blue-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-40619

BLUE FOUNDRY BANCORP

(Exact name of the registrant as specified in its charter)

Delaware

86-2831373

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification Number)

19 Park Avenue,

Rutherford,

New Jersey

07070

(Address of principal executive offices)

(Zip Code)

(201) 939-5000

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	BLFY	The NASDAQ Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging Growth Company

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of May 7, 2025 there were 28,522,500 shares issued and 21,720,825 shares outstanding of the Registrant’s Common Stock, par value $0.01 per share.

BLUE FOUNDRY BANCORP

FORM 10-Q

Index


		PAGE
PART I.	FINANCIAL INFORMATION	3
ITEM 1.	FINANCIAL STATEMENTS	3
	CONSOLIDATED BALANCE SHEETS	3
	CONSOLIDATED STATEMENTS OF OPERATIONS	4
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS	5

	CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY	6
	CONSOLIDATED STATEMENTS OF CASH FLOWS	7
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	9
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	36
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	40
ITEM 4.	CONTROLS AND PROCEDURES	43
PART II.	OTHER INFORMATION	43
ITEM 1.	LEGAL PROCEEDINGS	43
ITEM 1A.	RISK FACTORS	43
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES. USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES	44
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	44
ITEM 4.	MINE SAFETY DISCLOSURES	44
ITEM 5.	OTHER INFORMATION	44
ITEM 6.	EXHIBITS	45

Part I Financial Information

ITEM 1. FINANCIAL STATEMENTS

BLUE FOUNDRY BANCORP

Consolidated Balance Sheets


	March 31, 2025		December 31, 2024
	(Unaudited)		(Audited)
	(In thousands, except share data )
ASSETS
Cash and cash equivalents	$	46,220	$	42,502
Securities available-for-sale, at fair value	286,620		297,028


Securities held-to-maturity, net (fair value of $29,618 at March 31, 2025 and $29,995 at December 31, 2024, and allowance for credit losses of $97 at March 31, 2025 and $98 at December 31, 2024)	32,038		33,076
FHLB stock and other investments	17,605		17,791

Loans receivable, net of allowance for credit losses of $13,152 at March 31, 2025 and $12,965 at December 31, 2024	1,612,503		1,570,517

Interest and dividends receivable	8,746		8,014
Premises and equipment, net	28,805		29,486
Right-of-use assets	22,778		23,470

Bank owned life insurance	22,638		22,519
Other assets	14,253		16,280
Total assets	$	2,092,206	$	2,060,683
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits	$	1,387,241	$	1,343,320
Advances from the Federal Home Loan Bank	334,000		339,500
Advances by borrowers for taxes and insurance	9,743		9,356
Lease liabilities	24,490		25,168
Other liabilities	10,069		11,141
Total liabilities	1,765,543		1,728,485
Shareholders’ equity
Preferred stock, $0.01 par value, 10,000,000 authorized: none issued	—		—
Common stock $0.01 par value; 70,000,000 shares authorized; 28,522,500 shares issued at March 31, 2025 and December 31, 2024; 22,047,649 and 22,522,626 shares outstanding at March 31, 2025 and December 31, 2024, respectively	285		285
Additional paid-in capital	277,895		277,304
Retained earnings	149,737		152,429
Treasury stock, at cost: 6,474,851 and 5,999,874 shares at March 31, 2025 and December 31, 2024, respectively	(64,243)		(59,699)
Unallocated common shares held by Employee Stock Ownership Plan	(18,939)		(19,167)
Accumulated other comprehensive loss	(18,072)		(18,954)
Total shareholders’ equity	326,663		332,198
Total liabilities and shareholders’ equity	$	2,092,206	$	2,060,683

See accompanying notes to the consolidated financial statements.

BLUE FOUNDRY BANCORP

Consolidated Statements of Operations

(Unaudited)


	Three Months Ended March 31,
			2025		2024
		(Dollars in thousands, except share data)
Interest and dividend income:
Loans			$	18,892	$	17,192
Taxable investment income			3,785		3,614
Non-taxable investment income			36		36
Total interest income			22,713		20,842
Interest expense:
Deposits			9,026		8,413
Borrowed funds			2,943		3,012
Total interest expense			11,969		11,425
Net interest income			10,744		9,417
Provision for (release of) credit losses			201		(535)
Net interest income after provision for (release of) credit losses			10,543		9,952
Non-interest income:
Fees and service charges			243		329

Gain on sale of loans			—		36


Other income			151		86
Total non-interest income			394		451
Non-interest expense:
Compensation and benefits			7,838		7,549

Occupancy and equipment			2,303		2,192

Data processing			1,487		1,387

Advertising			67		72
Professional services			699		730


Federal deposit insurance premiums			223		199

Other expense			1,012		1,113
Total non-interest expenses			13,629		13,242
Loss before income tax expense			(2,692)		(2,839)
Income tax expense			—		—
Net loss			$	(2,692)	$	(2,839)
Basic loss per share			$	(0.13)	$	(0.13)
Diluted loss per share			$	(0.13)	$	(0.13)
Weighted average shares outstanding - basic			20,404,941		22,095,260
Weighted average shares outstanding - diluted (1)			20,404,941		22,095,260

(1) The assumed vesting of outstanding restricted stock units had an antidilutive effect on diluted earnings per share due to the Company’s net loss for the 2025 and 2024 periods.

See accompanying notes to the consolidated financial statements.

BLUE FOUNDRY BANCORP

Consolidated Statements of Comprehensive Loss

(Unaudited)


	Three Months Ended March 31,
			2025		2024
		(In thousands)
Net loss			$	(2,692)	$	(2,839)
Other comprehensive income (loss), net of tax (1):
Unrealized gain (loss) on securities available-for-sale:
Unrealized gain (loss) arising during the period			4,083		(1,109)

			4,083		(1,109)
Unrealized (loss) gain on cash flow hedge:
Unrealized (loss) gain arising during the period			(4,347)		1,164
Reclassification adjustment for gain included in net loss			1,141		1,649
			(3,206)		2,813
Post-retirement plans:

Reclassification adjustment for amortization of:

Net actuarial gain			5		1
			5		1
Total other comprehensive income, net of tax (1)			882		1,705
Comprehensive loss			$	(1,810)	$	(1,134)

(1) Reflects deferred tax valuation allowance.

See accompanying notes to the consolidated financial statements.

BLUE FOUNDRY BANCORP

Consolidated Statements of Changes in Shareholders’ Equity

Three Months Ended March 31, 2024 and 2025

(Unaudited)


	Common Stock			Additional Paid-In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Unallocated Common Stock Held by ESOP		Total Shareholders’ Equity
	Shares	Par Value
	(In thousands, except share data)
Balance at December 31, 2023	24,509,950	$	285	$	273,991	$	164,340	$	(40,016)	$	(22,880)	$	(20,080)	$	355,640


Net loss	—	—		—		(2,839)		—		—		—		(2,839)
Other comprehensive loss	—	—		—		—		—		1,705		—		1,705
Purchase of Treasury stock	(556,353)	—		—		—		(5,332)		—		—		(5,332)
Treasury stock allocated to restricted stock plan	5,291	—		(431)		—		418		—		—		(13)
Compensation cost for stock options and restricted stock	—	—		781		—		—		—		—		781
ESOP shares committed to be released (22,818 shares)	—	—		(14)		—		—		—		228		214
Balance at March 31, 2024	23,958,888	$	285	$	274,327	$	161,501	$	(44,930)	$	(21,175)	$	(19,852)	$	350,156

Balance at December 31, 2024	22,522,626	285		$	277,304	$	152,429	$	(59,699)	$	(18,954)	$	(19,167)	$	332,198


Net loss	—	—		—		(2,692)		—		—		—		(2,692)
Other comprehensive income	—	—		—		—		—		882		—		882
Purchase of Treasury stock	(493,194)	—		—		—		(4,754)		—		—		(4,754)
Treasury stock allocated to restricted stock plan, net of forfeitures	18,217	—		(210)		—		210		—		—		—
Compensation cost for stock options and restricted stock	—	—		811		—		—		—		—		811
ESOP shares committed to be released (22,818 shares)	—	—		(10)		—		—		—		228		218
Balance at March 31, 2025	22,047,649	$	285	$	277,895	$	149,737	$	(64,243)	$	(18,072)	$	(18,939)	$	326,663

See accompanying notes to the consolidated financial statements.

BLUE FOUNDRY BANCORP

Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended March 31,
	2025		2024
	(In thousands)
Cash flows from operating activities
Net loss	$	(2,692)	$	(2,839)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of premises and equipment	742		788
Amortization (accretion) of:
Right-of-use asset	692		718
Deferred loan fees, costs, and discounts, net	148		40
Premiums and discounts on securities	(87)		196




Provision for (release of) credit losses	201		(535)

Proceeds from sales of loans held for sale	—		486
Gains on sale of loans, net	—		(36)
Origination of loans held for sale	—		(450)



Increase in bank owned life insurance cash surrender value	(119)		(119)


ESOP and stock-based compensation expense	1,029		995

Increase in interest and dividends receivable	(732)		(406)
Increase in other assets	(644)		(1,731)
Decrease in other liabilities	(1,653)		(1,266)
Change in lease liability	(678)		(696)
Net cash used in operating activities	(3,793)		(4,855)
Cash flows from investing activities
Net change in loans receivable	(791)		6,504
Purchases of residential and consumer loans	(41,546)		—






Proceeds from sales and calls of securities available-for-sale	3,999		—
Principal payments and maturities on securities available-for-sale	10,647		17,325
Principal payments and maturities on securities held-to-maturity	971		—
Purchases of other investments	(50)		—

Purchase of Federal Home Loan Bank stock	(33,975)		(6,818)
Redemption of Federal Home Loan Bank stock	34,223		9,293


Purchases of premises and equipment	(61)		(9)
Net cash (used in) provided by investing activities	(26,583)		26,295
Cash flows from financing activities
Net increase in deposits	43,921		46,280

Proceeds from advances from Federal Home Loan Bank	640,000		354,000
Repayments of advances from Federal Home Loan Bank	(645,500)		(409,000)
Net increase in advances by borrowers for taxes and insurance	387		439
Purchase of treasury stock	(4,714)		(5,431)


Net cash provided by (used in) financing activities	34,094		(13,712)
Net increase in cash and cash equivalents	3,718		7,728
Cash and cash equivalents at beginning of period	42,502		46,025
Cash and cash equivalents at end of period	$	46,220	$	53,753

See accompanying notes to the consolidated financial statements.

BLUE FOUNDRY BANCORP

Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended March 31,
	2025		2024
	(In thousands)
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest	$	11,443	$	11,694
Taxes	44		17

See accompanying notes to the consolidated financial statements.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Blue Foundry Bancorp (the “Company”), and its wholly owned subsidiary, Blue Foundry Bank (the “Bank”), and the Bank’s wholly owned subsidiaries, TrackView LLC and Blue Foundry Investment Company (collectively, the “Company”). All intercompany accounts and transactions have been eliminated in consolidation. Blue Foundry Bancorp owns 100% of the common stock of Blue Foundry Bank.

Segment Reporting

The Company operates as a single operating segment for financial reporting purposes.

Basis of Financial Statement Presentation

The consolidated financial statements of the Company have been prepared in conformity with U.S. generally accepted accounting principles. Certain information and note disclosures usually included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for the preparation of the Quarterly Reports on Form 10-Q and with Regulation S-X. The interim unaudited consolidated financial statements reflect all normal and recurring adjustments, which are, in the opinion of management, considered necessary for a fair presentation of the consolidated balance sheets and the consolidated statements of income for the periods presented. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheets and revenues and expenses for the period. Actual results could differ from those estimates. Some items in the prior year financial statements may be reclassified to conform to the current presentation. The results of operations and other data presented for the three months ended March 31, 2025 are not necessarily indicative of the results of operations that may be expected for subsequent periods or the full year results. These financial statements should be read in conjunction with the annual financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed on March 27, 2025.

The accounting policies of the Company conform to U.S. GAAP and to general practice within the financial services industry. A discussion of these policies can be found in Note 1, Summary of Significant Accounting Policies, included in the Company’s 2024 Annual Report on Form 10-K. Except for the below, there have been no changes to the Company’s significant accounting policies since December 31, 2024.

Accounting Standards Not Yet Adopted

Accounting Standards Update (“ASU”) No. 2024-03 In November 2024, the Financial Accounting Standards Board (“the FASB”) issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-03) (“ASU 2024-03”) Disaggregation of Income Statement Expenses, which requires entities to disclose specified information about certain costs and expenses in the notes to financial statements at each interim and annual reporting period, including the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion included in each relevant expense caption. For the employee compensation category, bank holding companies may continue to present compensation expense on the face of the income statement in accordance with Regulation S-X Rule 210.9-04. A qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively are also required to be disclosed. In addition, entities must disclose the total amount of selling expenses and, in annual reporting periods, their definition of selling expenses.

In January 2025, the FASB issued ASU 2025-01 Clarifying the Effective Date of ASU 2024-03. The Update is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments may be applied on either a prospective or retrospective basis. The Company is currently evaluating this guidance to determine the impact of ASU 2024-03 on its consolidated financial statements and footnote disclosures; however, the impact is not expected to be material.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

As an “emerging growth company” as defined in Title 1 of the Jumpstart Our Business Startups (“JOBS”) Act, the Company elected to use the extended transition period to delay the adoption of new or reissued accounting pronouncements applicable to public companies until such pronouncements were made applicable to private companies.

NOTE 2 – SECURITIES

The amortized cost of securities available-for-sale and their estimated fair values at March 31, 2025 and December 31, 2024 are as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In thousands)
March 31, 2025
U.S. Treasury notes	$	41,643	$	11	$	(991)	$	40,663
Corporate bonds	71,093		453		(1,839)		69,707
U.S. Government agency obligations	799		—		(53)		746
Obligations issued by U.S. states and their political subdivisions	6,340		—		(330)		6,010
Mortgage-backed securities:
Residential	167,355		213		(19,788)		147,780
Multifamily	18,507		—		(848)		17,659
Asset-backed securities	4,226		—		(171)		4,055
Total	$	309,963	$	677	$	(24,020)	$	286,620


December 31, 2024
U.S. Treasury notes	$	41,259	$	40	$	(1,160)	$	40,139
Corporate bonds	75,122		389		(2,357)		73,154
U.S. Government agency obligations	874		—		(62)		812
Obligations issued by U.S. states and their political subdivisions	6,357		—		(333)		6,024
Mortgage-backed securities:
Residential	171,754		9		(22,722)		149,041
Multifamily	19,776		—		(1,033)		18,743
Asset-backed securities	9,312		—		(197)		9,115
Total	$	324,454	$	438	$	(27,864)	$	297,028

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The amortized cost of securities held-to-maturity, allowance for credit losses and their estimated fair values at March 31, 2025 and December 31, 2024, are as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In thousands)
March 31, 2025
Corporate bonds	$	18,600	$	—	$	(1,685)	$	16,915

Asset-backed securities	13,535		—		(832)		12,703
Total	$	32,135	$	—	$	(2,517)	$	29,618
Allowance for credit loss	(97)
	$	32,038
December 31, 2024
Corporate bonds	$	18,600	$	—	$	(2,186)	$	16,414
Asset-backed securities	14,574		—		(993)		13,581
Total	$	33,174	$	—	$	(3,179)	$	29,995
Allowance for credit loss	(98)
	$	33,076

At March 31, 2025 and December 31, 2024, the allowance for credit losses on securities held-to-maturity totaled $97 thousand and $98 thousand, respectively, and related to the corporate bonds. No loss is expected on the asset-backed securities.

Securities pledged at March 31, 2025 and December 31, 2024 had a carrying amount of $119.6 million and $119.8 million, respectively, and were pledged to our credit line with the Federal Reserve Bank and to secure public deposits.

The amortized cost and fair value of debt securities are shown below by contractual maturity as of March 31, 2025. Expected maturities on mortgage and asset-backed securities generally exceed 20 years; however, they may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without penalties.


	Amortized Cost (1)		Estimated Fair Value
	(In thousands)
Available-for-sale
Due in one year or less	$	50,677	$	50,558
Due from one year to five years	18,626		18,494
Due from five to ten years	49,582		47,306
Due after ten years	990		768
Mortgage-backed and asset-backed securities	190,088		169,494
Total	$	309,963	$	286,620
Held-to-maturity


Due from five to ten years	18,600		16,915

Mortgage-backed and asset-backed securities	13,535		12,703
Total	$	32,135	$	29,618

(1) Excludes the allowance for credit losses on held-to-maturity securities at March 31, 2025.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Credit Quality Indicators

Credit ratings are a key measure for estimating the probability of a bond’s default and for monitoring credit quality on an on-going basis. For bonds other than U.S. Treasuries and bonds issued or guaranteed by U.S. government agencies, credit ratings issued by one or more nationally recognized statistical rating organization are considered in conjunction with an assessment by the Company’s management. Investment grade reflects a credit quality of BBB- or above. None of the Company’s securities are on non-accrual status, nor are any past due.

The table below indicates the credit profile of the Company’s debt securities held-to-maturity at amortized cost for the periods shown.


March 31, 2025	AAA		A1		BBB+		BBB		BBB-		Total
	(In thousands)

Corporate bonds	$	—	$	—	$	1,600	$	16,000	$	1,000	$	18,600





Asset-backed securities	8,635		4,900		—		—		—		13,535
Total held-to-maturity	$	8,635	$	4,900	$	1,600	$	16,000	$	1,000	$	32,135


December 31, 2024	AAA		A1		BBB+		BBB		BBB-		Total
	(In thousands)

Corporate bonds	$	—	$	—	$	1,600	$	16,000	$	1,000	$	18,600





Asset-backed securities	8,677		5,897		—		—		—		14,574
Total held-to-maturity	$	8,677	$	5,897	$	1,600	$	16,000	$	1,000	$	33,174

At March 31, 2025 and December 31, 2024, there was one security with a value of $2.0 million included in the BBB rating that had a split rating.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following tables summarize available-for-sale securities with unrealized losses at March 31, 2025 and December 31, 2024, aggregated by major security type and length of time in a continuous loss position.


	Less than 12 Months				12 Months or More				Total
	Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Number of Securities	Unrealized Losses		Estimated Fair Value
	(Dollars in thousands)
March 31, 2025
U.S. Treasury notes	$	(1)	$	24,767	$	(990)	$	5,948	3	$	(991)	$	30,715
Corporate bonds	(24)		1,976		(1,815)		40,784		19	(1,839)		42,760
U.S. Government agency obligations	—		—		(53)		746		2	(53)		746
Obligations issued by U.S. states and their political subdivisions	—		—		(330)		6,010		5	(330)		6,010
Mortgage-backed securities:
Residential	(23)		9,866		(19,765)		111,948		43	(19,788)		121,814
Multifamily	(46)		10,027		(802)		7,632		5	(848)		17,659
Asset-backed securities	—		—		(171)		4,055		2	(171)		4,055
Total	$	(94)	$	46,636	$	(23,926)	$	177,123	79	$	(24,020)	$	223,759





December 31, 2024
U.S. Treasury notes	$	—	$	—	$	(1,160)	$	5,776	1	$	(1,160)	$	5,776
Corporate bonds	—		—		(2,357)		39,286		19	(2,357)		39,286
U.S. Government agency obligations	—		—		(62)		812		2	(62)		812
Obligations issued by U.S. states and their political subdivisions	—		—		(333)		6,024		5	(333)		6,024
Mortgage-backed securities:
Residential	(64)		18,888		(22,658)		112,396		47	(22,722)		131,284
Multifamily	(56)		11,237		(977)		7,506		5	(1,033)		18,743
Asset-backed securities	—		—		(197)		4,115		2	(197)		4,115
Total	$	(120)	$	30,125	$	(27,744)	$	175,915	81	$	(27,864)	$	206,040

Of the available-for-sale securities in an unrealized loss position at March 31, 2025, 53 were comprised of U.S. Government agency obligations, Treasury notes, and mortgage-backed securities. These securities were all issued by U.S. Government-sponsored entities and agencies, which the government has affirmed its commitment to support. Corporate bonds, obligations issued by U.S. states and their political subdivisions and asset-backed securities in an unrealized loss position all experienced a decline in fair value, which is attributable to changes in interest rates and liquidity, not credit quality. The Company does not intend to sell these securities, nor does it foresee being required to sell them before the anticipated recovery or maturity.

The following tables summarizes held-to-maturity securities with unrealized losses at March 31, 2025 and December 31, 2024, aggregated by major security type and length of time in a continuous loss position.


	Less than 12 Months				12 Months or More				Total
	Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Number of Securities	Unrealized Losses		Estimated Fair Value
	(Dollars in thousands)
March 31, 2025
Corporate Bonds	(150)		2,850		(1,535)		14,065		9	(1,685)		16,915
Asset-backed securities	—		—		(832)		12,703		2	(832)		12,703
Total	$	(150)	$	2,850	$	(2,367)	$	26,768	11	$	(2,517)	$	29,618

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


	Less than 12 Months				12 Months or More				Total
	Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Number of Securities	Unrealized Losses		Estimated Fair Value
	(Dollars in thousands)
December 31, 2024
Corporate Bonds	—		—		(2,186)		16,414		9	(2,186)		16,414
Asset-backed securities	—		—		(993)		13,581		2	(993)		13,581
Total	$	—	$	—	$	(3,179)	$	29,995	11	$	(3,179)	$	29,995

The held-to-maturity securities in an unrealized loss position at March 31, 2025, are corporate bonds and asset-backed securities. Unrealized losses are attributable to changes in interest rates and liquidity, not credit quality. The Company also does not intend to sell these securities, nor does it foresee being required to sell them before the anticipated recovery or maturity.

NOTE 3 – LOANS RECEIVABLE

A summary of loans receivable, net at March 31, 2025 and December 31, 2024, follows:


	March 31, 2025		December 31, 2024
	(In thousands)
Residential	$	512,793	$	518,243
Multifamily	645,399		671,116
Commercial real estate	288,151		259,633
Construction	92,813		85,546
Junior liens	26,902		25,422
Commercial and industrial	18,079		16,311
Consumer and other	41,518		7,211
Total loans	1,625,655		1,583,482


Less: Allowance for credit losses (1)	13,152		12,965
Loans receivable, net	$	1,612,503	$	1,570,517

(1) For more information, see Note 4 - Allowance for Credit Losses.

Loans are recorded at amortized cost, which includes principal balance, net deferred fees or costs, premiums and discounts. The Company elected to exclude accrued interest receivable from amortized cost. Accrued interest receivable is reported separately in the consolidated balance sheets and totaled $7.2 million and $6.7 million at March 31, 2025 and December 31, 2024, respectively. Loan origination fees and certain direct loan origination costs are deferred and the net fee or cost is recognized in interest income as an adjustment of yield. At March 31, 2025 and December 31, 2024, net deferred loan fees totaled $2.2 million and $2.0 million, respectively.

The portfolio classes in the above table have unique risk characteristics with respect to credit quality:

•Payment on multifamily and commercial real estate mortgages is driven principally by operating results of the managed properties or underlying business and secondarily by the sale or refinance of such properties. Both primary and secondary sources of repayment and the value of the properties in liquidation, may be affected to a greater extent by adverse conditions in the real estate market or the economy in general.

•Properties underlying construction loans often do not generate sufficient cash flows to service debt and thus repayment is subject to the ability of the borrower and, if applicable, guarantors, to complete development or construction of the property and carry the project, often for extended periods of time. As a result, the performance of these loans is contingent upon future events whose probability at the time of origination is uncertain.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

•Commercial and industrial (“C&I”) loans include C&I revolving lines of credit, term loans, SBA 7a loans and to a lesser extent, Paycheck Protection Program (“PPP”) loans. Payments on C&I loans are driven principally by the cash flows of the businesses and secondarily by the sale or refinance of any collateral securing the loans. Both the cash flow and value of the collateral in liquidation may be affected by adverse general economic conditions.

•The ability of borrowers to service debt in the residential, junior liens and consumer loan portfolios is generally subject to personal income which may be impacted by general economic conditions, such as increased unemployment levels. These loans are predominately collateralized by first and second liens on single family properties. If a borrower cannot maintain the loan, the Company’s ability to recover against the collateral in sufficient amount and in a timely manner may be significantly influenced by market, legal and regulatory conditions.

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the quality and realizable value of collateral, if any, and the ability of borrowers to service their debts such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans by credit risk. This analysis is performed whenever credit is extended, renewed, or modified, or when an observable event occurs indicating a potential decline in credit quality, and no less than annually for large balance loans. The Company used the following definitions for risk ratings for loan classification:

Pass – Loans classified as pass are loans performing under the original contractual terms, do not currently pose any identified risk and can range from the highest to pass/watch quality, depending on the degree of potential risk.

Special Mention – Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the Company’s credit position at some future date.

Substandard – Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor, or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the repayment and liquidation of the debt. They are characterized by a distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable.

Loss – Assets classified as loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the asset even though partial recovery may be effected in the future.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the risk category of loans by class of loan and vintage as of March 31, 2025:


	Term Loans by Origination Year
	2025		2024		2023		2022		2021		Pre-2021		Revolving Loans		Total
	(in thousands)
Residential
Pass	$	8,754	$	24,366	$	12,828	$	88,827	$	100,352	$	272,350	$	—	$	507,477
Special mention	—		—		—		—		—		193		—		193
Substandard	—		—		—		306		—		4,817		—		5,123


Total	8,754		24,366		12,828		89,133		100,352		277,360		—		512,793
Multifamily
Pass	—		15,652		16,873		269,931		127,001		210,169		—		639,626
Special mention	—		—		—		5,339		—		324		—		5,663
Substandard	—		—		—		—		—		110		—		110


Total	—		15,652		16,873		275,270		127,001		210,603		—		645,399
Commercial real estate
Pass	33,386		35,770		26,644		115,239		14,376		61,928		—		287,343
Special mention	—		—		—		—		—		808		—		808



Total	33,386		35,770		26,644		115,239		14,376		62,736		—		288,151
Construction
Pass	2,865		9,673		26,427		36,348		17,500		—		—		92,813




Total	2,865		9,673		26,427		36,348		17,500		—		—		92,813
Junior liens
Pass	964		6,514		4,928		5,249		1,240		7,861		—		26,756

Substandard	—		—		—		—		—		146		—		146


Total	964		6,514		4,928		5,249		1,240		8,007		—		26,902
Commercial and industrial
Pass	1,910		7,452		5,558		92		2,530		—		—		17,542

Substandard	—		—		523		—		14		—		—		537


Total	1,910		7,452		6,081		92		2,544		—		—		18,079
Consumer and other
Pass	34,834		6,660		—		—		—		—		24		41,518




Total	34,834		6,660		—		—		—		—		24		41,518
Total gross loans	$	82,713	$	106,087	$	93,781	$	521,331	$	263,013	$	558,706	$	24	$	1,625,655

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the risk category of loans by class of loan and vintage as of December 31, 2024:


	Term Loans by Origination Year
	2024		2023		2022		2021		2020		Pre-2020		Revolving Loans		Total
	(in thousands)
Residential
Pass	$	24,396	$	12,941	$	90,735	$	101,928	$	13,851	$	269,751	$	—	$	513,602
Special mention	—		—		—		—		—		264		—		264
Substandard	—		—		225		—		—		4,152		—		4,377


Total	24,396		12,941		90,960		101,928		13,851		274,167		—		518,243
Multifamily
Pass	15,690		16,933		272,345		147,322		34,541		178,799		—		665,630
Special mention	—		—		5,368		—		—				—		5,368
Substandard	—		—		—		—		—		118		—		118


Total	15,690		16,933		277,713		147,322		34,541		178,917		—		671,116
Commercial real estate
Pass	35,728		26,636		115,871		14,489		14,633		51,448		—		258,805
Special mention	—		—		—		—		—		828		—		828



Total	35,728		26,636		115,871		14,489		14,633		52,276		—		259,633
Construction
Pass	6,300		26,409		35,342		17,495		—		—		—		85,546




Total	6,300		26,409		35,342		17,495		—		—		—		85,546
Junior liens
Pass	5,833		4,655		5,154		1,102		222		8,264		—		25,230
Special mention	—		—		—		—		—		43		—		43
Substandard	—		—		—		—		—		149		—		149


Total	5,833		4,655		5,154		1,102		222		8,456		—		25,422
Commercial and industrial
Pass	7,603		5,730		95		2,305		—		—		—		15,733

Substandard	—		563		—		15		—		—		—		578


Total	7,603		6,293		95		2,320		—		—		—		16,311
Consumer and other
Pass	7,186		—		—		—		—		—		25		7,211




Total	7,186		—		—		—		—		—		25		7,211
Total gross loans	$	102,736	$	93,867	$	525,135	$	284,656	$	63,247	$	513,816	$	25	$	1,583,482

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Past Due and Non-accrual Loans

The following table presents the recorded investment in past due and current loans by loan portfolio class as of March 31, 2025 and December 31, 2024:


	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater Past Due		Total Past Due		Current		Total Loans Receivable
	(In thousands)
March 31, 2025
Residential	$	2,651	$	85	$	4,292	$	7,028	$	505,765	$	512,793
Multifamily	25		—		—		25		645,374		645,399
Commercial real estate	363		—		—		363		287,788		288,151
Construction	—		—		—		—		92,813		92,813
Junior liens	435		61		—		496		26,406		26,902
Commercial and industrial	525		—		14		539		17,540		18,079
Consumer and other	—		—		—		—		41,518		41,518
Total	$	3,999	$	146	$	4,306	$	8,451	$	1,617,204	$	1,625,655

December 31, 2024
Residential	$	3,085	$	315	$	3,892	$	7,292	$	510,951	$	518,243
Multifamily	303		—		—		303		670,813		671,116
Commercial real estate	774		—		—		774		258,859		259,633
Construction	—		—		—		—		85,546		85,546
Junior liens	—		—		149		149		25,273		25,422
Commercial and industrial	—		563		15		578		15,733		16,311
Consumer and other	—		—		—		—		7,211		7,211
Total	$	4,162	$	878	$	4,056	$	9,096	$	1,574,386	$	1,583,482

The following tables presents information on non-accrual loans at March 31, 2025 and December 31, 2024:


	Non-accrual		Interest Income Recognized on Non-accrual Loans		Amortized Cost Basis of Loans > 90 Day Past Due and Still Accruing		Amortized Cost Basis of Non-accrual Loans Without Related Allowance
March 31, 2025	(In thousands)
Residential	$	5,040	$	9	$	—	$	5,040



Junior liens	146		5		—		146
Commercial and industrial	537		—		—		537

Total	$	5,723	$	14	$	—	$	5,723




December 31, 2024
Residential	$	4,377	$	11	$	—	$	4,377
Multifamily	—		4		—		—


Junior liens	149		2		—		149
Commercial and industrial	578		—		—		578

Total	$	5,104	$	17	$	—	$	5,104

The Company had no loans held-for-sale at March 31, 2025 and December 31, 2024.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Modifications made to borrowers experiencing financial difficulty may include principal forgiveness, interest rate reductions, other than insignificant payment delays, term extensions or a combination thereof intended to minimize economic loss and to avoid foreclosure or repossession of collateral. If the borrower has demonstrated performance under the previous terms and our underwriting process show the borrower has the capacity to continue to perform under the restructured terms, the loan will continue to accrue interest.

There were no modifications to borrowers experiencing financial difficulty in the first quarter of 2025.

The following table presents the amortized cost basis at March 31, 2024, of previous loan modifications to borrowers experiencing financial difficulty during the first quarter of 2024, disaggregated by type of modification.


	Payment Delays		Term Extensions		Total Principal		% of Total Class of Loans
	(Dollars in thousands)
Residential	$	—	$	113	$	113	0.02	%




Commercial and industrial	756		—		756		4.18

Total	$	756	$	113	$	869	0.05	%


						Types of Modifications
Residential						Term extensions of 3 to 12 months






Commercial and industrial						Deferral of three payments

The Company closely monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the payment status and amortized cost basis at March 31, 2025, of loans that were modified during the twelve-month period ended March 31, 2025.


	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total
	(In thousands)




Junior liens	$	41	$	—	$	—	$	—	$	41


Total	$	41	$	—	$	—	$	—	$	41

The following table presents the payment status and amortized cost basis at March 31, 2024, of loans that were modified during the twelve-month period ended March 31, 2024.


	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Non-Accrual		Total
	(In thousands)
Residential	$	3,066	$	—	$	—	$	—	$	112	$	3,178




Commercial and industrial	—		—		756		—		—		756

Total	$	3,066	$	—	$	756	$	—	$	112	$	3,934

The Company had $3.7 million in consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings were in process at both March 31, 2025, and December 31, 2024. At March 31, 2025 and December 31, 2024, the Company had no OREO (other real estate owned) properties.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 – ALLOWANCE FOR CREDIT LOSSES

Allowance for Credit Losses - Loans

The allowance for credit losses on loans is summarized in the following table:


	For the Three Months Ended March 31,
			2025		2024
		(In thousands)
Balance at beginning of period			$	12,965	$	14,154

Charge-offs			(22)		(13)
Recoveries			6		4
Net charge-offs			(16)		(9)
Provision for (recovery of) credit loss on loans			203		(396)
Balance at end of period			$	13,152	$	13,749

The following tables present the activity in the Company’s allowance for credit losses by class of loans based on the analysis performed for the three months ended March 31, 2025 and 2024:


	Balance at December 31, 2024		Charge-offs		Recoveries		Provision for (Release of) Credit Loss - Loans		Balance at March 31, 2025
	(In thousands)
Residential	$	1,989	$	—	$	—	$	(1)	$	1,988
Multifamily	6,609		—		—		(214)		6,395
Commercial real estate	3,641		—		—		382		4,023
Construction	460		—		—		10		470
Junior liens	109		—		—		4		113
Commercial and industrial	157		(2)		—		8		163
Consumer and other	—		(20)		6		14		—

Total	$	12,965	$	(22)	$	6	$	203	$	13,152

The commercial and industrial charge-off relates to a loan originated in 2021. Consumer and other charge-offs relate to overdrafts in the three months ended March 31, 2025, which originated in the fourth quarter of 2024 or first quarter of 2025, as it is our policy to charge these off within 60 days of occurrence.


	Balance at December 31, 2023		Charge-offs		Recoveries		(Release of) Provision for Loan Loss		Balance at March 31, 2024
	(In thousands)
Residential	$	1,968	$	—	$	—	$	(49)	$	1,919
Multifamily	7,046		—		—		(43)		7,003
Commercial real estate	3,748		—		—		(517)		3,231
Construction	1,222		—		—		(338)		884
Junior liens	76		—		—		1		77
Commercial and industrial	94		—		—		541		635
Consumer and other	—		(13)		4		9		—

Total	$	14,154	$	(13)	$	4	$	(396)	$	13,749

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Consumer and other charge-offs relate to overdrafts in the three months ended March 31, 2024, which originated in the fourth quarter of 2023 or first quarter of 2024, as it is our policy to charge these off within 60 days of occurrence.

The following table represents the allocation of allowance for loan losses and the related recorded investment, including deferred fees and costs, in loans by loan portfolio segment, disaggregated based on the impairment methodology at March 31, 2025 and December 31, 2024:


	Loans						Allowance for Credit Losses on Loans
March 31, 2025	Individually Evaluated		Collectively Evaluated		Total		Individually Evaluated		Collectively Evaluated		Total
	(In thousands)
Residential	$	4,146	$	508,647	$	512,793	$	—	$	1,988	$	1,988
Multifamily	—		645,399		645,399		—		6,395		6,395
Commercial real estate	—		288,151		288,151		—		4,023		4,023
Construction	—		92,813		92,813		—		470		470
Junior liens	146		26,756		26,902		—		113		113
Commercial and industrial (1)	523		17,556		18,079		—		163		163
Consumer and other (2)	—		41,518		41,518		—		—		—

Total	$	4,815	$	1,620,840	$	1,625,655	$	—	$	13,152	$	13,152

(1) Includes PPP loans which carry the federal guarantee of the SBA and do not have an allowance for credit losses.

(2) Includes purchased consumer loans that are cash-collateralized up to the first 3% of losses and do not have an allowance for credit losses as of March 31, 2025.


	Loans						Allowance for Credit Losses on Loans
December 31, 2024	Individually Evaluated		Collectively Evaluated		Total		Individually Evaluated		Collectively Evaluated		Total
	(In thousands)
Residential	$	3,960	$	514,283	$	518,243	$	—	$	1,989	$	1,989
Multifamily	—		671,116		671,116		—		6,609		6,609
Commercial real estate	—		259,633		259,633		—		3,641		3,641
Construction	—		85,546		85,546		—		460		460
Junior liens	—		25,422		25,422		—		109		109
Commercial and industrial (1)	563		15,748		16,311		—		157		157
Consumer and other	—		7,211		7,211		—		—		—

Total	$	4,523	$	1,578,959	$	1,583,482	$	—	$	12,965	$	12,965

(1) Includes PPP loans which carry the federal guarantee of the SBA and do not have an allowance for credit losses.

(2) Includes purchased consumer loans that are cash-collateralized up to the first 3% of losses and do not have an allowance for credit losses as of December 31, 2024.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Allowance for Credit Losses - Securities

At March 31, 2025 and December 31, 2024, the balance of the allowance of credit losses on securities was $97 thousand and $98 thousand, respectively. The Company recorded a decrease in provision for credit losses on held-to-maturity securities of $1 thousand and $18 thousand for the three months ended March 31, 2025 and 2024, respectively. Accrued interest receivable on securities is reported as a component of accrued interest receivable on the consolidated balance sheets and totaled $1.6 million and $1.4 million at March 31, 2025 and December 31, 2024, respectively. The Company made the election to exclude accrued interest receivable from the estimate of credit losses on securities.

Allowance for Credit Losses - Off-Balance-Sheet Exposures

The allowance for credit losses on off-balance-sheet exposures is reported in other liabilities in the consolidated balance sheets. The liability represents an estimate of expected credit losses arising from off-balance-sheet exposures such as letters of credit, guarantees and unfunded loan commitments. The process for measuring lifetime expected credit losses on these exposures is consistent with that for loans as discussed above, but is subject to an additional estimate reflecting the likelihood that funding will occur. No liability is recognized for off-balance-sheet credit exposures that are unconditionally cancellable by the Company. Adjustments to the liability are reported as a component of provision for credit losses.

At March 31, 2025 and December 31, 2024, the balance of the allowance for credit losses for off-balance-sheet exposures was $156 thousand and $157 thousand, respectively. The Company recorded a release of provision for credit loss on off-balance-sheet exposures of $1 thousand and $121 thousand for the three months ended March 31, 2025 and 2024.

NOTE 5 – LEASES

The Company leases certain office space, land and equipment under operating leases. These leases have original terms ranging from one year to 40 years. Operating lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of the future minimum lease payments over the lease term.

The Company had the following related to operating leases:


		March 31, 2025			December 31, 2024
	(Dollars in thousands)
Right-of-use assets		$	22,778		$	23,470
Lease liabilities		24,490			25,168
Weighted average remaining lease term for operating leases		9.2 years			9.4 years
Weighted average discount rate used in the measurement of lease liabilities		2.53		%	2.54		%

The following table is a summary of the Company’s components of net lease cost for the three months ended March 31, 2025 and 2024. The variable lease cost primarily represents variable payments such as common area maintenance and utilities.


	Three Months Ended March 31,
			2025		2024
		(In thousands)
Operating lease cost			$	888	$	874

Variable lease cost			82		67
Total lease cost included as a component of occupancy and equipment			$	970	$	941

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents supplemental cash flow information related to operating leases:


	Three Months Ended March 31,
			2025		2024
		(In thousands)
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows from operating leases			$	955	$	918

Future undiscounted lease payments for operating leases with initial terms of one year or more as of March 31, 2025 are as follows:


Through March 31,	(In thousands)
2026	$	3,290
2027	3,265
2028	3,161
2029	2,790
2030	2,706
Thereafter	12,184
Total undiscounted lease payments	27,396
Less: imputed interest	2,906
Total	$	24,490

NOTE 6 – DEPOSITS

Deposits at March 31, 2025 and December 31, 2024 are summarized as follows:


	March 31, 2025		December 31, 2024
	(In thousands)
Non-interest bearing deposits	$	25,222	$	26,001
NOW and demand accounts	398,332		369,554
Savings	236,779		240,426
Time deposits	726,908		707,339
Total	$	1,387,241	$	1,343,320

Money market accounts are included within the NOW and demand accounts and savings captions. Included in time deposits are brokered deposits totaling $205.0 million at March 31, 2025 and $155.0 million at December 31, 2024.

Time deposits mature as follows for the years ending December 31:


	(In thousands)
Remainder of 2025	$	703,682
2026	16,654
2027	2,822
2028	2,109
2029	1,081
2030	560
	$	726,908

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - STOCK-BASED COMPENSATION

Employee Stock Ownership Plan

The Company maintains an Employee Stock Ownership Plan (“ESOP”), a tax-qualified plan designed to invest primarily in the Company’s common stock. The ESOP provides employees with the opportunity to receive a funded retirement benefit from the Bank, based primarily on the value of the Company’s common stock.

The ESOP borrowed funds from the Company to purchase 2,281,800 shares of stock at $10 per share. The loan is secured by the shares purchased, which are held until allocated to participants. Shares are released for allocation to participants as loan payments are made. Loan payments are principally funded by discretionary cash contributions by the Bank, as well as dividends, if any, paid to the ESOP on unallocated shares. When loan payments are made, ESOP shares are allocated to participants at the end of the plan year (December 31) based on relative compensation, subject to federal tax law limits. Participants receive the allocated vested shares at the end of employment. Dividends on allocated shares, if any, increase participants accounts.

At March 31, 2025, the principal balance on the ESOP loan was $19.9 million. There were no contributions to the ESOP during the three months ended March 31, 2025, as loan payments are made annually during the fourth quarter of each year. ESOP shares are committed to be released from unallocated and compensation expense is recognized over the service period.

At March 31, 2025 and December 31, 2024, there were 1,916,712 unallocated shares and 365,088 shares allocated to participants. The fair value of unallocated shares at March 31, 2025 and December 31, 2024 was $17.6 million and $18.8 million, respectively, computed using the closing trading price of the Company’s common stock on each date.

For the three months ended March 31, 2025 and 2024, ESOP compensation expense for the shares committed to be released from unallocated was $218 thousand and $214 thousand, respectively. Shares committed to be released from unallocated was 22,818 for the three months ended March 31, 2025 and 2024.

Equity Incentive Plan

At the annual meeting held on August 25, 2022, shareholders of the Company approved the Blue Foundry Bancorp 2022 Equity Incentive Plan (“Equity Plan”) which provides for the granting of up to 3,993,150 shares (1,140,900 restricted stock awards and 2,852,250 stock options) of the Company’s common stock.

Restricted shares granted under the Equity Plan generally vest in equal installments, over a service period between five and seven years beginning one year from the date of grant. Additionally, certain restricted shares awarded can be performance vesting awards, which may or may not vest depending upon the attainment of certain corporate financial targets. The vesting of the awards accelerate upon death, disability or an involuntary termination at or following a change in control. The product of the number of shares granted and the grant date closing market price of the Company’s common stock determine the fair value of restricted shares under the Equity Plan. Management recognizes compensation expense for the fair value of time-based restricted shares on a straight-line basis over the requisite service period. Performance based awards are expensed based on the fair value of the shares and the probability of achieving the performance goals.

During the three months ended March 31, 2025, the Company granted to certain employees, under the 2022 Equity Plan, 28,500 restricted stock awards with a total grant-date fair value of $270 thousand. These grants vest ratably over a three year period.

There were no performance shares granted during the first quarter of 2025.

During the first quarter of 2024, the Company granted to directors and employees, under the 2022 Equity Plan, 184,625 restricted stock awards with a total grant-date fair value of $1.8 million. Of these grants, 2,900 vest one year from the date of grant, 19,255 and 162,470 vest in equal installments over five and six years, respectively, beginning one year from the date of grant.

During the first quarter of 2024, the Company granted 193,070 performance-based restricted stock awards to its officers with a total grant date fair value of $1.8 million. Vesting of the performance-based restricted stock units will be based on achievement of certain levels of loan growth, deposit growth and net interest margin and will convert to a four-year time vest after the three-year measurement period ending December 31, 2026. At the end of the performance period, the number of actual shares to be awarded may vary between 0% and 100% of target amounts.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary the Company’s restricted stock shares activity and related information for the three months ended March 31, 2025:


	Number of Shares Awarded	Weighted Average Grant Date Fair Value
Outstanding - December 31, 2024	786,764	$	10.78
Granted	28,500	9.48
Forfeited	(10,283)	10.66
Vested	(69,400)	10.97

Outstanding - March 31, 2025	735,581	$	10.72

Expected future expense relating to the non-vested restricted shares outstanding as of March 31, 2025 is $7.0 million over a weighted average period of 4.2 years.

Stock options granted under the Equity Plan generally vest in equal installments over a service period between five and seven years beginning one year from the date of grant. The vesting of the options accelerate upon death, disability or an involuntary termination at or following a change in control. Stock options were granted at an exercise price equal to the fair value of the Company’s common stock on the grant date based on the closing market price and have an expiration period of ten years.

No stock options were granted during the three months ended March 31, 2025. There were 48,133 stock options granted during the three months ended March 31, 2024. The fair value of stock options granted during the first quarter of 2024 were estimated utilizing the Black-Scholes option pricing model: an expected life of 6.50 years, risk-free rate of 3.94%, volatility of 32.26% and a dividend yield of 0.84%. Due to the limited historical information of the Company’s stock, management considered the weighted historical volatility of the Company and similar entities for an appropriate period in determining the volatility rate used in the estimation of fair value. The expected life of the stock option was estimated using the simplified method. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The Company recognizes compensation expense for the fair values of these awards, which have straight-line vesting, on a straight-line basis over the requisite service period of the awards. Upon exercise of vested options, management expects to draw on treasury stock as the source for shares.

The following is a summary of the Company’s stock option activity and related information for the three months ended March 31, 2025:


	Number of Stock Options	Weighted Average Grant Date Fair Value		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)
Outstanding - December 31, 2024	2,291,686	$	4.09	$	11.57	8.8


Forfeited	(20,358)	4.25		11.69
Expired	(3,857)	4.25		11.69
Outstanding - March 31, 2025	2,267,471	$	4.09	$	11.57	8.8
Exercisable - March 31, 2025	721,352

Expected future expense relating to the non-vested options outstanding as of March 31, 2025 is $5.6 million over a weighted average period of 4.0 years.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the share-based compensation expense for the three months ended March 31, 2025 and 2024.


	Three Months Ended March 31,
	2025		2024
	(In thousands)
Stock option expense	$	366	$	379
Restricted stock expense	445		402
Total share-based compensation expense	$	811	$	781

NOTE 8 – DERIVATIVES AND HEDGING ACTIVITIES

The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.

The Company had interest rate swaps with notional amounts totaling $391.0 million and $349.0 million at March 31, 2025 and December 31, 2024, respectively. As of March 31, 2025 and December 31, 2024, they were designated as cash flow hedges of certain Federal Home Loan Bank (“FHLB”) advances and brokered deposits. They were determined to be highly effective during all periods presented. The Company expects the hedges to remain highly effective during the remaining terms of the swaps.

Summary information about the interest rate swaps designated as cash flow hedges as of period-end is as follows:


	March 31, 2025			December 31, 2024
	(Dollars in thousands)
Notional amounts	$	391,000		$	349,000
Weighted average pay rates	3.25		%	3.12		%
Weighted average receive rates	4.40		%	4.62		%
Weighted average maturity	2.3 years			2.4 years

Gross unrealized gain included in other assets	$	6,157		$	8,817
Gross unrealized loss included in other liabilities	1,000			453
Unrealized gains, net	$	5,157		$	8,364

The Company held $5.3 million and $9.0 million at March 31, 2025 and December 31, 2024, respectively, of cash collateral pledged from the counterparty for these interest-rate swaps and had no securities or cash pledged to the counterparty.

Interest income or expense recorded on these swap transactions is reported as a component of interest expense on FHLB advances or brokered deposits. Interest income during the three months ended March 31, 2025 and 2024 totaled $1.1 million and $1.6 million, respectively. At March 31, 2025, the Company expected $2.8 million of the unrealized gain to be reclassified as a reduction to interest expense during the remainder of 2025.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Cash Flow Hedge

The effect of cash flow hedge accounting on accumulated other comprehensive income for the three months ended March 31, 2025 and 2024 is as follows:


	Amount of (Loss) Gain Recognized in OCI (Net of Tax) on Derivative (1)		Location of Gain (Loss) Reclassified from OCI into Income/(Expense)	Amount of Gain Reclassified from OCI to Expense
	(In thousands)
Three months ended March 31, 2025
Interest rate contracts	$	(3,206)	Interest Expense	$	1,141

Three months ended March 31, 2024
Interest rate contracts	$	2,813	Interest Expense	$	1,649

(1) Net of tax, adjusted for deferred tax valuation allowance.

NOTE 9 – ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income represents the net unrealized holding gains on securities available-for-sale, derivatives and the funded status of the Company’s post-retirement plans, as of the balance sheet dates, net of the related tax effect.

The following table presents the components of other comprehensive income both gross and net of tax, inclusive of a deferred tax valuation allowance, for the 2025 and 2024 periods:


	Three Months Ended March 31,
	2025						2024
	Before Tax		Tax Effect (1)		After Tax		Before Tax		Tax Effect (1)		After Tax
	(In thousands)
Components of Other Comprehensive Income:
Unrealized gain (loss) on securities available-for-sale:
Unrealized gain (loss) arising during the period	$	4,083	$	—	$	4,083	$	(1,109)	$	—	$	(1,109)


Unrealized gain (loss) on cash flow hedge:
Unrealized (loss) gain arising during the period	(4,347)		—		(4,347)		1,164		—		1,164
Reclassification adjustment for gain included in net loss	1,141		—		1,141		1,649		—		1,649
Total (loss) gain	(3,206)		—		(3,206)		2,813		—		2,813
Post-Retirement plans:

Reclassification adjustment for amortization of:

Net actuarial loss	5		—		5		1		—		1

Total other comprehensive income	$	882	$	—	$	882	$	1,705	$	—	$	1,705

(1) Adjusted for deferred tax valuation allowance.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of the changes in accumulated other comprehensive income by component, net of tax, inclusive of a deferred tax valuation allowance, for the periods indicated:


	Unrealized Gains on Cash Flow Hedges		Unrealized Losses on Available-for-Sale Securities		Post-Retirement Plans		Total
	(In thousands)
Balance at December 31, 2024	$	8,363	$	(27,426)	$	109	$	(18,954)
Other comprehensive (loss) income before reclassification	(4,347)		4,083		—		(264)
Amounts reclassified from accumulated other comprehensive income	1,141		—		5		1,146
Net current period other comprehensive (loss) income	(3,206)		4,083		5		882
Balance at March 31, 2025	$	5,157	$	(23,343)	$	114	$	(18,072)


	Unrealized Gains and Losses on Cash Flow Hedges		Unrealized Gains and Losses on Available-for-Sale Securities		Post-Retirement Plans		Total
	(In thousands)
Balance at December 31, 2023	$	7,582	$	(30,699)	$	237	$	(22,880)
Other comprehensive income (loss) before reclassification	1,164		(1,109)		—		55
Amounts reclassified from accumulated other comprehensive income	1,649		—		1		1,650
Net current period other comprehensive income (loss)	2,813		(1,109)		1		1,705
Balance at March 31, 2024	$	10,395	$	(31,808)	$	238	$	(21,175)

The following table presents information about amounts reclassified from accumulated other comprehensive income (loss) to the consolidated statements of income for the periods indicated:


Details about Accumulated Other Comprehensive Income Components	Three Months Ended March 31,			Affected Line Item in the Statement Where Net Income is Presented
		2025				2024
		(In thousands)


(Gains) losses on cash flow hedges:
Interest rate contracts		$	(1,141)	$	(1,649)		Interest expense
Amortization of post-retirement plan items:
Net actuarial (gains)		(5)		(1)			Compensation and employee benefits
Total tax effect		—		—			Income tax expense
Total reclassification for the period, net of tax		$	(1,146)	$	(1,650)

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 – FAIR VALUE OF ASSETS AND LIABILITIES

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate fair value:

Securities: For securities available-for-sale and equity securities, fair value was estimated using a market approach. The majority of the Company’s securities are fixed income instruments that are not quoted on an exchange, but are traded in active markets. Prices for these instruments are obtained through third party data service providers or dealer market participants with which the Company has historically transacted both purchases and sales of securities. Prices obtained from these sources include market quotations and matrix pricing. Matrix pricing, a Level 2 input as defined by ASC 820, is a mathematical technique used principally to value certain securities to benchmark or comparable securities. The Company also holds debt instruments issued by the U.S. government and U.S. government sponsored agencies that are traded in active markets with readily observable quoted market prices that are considered Level 1 inputs.

Derivatives: The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). The Company’s derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services.

Impaired loans: The fair value of collateral dependent impaired loans is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Other real estate owned (OREO): Property acquired through foreclosure or deed in lieu of foreclosure is carried at fair value less estimated disposal costs of the acquired property. Fair value of OREO is based on the appraised value of the collateral using discount rates similar to those used in impaired loan valuation.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the fair value of assets and liabilities as of March 31, 2025:


			Fair Value Measurements at March 31, 2025, Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
	(In thousands)
Measured on a recurring basis:
Financial assets
Securities available-for-sale:
U.S. Treasury notes	$	40,663	$	40,663	$	—	$	—
Corporate bonds	69,707		—		69,707		—
U.S. Government agency obligations	746		746		—		—
Obligations issued by U.S. states and their political subdivisions	6,010		—		6,010		—
Mortgage-backed securities:
Residential	147,780		—		147,780		—
Multifamily	17,659		—		17,659		—
Asset-backed securities	4,055		—		4,055		—
Total securities available-for-sale	286,620		41,409		245,211		—
Derivatives	6,157		—		6,157		—

Total financial assets measured on a recurring basis	$	292,777	$	41,409	$	251,368	$	—
Financial liabilities
Derivatives	$	1,000	$	—	$	1,000	$	—

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the fair value of assets and liabilities as of December 31, 2024:


			Fair Value Measurements at December 31, 2024, Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
	(In thousands)
Measured on a recurring basis:
Financial assets
Securities available-for-sale:
U.S. Treasury notes	$	40,139	$	40,139	$	—	$	—
Corporate bonds	73,154		—		73,154		—
U.S. Government agency obligations	812		812		—		—
Obligations issued by U.S. states and their political subdivisions	6,024		—		6,024		—
Mortgage-backed securities:
Residential	149,041		—		149,041		—
Multifamily	18,743		—		18,743		—
Asset-backed securities	9,115		—		9,115		—
Total securities available-for-sale	297,028		40,951		256,077		—
Derivatives	8,817		—		8,817		—
Total financial assets measured on a recurring basis	$	305,845	$	40,951	$	264,894	$	—
Financial liabilities
Derivatives	$	453	$	—	$	453	$	—

Other Fair Value Disclosures

Fair value estimates, methods and assumptions for the Company’s financial instruments that are not recorded at fair value on a recurring or non-recurring basis are set forth below.

Securities held-to-maturity: The Company’s securities held-to-maturity portfolio is carried at amortized cost less allowance for credit losses. The fair values of debt securities held-to-maturity are provided by a third-party pricing service. The pricing service may use quoted market prices of comparable instruments or a variety of other forms of analysis, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include, but are not limited to, benchmark yields, credit spreads, default rates, prepayment speeds and non-binding broker quotes.

Loans, net: Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type, such as residential mortgage and consumer. Each loan category is further segmented into fixed and adjustable rate interest terms and by performing and non-performing categories. Estimated fair value of loans is determined using a discounted cash flow model that employs an exit discount rate that reflects the current market pricing for loans with similar characteristics and remaining maturity, adjusted for estimated credit losses inherent in the portfolio at the balance sheet date.

Time deposits: The fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using rates for currently offered deposits of similar remaining maturities.

Federal Home Loan Bank advances: The fair value of borrowings is based on securities dealers’ estimated fair values, when available, or estimated using discounted cash flow analysis. The discount rates used approximate the rates offered for similar borrowings of similar remaining terms.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following tables present the book value, fair value, and placement in the fair value hierarchy of financial instruments not recorded at fair values in their entirety on a recurring basis on the Company’s consolidated balance sheets at March 31, 2025 and December 31, 2024. The fair value measurements presented are consistent with Topic 820, Fair Value Measurement, in which fair value represents exit price.

These tables exclude financial instruments for which the carrying amount approximates fair value. Financial instruments for which the carrying amount approximates fair value include cash and cash equivalents, other investments, non-maturity deposits, overnight borrowings and accrued interest, which are excluded from the table below.

The carrying amounts and fair value of financial instruments not carried at fair value, at March 31, 2025 and December 31, 2024, are as follows:


			Fair Value Measurements at March 31, 2025, Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Book Value		(Level 1)		(Level 2)		(Level 3)
	(In thousands)
Measured on a non-recurring basis:
Financial assets
Securities held-to-maturity:

Corporate bonds	$	18,600	$	—	$	16,915	$	—




Asset-backed securities	13,535		—		12,703		—
Securities held-to-maturity	32,135		—		29,618		—
Loans, net	1,612,503		—		—		1,530,252
Financial liabilities
Time deposits	726,908		—		724,911		—
FHLB advances	334,000		—		336,122		—
			Fair Value Measurements at December 31, 2024, Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Book Value		(Level 1)		(Level 2)		(Level 3)
	(In thousands)
Measured on a non-recurring basis:
Financial assets
Securities held-to-maturity:

Corporate bonds	$	18,600	$	—	$	16,414	$	—




Asset-backed securities	14,574		—		13,581		—
Securities held-to-maturity	33,174		—		29,995		—
Loans, net	1,570,517		—		—		1,468,929
Financial liabilities
Time deposits	707,339		—		705,514		—
FHLB advances	339,500		—		340,131		—

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 – REVENUE FROM CONTRACTS WITH CUSTOMERS AND OTHER INCOME

All of the Company’s revenue from contracts with customers in the scope of ASC 606 is recognized within non-interest income in the statements of income.

The following table presents the Company’s sources of revenue from contracts with customers for the three months ended March 31, 2025 and 2024, respectively:


	Three Months Ended March 31,
		2025		2024
		(In thousands)



Service charges on deposits		$	73	$	75
Interchange income		124		128
Total revenue from contracts with customers		$	197	$	203

Service Charges on Deposit Accounts: The Company earns fees from its deposit customers for transaction-based account maintenance. Transaction based fees, which include services such as ATM use fees, stop payment charges, statement rendering and wire transfer fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation.

Interchange Income: The Company earns interchange fees from debit cardholder transactions conducted through a payment network. Interchange fees from debit cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. In addition, the Company earns interchange fees from credit cardholder transactions through its partnership with a third party.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - EARNINGS PER SHARE

Basic earnings per share (“EPS”) represents income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common shares (such as unexercised stock options and unvested restricted stock) were exercised or converted into additional common shares that would then share in the earnings of the entity. Diluted EPS is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding for the period, plus the effect of potential dilutive common share equivalents.

Shares held by the ESOP that have not been allocated to employees in accordance with the terms of the ESOP, referred to as “unallocated ESOP shares,” are not deemed outstanding for earnings per share calculations.


	Three Months Ended March 31,
	2025		2024
	(Income in thousands, except share data)
Net loss applicable to common shares	$	(2,692)	$	(2,839)
Shares
Average number of common shares outstanding	22,310,244		24,091,835
Less: Average unallocated ESOP shares	1,905,303		1,996,575
Average number of common shares outstanding used to calculate basic earnings per common share	20,404,941		22,095,260
Common stock equivalents	—		—
Average number of common shares outstanding used to calculate diluted earnings per common share	20,404,941		22,095,260
Loss per common share
Basic	$	(0.13)	$	(0.13)

Diluted	$	(0.13)	$	(0.13)

Excluded from the earnings per share calculation are anti-dilutive equity awards for the three months ended March 31, 2025 and 2024, totaling 1,086,386 and 1,417,627, respectively. Due to the Company’s net loss for the three months ended March 31, 2025 and 2024, the assumed vesting of outstanding restricted stock units had an antidilutive effect on diluted earnings per share.

NOTE 13 - SEGMENT REPORTING

We conduct our operations through a single business segment. Substantially all of our interest and fees on loans and long-lived assets relate to our operations. Pursuant to FASB ASC 280, Segment Reporting, operating segments represent components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision maker in determining how to allocate resources and in assessing performance. The chief operating decision maker uses a variety of measures to assess the performance of the business as a whole, depending on the nature of the activity. The Company generates revenue from several business channels. Those streams are organized by the types of partners we work with to reach our customers, with success principally measured based on interest and fees on loans, loan receivables, active accounts and other sales metrics. Detailed profitability information of the nature that could be used to allocate resources and assess the performance and operations for each sales platform individually, however, is not used by our chief operating decision maker. Expense activities, including funding costs, credit losses and operating expenses, are not measured for each platform but instead are managed for the Company as a whole.

BLUE FOUNDRY BANCORP

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table represents segment information for the three months ended March 31, 2025 and 2024:


	For the Three Months Ended March 31,
	2025		2024
Interest income:
Loans	$	18,892	$	17,192
Taxable investment income	3,785		3,614
Non-taxable investment income	36		36
Total interest income	22,713		20,842
Interest expense:
Deposits	9,026		8,413
Borrowed funds	2,943		3,012
Total interest expense	11,969		11,425
Net interest income	10,744		9,417
Provision for (release of) credit losses	201		(535)
Net interest income after release of credit losses	10,543		9,952
Non-interest income:
Fees and service charges	243		329
Other income	151		122
Total non-interest income	394		451
Non-interest expense:
Compensation and benefits	7,838		7,549
Occupancy and equipment	2,303		2,192
Data processing	1,487		1,387
Other expense	2,001		2,114
Total non-interest expense	13,629		13,242
Loss before income tax expense	(2,692)		(2,839)
Income tax expense	—		—
Net loss	$	(2,692)	$	(2,839)

Our segment assets represent our assets as presented on the Consolidated Balance Sheets.

NOTE 14 - SUBSEQUENT EVENTS

As defined in FASB ASC 855, “Subsequent Events,” subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued or available to be issued. Financial statements are considered issued when they are widely distributed to stockholders and other financial statement users for general use and reliance in a form and format that complies with U.S. GAAP. The Company performed an evaluation and determined that there are no subsequent events to report.

ITEM 2. 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 March 31, 2025, and our results of operations for the three month periods ended March 31, 2025 and 2024. This section should be read in conjunction with the unaudited interim condensed consolidated financial statements and notes thereto of the Company appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q that are not historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements, which are based on certain current assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target” and similar expressions.

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

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

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results could differ from these estimates.

Comparison of Operating Results for the Three Months Ended March 31, 2025 and 2024

General. The Company recorded a net loss of $2.7 million for the three months ended March 31, 2025, compared to a net loss of $2.8 million for the three months ended March 31, 2024.

Interest Income. Interest income for the three months ended March 31, 2025 was $22.7 million, an increase of $1.9 million, or 9.0%, from $20.8 million for the three months ended March 31, 2024, largely driven by increases in the rates earned on interest-earning assets. The yield on average interest-earning assets increased 26 basis points to 4.51% for the three months ended March 31, 2025 from 4.25% for the three months ended March 31, 2024.

Interest Expense. Interest expense was $12.0 million and $11.4 million for the first quarter of 2025 and 2024, respectively, an increase of $544 thousand primarily driven by the increase in the average balances of time deposits and interest-bearing core deposits of $93.6 million and $3.1 million, respectively, when compared to the first quarter of 2024, partially offset by the decrease in the average balance of FHLB advances of $26.5 million. In addition, the cost of average interest-bearing liabilities increased three basis points to 2.89% for the three months ended March 31, 2025 from 2.86% for the three months ended March 31, 2024, due to increased costs of interest-bearing core deposits and FHLB advances, mostly offset by lower cost on time deposits.

Net Interest Income. Net interest income was $10.7 million and $9.4 million for the three months ended March 31, 2025 and 2024, respectively. Net interest rate spread increased 23 basis points to 1.62% and net interest margin increased 24 basis points to 2.16%.

Provision for Credit Losses. The Company recorded a $201 thousand provision for credit losses for the first quarter of 2025, compared to a $535 thousand release of provision for credit losses for the same period of 2024. The provision included an increase in the allowance for credit losses (“ACL”) on loans of $203 thousand and a release of provision of $1 thousand on both HTM securities and off-balance-sheet commitments. The provision was primarily driven by the increase in loan balances and the shift in the composition of the loan portfolio. As of March 31, 2025, the ACL on loans as a percentage of total loans was 0.81%.

Non-interest Income. Non-interest income totaled $394 thousand and $451 thousand for the first quarters of 2025 and 2024, respectively, a decrease of $57 thousand, or 12.6%, when comparing the two periods. The 2024 quarter included a gain on sale of loans of $36 thousand that did not occur in the 2025 quarter.

Non-interest Expense. Non-interest expense was $13.6 million for the first quarter of 2025, an increase of $387 thousand driven by increases of $289 thousand, $111 thousand and $100 thousand in compensation and benefits expenses, occupancy and equipment expenses and data processing, respectively. Compensation and benefits expense increased due to merit-based salary adjustments. Occupancy and equipment expense include higher snowplowing and other maintenance costs.

Income Tax Expense. The Company did not record a tax benefit for the loss incurred during the current or previous year quarter due to the full valuation allowance required on its deferred tax assets. The Company’s current tax position reflects the previously established full valuation allowance on its deferred tax assets. At March 31, 2025, the valuation allowance on deferred tax assets was $25.4 million.

Average Balances and Yields

The following tables present information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting annualized average yields and costs. The yields and costs for the periods indicated are derived by dividing annualized income or expense by the average balances of assets or liabilities, respectively, for the periods presented. Average balances have been calculated using daily balances. The amortization and accretion of deferred fees and costs are included in interest income on loans and are not material.


	Three Months Ended March 31,
	2025						2024
	Average Balance		Interest		Average Yield/Cost		Average Balance		Interest		Average Yield/Cost
	(Dollars in thousands)
Assets:
Loans (1)	$	1,601,262	$	18,892	4.72	%	$	1,555,534	$	17,192	4.45	%
Mortgage-backed securities	189,820		1,323		2.79	%	160,349		876		2.20	%
Other investment securities	163,590		1,689		4.13	%	183,717		1,652		3.62	%
FHLB stock	17,680		399		9.02	%	20,123		492		9.83	%
Cash and cash equivalents	43,195		410		3.80	%	51,561		630		4.92	%
Total interest-earning assets	2,015,547		22,713		4.51	%	1,971,284		20,842		4.25	%
Non-interest earning assets	61,518						59,357
Total assets	$	2,077,065					$	2,030,641
Liabilities and shareholders' equity:
NOW, savings, and money market deposits	$	619,234	$	2,031	1.33	%	$	616,169	$	1,937	1.26	%
Time deposits	712,796		6,995		3.98	%	619,220		6,476		4.21	%
Interest-bearing deposits	1,332,030		9,026		2.75	%	1,235,389		8,413		2.74	%
FHLB advances	347,394		2,943		3.39	%	373,874		3,012		3.24	%
Total interest-bearing liabilities	1,679,424		11,969		2.89	%	1,609,263		11,425		2.86	%
Non-interest bearing deposits	25,411						26,491
Non-interest bearing other	40,679						41,569
Total liabilities	1,745,514						1,677,323
Total shareholders' equity	331,551						353,318
Total liabilities and shareholders' equity	$	2,077,065					$	2,030,641
Net interest income			$	10,744					$	9,417
Net interest rate spread (2)					1.62	%					1.39	%
Net interest margin (3)					2.16	%					1.92	%

(1) Average loan balances are net of deferred loan fees and costs, premiums and discounts and include non-accrual loans.

(2) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.

(3) Net interest margin represents net interest income divided by average interest-earning assets.

Comparison of Financial Condition at March 31, 2025 and December 31, 2024

Total Assets. Total assets were $2.09 billion and $2.06 billion at March 31, 2025 and December 31, 2024, respectively.

Cash and cash equivalents. Cash and cash equivalents increased $3.7 million, or 9%, to $46.2 million at March 31, 2025 from $42.5 million at December 31, 2024.

Securities available-for-sale. Securities available-for-sale decreased $10.4 million, or 3.5%, to $286.6 million at March 31, 2025 from $297.0 million at December 31, 2024, due to maturities, calls and pay downs offset by a decrease in unrealized losses of $4.1 million.

Securities held-to-maturity. Held-to-maturity securities decreased $1.0 million or 3.1% to $32.0 million at March 31, 2025 from $33.1 million at December 31, 2024, due to pay downs in the portfolio.

Gross Loans. Gross loans held for investment increased $42.2 million to $1.63 billion at March 31, 2025, from $1.56 billion at December 31, 2024. Consumer, commercial real estate and construction loans increased $34.3 million, $28.5 million, and $7.3 million, respectively. Partially offsetting these increases were decreases in multifamily loans of $25.7 million and residential loans of $5.5 million. During the first quarter of 2025, the Company purchased consumer and residential loans totaling $35.0 million and $6.6 million, respectively.

The following table presents loans at March 31, 2025 and December 31, 2024 allocated by loan category:


	March 31, 2025		December 31, 2024
	(In thousands)
Residential	$	512,793	$	518,243
Multifamily	645,399		671,116
Commercial real estate	288,151		259,633
Construction	92,813		85,546
Junior liens	26,902		25,422
Commercial and industrial	18,079		16,311
Consumer and other	41,518		7,211
Total loans	1,625,655		1,583,482
Less: Allowance for credit losses	13,152		12,965
Loans receivable, net	$	1,612,503	$	1,570,517

The table below presents the balance of non-performing loans on the dates indicated:


	March 31, 2025		December 31, 2024
	(In thousands)
Residential	$	5,040	$	4,377



Junior liens	146		149
Commercial and industrial	537		578



Total non-performing assets	$	5,723	$	5,104

Total Deposits. Total deposits were $1.39 billion at March 31, 2025, an increase of $43.9 million, or 3.3%, from December 31, 2024. This was largely the result of increases of $28.8 million and $19.6 million in NOW and demand accounts and certificate of deposits, respectively. Core deposits (defined as non-interest bearing checking, NOW and demand accounts and savings accounts) represented 47.6% of total deposits at March 31, 2025, compared to 47.3% at December 31, 2024. Brokered deposits totaled $205.0 million and $155.0 million at March 31, 2025 and December 31, 2024, respectively. The increase in brokered deposits replaced the reduction in retail time deposits and funded loan originations.

The following table presents the totals of deposit accounts by account type, at the dates shown below:


	March 31, 2025		December 31, 2024
	(In thousands)
Non-interest bearing deposits	$	25,222	$	26,001
NOW and demand accounts (1)	398,332		369,554
Savings (1)	236,779		240,426
Core deposits	660,333		635,981
Time deposits	726,908		707,339
Total deposits	$	1,387,241	$	1,343,320

(1) Money market accounts are included within the NOW and demand accounts and savings captions.

Borrowings. The Company had $334.0 million and $339.5 million of borrowings at March 31, 2025 and December 31, 2024, respectively, a decrease of $5.5 million, or 1.6% as the increase in deposits were partially used to pay down borrowings. Borrowings consist solely of Federal Home Loan Bank of New York advances.

Total Shareholders’ Equity. Total shareholders’ equity decreased by $5.5 million, or 1.7%, to $326.7 million at March 31, 2025 compared to $332.2 million at December 31, 2024. The decrease was primarily driven by the repurchase of shares, including shares netted for income tax withholding on vested equity awards, at a cost of $4.8 million. Additionally, the year-to-date loss, partially offset by favorable changes in accumulated other comprehensive income, contributed to the decrease in shareholders’ equity.

Off-Balance Sheet. To help manage our interest rate position, the Company had $391.0 million in interest rate hedges at March 31, 2025, with a weighted average duration of 2.3 years. This represents an increase of $42.0 million from December 31, 2024, when interest rate hedges totaled $349.0 million with a weighted average duration of 2.4 years. See Note 8, Derivatives and Hedging Activities, of Notes to Consolidated Financial Statements in “Item 1- Financial Statements.”

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Qualitative Analysis. Our most significant form of market risk is interest rate risk because, as a financial institution, the majority of our assets and liabilities are sensitive to changes in interest rates. Therefore, a principal part of our operations is to manage interest rate risk and limit the exposure of our balance sheet and results of operations to changes in market interest rates. Our ALCO/Investment Committee, which consists of members of management, is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the policy and guidelines approved by our board of directors. We currently utilize a modeling program, on a quarterly basis, to evaluate our sensitivity to changing interest rates, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the board of directors.

We have sought to manage our interest rate risk in order to minimize the exposure of our earnings and capital to changes in interest rates. We have implemented the following strategies to manage our interest rate risk: growing target deposit accounts, such as small business accounts; utilizing our investment securities portfolio and interest rate swaps as part of our balance sheet asset and liability and interest rate risk management strategy to reduce the impact of movements in interest rates on net interest income and economic value of equity, which can create temporary valuation adjustments to equity in Accumulated Other Comprehensive Income; continuing the diversification of our loan portfolio by adding more commercial and consumer loans, which typically have shorter maturities and/or balloon payments.

By following these strategies, we believe that we are positioned to react to increases and decreases in market interest rates.

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 Company has entered into derivative financial instruments to reduce risk associated with interest rate volatility by matching asset maturities and liability maturities. These derivatives had an aggregate notional amount of $391.0 million as of March 31, 2025.

Quantitative Analysis. We compute amounts by which the net present value of our cash flow from assets, liabilities and off-balance-sheet items would change in the event of a range of assumed changes in market interest rates. 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. This model uses a discounted cash flow analysis and an option-based pricing approach to measure the interest rate sensitivity of net portfolio value. The model estimates the economic value of each type of asset, liability and off-balance-sheet contract under the assumption that the United States Treasury yield curve increases or decreases instantaneously by 100 to 200 basis points in 100 basis point increments. A basis point equals one-hundredth of one percent, and 100 basis points equals one percent. 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.

The following table sets forth, at March 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%.


	Net Interest Income
Change in Interest Rates (basis points)	Amount		Change		Percent
	(Dollars in thousands)
+200	$	50,651	$	1,682	3.4	%
+100	49,858		889		1.8
0	48,969		—		—
-100	50,171		1,202		2.5
-200	51,296		2,327		4.8

The following table sets forth, at March 31, 2025, the calculation of the estimated changes in our net portfolio value, 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%.


	EVE						NPV as a Percent of Portfolio Value of Assets
Change in Interest Rates (basis points)	Estimated EVE		Estimated Increase (Decrease)
			Amount		Percent		NPV Ratio		Change
	(Dollars in thousands)
+200	$	137,499	$	(68,009)	(33.1)	%	6.6	%	(3.3)
+100	171,395		(34,113)		(16.6)		8.2		(1.6)
0	205,508		—		—		9.8		—
-100	238,144		32,636		15.9		11.4		1.6
-200	271,025		65,517		31.9		13.0		3.1

The tables above indicates that at March 31, 2025, in the event of an instantaneous 100 basis point increase in interest rates, we would experience a 17% decrease in EVE. In the event of an instantaneous 100 basis point decrease in interest rates, we would experience a 16% increase in EVE.

Certain short comings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. The above tables assume that the composition of our interest sensitive assets and liabilities existing at the date indicated remains constant uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the table provides an indication of our interest rate risk exposure at a particular point in time, the data does not reflect any actions we may take in response to changes in interest rates. 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.

Liquidity and Capital Resources

Liquidity is the ability to meet current and future financial obligations of a short-term and long-term nature. Our primary sources of funds consist of deposit inflows, principal and interest payments on loans and securities, maturity of securities, wholesale funding such as borrowings from the Federal Home Loan Bank of New York and brokered deposits and, to a lesser extent, proceeds from the sale of securities. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows, calls of investment securities and borrowed funds and prepayments on loans are greatly influenced by general interest rates, economic conditions and competition.

Management regularly adjusts our investments in liquid assets based upon an assessment of (1) expected loan demand, (2) expected deposit flows, (3) yields available on interest-earning deposits and securities, and (4) the objectives of our interest-rate risk and investment policies.

At March 31, 2025, we had $11.0 million in commitments to originate loans and unused lines of credit totaled $94.8 million. We anticipate that we will have sufficient funds available to meet our current loan origination and lines of credit commitments. Certificates of deposit that are scheduled to mature in less than one year from March 31, 2025 totaled $717.5 million. Management expects, based on historical experience, that a deposit relationship will be retained with a substantial portion of certificate holders. However, if a substantial portion of these deposits is not retained, we may borrow against our available borrowing capacity or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense. Available borrowing capacity at March 31, 2025 was $275.6 million with Federal Home Loan Bank of New York, a $107.5 million line of credit with the Federal Reserve Bank of New York and a $30.0 million unsecured line of credit with a correspondent bank. Total available borrowing capacity is 2.6x times total uninsured and uncollateralized deposits to third-party customers. The estimated fair market value of unencumbered securities totaled $196.6 million or 62.2% of the portfolio at March 31, 2025.

We are a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to originate loans, unused lines of credit and standby letters of credit, which involve elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. Our exposure to credit loss is represented by the contractual amount of the instruments. 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 March 31, 2025 pursuant to off-balance-sheet arrangements and contractual obligations.

The Bank is subject to various regulatory capital requirements administered by the New Jersey Department of Banking and Insurance (“NJDOBI”) and the Federal Deposit Insurance Corporation (“FDIC”). At March 31, 2025, the Bank exceeded all applicable regulatory capital requirements, and was considered “well capitalized” under regulatory guidelines.


	Actual				Minimum Capital Adequacy				For Classification With Capital Buffer				For Classification as Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in thousands)
March 31, 2025
Common equity tier 1	$	287,537	18.58	%	$	69,623	4.50	%	$	108,302	7.00	%	$	100,566	6.50	%
Tier 1 capital	287,537		18.58	%	92,830		6.00	%	131,509		8.50	%	123,773		8.00	%
Total capital	300,942		19.45	%	123,773		8.00	%	162,453		10.50	%	154,717		10.00	%
Tier 1 (leverage) capital	287,537		13.73	%	83,750		4.00	%	N/A		N/A		104,687		5.00	%
December 31, 2024
Common equity tier 1	$	289,614	19.26	%	$	67,673	4.50	%	$	105,269	7.00	%	$	97,749	6.50	%
Tier 1 capital	289,614		19.26	%	90,230		6.00	%	127,826		8.50	%	120,307		8.00	%
Total capital	302,834		20.14	%	120,307		8.00	%	157,903		10.50	%	150,384		10.00	%
Tier 1 (leverage) capital	289,614		13.98	%	82,862		4.00	%	N/A		N/A		103,577		5.00	%

ITEM 4. CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective. There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is not engaged in any legal proceedings of a material nature at the present time. The Company is subject to various legal actions arising in the normal course of business. In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on the Company’s financial condition or results of operations.

ITEM 1.A. RISK FACTORS

There have been no material changes in risk factors from those identified in the Annual Report on Form 10-K for the year ended December 31, 2024.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES. USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES

The following table reports information regarding repurchases of our common stock during the quarter ended March 31, 2025, and the stock repurchase plan approved by our board of directors.


Period	Total Number of Shares Purchased (1) (2)	Average Price paid Per Share	As part of Publicly Announced Plans or Programs	Yet to be Purchased Under the Plans or Programs

January	166,500	$9.44	166,500	694,572
February	121,909	9.86	111,000	583,572
March	204,785	9.45	186,585	396,987









Total	493,194	$9.55	464,085

(1) On November 8, 2024, the Company adopted its fifth repurchase program to repurchase up to 1,139,420 shares, or 5%, of its outstanding common stock. The fifth repurchase program has no expiration date.

(2) 29,109 shares were withheld to cover income taxes related to restricted stock vesting under our 2022 Equity Plan. Shares withheld to pay income taxes are repurchased pursuant to the terms of the 2022 Equity Plan and not under our share repurchase program.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

During the first quarter of 2025, none of our directors or officers adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company’s securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement,” as that term is used in SEC regulations.

ITEM 6. EXHIBITS

The following exhibits are either filed as part of this report or are incorporated herein by reference:


3.1			Amended and Restated Certificate of Incorporation of Blue Foundry Bancorp (Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the Year Ended December 31, 2023 (File No. 001-40619))
3.2			Bylaws of Blue Foundry Bancorp (Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-254079))
4			Form of Common Stock Certificate of Blue Foundry Bancorp (Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-254079))


31.1			Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2			Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1			Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101			The following materials from the Company’s Form 10-Q for the quarter ended March 31, 2025, formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Income, (ii) the Consolidated Balance Sheets; (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Shareholder’s Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements.
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BLUE FOUNDRY BANCORP

Dated:

May 12, 2025

By:

/s/ James D. Nesci

James D. Nesci

Chief Executive Officer

(Principal Executive Officer)

Dated:

May 12, 2025

By:

/s/ Kelly Pecoraro

Kelly Pecoraro

Chief Financial Officer

(Principal Financial Officer)