interest Income
(Dollars in Thousands) (Unaudited)

	Three Months Ended,
	September 30, 2022									June 30, 2022									September 30, 2021
	Average Balance			Interest			Average Yield/Cost			Average Balance			Interest			Average Yield/Cost			Average Balance			Interest			Average Yield/Cost
	(Dollars in thousands)
Assets:
Loans (1)	$	1,465,114		$	13,692		3.71	%		$	1,369,389		$	12,444		3.64	%		$	1,251,343		$	12,044		3.86	%
Mortgage-backed securities		197,406			1,055		2.12	%			205,387			1,066		2.08	%			165,170			762		1.85	%
Other investment securities		204,506			1,230		2.39	%			208,958			1,144		2.20	%			163,393			871		2.14	%
FHLB stock		13,141			139		4.20	%			10,121			116		4.60	%			14,442			183		5.09	%
Cash and cash equivalents		49,163			256		2.07	%			74,242			108		0.58	%			473,797			213		0.18	%
Total interest-bearing assets		1,929,330			16,372		3.37	%			1,868,097			14,878		3.19	%			2,068,145			14,073		2.73	%
Non-interest earning assets		61,264									68,003									97,287
Total assets	$	1,990,594								$	1,936,100								$	2,165,432
Liabilities and shareholders’ equity:
NOW, savings, and money market deposits	$	831,191			759		0.36	%		$	808,253			312		0.15	%		$	687,470			242		0.14	%
Time deposits		405,823			665		0.65	%			431,813			638		0.59	%			580,499			1,409		0.97	%
Interest-bearing deposits		1,237,014			1,424		0.46	%			1,240,066			950		0.31	%			1,267,969			1,651		0.52	%
FHLB advances		243,647			1,133		1.84	%			187,698			766		1.64	%			282,153			1,318		1.87	%
Total interest-bearing liabilities		1,480,661			2,557		0.69	%			1,427,763			1,716		0.48	%			1,550,122			2,969		0.77	%
Non-interest bearing deposits		49,869									41,429									176,045
Non-interest bearing other		48,103									46,688									42,907
Total liabilities		1,578,633									1,515,880									1,769,074
Total shareholders’ equity		411,961									420,220									396,358
Total liabilities and shareholders’ equity	$	1,990,594								$	1,936,100								$	2,165,432
Net interest income				$	13,815									13,162								$	11,104
Net interest rate spread (2)							2.68	%								2.71	%								1.96	%
Net interest margin (3)							2.84	%								2.83	%								2.15	%

(1) Average loan balances are net of deferred loan fees and costs, and premiums and discounts, and include non-accrual loans.
(2) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(3) Net interest margin represents net interest income divided by average interest-earning assets.

	Nine Months Ended September 30,
		2022									2021
	Average Balance			Interest			Average Yield/Cost			Average Balance			Interest			Average Yield/Cost
	(Dollars in thousands)
Assets:
Loans (1)	$	1,372,306		$	37,792		3.68	%		$	1,274,274		$	36,362		3.82	%
Mortgage-backed securities		191,662			2,842		1.98	%			153,031			2,201		1.92	%
Other investment securities		204,009			3,395		2.22	%			139,909			2,324		2.22	%
FHLB stock		11,080			371		4.48	%			15,662			585		5.00	%
Cash and cash equivalents		103,526			444		0.57	%			394,656			346		0.12	%
Total interest-bearing assets		1,882,583			44,844		3.18	%			1,977,532			41,818		2.83	%
Non-interest earning assets		69,008									84,360
Total assets	$	1,951,591								$	2,061,892
Liabilities and shareholders’ equity:
NOW, savings, and money market deposits		799,762			1,323		0.22	%			663,581			835		0.17	%
Time deposits		431,724			1,933		0.60	%			648,672			6,013		1.24	%
Interest-bearing deposits		1,231,486			3,256		0.35	%			1,312,253			6,848		0.70	%
FHLB advances		205,828			2,672		1.74	%			308,614			4,357		1.89	%
Total interest-bearing liabilities		1,437,314			5,928		0.55	%			1,620,867			11,205		0.92	%
Non-interest bearing deposits		45,338									126,933
Non-interest bearing other		47,691									44,684
Total liabilities		1,530,343									1,792,484
Total shareholders’ equity		421,248									269,408
Total liabilities and shareholders’ equity	$	1,951,591								$	2,061,892
Net interest income				$	38,916								$	30,613
Net interest rate spread (2)							2.64	%								1.91	%
Net interest margin (3)							2.76	%								2.07	%

(1) Average loan balances are net of deferred loan fees and costs, and premiums and discounts, and include non-accrual loans.
(2) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(3) Net interest margin represents net interest income divided by average interest-earning assets.

BLUE FOUNDRY BANCORP AND SUBSIDIARY
Adjusted Pre-Provision Net Revenue (Non-GAAP)
(Dollars in Thousands Except Per Share Data) (Unaudited)

This press release contains certain supplemental financial information, described in the table below, which has been determined by methods other than U.S. Generally Accepted Accounting Principles (“GAAP”) that management uses in its analysis of Blue Foundry’s performance. Management believes these non-GAAP financial measures provide information useful to investors in understanding Blue Foundry’s financial results. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and Blue Foundry strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

Net income, as presented in the Consolidated Statements of Operations, includes the provision for loan losses, provision for commitments and letters of credit, and income tax expense while pre-provision net revenue does not.

	Three months ended
	September 30, 2022				June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021
	(Dollars in thousands)
Pre-provision net revenue (PPNR) and efficiency ratio, as adjusted:
Net interest income	$	13,815			$	13,162			$	11,939			$	12,336			$	11,104
Other income		799				494				927				704				489
Operating expenses, as reported		13,669				13,019				13,216				17,380				33,118
Less: Fee on debt extinguishment		—				—				—				754				1,401
Less: Loss on pension withdrawal		—				—				—				1,974				9,232
Less: Charitable contribution		—				—				—				—				9,000
Less: Provision for commitments and letters of credit		170				(108	)			(170	)			148				1,245
Less: Loss on assets held for sale		—				—				—				83				—
Operating expenses, as adjusted		13,499				13,127				13,386				14,421				12,240
Pre-provision net revenue (loss), as adjusted	$	1,115			$	529			$	(520	)		$	(1,381	)		$	(647	)
Efficiency ratio, as adjusted		92.4	%			96.1	%			104.0	%			110.6	%			105.6	%
Core deposits:
Total deposits	$	1,266,497			$	1,296,674			$	1,283,022			$	1,247,040			$	1,265,617
Less: time deposits		365,548				430,696				444,936				473,795				521,510
Core deposits	$	900,949			$	865,978			$	838,086			$	773,245			$	744,107
Core deposits to total deposits		71.1	%			66.8	%			65.3	%			62.0	%			58.8	%
Tangible equity:
Shareholders’ equity (1) (2)	$	397,338			$	412,293			$	420,214			$	429,472			$	448,235
Less: intangible assets		760				630				452				437				354
Tangible equity	$	396,578			$	411,663			$	419,762			$	429,035			$	447,881
Tangible book value per share:
Tangible equity	$	396,578			$	411,663			$	419,762			$	429,035			$	447,881
Shares outstanding		28,155,292				28,522,500				28,522,500				28,522,500				28,522,500
Tangible book value per share	$	14.09			$	14.43			$	14.72			$	15.04				15.70

(1) The Company recorded a deferred tax asset valuation allowance of $16.8 million as of December 31, 2021.
(2) Accumulated other comprehensive income (AOCI) declined by $32.1 million in 2022, largely a result of the rising rate environment which negatively impacted the fair value of the Company’s available-for-sale investment portfolio.