Blue Foundry Bancorp (BLFY -1.38%), a New Jersey-based community bank, released its earnings for Q2 2025 on July 30, 2025, reporting continued incremental improvement in core results. The company posted a diluted loss per share of $(0.10) (GAAP), narrower than the $(0.12) GAAP anticipated by analysts and smaller than last year’s $(0.11) GAAP loss. Results reflect outperformance on both the top and bottom line (GAAP), with expanding margins and progress in loan and deposit growth. Despite these gains, the period remained unprofitable, but the overall assessment points to slow, steady progress in key operating areas.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS – Diluted | $(0.10) | $(0.12) | $(0.11) | -9.1 % |
| Revenue | $23.4 million | $11.8 million | $10.1 million | 131.7 % |
| Net Interest Margin | 2.28 % | 1.96 % | 0.32 pp | |
| Non-Interest Expense | $13.5 million | $13.2 million | 2.3 % | |
| Tangible Book Value per Share | $14.87 | $14.69 | 1.2 % |
Source: Analyst estimates for the quarter provided by FactSet.
Company Overview and Key Focus Areas
Blue Foundry Bancorp operates as a community-focused bank, providing personal and commercial banking services, including loans and deposit products, mainly in northern New Jersey. It is known for holding less than 1% of bank deposits in a highly competitive and affluent region, serving individuals and small to midsize businesses.
Recently, the company has prioritized broadening its loan portfolio to move beyond its traditional concentration in residential and multifamily real estate, shifting towards commercial real estate, commercial & industrial, and consumer loans. Key factors for success include effective portfolio diversification, disciplined cost control, maintaining strong asset quality, and strategic capital management. Adaptation to regulatory requirements and sensitivity to interest rate changes are also essential to ongoing performance.
Quarter in Detail: Notable Trends and Developments
The earnings release highlights gradual progress across several important metrics. Net interest margin, a core profitability measure for banks showing the difference between interest earned on loans and paid for deposits, rose to 2.28% in Q2 2025. This represents a 12 basis point improvement from the prior quarter (Q2 2025 vs Q1 2025). Yield on average interest-earning assets ticked up, while the cost of average interest-bearing liabilities dropped, supporting the margin’s upward movement.
This improvement reflected both increased loan balances and active management of deposit funding costs. Quarterly loan growth of $47.4 million brought total loans to $1.67 billion as of Q2 2025, including marked increases in commercial real estate and construction lending in Q1 2025. The residential and multifamily portfolios shrank or stayed flat, while consumer loans rose dramatically during the first six months of 2025 due to purchases of unsecured credit-enhanced assets—a strategy delivering higher yields and supported by credit reserves to offset risk.
Efficiency ratio, which compares operating costs to total income and serves as a measure of bank productivity, remained elevated at 112.4% (non-GAAP). While this marks an improvement from the previous year’s 130.7% efficiency ratio (non-GAAP), it remains well above the typical industry threshold of 65%. Non-interest expense was $13.5 million in the second quarter of 2025 compared to $13.2 million in the second quarter of 2024, mainly due to increased staff and marketing spending. Efforts to control costs continue, but progress on improving the ratio is gradual, with management highlighting branch staff, technology, and variable compensation as ongoing contributors to expense levels.
Non-performing loans increased to $6.3 million, or 0.38% of total loans at June 30, 2025, compared to $5.1 million, or 0.33% of total loans at December 31, 2024, an important achievement as the company moves into new, higher-yield loan segments. Net recoveries in the quarter signaled limited realized credit losses, and the allowance for credit losses was 0.80% of loan balances as of Q2 2025, with reserves covering over twice the amount of non-performing loans. Provision for credit losses of $463 thousand in Q2 2025 was primarily due to an increase in the provision for off-balance-sheet commitments, with a net provision for the allowance for credit losses for loans of $147 thousand. Net charge-offs were $11 thousand for the six months ended June 30, 2025.
Loan Mix, Deposits, and Capital Position
The company’s focus on business lending and higher-yield products is evident in its portfolio composition at quarter’s end. Commercial real estate loans climbed to $293.2 million as of June 30, 2025, while Construction lending (GAAP) increased to $97.2 million. Consumer and other loans surged past $83.7 million as of June 30, 2025, primarily through external portfolio purchases that include built-in credit reserves—a risk-mitigation step that lowers potential defaults. In contrast, the multifamily segment shrank by $37.3 million over the first half of fiscal 2025, underlining the ongoing strategic rebalancing. CEO James D. Nesci stated, “We continue to execute on our strategy of diversifying our loan portfolio, emphasizing asset classes that provide higher yields and better risk-adjusted returns.”
Deposit trends were favorable for the quarter. Total deposits rose 2.1% to $1.42 billion from the prior quarter, with core deposits—which generally carry lower interest expense—increased modestly to 48.4% of total deposits. Brokered deposits, sourced through third-party channels to help manage funding costs and duration, grew notably to $225.0 million as of June 30, 2025, offsetting runoff in retail time deposits. management has the capacity to extend funding maturity and manage costs through these instruments, obtaining brokered funds for up to three years at 3.75%. Non-interest bearing checking deposits remain very low at less than 2 % of the total.
On the capital side, the company retained a strong equity position. Tangible equity stood at 15.10% of tangible assets (non-GAAP), comfortably above regulatory benchmarks. Tangible book value per share (non-GAAP) rose to $14.87, helped by share repurchases—406,391 shares were bought back at an average price of $9.42 during Q2 2025. As of June 30, 2025, the Company had $256.1 million of additional borrowing capacity at the FHLB, $110.3 million in secured lines at the Federal Reserve Bank, and $30.0 million of other unsecured lines of credit. The coverage of uninsured or uncollateralized deposits remained healthy at 12%.
The period saw no material, one-time financial events and no reported changes to dividend policies. BLFY does not currently pay a dividend.
Looking Ahead
Management did not issue explicit forward financial guidance for the coming quarter or the rest of fiscal 2025. In public comments, executives pointed to a continued focus on net interest margin expansion, gradual revenue growth, and tight expense control. They cited scheduled repricing of lower-yielding multifamily loans in the first half of 2026 as a potential margin driver, with any benefit from federal interest rate cuts likely to be offset by changes in deposit pricing and yielding assets.
For upcoming periods, further details on organic loan growth versus purchased balances, continued efforts to increase core deposits, and any strategic adjustments in funding sources will be central to assessing longer-term improvement. The company’s capital strength, steady asset quality, and persistent efforts at loan and deposit diversification set the baseline for the next phase of execution and improvement.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
