Blue Foundry Bancorp's Q4 2024: Key Contradictions in Loan Yields, Deposit Costs, and Credit Quality

These are the key contradictions discussed in Blue Foundry Bancorp's latest 2024Q4 earnings call, specifically including: Loan Yields and Deposit Costs, Loan Growth Expectations, and Credit Quality Assessment:



Loan and Deposit Growth:
- Blue Foundry Bancorp reported a $32 million increase in loans, predominantly in commercial portfolios, and a $25 million growth in deposits, with a 17% increase in non-interest bearing accounts.
- This growth was driven by the company's strategic focus on attracting full banking relationships with small to medium-sized businesses in its marketplace.

Net Interest Margin Improvement:
- The company experienced a seven basis point improvement in net interest margin, with an increase in net interest income by $386,000.
- This improvement was due to increases in loan yields and decreases in deposit and borrowing costs, marking a potential inflection point in the company's financial trajectory.

Capital Strength and Liquidity:
- Blue Foundry maintained strong capital levels, with tangible equity to tangible common assets at 16.1%, and robust liquidity, including $408 million in untapped borrowing capacity.
- This robust financial position is attributed to conservative capital management and a low concentration risk in deposits.

Expenses and Compensation:
- Expenses improved by $386,000, with a decrease in compensation expenses primarily due to lower variable compensation expenses.
- The company expects expenses to return to the mid-to-high $13 million range in 2025, as bonus accruals reset and normal inflationary factors take effect.