Q1 2024 Blue Foundry Bancorp Earnings Call
Operator: Good morning, and welcome to Blue Foundry Bancorp's first quarter 2024 earnings call. Comments made during today's call may include forward-looking statements which are based on management's current expectations and are subject to uncertainty and changes in circumstances. Blue Foundry encourages all participants to refer to the full disclaimer contained in this morning's early earnings release, which has been posted on the investor relations page on BlueFoundryBank.com. During the call, management will refer to non-GAAP measures, which exclude certain items from reported results.
Good morning, and welcome to Blue Foundries Bancorp's first quarter 2024 earnings call comments made during today's call may include forward looking statements, which are based on management's current expectations and are subject to uncertainty and changes in circumstances.
Blue foundry encourages all participants to refer to the full disclaimer contained in this morning's early earnings release, which has been posted to the Investor Relations page on Blue Foundry Bank Dot com during the call management will refer to non-GAAP measures, which exclude certain items from reported results. Please refer to today's earnings release for.
Operator: Please refer to today's earnings release for reconciliations of these non-GAAP measures. As a reminder, this event is being recorded. Your line will be muted for the duration of the call. After the speaker's remarks, there will be a question and answer session. I'll now turn the call over to President and CEO Jim Nesci. Thank you, operator.
Reconciliations of these non-GAAP measures.
As a reminder, this event is being recorded.
Your line will be muted for the duration of the call. After the Speakers' remarks, there'll be a question and answer session. I will now turn the call over to President and CEO Jim <unk>. Please.
Speaker Change: Please go ahead.
Jim: Thank you operator.
James Nesci: Good morning to everyone, and welcome to our first quarter earnings call. I am joined by our Chief Financial Officer, Kelly Pecoraro. I'm going to provide a strategic update, and then Kelly will discuss the company's first quarter financial results in detail.
Jim: Good morning, everyone and welcome to our first quarter earnings call.
Jim: And by our Chief Financial Officer, Kelly Haecker on it.
Jim: To provide a strategic update and then Kelly will discuss the company's first quarter financial results in detail.
James Nesci: We continue to focus on executing against our strategy and delivering value for all of Blue Foundry's stakeholders. Paramount to our success is our ability to leverage the company's strong capital position to fund assets in the public room. The first quarter was a promising step in the right direction.
Speaker Change: We continue to focus on executing.
Kelly Pecoraro: Yes, our strategy and delivering value for all its new foundry stakeholders Paramount to our success is our ability to leverage the company's strong capital position.
Kelly Pecoraro: But an asset and deposit growth.
Kelly: The first quarter was a promising step in the right direction during the quarter, we grew deposits by $46 million.
James Nesci: During the quarter, we grew deposits by 46 million dollars. This growth was driven by the execution of our strategic initiatives and resulted in a reduction in our loan-to-deposit ratio by 500 basis points. Continued deposit growth will allow us to generate interest-earning assets and expand revenue while maintaining an appropriate amount of leverage, given our strategy to become a more commercially oriented institution, have been selected and originating real estate loans while building our commercial pipeline. We expect to see production and commercial credits pick up as we move through 2024.
This growth was driven by the execution of our strategic initiatives have resulted in a reduction in our loan to deposit ratio by 500 basis points.
Kelly: Deposit growth will allow us to generate interest, earning assets and to expand revenue, while maintaining an appropriate amount of leverage.
Kelly: Given our strategy to become a more commercially oriented institution.
Kelly: Selective in originating real estate loans, while building our commercial pipeline.
Kelly: We expect to see production and commercial credits pick up as we move through 2024.
James Nesci: We are disciplined in underwriting strong credits for all of our low-credit work. We are committed to continue being good stewards of capital. Our stock, along with many of our peers, is trading at a discount to tangible book value. We believe that repurchasing shares at these levels is a prudent use of capital. In the first quarter, our board approved another repurchase program for us in less than two years. Under our repurchase programs, we repurchased 532,000 shares at a weighted average share price of $9.49 during the quarter.
Kelly: Okay.
Kelly: We are disciplined as underwriting strong credits for us all of our product offerings.
Kelly: We are committed to continue being good stewards of capital.
Kelly: Our stock along with many of our peers.
Kelly: Is trading at a discount to tangible book value, we believe that repurchasing shares at these levels is a prudent use of capital.
Kelly: In the first quarter, our board approved another repurchase program.
Kelly: And last but two years.
Kelly: Under our repurchase program, we repurchased 532000 shares at a weighted average share price of $9 49 during the quarter. These.
James Nesci: These repurchases, coupled with an improvement to our AOCI, helped increase tangible hook value per share by $0.11 to $14.60. Our bank and holding company remain well capitalized, with capital levels that are among the highest in the banking industry; tangible equity to tangible common assets was 17.25% as of March 31st. Blue Foundry continues to operate with a low percentage of uninsured depositors and a low concentration risk to any single depositor, uninsured, and uncollateralized deposits from customer accounts totaling $133 million as of March 31st.
Kelly: These repurchases coupled with an improvement to our OCI helped increased tangible book value per share by 11 two.
Kelly: $214 60.
Our bank and holding company remained well capitalized with capital levels that are among the highest in the banking industry.
Kelly: Tangible equity to tangible common assets was $17 two 5% as of March 31.
Kelly: Blue foundry continues to operate with a low percentage of uninsured deposits.
Kelly: It's a low concentration risk any single depositor.
Kelly: Uninsured and uncollateralized deposits from customer accounts for $133 million at March 31.
James Nesci: This is approximately 10% of the company's total deposit. At the end of the first quarter, we had $418 million in untapped borrowing capacity, and our unencumbered, available-for-sale securities, providing another $251 million of liquidity. We had $54 million of cash on the balance, of which $38 million was unrestricted. Additionally, our available liquidity covers 5.3 times our uninsured and uncollateralized deposits to customers. With that, I'd like to turn the call over to Kelly, and then we would be delighted to answer your questions.
Kelly: This is approximately 10% of the company's total deposits.
Kelly: At the end of the first quarter, we had $418 million untapped borrowing capacity at our unencumbered available for sale Securities provided another $251 billion of liquidity.
Kelly: Had $54 million of cash on the balance sheet of which $38 million was unrestricted. Additionally, our available liquidity covers five three times, our uninsured and uncollateralized deposits customers.
Kelly: With that I'd like to turn the call over to Kelly, but then we would be delighted to answer your questions Kelly.
Kelly Pecoraro: Thank you, Jim, and good morning, everyone. The net loss for the first quarter was $2.8 million compared to a net loss of $2.9 million during the prior quarter. This improvement was driven by a release in the provision for credit losses and an improvement in net interest margins, partially offset by an increase in expenses which was guided to last quarter; our asset quality continues to remain strong in the current environment. During the quarter, we had a release of provision for credit losses of $535,000, driven by forecasted improvement to the economic drivers used to model our credit loss; a release occurred in all three categories, loans, off-bal As a reminder, the majority of our allowance for credit loss is derived from quantitative measures, and our allowance methodology places greater weight on the baseline in adverse forecasts.
Kelly: Thank you Jim.
Kelly: Morning, everyone.
The net loss for the first quarter was $2 8 million.
Kelly: Compared to a net loss of $2.
Kelly: $9 million during the prior quarter.
Kelly: This improvement was driven by royalties and the provision for credit losses.
And an improvement in net interest margin.
Kelly: Partially offset by an increase in expenses, which was guided to last quarter.
Kelly: Our asset quality continues to remain strong in the current environment.
Kelly: During the quarter, we had a release of provisions for credit losses of $535000.
Kelly: Driven by forecasted improvement to the economic drivers is to model our credit market.
Kelly: Our lease occurred in all three categories.
Kelly: Bonds off balance sheet commitments and held to maturity securities.
Kelly: As a reminder, the majority of our allowance for credit loss is derived from quantitative measures.
Kelly: And our allowance methodology places greater weighting on the baseline adverse forecast.
Kelly Pecoraro: While non-accrual loans increased $793,000 due to a single small business credit, non-performing assets to total assets remained low, increasing four basis points to 36 basis points, the allowed to total loans decreased three basis points, to 88 basis points, due to the decrease in the allowance for credit losses on loans, and our allowance to non-accrual loans decreased to 205% from 240% the prior quarter due to the increase in non-accrual loans Net interest income increased by $221,000, leading to an eight-basis point expansion in net interest margin; interest income expanded $507,000, and interest expense increased $286,000.
While non accrual loans increased $793000 due to a single small business credit.
Kelly: Performing assets to total assets remains low.
Kelly: Four basis points to 36 basis points.
Kelly: Our allowance to total loans decreased three basis points.
Kelly: 88 basis points.
Kelly: The decrease in the allowance for credit losses on loans.
Kelly: Our allowance to nonaccrual loans.
Kelly: Decrease 205% from 240% the prior quarter.
Kelly: Due to the increase in non accrual loans, coupled with a decrease in allowance for credit losses on loans.
Kelly: Net interest income increased by $221000, leading to an eight basis point expansion in net interest margin.
Kelly: Interest income expanded $507000.
Kelly: Interest expense increased $286000.
Kelly Pecoraro: We may experience slight margin pressure over the next couple of quarters depending on interest rate activity and our ability to generate asset growth given the current macroeconomic environment. Yields on loans increased by 16 basis points to 4.45 percent, and yields on all interest-earning assets increased by 19 basis points to 4.25%. Cost of funds increased 11 basis points to 2.81%, but we continue to remain competitive in deposit prices. This resulted in the cost of interest-bearing deposits increasing by 22 basis points to 2.74%. Conversely, borrowing costs decreased 14 basis points to 3.24% as we paid off higher-cost short-term wholesale borrowing. However, expenses increased by $699,000, primarily driven by compensation and benefits.
Kelly: Remote life.
Kelly: Slight margin pressure over the next couple of quarters, depending on interest rate activity and our ability to generate asset growth given the current macro economic environment.
Kelly: Yield on loans increased by 16 basis points.
Kelly: Four or 5%.
Kelly: And.
Kelly: All interest, earning assets increased by 19 basis points to four.
Kelly: For two 5%.
Kelly: Cost of funds increased 11 basis points to 281%.
Kelly: We continue to remain competitive deposit pricing.
Kelly: This resulted in the cost of interest bearing deposits increasing <unk>.
Kelly: Two basis points to 274%.
Kelly: Conversely, borrowing costs decreased 14 basis points to 324% as we paid off higher cost short term wholesale borrowing.
Kelly: Expenses increased by $699000, primarily driven by compensation and benefits.
Kelly Pecoraro: While compensation and benefits increased as a result of variable compensation bonus accruals resetting for new performance targets in 2024, our headcount remained stable throughout the quarter. We continue to explore opportunities to optimize our expense base, and we expect operating expenses for the second quarter of 2024 to be in the mid to high $13 million range. Moving on to the Bound Sheet.
Kelly: While compensation and benefits increased as a result of variable compensation and bonus accruals.
Setting, bringing performance targets in 2024, our head count remained stable throughout the quarter.
Kelly: We continue to explore opportunities to optimize our expense base.
Kelly: Operating expenses for the SEC.
Kelly: Fourth quarter 2024.
In the mid to high $13 million range.
Kelly: Moving on to the balance sheet.
Kelly Pecoraro: Gross loans declined by $6.6 million during the quarter as amortization and payoffs outpaced new loan funding. As a reminder, less than 2%, or $22 million, of our loan portfolio is in office space, and none is in New York City. Our guest securities portfolio has a duration of 4.8 years. As a result of maturities, calls, and scheduled paydowns, this portfolio was reduced by $18.6 million during the quarter.
Kelly: Gross loss declined by $6 million during the quarter.
Kelly: Amortization and payoffs outpaced new loan funding.
Kelly: As a reminder, less than 2% or $22 million of our loan portfolio is in office space and.
<unk> is in New York City.
Kelly: Our debt securities portfolio has a duration of four eight years.
Kelly: As a result of maturities call unscheduled pay downs this portfolio was reduced by $18 $6 million during the quarter.
Kelly Pecoraro: Deposits increased by $46.3 million, or 3.7% during the quarter. Our frontline staff was able to grow retail time deposits by $50.2 million and growth for deposits by approximately $500,000. This growth was partially offset as we allowed wholesale deposits to mature. Our focus remains on attracting the full banking relationship of small to medium-sized businesses; we offer an extensive suite of low-cost deposit products to our business customers. During the quarter, commercial account balances increased $18.5 million, or 10%.
Kelly: Deposits increased by $46 $3 million or three 7% during the quarter.
Kelly: Our frontline staff were able to grow retail time deposits by $52 million.
And growing core deposits by approximately $500000.
Kelly: This growth was partially offset as we allow us wholesale deposits to mature.
Kelly: Our focus remains on attracting the full banking relationships are small to medium sized businesses.
Kelly: We offer an extensive suite of low cost deposit products to our business customers.
Kelly: During the quarter commercial account balances increased 18 5 million or 10%.
Kelly Pecoraro: As a result of our strong deposit growth and cash flow from the loan and securities portfolios, we were able to pay down $55 million of higher-cost short-term borrowing. And with that, Jim and I are happy to take your questions.
Kelly: As a result of our strong deposit growth and cash flow from the loan and securities portfolios, we were able to pay down $55 million of higher cost short term borrowings.
Speaker Change: And with that Jim and I are happy to take your questions.
Operator: If you'd like to queue for a question, you can do so by pressing star 1 on your telephone keypad. And if for any reason you'd like to remove your question, you can press star 2. Again, to queue for a question, please press star one. We'll pause here briefly as questions are registered. Our first question is from Justin Crowley with Piper Sandler. Your line is now open.
Speaker Change: If you'd like to queue for a question you can do so by pressing star one on your telephone keypad and if for any reason that you'd like to remove your question you can press star two.
Speaker Change: The Q for your question. Please press Star one we'll pause here briefly as questions are registered.
Okay.
Speaker Change: Our first question is from Justin <unk> with Piper Sandler Your line is now open.
Justin Frank Crowley: Hey, good morning guys. I just wanted to start off on the margin. You know, it's nice to see some inflection in the quarter. As I think about your balance sheet, lower rates would, of course, be helpful. But as we face, you know, the idea of higher for longer, I was wondering if you could just unpack a little more what drives perhaps just the commentary on NIM pressure looking ahead versus what you saw in the current quarter.
Justin: Hey, good morning, guys.
Justin: Just wanted to start off on the margin.
Justin: It was nice to see some inflection in the quarter.
Justin: As I think about your balance sheet lower rates would of course be helpful.
Justin: As we face the idea of higher for longer I was wondering if you can just unpack a little more what drives perhaps just a commentary on NIM pressure looking ahead versus what you saw in the current quarter.
James Nesci: Thank you, Justin. Good morning.
Speaker Change: Thank you, Jeff and good morning.
Kelly Pecoraro: So as we looked, we were very pleased with the quarterly expansion in NIMS. We are mindful, though, within our portfolio, we have about 230 million time deposits that will reprice. So currently, they're at about a 470 rate. And given the pressure on deposit pricing in the market, that will probably reset to a higher price level given the current rate. So depending on that, we could see some pressure on deposit costs to go even higher.
Jeff: We were very pleased with the quarter's expansion in NIM.
We are mindful, though within our portfolio, we have about $230 million of time deposits.
Speaker Change: We'll reprice. So currently they are at about a 470 rate and given the pressure on deposit pricing in the market that was probably reset to a higher price level given the current rates. So depending upon that we could see some pressure on deposit costs to go even higher.
Justin Frank Crowley: Okay, gotcha. That's helpful.
Justin Frank Crowley: And then just as far as that deposit gathering side, you know, obviously, a good quarter to start off the year. But, you know, how are you thinking about deposit generation going forward versus having to rely on, you know, more wholesale funding channels? You know, obviously, you're able to reduce that in the quarter. Just curious about your thoughts there. Obviously, it's a competitive environment, so
Speaker Change: Okay got you that's helpful and then just as far as that deposit gathering side.
Speaker Change: Obviously, a good quarter.
Speaker Change: To start off the year, but how are you thinking about deposit generation going forward versus having to rely on more wholesale funding channels.
Obviously, you were able to reduce that in the quarter just curious.
Speaker Change: Thoughts there, obviously, it's a competitive environment so.
James Nesci: Good morning, Justin. It's Jim.
Chip: Good morning, Justin it's chip.
Chip: We are out in the marketplace.
James Nesci: We are out in the marketplace, shaking all the bushes, working on small business, and putting our people forward, surrounding ourselves on the commercial side as much as possible. I think we have strong products, and we're going to keep driving towards organic growth on the deposit side as much as possible, as opposed to wholesale funding. Organic growth is what we hope will lead us to a better market going forward.
Chip: Taking all of Bush's working on small business and putting our people forward surrounding ourselves on the commercial side as much as possible I think we have strong products Keith.
Chip: Keep driving towards organic growth on that deposit side as much as possible as opposed to wholesale funding. The organic growth is what we hope to lead us to a better market going forward.
Justin Frank Crowley: Okay, I appreciate that. And then, on credit, you touched on it, but it looked quite clean once again. And you mentioned the small pick-up and non-performers. But, you know, obviously, you're able to release some reserves in the quarter. You know, steam's just more of the world we live in with Cecil. But, you know, what are you seeing under the hood when you look at your book in terms of any early signs of stress, if any at all?
Speaker Change: Okay I appreciate that and then just on credit you touched on it but it looked like we once again.
Speaker Change: Mentioned, a small tick up in non performers.
Speaker Change: But obviously you are able to release some reserves in the quarter.
It seems just more of the world we live in with seasonal but what are you seeing under the Hood. When you look at your book in terms of any early signs of stress if any at all.
Kelly Pecoraro: Yeah, Justin, we are pleased with our level of non-performing loans. While we did pick up, we do look forward to some resolution of some non-performing loans that are on our books. There's nothing right now at this point that's concerning besides what we've disclosed in the non-performing loans. So, you know, pleased with the credit metrics. We have strong underwriting, and that has served us well.
Speaker Change: Yeah.
Speaker Change: We are pleased with our level of nonperforming, while we did tick up.
Speaker Change: Do look forward to some resolution of some nonperforming center on our books. There is nothing right now at this point that's concerning besides what we've disclosed in the nonperforming.
Speaker Change: So pleased with the credit metrics, we have strong underwriting and that has served us well.
Justin Frank Crowley: Okay. And then I guess just my obligatory question on buybacks, but you know, I think the desire to stay active is still there based on what we saw during the quarter, where capital levels stand, and then, you know, just where activity got done versus where the stock is now. Just curious, any updated thoughts there, if there's possibly, you know, room to get even more active if the balance sheet continues to kind of shrink in size or at least stay roughly where it is?
Speaker Change: Okay.
And then I guess, just my obligatory question on buybacks, but we think the desire to stay.
Speaker Change: Bill there based on what we saw during the quarter, where capital levels stand and then just where activity got done at versus where the stock is now just curious any updated thoughts there theres, possibly.
Speaker Change: We're going to get even more active the balance sheet continues to kind of shrink in size or at least stay roughly where it is.
Yes, Sir.
James Nesci: The board and I and Kelly, we all strongly believe in buybacks. I think you'll see us remain active in buybacks. I don't know that there are any further comments that we have at this time, but we believe in buybacks. The board of directors believes in buybacks, and we do believe it works given where the price of the shares is.
Speaker Change: Reported.
Speaker Change: Kelly do you all strongly believe in buyback.
Bill: I think youll see us the remaining active in buybacks I don't know that there is.
Bill: Any further comments that we have at this time, but we believe a buyback to the board of directors, who will use it and buybacks and we do believe.
Bill: It works, given where the price of the shares are today.
Justin Frank Crowley: Okay, great. Thanks, Jim and Kelly. I appreciate it. I'll leave it there.
Speaker Change: Okay, great. Thanks.
Speaker Change: Thanks, Jim Kelly I appreciate it I'll leave it there.
Speaker Change: Yeah.
Kelly Pecoraro: Thanks so much; have a great day!
Speaker Change: Thanks, so much and great day.
Operator: Our next question is from Chris O'Connell with KBW. Your line is now open.
Speaker Change: Our next question is from Chris O'connell with <unk>. Your line is now open.
Chris O'connell: Hey, good morning.
Chris O'connell: So I just want to start off on the loan side, and you know how the pipeline's doing, and you know where you guys are thinking about in terms of, you know, reaching growth for the full year of 2024.
Chris O'connell: So.
Chris O'connell: Just wanted to start off.
Chris O'connell: On the loan side.
Chris O'connell: And.
Chris O'connell: How the pipeline is doing.
Chris O'connell: Where you guys are thinking about in terms of.
Chris O'connell: Reaching growth for the full year 2024.
Kelly Pecoraro: Right Chris, so as you saw, we had a slight reduction in our loan portfolio this quarter, and really that's driven by a couple of things. You know, competition for loans, but we are, as Jim noted, being very selective in the assets that we're putting on our books. So when we look at the shift, we were pleased with the reduction in our multifamily and residential and the growth within the C&I and other commercial real estate line items.
Speaker Change: Great Chris So I just thought we had a slight reduction in our loan portfolio. This quarter and really that's driven there's couple of things you know competition for loans, but we are as Jim noted being very selective in the assets that we're putting on our books. So when you look at our the shift we are pleased with.
Speaker Change: The reduction in our multifamily and residential and the growth within the C&I.
Speaker Change: And other commercial real estate.
Kelly Pecoraro: So we're looking to be prudent as we put those assets and our pipeline right now, and while we sit at about 40 million in our pipeline, you know those are in those asset classes that we're looking to focus on.
Speaker Change: So we're looking to be prudent as we put those assets.
And our pipeline right now, while we sit at about $40 million in our pipeline.
Speaker Change: Those are in those asset classes that we're looking to focus on.
Chris O'connell: Chris, I think they tried... And what's the yield in Python?
Speaker Change: Got it.
Speaker Change: Great.
Speaker Change: Brian.
Brian: Didn't quite fine.
Kelly Pecoraro: The yields in the pipeline are just right around 7.5, and 7.6.
Brian: The yields and the pipeline is just right around seven Mcf seven six.
Brian: Great.
Brian: Okay.
Brian: And as absent any rate change impacts as.
Chris O'connell: And as you know, absent any, you know, rate change impacts, you know, as you're looking at the next couple quarters with the NIM pressure, any sense as to where you could see, you know, the level of bottoming?
Brian: As Youre looking out the next couple of quarters with the NIM pressure.
Brian: Any sense as to where you could see.
Brian: The level of bottoming.
Kelly Pecoraro: I don't think we have a level where we bottom, you know; it's very dependent upon the repricing, us being able to gather and put on the higher yielding assets. But we are mindful, as I had mentioned, of some of the repricing in our deposit book. This quarter, we benefited from our borrowings being paid down, both higher costs and being able to replace them with deposits. So,
Brian: I don't think we have a level, where we bought them, it's very dependent upon the repricing us being able to gather and put on the higher yielding assets.
Brian: But we are mindful as I had mentioned with some of the repricing of our deposit book this quarter, we benefited from our borrowings being T down both higher costs and being able to replace them with deposits.
Brian:
Brian: So has that changed.
Chris O'connell: And where are those CDs, the 230 million? Where do you see them repricing to? Right now.
Brian: And where is.
Brian: Where are those Cds that $230 million.
Brian: You see them repricing too.
Brian: Well right now they are on the books of about a 470 <unk> and our current.
Kelly Pecoraro: Well, right now, they're on the books at about a 470, and our current promotional rates out there are about 525.
Brian: Promotional rates out there are about $5 25.
Brian: Yeah.
Speaker Change: Okay great.
Chris O'connell: Um, it's helpful and then, just, you know, more broadly or strategically thinking, I mean, how are you guys thinking about, you know, the pace or the movement toward, you know, kind of positive profitability? You know, are there any, you know, incentive targets that are linked to that? And, you know, do you see that happening? You know, over the course of the next few quarters? Do you think you need the yield curve to change? You know, what's the pathway there?
Speaker Change: That's helpful.
Speaker Change: And then.
Speaker Change: Just more broadly are strategically thinking I mean.
Speaker Change: How are you guys thinking about the pace or the movement toward.
Speaker Change: Positive profitability.
Speaker Change: Is there any incentive targets.
Speaker Change: That are linked to that and do.
Speaker Change: Do you see that happening.
Speaker Change: Over the course of the next few quarters do you think you'd need the yield curve to change.
Speaker Change: What's the pathway there.
James Nesci: stickers. I'll call start, and I'll let Kelly finish.
Speaker Change: So Chris I'll start and I'll, let Kelly finish.
Speaker Change: The.
James Nesci: The goal is always to become profitable and continue to improve the financials for the company and for its shareholders. On the expense side, we continue to look for any expenses that we can cut or reduce or be more strategic about. We continue to consolidate vendors whenever possible.
Speaker Change: The goal is always to become profitable.
Speaker Change: To continue to improve through the financials for the company and for its shareholders.
Kelly: The expense side, we continue to look for any expenses that we can cut or reduce or being more strategic about.
Kelly: We continue to consolidate vendors whenever possible.
James Nesci: We are very mindful of our staffing and our salaries and benefits. So I think there's a lot being done when you look at the company over the course of the last three years. Much has been accomplished. But the curve, as you indicated, is changing.
Kelly: We're very mindful of our staffing and our salaries and benefits. So I think theres a lot being done when you look at the company over the course of the last three years much has been accomplished.
Kelly: But the curve as you indicate is changed and it's changed dramatically over the last 18 24 months and it's become more difficult.
James Nesci: I mean, it's changed dramatically over the last 18-24 months, and it's become more difficult for us as a liability-sensitive bank to produce a NIM that's sufficient. We will continue to look for more organic retail deposits, and we're also more focused on commercial and industrial-type loans to get a higher yielding asset onto the books. We think all of those things will lead to greater profitability. That's the focus. That's the strategy. The compensation, I think, was a question you asked about.
Kelly: For us I say liability sensitive back to producing a NIM. That's efficient we will continue to look for more organic.
Kelly: Retail deposits and were also more focused on commercial.
Kelly: Marshall and industrial type loans to get a higher yielding asset onto the books, we think all of those things.
Kelly: And lead to greater <unk>.
Kelly: <unk> ability.
Kelly: That's the focus that's the strategy the compensation I think was the question you asked about our metrics are tied to things that.
James Nesci: Our metrics are tied to things that lead to greater profitability in the long haul. Every employee at Blue Foundry Bank is focused on these things. We talk about them frequently. We have town halls. Every employee is invested in this company. So, yeah, it's top of mind for all of us. I appreciate the question, but I don't know if Kelly wants to add anything to it.
Kelly: Leading to greater profitability in the long haul.
Kelly: Every employee at loop battery Bank is focused on these items, we talk about them frequently we have town halls every employees invested in this company.
Kelly: Yes.
Speaker Change: Top of mind for all of US I. Appreciate the question, but I don't know if Kelly wants to add anything to it.
Kelly Pecoraro: I think Jim, you covered it off, and we're looking to hit on those strategic initiatives, and compensate relative to those targets as we look to profitability.
Kelly: Jim you covered off and we're looking to get on those strategic initiatives.
Kelly: Compensate relative to those targets as we look to profitability.
Chris O'connell: Great. And, you know, along those lines, is there anything that you've mapped out that maybe you don't quite have hard numbers around on the expense side as you get through the year and into 2025? Any projects or anything where you think you can, you know, cut out any significant costs?
Kelly: Great.
Speaker Change: And along those lines.
Speaker Change: Is there anything that you've mapped out.
Speaker Change: That maybe don't you don't quite have.
Speaker Change: Hard numbers around.
Speaker Change: The expense side.
Speaker Change: Through the year and into 2025.
Speaker Change: Any projects or anything that where you think you can.
Speaker Change: Cut out any significant costs.
James Nesci: I don't have any additional guidance at this time. I don't know of any, but I don't have any guidance in any way on that topic. I would tell you right now, it's: We're trying to be as lean as possible and to create a better, better bank every single day.
Speaker Change: I don't have any additional guidance at this time.
Speaker Change: Got it.
Speaker Change: Don't know if any but I don't have any guidance and any of that on that topic.
Speaker Change: Tell you right now.
We're trying to be as lean as possible and to create.
Speaker Change: Create a better.
Chris O'connell: Great. Appreciate the time. Thanks for taking my questions.
Better Bank every single day.
Speaker Change: Great appreciate the time, thanks for taking my questions.
Kelly Pecoraro: Thank you, and have a great day!
Speaker Change: Thank you.
Speaker Change: A great day.
Operator: We have no further questions at this time, so I'll pass the call back to the management team for any closing remarks.
Speaker Change: We have no further questions at this time, so I'll pass the call back to the management team for any closing remarks.
James Nesci: Thank you, operator, and to everyone who is listening today. Thank you very much for your interest in Blue Foundry Bank. We look forward to speaking to you again in the next quarter.
Speaker Change: Thank you operator and to everyone listening today. Thank you very much for your interest in Blue Battery Bank. We look forward to speaking to you again in the next quarter great.
Operator: That concludes today's call. Thank you all for your participation. You may now disconnect your lines.
Speaker Change: Okay.
Speaker Change: That concludes today's call. Thank you all for your participation you may now disconnect your lines.