Breaking Down Blue Foundry Bancorp (BLFY) Financial Health: Key Insights for Investors

You are looking at Blue Foundry Bancorp (BLFY) and seeing a classic bank story: strong capital and asset growth, but still chasing profitability in a tough rate environment. The headline number for the first nine months of 2025 is a persistent net loss of $(6.5) million, but that loss is actually an improvement from the prior year, and the third quarter's net loss narrowed to just $(1.9) million. Honestly, the real story is the balance sheet strength-total assets hit $2.16 billion as of September 30, 2025, fueled by impressive year-to-date deposit growth of 11.2%, or about $150 million. The bank is well-insulated with a CET1 capital ratio of 17.63%, which is defintely a fortress level. But still, you have to watch the credit quality: Non-Performing Loans rose to $11.4 million, or 0.7% of total loans, up from 0.3% at year-end 2024. We need to break down how they plan to convert that solid tangible book value per share of $15.14 into sustainable earnings, especially with loan growth concentrated in commercial real estate.

Revenue Analysis

You're looking for a clear picture of how Blue Foundry Bancorp (BLFY) actually makes its money, and the short answer is: it's a classic bank story, but with a crucial twist in 2025. The direct takeaway is that while total revenue is growing, the real story is the structural improvement in their core business-Net Interest Income (NII)-which is finally starting to pay off.

For a regional bank like Blue Foundry Bancorp, the primary revenue source is, defintely, Net Interest Income (NII). This is the difference between the interest they earn on assets, primarily loans, and the interest they pay out on liabilities, mainly deposits. In the first three quarters of 2025, NII has been the engine driving their top-line growth, showing a clear upward trend as they manage their balance sheet more aggressively.

The year-over-year revenue growth has been strong and accelerating throughout 2025. Total revenue in the first quarter of 2025 hit $10.9 million, a 5.1% increase from the same period in 2024. By the third quarter of 2025, that momentum had really picked up, with revenue reaching $12.61 million, representing a significant 33% year-over-year jump. This puts the full-year 2025 revenue forecast at approximately $47.93 million, a solid step up from the prior year.

Here's the quick math on their quarterly revenue progress in 2025:

• Q1 2025 Revenue: $10.9 million
• Q2 2025 Revenue: $12.04 million
• Q3 2025 Revenue: $12.61 million

The most significant change in the revenue stream isn't just the dollar amount, but the quality of the earnings, specifically the expansion of the Net Interest Margin (NIM)-which is the profitability measure for a bank's lending activities. This margin is expanding because the yield on their loans is rising faster than the cost of their deposits.

The contribution of different business segments to this revenue growth is heavily skewed toward their lending portfolio. Management is executing a strategic pivot to higher-yielding assets. This means they are actively shifting away from lower-yield loans, like certain types of multifamily Commercial Real Estate (CRE), and focusing on:

• Higher-yielding consumer loans (e.g., purchasing $35 million in credit-enhanced consumer loans in Q1 2025).
• New owner-occupied CRE loans (Q1 2025 production included $33 million in CRE loans at a weighted average yield of approximately 7.1%).

This strategic focus is clearly reflected in the NIM improvements throughout 2025. The NIM is the single most important metric for a bank's core profitability, and it's moving in the right direction:

What this estimate hides is the impact of future loan repricing. The bank has approximately $220 million of loans expected to reprice or mature in 2025 with anticipated yields near 7%, a structural catalyst that will provide a massive, automatic boost to NII in late 2025 and into 2026. This is the long-term value driver. For a deeper dive into who is betting on this turnaround, check out Exploring Blue Foundry Bancorp (BLFY) Investor Profile: Who's Buying and Why?

Profitability Metrics

You're looking for a clear read on Blue Foundry Bancorp's (BLFY) financial health, and the core takeaway is this: the bank is still in a turnaround phase, posting losses, but the trend on their core business-lending-is defintely moving in the right direction. They are not profitable yet, but they are getting less unprofitable.

For a bank, the most important profitability measure isn't traditional gross profit; it's Net Interest Income (NII), which is the revenue from loans and investments minus the interest paid on deposits and borrowings. In the third quarter of 2025, Blue Foundry Bancorp's NII was $12.2 million, a solid increase from $10.7 million in Q1 2025. This growth is the engine they need to keep fueling.

Net Loss and Margin Trends

While the revenue side is improving, the bottom line still shows a loss. Blue Foundry Bancorp reported a net loss of $1.9 million for the third quarter of 2025, which translates to a net loss margin of about -15.6% against their NII. Here's the quick math on the trend, which is what matters most for a company in this stage:

• Q1 2025 Net Loss: $2.7 million
• Q2 2025 Net Loss: $2.0 million
• Q3 2025 Net Loss: $1.9 million

The losses are consistently narrowing, quarter-over-quarter in 2025. Honestly, this loss reduction has been a long-term focus, with losses narrowing by an average of 27.9% per year over the last five years. They are making progress, but sustained profitability remains out of reach for now.

Operational Efficiency: A Clear Headwind

The biggest hurdle to profitability is operational efficiency, or the lack thereof. For a bank, this is measured by the Efficiency Ratio (non-interest expense as a percentage of net operating revenue). You want this number low-ideally below 60% for a well-run institution.

Blue Foundry Bancorp's Efficiency Overhead Ratio was a staggering 112.40% as of October 2025. To be fair, the aggregate Return on Assets (ROA) for the entire US banking industry in Q1 2025 was 1.16%, while Blue Foundry Bancorp's Return on Equity (ROE) is deeply negative at -11.2%. This tells you they spend more than they earn, and their use of assets and equity is significantly less efficient than their peers. Non-interest expenses remain a pressure point, increasing by $748,000 in Q1 2025, with management guiding quarterly operating expenses to remain near $13-14 million. That's a lot of overhead to cover with their current NII.

Core Margin Improvement and Valuation Context

Still, the core lending margin is showing strength. The Net Interest Margin (NIM), which is the bank's core 'gross margin,' expanded to 2.34% in Q3 2025, up from 2.16% in Q1 2025. This expansion is due to higher yields on assets (like loans) and a reduction in the cost of funds (like deposits). They are getting better pricing on their products and cheaper funding, which is exactly what you want to see. This focus on the fundamentals is crucial for their long-term health. You can read more about their strategy in their Mission Statement, Vision, & Core Values of Blue Foundry Bancorp (BLFY).

The market is clearly aware of the profitability gap. Blue Foundry Bancorp's Price-to-Book (P/B) ratio is only 0.5x, which is a significant discount to the US banks industry average of 1x. This low valuation multiple reflects the ongoing business risk and the lack of consistent profits. Until they can drive that efficiency ratio down and flip that net loss to a net profit, the stock will likely remain out of favor.

Debt vs. Equity Structure

Blue Foundry Bancorp (BLFY) operates with a notably higher debt-to-equity (D/E) ratio than its regional bank peers, signaling a more aggressive use of leverage to fund its growth, which is a key risk/reward factor for investors.

As of the third quarter of 2025, the company's total shareholders' equity stood at approximately $325.334 million. Its total assets were $2,104.321 million, meaning the majority of its funding comes from liabilities, primarily customer deposits, which are the lifeblood of any bank.

When assessing a bank's financial leverage, we look closely at non-deposit borrowings-the true debt. Blue Foundry Bancorp's main source of wholesale funding is Federal Home Loan Bank (FHLB) advances, which were $338.042 million as of September 30, 2025. This constitutes the bulk of their non-deposit debt, used to supplement customer deposits and fund loan growth.

The company's Debt-to-Equity (D/E) ratio is approximately 1.07. To be fair, a bank's D/E ratio is naturally higher than a manufacturing company's, but this figure is still elevated. The average D/E ratio for US Regional Banks is closer to 0.5, meaning Blue Foundry Bancorp is using more than twice the leverage of the average regional bank to finance its operations relative to its equity base. This higher leverage can amplify returns, but it defintely increases risk.

Here's the quick math on their capital structure and industry comparison:

In terms of recent activity, the company is actively managing its funding mix to reduce the cost of its interest-bearing liabilities, which is a smart move in a high-rate environment. The cost of borrowings saw a strategic decline to 2.72% in the third quarter of 2025. On the equity side, Blue Foundry Bancorp has been using a stock repurchase program, which is a form of capital management that reduces shares outstanding and helps increase tangible book value per share, which hit $15.14 by Q3 2025. They are balancing debt financing with active equity management to optimize their capital structure.

This approach of using higher leverage (debt) to fuel loan growth-like the $41.9 million increase in total loans in Q3 2025-is a calculated risk. It can lead to better returns on equity if the new loans perform well, but it leaves less buffer if credit quality dips. For a deeper dive into the overall picture, check out the full analysis at Breaking Down Blue Foundry Bancorp (BLFY) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You're looking at Blue Foundry Bancorp (BLFY) to see if it has the cash and capital to weather a storm, and the short answer is: yes, its capital position is defintely a core strength, but you need to look past the typical liquidity ratios for a bank like this. They are managing their balance sheet aggressively to drive future profitability, and that shows up in their cash flows.

As of September 30, 2025, the company's total assets stood at $2.16 billion, an increase from $2.06 billion at the end of 2024. This growth is a direct result of their strategy to expand their loan portfolio, which reached $1.70 billion net of allowance for credit losses. Their core liquidity-the cash and liquid securities-is stable, but the real story is in their capital cushion, which remains robust.

Current and Quick Ratios: A Bank's Unique View

For a non-financial company, a current ratio (current assets / current liabilities) of around 2.0 is ideal. For a bank, the calculation is often less meaningful because deposits (a liability) are the core of their business model. Still, for context, Blue Foundry Bancorp's latest reported Current Ratio is 1.17, which is identical to its Quick Ratio. This is because a bank's most liquid assets are already included in the quick ratio, like cash and investment securities. The key takeaway here is simple: they have enough near-term liquid assets to cover their immediate obligations, but their true safety net is their regulatory capital.

• Current Ratio: 1.17 (Liquid assets cover short-term liabilities).
• Quick Ratio: 1.17 (Essentially the same as current ratio for a bank).
• Cash & Equivalents: $44.1 million as of September 30, 2025.

Working Capital and Funding Trends

The company's working capital management is all about attracting deposits to fund loan growth. They are succeeding in growing their funding base, with total deposits increasing by $150 million, or 11.2%, year-to-date through Q3 2025, reaching $1.49 billion. This is a strong sign of customer confidence. Plus, they are strategically focusing on core deposits (non-interest bearing checking, NOW, demand, and savings), which represented 47.6% of total deposits as of March 31, 2025-a cheaper, stickier source of funding. They are also actively reducing higher-cost funding, like Federal Home Loan Bank (FHLB) advances, which decreased to $301.0 million from $339.5 million at the end of 2024. This is a smart move to improve their net interest margin (NIM). You can read more about their strategic focus on client relationships in their Mission Statement, Vision, & Core Values of Blue Foundry Bancorp (BLFY).

Cash Flow Statement Overview

The cash flow statement for the nine months ended September 30, 2025, reveals where the capital is moving:

The $(2.0) million net cash used in operating activities is a direct reflection of the company's net loss of $6.5 million for the nine months. The investing cash flow is negative because they are actively deploying capital by originating and purchasing loans, like the $41.9 million increase in loans during Q3 2025 alone. This is a growth-focused cash burn, not a distress signal.

Liquidity Concerns and Strengths

The main concern is the continued net loss, which resulted in the small negative operating cash flow. However, this is largely offset by a few powerful strengths. The company is demonstrably well capitalized, with a Common Equity Tier 1 (CET1) ratio of 17.63%, which is significantly above the regulatory minimum of 4.5% for a well-capitalized bank. Their tangible book value per share also increased to $15.14 in Q3 2025. This high tangible book value and strong capital ratio provide a massive liquidity buffer (a solvency strength) that far outweighs the near-term operating cash flow deficit. They have the capital to absorb losses and keep executing their growth strategy. Finance: Monitor the trend in operating cash flow to ensure it turns positive alongside expected margin improvements in 2026.

Valuation Analysis

You're looking at Blue Foundry Bancorp (BLFY) and trying to figure out if the market has it right. Honestly, the valuation metrics suggest a classic 'cheap for a reason' scenario, which is common in regional banking right now. The stock is trading at a significant discount to its book value, but that's offset by the fact that the company isn't profitable yet, which creates a clear risk-reward profile.

To be fair, the primary signal here is the Price-to-Book (P/B) ratio. As of late 2025, Blue Foundry Bancorp's P/B ratio stands at a low 0.54. For a bank, a P/B under 1.0 suggests the stock is trading for less than the value of its net assets, which often signals a deep discount or market concern about asset quality or future earnings power. In this case, the market is pricing the company at about 54 cents for every dollar of book value.

Here's the quick math on the negative profitability: The Price-to-Earnings (P/E) ratio is negative, sitting around -17.00. This isn't a surprise since the company reported a trailing 12-month (TTM) net income of approximately -$8.7 million as of October 2025, with analysts forecasting a full-year 2025 EPS of -$0.47. You can't use a negative P/E to compare against peers, so you must lean on the P/B and the tangible book value per share (TBVPS), which was a robust $14.69. That's a huge gap from the current stock price around $8.12.

The Enterprise Value-to-EBITDA (EV/EBITDA) multiple is less informative here because, as a bank, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is not a primary metric, and the company's LTM EBITDA is not explicitly reported or is negative. Still, the Enterprise Value (EV) is estimated at roughly $495 million.

Stock Performance and Analyst Sentiment

Your investment decision must also account for the recent stock performance and what the Street thinks. Over the last 12 months leading up to November 2025, the stock price has decreased 26.62%, with the 52-week trading range spanning from a low of $7.92 to a high of $11.38. That's a rough ride, defintely indicating investor pessimism.

The analyst consensus reflects this mixed view. The average rating is a 'Reduce,' which is a cautious stance between Hold and Sell. The breakdown is clear:

• Consensus Rating: Reduce
• Analyst Coverage: 1 Hold, 1 Sell
• Average Target Price: $10.00

This $10.00 target price represents an upside of about 27.9% from the recent trading price of $7.82. So, the analysts see a path for a significant price recovery, but they are not yet ready to issue a strong buy signal. The market is waiting for a sustained turn to profitability.

Dividend Policy and Investor Takeaway

If you're looking for income, Blue Foundry Bancorp is not the place. The company does not currently pay a dividend, meaning the dividend yield is 0.00% and the payout ratio is not applicable. This is a growth-focused or turnaround story, not an income play. The capital is being retained to support the balance sheet and future loan growth.

The bottom line is that Blue Foundry Bancorp (BLFY) looks undervalued on a P/B basis, but the negative earnings and stock decline show the market's skepticism. The opportunity is in the discount to tangible book value, but the risk is the lack of near-term profitability. You need to decide if you believe the management can execute the turnaround to close the gap between the $8.12 stock price and the $14.69 tangible book value per share. If you want to dig deeper into who is buying this discounted stock, you should check out Exploring Blue Foundry Bancorp (BLFY) Investor Profile: Who's Buying and Why?

Risk Factors

You're looking at Blue Foundry Bancorp (BLFY) and seeing the progress-the net interest margin expansion, the loan growth-but a seasoned analyst knows the first step is mapping the risks. The bank is defintely moving in the right direction, but it's still navigating a difficult transition from a traditional mutual holding company to a growth-focused commercial bank. The near-term risks center on profitability, asset quality, and the cost of funding.

The most pressing financial risk is the persistent Net Loss. For the third quarter of 2025, Blue Foundry Bancorp reported a net loss of $(1.9) million. While this is an improvement from the $(4.0) million loss in the same quarter last year, the nine-month net loss through September 30, 2025, still stands at $(6.5) million. This ongoing unprofitability means the bank is consuming capital, even with its strong capital ratios. The market sees this, which is why the stock trades at a discounted Price-to-Book ratio of roughly 0.5x as of October 2025, undercutting the US banks industry average of 1x. That discount is the market pricing in the risk of no clear sign of profitability ahead.

Asset Quality and Credit Risk

Credit quality is another area demanding a close look. We've seen a notable rise in non-performing loans (NPLs), which are loans where the borrower has stopped making payments. At the end of Q3 2025, NPLs rose to $11.4 million, or 0.7% of total loans, a significant jump from $5.1 million (or 0.3% of loans) at the end of 2024. This increase is a red flag, suggesting potential pressure on the loan portfolio, especially in a slowing economic environment. The bank responded by increasing its provision for credit losses to $589,000 in Q3 2025, driven by a more cautious economic forecast. Here's the quick math: higher NPLs mean a higher provision, which directly hits the bottom line.

External and Operational Headwinds

External market conditions and internal operational costs create further drag. The competitive banking environment in the New Jersey market forces the bank to pay up for deposits, which is a major component of interest rate risk. The bank's reliance on time deposits, which accounted for $789 million or 53% of total deposits at September 30, 2025, makes it highly sensitive to interest rate hikes. Also, operational costs are rising. Non-interest expense hit $13.9 million in Q3 2025, up $619,000 year-over-year, largely due to higher compensation and benefits as they scale their commercial banking platform.

What this estimate hides is the risk of a sharp economic downturn, which would accelerate the growth of those non-performing loans far beyond current provisions. The bank is mitigating these risks through clear actions:

• Maintain a robust capital buffer: CET1 ratio of 17.63% at Q3 2025.
• Drive net interest margin expansion: NIM reached 2.34% in Q3 2025.
• Focus on higher-yielding assets: Loan production yields were around 7.1% in Q1 2025.

They are well-capitalized, but the path to consistent profit is still the biggest hurdle. You can see more details on the bank's strategy in Breaking Down Blue Foundry Bancorp (BLFY) Financial Health: Key Insights for Investors.

Finance: Monitor the NPL trend and deposit cost structure for Q4 2025 by January.

Growth Opportunities

You're looking at Blue Foundry Bancorp (BLFY) and wondering where the growth comes from, especially as they're still working toward consistent profitability. Honestly, the story here isn't about massive new market expansion; it's about a precise, margin-focused transformation strategy that's defintely showing progress in the 2025 numbers.

The core growth driver is a strategic shift in their lending mix-moving away from lower-yield assets and into higher-yielding ones. This is what's expanding their net interest margin (NIM), which hit 2.34% in the third quarter of 2025. Their management is focused on driving loan growth in higher-yielding asset classes while simultaneously growing and diversifying low-cost funding sources.

Here's the quick math on what that strategy looks like in action for 2025:

• Loans increased by $131.4 million during the first nine months of 2025, reaching $1.71 billion by Q3.
• They strategically purchased unsecured consumer loans, adding $114.5 million to the consumer loan portfolio through Q3 2025 to improve yields.
• Deposits grew by $150.1 million, or 11.17%, in the first nine months of 2025, with a focus on attracting full banking relationships from small- to medium-sized businesses.

The bank's competitive advantage is twofold: strong credit quality and a discounted market valuation. As of Q1 2025, their non-performing asset to total asset ratio was a very strong 0.27%. Plus, the stock has been trading at a Price-to-Book ratio of just 0.5x, which is meaningfully cheaper than the US banks industry average of 1x. This discount means there's potential upside as profitability improves.

The market is clearly anticipating a turnaround, even with the current losses. For the full 2025 fiscal year, analysts have a clear line on where they expect the company to land. This is the near-term reality you need to map your actions to, as we discussed in Breaking Down Blue Foundry Bancorp (BLFY) Financial Health: Key Insights for Investors.

What this estimate hides is that revenue is forecast to grow at an average of 19% per year over the next two years, significantly outpacing the 7.3% forecast for the broader US Banks industry.

The management team is also focused on shareholder value, repurchasing 837,388 shares in Q3 2025 alone. This commitment, coupled with the slow but steady expansion of the net interest margin, suggests they are executing on their transformation strategy. The biggest risk remains the actual translation of loss reduction-which has narrowed by an average of 27.9% per year over the last five years-into sustained, repeatable profit.

Next Step: Portfolio Manager: Model a scenario where the 2026 NIM hits 2.50% to quantify the impact on the current EPS forecast by next Friday.