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What changed in Blue Foundry Bancorp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Blue Foundry Bancorp's 2024 and 2025 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 2025 report.

+305 added−272 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-27)

Top changes in Blue Foundry Bancorp's 2025 10-K

305 paragraphs added · 272 removed · 217 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

115 edited+24 added−16 removed174 unchanged
Biggest changeAnnual 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.
Biggest changeAnnual reporting requirements under Part 363, as revised, are as currently as follows for banks such as the Bank with $1.0 billion in total assets: (1) annual audited financial statements; and (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.
Generally, Section 23A of the Federal Reserve Act, applicable to FDIC-insured state nonmember banks by Section 18(j) of the Federal Deposit Insurance Act, and the Federal Reserve Board’s Regulation W prohibit a bank and its subsidiaries from engaging in a “covered transaction” with an affiliate if the aggregate amount of covered transactions outstanding with that affiliate, including the proposed transaction, would exceed an amount equal to 10.0% of the bank’s capital stock and surplus.
Generally, Section 23A of the Federal Reserve Act, made applicable to FDIC-insured state nonmember banks by Section 18(j) of the Federal Deposit Insurance Act, and the Federal Reserve Board’s Regulation W prohibit a bank and its subsidiaries from engaging in a “covered transaction” with an affiliate if the aggregate amount of covered transactions outstanding with that affiliate, including the proposed transaction, would exceed an amount equal to 10.0% of the bank’s capital stock and surplus.
Additionally, we do not offer “subprime loans” (loans that are made with low down-payments to borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burden ratios) or Alt-A loans (defined as loans having less than full documentation). 8 Multifamily Loans .
Additionally, we do not offer “subprime loans” (loans that are made with low down-payments to borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burden ratios) or Alt-A loans (defined as loans having less than full documentation). Multifamily Loans .
Technological advances, for example, have lowered barriers to entry, allowed banks to expand their geographic reach by providing services over the internet and made it possible for non-depository institutions, including financial technology companies, to offer products and services that traditionally have been provided by banks. The flow of deposits is also significantly influenced by the general economic conditions.
Technological advances, for example, have lowered barriers to entry, allowed banks to expand their geographic reach by providing services over the internet and made it possible for non-depository institutions, including financial technology companies, to offer products and services that traditionally have been provided by banks. 6 The flow of deposits is also significantly influenced by the general economic conditions.
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.
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.
This regulation establishes a comprehensive framework of activities in which a bank holding company and New Jersey savings bank may engage and is intended primarily for the protection of the Deposit Insurance Fund and depositors. Set forth below is a brief description of certain material regulatory requirements that are applicable to the Bank and the Company.
This regulation establishes a comprehensive framework of activities in which a bank holding company and New Jersey savings bank may engage and is intended primarily for the protection of the Deposit Insurance Fund and depositors. 19 Set forth below is a brief description of certain material regulatory requirements that are applicable to the Bank and the Company.
The amount of the deferred tax asset considered realizable could be adjusted if estimates of future taxable income increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth. 29
The amount of the deferred tax asset considered realizable could be adjusted if estimates of future taxable income increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth.
In addition, a nonmember bank may control a subsidiary that engages in activities as principal that would only be permitted for a national bank to conduct in a “financial subsidiary” if a bank meets specified conditions and deducts its investment in the subsidiary for regulatory capital purposes. Interstate Banking and Branching.
In addition, a nonmember bank may control a subsidiary that engages in activities as principal that would only be permitted for a national bank to conduct in a “financial subsidiary” if a bank meets specified conditions and deducts its investment in the subsidiary for regulatory capital purposes. 22 Interstate Banking and Branching.
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.
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 initial 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.
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.
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.
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.
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. The FDIC assesses all insured depository institutions.
Federal Securities Laws The Company’s common stock is registered with the Securities and Exchange Commission. The Company is subject to the information, proxy solicitation, insider trading restrictions and other requirements under the Exchange Act. Emerging Growth Company Status. We are an emerging growth company.
Federal Securities Laws The Company’s common stock is registered with the Securities and Exchange Commission. The Company is subject to the information, proxy solicitation, insider trading restrictions and other requirements under the Exchange Act. 27 Emerging Growth Company Status. We are an emerging growth company.
If the appropriate federal banking agency determines that an institution fails to meet any standard prescribed by the guidelines, the agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard. 22 Activities and Investments.
If the appropriate federal banking agency determines that an institution fails to meet any standard prescribed by the guidelines, the agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard. Activities and Investments.
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.
At December 31, 2025, 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.
“Critically undercapitalized” institutions are subject to additional measures including, subject to a narrow exception, 23 the appointment of a receiver or conservator within 270 days after they are determined to be critically undercapitalized.
“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 they are determined to be critically undercapitalized.
We generally originate home equity loans and lines of credit of up to $500,000 with a maximum loan-to-value ratio of 80% (75% if the loan is for a condo) and terms of up to 20 years. Home equity lines of credit have adjustable rates of interest that are based on the prime rate, as published in The Wall Street Journal.
We generally originate home equity loans and lines of credit of up to $500,000 with a maximum loan-to-value ratio of 75% (70% if the loan is for a condo) and terms of up to 20 years. Home equity lines of credit have adjustable rates of interest that are based on the prime rate, as published in The Wall Street Journal.
The following tables set forth certain information at December 31, 2024 regarding the dollar amount of loan principal repayments becoming due during the periods indicated. The tables do not include any estimate of prepayments that significantly shorten the average loan life and may cause actual repayment experience to differ from that shown below.
The following tables set forth certain information at December 31, 2025 regarding the dollar amount of loan principal repayments becoming due during the periods indicated. The tables do not include any estimate of prepayments that significantly shorten the average loan life and may cause actual repayment experience to differ from that shown below.
At December 31, 2024, our total commercial real estate loan portfolio was comprised of less than 2% in office space, none of which was in New York City. Commercial real estate loans are underwritten to asset specific guidelines in accordance to policy with the loan-to-value ratio limit generally being 75% of the appraised value of the property.
At December 31, 2025, our total commercial real estate loan portfolio was comprised of less than 2% in office space, none of which was in New York City. Commercial real estate loans are underwritten to asset specific guidelines in accordance to policy with the loan-to-value ratio limit generally being 75% of the appraised value of the property.
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.
At December 31, 2025, 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.
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.
Adjustable Rate Loans. The following table sets forth the dollar amount of all loans at December 31, 2025 that are due after December 31, 2026 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.
Approximately 90% of our securities portfolio was classified as available-for-sale, with the remaining 10% classified as held-to-maturity. 16 Portfolio Maturities and Yields. The following table sets forth the stated maturities and weighted average yields of investment securities at December 31, 2024. Weighted average yields on tax-exempt securities presented exclude the tax equivalent yield.
Approximately 90% of our securities portfolio was classified as available-for-sale, with the remaining 10% classified as held-to-maturity. 16 Portfolio Maturities and Yields. The following table sets forth the stated maturities and weighted average yields of investment securities at December 31, 2025. Weighted average yields on tax-exempt securities presented exclude the tax equivalent yield.
Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2024.
Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2025.
As such, it is grouped with any other capital losses for the year to which carried and is used to offset any capital gains. Any loss remaining after the five-year carryover period that has not been deducted is no longer deductible. At December 31, 2024, the Company had no capital loss carryovers.
As such, it is grouped with any other capital losses for the year to which carried and is used to offset any capital gains. Any loss remaining after the five-year carryover period that has not been deducted is no longer deductible. At December 31, 2025, the Company had no capital loss carryovers.
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.
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, 2025, 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, 2024. 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, 2025. Holding Company Regulation Federal Holding Company Regulation .
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.
A qualifying institution may opt in and out of the community bank leverage ratio framework on its quarterly call report. As of December 31, 2025, the Bank has not opted into the community bank leverage ratio framework. At December 31, 2025, the Bank exceeded each of its applicable capital requirements. Standards for Safety and Soundness.
At December 31, 2024 and 2023, there were no loans 90 days past due and still accruing. When loans are placed on non-accrual status, unpaid accrued interest is fully reversed, and further income is recognized only to the extent received on a cash basis or cost recovery method. Other Real Estate Owned (“REO”).
At December 31, 2025 and 2024, there were no loans 90 days past due and still accruing interest. When loans are placed on non-accrual status, unpaid accrued interest is fully reversed, and further income is recognized only to the extent received on a cash basis or cost recovery method. 12 Other Real Estate Owned (“REO”).
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.
At December 31, 2025, 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.
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.
Therefore, commercial and industrial loans that we originate may have greater credit risk than residential real estate loans. In addition, commercial and industrial loans generally require substantially greater evaluation and oversight efforts.
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.
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, 2025 and 2024, loan originations totaled $192.6 million and $116.0 million, respectively.
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.
At December 31, 2025, our largest commercial real estate loan totaled $23.4 million and was secured by a grocery-anchored shopping center. At December 31, 2025, 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.
When setting these terms, we take into account the products, features and rates offered by competitors, our liquidity needs, profitability and the preferences of our customers. We may supplement customer deposits with brokered and listed deposits. At December 31, 2024 and 2023, brokered deposits totaled $155.0 million and $125.0 million, respectively.
When setting these terms, we take into account the products, features and rates offered by competitors, our liquidity needs, profitability and the preferences of our customers. We may supplement customer deposits with brokered and listed deposits. At December 31, 2025 and 2024, brokered deposits totaled $275.0 million and $155.0 million, respectively.
As of December 31, 2024, the Bank does not have any loans deemed to be Regulation O loans.
As of December 31, 2025, the Bank does not have any loans deemed to be Regulation O loans.
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.
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, 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.
At December 31, 2025, based on the 15% limitation, the Bank’s loans-to-one-borrower limit was approximately $45.1 million, our internal policy limit was $40.6 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, 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.
At December 31, 2025, our largest loan relationship with a single borrower was for $32.8 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. Delinquencies and Asset Quality Delinquency Procedures.
At December 31, 2024, our securities portfolio consisted of investment-grade securities. Approximately 60% of the portfolio is either 100% guaranteed by the U.S. government or implicitly guaranteed by the U.S. government. The remaining 40% consisted of corporate bonds, municipal bonds, privately issued asset-backed securities and other investment securities.
At December 31, 2025, our securities portfolio consisted of investment-grade securities. Approximately 80% of the portfolio is either 100% guaranteed by the U.S. government or implicitly guaranteed by the U.S. government. The remaining 20% consisted of corporate bonds, municipal bonds, privately issued asset-backed securities and other investment securities.
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.
At December 31, 2025, we had $24.2 million of commercial and industrial loans. Commercial and industrial loans represent 1.4% 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, the Company had $42.4 million in net operating loss carryovers. The Company contributed $9.0 million to the Blue Foundry Charitable Foundation in 2021 and the deferred benefit has a five-year carryforward limitation. Capital Loss Carryovers.
At December 31, 2025, the Company had $46.7 million in net operating loss carryovers. The Company contributed $9.0 million to the Blue Foundry Charitable Foundation in 2021 and the deferred benefit has a five-year carryforward limitation. Capital Loss Carryovers.
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.
Uninsured deposits totaling $108.5 million were deposits of the Company and its subsidiaries and $39.6 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, 2025.
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.
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, 2025, the Company has approximately $86.5 million, or 5.1% of total loans, in New York multifamily loans that have some form of rent stabilization or rent control.
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.
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.
At December 31, 2024, we had the ability to borrow approximately $614.0 million under our credit facilities with the FHLB, of which $339.5 million was advanced. Borrowings from the FHLB are secured by loans pledged at the FHLB. We can borrow at the Federal Reserve Bank (“FRB”) Discount Window up to the amount of collateral pledged.
At December 31, 2025, we had the ability to borrow approximately $619.2 million under our credit facilities with the FHLB, of which $301.0 million was advanced. Borrowings from the FHLB are secured by loans pledged at the FHLB. We can borrow at the Federal Reserve Bank (“FRB”) Discount Window up to the amount of collateral pledged.
Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. For the year ended December 31, 2024, a valuation allowance of $25.1 million has been maintained against our net deferred tax asset.
Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. 29 For the year ended December 31, 2025, a valuation allowance of $27.3 million has been maintained against our net deferred tax asset.
See “Federal Bank Regulation - Capital Requirements.” Examination and Enforcement. The NJDOBI may examine the Bank as it deems advisable. It typically examines the Bank at least every two years, typically alternating exams with the FDIC such that the Bank is subject to regulatory examination every year. Regulated institutions are assessed for expenses incurred by the NJDOBI.
See “Federal Bank Regulation - Capital Requirements.” Examination and Enforcement. The NJDOBI may examine the Bank as it deems advisable. It typically examines the Bank at least every two years, typically alternating exams with the FDIC such that the Bank is subject to regulatory examination every year.
Employees and Human Capital Resources At December 31, 2024 we employed 184 employees, nearly all of whom are full-time and of which approximately 59% are women. At December 31, 2023, we employed 179 employees. As a financial institution, approximately 40% of our employees are employed at our branch offices, and another 4% are employed at our customer care call center.
Employees and Human Capital Resources At December 31, 2025 we employed 189 employees, nearly all of whom are full-time and of which approximately 59% are women. At December 31, 2024, we employed 184 employees. As a financial institution, approximately 38% of our employees are employed at our branch offices, and another 3% are employed at our customer care call center.
Common equity Tier 1 capital is generally defined as common shareholders’ equity and retained earnings. Tier 1 capital is generally defined as common equity Tier 1 and Additional Tier 1 capital. Additional Tier 1 capital generally includes certain noncumulative perpetual preferred stock and related surplus and minority interests in equity accounts of consolidated subsidiaries.
Tier 1 capital is generally defined as common equity Tier 1 and Additional Tier 1 capital. Additional Tier 1 capital generally includes certain noncumulative perpetual preferred stock and related surplus and minority interests in equity accounts of consolidated subsidiaries. Total capital includes Tier 1 capital (common equity Tier 1 capital plus Additional Tier 1 capital) and Tier 2 capital.
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. 23 Transaction with Affiliates and Regulation W / Loans to Insiders and Regulation O .
Our commercial real estate loans are secured primarily by industrial facilities, retail facilities and other commercial properties, most of which are located in our primary market area. Of these loans, $77.0 million are owner-occupied.
Our commercial real estate loans are secured primarily by industrial facilities, retail facilities and other commercial properties, most of which are located in our primary market area. Of these loans, $113.8 million, or 37.2%, are owner-occupied.
Total capital includes Tier 1 capital (common equity Tier 1 capital plus Additional Tier 1 capital) and Tier 2 capital. Tier 2 capital is comprised of capital instruments and related surplus meeting specified requirements, and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible securities, intermediate preferred stock and subordinated debt.
Tier 2 capital is comprised of capital instruments and related surplus meeting specified requirements, and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible securities, intermediate preferred stock and subordinated debt.
In determining the amount of risk-weighted assets for purposes of calculating risk-based capital ratios, a bank’s assets, including certain off-balance sheet assets (e.g., recourse obligations, direct credit substitutes, residual interests), are multiplied by a risk weight factor assigned by the regulations based on perceived risks inherent in the type of asset.
Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations. 21 In determining the amount of risk-weighted assets for purposes of calculating risk-based capital ratios, a bank’s assets, including certain off-balance sheet assets (e.g., recourse obligations, direct credit substitutes, residual interests), are multiplied by a risk weight factor assigned by the regulations based on perceived risks inherent in the type of asset.
Our residential loan portfolio consists of mortgage loans that enable borrowers to purchase or refinance existing homes, most of which serve as the primary residence of the borrower. At December 31, 2024, residential real estate loans totaled $518.2 million, or 32.7% of our total loan portfolio, and consisted of $347.1 million of fixed-rate loans and $170.8 million of adjustable-rate loans.
Our residential loan portfolio consists of mortgage loans that enable borrowers to purchase or refinance existing homes, most of which serve as the primary residence of the borrower. At December 31, 2025, residential real estate loans totaled $510.6 million, or 30.2% of our total loan portfolio, and consisted of $359.7 million of fixed-rate loans and $150.8 million of adjustable-rate loans.
The NJDOBI has authority to enforce applicable law and prevent practices that may cause harm to an institution, including the issuance of cease and desist orders and civil money penalties and removal of directors, officers and employees.
Regulated institutions are assessed for expenses incurred by the NJDOBI. 20 The NJDOBI has authority to enforce applicable law and prevent practices that may cause harm to an institution, including the issuance of cease and desist orders and civil money penalties and removal of directors, officers and employees.
At December 31, 2024, we had $107.7 million pledged at the FRB. We also have an unsecured line of $30.0 million with a correspondent bank. Subsidiary Activities Blue Foundry Bancorp has one direct subsidiary, Blue Foundry Bank.
At December 31, 2025, we had $68.1 million pledged at the FRB. We also have an unsecured line of $30.0 million with a correspondent bank which we have not utilized. Subsidiary Activities Blue Foundry Bancorp has one direct subsidiary, Blue Foundry Bank.
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.
At December 31, 2025, we had $641.0 million in multifamily loans, representing 37.9% 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.
As of December 31, 2024, these loans were all performing with terms. At December 31, 2024, substandard loans represent six residential loans totaling $4.4 million, three commercial and industrial loans totaling $578 thousand , one multifamily loan totaling $118 thousand and one junior lien loan totaling $149 thousand.
At December 31, 2024, substandard loans represent six residential loans totaling $4.4 million, three commercial and industrial loans totaling $578 thousand , one multifamily loan totaling $118 thousand and one junior lien loan totaling $149 thousand.
See discussion on Deferred Tax valuation Allowance on the next page of this document. Corporate Dividends. We may generally exclude from our income 100% of dividends received from the Bank as a member of the same affiliated group of corporations. Audit of Tax Returns.
See discussion on Deferred Tax valuation Allowance on the next page of this document. 28 Corporate Dividends. We may generally exclude from our income 100% of dividends received from the Bank as a member of the same affiliated group of corporations. Audit of Tax Returns. The Company’s federal income tax returns have not been audited in the last three years.
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%.
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%. The required insurance coverage amount varies based on the loan-to-value ratio and term of the loan.
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.
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. In such cases, approval by the Loan Committee or Loan Oversight Committee may be required.
Our adjustable-rate residential real estate loans can have initial and periodic caps of up to 2.0% on interest rate changes, with a current cap on total increases of 6.0% over the life of the loan.
Our adjustable-rate residential real estate loans can have initial and periodic caps of up to 2.0% on interest rate changes, with a current cap on total increases of 6.0% over the life of the loan. 8 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.
At December 31, 2024, our largest multifamily loan totaled $23.8 million and was performing in accordance with its original terms. Commercial Real Estate Loans . At December 31, 2024, we had $259.6 million in commercial real estate loans, representing 16.4% of our total loan portfolio.
At December 31, 2025, our largest multifamily loan totaled $23.3 million and was performing in accordance with its original terms. Commercial Real Estate Loans . At December 31, 2025, we had $306.1 million in commercial real estate loans, representing 18.1% of our total loan portfolio.
Institutions that have not exercised the AOCI opt-out have AOCI incorporated into common equity Tier 1 capital (including unrealized gains and losses on available-for-sale-securities). The Bank exercised the opt-out election regarding the treatment of AOCI. Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations.
Institutions that have not exercised the AOCI opt-out have AOCI incorporated into common equity Tier 1 capital (including unrealized gains and losses on available-for-sale-securities). The Bank exercised the opt-out election regarding the treatment of AOCI.
All loans that we originate or purchase are underwritten pursuant to our policies and procedures, which, for residential loans, generally incorporate Fannie Mae and Freddie Mac underwriting guidelines to the extent applicable. We originate both adjustable-rate and fixed-rate loans.
We also obtain referrals from existing and former customers and from accountants, real estate brokers, builders and attorneys. All loans that we originate or purchase are underwritten pursuant to our policies and procedures, which, for residential loans, generally incorporate Fannie Mae and Freddie Mac underwriting guidelines to the extent applicable. We originate both adjustable-rate and fixed-rate loans.
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.
The asset threshold in Part 363 are now subject to periodic adjustments. 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.
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.
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.
December 31, 2024 December 31, 2023 60-89 Days 90 Days or More 60-89 Days 90 Days or More Number of Loans Principal Balance Number of Loans Principal Balance Number of Loans Principal Balance Number of Loans Principal Balance (Dollars in thousands) Residential 2 $ 315 2 $ 3,892 1 $ 752 3 $ 3,926 Junior liens — — 1 149 — — 1 49 Commercial and Industrial 1 563 2 15 — — 3 39 Total 3 $ 878 5 $ 4,056 1 $ 752 7 $ 4,014 12 Non-Performing Assets.
December 31, 2025 December 31, 2024 60-89 Days 90 Days or More 60-89 Days 90 Days or More Number of Loans Principal Balance Number of Loans Principal Balance Number of Loans Principal Balance Number of Loans Principal Balance (Dollars in thousands) Residential 1 $ 44 5 $ 4,002 2 $ 315 2 $ 3,892 Multifamily 1 1,036 3 5,669 — — — — Junior liens — — 1 144 — — 1 149 Commercial and Industrial — — — — 1 563 2 15 Total 2 $ 1,080 9 $ 9,815 3 $ 878 5 $ 4,056 Non-Performing Assets.
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.
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.
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.
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.
Our ability to originate fixed or adjustable-rate loans depends upon the relative customer demand for such loans, which is affected by current market interest rates as well as anticipated future market interest rates.
Our ability to originate fixed or adjustable-rate loans depends upon the relative customer demand for such loans, which is affected by current market interest rates as well as anticipated future market interest rates. Our loan origination and purchase activity may be adversely affected by a rising interest rate environment, which typically results in decreased loan demand.
We evaluate the qualifications and financial condition of the borrower (including credit history), profitability and expertise, as well as the value and condition of the mortgaged property securing the loan.
We consider a number of factors in originating multifamily and commercial real estate loans. We evaluate the qualifications and financial condition of the borrower (including credit history), profitability and expertise, as well as the value and condition of the mortgaged property securing the loan.
During the last four months of 2024, the Federal Reserve reduced the federal funds rate three times, totaling 100 basis points, to 4.50% at the end of the year. By year end 2024, inflation had declined to 2.9% from 3.4% at December 31, 2023.
After holding rates steady through the first half of 2025, the Federal Reserve reduced the federal funds rate three times in the last four months of the year, totaling 75 basis points, to 3.75% at December 31, 2025. By year end 2025, inflation had declined to 2.8% from 2.9% at December 31, 2024.
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.
Year Ended December 31, 2025 2024 (Dollars in thousands) Allowance for credit losses on loans at beginning of period $ 12,965 $ 14,154 Provision (recovery of provision) for credit losses on loans 1,477 (1,144) Charge-offs: Commercial and Industrial (2) — Consumer and other (61) (56) Total charge-offs (63) (56) Recoveries: Consumer and other 13 11 Total recoveries 13 11 Net charge-offs (50) (45) Allowance for credit losses on loans at end of period $ 14,392 $ 12,965 Allowance for credit losses on loans to non-performing loans at end of period 126.56 % 254.02 % Allowance for credit losses on loans to total loans outstanding at end of period 0.85 0.83 Net charge-offs to average loans outstanding during period — — Allocation of Allowance for Credit Losses on Loans.
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.
All residential loans purchased were within New Jersey and were underwritten to FNMA standards, a comparable underwriting standard as internally-originated loans. Residential loan purchases totaled $46.5 million and $21.6 million for the years ended December 31, 2025 and 2024, respectively. In addition, the Company acquired $137.8 million and $8.0 million in consumer loans during 2025 and 2024, respectively.
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.
At December 31, 2025, the average loan size of our commercial and industrial loans was $1.1 million, and our largest outstanding commercial and industrial loan balance was a $11.9 million conventional C&I term loan to an organization that provides meals for medicare and medicaid patients. This loan was performing in accordance with its repayment terms at December 31, 2025.
In addition, our Employee Stock Ownership Plan (“ESOP”) gives employees an opportunity to accumulate shares of our common stock and is 100% funded by the Company. The safety, health and wellness of our employees is a top priority.
In addition, our Employee Stock Ownership Plan (“ESOP”) gives employees an opportunity to accumulate shares of our common stock and is 100% funded by the Company. Supervision and Regulation The Company and the Bank operate in the highly-regulated banking industry.
December 31, 2024 December 31, 2023 (Dollars in thousands) Non-Performing Assets: Non-accrual loans: Residential $ 4,377 $ 5,884 Multifamily — 146 Junior liens 149 49 Commercial and Industrial 578 39 Total non-performing loans 5,104 6,118 Real estate owned — 593 Total non-performing assets $ 5,104 $ 6,711 Total non-performing loans to total loans 0.33 % 0.39 % Total non-performing loans to total assets 0.25 % 0.30 % Total non-performing assets to total assets 0.25 % 0.33 % Classified Assets .
December 31, 2025 December 31, 2024 (Dollars in thousands) Non-Performing Assets: Non-accrual loans: Residential $ 5,021 $ 4,377 Multifamily 5,669 — Junior liens 242 149 Commercial and Industrial 440 578 Total 11,372 5,104 Real estate owned — — Total non-performing assets $ 11,372 $ 5,104 Total non-performing loans to total loans 0.67 % 0.33 % Total non-performing loans to total assets 0.55 % 0.25 % Total non-performing assets to total assets 0.55 % 0.25 % 13 Classified Assets .
Home equity lines of credit are secured by residential real estate in a first or second lien position. The procedures for underwriting consumer loans include assessing the applicant’s payment history on other indebtedness, the applicant’s ability to meet existing obligations and payments on the proposed loan, and the loan-to-value ratio of the collateral property.
The procedures for underwriting consumer loans include assessing the applicant’s payment history on other indebtedness, the applicant’s ability to meet existing obligations and payments on the proposed loan, and the loan-to-value ratio of the collateral property.
The primary purpose of FDICIA 112 is to provide a framework for early risk identification in financial management through an effective system of internal controls.
The primary purpose of FDICIA 112 and Part 363 is to provide a framework for early risk identification in financial management through an effective system of internal controls. Part 363’s asset thresholds were revised by a final rule issued by the FDIC in November 2025.
Notwithstanding the above, the Federal Reserve Board has issued a supervisory bulletin regarding the payment of dividends and repurchase or redemption of outstanding shares of stock by bank holding companies.
Additionally, under the prompt corrective action laws, the ability of a bank holding company to pay dividends may be restricted if a subsidiary bank becomes undercapitalized. 26 Notwithstanding the above, the Federal Reserve Board has issued a supervisory bulletin regarding the payment of dividends and repurchase or redemption of outstanding shares of stock by bank holding companies.
December 31, 2024 December 31, 2023 Amount Percent Amount Percent (Dollars in thousands) Residential $ 518,243 32.72 % $ 550,929 35.30 % Multifamily 671,116 42.38 682,564 43.74 Commercial real estate 259,633 16.40 232,505 14.90 Construction and land 85,546 5.40 60,414 3.87 Junior liens 25,422 1.61 22,503 1.44 Commercial and Industrial 16,311 1.03 11,768 0.75 Consumer and other 7,211 0.46 47 — Total loans $ 1,583,482 100.00 % $ 1,560,730 100.00 % Loan Maturity .
December 31, 2025 December 31, 2024 Amount Percent Amount Percent (Dollars in thousands) Residential $ 510,583 30.20 % $ 518,243 32.72 % Multifamily 641,027 37.92 671,116 42.38 Commercial real estate 306,096 18.11 259,633 16.40 Construction and land 51,353 3.04 85,546 5.40 Junior liens 31,008 1.83 25,422 1.61 Commercial and Industrial 24,159 1.43 16,311 1.03 Consumer and other 126,306 7.47 7,211 0.46 Total loans $ 1,690,532 100.00 % $ 1,583,482 100.00 % Loan Maturity .

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur 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.
Biggest changeOur 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. 35 If additional borrowers become delinquent and do not pay their loans and we are unable to successfully manage our non-performing assets, our losses and troubled assets could increase significantly, which could have a material adverse effect on our financial condition and results of operations.
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.
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.
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.
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.
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.
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. 36 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. 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.
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.
Moreover, a significant decline in general economic conditions caused by inflation, recession, acts of terrorism, civil unrest, an outbreak of hostilities or other international or domestic calamities, an epidemic or pandemic, unemployment or other factors beyond our control could further impact these local economic conditions and could further negatively affect the financial results of our banking operations.
Moreover, a significant decline in general economic conditions caused by inflation, recession, tariffs, acts of terrorism, civil unrest, an outbreak of hostilities or other international or domestic calamities, an epidemic or pandemic, unemployment or other factors beyond our control could further impact these local economic conditions and could further negatively affect the financial results of our banking operations.
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.
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. 38 Interruption of our customers’ supply chains and federal funding could negatively impact their business and operations and impact their ability to repay their loans.
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.
If the Federal Reserve lowers market interest rates 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.
A failure in or breach of our operational or information security systems, or those of our third-party service providers, as a result of cyber-attacks or information security breaches or due to employee error, malfeasance or other disruptions could adversely affect our business, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and/or cause losses. 37 If this confidential or proprietary information were to be mishandled, misused or lost, we could be exposed to significant regulatory consequences, reputational damage, civil litigation and financial loss.
A failure in or breach of our operational or information security systems, or those of our third-party service providers, as a result of cyber-attacks or information security breaches or due to employee error, malfeasance or other disruptions could adversely affect our business, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and/or cause losses. 40 If this confidential or proprietary information were to be mishandled, misused or lost, we could be exposed to significant regulatory consequences, reputational damage, civil litigation and financial loss.
If these vendors encounter any of these issues, or if we have difficulty communicating with them, we could be exposed to disruption of operations, loss of service or connectivity to customers, reputational damage, and litigation risk that could have a material adverse effect on our business and, in turn, our financial condition and results of operations. 38 In addition, our operations are exposed to risk that these vendors will not perform in accordance with the contracted arrangements under service level agreements.
If these vendors encounter any of these issues, or if we have difficulty communicating with them, we could be exposed to disruption of operations, loss of service or connectivity to customers, reputational damage, and litigation risk that could have a material adverse effect on our business and, in turn, our financial condition and results of operations. 41 In addition, our operations are exposed to risk that these vendors will not perform in accordance with the contracted arrangements under service level agreements.
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.
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. 43 Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions.
These obligations will increase our operating expenses and could divert our management’s attention from our operations. 39 We are a community bank and our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance.
These obligations will increase our operating expenses and could divert our management’s attention from our operations. 42 We are a community bank and our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance.
Phishing, a means for identity thieves to obtain sensitive personal information through fraudulent e-mail, text or voice mail, is an emerging threat targeting the customers of financial entities.
Phishing, a means for identity thieves to obtain sensitive personal information through fraudulent e-mail, text or voice mail, is a threat targeting the customers of financial entities.
While we anticipate that adjustable-rate loans will better offset the adverse effects of an increase in interest rates as compared to fixed-rate loans, an increased monthly payment required of adjustable-rate loan borrowers in a rising interest rate environment could cause an increase in delinquencies and defaults.
Risks Related to Loan Underwriting Adjustable-Rate Loans. While we anticipate that adjustable-rate loans will better offset the adverse effects of an increase in interest rates as compared to fixed-rate loans, an increased monthly payment required of adjustable-rate loan borrowers in a rising interest rate environment could cause an increase in delinquencies and defaults.
Additionally, financial markets may be adversely affected by the current or anticipated impact of military conflict, including the Russia and Ukraine war, terrorism or other geopolitical events. 36 Risks Related to Competition Strong competition within our market area may limit our growth and profitability. Competition in the banking and financial services industry is intense.
Additionally, financial markets may be adversely affected by the current or anticipated impact of military conflict, including the Russia and Ukraine and Iran wars, terrorism or other geopolitical events. 39 Risks Related to Competition Strong competition within our market area may limit our growth and profitability. Competition in the banking and financial services industry is intense.
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.
Our non-interest expense totaled $57.0 million and $52.6 million for the years ended December 31, 2025 and 2024, 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 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.
Our efficiency ratio was 116.11% and 133.71% for the years ended December 31, 2025 and 2024, 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, 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.
For the year ended December 31, 2025, we recorded a loss of approximately $10.0 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.
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.
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, 2025, our held-to-maturity debt securities portfolio totaled $27.1 million with net unrealized losses of $1.5 million.
ITEM 1A. RISK FACTORS Risks Related to Interest Rate Risk Future changes in interest rates may reduce any future profits.
Risks Related to Interest Rate Risk Future changes in interest rates may reduce any future profits.
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.
As of December 31, 2025, the Company had approximately $328.2 million in its investment portfolio, with $301.2 million designated as available-for-sale and $27.1 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.
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.
At December 31, 2025, our net portfolio value would decrease by $65.2 million if there was an instantaneous 200 basis point increase in market interest rates.
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.
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, 2025, we had approximately $96.5 million, $599 thousand and $152.9 million invested in U.S.
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.
Generally, the value of securities fluctuates inversely with changes in interest rates. At December 31, 2025, our available-for-sale debt securities portfolio totaled $301.2 million with net unrealized losses of $16.9 million and are reported as a separate component of stockholders' equity.
Our loan portfolio is concentrated primarily in New Jersey. This makes us vulnerable to a downturn in the local economy and real estate markets.
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.
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.
As of December 31, 2025, the Company has approximately $86.5 million, or 5.1% of total loans, in New York multifamily loans that have some form of rent stabilization or rent control. Of these loans, only 14% reprice or mature in 2026, respectively, with the remainder maturing or repricing in 2027 through 2032. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 44
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.
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.
Our allowance for credit losses on loans was 0.83% of total loans and 254.02% of non-performing loans at December 31, 2024.
Our allowance for credit losses on loans was 0.85% of total loans and 126.56% of non-performing loans at December 31, 2025.
At December 31, 2024, our non-performing assets, which consist of non-performing loans, were $5.1 million, or 0.25% of total assets.
At December 31, 2025, our non-performing assets, which consist of non-performing loans, were $11.4 million, or 0.55% of total assets.
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.
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. 37 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.
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.
Inflationary pressures and rising prices may affect our results of operations and financial condition. Inflation may present a significant risk as it can lead to increased costs and reduced purchasing power for consumers.
Volatility and uncertainty related to inflation and the effects of inflation, which may lead to increased costs for businesses and consumers and potentially contribute to poor business and economic conditions generally, may also enhance or contribute to some of the risks discussed herein.
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. 34 Volatility and uncertainty related to inflation and the effects of inflation, which may lead to increased costs for businesses and consumers and potentially contribute to poor business and economic conditions generally, may also enhance or contribute to some of the risks discussed herein.
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.
The net unrealized losses on our held-to-maturity securities are not recorded in the financial statements until realized upon sale.
For further discussion of how changes in interest rates could impact us, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Market Risk.” 30 Risks Related to Lending Activities Because we intend to increase our commercial real estate and commercial loan originations, our lending risk will increase.
For further discussion of how changes in interest rates could impact us, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Market Risk.” Risks Related to Lending Activities If our allowance for credit losses on loans is not sufficient to cover actual loan losses, our earnings and capital could decrease.
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.
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. Severe weather, acts of terrorism, geopolitical and other external events could impact our ability to conduct business.
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.
Local economic conditions have a significant impact on the ability of our borrowers to repay loans and the value of the collateral securing loans.
Removed
Commercial real estate and commercial loans generally have more risk than residential mortgage loans. Because the repayment of commercial real estate and commercial loans depends on the successful management and operation of the borrower’s properties or related businesses, repayment of such loans can be affected by adverse conditions in the real estate market or the local economy.
Added
ITEM 1A. RISK FACTORS Risks Relating to the Merger Because the market price of Fulton common stock may fluctuate prior to the effective time, including as a result of Blue Foundry’s financial performance prior to the effective time, stockholders cannot be certain of the market value of the merger consideration to be received by Blue Foundry stockholders.
Removed
Commercial real estate and commercial loans may also involve relatively large loan balances to individual borrowers or groups of related borrowers. A downturn in the real estate market or the local economy could adversely impact the value of properties securing the loan or the revenues from the borrower’s business thereby increasing the risk of non-performing loans.
Added
At the effective time, each share of Blue Foundry common stock issued and outstanding immediately prior to the effective time (other than certain excluded shares as described in the merger agreement) will be converted into the right to receive 0.650 of a share of Fulton common stock.
Removed
Also, many of our multifamily and commercial real estate and commercial business borrowers have more than one loan outstanding with us. Consequently, an adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss compared to an adverse development with respect to a residential mortgage loan.
Added
This exchange ratio is fixed and will not be adjusted for changes in the market price of either Fulton common stock or Blue Foundry common stock. Changes in the price of Fulton common stock between now and the effective time will affect the value that Blue Foundry stockholders will receive in the merger.
Removed
Further, unlike residential mortgages or multifamily and commercial real estate loans, commercial and industrial loans may be secured by collateral other than real estate, such as inventory and accounts receivable, the value of which may be more difficult to appraise, may be more susceptible to fluctuation in value at default, and may be more difficult to realize upon enforcement of our remedies.
Added
Neither Fulton nor Blue Foundry is permitted to terminate the merger agreement as a result of any increase or decrease in the market price of Fulton common stock or Blue Foundry common stock.
Removed
As our commercial real estate and commercial loan portfolios increase, the corresponding risks and potential for losses from these loans may also increase. If our allowance for credit losses on loans is not sufficient to cover actual loan losses, our earnings and capital could decrease.
Added
Stock price changes may result from a variety of factors, including general market and economic conditions, changes in Fulton’s and Blue Foundry’s businesses, operations and prospects, the performance of peer companies and other financial companies, volatility in the prices of securities in global financial markets, including market prices of Fulton, Blue Foundry and other banking companies, the effects of proposed or imposed tariffs by the U.S. government and retaliatory tariffs proposed or imposed by U.S. trading partners and the risk of any recession or slowdown in economic growth, particularly in the states of Pennsylvania, Delaware, Maryland, New Jersey and Virginia, and regulatory considerations and tax laws, many of which are beyond Fulton’s and Blue Foundry’s control.
Removed
If additional borrowers become delinquent and do not pay their loans and we are unable to successfully manage our non-performing assets, our losses and troubled assets could increase significantly, which could have a material adverse effect on our financial condition and results of operations. Risks Related to Loan Underwriting Adjustable-Rate Loans.
Added
The market price of Fulton common stock after the merger may be affected by factors different from those currently affecting the independent businesses of Fulton and Blue Foundry. As a result of the merger, Blue Foundry stockholders will become Fulton shareholders.
Removed
Our business strategy includes growth in assets, deposits and the scale of our operations. Achieving our growth targets will require us to attract customers that currently bank at other financial institutions in our market, thereby increasing our share of the market, and to expand the size of our market area.
Added
Fulton’s business differs from that of Blue Foundry and certain adjustments may be made to Fulton’s business as a result of the merger.
Removed
Our ability to successfully grow will depend on a variety of factors, including our ability to attract and retain experienced bankers, the continued availability of desirable business opportunities, the competitive responses from other financial institutions in our market area and our ability to manage our growth.
Added
Accordingly, the results of operations of Fulton and the market price of Fulton common stock after the completion of the merger may be affected by factors different from those currently affecting the independent results of operations of Blue Foundry.
Removed
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.
Added
Fulton and Blue Foundry are expected to incur substantial costs related to the merger and integration, and these costs may be greater than anticipated due to unexpected events. Fulton and Blue Foundry have incurred and expect to incur a number of significant non-recurring costs associated with the merger.
Removed
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.
Added
These costs include legal, financial advisory, accounting, consulting and other advisory fees, severance/employee benefit-related costs, public company filing fees and other regulatory fees, financial printing and other printing costs and other related costs.
Removed
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.
Added
Some of these costs are payable by either Fulton or Blue Foundry regardless of whether or not the merger is completed. 30 In addition, Fulton will incur integration costs following the completion of the merger as Fulton and Blue Foundry integrate their businesses, including facilities and systems consolidation costs and employment-related costs.
Removed
From time to time, we may implement new lines of business or offer new products and services within existing lines of business. In addition, we will continue to invest in research, development, and marketing for new products and services. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed.
Added
Fulton and Blue Foundry may also incur additional costs to maintain employee morale and to retain key employees. There are a large number of processes, policies, procedures, operations, technologies and systems that may need to be integrated, including purchasing, accounting and finance, payroll, compliance, treasury management, branch operations, vendor management, risk management, lines of business, pricing and benefits.
Removed
In developing and marketing new lines of business and/or new products and services we may invest significant time and resources. Initial timetables for the development and introduction of new lines of business and/or new products or services may not be achieved and price and profitability targets may not prove feasible.
Added
While Fulton and Blue Foundry have assumed that a certain level of costs will be incurred, there are many factors beyond their control that could affect the total amount or the timing of the integration costs. Moreover, many of the costs that will be incurred are, by their nature, difficult to estimate accurately.
Removed
Furthermore, if customers do not perceive our new offerings as providing significant value, they may fail to accept our new products and services. External factors, such as compliance with regulations, competitive alternatives, and shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service.
Added
These integration costs may result in Fulton taking charges against earnings following the completion of the merger, and the amount and timing of such charges are uncertain at present. There can be no assurances that the expected benefits and efficiencies related to the integration of the businesses will be realized to offset these transaction and integration costs over time.
Removed
Furthermore, the burden on management and our information technology in introducing any new line of business and/or new product or service could have a significant impact on the effectiveness of our system of internal controls.
Added
Combining Fulton and Blue Foundry may be more difficult, costly or time-consuming than expected, and Fulton and Blue Foundry may fail to realize the anticipated benefits and cost savings of the merger. The success of the merger will depend, in part, on the ability to realize the anticipated cost savings from combining the businesses of Fulton and Blue Foundry.
Removed
Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on our business, financial condition and results of operations. Severe weather, acts of terrorism, geopolitical and other external events could impact our ability to conduct business.
Added
To realize the anticipated benefits and cost savings from the merger, Fulton and Blue Foundry must successfully integrate and combine their businesses in a manner that permits those cost savings to be realized without adversely affecting current revenues and future growth.
Added
If Fulton and Blue Foundry are not able to successfully achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected. In addition, the actual cost savings of the merger could be less than anticipated, and integration may result in additional and unforeseen expenses.
Added
An inability to realize the full extent of the anticipated benefits of the merger and the other transactions contemplated by the merger agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, levels of expenses and operating results of Fulton following the completion of the merger, which may adversely affect the value of the common stock of Fulton following the completion of the merger.
Added
Fulton and Blue Foundry have operated and, until the effective time of the Merger, must continue to operate, independently.
Added
It is possible that the integration process could result in the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the companies’ ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the merger.
Added
Integration efforts between the companies may also divert management attention and resources. These integration matters could have an adverse effect on each of Fulton and Blue Foundry during this transition period and for an undetermined period after completion of the merger on Fulton.
Added
The future results of Fulton following the completion of the merger may suffer if Fulton does not effectively manage its expanded operations. Following the merger, the size of the business of Fulton will increase beyond the current size of either Fulton’s or Blue Foundry’s business.
Added
Fulton’s future success will depend, in part, upon its ability to manage this expanded business, which may pose challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity. Fulton may also face increased scrutiny from governmental entities as a result of the increased size of its business.
Added
There can be no assurances that Fulton will be successful or that it will realize the expected operating efficiencies, revenue enhancement or other benefits currently anticipated from the merger. 31 Fulton may be unable to retain legacy Blue Foundry personnel successfully after the completion of the merger.
Added
The success of the merger will depend in part on Fulton’s ability to retain the talent and dedication of key employees currently employed by Blue Foundry. It is possible that these employees may decide not to remain with Blue Foundry while the merger is pending or after the completion of the merger.
Added
If Fulton and Blue Foundry are unable to retain key employees, including management, who are critical to the successful integration and future operations of Fulton following the merger, Fulton and Blue Foundry could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs.
Added
In addition, following the completion of the merger, if key employees terminate their employment, Fulton’s business activities following the merger may be adversely affected, and management’s attention may be diverted to successfully hiring suitable replacements, all of which may cause Fulton’s business following the merger to suffer.
Added
Fulton and Blue Foundry also may not be able to locate or retain suitable replacements for key employees who leave either company. If the remaining conditions to the closing of the merger are not met, the merger agreement may be terminated in accordance with its terms and the merger may not be completed.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+1 added−0 removed11 unchanged
Biggest changeThe Chief Information Security Officer has many years of experience leading cybersecurity governance and operations in financial services, supported by staff cybersecurity specialists. Management provides cybersecurity statistics and details to the Board quarterly. Board Committee Oversight The Company’s Board Enterprise Risk Committee provides oversight of the cyber program. The Committee consists of Board members, chaired by an independent director.
Biggest changeManagement provides cybersecurity statistics and details to the Board quarterly. Board Committee Oversight The Company’s Board Enterprise Risk Committee provides oversight of the cyber program. The Committee consists of Board members, chaired by an independent director. Committee members have extensive experience in various disciplines including risk management, communications, litigation, banking and transactional matters, and regulatory compliance.
Our Chief Information Security Officer and our Chief Technology Officer, who reports directly to our President and Chief Executive Officer, along with key members of their teams, regularly collaborate with peer banks, industry groups and policymakers to discuss cybersecurity trends and issues and identify best practices.
The role of Chief Information Security Officer and Chief Technology Officer, who reports directly to our President and Chief Executive Officer, along with key members of their teams, regularly collaborate with peer banks, industry groups and policymakers to discuss cybersecurity trends and issues and identify best practices.
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.
Risk Factors. 45 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.
Committee members have extensive experience in various disciplines including risk management, communications, litigation, banking and transactional matters, and regulatory compliance. The Board Committee receives regular reports informing on the effectiveness of the overall cybersecurity program and the detection, response, and recovery from significant cyber incidents. Cybersecurity metrics are reported quarterly to the Committee and Key Risk Indicators are reported.
The Board Committee receives regular reports informing on the effectiveness of the overall cybersecurity program and the detection, response, and recovery from significant cyber incidents. Cybersecurity metrics are reported quarterly to the Committee and Key Risk Indicators are reported.
The structure of our information security program is designed around the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework, regulatory guidance and other industry standards. In addition, we leverage certain industry and government associations, third-party benchmarking, audits and threat intelligence feeds to facilitate and promote program effectiveness.
In addition, we leverage certain industry and government associations, third-party benchmarking, audits and threat intelligence feeds to facilitate and promote program effectiveness.
Our Chief Information Security Officer is primarily responsible for this cyber security component and is a key member of the risk management organization, reporting directly to the Chief Risk Officer. Our objective for managing cybersecurity risk is to avoid or minimize the impacts of external threat events or other efforts to penetrate, disrupt or misuse our systems or information.
The Chief Information Security Officer is primarily responsible for this cyber security component and is a key member of the risk management organization. This role reports directly to the Chief Risk Officer.
Added
Our objective for managing cybersecurity risk is to avoid or minimize the impacts of external threat events or other efforts to penetrate, disrupt or misuse our systems or information. The structure of our information security program is designed around the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework, regulatory guidance and other industry standards.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed0 unchanged
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.
Biggest changeWe own five properties and lease 16 properties at December 31, 2025. The aggregate net book value of premises and equipment was $26.8 million at December 31, 2025.
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 2. PROPERTIES At December 31, 2025, 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

1 edited+0 added−0 removed1 unchanged
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
Biggest changeAt December 31, 2025, 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. 46 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+1 added−1 removed3 unchanged
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.
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 — $— — 735,741 November — $— — 735,741 December — $— — 735,741 Total — — (1) On June 18, 2025, the Company adopted its sixth repurchase program, which authorized the purchase of 5% or 1,082,533 shares, of its outstanding common stock commencing upon the completion of the Company’s fifth stock repurchase program on May 19, 2025.
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.
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, 2025 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, 2024, there were 1,118 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, 2025, there were 1,003 stockholders of record.
Removed
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
Added
The sixth repurchase program has no expiration date. ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

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

44 edited+7 added−22 removed12 unchanged
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.
Biggest changeYear Ended December 31, 2025 2024 Average Balance Interest Average Yield/Cost Average Balance Interest Average Yield/Cost (Dollars in thousands) Assets: Loans (1) $ 1,662,021 $ 80,716 4.86 % $ 1,553,143 $ 70,185 4.52 % Mortgage-backed securities 182,055 5,029 2.76 % 173,691 4,276 2.46 % Other investment securities 150,883 6,342 4.20 % 174,172 6,440 3.70 % FHLB stock 16,853 1,398 8.29 % 18,038 1,756 9.73 % Cash and cash equivalents 47,377 1,821 3.84 % 58,261 2,794 4.80 % Total interest earning assets 2,059,189 95,306 4.63 % 1,977,305 85,451 4.32 % Non-interest earning assets 62,004 59,832 Total assets $ 2,121,193 $ 2,037,137 Liabilities and shareholders' equity: NOW, savings, and money market deposits $ 656,302 9,453 1.44 % $ 610,172 7,803 1.28 % Time deposits 745,261 27,594 3.70 % 665,740 29,027 4.36 % Interest bearing deposits 1,401,563 37,047 2.64 % 1,275,912 36,830 2.89 % FHLB advances 328,840 10,875 3.31 % 348,306 11,071 3.18 % Total interest bearing liabilities 1,730,403 47,922 2.77 % 1,624,218 47,901 2.95 % Non-interest bearing deposits 25,371 24,980 Non-interest bearing other 42,397 42,345 Total liabilities 1,798,171 1,691,543 Total shareholders' equity 323,022 345,594 Total liabilities and shareholders' equity $ 2,121,193 $ 2,037,137 Net interest income $ 47,384 $ 37,550 Net interest rate spread (2) 1.86 % 1.37 % Net interest margin (3) 2.30 % 1.90 % (1) Average loan balances are net of deferred loan fees and costs, premiums and discounts and includes non-accrual loans.
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.
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, 2025, and our results of operations for the years ended December 31, 2025 and 2024.
(2) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. (3) Net interest margin represents net interest income divided by average interest-earning assets. 48 Rate/Volume Table The following table sets forth the effects of changing rates and volumes on net interest income.
(2) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. (3) Net interest margin represents net interest income divided by average interest-earning assets. 50 Rate/Volume Table The following table sets forth the effects of changing rates and volumes on net interest income.
During the year, the increase in cost of interest-bearing liabilities outpaced the increase in yield on interest-earning assets.
During the year, the increase in yield on interest-earning assets outpaced the decrease in cost of interest-bearing liabilities.
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.
However, if a substantial portion of these deposits is not retained, we may utilize additional 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, 2025 was $318.2 million with FHLB.
We intend to continue to provide a broad array of banking and other financial services to retail, commercial and small business customers while growing our presence in our markets and expanding our franchise.
A broad array of banking and other financial services to retail, commercial and small business customers while growing our presence in our markets and expanding our franchise.
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.
The Bank has entered into derivative financial instruments to reduce risk associated with interest rate volatility by aligning repricing terms of assets and liabilities. These derivatives had an aggregate notional amount of $526.0 million and $349.0 million as of December 31, 2025 and 2024, respectively.
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 change was due to a decrease in Federal Home Loan Bank of New York stock as a result of a reduction in FHLB borrowings. Gross Loans . Gross loans held for investment increased $107.1 million, or 6.8%, to $1.69 billion at December 31, 2025 from $1.58 billion at December 31, 2024.
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.
We also had the ability to borrow up to $68.1 million at the FRB’s Discount Window and a $30.0 million available line of credit with a correspondent bank at December 31, 2025. Additionally, 75.9% of the Bank’s investment securities are unencumbered and could be used as collateral for additional borrowing capacity.
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 recorded a provision for credit losses of $2.1 million for the year ended December 31, 2025 compared to a release of provision for credit losses of $1.4 million for the year ended December 31, 2024.
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.
See Note 12, Derivatives, of the Notes to the Consolidated Financial Statements in “Part II, Item 8- Financial Statements.” At December 31, 2025, we had outstanding commitments to originate loans of $24.3 million and unused lines of credit of $151.4 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 $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.
To help manage our interest rate position, the Company had $526.0 million in interest rate hedges at December 31, 2025, with a weighted average duration of 1.8 years. This represents an increase of $177.0 million from December 31, 2024, when interest rate hedges totaled $349.0 million with a weighted average duration of 2.4 years.
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 .
Securities available-for-sale increased $4.2 million, or 1.4%, to $301.2 million at December 31, 2025 from $297.0 million at December 31, 2024 due to a $10.5 million improvement in the unrealized loss position on the portfolio and purchases, partially offset by amortization, maturities, calls and paydowns during the year. Securities Held-To-Maturity .
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.
Certificates of deposit that are scheduled to mature in less than one year from December 31, 2025 totaled $766.3 million, including $275.0 million of brokered time deposits. Management expects, based on historical experience, that a substantial portion of the maturing certificates of deposit to customers will be retained.
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.
The yield on average interest-earning assets increased 31 basis points to 4.63% for the year ended December 31, 2025 from 4.32% for the year ended December 31, 2024, while the cost of average interest-bearing liabilities decreased 18 basis points to 2.77% for the year ended December 31, 2025 from 2.95% for the year ended December 31, 2024.
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 Company has identified the allowance for credit losses on loans and income taxes to be critical accounting policies. 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, 2025 and 2024 General .
The total cost of deposits and total cost of funds increased 90 basis points and 64 basis points, respectively. 46 Provision for Credit Losses .
The total cost of deposits and total cost of funds decreased 23 basis points and 18 basis points, respectively. Provision for Credit Losses .
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.
For the year ended December 31, 2025 net interest income was $47.4 million, an increase of $9.8 million or 26.2%, compared to $37.6 million for same period in 2024. Net interest margin for the year ended December 31, 2025 increased by 40 basis points to 2.30% from 1.90% for the year ended December 31, 2024.
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.
During 2025, the cost of funds decreased by 18 basis points. The cost of time deposits decreased by 66 basis points, while the cost of interest-bearing core deposits and FHLB advances increased by 16 basis points and 13 basis points, respectively. Net Interest Income and Margin.
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 .
Total assets increased $107.3 million to $2.17 billion at December 31, 2025. Cash and cash equivalents . Cash and cash equivalents was $53.1 million at December 31, 2025 and $42.5 million at December 31, 2024. Securities Available-For-Sale .
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 .
The net provision in 2025 consisted of $1.5 million on loans and $653 thousand for commitments and letters of credit, and a release of provision of $7 thousand on held-to-maturity securities. During 2025, credit quality remained strong with a slight rise in non-performing loan balances of $6.3 million, coupled with growth in the loan portfolio of approximately 6.76%.
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%.
Non-interest expense totaled $57.0 million and $52.6 million for the year ended December 31, 2025 and 2024, respectively, an increase of $4.4 million or 8.3%, which includes current period merger-related expenses of $1.3 million.
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.
The yield on loans and securities increased as loans and securities generally were originated at higher rates during the year. Additionally, the average balances of cash and cash equivalents increased $10.9 million, however, the yield on cash and cash equivalents decreased 95 basis points during 2025. Interest Expense.
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.
The following table presents the totals of deposit accounts by account type, at the dates shown below: December 31, 2025 December 31, 2024 (In thousands) Non-interest bearing deposits $ 26,878 $ 26,001 NOW and demand accounts (1) 489,163 369,554 Savings (1) 213,444 240,426 Time deposits 780,390 707,339 Total deposits $ 1,509,875 $ 1,343,320 (1) Money market accounts are included within the NOW and demand accounts and savings captions. 52 Borrowings.
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.
The Company recorded a net loss for the year ended December 31, 2025 of $10.0 million compared to net loss of $11.9 million for the year ended December 31, 2024. The decreased loss was largely driven by an increase of $9.8 million in net interest income offset by an increases in provision for credit losses and non-interest expenses. Interest Income.
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.
Estimates associated with these policies are susceptible to material changes as a result of changes in facts and circumstances. 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.
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.
Customer deposits increased $93.5 thousand and core deposits (defined as non-interest bearing deposits, NOW and demand accounts, and savings accounts) represented 48.3% of total deposits at December 31, 2025 compared to 47.3% at December 31, 2024.
In recent years, we have focused on, and invested heavily in, our technology and infrastructure to improve our delivery channels and create competitive products and services, a strong workforce and an enhanced awareness of our banking brand in our market area.
In recent years, we have focused on, and invested heavily in, our technology and infrastructure to improve our delivery channels and create competitive products and services, a strong workforce and an enhanced awareness of our banking brand in our market area. 47 Critical Accounting Policies Certain of our accounting policies are important to the presentation of our financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain.
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.
In addition, the Company acquired $137.8 million in consumer loans and purchased $46.5 million of conforming residential mortgages in New Jersey during the year. 51 The following table presents loans allocated by loan category: December 31, 2025 December 31, 2024 (In thousands) Residential $ 510,583 $ 518,243 Multifamily 641,027 671,116 Commercial real estate 306,096 259,633 Construction 51,353 85,546 Junior liens 31,008 25,422 Commercial and industrial 24,159 16,311 Consumer and other 126,306 7,211 Total loans $ 1,690,532 $ 1,583,482 The table below presents the balance of non-performing assets on the dates indicated: December 31, 2025 December 31, 2024 (In thousands) Residential $ 5,021 $ 4,377 Multifamily 5,669 — Junior liens 242 149 Commercial and industrial 440 578 Total non-performing assets $ 11,372 $ 5,104 Other Assets.
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.
Interest income increased $9.9 million, or 11.5%, to $95.3 million for the year ended December 31, 2025 from $85.5 million for the year ended December 31, 2024. Interest income from loans and securities increased $10.5 million and $655 thousand, respectively. The average balance of loans increased $108.9 million while the average balance of securities decreased $14.9 million, respectively.
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.
At December 31, 2025 and 2024 the valuation allowance on deferred tax assets was $27.3 million and $25.1 million, respectively. The Company did not record a tax benefit for the loss incurred during 2025 and 2024 because a full valuation allowance was required on its deferred tax assets.
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’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. At December 31, 2025, Blue Foundry Bancorp (unconsolidated) had liquid assets of $23.3 million. The Bank is subject to various regulatory capital requirements administered by the NJDOBI and the FDIC.
Business—Supervision and Regulation—Federal Banking Regulation—Capital Requirements” and Note 19 of the Notes to the Consolidated Financial Statements.
At December 31, 2025, the Bank exceeded all applicable regulatory capital requirements, and was considered “well capitalized” under regulatory guidelines. See “Item 1. Business—Supervision and Regulation—Federal Banking Regulation—Capital Requirements” and Note 19 of the Notes to the Consolidated Financial Statements.
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.
Securities held-to-maturity totaled $27.0 million at December 31, 2025 decreasing $6.1 million from $33.1 million at December 31, 2024, primarily due to paydowns and amortization. FHLB Stock and Other investments. Other investments decreased $1.4 million, or 8.0%, to $16.4 million at December 31, 2025 from $17.8 million at December 31, 2024.
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.
Management believes that our current sources of liquidity are more than sufficient to fulfill our obligations as of December 31, 2025, pursuant to off-balance-sheet arrangements and contractual obligations. 53 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 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.
Interest expense was flat at $47.9 million for the years ended December 31, 2025 and 2024. The average balance of interest-bearing deposits increased $125.7 million as we grew average interest-bearing core deposits (checking, savings and money market accounts) and average time deposits by $46.1 million and $79.5 million, respectively. The average balance of FHLB advances decreased $19.5 million.
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.
Year Ended December 31, 2025 vs. 2024 Increase (Decrease) Due to Volume Rate Net (In thousands) Interest income: Loans $ 4,921 $ 5,593 $ 10,514 Mortgage-backed securities 206 551 757 Other investment securities (861) 763 (98) FHLB stock (115) (243) (358) Cash and cash equivalents (522) (452) (974) Total interest-earning assets $ 3,629 $ 6,212 $ 9,841 Interest expense: Interest-bearing deposits $ 4,057 $ (3,841) $ 216 FHLB advances (619) 423 (196) Total interest-bearing liabilities 3,438 (3,418) 20 Net decrease in net interest income $ 191 $ 9,630 $ 9,821 Comparison of Financial Condition at December 31, 2025 and December 31, 2024 Total Assets.
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%.
Non-interest Income . Non-interest income was relatively stable at $1.7 million for the year ended December 31, 2025 compared to $1.8 million for the year ended December 31, 2024.
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.
We use the same credit policies in making commitments that we do for on-balance sheet instruments.
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.
Consumer loans increased $119.1 million, commercial real estate loans increased $46.5 million, and nonresidential owner occupied loans increased $36.8 million, while construction loans and the multifamily loan portfolio decreased $34.2 million and $30.1 million, respectively. Loan fundings totaled $192.6 million during 2025, including originations of $154.0 million in commercial real estate loans and $17.7 million in commercial and industrial loans.
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.
The increase was primarily driven by increases in compensation and benefits costs of $2.5 million and professional services of $1.5 million, of which $1.1 million are merger related. Income Tax Expense . The Company’s current tax position reflects the previously established full valuation allowance on its deferred tax assets.
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 .
The decrease of $111 thousand was due, in part, to a gain on sale of REO property of $123 thousand recorded in the 2024 period that did not occur in the 2025 period. 48 Non-interest Expense .
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.
See Note 12, Derivatives, of Notes to Consolidated Financial Statements in “Part II, Item 8- Financial Statements.” Total Deposits. Total deposits increased $166.6 million or 12.4% to $1.51 billion at December 31, 2025 compared to $1.34 billion at December 31, 2024.
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.
See Note 12, Derivatives, of Notes to Consolidated Financial Statements in “Part II, Item 8- Financial Statements.” Total Shareholders’ Equity. Total shareholders’ equity decreased by $19.5 million, or 5.9%, to $312.7 million at December 31, 2025 compared to $332.2 million at December 31, 2024.
Removed
As a result, we believe we are well positioned to capitalize on the opportunities available in our market by focusing on the following core strategies. Grow funding sources with an emphasis on core deposits to improve cost and mix and improve our Loan/Deposit ratio.
Added
On July 4, 2025, the “One Big Beautiful Bill” (“OBBB”) was enacted into law. The legislation includes a number of significant tax-related provisions, including changes affecting corporate tax incentives, international tax provisions and various business credits and deductions.
Removed
The Company’s core banking strategy is to target small and medium-sized businesses and to continue the transition to relationship driven business and retail customers to grow the deposit base. The focus on small and medium-sized businesses will seek to attract and develop customers whose businesses are growing.
Added
The Company has evaluated the impact of the OBBB on its financial statements and, based on its assessment, has determined the legislation will not have a material impact. 49 Analysis of Net Interest Income Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities.
Removed
As these customers grow, they can become full-service relationships that provide both lower-cost core deposits and lending opportunities. Blue Foundry’s market area has many small and medium-sized business opportunities to attract, onboard and leverage. Opportunities also exist to gain the banking relationships of business owners, as well as their employees.
Added
Other assets decreased $3.0 million, or 18.4%, to $13.3 million at December 31, 2025 from $16.3 million at December 31, 2024 primarily due to a decrease of $5.2 million in gross unrealized gains on interest rate swaps in the 2025 period partially offset by increases in pending electronic fund transfers at December 31, 2025.
Removed
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.
Added
Time deposits increased $73.1 million, which includes $120.0 million in brokered deposits, bringing the total brokered deposit balance to $275.0 million at December 31, 2025. All brokered deposits are associated with longer-dated swap agreements.
Removed
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.
Added
See Note 12, Derivatives, of Notes to Consolidated Financial Statements in “Part II, Item 8- Financial Statements.” Uninsured and uncollateralized deposits from third-party customers were $196.0 million, or 13% of deposits, at the end of December 31, 2025.
Removed
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.
Added
The Company had $301.0 million of borrowings at December 31, 2025, a decrease of $38.5 million, or 11.3%, from $339.5 million at December 31, 2024. During the year, we replaced maturing borrowings with brokered deposits. Borrowings consisted solely of Federal Home Loan Bank of New York advances; $251.0 million of which are associated with longer-dated swap agreements.
Removed
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.
Added
The decrease was driven by the Company’s repurchase of 1,707,864 of its shares at a cost of $16.3 million and the net loss of $10.0 million. These decreases were partially offset by favorable changes in accumulated other comprehensive income and unallocated ESOP. Off-Balance Sheet.
Removed
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.
Removed
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.
Removed
Management will continue to foster a culture of continuous improvement where each employee is empowered to find ways to make every process more efficient and effective in their daily routines. Benefits include increased employee engagement, customer satisfaction and loyalty and greater efficiency and productivity.
Removed
As the Bank grows, processes must continue to be scaled, allowing for growth, as well as addition of incremental capabilities without requiring similar growth in infrastructure or staffing. 45 Leveraging technology to enable revenue growth will continue to be a strategic focus.
Removed
The Bank will continue to explore and evaluate technology offerings from FinTechs to identify partnering opportunities to enhance systems, infrastructure, processes, and/or organizational structure to improve delivery channels or ensure regulatory compliance. The Company recognizes that technology must be nimble and quick, and touch-points must be customer friendly.
Removed
The Bank also wants to ensure that all system options and capabilities are utilized to more efficiently and effectively make better use of all resources.
Removed
Critical Accounting Policies Certain of our accounting policies are important to the presentation of our financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Estimates associated with these policies are susceptible to material changes as a result of changes in facts and circumstances.
Removed
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.
Removed
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 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
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
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
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.
Removed
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
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.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+1 added−0 removed14 unchanged
Biggest changeComputations 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.
Biggest changeIn calculating changes in EVE, for the various scenarios we forecast loan and securities prepayment rates and deposit decay rates. 54 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.
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%.
The following table sets forth, at December 31, 2025, 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%.
In addition, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our NPV and will differ from actual results. 54
In addition, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our NPV and will differ from actual results. 55
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.
These derivatives had an aggregate notional amount of $526.0 million as of December 31, 2025. 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.
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.
In the event of an instantaneous 100 basis point decrease in interest rates, the Bank would experience a 13.5% increase in NPV. Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements.
An increase in interest rates from 3% to 4% would mean, for example, a 100-basis point increase in the “Basis Point Change in Interest Rates” column below.
A basis point equals one-hundredth of one percent, and 100 basis points equals one percent. An increase in interest rates from 3% to 4% would mean, for example, a 100-basis point increase in the “Basis Point Change in Interest Rates” column below.
By 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.
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 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.
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.
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.
Net Interest Income Change in Interest Rates (basis points) Amount Change Percent (Dollars in thousands) +200 $ 54,941 2,005 3.8 % +100 54,033 1,097 2.1 0 52,936 — — -100 52,323 (613) (1.2) -200 51,562 (1,374) (2.6) The following table sets forth, at December 31, 2025, 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 $ 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.
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 $ 165,765 $ (65,195) (28.2) % 7.7 % (3.0) +100 198,299 (32,661) (14.1) 9.2 (1.5) 0 230,960 — — 10.7 — -100 262,204 31,244 13.5 12.1 1.4 -200 295,581 64,620 28.0 13.6 3.0 The table above indicates that at December 31, 2025, in the event of an instantaneous 100 basis point increase in interest rates, the Bank would experience a 14.1% decrease in NPV.
Added
By following these strategies, we believe that we are better positioned to react to increases and decreases in market interest rates.

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