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What changed in Blue Foundry Bancorp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Blue Foundry Bancorp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+279 added−284 removedSource: 10-K (2025-03-27) vs 10-K (2024-03-27)

Top changes in Blue Foundry Bancorp's 2024 10-K

279 paragraphs added · 284 removed · 228 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

125 edited+22 added−25 removed158 unchanged
Biggest changeDecember 31, 2023 December 31, 2022 Amount Percent of Allowance to Total Allowance Percent of Loans in Category to Total Loans Amount Percent of Allowance to Total Allowance Percent of Loans in Category to Total Loans (Dollars in thousands) Residential one-to-four family $ 1,968 13.90 % 35.30 % $ 2,264 16.90 % 38.55 % Multifamily 7,046 49.79 % 43.74 % 5,491 40.98 % 44.75 % Non-residential 3,748 26.48 % 14.90 % 3,357 25.05 % 14.03 % Construction and land 1,222 8.63 % 3.87 % 1,697 12.66 % 1.17 % Junior liens 76 0.54 % 1.44 % 451 3.37 % 1.20 % Commercial and Industrial 94 0.66 % 0.75 % 47 0.35 % 0.30 % Total 14,154 100.00 % 100.00 % 13,307 99.31 % 100.00 % Unallocated — — % — % 93 0.69 % — % Total allowance for credit losses on loans $ 14,154 100.00 % 100.00 % $ 13,400 100.00 % 100.00 % 15 Investment Activities General.
Biggest changeDecember 31, 2024 December 31, 2023 Amount Percent of Allowance to Total Allowance Percent of Loans in Category to Total Loans Amount Percent of Allowance to Total Allowance Percent of Loans in Category to Total Loans (Dollars in thousands) Residential $ 1,989 15.34 % 32.72 % $ 1,968 13.90 % 35.30 % Multifamily 6,609 50.98 % 42.38 % 7,046 49.79 % 43.74 % Commercial real estate 3,641 28.08 % 16.40 % 3,748 26.48 % 14.90 % Construction and land 460 3.55 % 5.40 % 1,222 8.63 % 3.87 % Junior liens 109 0.84 % 1.61 % 76 0.54 % 1.44 % Commercial and industrial 157 1.21 % 1.03 % 94 0.66 % 0.75 % Consumer and other (1) — — % 0.46 % — — % — % Total allowance for credit losses on loans $ 12,965 100.00 % 100.00 % $ 14,154 100.00 % 100.00 % (1) Consumer and other includes the consumer loan participation that provided credit enhancement, which based upon our analysis was sufficient to cover the expected credit losses under that portfolio. 15 Investment Activities General.
Under ASU 2016-13, the Company’s methodology for determining the allowance for credit losses on loans is based upon key assumptions, including the lookback period, historical loss experience, economic forecasts over a reasonable and supportable forecast period, reversion period, prepayments and qualitative adjustments. The allowance is measured on a pool basis when similar risk characteristics exist.
Allowance for Credit Losses Under ASU 2016-13, the Company’s methodology for determining the allowance for credit losses on loans is based upon key assumptions, including the lookback period, historical loss experience, economic forecasts over a reasonable and supportable forecast period, reversion period, prepayments and qualitative adjustments. The allowance is measured on a pool basis when similar risk characteristics exist.
Capital Requirements. Under FDIC regulations, the Bank must meet several minimum capital standards: a common equity Tier 1 capital to risk-based assets ratio, a Tier 1 capital to risk-based assets ratio, a total capital risk-based assets ratio, and a Tier 1 capital to total assets leverage ratio.
Capital Requirements. Under FDIC regulations, the Bank must meet several minimum capital standards: a common equity Tier 1 capital to risk-based assets ratio, a Tier 1 capital to risk-based assets ratio, a total capital to risk-based assets ratio, and a Tier 1 capital to total assets leverage ratio.
In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if an institution does not hold a “capital conservation buffer” of 2.5%, effectively resulting in the following minimum ratios: (1) a common equity Tier 1 capital ratio of 7.0%, (2) a Tier 1 to risk-based assets capital ratio of 8.5%, and (3) a total capital ratio of 10.5%.
In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if an institution does not hold a “capital conservation buffer” of 2.5%, effectively resulting in the following minimum ratios: (1) a common equity Tier 1 capital ratio of 7.0%, (2) a Tier 1 capital to risk-based assets ratio of 8.5%, and (3) a total capital ratio of 10.5%.
An institution is considered “well capitalized” if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a leverage ratio of 5.0% or greater and a common equity Tier 1 ratio of 6.5% or greater.
An institution is considered “well capitalized” if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a leverage ratio of 5.0% or greater and a common equity Tier 1 capital ratio of 6.5% or greater.
An institution is considered “adequately capitalized” if it has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater, a leverage ratio of 4.0% or greater and a common equity Tier 1 ratio of 4.5% or greater.
An institution is considered “adequately capitalized” if it has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater, a leverage ratio of 4.0% or greater and a common equity Tier 1 capital ratio of 4.5% or greater.
An institution is considered “undercapitalized” if it has a total risk-based capital ratio of less than 8.0%, a Tier 1 risk-based capital ratio of less than 6.0%, a leverage ratio of less than 4.0% or a common equity Tier 1 ratio of less than 4.5%.
An institution is considered “undercapitalized” if it has a total risk-based capital ratio of less than 8.0%, a Tier 1 risk-based capital ratio of less than 6.0%, a leverage ratio of less than 4.0% or a common equity Tier 1 capital ratio of less than 4.5%.
An institution is considered “significantly undercapitalized” if it has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.0%, a leverage ratio of less than 3.0% or a common equity Tier 1 ratio of less than 3.0%.
An institution is considered “significantly undercapitalized” if it has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.0%, a leverage ratio of less than 3.0% or a common equity Tier 1 capital ratio of less than 3.0%.
A bank holding company is generally required to give the Federal Reserve Board prior written notice of any purchase or redemption of its outstanding equity securities if the gross consideration for the purchase or redemption, when combined with the net consideration paid for all such purchases or redemptions during the preceding 12 months, is equal to 10% or more of the company’s consolidated net worth.
A bank holding company is generally required to give the Federal Reserve Board prior written notice of any purchase or redemption of its outstanding equity securities if the gross consideration for the purchase or redemption, when combined with the net consideration paid for all such purchases or redemptions during the preceding 12 months, is equal to 10% or more of the holding company’s consolidated net worth.
Annual reporting requirements under FDICIA are as follows: (1) annual audited financial statements; (2) management report stating management's responsibility for preparing the institution's annual financial statements, establishing and maintaining an adequate internal control structure and procedures for financial reporting and for complying with laws and regulations, and assessment by management of the institution's compliance with such laws and regulations; and (3) for insured depository institutions with consolidated total assets over $1.0 billion or more, such as the Bank, the independent public accountant who audits the institution's financial statements shall examine, attest to, and report separately on the assertion of management concerning the effectiveness of the institution's internal control structure and procedures for financial reporting.
Annual reporting requirements under FDICIA 112 are as follows: (1) annual audited financial statements; (2) management report stating management's responsibility for preparing the institution's annual financial statements, establishing and maintaining an adequate internal control structure and procedures for financial reporting and for complying with laws and regulations, and assessment by management of the institution's compliance with such laws and regulations; and (3) for insured depository institutions with consolidated total assets over $1.0 billion or more, such as the Bank, the independent public accountant who audits the institution's financial statements shall examine, attest to, and report separately on the assertion of management concerning the effectiveness of the institution's internal control structure and procedures for financial reporting.
Other investments also consist of, to a much lesser extent, an investment in a financial technology fund carried at net asset value (“NAV”) and shares in a cooperative that provides community banking core technology solutions, carried at cost. Sources of Funds General. Deposits have traditionally been our primary source of funds for our lending and investment activities.
Other investments also consist of, to a much lesser extent, an investment in a financial technology fund carried at net asset value and shares in a cooperative that provides community banking core technology solutions, carried at cost. Sources of Funds General. Deposits have traditionally been our primary source of funds for our lending and investment activities.
Our offices are equipped with stand-up desks, and the mindfulness room provides a place for employees to take a quiet break from their busy day. Nursing moms have access to a lactation room equipped with a refrigerator and sink for their privacy and convenience. Supervision and Regulation The Company and the Bank operate in the highly-regulated banking industry.
Our offices are equipped with stand-up desks, and the mindfulness room provides a place for employees to take a quiet break from their busy day. Nursing moms have access to a lactation room equipped with a refrigerator and sink for their privacy and convenience. 19 Supervision and Regulation The Company and the Bank operate in the highly-regulated banking industry.
Federal law may also limit the amount of dividends that may be paid by the Bank. See “Federal Bank Regulation—Prompt Corrective Regulatory Action” below. Minimum Capital Requirements. Regulations of the NJDOBI impose on New Jersey-chartered depository institutions, including the Bank, minimum capital requirements generally similar to those imposed by the FDIC on insured state banks.
Federal law may also limit the amount of dividends that may be paid by the Bank. See “Federal Bank Regulation - Prompt Corrective Regulatory Action” below. 20 Minimum Capital Requirements. Regulations of the NJDOBI impose on New Jersey-chartered depository institutions, including the Bank, minimum capital requirements generally similar to those imposed by the FDIC on insured state banks.
The exercise of these lending, investment and activity powers is limited by federal law and regulations. See “Federal Bank Regulation Activities and Investments” below. Certain corporate transactions by a savings bank, such as establishing branches and acquiring other banks, require the prior approval of the NJDOBI. 20 Loans-to-One-Borrower Limitations.
The exercise of these lending, investment and activity powers is limited by federal law and regulations. See “Federal Bank Regulation Activities and Investments” below. Certain corporate transactions by a savings bank, such as establishing branches and acquiring other banks, require the prior approval of the NJDOBI. Loans-to-One-Borrower Limitations.
Classified Assets . Federal regulations provide for the classification of loans and other assets, such as debt and equity securities considered to be of lesser quality, as substandard, doubtful or loss. An asset is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.
Federal regulations provide for the classification of loans and other assets, such as debt and equity securities considered to be of lesser quality, as substandard, doubtful or loss. An asset is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.
As an emerging growth company, we also will not be subject to Section 404(b) of the Sarbanes-Oxley Act of 2002, which would require that our independent auditors review and attest as to the effectiveness of our internal control over financial reporting.
As an emerging growth company, we also will not be subject to Section 404(b) of the Sarbanes-Oxley Act of 2002, which would require that our independent auditors review and attest as to the effectiveness of our internal control over financial 27 reporting.
Once a construction project is satisfactorily completed, we look to provide permanent financing. Junior Liens and Consumer Loans . We offer consumer loans to customers residing in our market area. Our consumer loans and junior liens consist primarily of home equity loans and lines of credit.
Once a construction project is satisfactorily completed, we look to provide permanent financing. Junior Liens and Consumer Loans . We generally offer consumer loans to customers residing in our market area. Our consumer loans and junior liens consist primarily of home equity loans and lines of credit.
See “New Jersey Banking Laws and Supervision—Loan-to-One Borrower Limitations.” All loans by a bank to all insiders and insiders’ related interests in the aggregate may not exceed the bank’s unimpaired capital and unimpaired surplus.
See “New Jersey Banking Laws and Supervision—Loans-to-One Borrower Limitations.” All loans by a bank to all insiders and insiders’ related interests in the aggregate may not exceed the bank’s unimpaired capital and unimpaired surplus.
New Jersey, counted among the wealthiest states in the nation with an estimated population of 9.29 million, is considered one of the most attractive banking markets in the United States. Within our primary market areas, the Bank had less than 1% of bank deposit market share as of June 30, 2023, the latest date for which statistics are available.
New Jersey, counted among the wealthiest states in the nation with an estimated population of 9.29 million, is considered one of the most attractive banking markets in the United States. Within our primary market areas, the Bank had less than 1% of bank deposit market share as of June 30, 2024, the latest date for which statistics are available.
Information on this website is not and should not be considered a part of this Annual Report on Form 10-K. Market Area Our market area is primarily northern New Jersey. As of December 31, 2023, the Bank operates 20 full service banking offices in Bergen, Essex, Hudson, Middlesex, Morris, Passaic, and Union counties in New Jersey.
Information on this website is not and should not be considered a part of this Annual Report on Form 10-K. Market Area Our market area is primarily northern New Jersey. As of December 31, 2024, the Bank operates 20 full service banking offices in Bergen, Essex, Hudson, Middlesex, Morris, Passaic, and Union counties in New Jersey.
Privacy Regulations. Federal law and regulations generally requires that the Bank disclose its privacy policy, including identifying with whom it shares a customer’s “non-public personal information,” to customers at the time of establishing the customer relationship. In addition, financial institutions are generally required to furnish their customers a privacy notice annually.
Privacy Regulations. Federal law and regulations generally require that the Bank disclose its privacy policy, including identifying with whom it shares a customer’s “non-public personal information,” to customers at the time of establishing the customer relationship. In addition, financial institutions are generally required to furnish their customers a privacy notice annually.
Adjustable Rate Loans. The following table sets forth the dollar amount of all loans at December 31, 2023 that are due after December 31, 2024 and have either fixed interest rates or floating or adjustable interest rates. The amounts shown below include unearned loan origination fees and costs and unamortized premium and discounts, net.
Adjustable Rate Loans. The following table sets forth the dollar amount of all loans at December 31, 2024 that are due after December 31, 2025 and have either fixed interest rates or floating or adjustable interest rates. The amounts shown below include unearned loan origination fees and costs and unamortized premium and discounts, net.
An institution is considered “critically undercapitalized” if it has a ratio of tangible equity (as defined in the regulations) to total assets equal to or less than 2.0%. At December 31, 2023, the Bank was classified as a “well capitalized” institution under these definitions.
An institution is considered “critically undercapitalized” if it has a ratio of tangible equity (as defined in the regulations) to total assets equal to or less than 2.0%. At December 31, 2024, the Bank was classified as a “well capitalized” institution under these definitions.
The Federal Home Loan Banks provide a central credit facility primarily for member institutions. The Bank, as a member of the FHLB, is required to acquire and hold shares of capital stock in the FHLB. The Bank was in compliance with this requirement at December 31, 2023. Holding Company Regulation Federal Holding Company Regulation .
The Federal Home Loan Banks provide a central credit facility primarily for member institutions. The Bank, as a member of the FHLB, is required to acquire and hold shares of capital stock in the FHLB. The Bank was in compliance with this requirement at December 31, 2024. Holding Company Regulation Federal Holding Company Regulation .
The CRA requires the FDIC to provide a written evaluation of an institution’s CRA performance utilizing a four-tiered descriptive rating system.
The CRA currently requires the FDIC to provide a written evaluation of an institution’s CRA performance utilizing a four-tiered descriptive rating system.
Our marketing strategies focus on the strength of our knowledge of local consumer and small business markets, as well as expanding relationships with current customers and reaching out to develop new, profitable business relationships. Competition We face significant competition for deposits and loans.
Our marketing strategies focus on the strength of our knowledge of local consumer and small to medium size business markets, as well as expanding relationships with current customers and reaching out to develop new, profitable business relationships. Competition We face significant competition for deposits and loans.
One of the principal exceptions to this prohibition is for activities the Federal Reserve Board had determined to be so closely related to banking or managing or controlling banks as to be a proper incident thereto.
One of the principal exceptions to this prohibition is for activities the Federal Reserve Board has determined to be so closely related to banking or managing or controlling banks as to be a proper incident thereto.
At December 31, 2023, our largest one-to-four family residential loan totaled $3.7 million, is secured by single family home located on approximately 53 acres of property and was not performing in accordance with its original terms. Our adjustable-rate residential real estate loans have interest rates that are fixed for an initial period ranging from three to ten years.
At December 31, 2024, our largest residential loan totaled $3.7 million, is secured by single family home located on approximately 53 acres of property and was not performing in accordance with its original terms. Our adjustable-rate residential real estate loans have interest rates that are fixed for an initial period ranging from three to ten years.
For example, a risk weight of 0% is assigned to cash and U.S. government securities, a risk weight of 50% is generally assigned to prudently underwritten first lien one-to-four family residential mortgages, a risk weight of 100% is assigned to commercial and consumer loans, a risk weight of 150% is assigned to certain past due loans and a risk weight of between 0% to 600% is assigned to permissible equity interests, depending on certain specified factors.
For example, a risk weight of 0% is assigned to cash and U.S. government securities, a risk weight of 50% is generally assigned to prudently underwritten first lien residential mortgages, a risk weight of 100% is assigned to commercial and consumer loans, a risk weight of 150% is assigned to certain past due loans and a risk weight of between 0% to 600% is assigned to permissible equity interests, depending on certain specified factors.
The CRA requires the FDIC, in connection with its examination of each state non-member bank, to assess the institution’s record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications by such institution, including applications to establish branches and acquire other financial institutions.
The CRA requires the FDIC, in connection with its examination of each state nonmember bank, to assess the institution’s record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications by such institution, including applications to establish branches and acquire other financial institutions.
The one-to-four family residential mortgage loans we are currently originating are generally underwritten according to Fannie Mae and Freddie Mac guidelines and we refer to loans that conform to such guidelines as “conforming loans.” We generally originate both fixed and adjustable-rate mortgage loans in amounts up to the maximum conforming loan limits.
The residential mortgage loans we are currently originating are generally underwritten according to Fannie Mae and Freddie Mac guidelines and we refer to loans that conform to such guidelines as “conforming loans.” We generally originate both fixed and adjustable-rate mortgage loans in amounts up to the maximum conforming loan limits.
We originate one-to-four family residential mortgage loans with loan-to-value ratios of generally up to 80% to 90% of the appraised value, depending on the size of the loan. We may originate loans with loan-to-value ratios that exceed 90% depending upon the product type. Mortgage insurance is required for all mortgage loans that have a loan-to-value ratio greater than 80%.
We originate residential mortgage loans with loan-to-value ratios of generally up to 80% to 90% of the appraised value, depending on the size of the loan. We may originate loans with loan-to-value ratios that exceed 90% depending upon the product type. Mortgage insurance is required for all mortgage loans that have a loan-to-value ratio greater than 80%.
A qualifying institution may opt in and out of the community bank leverage ratio framework on its quarterly call report. As of December 31, 2023, the Bank has not opted into the community bank leverage ratio framework. At December 31, 2023, the Bank exceeded each of its capital requirements. Standards for Safety and Soundness.
A qualifying institution may opt in and out of the community bank leverage ratio framework on its quarterly call report. As of December 31, 2024, the Bank has not opted into the community bank leverage ratio framework. At December 31, 2024, the Bank exceeded each of its applicable capital requirements. Standards for Safety and Soundness.
Our loan origination and purchase activity may be adversely affected by a rising interest rate environment, which typically results in decreased loan demand. 10 We consider a number of factors in originating multifamily and non-residential real estate loans.
Our loan origination and purchase activity may be adversely affected by a rising interest rate environment, which typically results in decreased loan demand. 10 We consider a number of factors in originating multifamily and commercial real estate loans.
Blue Foundry Bank’s principal business consists of originating one-to-four family residential, multifamily, and non-residential real estate mortgages, home equity loans and lines of credit, construction and commercial and industrial loans in our principal market and surrounding areas. In addition, we occasionally lend outside of our branch network in more densely populated and metropolitan areas, adding diversification to our loan portfolio.
Blue Foundry Bank’s principal business consists of originating residential, multifamily, and commercial real estate mortgages, construction, commercial and industrial loans and home equity loans and lines of credit in our principal market and surrounding areas. In addition, we occasionally lend outside of our branch network in more densely populated and metropolitan areas, adding diversification to our loan portfolio.
Similarly, government regulations, such as the existing New York City Rent Regulation and Rent Stabilization laws, could limit future increases in the revenue from these buildings. As of December 31, 2023, the Company has approximately $109 million in New York multifamily loans that have some form of rent stabilization or rent control or 7.4% of total loans.
Similarly, government regulations, such as the existing New York City Rent Regulation and Rent Stabilization laws, could limit future increases in the revenue from these buildings. As of December 31, 2024, the Company has approximately $107.7 million, or 7.4% of total loans, in New York multifamily loans that have some form of rent stabilization or rent control.
We generally do not offer “interest only” mortgage loans on one-to-four family residential properties or loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loan.
We generally do not offer “interest only” mortgage loans on residential properties or loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loan.
The Bank is a certified Small Business Administration (“SBA”) lender and is a participant in SBA lending programs which typically provides guarantees of up to 75% of the principal on the underlying loans. We provide loans under the 7(a) Loan Program, the SBA’s most common loan program. We may sell a portion of these loans in the secondary market.
The Bank is a certified SBA lender and is a participant in SBA lending programs which typically provides guarantees of up to 75% of the principal on the underlying loans. We provide loans under the 7(a) Loan Program, the SBA’s most common loan program. We may sell a portion of these loans in the secondary market.
In such cases, approval by the Loan Committee or Loan Oversight Committee may be required. For commercial loans, a minimum of three approvals are required (two of which must include the Chief Lending Officer and Chief Credit Officer), with a third approval from any voting member of the Loan Committee. Loans to One Borrower.
In such cases, approval by the Loan Committee or Loan Oversight Committee may be required. For commercial loans, a minimum of three approvals are required (two of which must include the Head of Commercial Banking or Head of Consumer Banking and Chief Credit Officer), with a third approval from any voting member of the Loan Committee. Loans to One Borrower.
Our primary sources of funds are deposits, principal and interest payments on loans and securities, and borrowings from the Federal Home Loan Bank of New York (“FHLB”). Blue Foundry Bank is subject to comprehensive regulation and examination by the New Jersey Department of Banking and Insurance (“NJDOBI”) and the Federal Deposit Insurance Corporation (“FDIC”). Our website address is www.bluefoundrybank.com .
Our primary sources of funds are deposits, principal and interest payments on loans and securities and borrowings. Blue Foundry Bank is subject to comprehensive regulation and examination by the New Jersey Department of Banking and Insurance (“NJDOBI”) and the Federal Deposit Insurance Corporation (“FDIC”). Our website address is www.bluefoundrybank.com .
Originations, Purchases and Participations of Loans Loan origination activities are conducted by our lending personnel and throughout the branch network. We market, network and call on prospective customers and centers of influence to originate loans. We also obtain referrals from existing and former customers and from accountants, real estate brokers, builders and attorneys.
Originations, Purchases and Participations of Loans Loan origination activities are conducted by our commercial and consumer bankers and throughout the branch network. We market, network and call on prospective customers and centers of influence to originate loans. We also obtain referrals from existing and former customers and from accountants, real estate brokers, builders and attorneys.
Federal Insurance of Deposit Accounts. The Bank is a member of the Deposit Insurance Fund, which is administered by the FDIC. Deposit accounts in the Bank are insured up to a maximum of $250,000 for each separately insured depositor. The FDIC assesses all insured depository institutions.
Federal Insurance of Deposit Accounts. The Bank is a member of the Deposit Insurance Fund, which is administered by the FDIC. Deposit accounts in the Bank are insured up to a maximum of $250,000 for each separately insured depositor for each account ownership category. 24 The FDIC assesses all insured depository institutions.
The Bank’s most recent FDIC CRA rating in March 2021 was “Satisfactory.” On October 24, 2023, the FDIC, the Federal Reserve Board, and the Office of the Comptroller of the Currency issued a final rule to strengthen and modernize the CRA regulations.
The Bank’s most recent FDIC CRA rating in June 2024 was “Satisfactory.” On October 24, 2023, the FDIC, the Federal Reserve Board, and the Office of the Comptroller of the Currency issued a final rule to strengthen and modernize the CRA regulations.
At December 31, 2023, our largest loan relationship with a single borrower was for $34.3 million, which consisted of one loan secured by non-residential, non-owner occupied real estate and seven loans secured by multifamily real estate, each of which was performing in accordance with its terms. 11 Delinquencies and Asset Quality Delinquency Procedures.
At December 31, 2024, our largest loan relationship with a single borrower was for $33.6 million, which consisted of one loan secured by non-residential, non-owner occupied real estate and seven loans secured by multifamily real estate, each of which was performing in accordance with its terms. 11 Delinquencies and Asset Quality Delinquency Procedures.
Therefore, commercial and industrial loans that we originate may have greater credit risk than one-to-four family residential real estate loans or, generally, consumer loans. In addition, commercial and industrial loans generally require substantially greater evaluation and oversight efforts.
Therefore, commercial and industrial loans that we originate may have greater credit risk than residential real estate loans or, generally, consumer loans. In addition, commercial and industrial loans generally require substantially greater evaluation and oversight efforts.
The rate of the capital base was to have been 0% starting in 2021. The legislation imposed a tax rate of 0.1875% for tax years beginning on or after January 1, 2021 and before January 1, 2024, with the 0% rate to take effect in 2024.
In addition, the scheduled phase-out of the capital base tax was delayed. The rate of the capital base was to have been 0% starting in 2021. The legislation imposed a tax rate of 0.1875% for tax years beginning on or after January 1, 2021 and before January 1, 2024, with the 0% rate to take effect in 2024.
At December 31, 2023, we had $11.8 million of commercial and industrial loans. Commercial and industrial loans represent 0.8% of our total loan portfolio. We offer term loans, lines of credit and revolving lines of credit with varying maturity terms to small businesses in our market area to finance short-term working capital needs such as accounts receivable and inventory.
At December 31, 2024, we had $16.3 million of commercial and industrial loans. Commercial and industrial loans represent 1.0% of our total loan portfolio. We offer term loans, lines of credit and revolving lines of credit with varying maturity terms to small businesses in our market area to finance short-term working capital needs such as accounts receivable and inventory.
All loans are appraised by outside independent and qualified appraisers that are duly approved in accordance with Blue Foundry Bank policy. Loans are monitored on an ongoing basis, based on policy requirements, often requiring updated financials statements. During the years ended December 31, 2023 and 2022, loan originations totaled $119.6 million and $488.2 million, respectively.
All loans are appraised by outside independent and qualified appraisers that are duly approved in accordance with Blue Foundry Bank policy. Loans are monitored on an ongoing basis, based on policy requirements, often requiring updated financial statements. During the years ended December 31, 2024 and 2023, loan originations totaled $116.0 million and $119.6 million, respectively.
At December 31, 2023 the outstanding balances of our loan participations where we are not the lead lender totaled $126.8 million, or 8.1% of our loan portfolio. All such loans were performing at December 31, 2023 in accordance with their original repayment terms. Credit Policy and Procedures Loan Approval Procedures and Authority .
At December 31, 2024 the outstanding balances of our loan participations where we are not the lead lender totaled $175.5 million, or 11.1% of our loan portfolio. All such loans were performing at December 31, 2024 in accordance with their original repayment terms. Credit Policy and Procedures Loan Approval Procedures and Authority .
We expect competition to remain intense in the future as a result of legislative, regulatory and technological changes and the continuing trend toward consolidation in the financial services industry.
We expect competition to remain intense in the future as a result of legislative, regulatory and technological changes and the potential of consolidation in the financial services industry.
The Bank may purchase residential loans through its residential loan purchase program to utilize excess liquidity and to supplement originations. All loans purchased were within New Jersey and were underwritten to FNMA standards, a comparable underwriting standard as internally-originated loans. Loan purchases totaled $6.8 million and $104.0 million for the years ended December 31, 2023 and 2022, respectively.
The Bank may purchase residential loans through its residential loan purchase program to supplement originations. All residential loans purchased were within New Jersey and were underwritten to FNMA standards, a comparable underwriting standard as internally-originated loans. Loan purchases totaled $21.6 million and $6.8 million for the years ended December 31, 2024 and 2023, respectively.
Uninsured deposits totaling $80.9 million were deposits of the Company and its subsidiaries and $33.8 million were municipal deposits covered by supplemental insurance on such deposits under New Jersey’s Governmental Unit Deposit Protection Act. 18 The following table sets forth the maturity of time deposits in excess of $250,000 at December 31, 2023.
Uninsured deposits totaling $83.8 million were deposits of the Company and its subsidiaries and $39.3 million were municipal deposits covered by supplemental insurance on such deposits under New Jersey’s Governmental Unit Deposit Protection Act. 18 The following table sets forth the maturity of time deposits in excess of $250,000 at December 31, 2024.
In 1992, Boiling Springs Savings & Loan Association converted to a New Jersey-chartered mutual savings bank and became known as Boiling Springs Savings Bank. Boiling Springs Savings Bank’s name was changed to Blue Foundry Bank in 2019. At December 31, 2023, the Bank had assets of $2.04 billion, net loans of $1.55 billion and deposits of $1.24 billion.
In 1992, Boiling Springs Savings & Loan Association converted to a New Jersey-chartered mutual savings bank and became known as Boiling Springs Savings Bank. Boiling Springs Savings Bank’s name was changed to Blue Foundry Bank in 2019. At December 31, 2024, the Bank had assets of $2.06 billion, net loans of $1.57 billion and deposits of $1.34 billion.
Regulation O contains a general exception for extensions of credit made pursuant to a benefit or compensation plan of a bank that is widely available to employees of the bank and that does not give any preference to insiders of the bank over other employees. As of December 31, 2023, the Bank does not have any such loans.
Regulation O contains a general exception for extensions of credit made pursuant to a benefit or compensation plan of a bank that is widely available to employees of the bank and that does not give any preference to insiders of the bank over other employees.
Due to our use of the extended transition period, our financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards. 27 A company loses emerging growth company status on the earlier of: (1) the last day of the fiscal year of the company during which it had total annual gross revenues of $1.07 billion or more; (2) the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the company pursuant to an effective registration statement under the Securities Act; (3) the date on which such company has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (4) the date on which such company is deemed to be a “large accelerated filer” under Securities and Exchange Commission regulations (generally, a “large accelerated filer” is defined as a corporation with at least $700 million of voting and non-voting equity held by non-affiliates).
A company loses emerging growth company status on the earlier of: (1) the last day of the fiscal year of the company during which it had total annual gross revenues of $1.07 billion or more; (2) the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the company pursuant to an effective registration statement under the Securities Act; (3) the date on which such company has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (4) the date on which such company is deemed to be a “large accelerated filer” under Securities and Exchange Commission regulations (generally, a “large accelerated filer” is defined as a corporation with at least $700 million of voting and non-voting equity held by non-affiliates).
Federal laws also prohibit unfair, deceptive or abusive acts or practices against consumers, which can be enforced by the Consumer Financial Protection Bureau, the FDIC and state attorneys general. 25 Federal Home Loan Bank System The Bank is a member of the Federal Home Loan Bank System, which consists of 11 regional Federal Home Loan Banks.
Other federal laws also prohibit unfair, deceptive or abusive acts or practices against consumers, and those can be enforced against the Bank by the state attorneys general. Federal Home Loan Bank System The Bank is a member of the Federal Home Loan Bank System, which consists of 11 regional Federal Home Loan Banks.
A bank’s loans to its executive officers, directors, any owner of 10% or more of its stock (each, an insider) and any of certain entities controlled by any such person (an insider’s related interests), as well as loans to insiders of affiliates and such insiders’ related interests, are subject to the conditions and limitations imposed by Section 22(h) of the Federal Reserve Act and its implementing regulation, Regulation O.
A bank’s loans to its executive officers, directors, any owner of 10% or more of its stock (each, an insider) and any of certain entities controlled by any such person (an insider’s related interests), as well as loans to insiders of affiliates and such insiders’ related interests, are subject to the conditions and limitations imposed by Section 22(h) of the Federal Reserve Act and its implementing regulation, Regulation O, as made applicable to FDIC-insured state nonmember banks by Section 18(j) of the Federal Deposit Insurance Act and FDIC regulations.
Subject to market conditions and our asset-liability analysis, we expect to continue to focus on commercial real estate, multifamily and traditional C&I lending as part of our effort to diversify the loan portfolio and increase the overall yield earned on our loans.
C&I loans include C&I revolvers, term loans and Small Business Administration (“SBA”) 7a loans. Subject to market conditions and our asset-liability analysis, we expect to continue to focus on commercial real estate and traditional C&I lending as part of our effort to diversify the loan portfolio and increase the overall yield earned on our loans.
At December 31, 2023, based on the 15% limitation, the Bank’s loans-to-one-borrower limit was approximately $46.6 million, our internal policy limit was $42.0 million, representing 90% of the 15% limit. On the same date, the Bank had no borrowers with outstanding balances in excess of this amount.
At December 31, 2024, based on the 15% limitation, the Bank’s loans-to-one-borrower limit was approximately $45.4 million, our internal policy limit was $40.9 million, representing 90% of the 15% limit. On the same date, the Bank had no borrowers with outstanding balances in excess of this amount.
Under our current policy, no loan may be approved by a single officer. At a minimum, two officers are required to approve a loan – typically consisting of the loan product manager and a member of the management Loan Committee. Depending upon certain factors, such as the size of the loan request, escalating loan approval authorities may be required.
Under our current policy, no loan may be approved by a single officer. At a minimum, two officers are required to approve a loan, at least one of whom is a voting member of the Loan Committee. Depending upon certain factors, such as the size of the loan request, escalating loan approval authorities may be required.
Attorney General for prosecution of a civil action seeking actual and punitive damages and injunctive relief. Certain of these statutes, including Section 5 of the Federal Trade Commission Act, which prohibits unfair and deceptive acts and practices against consumers.
Attorney General for prosecution of a civil action seeking actual and punitive damages and injunctive relief. Section 5 of the Federal Trade Commission Act prohibits unfair and deceptive acts and practices against consumers and is enforced by the FDIC.
At December 31, 2023, we had $682.6 million in multifamily loans, representing 43.7% of our total loan portfolio. Our multifamily loans are secured primarily by apartment buildings having five or more units, most of which are located in our primary market area.
At December 31, 2024, we had $671.1 million in multifamily loans, representing 42.4% of our total loan portfolio. Our multifamily loans are secured primarily by apartment buildings having five or more units, most of which are located in our primary market area.
The real estate owned is recorded at the lower of carrying amount or fair value, less estimated costs to sell. Soon after acquisition, we order a new appraisal to determine the current market value of the property.
When we acquire real estate as a result of foreclosure or a deed-in-lieu transaction, the real estate is classified as real estate owned. The real estate owned is recorded at the lower of carrying amount or fair value, less estimated costs to sell. Soon after acquisition, we order a new appraisal to determine the current market value of the property.
Section 23B transactions also include the bank’s providing services and selling assets to an affiliate. In addition, loans or other extensions of credit by a bank to an affiliate are required to be collateralized according to the requirements set forth in Section 23A of the Federal Reserve Act.
In addition, loans or other extensions of credit by a bank to an affiliate are required to be collateralized according to the requirements set forth in Section 23A of the Federal Reserve Act.
At December 31, 2023, Blue Foundry Bank has two active subsidiaries, Blue Foundry Investment Company, a New Jersey corporation formed to manage and invest in securities and TrackView LLC, a limited liability company formed to hold certain real estate owned.
At December 31, 2024, Blue Foundry Bank had one active corporate subsidiary, Blue Foundry Investment Company, a New Jersey corporation formed to manage and invest in securities. The Bank also has two inactive subsidiaries, TrackView LLC and Blue Foundry, LLC, each a limited liability company formed under New Jersey law to hold certain real estate owned.
All multifamily loans are subject to our underwriting procedures and guidelines. Repayment of multifamily loans is dependent, in significant part, on cash flow from the collateral property sufficient to satisfy operating expenses and debt service.
Our multifamily loans are offered with fixed and adjustable rate interest terms. All multifamily loans are subject to our underwriting procedures and guidelines. Repayment of multifamily loans is primarily dependent on cash flow from the collateral property sufficient to satisfy operating expenses and debt service.
At December 31, 2023, substandard loans represent nine residential one-to-four family loans totaling $5.9 million, one multifamily loan totaling $146 thousand and one junior lien loan totaling $49 thousand. At December 31, 2022 special mention loans included one non-residential real estate loan totaling $247 thousand, one multifamily real estate loan totaling $897 thousand and two non-residential loans totaling $1.1 million.
At December 31, 2023, special mention loans included two residential family loans totaling $663 thousand and one commercial real estate loan totaling $904 thousand. Substandard loans at December 31, 2023, included nine residential loans totaling $5.9 million, one multifamily real estate loan totaling $146 thousand and one junior lien loan totaling $49 thousand.
Listed deposits totaled $11.4 million and $40.4 million at December 31, 2023 and 2022, respectively. At December 31, 2023 and 2022, brokered deposits totaled $125.0 million and $75.0 million, respectively. The flow of deposits is influenced significantly by general economic conditions, changes in money market and other prevailing interest rates and competition.
There were no listed deposits at December 31, 2024, while listed deposits totaled $11.4 million at December 31, 2023. The flow of deposits is influenced significantly by general economic conditions, changes in money market and other prevailing interest rates and competition.
The applicability date for the majority of the provisions in the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027. Consumer Protection and Fair Lending Regulations.
Under the new regulations, the applicability date for the majority of the provisions is January 1, 2026, and additional requirements will be applicable on January 1, 2027.
Year Ended December 31, 2023 2022 (Dollars in thousands) Allowance for credit losses on loans at beginning of period $ 13,400 $ 14,425 Impact of adoption 2016-13 668 — Provision (recovery of provision) for credit losses on loans 146 (1,001) Charge-offs: Residential one-to-four family (18) — Consumer and other (46) (58) Total charge-offs (64) (58) Recoveries: Residential one-to-four family — 30 Consumer and other 4 4 Total recoveries 4 34 Net charge-offs (60) (24) Allowance for credit losses on loans at end of period $ 14,154 $ 13,400 Allowance for credit losses on loans to non-performing loans at end of period 231.35 % 172.52 % Allowance for credit losses on loans to total loans outstanding at end of period 0.91 0.87 Net charge-offs to average loans outstanding during period — — Allocation of Allowance for Credit Losses on Loans.
Year Ended December 31, 2024 2023 (Dollars in thousands) Allowance for credit losses on loans at beginning of period $ 14,154 $ 13,400 Impact of adoption 2016-13 — 668 Provision (recovery of provision) for credit losses on loans (1,144) 146 Charge-offs: Residential — (18) Consumer and other (56) (46) Total charge-offs (56) (64) Recoveries: Consumer and other 11 4 Total recoveries 11 4 Net charge-offs (45) (60) Allowance for credit losses on loans at end of period $ 12,965 $ 14,154 Allowance for credit losses on loans to non-performing loans at end of period 254.02 % 231.35 % Allowance for credit losses on loans to total loans outstanding at end of period 0.83 0.91 Net charge-offs to average loans outstanding during period — — Allocation of Allowance for Credit Losses on Loans.
At December 31, 2023, the average loan size of our commercial and industrial loans was $654 thousand, and our largest outstanding commercial and industrial loan balance was a $4.9 million conventional C&I term loan to an event and food services company. This loan was performing in accordance with its repayment terms at December 31, 2023.
At December 31, 2024, the average loan size of our commercial and industrial loans was $816 thousand, and our largest outstanding commercial and industrial loan balance was a $5.4 million conventional C&I term loan to a meal delivery organization. This loan was performing in accordance with its repayment terms at December 31, 2024.
An institution’s determination as to the classification of its assets and the amount of its valuation allowances is subject to review by the regulatory authorities, which may require the establishment of additional general or specific loss allowances.
When an insured institution classifies problem assets as “loss,” it is required to charge-off such amount. An institution’s determination as to the classification of its assets and the amount of its valuation allowances is subject to review by the regulatory authorities, which may require the establishment of additional general or specific loss allowances.
Our selection and promotion processes are without bias and include the active recruitment of minorities, women, individuals with disabilities and veterans, without regard to race, color, religion, sex, LGBTQ+, national origin, disability or protected veteran status.
We seek to hire well-qualified employees who are also a good fit for our value system. Our selection and promotion processes are without bias and include the active recruitment of minorities, women, individuals with disabilities and veterans, without regard to race, color, religion, sex, LGBTQ+, national origin, disability or protected veteran status.
As a member of FHLB, we are required to purchase stock in the FHLB, which stock is carried at cost and classified as other investment securities.
At December 31, 2024, other investments primarily consisted of membership and activity-based shares in FHLB stock. As a member of FHLB, we are required to purchase stock in the FHLB, which stock is carried at cost and classified as other investment securities.
Control, as defined under the Change in Bank Control Act, means ownership, control of or the power, to vote 25% or more of any class of voting securities of the company.
Control, as defined under the Change in Bank Control Act and its implementing regulations, means the power, directly or indirectly, to direct the management or policies of a company, or the ownership, control or power to vote 25% or more of any class of voting securities of the company.
In April 2021, legislation increased the corporate franchise tax rate to 7.25% for tax years beginning on or after January 1, 2021 and before January 1, 2024 for taxpayers with a business income base greater than $5 million. In addition, the scheduled phase-out of the capital base tax was delayed.
New York State imposes a corporate income tax, based on net income allocable to New York State at a rate of 6.5%. In April 2021, legislation increased the corporate franchise tax rate to 7.25% for tax years beginning on or after January 1, 2021 and before January 1, 2024 for taxpayers with a business income base greater than $5 million.
At December 31, 2023, this loan was performing in accordance with its original terms. Construction Loans. We make construction loans, primarily to contractors and builders of multifamily and mixed-use projects and other commercial and industrial real estate projects.
At December 31, 2024, our largest commercial real estate loan totaled $23.9 million and was secured by a grocery-anchored shopping center. At December 31, 2024, this loan was performing in accordance with its original terms. Construction Loans. We make construction loans, primarily to contractors and builders of multifamily and mixed-use projects and other commercial and industrial real estate projects.
We generally originate multifamily loans with maximum terms of 10 years based on amortization periods between 25 and 30 years. We generally limit loan-to-value ratios to less than 80% of the appraised value of the property for multifamily loans. Our multifamily loans are offered with fixed and adjustable rate interest terms.
Currently, we originate multifamily loans with maximum terms of 10 years based on amortization periods between 25 and 30 years. We have a portfolio of legacy multifamily loans with terms up to 30 years. We generally limit loan-to-value ratios to less than 75% of the appraised value of the property for multifamily loans.
In connection with the filing of our periodic reports with the FDIC and in accordance with our classification of assets policy, we regularly review the problem loans in our portfolio to determine whether any loans require classification in accordance with applicable regulations.
In connection with the filing of our periodic reports with the FDIC and in accordance with our classification of assets policy, we regularly review the problem loans in our portfolio to determine whether any loans require classification in accordance with applicable regulations. 13 The following table sets forth our amounts of special mention and classified loans as of December 31, 2024 and 2023.
“Critically undercapitalized” institutions are subject to additional measures including, subject to a narrow exception, the appointment of a receiver or conservator within 270 days after it is determined to be critically undercapitalized. 23 A bank that is classified as well-capitalized, adequately capitalized or undercapitalized may be treated as though it were in the next lower capital category if the FDIC, after notice and opportunity for hearing, determines that an unsafe or unsound condition, or an unsafe or unsound practice, warrants such treatment.
A bank that is classified as well-capitalized, adequately capitalized or undercapitalized may be treated as though it were in the next lower capital category if the FDIC, after notice and opportunity for hearing, determines that an unsafe or unsound condition, or an unsafe or unsound practice, warrants such treatment.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFurther, deterioration in local economic conditions could drive the level of loan losses beyond the level we have provided for in our allowance for credit losses on loans, which in turn could necessitate an increase in our provision for loan losses and a resulting reduction to our earnings and capital. 33 A worsening of economic conditions in our market area could reduce demand for our products and services and/or result in increases in our level of non-performing loans, which could adversely affect our operations, financial condition and earnings Local economic conditions have a significant impact on the ability of our borrowers to repay loans and the value of the collateral securing loans.
Biggest changeA worsening of economic conditions in our market area could reduce demand for our products and services and/or result in increases in our level of non-performing loans, which could adversely affect our operations, financial condition and earnings Local economic conditions have a significant impact on the ability of our borrowers to repay loans and the value of the collateral securing loans.
Our non-performing assets adversely affect our net income in various ways: • we record interest income only on the cash basis or cost-recovery method for non-accrual loans and we do not record interest income for other real estate owned; • we must provide for expected loan losses through a current period charge to the provision for credit losses on loans; 31 • non-interest expense increases when we write down the value of properties in our other real estate owned portfolio to reflect changing market values; • there are legal fees associated with the resolution of problem assets, as well as carrying costs, such as taxes, insurance and maintenance fees; and • the resolution of non-performing assets requires the active involvement of management, which can distract them from more profitable activity.
Our non-performing assets adversely affect our net income in various ways: • we record interest income only on the cash basis or cost-recovery method for non-accrual loans and we do not record interest income for other real estate owned; • we must provide for expected loan losses through a current period charge to the provision for credit losses on loans; • non-interest expense increases when we write down the value of properties in our other real estate owned portfolio to reflect changing market values; • there are legal fees associated with the resolution of problem assets, as well as carrying costs, such as taxes, insurance and maintenance fees; and • the resolution of non-performing assets requires the active involvement of management, which can distract them from more profitable activity.
The Company’s access to funding sources in amounts adequate to finance or capitalize its activities, or on terms that are acceptable, could be impaired by factors that affect the Company directly or the financial services industry or economy in general, such as disruptions in the financial markets or negative views and expectations about the prospects for the financial services industry, a decrease in the level of the Company’s business activity as a result of a downturn in markets or by one or more adverse regulatory actions against the Company or the financial sector in general.
The Company’s access to funding sources in amounts adequate to finance or capitalize its activities, or on terms that are acceptable, could be impaired by factors that affect the Company directly or the financial services industry or economy in general, such as disruptions in the financial markets or negative views and expectations about the prospects for the financial services industry, a decrease in the level of the Company’s business activity as a result of a downturn in 34 markets or by one or more adverse regulatory actions against the Company or the financial sector in general.
An increase in our allowance for credit losses on loans or loan charge-offs as required by these regulatory authorities may reduce our net income and our capital, which may have a material adverse effect on our financial condition and results of operations. If our non-performing assets increase, our earnings will be adversely affected.
An increase in our allowance for credit losses on loans or loan charge-offs as required by these regulatory authorities may reduce our net income and our capital, which may have a material adverse effect on our financial condition and results of operations. 31 If our non-performing assets increase, our earnings will be adversely affected.
Our ability 32 to continue to originate a significant amount of construction loans is dependent on the strength of the general real estate market in our market areas. Junior Liens and Consumer Loans. Consumer loans may entail greater risk than residential mortgage loans, as they can be unsecured, subordinately secured or secured by assets that depreciate rapidly.
Our ability to continue to originate a significant amount of construction loans is dependent on the strength of the general real estate market in our market areas. Junior Liens and Consumer Loans. Consumer loans may entail greater risk than residential mortgage loans, as they can be unsecured, subordinately secured or secured by assets that depreciate rapidly.
Underwriting is focused on the borrowers’ financial strength, credit history and demonstrated ability to produce a quality product and effectively market and manage its operations. Construction lending involves additional risks when compared to permanent residential lending because funds are advanced upon the collateral of the project, which is of uncertain value before its completion.
Underwriting is focused on the borrowers’ financial strength, credit history and demonstrated ability to produce a quality product and effectively market and manage its operations. 32 Construction lending involves additional risks when compared to permanent residential lending because funds are advanced upon the collateral of the project, which is of uncertain value before its completion.
Taken as a whole, these statutory provisions and provisions in our certificate of incorporation and bylaws could result in our being less attractive to a potential acquirer and thus could adversely affect the market price of our common stock. 41 Our New York State multifamily loan portfolio could be adversely impacted by changes in legislation or regulation.
Taken as a whole, these statutory provisions and provisions in our certificate of incorporation and bylaws could result in our being less attractive to a potential acquirer and thus could adversely affect the market price of our common stock. Our New York State multifamily loan portfolio could be adversely impacted by changes in legislation or regulation.
For example in 2019, New York State passed the Housing Stability & Tenant Protection Act, impacting one million rent-regulated apartment units. The Legislation, limited rent increases from material capital improvements, eliminated the ability for apartments to exit rent regulation, did away with vacancy decontrol and high-income deregulation and repealed the 20% vacancy bonus.
For example, New York State passed the Housing Stability & Tenant Protection Act, impacting one million rent-regulated apartment units. The Legislation, limited rent increases from material capital improvements, eliminated the ability for apartments to exit rent regulation, did away with vacancy decontrol and high-income deregulation and repealed the 20% vacancy bonus.
Our future success will depend, to a significant extent, on the ability of our new management team to operate effectively, both individually and as a group. We must successfully manage issues that may result from the integration of the new members of our executive management.
Our future success will depend, to a significant extent, on the ability of our new management team to operate effectively, both individually and as a group. We must successfully manage issues that may result from the integration of the new members of our senior management.
The net unrealized losses on our held-to-maturity securities are not reported in the financial statements until realized upon sale. The Company does not intend to sell held-to-maturity securities, nor does it foresee being required to sell them before the anticipated recovery or maturity.
The net unrealized losses on our held-to-maturity securities are not recorded in the financial statements until realized upon sale. The Company does not intend to sell held-to-maturity securities, nor does it foresee being required to sell them before the anticipated recovery or maturity.
Our non-interest expense totaled $51.6 million and $52.8 million for the years ended December 31, 2023 and 2022, respectively. We continue to analyze our expenses and achieve efficiencies where available. Although we strive to generate increases in both net interest income and non-interest income, our efficiency ratio remains high.
Our non-interest expense totaled $52.6 million and $51.6 million for the years ended December 31, 2024 and 2023, respectively. We continue to analyze our expenses and achieve efficiencies where available. Although we strive to generate increases in both net interest income and non-interest income, our efficiency ratio remains high.
In reaching a decision whether to make a non-residential real estate or multifamily loan, we consider the net operating income of the property, the borrower’s expertise, credit history and profitability and the value of the underlying property. At times, we may also perform a global cash flow analysis of the borrower.
In reaching a decision whether to make a commercial real estate or multifamily loan, we consider the net operating income of the property, the borrower’s expertise, credit history and profitability and the value of the underlying property. At times, we may also perform a global cash flow analysis of the borrower.
Accordingly, any new branch can be expected to negatively impact our earnings until the branch attracts a sufficient number of deposits and loans to offset expenses. We cannot assure that new branches opened will be successful even after they have been established. New lines of business or new products and services may subject us to additional risks.
Accordingly, any new branch can be expected to negatively impact our earnings until the branch attracts a sufficient number of deposits and loans to offset expenses. It cannot be assured that new branches opened will be successful even after they have been established. New lines of business or new products and services may subject us to additional risks.
Of primary concern in non-residential real estate and multifamily lending is the borrower’s creditworthiness and the feasibility and cash flow potential of the asset. Payments on loans secured by income producing properties often depend on the successful operation and management of the properties.
Of primary concern in commercial real estate and multifamily lending is the borrower’s creditworthiness and the feasibility and cash flow potential of the asset. Payments on loans secured by income producing properties often depend on the successful operation and management of the properties.
To help minimize the risks associated with rising interest rates and the subsequent risk of default, we often perform a stress analysis during underwriting. MultiFamily and Non-Residential Real Estate Loans. Loans secured by non-residential and multifamily real estate generally have larger balances and involve a greater degree of risk than one-to-four family residential real estate loans.
To help minimize the risks associated with rising interest rates and the subsequent risk of default, we often perform a stress analysis during underwriting. Multifamily and Commercial Real Estate Loans. Loans secured by commercial and multifamily real estate generally have larger balances and involve a greater degree of risk than residential real estate loans.
Growth opportunities may not be available or we may not be able to manage our growth successfully. If we do not manage our growth effectively, our financial condition and operating results could be negatively affected. Building market share through de novo branching may cause our expenses to increase faster than revenues.
Growth opportunities may not be available or we may not be able to manage our growth successfully. If we do not manage our growth effectively, our financial condition and operating results could be negatively affected. Building market share through de novo branching may cause our expenses to increase faster than revenues. We may open de novo branches in contiguous markets.
Our efficiency ratio was 117.93% and 97.39% for the years ended December 31, 2023 and 2022, respectively. The cost of additional finance and accounting systems, procedures and controls in order to satisfy our new public company reporting requirements will increase our expenses. As a result of the completion of the stock offering, we became a public reporting company.
Our efficiency ratio was 133.71% and 117.93% for the years ended December 31, 2024 and 2023, respectively. The cost of additional finance and accounting systems, procedures and controls in order to satisfy our new public company reporting requirements will increase our expenses. As a result of the completion of the stock offering, we became a public reporting company.
For the year ended December 31, 2023, we recorded a loss of $7.4 million. Our financial condition and results of operations are significantly affected by changes in market interest rates, and the degree to which these changes disparately impact short-term and long-term interest rates and influence the behavior of our customer base.
For the year ended December 31, 2024, we recorded a loss of $11.9 million. Our financial condition and results of operations are significantly affected by changes in market interest rates, and the degree to which these changes disparately impact short-term and long-term interest rates and influence the behavior of our customer base.
Members of our senior management team and lending personnel who have expertise and key business relationships in our markets could be difficult to replace.
Members of our senior management team and bankers who have expertise and key business relationships in our markets could be difficult to replace.
Therefore, decreases in the fair value of securities available-for-sale resulting from increases in interest rates could have an adverse effect on stockholders' equity. At December 31, 2023, our held-to-maturity debt securities portfolio totaled $33.4 million with net unrealized losses of $5.1 million.
Therefore, decreases in the fair value of securities available-for-sale resulting from increases in interest rates could have an adverse effect on stockholders' equity. At December 31, 2024, our held-to-maturity debt securities portfolio totaled $33.2 million with net unrealized losses of $3.2 million.
We are building market share by opening de novo branches in contiguous markets. There are considerable costs involved in de novo branching as new branches generally require time to generate sufficient revenues to offset their initial start-up costs, especially in areas in which we do not have an established presence.
There are considerable costs involved in de novo branching as new branches generally require time to generate sufficient revenues to offset their initial start-up costs, especially in areas in which we do not have an established presence.
Conversely, should market interest rates fall below current levels, our net interest income could also be negatively affected if competitive pressures prevent us from reducing rates on our deposits, while the yields on our assets decrease through loan prepayments and interest rate adjustments.
If the Federal Reserve lowers market interest rates current levels, our net interest income could also be negatively affected if competitive pressures prevent us from reducing rates on our deposits, while the yields on our assets decrease through loan prepayments and interest rate adjustments.
Such regulation and supervision govern the activities in which a financial institution and its holding company may engage and are intended primarily for the protection of insurance funds and the depositors and borrowers of Blue Foundry Bank rather than for the protection of our shareholders.
We are subject to extensive regulation, supervision and examination by our banking regulators. Such regulation and supervision govern the activities in which a financial institution and its holding company may engage and are intended primarily for the protection of insurance funds and the depositors and borrowers of Blue Foundry Bank rather than for the protection of our shareholders.
At December 31, 2023, our net portfolio value would decrease by $73.9 million if there was an instantaneous 200 basis point increase in market interest rates.
At December 31, 2024, our net portfolio value would decrease by $70.1 million if there was an instantaneous 200 basis point increase in market interest rates.
As of December 31, 2023, the Company had approximately $317.0 million in its investment portfolio, with $283.8 million designated as available-for-sale and $33.4 million designated as held-to-maturity. For securities available-for-sale, ASU 2016-13 requires entities to determine if impairment is related to credit loss or non-credit loss.
As of December 31, 2024, the Company had approximately $330.1 million in its investment portfolio, with $297.0 million designated as available-for-sale and $33.2 million designated as held-to-maturity. For securities available-for-sale, ASU 2016-13 requires entities to determine if impairment is related to credit loss or non-credit loss.
Given that future deterioration in the U.S. credit and financial markets is a possibility, no assurance can be made that losses or significant deterioration in the fair value of our U.S. government issued or guaranteed investments will not occur. At December 31, 2023, we had approximately $36.9 million, $11.5 million and $149.8 million invested in U.S.
Given that future deterioration in the U.S. credit and financial markets is a possibility, no assurance can be made that losses or significant deterioration in the fair value of our U.S. government issued or guaranteed investments will not occur. At December 31, 2024, we had approximately $41.3 million, $874 thousand and $171.8 million invested in U.S.
As the Federal Reserve continues to raise interest rates, our interest-bearing liabilities may be subject to repricing or maturing more quickly than our interest-earning assets.
Conversely, if the Federal Reserve raises interest rates, our interest-bearing liabilities may be subject to repricing or maturing more quickly than our interest-earning assets.
The geographic concentration of our loan portfolio and lending activities makes us vulnerable to a downturn in our local market area. Our loan portfolio is concentrated primarily in New Jersey. This makes us vulnerable to a downturn in the local economy and real estate markets.
Our loan portfolio is concentrated primarily in New Jersey. This makes us vulnerable to a downturn in the local economy and real estate markets.
Accordingly, we could suffer losses if we fail to properly anticipate and manage these risks. Risks Related to Regulatory Matters Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs of operations. We are subject to extensive regulation, supervision and examination by our banking regulators.
Accordingly, we could suffer losses if we fail to properly anticipate and manage these risks. Risks Related to Regulatory Matters Changes in laws, regulations and the regulatory policies of the Federal government, and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs of operations.
As of December 31, 2023, the Company has approximately $109 million, or 7.4% of total loans, in New York multifamily loans that have some form of rent stabilization or rent control. Of these loans, only 18% and 13% reprice or mature in 2024 and 2025, respectively, with the remainder maturing or repricing in 2026 through 2030. ITEM 1B.
As of December 31, 2024, the Company has approximately $108 million, or 6.8% of total loans, in New York multifamily loans that have some form of rent stabilization or rent control. Of these loans, only 32% and 14% reprice or mature in 2025 and 2026, respectively, with the remainder maturing or repricing in 2027 through 2032. ITEM 1B.
If the credit loss expense is significant enough it could affect the ability of Blue Foundry Bank to upstream dividends to the Company, which could have a material adverse effect on our liquidity and our ability to pay dividends to shareholders and could also negatively impact our regulatory capital ratios.
If the credit loss expense is significant enough it could affect the ability of Blue Foundry Bank to upstream dividends to the Company, which could have a material adverse effect on our liquidity and our ability to pay dividends to shareholders and could also negatively impact our regulatory capital ratios. 33 The geographic concentration of our loan portfolio and lending activities makes us vulnerable to a downturn in our local market area.
In addition, the effect of rising rates could be compounded if deposit customers move funds into higher yielding accounts or are lost to competitors offering higher rates on their deposit products.
In addition, the effect of rising rates could be compounded if deposit customers move funds into higher yielding accounts or are lost to competitors offering higher rates on their deposit products. Changes in interest rates also affect the value of our interest-earning assets and in particular our securities portfolio.
Changes in interest rates also affect the value of our interest-earning assets and in particular our securities portfolio. Generally, the value of securities fluctuates inversely with changes in interest rates. At December 31, 2023, our available-for-sale debt securities portfolio totaled $283.8 million with net unrealized losses of $30.7 million and are reported as a separate component of stockholders' equity.
Generally, the value of securities fluctuates inversely with changes in interest rates. At December 31, 2024, our available-for-sale debt securities portfolio totaled $297.0 million with net unrealized losses of $27.4 million and are reported as a separate component of stockholders' equity.
Our allowance for credit losses on loans was 0.91% of total loans and 231.35% of non-performing loans at December 31, 2023.
Our allowance for credit losses on loans was 0.83% of total loans and 254.02% of non-performing loans at December 31, 2024.
Any decline in available funding could adversely impact our ability to originate loans, invest in securities, meet expenses, or to fulfill obligations such as repaying borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, financial condition and results of operations. 35 Our business strategy includes growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively.
Any decline in available funding could adversely impact the Company’s ability to originate loans, invest in securities, meet expenses, or to fulfill obligations such as meeting deposit withdrawal demands, any of which could have a material adverse impact on its liquidity, business, financial condition and results of operations.
Further, unless and until U.S. political, credit and financial market conditions have been sufficiently resolved or stabilized, it may increase our future borrowing costs. Risks Related to Growth A lack of liquidity could adversely affect our financial condition and results of operations. Liquidity is essential to our business.
Further, unless and until U.S. political, credit and financial market conditions have been sufficiently resolved or stabilized, it may increase our future borrowing costs. 35 Risks Related to Growth Our business strategy includes growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively.
These changes could materially impact, potentially retroactively, how we report our financial condition and results of operations. We are subject to stringent capital requirements, which may adversely impact our return on equity, require us to raise additional capital, or restrict us from paying dividends or repurchasing shares.
Depending on the industries and markets involved, changes to tax law and increased or reduced public expenditures could affect us directly or the business operations of our customers. We are subject to stringent capital requirements, which may adversely impact our return on equity, require us to raise additional capital, or restrict us from paying dividends or repurchasing shares.
Any decline in available funding could adversely impact the Company’s ability to originate loans, invest in securities, meet expenses, or to fulfill obligations such as meeting deposit withdrawal demands, any of which could have a material adverse impact on its liquidity, business, financial condition and results of operations. 34 The failure to address the Federal debt ceiling in a timely manner, downgrades of the U.S. credit rating and uncertain credit and financial market conditions may affect the stability of securities issued or guaranteed by the Federal government, which may affect the valuation or liquidity of our investment securities portfolio and increase future borrowing costs.
The failure to address the Federal debt ceiling in a timely manner, downgrades of the U.S. credit rating and uncertain credit and financial market conditions may affect the stability of securities issued or guaranteed by the Federal government, which may affect the valuation or liquidity of our investment securities portfolio and increase future borrowing costs.
At December 31, 2023, our non-performing assets, which consist of non-performing loans and other real estate owned, were $6.7 million, or 0.33% of total assets.
At December 31, 2024, our non-performing assets, which consist of non-performing loans, were $5.1 million, or 0.25% of total assets.
An institution will be subject to limitations on paying dividends, repurchasing its shares, and paying discretionary bonuses, if its capital levels fall below the buffer amount. 40 Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.
An institution will be subject to limitations on paying dividends, repurchasing its shares and paying discretionary bonuses, if its capital levels fall below the buffer amount. 40 Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions.
Removed
We rely on our ability to gather deposits, make investments and effectively manage the repayment and maturity schedules of loans to ensure that there is adequate liquidity to fund our operations and pay our obligations.
Added
Further, deterioration in local economic conditions could drive the level of loan losses beyond the level we have provided for in our allowance for credit losses on loans, which in turn could necessitate an increase in our provision for loan losses and a resulting reduction to our earnings and capital.
Removed
An inability to raise funds through deposits, borrowings, the sale and maturities of loans and securities and other sources could have a substantial negative effect on liquidity. Our most important source of funds is deposits.
Added
Inflationary pressures and rising prices may affect our results of operations and financial condition. After peaking in 2022, inflation moderated in 2023 but remained above the Federal Reserve's 2% target throughout 2024. Inflation may present a significant risk as it can lead to increased costs and reduced purchasing power for consumers.
Removed
Deposit balances can decrease when customers perceive alternative investments as providing a better risk/return tradeoff, which are strongly influenced by external factors such as changes in interest rates, local and national economic conditions, the availability and attractiveness of alternative investments, and perceptions of the stability of the financial services industry generally and of our institution specifically.
Added
Small to medium-sized businesses may be impacted more during periods of high inflation as they are not able to leverage economies of scale to mitigate cost pressures compared to larger businesses. Consequently, the ability of our business customers to repay their loans may deteriorate, and in some cases this deterioration may occur quickly.
Removed
Further, the demand for deposits may be reduced due to a variety of factors such as demographic patterns, changes in customer preferences, reductions in consumers’ disposable income, the monetary policy of the Federal Reserve, or regulatory actions that decrease customer access to particular products.
Added
Furthermore, a prolonged period of inflation could cause wages and other operating costs to increase. These factors could adversely affect our results of operations and financial condition. Interruption of our customers’ supply chains and federal funding could negatively impact their business and operations and impact their ability to repay their loans.
Removed
If customers move money out of bank deposits and into other investments such as money market funds, we would lose a relatively low-cost source of funds, which would increase our funding costs and reduce net interest income. Any changes made to the rates offered on deposits to remain competitive with other financial institutions may also adversely affect profitability and liquidity.
Added
Any material interruption in our customers’ supply chains, such as a material interruption of the resources required to conduct their business, such as those resulting from interruptions in service by third-party providers, trade restrictions, including increased tariffs or quotas, embargoes or customs restrictions, reductions in federal subsidies or grants, social or labor unrest, natural disasters, epidemics or pandemics or political disputes and military conflicts, that cause a material disruption in our customers’ supply chains, could have a negative impact on their business and ability to repay their borrowings with us.
Removed
Other primary sources of funds consist of cash flows from operations, maturities and sales of investment securities and borrowings from the FHLB of New York. We also have borrowing capacity through three correspondent banks and have the ability to participate in the Federal Reserve’s new Bank Term Funding Program as needed.
Added
In the event of disruptions in our customers’ supply chains, the labor and materials they rely on in the ordinary course of business may not be available at reasonable rates or at all.
Removed
Our access to funding sources in amounts adequate to finance or capitalize our activities, or on terms that are acceptable, could be impaired by factors that affect us directly or the financial services industry or economy in general, such as disruptions in the financial markets, changes in the value of investment securities, negative views and expectations about the prospects for the financial services industry, a decrease in our business activity as a result of a downturn in markets, or adverse regulatory actions against us.
Added
Additionally, changes in distribution of federal funds or freezing of federal funds, including reductions in federal workforce causing unemployment, could have an adverse effect on the ability of consumers and businesses to pay debts and/or affect the demand for loans and deposits.
Removed
Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social and governance (“ESG”) practices and disclosure. Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions and human rights.
Added
These changes could materially impact, potentially retroactively, how we report our financial condition and results of operations. Additionally, Congress and the administration through executive orders control fiscal policy through decisions on taxation and expenditures.
Removed
Increased ESG-related compliance costs could result in increases to our overall operational costs. Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, and our stock price.
Removed
New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence, and disclosure. Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions.
Removed
Under regulations applicable to the conversion, for a period of three years following completion of our stock offering and related transactions in July 2021 , no person may acquire beneficial ownership of more than 10% of our common stock without prior approval of the Federal Reserve Board.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe leverage internal and external auditors and independent external partners to periodically review our processes, systems and controls, including with respect to our information security program, to assess their design and operating effectiveness and make recommendations to strengthen our risk management program. 42 We maintain a Cyber Incident Response Procedure that provides a documented framework for responding to actual and potential cybersecurity incidents, including timely notification of and escalation to the appropriate Board-approved management committees and to the Enterprise Risk Committee of our Board of Directors.
Biggest changeWe maintain a Cyber Incident Response Procedure that provides a documented framework for responding to actual and potential cybersecurity incidents, including timely notification of and escalation to the appropriate Board-approved management committees and to the Enterprise Risk Committee of our Board of Directors.
Cybersecurity Governance Management Committee Oversight The Company has established an Information Risk Management Subcommittee, chaired by the Chief Information Security Officer and supported by leaders from departments across the Company. The Cybersecurity function is provided by qualified financial service technology professionals, with extensive certifications and/or advanced degrees in cybersecurity.
Risk Factors. 42 Cybersecurity Governance Management Committee Oversight The Company has established an Information Risk Management Subcommittee, chaired by the Chief Information Security Officer and supported by leaders from departments across the Company. The Cybersecurity function is provided by qualified financial service technology professionals, with extensive certifications and/or advanced degrees in cybersecurity.
For further discussion of risks from cybersecurity threats, see the section captioned “Cyber-attacks or other security breaches could adversely affect our operations, net income or reputation” in Item 1A. Risk Factors.
For further discussion of risks from cybersecurity threats, see the section captioned “Cyber-attacks or other security breaches could adversely affect our operations, net income or reputation” in Item 1A.
Added
We leverage internal and external auditors and independent external partners to periodically review our processes, systems and controls, including with respect to our information security program, to assess their design and operating effectiveness and make recommendations to strengthen our risk management program.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe own five properties and lease 16 properties at December 31, 2023. The aggregate net book value of premises and equipment was $32.5 million at December 31, 2023.
Biggest changeWe own five properties and lease 16 properties at December 31, 2024. The aggregate net book value of premises and equipment was $29.5 million at December 31, 2024.
ITEM 2. PROPERTIES At December 31, 2023, the Company and the Bank conducted business through 20 full-service branch offices, located in northern New Jersey and the Company’s administrative offices located at 7 Sylvan Way, Parsippany, New Jersey. The Company’s principal executive office is located at 19 Park Avenue, Rutherford, New Jersey.
ITEM 2. PROPERTIES At December 31, 2024, the Company and the Bank conducted business through 20 full-service branch offices, located in northern New Jersey and the Company’s administrative offices located at 7 Sylvan Way, Parsippany, New Jersey. The Company’s principal executive office is located at 19 Park Avenue, Rutherford, New Jersey.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAt December 31, 2023, we were not a party to any pending legal proceedings that we believe would have a material adverse effect on our financial condition, results of operations or cash flows. ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 43 PART II
Biggest changeAt December 31, 2024, we were not a party to any pending legal proceedings that we believe would have a material adverse effect on our financial condition, results of operations or cash flows. ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 43 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total Number of Shares Purchased (1) Average Price paid Per Share As part of Publicly Announced Plans or Programs Yet to be Purchased Under the Plans or Programs (1) October 148,810 $7.87 148,810 947,399 November 283,300 8.37 283,300 664,099 December 225,052 9.71 225,052 439,047 Total 657,162 $8.72 657,162 (1) On April 19, 2023, the Company adopted its second program to repurchase up to 1,335,126 shares, or 5%, of its outstanding common stock.
Biggest changePeriod Total Number of Shares Purchased (1) Average Price paid Per Share As part of Publicly Announced Plans or Programs Yet to be Purchased Under the Plans or Programs (1) October 164,900 $10.01 164,900 37,603 November 157,151 $11.07 157,151 1,019,872 December 158,800 $10.42 158,800 861,072 Total 480,851 $10.49 480,851 (1) On February 21, 2024, the Company adopted its fourth program to repurchase up to 1,203,545 shares, or 5%, of its outstanding common stock.
No assurances can be given that any cash dividends will be paid or that, if paid, will not be reduced or eliminated in the future. Issuer Purchases of Equity Securities The following table reports information regarding repurchases of our common stock during the quarter ended December 31, 2023 and the stock repurchase plans approved by our Board of Directors.
No assurances can be given that any cash dividends will be paid or that, if paid, will not be reduced or eliminated in the future. Issuer Purchases of Equity Securities The following table reports information regarding repurchases of our common stock during the quarter ended December 31, 2024 and the stock repurchase plans approved by our Board of Directors.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock is listed on the Nasdaq Global Select Market under the trading symbol “BLFY.” Trading in the Company’s common stock commenced on July 16, 2021. As of December 31, 2023, there were 1,308 stockholders of record.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock is listed on the Nasdaq Global Select Market under the trading symbol “BLFY.” Trading in the Company’s common stock commenced on July 16, 2021. As of December 31, 2024, there were 1,118 stockholders of record.
On August 16, 2023, the Company adopted its third repurchase program, which authorized the purchase of 5%, or 1,268,382 shares, of its outstanding common stock commencing upon the completion of the Company’s second stock repurchase program on August 17, 2023. The third repurchase program has no expiration date. ITEM 6. [RESERVED] 44
On November 8, 2024, the Company adopted its fifth repurchase program, which authorized the purchase of 5%, or 1,139,420 shares, of its outstanding common stock commencing upon the completion of the Company’s fourth stock repurchase program on November 7, 2024. The fifth repurchase program has no expiration date. ITEM 6. [RESERVED] 44

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

44 edited+14 added−17 removed20 unchanged
Biggest changeYear Ended December 31, 2023 2022 Average Balance Interest Average Yield/Cost Average Balance Interest Average Yield/Cost (Dollars in thousands) Assets: Loans (1) $ 1,569,590 $ 65,685 4.18 % $ 1,407,502 $ 52,279 3.71 % Mortgage-backed securities 172,405 3,693 2.14 % 190,540 3,934 2.06 % Other investment securities 195,754 6,010 3.07 % 203,002 4,820 2.37 % FHLB stock 21,249 1,582 7.45 % 12,629 587 4.65 % Cash and cash equivalents 46,245 2,135 4.62 % 88,703 793 0.89 % Total interest earning assets 2,005,243 79,105 3.94 % 1,902,376 62,413 3.28 % Non-interest earning assets 56,297 64,786 Total assets $ 2,061,540 $ 1,967,162 Liabilities and shareholders' equity: NOW, savings, and money market deposits $ 722,149 8,339 1.15 % $ 812,473 2,959 0.36 % Time deposits 501,124 15,777 3.15 % 412,734 2,779 0.67 % Interest bearing deposits 1,223,273 24,116 1.97 % 1,225,207 5,738 0.47 % FHLB advances 396,265 13,070 3.30 % 235,589 4,832 2.05 % Total interest bearing liabilities 1,619,538 37,186 2.30 % 1,460,796 10,570 0.72 % Non-interest bearing deposits 25,227 44,029 Non-interest bearing other 43,868 47,707 Total liabilities 1,688,633 1,552,532 Total shareholders' equity 372,907 414,630 Total liabilities and shareholders' equity $ 2,061,540 $ 1,967,162 Net interest income $ 41,919 $ 51,843 Net interest rate spread (2) 1.64 % 2.56 % Net interest margin (3) 2.09 % 2.73 % (1) Average loan balances are net of deferred loan fees and costs, premiums and discounts and includes non-accrual loans.
Biggest changeYear Ended December 31, 2024 2023 Average Balance Interest Average Yield/Cost Average Balance Interest Average Yield/Cost (Dollars in thousands) Assets: Loans (1) $ 1,553,143 $ 70,185 4.52 % $ 1,569,590 $ 65,685 4.18 % Mortgage-backed securities 173,691 4,276 2.46 % 172,405 3,693 2.14 % Other investment securities 174,172 6,440 3.70 % 195,754 6,010 3.07 % FHLB stock 18,038 1,756 9.73 % 21,249 1,582 7.45 % Cash and cash equivalents 58,261 2,794 4.80 % 46,245 2,135 4.62 % Total interest earning assets 1,977,305 85,451 4.32 % 2,005,243 79,105 3.94 % Non-interest earning assets 59,832 56,297 Total assets $ 2,037,137 $ 2,061,540 Liabilities and shareholders' equity: NOW, savings, and money market deposits $ 610,172 7,803 1.28 % $ 722,149 8,339 1.15 % Time deposits 665,740 29,027 4.36 % 501,124 15,777 3.15 % Interest bearing deposits 1,275,912 36,830 2.89 % 1,223,273 24,116 1.97 % FHLB advances 348,306 11,071 3.18 % 396,265 13,070 3.30 % Total interest bearing liabilities 1,624,218 47,901 2.95 % 1,619,538 37,186 2.30 % Non-interest bearing deposits 24,980 25,227 Non-interest bearing other 42,345 43,868 Total liabilities 1,691,543 1,688,633 Total shareholders' equity 345,594 372,907 Total liabilities and shareholders' equity $ 2,037,137 $ 2,061,540 Net interest income $ 37,550 $ 41,919 Net interest rate spread (2) 1.37 % 1.64 % Net interest margin (3) 1.90 % 2.09 % (1) Average loan balances are net of deferred loan fees and costs, premiums and discounts and includes non-accrual loans.
Blue Foundry Bancorp is a separate legal entity from Blue Foundry Bank and must provide for its own liquidity to fund dividend payments, stock repurchases, and other corporate risk factors. The Company’s primary source of liquidity is issuance of stock and the receipt of dividend payments from the Bank in accordance with applicable regulatory requirements.
Blue Foundry Bancorp is a separate legal entity from Blue Foundry Bank and must provide for its own liquidity to fund dividend payments, stock repurchases, and other corporate risk factors. The Company’s primary source of liquidity is the issuance of stock and the receipt of dividend payments from the Bank in accordance with applicable regulatory requirements.
The yields and costs for the periods indicated are derived by dividing income or expense by the average balances of assets or liabilities, respectively, for the periods presented. Average balances have been calculated using daily balances. Non-accrual loans are included in average balances only. Loan origination fees are included in interest income on loans and are not material.
The yields and costs for the periods indicated are derived by dividing income or expense by the average balances of assets or liabilities, respectively, for the periods presented. Average balances have been calculated using daily balances. Non-accrual loans are included in average balances only. Amortization of loan origination fees are included in interest income on loans and are not material.
We use the same credit policies in making commitments that we do for on-balance sheet instruments. Management believes that our current sources of liquidity are more than sufficient to fulfill our obligations as of December 31, 2023 pursuant to off-balance-sheet arrangements and contractual obligations.
We use the same credit policies in making commitments that we do for on-balance sheet instruments. Management believes that our current sources of liquidity are more than sufficient to fulfill our obligations as of December 31, 2024, pursuant to off-balance-sheet arrangements and contractual obligations.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section is intended to assist in the understanding of the financial performance of the Company and its subsidiary through a discussion of our financial condition as of December 31, 2023, and our results of operations for the years ended December 31, 2023 and 2022.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section is intended to assist in the understanding of the financial performance of the Company and its subsidiary through a discussion of our financial condition as of December 31, 2024, and our results of operations for the years ended December 31, 2024 and 2023.
Facts and circumstances that could affect these judgments include, but are not limited to, changes in interest rates, changes in the performance of the economy and changes in the financial condition of borrowers. The Company has identified the allowance for credit losses on loans and income taxes to be a critical accounting policy.
Facts and circumstances that could affect these judgments include, but are not limited to, changes in interest rates, changes in the performance of the economy and changes in the financial condition of borrowers. The Company has identified the allowance for credit losses on loans and income taxes to be critical accounting policies.
Our borrowings consisted solely of Federal Home Loan Bank of New York advances, $209.0 million of which are associated with longer-dated swap agreements. See Note 12, Derivatives, of Notes to Consolidated Financial Statements in “Part II, Item 8- Financial Statements.” Total Shareholders’ Equity.
Borrowings consisted solely of Federal Home Loan Bank of New York advances; $224.0 million of which are associated with longer-dated swap agreements. See Note 12, Derivatives, of Notes to Consolidated Financial Statements in “Part II, Item 8- Financial Statements.” Total Shareholders’ Equity.
These accounting policies and our significant accounting policies are discussed in detail in Note 1 to our Consolidated Financial Statements included in Part II, Item 8. Comparison of Operating Results for the Years Ended December 31, 2023 and 2022 General .
These accounting policies are discussed in detail in Note 1 to our Consolidated Financial Statements included in Part II, Item 8. Comparison of Operating Results for the Years Ended December 31, 2024 and 2023 General .
The Bank has entered into derivative financial instruments to reduce risk associated with interest rate volatility by matching repricing terms of assets and liabilities. These derivatives had an aggregate notional amount of $259.0 million and $109.0 million at of December 31, 2023 and 2022, respectively.
The Bank has entered into derivative financial instruments to reduce risk associated with interest rate volatility by matching repricing terms of assets and liabilities. These derivatives had an aggregate notional amount of $349.0 million and $259.0 million at of December 31, 2024 and 2023, respectively.
At December 31, 2023, Blue Foundry Bancorp (unconsolidated) had liquid assets of $61.4 million. The Bank is subject to various regulatory capital requirements administered by the NJDOBI and the FDIC. At December 31, 2023, the Bank exceeded all applicable regulatory capital requirements, and was considered “well capitalized” under regulatory guidelines. See “Item 1.
At December 31, 2024, Blue Foundry Bancorp (unconsolidated) had liquid assets of $41.3 million. The Bank is subject to various regulatory capital requirements administered by the NJDOBI and the FDIC. At December 31, 2024, the Bank exceeded all applicable regulatory capital requirements, and was considered “well capitalized” under regulatory guidelines. See “Item 1.
The Company recorded a net loss for the year ended December 31, 2023 of $7.4 million compared to net income of $2.4 million for the year ended December 31, 2022. The decrease was largely driven by a decrease of $9.9 million in net interest income. Interest Income.
The Company recorded a net loss for the year ended December 31, 2024 of $11.9 million compared to net loss of $7.4 million for the year ended December 31, 2023. The increased loss was largely driven by a decrease of $4.4 million in net interest income. Interest Income.
However, if a substantial portion of these deposits is not retained, we may utilize FHLB advances or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense. Available borrowing capacity at December 31, 2023 was $320.0 million with FHLB.
However, if a substantial portion of these deposits is not retained, we may utilize wholesale funding or raise interest rates on customer deposits to attract new accounts, which may result in higher levels of interest expense. Available borrowing capacity at December 31, 2024 was $270.6 million with FHLB.
Certificates of deposit that are scheduled to mature in less than one year from December 31, 2023 totaled $572.4 million. Management expects, based on historical experience, that a substantial portion of the maturing certificates of deposit will be renewed.
Certificates of deposit that are scheduled to mature in less than one year from December 31, 2024 totaled $697.2 million. Management expects, based on historical experience, that a substantial portion of the maturing certificates of deposit will be retained.
See Note 12, Derivatives and Hedging Activities, of Notes to Consolidated Financial Statements in “Item 1- Financial Statements.” Liquidity and Capital Resources Liquidity is the ability to meet current and future financial obligations of a short-term and long-term nature.
See Note 12, Derivatives, of Notes to Consolidated Financial Statements in “Part II, Item 8- Financial Statements.” Liquidity and Capital Resources Liquidity is the ability to meet current and future financial obligations of a short-term and long-term nature.
Net Interest Income and Margin. For the year ended December 31, 2023 net interest income was $41.9 million, a decrease of $9.9 million or 19.1%, compared to $51.8 million for same period in 2022. Net interest margin for the year ended December 31, 2023 decreased by 64 basis points to 2.09% from 2.73% for the year ended December 31, 2022.
For the year ended December 31, 2024 net interest income was $37.6 million, a decrease of $4.4 million or 10.4%, compared to $41.9 million for same period in 2023. Net interest margin for the year ended December 31, 2024 decreased by 19 basis points to 1.90% from 2.09% for the year ended December 31, 2023.
Improving operating leverage and efficiency will assist in increasing revenue and managing operating expenses to reach necessary and expected performance targets. We will continue to reduce redundant tasks and streamline workflows to provide a consistently better customer experience.
The Company seeks to achieve meaningful balance sheet growth to absorb narrowing margins and operating costs. Improving operating leverage and efficiency will assist in increasing revenue and managing operating expenses to reach necessary and expected performance targets. We will continue to reduce redundant tasks and streamline workflows to provide a consistently better customer experience.
We intend to pursue these commercial relationships through the lending, retail branch and the retail business development personnel that we have recruited and continue to recruit, who have the experience and relationships necessary to build relationships with the privately-owned businesses managed and/or operating within the market and those located in areas targeted for expansion.
We intend to pursue these commercial relationships through our branch network and the commercial bankers that we have recruited and continue to recruit, who build relationships with the privately-owned businesses managed and/or operating within the market and those located in areas targeted for expansion. We look to partner with our customers in their journey to build their businesses.
The yield on average interest-earning assets increased 66 basis points to 3.94% for the year ended December 31, 2023 from 3.28% for the year ended December 31, 2022, while the cost of average interest-bearing liabilities increased 158 basis points to 2.30% for the year ended December 31, 2023 from 0.72% for the year ended December 31, 2022.
The cost of average interest-bearing liabilities increased 65 basis points to 2.95% for the year ended December 31, 2024 from 2.30% for the year ended December 31, 2023, while the yield on average interest-earning assets increased 38 basis points to 4.32% for the year ended December 31, 2024 from 3.94% for the year ended December 31, 2023.
See Note 12 of the Notes to the Consolidated Financial Statements. 51 At December 31, 2023, we had outstanding commitments to originate loans of $18.1 million and unused lines of credit of $92.7 million. We anticipate that we will have sufficient funds available to meet our current loan origination commitments.
See Note 12, Derivatives, of the Notes to the Consolidated Financial Statements in “Part II, Item 8- Financial Statements.” 51 At December 31, 2024, we had outstanding commitments to originate loans of $20.9 million and unused lines of credit of $84.6 million. We anticipate that we will have sufficient funds available to meet our current loan origination commitments.
To help manage our interest rate position, the Company had $259.0 million in interest rate hedges at December 31, 2023, with a weighted average duration of 3.2 years and a weighted average rate of 2.58%.
To help manage our interest rate position, the Company had $349.0 million in interest rate hedges at December 31, 2024, with a weighted average duration of 2.4 years. This represents an increase of $90.0 million from December 31, 2023, when interest rate hedges totaled $259.0 million with a weighted average duration of 3.2 years.
Prior year disclosures have not been restated. The Company recorded a net release of provision for credit losses of $441 thousand for the year ended December 31, 2023 compared to a release of provision for loan losses of $1.0 million for the year ended December 31, 2022.
The Company recorded a release of provision for credit losses of $1.4 million for the year ended December 31, 2024 compared to a release of provision for credit losses of $441 thousand for the year ended December 31, 2023.
The Company’s current tax position reflects the previously established full valuation allowance on its deferred tax assets. At December 31, 2023, the valuation allowance on deferred tax assets was $24.1 million. The Company did not record a tax benefit for the loss incurred during 2023 because a full valuation allowance was required on its deferred tax assets.
The Company’s current tax position reflects the previously established full valuation allowance on its deferred tax assets. At December 31, 2024 and 2023 the valuation allowance on deferred tax assets was $25.1 million and $24.0 million, respectively.
Additionally, almost all of the Bank’s investment securities are unencumbered and could be used as collateral for additional borrowing capacity. We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers.
We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers.
The Company’s overall strategy for loan growth and revenue generation will primarily be driven by further diversification into commercial lending, particularly CRE and C&I lending. Our market area includes a sizable number of small to medium-sized businesses, which are potentially full-service relationships that can provide both core deposits and lending opportunities.
Our market area includes a sizable number of small to medium-sized businesses, which are potentially full-service relationships that can provide both core deposits and lending opportunities.
Total assets increased $1.6 million to $2.04 billion at December 31, 2023. Cash and cash equivalents . Cash and cash equivalents increased $4.8 million, or 11.8%, to $46.0 million at December 31, 2023 from $41.2 million at December 31, 2022. Securities Available-For-Sale .
Total assets increased $15.7 million to $2.06 billion at December 31, 2024. Cash and cash equivalents . Cash and cash equivalents was $42.5 million at December 31, 2024 and $46.0 million at December 31, 2023. Securities Available-For-Sale .
The increase was related to the purchases of Federal Home Loan Bank of New York stock made in conjunction with borrowings in 2023. Gross Loans . Gross loans held for investment increased $15.6 million, or 1.01%, to $1.56 billion at December 31, 2023 from $1.55 billion at December 31, 2022.
The change was due to a decrease in Federal Home Loan Bank of New York stock as a result of a reduction in FHLB borrowings. 49 Gross Loans . Gross loans held for investment increased $22.8 million, or 1.5%, to $1.58 billion at December 31, 2024 from $1.56 billion at December 31, 2023.
The total cost of deposits increased 148 basis points and the total cost of funds increased 156 basis points. 46 Provision for Credit Losses . Provisions for credit losses are charged to operations to establish an allowance for credit losses.
The total cost of deposits and total cost of funds increased 90 basis points and 64 basis points, respectively. 46 Provision for Credit Losses .
This shift resulted in the ratio of core deposits to total deposits decreasing from 67.7% at December 31, 2022 to 52.1% at December 31, 2023. 50 The following table presents the totals of deposit accounts by account type, at the dates shown below: December 31, 2023 December 31, 2022 (In thousands) Non-interest bearing deposits $ 27,739 $ 37,907 NOW and demand accounts (1) 361,139 410,937 Savings (1) 259,402 423,758 Time deposits 596,624 416,260 Total deposits $ 1,244,904 $ 1,288,862 (1) Money market accounts are included within the NOW and demand accounts and savings captions.
Uninsured and uncollateralized deposits from third-party customers were $147.6 million, or 11% of deposits, at the end of December 31, 2024. 50 The following table presents the totals of deposit accounts by account type, at the dates shown below: December 31, 2024 December 31, 2023 (In thousands) Non-interest bearing deposits $ 26,001 $ 27,739 NOW and demand accounts (1) 369,554 361,139 Savings (1) 240,426 259,402 Time deposits 707,339 596,624 Total deposits $ 1,343,320 $ 1,244,904 (1) Money market accounts are included within the NOW and demand accounts and savings captions.
Interest income increased $16.7 million, or 26.7%, to $79.1 million for the year ended December 31, 2023 from $62.4 million for the year ended December 31, 2022. The increase was due to an increase in market rates with interest income from loans and securities increasing $13.4 million and $3.3 million, respectively.
Interest income increased $6.3 million, or 8.0%, to $85.5 million for the year ended December 31, 2024 from $79.1 million for the year ended December 31, 2023. Interest income from loans and securities increased $4.5 million and $1.0 million, respectively.
Critical to succeeding will be the ability to leverage technology, utilize management information, assign responsibility and accountability and develop a steady stream of referral opportunities to build quality relationships. Grow and further diversify the loan portfolio.
We have broadened our business customer offerings and have a full suite of cash management products for businesses. We anticipate steadily increasing deposit accounts each year. Critical to succeeding will be the ability to leverage technology, utilize management information, assign responsibility and accountability and develop a steady stream of referral opportunities to build quality relationships.
We look to partner with our customers in their journey to build their businesses. We believe pursuing this strategy will allow us to both grow and diversify our business mix while providing us with the best opportunities to drive strong financial returns.
We believe pursuing this strategy will allow us to both grow and diversify our business mix while providing us with the best opportunities to drive strong financial returns. Further, our investment in technology is intended to facilitate the delivery of consumer and business solutions without the need for traditional sales channels. Improve operating leverage and efficiency.
Securities available-for-sale decreased $30.5 million, or 9.7%, to $283.8 million at December 31, 2023 from $314.2 million at December 31, 2022 due to amortization, maturities, calls and sales during the year. In addition, the unrealized loss on available-for-sale securities increased by $5.5 million. During the year ended December 31, 2023, the Company sold $9.1 million of available-for-sale securities.
Securities available-for-sale increased $13.3 million, or 4.7%, to $297.0 million at December 31, 2024 from $283.8 million at December 31, 2023 due to purchases and a $3.3 million improvement in the unrealized loss position on the portfolio, partially offset by amortization, maturities and calls during the year. Securities Held-To-Maturity .
The net release of provision in 2023 consisted of a $146 thousand provision on loans, a release of provision of $575 thousand for commitments and letters of credit and a release of $12 thousand on held-to-maturity securities.
The net release of provision in 2024 consisted of a release of provision of $1.1 million on loans, $146 thousand for commitments and letters of credit and $60 thousand on held-to-maturity securities. During 2024, credit quality improved with reductions in non-performing loan balances of $1.0 million, coupled with modest growth in the loan portfolio. Non-interest Income .
Non-interest expense totaled $51.6 million and $52.8 million for the year ended December 31, 2023 and 2022, respectively, a decrease of $1.2 million or 2.3%. Excluding the provision for commitments and letters of credit, which prior to January 1, 2023 was recorded in non-interest expense, non-interest expense decreased $1.5 million.
Non-interest expense totaled $52.6 million and $51.6 million for the year ended December 31, 2024 and 2023, respectively, an increase of $1.0 million or 2.0%.
We also had a $30.0 million available line of credit with a correspondent bank and the ability to borrow up to $2.3 million at the FRB’s Discount Window at December 31, 2023. The Company also had the ability to participate in the FRB’s Bank Term Funding Program.
We also had the ability to borrow up to $107.7 million at the FRB’s Discount Window and a $30.0 million available line of credit with a correspondent bank at December 31, 2024. Additionally, 63.4% of the Bank’s investment securities are unencumbered and could be used as collateral for additional borrowing capacity.
Securities Held-To-Maturity . Securities held-to-maturity totaled $33.3 million at December 31, 2023 decreasing $451 thousand from $33.7 million at December 31, 2022, primarily due to amortization. Other investments. Other investments increased $4.3 million, or 26.6%, to $20.3 million at December 31, 2023 from $16.1 million at December 31, 2022.
Securities held-to-maturity totaled $33.1 million at December 31, 2024 decreasing $178 thousand from $33.3 million at December 31, 2023, primarily due to amortization, partially offset by a reduction in the provision for credit losses on HTM securities. Other investments. Other investments decreased $2.6 million, or 12.6%, to $17.8 million at December 31, 2024 from $20.3 million at December 31, 2023.
The table below presents the balance of non-performing assets on the dates indicated: December 31, 2023 December 31, 2022 (In thousands) Residential one-to-four family $ 5,884 $ 7,498 Multifamily 146 182 Non-residential — — Construction — — Junior liens 49 52 Commercial and industrial 39 35 Consumer and other — — Total $ 6,118 $ 7,767 Other real estate owned 593 — Total non-performing assets $ 6,711 $ 7,767 Other Assets.
The following table presents loans allocated by loan category: December 31, 2024 December 31, 2023 (In thousands) Residential $ 518,243 $ 550,929 Multifamily 671,116 682,564 Commercial real estate 259,633 232,505 Construction 85,546 60,414 Junior liens 25,422 22,503 Commercial and industrial 16,311 11,768 Consumer and other 7,211 47 Total loans 1,583,482 1,560,730 The table below presents the balance of non-performing assets on the dates indicated: December 31, 2024 December 31, 2023 (In thousands) Residential $ 4,377 $ 5,884 Multifamily — 146 Junior liens 149 49 Commercial and industrial 578 39 Total $ 5,104 $ 6,118 Other real estate owned — 593 Total non-performing assets $ 5,104 $ 6,711 Other Assets.
Our primary sources of funds consist of deposit inflows, loan repayments, maturities and sales of securities, borrowings from the FHLB and securities sold under agreements to repurchase.
Our primary sources of funds consist of deposit inflows, principal and interest payments on loans and securities, maturities of securities and FHLB advances and other borrowings.
Year Ended December 31, 2023 vs. 2022 Increase (Decrease) Due to Volume Rate Net (In thousands) Interest income: Loans $ 6,029 $ 7,377 $ 13,406 Mortgage-backed securities (379) 138 (241) Other investment securities (180) 1,370 1,190 FHLB stock 400 595 995 Cash and cash equivalents (383) 1,725 1,342 Total interest-earning assets $ 5,487 $ 11,205 $ 16,692 Interest expense: Interest-bearing deposits $ 245 $ 18,133 $ 18,378 FHLB advances 3,285 4,953 8,238 Total interest-bearing liabilities 3,530 23,086 26,616 Net increase in net interest income $ 1,957 $ (11,881) $ (9,924) Comparison of Financial Condition at December 31, 2023 and December 31, 2022 Total Assets.
Year Ended December 31, 2024 vs. 2023 Increase (Decrease) Due to Volume Rate Net (In thousands) Interest income: Loans $ (781) $ 5,281 $ 4,500 Mortgage-backed securities 27 556 583 Other investment securities (663) 1,093 430 FHLB stock (238) 412 174 Cash and cash equivalents 556 103 659 Total interest-earning assets $ (1,099) $ 7,445 $ 6,346 Interest expense: Interest-bearing deposits $ 3,872 $ 8,842 $ 12,714 FHLB advances (1,576) (423) (1,999) Total interest-bearing liabilities 2,296 8,419 10,715 Net decrease in net interest income $ (3,395) $ (974) $ (4,369) Comparison of Financial Condition at December 31, 2024 and December 31, 2023 Total Assets.
Interest expense increased $26.6 million, or 251.8%, to $37.2 million for the year ended December 31, 2023 compared to $10.6 million for the year ended December 31, 2022. The increase in interest expense was driven by increases of $18.4 million and $8.2 million in interest expense on deposits and borrowings, respectively due to an increase in rates paid.
Interest Expense. Interest expense increased $10.7 million, or 28.8%, to $47.9 million for the year ended December 31, 2024 compared to $37.2 million for the year ended December 31, 2023.
Total deposits decreased $44.0 million or 3.4% to $1.24 billion at December 31, 2023 compared to $1.29 billion at December 31, 2022 due to the competitive rate environment in our primary market area.
Total deposits increased $98.4 million or 7.9% to $1.34 billion at December 31, 2024 compared to $1.24 billion at December 31, 2023, largely due to an increase in customer deposits.
Construction loans increased $42.6 million, non-residential loans increased $16.4 million and commercial and industrial loans increased $7.1 million. These increases were partially offset by decreases in the residential and multifamily loan portfolios of $46.3 million and $8.1 million, respectively.
Commercial real estate loans increased $27.1 million, construction loans increased $25.1 million, consumer loans increased $7.2 million and commercial and industrial loans increased $4.5 million, while the residential and multifamily loan portfolios decreased $32.7 million and $11.4 million, respectively.
Borrowings. The Company had $397.5 million of borrowings at December 31, 2023, an increase of $87.0 million, or 28.0%, from $310.5 million at December 31, 2022. The increase is related to the execution of short-term borrowings during the 2023 to support loan growth.
Borrowings. The Company had $339.5 million of borrowings at December 31, 2024, a decrease of $58.0 million, or 14.6%, from $397.5 million at December 31, 2023. During the year, we were able to pay off maturing borrowings as deposit growth outpaced asset growth.
The average balance of FHLB advances increased $160.7 million offset by a small decrease in the average balance of interest bearing deposits of $1.9 million. Balances shifted from interest-bearing core deposits (checking, savings and money market accounts) to higher-cost time deposits with average interest-bearing core deposits declining by $90.3 million and average time deposits increasing $88.4 million.
The average balance of interest-bearing deposits increased $52.6 million as we grew deposits, however, interest-bearing core deposits (checking, savings and money market accounts) decreased by $112.0 million and average time deposits increased $164.6 million. The average balance of FHLB advances decreased $48.0 million. Net Interest Income and Margin.
Removed
While we have continued to maintain and deepen relationships with many of the commercial customers onboarded during PPP, we have also broadened the business customer offerings and have a full suite of cash management products for businesses. We anticipate steadily increasing deposit accounts each year.
Added
Grow and further diversify the loan portfolio. The Company’s overall strategy for loan growth and revenue generation will primarily be driven by further diversification into commercial lending, particularly owner-occupied commercial real estate and commercial and industrial lending.
Removed
Further, our investment in technology is intended to facilitate the delivery of consumer and business solutions without the need for traditional sales channels. Improve operating leverage and efficiency. The Company seeks to achieve meaningful balance sheet growth to absorb narrowing margins and operating costs.
Added
While the average balance of loans and securities decreased $16.4 million and $20.3 million, respectively, the yield on loans and securities increased as loans and securities were originated at higher rates during the year. Additionally, the average balances of cash and cash equivalents increased $12.0 million and the yield on cash and cash equivalents increased 18 basis points during 2024.
Removed
The average balance of loans increased $162.1 million, while the average balances of cash and securities decreased $42.5 million and $25.4 million, respectively. Average balances of loans for the year ended December 31, 2023 as compared to the 2022 period increased due to growth in the multifamily and non-residential mortgage portfolios. Interest Expense.
Added
The increase in interest expense was driven by an increase of $12.7 million in interest expense on deposits partially offset by a decrease of $2.0 million in interest expense on borrowings.
Removed
The Company adopted ASU No. 2016-13, “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments,” which replaces the incurred loss model for loans and other financial assets with an expected loss model and is referred to as the current expected credit loss (“CECL”) model.
Added
During 2024, the cost of time deposits and interest-bearing core deposits increased by 121 basis points and 13 basis points, respectively, while the cost of FHLB advances decreased by 12 basis points.
Removed
The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including loans receivable and held-to maturity debt securities. It also applies to off-balance-sheet credit exposures (loan commitments, standby letters of credit, financial guarantees and other similar instruments) and net investments in certain leases recognized by a lessor.
Added
During the year, the increase in cost of interest-bearing liabilities outpaced the increase in yield on interest-earning assets.
Removed
During 2023, credit quality improved with reductions in delinquent and non-performing loan balances of $2.3 million and $1.6 million, respectively, coupled with limited growth in the loan portfolio. Non-interest Income .
Added
Non-interest income was relatively stable at $1.8 million for both years ended December 31, 2024 and 2023. There was a slight decrease of $11 thousand, or 0.6%.
Removed
The Company recorded non-interest income of $1.8 million for the year ended December 31, 2023, a decrease of $859 thousand, or 32.2%, from $2.7 million recorded for the year ended December 31, 2022. The reduction was primarily due to a decrease in prepayment fees of $748 thousand as the increase in market rates slowed prepayments on loans.
Added
During 2024, fees and service charges were up minimally and the Company recorded a gain on sale of an REO property of $123 thousand; however, there was a reduction in gain on sale of loans and a lack of gain on sale of securities. Non-interest Expense .
Removed
In addition, the Company discontinued charging overdraft fees in the fourth quarter of 2022 resulting in no overdraft fees for the year ended December 31, 2023 compared to overdraft fees totaling $242 thousand for the same period in 2022. The Company began selling SBA loans during 2023, resulting in gains on sales of loans totaling $231 thousand. Non-interest Expense .
Added
The increase was primarily driven by increases in compensation and benefits costs of $994 thousand and in FDIC premiums of $56 thousand, offset in part by a decrease in data processing of $471 thousand and professional services of $118 thousand. Income Tax Expense .
Removed
The decrease was primarily driven by decreases in professional fees and advertising expenses of $1.1 million and $707 thousand, respectively, partially offset by increases of $725 thousand in occupancy and equipment expense, $365 thousand in data processing and $418 thousand in FDIC assessment. Occupancy and equipment expense increased as a result of additional branches and branch renovations.
Added
The Company did not record a tax benefit for the loss incurred during 2024 and 2023 because a full valuation allowance was required on its deferred tax assets. 47 Analysis of Net Interest Income Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities.
Removed
In addition, compensation and benefits costs declined by $808 thousand to $28.4 million for the year ended December 31, 2023, due to lower cash incentive expense offset in part by costs associated with equity grants made under the shareholder-approved equity incentive plan. Income Tax Expense .
Added
Loan fundings totaled $108.4 million during 2024, including originations of $35.7 million in commercial real estate loans, $33.7 million in construction loans, $12.2 million in multifamily loans and $11.2 million in commercial and industrial loans. In addition, the Company purchased $21.6 million of conforming residential mortgages in New Jersey and participated in an $8.0 million consumer loan during the year.
Removed
The effective tax rate for the year ended December 31, 2022 was 12.4% and was the result of the taxable income produced during the year ended December 31, 2022, partially offset by the ability to utilize a portion of the net operating losses that were fully reserved. 47 Analysis of Net Interest Income Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities.
Added
Other assets decreased $10.8 million, or 40.0%, to $16.3 million at December 31, 2024 from $27.1 million at December 31, 2023 due to the timing of the settlement of a matured security in 2023. Total Deposits.
Removed
Originations totaled $119.6 million during 2023, including originations of $35.6 million in construction loans, $27.4 million in non-residential real estate loans, and $17.3 million in multifamily loans. 49 The following table presents loans allocated by loan category: December 31, 2023 December 31, 2022 (In thousands) Residential one-to-four family $ 550,929 $ 594,521 Multifamily 682,564 690,278 Non-residential 232,505 216,394 Construction 60,414 17,990 Junior liens 22,503 18,477 Commercial and industrial 11,768 4,682 Consumer and other 47 38 Total gross loans 1,560,730 1,542,380 Deferred fees, costs and premiums and discounts, net (1) — 2,747 Total loans $ 1,560,730 $ 1,545,127 (1) With the adoption of ASU No. 2016-13, net deferred fees and costs are allocated to the loan segments.
Added
Core deposits (defined as non-interest bearing deposits, NOW and demand accounts, and savings accounts) represented 47.3% of total deposits compared to 48.8% at December 31, 2023, as time deposits increased $110.7 million. The increase in time deposits includes $30.0 million in brokered deposits, bringing the total brokered deposit balance to $155.0 million at December 31, 2024.
Removed
Other assets increased $4.9 million, or 22.2%, to $27.1 million at December 31, 2023 from $22.2 million at December 31, 2022. This increase was primarily driven by the increase in fair value of the Company’s interest rate swap agreements. See Note 12, Derivatives, of Notes to Consolidated Financial Statements in “Part II, Item 8- Financial Statements.” Total Deposits.
Added
Total shareholders’ equity decreased by $23.4 million, or 6.6%, to $332.2 million at December 31, 2024 compared to $355.6 million at December 31, 2023. The decrease was driven by the Company’s repurchase of 1,920,940 of its shares at a cost of $19.4 million and the net loss of $11.9 million.
Removed
Time deposits increased $180.4 million, or 43.3%, to $596.6 million with a weighted average rate of 4.1% at December 31, 2023 from $416.3 million with a weighted average rate of 1.8% at December 31, 2022. The increase in time deposits was due to an increase in rates paid on these non-core deposits.
Added
These decreases were partially offset by improvements in accumulated other comprehensive loss and the cost of equity compensation already reflected in equity. Treasury shares totaling 406,950 were used to fund the shareholder-approved restricted stock grants. Off-Balance Sheet.
Removed
Core deposits decreased $224.3 million, or 25.7%, to $648.3 million at December 31, 2023 from $872.6 million at December 31, 2022.
Removed
Total shareholders’ equity decreased by $38.1 million, or 9.7%, to $355.6 million at December 31, 2023 compared to $393.7 million at December 31, 2022. The Company also repurchased 3,717,949 of its shares at a cost of $36.3 million. Treasury shares totaling 732,780 were used to fund the shareholder-approved restricted stock grants. Off-Balance Sheet.
Removed
This represents an increase of $150.0 million from December 31, 2022, when we had $109.0 million in interest rate hedges with a weighted average duration of 4.2 years and a weighted average rate of 3.15%.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+6 added−3 removed9 unchanged
Biggest changeOther than cash flow hedging on interest expense, we generally do not engage in hedging activities such as engaging in futures or options, or investing in high-risk mortgage derivatives such as collateralized mortgage obligation residual interests, real estate mortgage investment conduit residual interests or stripped mortgage-backed securities. 52 The Bank has entered into derivative financial instruments to reduce risk associated with interest rate volatility by matching repricing terms of assets and and liabilities.
Biggest changeBy following these strategies, we believe that we are better positioned to react to increases and decreases in market interest rates. 52 Other than cash flow hedging on interest expense, we generally do not engage in hedging activities such as engaging in futures or options, or investing in high-risk mortgage derivatives such as collateralized mortgage obligation residual interests, real estate mortgage investment conduit residual interests or stripped mortgage-backed securities.
The following table sets forth, at December 31, 2023, the calculation of the estimated changes to the Bank’s net interest income, at the Bank level, that would result from the specified immediate changes in the United States Treasury yield curve. For purposes of this table, 100 basis points equals 1%.
The following table sets forth, at December 31, 2024, the calculation of the estimated changes to the Bank’s net interest income, at the Bank level, that would result from the specified immediate changes in the United States Treasury yield curve. For purposes of this table, 100 basis points equals 1%.
Our ALCO/Investment Committee, which consists of members of management, is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the policy and guidelines approved by our Board of Directors.
Our Asset/Liability Committee (“ALCO”)/Investment Committee, which consists of members of management, is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the policy and guidelines approved by our Board of Directors.
In the event of an instantaneous 100 basis point decrease in interest rates, the Bank would experience a 42% increase in NPV. 53 Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements.
In the event of an instantaneous 100 basis point decrease in interest rates, the Bank would experience a 18% increase in NPV. Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements.
Net Interest Income Change in Interest Rates (basis points) Amount Change Percent (Dollars in thousands) +200 $ 45,392 (1,012) (2.2) % +100 45,929 (475) (1.0) 0 46,404 — — -100 48,977 2,573 5.5 -200 51,187 4,783 10.3 The following table sets forth, at December 31, 2023, the calculation of the estimated changes in our NPV, at the Bank level, that would result from the specified immediate changes in the United States Treasury yield curve.
Net Interest Income Change in Interest Rates (basis points) Amount Change Percent (Dollars in thousands) +200 $ 48,719 1,209 2.5 % +100 48,153 643 1.4 0 47,510 — — -100 49,117 1,607 3.4 -200 50,419 2,909 6.1 53 The following table sets forth, at December 31, 2024, the calculation of the estimated changes in our NPV, at the Bank level, that would result from the specified immediate changes in the United States Treasury yield curve.
NPV Change in Interest Rates (basis points) Estimated NPV Estimated Increase (Decrease) NPV as a Percent of Portfolio Value of Assets Amount Percent NPV Ratio Change (Dollars in thousands) +200 $ 15,293 $ (73,921) (82.9) % 0.8 % (3.6) +100 51,896 (37,318) (41.8) 2.5 (1.8) 0 89,214 — — 4.4 — -100 126,976 37,763 42.3 6.2 1.9 -200 165,462 76,248 85.5 8.1 3.7 The table above indicates that at December 31, 2023, in the event of an instantaneous 100 basis point increase in interest rates, the Bank would experience a 42% decrease in NPV.
NPV Change in Interest Rates (basis points) Estimated NPV Estimated Increase (Decrease) NPV as a Percent of Portfolio Value of Assets Amount Percent NPV Ratio Change (Dollars in thousands) +200 $ 117,583 $ (70,082) (37.3) % 5.7 % (3.4) +100 152,321 (35,344) (18.8) 7.4 (1.7) 0 187,665 — — 9.1 — -100 220,891 33,226 17.7 10.7 1.6 -200 253,350 65,684 35.0 12.3 3.2 The table above indicates that at December 31, 2024, in the event of an instantaneous 100 basis point increase in interest rates, the Bank would experience a 19% decrease in NPV.
We have sought to manage our interest rate risk in order to minimize the exposure of our earnings and capital to changes in interest rates.
On a quarterly basis, our Board reviews various ALCO reports that estimate the sensitivity of the economic value of equity and net interest income under various interest rate scenarios. We have sought to manage our interest rate risk in order to minimize the exposure of our earnings and capital to changes in interest rates.
The net present value (“NPV”) analysis estimates the change in the NPV of assets and liabilities and off-balance sheet contracts over a range of immediate rate shock interest rate scenarios. This model uses a discounted cash flow analysis and an option-based pricing approach to measure the interest rate sensitivity of net portfolio value.
The economic value of equity (“EVE”) analysis estimates the change in the net present value (“NPV”) of assets and liabilities and off-balance sheet contracts over a range of immediate rate shock interest rate scenarios. In calculating changes in EVE, for the various scenarios we forecast loan and securities prepayment rates and deposit decay rates.
We currently utilize a third-party modeling program, prepared on a quarterly basis, to evaluate our sensitivity to changing interest rates, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Directors.
We currently utilize a third-party modeling program, prepared on a quarterly basis, to evaluate our sensitivity to changing interest rates and assess liquidity requirements and modify our lending, investing and deposit gathering strategies accordingly.
Removed
By following these strategies, we believe that we are better positioned to react to increases and decreases in market interest rates.
Added
The Bank has entered into derivative financial instruments to reduce risk associated with interest rate volatility. These derivatives are used to manage differences in the amount, timing and duration of the Bank’s known or expected cash receipts and its known or expected cash payments principally related to the Bank’s wholesale fundings.
Removed
These derivatives had an aggregate notional amount of $259.0 million as of December 31, 2023. Quantitative Analysis. We compute amounts by which the net present value of our cash flow from assets, liabilities and off-balance sheet items would change in the event of a range of assumed changes in market interest rates.
Added
These derivatives had an aggregate notional amount of $349.0 million as of December 31, 2024. Quantitative Analysis. As noted, we use a third-party industry standard asset/liability model to complete our quarterly interest rate risk reports. The model projects net interest income based on various interest rate scenarios and horizons.
Removed
The model estimates the economic value of each type of asset, liability and off-balance sheet contract under the assumption that the United States Treasury yield curve increases or decreases instantaneously by 100 to 200 basis points in 100 basis point increments. A basis point equals one-hundredth of one percent, and 100 basis points equals one percent.
Added
We use a combination of analyses to monitor our exposure to changes in interest rates. Our net interest income sensitivity analysis determines the relative balance between the repricing of assets, liabilities and off-balance sheet positions over various horizons.
Added
This asset and liability analysis includes expected cash flows from loans and securities, using forecasted prepayment rates, reinvestment rates, as well as contractual and forecasted liability cash flows.
Added
This analysis identifies mismatches in the timing of asset and liability cash flows but does not necessarily provide an accurate indicator of interest rate risk because the rate forecasts and assumptions used in the analysis may not reflect actual experience.
Added
Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied upon as indicative of actual results. A basis point equals one-hundredth of one percent, and 100 basis points equals one percent.

Other BLFY 10-K year-over-year comparisons