Executive Summary

Q3 showed continued core progress despite a small net loss: NIM expanded 6 bps to 2.34%, net interest income rose to $12.2M, deposits grew $77.1M (core +$18.6M) and loans +$41.9M; tangible book value reached $15.14 per share .
Results modestly missed S&P Global consensus: EPS (-$0.10) vs -$0.095* and “Revenue” (proxy) $12.02M* vs $12.35M*; Q2 EPS beat but revenue missed slightly (context below). Values retrieved from S&P Global.
Asset quality remained sound overall; NPLs rose to $11.4M (0.66% of loans) driven by one $5.3M commercial credit; management does not believe principal is at risk; ACL was 0.81% and coverage 121% .
Management emphasized deposit mix shift (de‑emphasize CDs, more MMAs), 2026 repricing tailwind (notably in multifamily), and cost control; Q4 NIM expected roughly flat before improvement in 2026; Q4 opex expected “high $13M/low $14M” .
Capital return continued: 837,388 shares repurchased at $9.09 (500k via a private block); 730k shares remained under the plan at quarter-end; tangible equity to tangible assets 14.58% .

What Went Well and What Went Wrong

What Went Well
- Net interest margin expanded again to 2.34% (+6 bps QoQ; +52 bps YoY) as asset yields increased and funding costs eased; net interest income rose to $12.2M (+$0.55M QoQ) .
- Healthy franchise growth: deposits +$77.1M QoQ (core +$18.6M) and loans +$41.9M QoQ; uninsured/uncollateralized deposits ~13% of total .
- Capital and TBV strengthened: tangible equity/tangible assets 14.58%; tangible book per share $15.14; CEO: “tangible book value exceeded $15 per share … as profitability slowly continues to improve, we expect market valuation to follow.” .
What Went Wrong
- Bottom line remains negative: net loss of $1.9M (EPS -$0.10), with PPNR still modestly negative (-$1.28M) as the efficiency ratio remained elevated at 110% .
- Nonperforming loans increased to $11.4M (0.66% of loans), largely from a single $5.3M commercial credit; coverage ratio fell to 121% given the NPL increase .
- Opex rose $347k QoQ (compensation and professional services), and management cited competitive deposit markets in Northern NJ that require rate discipline and product shifts .

Financial Results

Headline P&L and Ratios (company-reported)

Metric	Q3 2024	Q2 2025	Q3 2025
Net Interest Income ($M)	$9.09	$11.64	$12.19
Total Non-interest Income ($M)	$0.39	$0.41	$0.42
Total Revenue (NII + Non-int., $M)	$9.47	$12.05	$12.61
Provision for Credit Losses ($M)	$0.25	$0.46	$0.59
Non-interest Expense ($M)	$13.27	$13.54	$13.89
Net Income ($M)	$(4.04)	$(1.96)	$(1.87)
Diluted EPS ($)	$(0.19)	$(0.10)	$(0.10)
Net Interest Margin (%)	1.82	2.28	2.34
Efficiency Ratio (%)	140.04	112.40	110.15

Estimates vs Actuals (S&P Global consensus; revenue proxy used by S&P)

Metric	Q2 2025 Consensus	Q2 2025 Actual	Beat/Miss	Q3 2025 Consensus	Q3 2025 Actual	Beat/Miss
EPS ($)	-0.12*	-0.10*	Beat by $0.02*	-0.095*	-0.10*	Miss by $0.005*
“Revenue” ($M)	11.80*	11.58*	Miss by $0.22*	12.35*	12.02*	Miss by $0.33*

Values retrieved from S&P Global.

Balance Sheet and Credit KPIs

KPI	Q3 2024	Q2 2025	Q3 2025
Total Loans ($000)	1,550,983	1,673,036	1,714,915
Total Deposits ($000)	1,318,670	1,416,321	1,493,380
Core Deposits ($000)	617,408	685,543	704,160
Time Deposits ($000)	701,262	730,778	789,220
Brokered Deposits ($000)	—	225,000	275,000
Uninsured/Uncollateralized Deposits (% of total)	—	12%	13%
NPLs ($000)	5,146	6,281	11,387
NPLs / Total Loans (%)	0.33	0.38	0.66
ACL / Total Loans (%)	0.84	0.80	0.81
Provision for Credit Losses ($000)	248	463	589
Net Charge-offs ($000)	—	—	25

Loan Mix (Period-End Balances, $000)

Category	Sep 30, 2024	Jun 30, 2025	Sep 30, 2025
Residential	516,754	519,370	514,263
Multifamily	666,304	633,849	647,269
Commercial Real Estate	241,711	293,179	317,079
Construction	80,081	97,207	60,543
Junior Liens	24,174	27,996	29,694
Commercial & Industrial	14,228	17,729	24,315
Consumer & Other	7,731	83,706	121,752
Total Loans	1,550,983	1,673,036	1,714,915

Deposit Mix (Period-End Balances, $000)

Category	Sep 30, 2024	Jun 30, 2025	Sep 30, 2025
Non-interest Bearing	22,254	25,161	24,951
NOW & Demand	357,503	431,485	457,072
Savings	237,651	228,897	222,137
Core Deposits	617,408	685,543	704,160
Time Deposits	701,262	730,778	789,220
Total Deposits	1,318,670	1,416,321	1,493,380

Context and drivers:

NIM expansion: +9 bps in asset yields (to 4.67%) and -4 bps in cost of interest-bearing liabilities (to 2.72%); NIM +6 bps to 2.34% .
Opex: +$347k QoQ due to compensation (+$206k; day count/comp) and professional services (+$198k) .
Provision: $589k, driven by deterioration in economic variable forecasts; ACL to loans 0.81% .
NPL increase: primarily a single $5.3M commercial credit; legal remedies underway; no principal at risk per management .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin	Q4 2025	“Limited expansion in back half of 2025”	“Relatively flat” in Q4; 2026 repricing to drive improvement	Maintained (more cautious near term)
Loan Repricing Tailwinds	2026	~$75M repricing ~3.75% in 2026 (Q2 detail)	~H1’26: ~$45M sub‑4%; H2’26: ~$35–$40M sub‑3.75% to reprice	More specific, constructive
Deposit Strategy	2H 2025–2026	Keep CDs short; brokered to lower cost; core growth focus	De‑emphasize CDs; shift to MMAs; benefit to funding costs with rate cuts	Maintained with clearer mix shift
Customer CDs Repricing	Q4 2025–Q1 2026	Large CD maturities; repricing benefit skewed later	Most CD roll-offs Jan–Feb; limited Q4 pickup	Timing clarified (later)
Operating Expenses	Q4 2025	“Mid to high $13M” run-rate	“High $13M/low $14M” for Q4; 2026 TBD	Slightly higher band
Consumer Loan Portfolio	Next “couple of quarters”	Target ~7–8% of loans	Still consistent ~7–8% of loans	Maintained
Taxes (DTA Valuation Allowance)	Ongoing	No tax benefit due to full valuation allowance	No tax benefit; VA $25.3M at 9/30/25	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Net Interest Margin	Q1: +27 bps NIM expansion; Q2: +12 bps; drivers: loan yields up, deposit costs down	NIM 2.34% (+6 bps); yields +9 bps; liability cost -4 bps	Improving, pace moderating
Deposit Mix & Costs	Keep CDs short; use brokered to lower all-in rates; drive core growth	De-emphasize CDs; shift to MMAs; expect benefit from rate cuts; brokered optimized via swaps	Positive mix shift
Loan Mix & Pipeline	Diversify to higher ROE: owner-occupied CRE, C&I; consumer purchases with reserves (3%); LOIs >$40M >7%	Pipeline >$41M LOIs >7%; < $6M of MF; focus on C&I and owner-occupied; consumer +$38M QoQ	Constructive
Asset Quality	Low NPL ratios, strong coverage	NPLs rose to $11.4M on one $5.3M credit; legal actions; no principal risk expected	Mixed (idiosyncratic)
Expenses/Discipline	Opex to stay high‑$13M/low‑$14M; leverage variable comp and efficiency	Q4 opex “high $13M/low $14M”; continued discipline; initiatives can cause lumpiness	Stable to slightly higher
AI/Tech Efficiency	Exploring AI to drive efficiencies	Continued focus on operational efficiency; no new quantification	Ongoing
Capital & Buybacks	Active buybacks below TBV; TBV/share rising	837k shares repurchased at $9.09; 730k authorization remaining; TBV $15.14	Supportive

Management Commentary

CEO (press release): “We experienced expansion in our net interest margin due to improvements in both yield on assets and cost of funds… diversifying our loan portfolio with an emphasis on asset classes that provide higher yields and better risk‑adjusted returns” .
CEO (press release): “Tangible book value exceeded $15 per share. As our profitability slowly continues to improve, we expect market valuation to follow.” .
CEO (call): “We repurchased over 837,000 shares at a weighted average price of $9.09… Tangible book value per share increased to $15.14…” .
CFO (call) on margin trajectory: “We anticipate fourth quarter to be relatively flat… 2026 pickup in net interest margin,” citing $45M sub‑4% H1’26 and $35–$40M sub‑3.75% H2’26 repricing cohorts .
CFO (call) on deposits: “We’ve actively worked with our customers on core deposit growth, de‑emphasizing CDs… lowering those costs… responsive to market” .

Q&A Highlights

NIM outlook: Q4 NIM roughly flat; 2026 improvement from asset repricing (sub‑4% and sub‑3.75% cohorts) and new production >7% .
Deposit strategy: De-emphasize CDs, shift to MMAs; brokered optimized via swaps; most CD repricing benefit in early 2026 (Jan–Feb maturities) .
Loan growth mix: De-emphasize multifamily unless strategic; focus on full relationships in C&I/owner-occupied CRE; pipeline >$41M with rates >7% .
Expenses: Q4 opex expected in high $13M/low $14M; 2026 guidance pending strategic plan .
Capital returns: Strong buybacks in Q3 included a private block; 730k shares remain authorized; repurchase pace will be opportunistic, not necessarily repeating Q3 size .

Estimates Context

Q3 2025: EPS -$0.10 vs -$0.095*, miss by $0.005*; “Revenue” $12.02M* vs $12.35M*, miss by ~$0.33M*. Values retrieved from S&P Global.
Q2 2025: EPS -$0.10 vs -$0.12*, beat by $0.02*; “Revenue” $11.58M* vs $11.80M*, miss by ~$0.22M*. Values retrieved from S&P Global.
Implications: Slight revenue shortfalls relative to consensus may reflect slower-than-modeled topline expansion and conservative classification differences; sustained NIM gains and 2026 repricing should nudge EPS trajectories higher as operating leverage improves .

Key Takeaways for Investors

Sequential fundamental improvement continued: NIM +6 bps; NII +$0.55M; deposits and loans grew while TBV/share rose to $15.14 — a supportive setup for eventual profitability inflection .
Asset-quality headline worsened due to one commercial loan ($5.3M), but mgmt does not expect principal loss; watch resolution pace and coverage (ACL 0.81%; coverage 121%) .
Funding strategy is working: core deposits up, brokered used opportunistically (225M→275M), and CD de‑emphasis positions funding costs for relief as rates decline .
2026 is the earnings catalyst year: sizable sub‑4%/sub‑3.75% cohorts expected to reprice higher; Q4 2025 NIM near flat; investors should model more meaningful margin lift beginning 1H’26 .
Opex discipline remains key: Q4 opex guided to high‑$13M/low‑$14M; sustained PPNR improvement is required to flip EPS positive; efficiency initiatives (incl. AI) are a medium‑term lever .
Capital return underpins downside: shares repurchased well below TBV; 730k authorization remains; board will balance buybacks vs lending opportunities .
Near-term trading: stock may react to modest consensus misses and NPL headline; medium-term rerating case hinges on visible NIM inflection in 2026 and continued TBV accretion .

Appendix: Additional Detail

Selected Operating Metrics

Metric	Q3 2024	Q2 2025	Q3 2025
Yield on Avg Interest-Earning Assets (%)	4.32	4.58	4.67
Cost of Avg Interest-Bearing Liabilities (%)	3.03	2.76	2.72
Interest Rate Spread (%)	1.29	1.82	1.95

Capital and Shares

Tangible equity/tangible assets: 14.58%; TBV/share: $15.14 (shares outstanding 20,761,225) .
Q3 repurchases: 837,388 shares at $9.09 average; 500,000 in a privately negotiated block; 730,000 shares remained under authorization .

Notes: “Revenue” in the S&P Global estimates table reflects S&P’s definition for banks and may not match company “total revenue” or net interest income exactly; all estimate values marked with an asterisk are from S&P Global.

Blue Foundry Bancorp (BLFY)·Q3 2025 Earnings Summary