Q3 2025 Blue Foundry Bancorp Earnings Call

October 29, 2025

And are subject to uncertainty and changes in circumstances.

Foundry encourage all participants to refer to the full disclaimer contained in this morning's earnings release, which has been posted to the Investor Relations page on <unk> Foundry Bank Dot com.

During the call management will management will refer to non-GAAP measures, which exclude certain items from reported results. Please refer to today's earnings release for reconciliations of these non-GAAP measures.

Reminder, this event is being recorded.

Don will be muted for the duration of the call.

After the Speakers' remarks, there'll be a question and answer session.

I will now hand over to president and CEO, Jim Nancy to begin.

Thank you operator, good morning, and welcome to our third quarter earnings call I'm joined today by our Chief Financial Officer Kelly.

He will provide a E tail financial review after I share updates on our strategy and recent progress.

Earlier. This morning, we reported a quarterly net loss of $1 million and a quarterly pre provision net loss of $1 $3 million.

Both metrics have improved compared to the prior quarter.

During the third quarter, we advanced our core objectives of growing core deposits diversifying our loan portfolio to enhance risk adjusted returns and expanding our net interest margin.

Against these strategic initiatives better positions us for continued growth and long term value creation.

Deposits increased by $77 1 million loans grew by 41 $9 million and net interest margin expanded by six basis points.

Capital remains strong and we were able to increase tangible book value per share.

Our loan growth was driven by continued expansion in our commercial real estate and consumer loan portfolios.

Our commercial portfolio grew by $7 $2 million, reflecting strong origination activity of $81 $3 million, including approximately $40 million and owner occupied CRE and C&I.

Offset by $66 $8 billion in pay offs.

Our consumer loan portfolio increased by $38 million in the third quarter.

Supported by purchases of unsecured consumer loans with credit reserves.

This growth allows us to improve yields while maintaining prudent credit risk.

Our loan pipeline remains healthy with over $41 million and executed letters of intent primarily in commercial lending with anticipated weighted average rates about 7%.

Year to date, our relationship driven approach has enabled us to grow core deposits by over 10% and commercial deposits by over 17%.

Our net interest margin expanded by six basis points to 234% supported by a nine basis point increase in asset yield and a four basis point reduction in the cost of liability.

Net interest income was $12 $2 million up $551000 from the prior quarter, we remain focused on disciplined capital management and enhancing shareholder value.

<unk> book value per share increased to $15 and <unk> 14 per share.

During the quarter, we repurchased over 837000 shares at a weighted average price of $9 90 per share well below our tangible book value.

Since instituting share repurchases, we have repurchased 865 million shares.

James Nesci: Executed letters of intent, primarily in commercial lending, with anticipated weighted average rates above 7%. Year to date, our relationship-driven approach has enabled us to grow core deposits by over 10% and commercial deposits by over 17%. Our net interest margin expanded by 6 basis points to 2.34%, supported by a 9 basis point increase in asset yields and a 4 basis point reduction in the cost of liabilities. Net interest income was $12.2 million, up $551,000 from the prior quarter. We remain focused on disciplined capital management and enhancing shareholder value. Tangible book value per share increased to $15.14 per share. During the quarter, we repurchased over 837,000 shares at a weighted average price of $9.09 per share, well below our tangible book value. Since instituting share repurchases, we have repurchased 8.65 million shares. Liquidity and capital remain strong.

Liquidity and capital remained strong.

Primarily in commercial lending with anticipated weighted average rates about 7%.

At the end of the third quarter, we had $423 million in borrowing capacity.

Year to date, our relationship driven approach has enabled us to grow core deposits by over 10% and commercial deposits by over 17%.

Additional $178 million in unencumbered securities.

Tangible equity to tangible assets stood at $14 five 8%.

Our net interest margin expanded by six basis points to 234% supported by a nine basis point increase in asset yields and a four basis point reduction in the cost of liabilities.

And we remain well capitalized with capital ratios among the highest in the industry.

With robust capital ample liquidity and a focus on deepening commercial relationships. We believe blue fabric is positioned for continued growth.

Net interest income was $12 2 million.

$551000 from the prior quarter, we remain focused on disciplined capital management and enhancing shareholder value.

We expect downward rate movements, which will benefit our funding costs and anticipated repricing in our loan portfolio to have a favorable impact on our net interest margin over time.

Tangible book value per share increased to $15 and <unk> 14 per share.

With that I'll turn the call over to Kelly for a deeper look at our financials.

During the quarter, we repurchased over 837000 shares at a weighted average price of $9 90 per share well below our tangible book value.

Thank you Jim and good morning, everyone.

Tim mentioned, we reported a net loss of one $9 million for the third quarter, our 10 cents per diluted share.

Since instituting share repurchases, we have repurchased 865 million shares.

Sure.

This compares favorably to the $2 million and bought in the prior quarter.

Liquidity and capital remains strong.

This improvement.

James Nesci: At the end of the third quarter, we had $423 million in borrowing capacity and an additional $178 million in unencumbered securities. Tangible equity to tangible assets stood at 14.58%, and we remain well-capitalized with capital ratios among the highest in the industry. With robust capital, ample liquidity, and a focus on deepening commercial relationships, we believe Blue Foundry Bancorp is positioned for continued growth. We expect downward rate movements, which will benefit our funding costs, and anticipated repricing in our loan portfolio to have a favorable impact on our net interest margin over time. With that, I'll turn the call over to Kelly for a deeper look at our financials. Kelly?

At the end of the third quarter, we had $423 million in borrowing capacity and an additional $178 million in unencumbered.

Driven by an increase in net interest income, partially offset by an increased provision for credit losses.

And operating expenses.

<unk> Securities.

Tangible equity to tangible assets stood at $14 five 8%.

Net interest income increased $551000 versus prior quarter to $12 $2 million.

And we remain well capitalized with capital ratios among the highest in the industry.

And then by $693000 of additional interest income, representing an 11, 8% annualized increase.

With robust capital ample liquidity and a focus on deepening commercial relationships. We believe blue foundry is positioned for continued growth.

Thank you on average interest earning assets.

We expect downward rate movements, which will benefit our funding costs and anticipated repricing in our loan portfolio to have a favorable impact on our net interest margin over time.

To four 7%.

While the cost of average interest bearing liabilities declined to 272%.

With that I'll turn the call over to Kelly for a deeper look at our financials.

These improvements contributed to a six basis point expansion in our net interest margin.

Thank you Jim and good morning, everyone.

Kelly Pecoraro: Thank you, Jim, and good morning, everyone. As Jim mentioned, we reported a net loss of $1.9 million for the third quarter, or $0.10 per diluted share. This compares favorably to the $2 million loss in the prior quarter. This improvement was driven by an increase in net interest income, partially offset by an increase in provision for credit losses and an increase in operating expenses. Net interest income increased by $551,000 versus prior quarter to $12.2 million, driven by $693,000 of additional interest income, representing an 11.8% annualized increase. The yield on average interest-earning assets rose to 4.67%, while the cost of average interest-bearing liabilities declined to 2.72%. These improvements contributed to a 6 basis point expansion in our net interest margin. Non-interest expense increased by $347,000, primarily due to higher compensation and benefit expense and higher professional services expenses.

Jim mentioned, we reported a net loss of $1 $9 million for the third quarter, Our Tencent Harrington League chair.

No.

<unk> increased by $347000.

Primarily due to higher compensation and benefit expense and higher professional service expenses.

This compares favorably to the $2 million loss in the prior quarter.

The increase in compensation and benefits.

This improvement.

Driven by an increase in net interest income, partially offset by an increase from provision for credit losses.

You see day counts and the prior quarter, having higher forfeitures of equity grants.

We recorded a provision for credit loss.

And operating expenses.

$589000.

Net interest income increased by $551000 versus prior quarter to $12 $2 million.

Primarily driven by deterioration in economic forecast.

Our allowance methodology continues to place greater weight on baseline of adverse economic scenario.

Driven by $693000 of additional interest income, representing an 11, 8% annualized increase.

The allowance for credit loss was 0.81% of gross loans.

Thank you on average interest earning assets.

Oh, one basis point from the prior quarter, primarily reflecting changes in economic forecast.

To 467%.

While the cost of average interest bearing liabilities.

One to $2, 72%.

While charge offs remain minimal at $25000.

These improvements contributed to a six basis point expansion in our net interest margin.

Credit quality remains sound overall, and we continue to manage risk with discipline.

Non interest expense increased by $347000.

During the quarter, a $5 $3 million multifamily loan was added to non performing loans.

Primarily due to higher compensation and benefit expense and higher professional service expenses.

Currently we do not believe that there is a risk of loss of principal associated with credit.

The increase in compensation and benefits is due to day count and the prior quarter, having higher forfeitures.

Kelly Pecoraro: The increase in compensation and benefits is due to day counts and the prior quarter having higher forfeitures of equity grants. We recorded a provision for credit loss of $589,000, primarily driven by deterioration in economic forecasts. Our allowance methodology continues to place greater weight on baseline and adverse economic scenarios. The allowance for credit loss was 0.81% of gross loans, up 1 basis point from the prior quarter, primarily reflecting changes in economic forecasts, while charge-off remains minimal at $25,000. Credit quality remains sound overall, and we continue to manage risk with discipline. During the quarter, a $5.3 million multifamily loan was added to non-performing loans. Currently, we do not believe that there is a risk of loss of principal associated with this credit.

Total nonperforming loans was $11 4 million or 66 basis points.

Total loans on September 30th.

Graham.

Up from $6 $3 million or 38 basis points at the prior quarter and.

We recorded a provision for credit losses of $589000.

And narrowly driven by deterioration in economic forecast.

Reflecting the increase in nonperforming loans.

Moving on to the balance sheet, we saw a total loan growth of 41 $9 million for the quarter.

Our allowance methodology.

We need to place greater weight on baseline adverse economic scenarios.

We continue to focus on optimizing our portfolio composition.

The allowance for credit loss was 0.81% of gross loans.

We are encouraged by the growth in owner occupied commercial real estate and commercial and industrial loans this quarter.

Up one basis point from the prior quarter, primarily reflecting changes in economic forecast.

Our available for sale Securities portfolio.

While charge offs remains minimal at $25000.

The modified duration of approximately three nine years increase.

Credit quality remains sound overall, and we continue to manage risk with discipline.

Increased by $10 $3 million.

Marilyn do too.

Paul and maturities.

During the quarter, a $5 $3 million multifamily loan was added to non performing loans.

Partially offset by an improvement in the <unk>.

Realized loss position.

Currently we do not believe that there is a risk of loss of principal associated with this credit.

Deposits grew by $77 $1 million with core deposits, increasing by $18 $6 million.

Kelly Pecoraro: Total non-performing loans was $11.4 million, or 66 basis points of total loans on September 30, up from $6.3 million, or 38 basis points at the prior quarter end, reflecting the increase in non-performing loans. Moving on to the balance sheet, we saw total loan growth of $41.9 million for the quarter. We continue to focus on optimizing our portfolio composition, and we are encouraged by the growth in owner-occupied commercial real estate and commercial and industrial loans this quarter. Our available for sale securities portfolio, with a modified duration of approximately 3.9 years, decreased by $10.3 million, primarily due to calls and maturities, partially offset by an improvement in the unrealized loss position. Deposits grew by $77.1 million, with core deposits increasing by $18.6 million. Brokered deposits increased $50 million, helping us manage funding costs and support loan growth.

Total nonperforming loans was $11 4 million or 66 basis points of total loans on September 30th.

Brokered deposits increased $15 million, helping us manage funding costs and support loan growth.

Up from $6 3 million or 38 basis points at the prior quarter and reflecting.

Borrowings decrease by $42 million as we allowed them to roll off.

Reflecting the increase in nonperforming loans.

Great fun with brokered deposits.

Moving on to the balance sheet, we saw a total loan growth of $41 $9 million for the quarter.

With that Jim and I are happy to take your questions.

Thank you very much.

We continue to focus on optimizing our portfolio composition and we.

To ask a question.

Please press star followed by one on your telephone keypad now be.

We are encouraged by the growth in owner occupied commercial real estate and commercial and industrial loans this quarter.

If you change your mind, Please press star two.

To answer your question. Please ensure your device because on mute locally.

Our available for sale securities portfolio with the modified duration of approximately three nine years.

Our first question comes from Justin Crowley from Piper Sandler.

Your line is open Justin Please go ahead.

Increased by $10 $3 million, primarily due to call and maturity.

Hey, good morning.

Good morning.

Start off.

She was offset by an improvement in the unrealized loss position.

I wanted to start off on the margin here.

Continued progress with the lag from cuts we got last year.

Deposits grew by $77 $1 million with core deposits, increasing by $18 6 million.

So we got late this quarter very likely another one today and Moura fallout can you talk a little bit about how you've already maybe responded on the deposit side and just what your expectations are for matching the fed as rates continue to come down.

Brokered deposits increased $15 million, helping us manage funding costs and support loan growth.

Yes, Jeff in corn himself.

Borrowings decrease by $42 million as we allowed them to roll off and replaced them with broker deposits.

Kelly Pecoraro: Borrowings decreased by $42 million as we allowed them to roll off and replace them with brokered deposits. With that, Jim and I are happy to take your questions.

Look at where the market has been in the rate cuts, we did take advantage during the quarter.

Putting on another brokerage deposit and while we're trying to manage funding costs with that we were able to swap that and get that in at a lower rate as you look at customers' deposits as we move forward.

With that.

Jim and I are happy to take your questions.

Thank you very much to ask your question.

Operator: Thank you very much. To ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. In preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Justin Crowley from Piper Sandler. Your line is open, Justin. Please go ahead.

Please press star followed by one on your kind of thank you Pat now.

Our market is dependent upon competition.

Actively.

Change your mind please christoph.

Worked with our customers on core deposit growth deemphasizing CPE.

So ask your question. Please ensure your device is on mute.

Our first question comes from Justin Crowley from Piper Sandler.

On a customer perspective, and we continue to look at lowering those costs that we are paying on deposits, but again being responsive to market and looking to see where our customers are and what's going on.

And as open Justin Please go ahead.

Hey, good morning.

Justin Crowley: Hey, good morning.

Good morning, I'm going to have to start off.

James Nesci: Good morning.

Justin Crowley: I wanted to start off on the margin here. I saw continued progress with the lag from cuts we got last year. With the cut that we got late this quarter, very likely another one today, and more to follow. Can you talk a little bit about how you've already maybe responded on the deposit side and just what your expectations are for matching the Fed as rates continue to come down?

I wanted to start off on the margin here.

It's a reinforcement of okay.

So continued progress with the lag from cuts we got last year.

You'll see more shift from the C D to the money market product absolute bandwidth.

Okay got it and so I guess, what that de emphasis of new Cds in terms of the back book and what kind of benefit you could get.

Stuff comes up for repricing and I'm sure. The book's relatively sure can you quantify what that might look like over the coming quarters in terms of magnitude.

Yes, Jeff in corn himself.

Chris O'Connell: Yes, Justin. Good morning. As we look at where the market's been in the rate cuts, we did take advantage during the quarter of putting on another brokered deposit. While we're trying to manage funding costs with that, we were able to swap that and get that in at a lower rate. As we look at customer deposits as we move forward, a lot in our market is dependent upon competition. We've actively worked with our customers on core deposit growth, de-emphasizing CDs from a customer perspective. We continue to look at lowering those costs that we are paying on deposits, but again, being responsive to market and looking to see where our customers are and what's going on.

We look at where the market has been in the rate cuts. We did take advantage during the quarter of putting on another broker deposit and while were trying to manage funding costs with that we were able to swap that and get that in a lower rate as you look at customer deposits as we move forward and widen our market is dependent upon.

The yield pick up.

Yeah.

If youre looking from a perspective of the customer deposits for the <unk>, we do have.

Durations out there of five months of our special sits in five months E to shorten that life of the C. D. So.

Non competition we've actively.

So we don't necessarily anticipate a tremendous pickup in Q4 with any rate movement as those will be pulling off a little bit later, probably in January and February we see more of the roll off of those.

Worked with our customers on core deposit growth deemphasizing CPE.

The customer perspective.

We continue to look at lowering those costs that we are paying on deposits, but again being responsive to market and looking to see where our customers are and what's going on.

We see benefit in 2020 sets from that again, we'll be booking from managing the core deposit component of that and lowering those rates.

Move forward through the quarter.

James Nesci: To reinforce it a little bit, I think you'll see more shift from the CDs to the money market product at Blue Foundry Bancorp.

To reinforce that okay.

Just a part of those guys go we've seen is that as you.

You'll see more shift from the C D to the money market products fully fabric.

A year and the cost of deposits seems to pick up so we try to position ourselves.

Okay got it and so I guess, what that de emphasis of new Cds in terms of the back book and what kind of benefit you could get.

Justin Crowley: Okay. Got it. With that, the de-emphasis of new CDs, in terms of the backbook and what kind of benefit you could get as stuff comes up for repricing, I'm sure the book's relatively short. Can you quantify what that might look like over the coming quarters in terms of magnitude and yield pickup?

Not to end at 12, 31, obviously, we prefer to have some of that duration go out to January February to reposition as opposed to just kind of stop at year end.

Stuff comes up for repricing and I am sure. The book's relatively short can you quantify what that might look like over the coming quarters in terms of magnitude.

Okay, and then so will sort of be your near or medium term expectations. Just for the margin I think you've talked before about how multifamily repricing how that really starts to become more of a tailwind next year can you remind us what that looks like in terms of magnitude yield pick up and then just.

Yield pickup.

Yeah.

If youre looking from a perspective of the customer deposits for the <unk>, we do have.

Chris O'Connell: As we are looking from a perspective of the customer deposits for the CDs, we do have, you know, durations out there of five months. Some residentials have been a five-month CD to shorten that life of the CD. We don't necessarily anticipate a tremendous pickup in Q4 with any rate movement, as those will be rolling off a little bit later, probably in January, February, we see more of the roll-off of those. We see benefit in 2026 from that. Again, we'll be looking from managing the core deposit component of that and lowering those rates as we move forward through the quarter.

Durations out there of five months of our special sits in five months E to shorten that one of the C. D. So.

Anything else on the asset side, and how that could inform benefiting the margin in lieu of maybe deposit costs not coming down as quickly.

Yeah, I think as we look forward from a from a forecast perspective, we anticipate a fourth quarter to be relatively flat given where we are and that we do see that in pricing activity pick up on specifically the first half of 'twenty six.

So we see benefit in 2020 sets from that again, we'll be booking from managing the core deposit component of that and lowering those rates.

Probably around $45 million coming in that sub 4% from a repricing perspective maturity repricing and then in the latter half we have about another 35 40 million, that's really sub 375 that will be great pricing.

We move forward through the quarter.

Just a part of that we've seen.

James Nesci: Justin, part of the cycle we've seen is, as you get to year-end, the cost of deposit seems to tick up. We try to position ourselves not to end at 12/31. Obviously, we prefer to have some of that duration go out to January, February to reposition, as opposed to just kind of stop at year-end.

As you get to a year and the cost of deposits seems to tick up so we try to position ourselves.

And at 12, 31, obviously, we prefer to have some of that duration go out to January February to reposition as opposed to just kind of stop at year end.

So we really are looking for the 2026 pick up.

Net interest margin.

I know, it's hard to say, but could that pickup in net interest margin next year.

Okay, and then so we will sort of be your near or medium term expectations just for the margin.

Justin Crowley: Okay. What would sort of be your near or medium-term expectations just for the margin? I think you've talked before about how multifamily repricing, how that really starts to become more of a tailwind next year. Can you remind us what that looks like in terms of magnitude, yield pickup, and then just anything else on the asset side and how that could inform benefiting the margin in lieu of maybe deposit costs not coming down as quickly?

Could it look like on a quarterly basis, you got this quarter whats your bias towards greater.

You've talked before about how multifamily repricing.

Expansion, how do you how do you see that.

That really starts to become more of a tailwind next year could you remind us what that looks like in terms of magnitude yield pick up and then just anything else on the asset side and how that could inform benefiting the margin in lieu of maybe deposit costs not coming down as quickly.

And I think it's going to be a combination Justin ranks. So while we have repricing. We also have a new product.

That's our new production that we're looking to put on so depending upon what the market does and how we're able to execute.

Yeah, I think as we look forward from a from a forecast perspective, we anticipate a fourth quarter to be relatively flat given where we are and that we do see that repricing activity pick up on specifically the first half of 2006, we have.

Chris O'Connell: Yeah. I think as we look forward from a forecast perspective, we anticipate fourth quarter to be relatively flat given where we are and that we do see that repricing activity pick up. Specifically, the first half of 2026, we have probably around $45 million coming in that's sub 4% from a repricing perspective, maturity and repricing. In the latter half, we have about another $35 million, $40 million that's really sub 3.75% that will be repricing. We really are looking for the 2026 pickup in net interest margin.

Well really drive that.

It's hard to say exactly where we're going through our strategic planning now.

Looking at our initiatives.

Okay and then.

On the commercial loan growth I know, it's just one quarter.

Net growth in multifamily for the first time in a little while.

And then some solid growth in Cree, including the owner occupied you mentioned, Jim can you talk a little on opportunities Youre seeing there how the pipeline looks which I might have missed that and just how you expect that could trend as rates continue to come down.

So we really are looking for the 2026 pickup in net interest margin.

So obviously, we've tried to deemphasize the multifamily when we do multifamily.

I know, it's hard to say, but could that pick up in net interest margin next year.

Justin Crowley: I know it's hard to say, but could that pick up in net interest margin next year? Could it look like on a quarterly basis what you got this quarter? Would your bias be towards greater expansion? How do you see that?

While we're adding multifamily assets, they usually pretty strategic.

Now could it look like on a quarterly basis, you got this quarter would you buy SB towards greater expansion, how do you how do you see that.

Working with borrowers that we've worked with before.

Coupons are attractive to us so.

And I think youll see us back off of the multifamily a little bit unless there's a strategic reason to see it.

Chris O'Connell: I think it's going to be a combination, Justin, right? While we have repricing, we also have new products or new production that we're looking to put on. Depending upon what the market does and how we're able to execute, we'll really drive that. It's hard to say exactly where as we're going through our strategic planning now and looking at our initiatives.

And I think it's going to be a combination Justin ranks. So while we have repricing. We also have our new products, our new production that we're looking to put on so depending upon what the market does and how we're able to execute well.

Ni is where we try to focus pulling in the poll relationship. So we get this positive along with the asset.

But that that's where the team is focused right now it's really on that business banking side or commercial assets that are really driving that business level to go through.

We will really drive that.

It's hard to say exactly where we're going through our strategic planning now and looking at our initiatives.

And just to reemphasize.

Okay and then.

Justin Crowley: Okay. On the commercial loan growth, I know it's just one quarter, but saw net growth in multifamily for the first time in a little while, and then some solid growth in C&I, including the owner-occupied you mentioned, Jim. Can you talk a little on opportunities you're seeing there, how the pipeline looks, which I might have missed that, and just how you expect that could trend as rates continue to come down?

We emphasize.

On the commercial loan growth I know, it's just one quarter.

Alright, Justin just to reemphasize the pipeline as we discussed we have over 41 million.

Net growth in multifamily for the first time in a little while.

Letters of intent out there with.

Raised above 7% in that in that bucket, there is less than $6 million of multifamily so really deemphasizing that asset class and as Jim said, it's really got to be relationship driven for us to be a engagement.

James Nesci: Yeah. Obviously, we've tried to de-emphasize the multifamily. When we do multifamily, while we're adding multifamily assets, they're usually pretty strategic, working with borrowers that we've worked with before. Coupons are attractive to us. I think you'll see us back off of the multifamily a little bit unless there's a strategic reason. The C&I is where we try to focus, pulling in the full relationship so we get the deposit along with the asset. That's where the team is focused right now. It's really on that business banking side or commercial assets that are really driving that business loan to go through.

So obviously, we've tried to deemphasize the multifamily when we do multifamily.

The class.

Okay, and then just one last one quickly for me on expenses I'm not sure if I missed it I'm not sure. If you gave guide for the fourth quarter or not but.

While we're adding multifamily assets they are usually pretty strategic.

Working with borrowers that we've worked with before.

Between that and just as we look out into next year.

Coupons are attractive to us so again, I think youll see us back off of the multifamily a little bit unless there's a strategic reason.

I guess, you'll see the normal merit increases et cetera.

Again between the fourth quarter, but 26 as well what do you think is a reasonable level of expense growth to expect for the company.

The C&I is where we try to focus pulling in the full relationship. So we get the deposit along with the assets.

So I think at this point for fourth quarter as we look we're going to be in that high <unk> low <unk> range.

But that's where the team is focused right now it's really on that business banking side or commercial assets that are really driving that business while to go through.

Again, you know as you noted expenses were a little bit elevated some on the compensation front and then also as we look at the professional services. There's all these initiatives that we're doing here. So those don't come in smooth over a time period. It all depends on what we're doing at the institution.

And just to reemphasize.

Chris O'Connell: Just to re-emphasize, Justin, just to re-emphasize, you know the pipeline, as we discussed, we have over $41 million letters of intent out there with rates above 7%. In that bucket, there's less than $6 million of multifamily. Really de-emphasizing that asset class. As Jim said, it's really got to be relationship-driven for us to be engaging with that asset class.

We emphasize.

Sorry, Justin just to reemphasize the pipeline as we discussed we have over 41 million.

Letters of intent out there with rates above 7% in that in that bucket. There is less than $6 million of multifamily. So really deemphasizing that asset class and as Jim said, it's really got to be relationship driven for us to be engaged.

And we are not.

Not really prepared at this time to give guidance on 'twenty six as we're working through our initiatives and our strategic planning process.

Okay got it very helpful. I'll leave it there thanks so much.

Okay.

Asset class.

Okay, and then just one last one quickly for me on expenses I'm not sure if I missed it I'm not sure. If you gave guide for the fourth quarter or not but.

Justin Crowley: Okay. Just one last one quickly for me. On expenses, I'm not sure if I missed it. I'm not sure if you gave guide for the fourth quarter or not. Between that and just as we look out to next year, I guess you'll see the normal merit increases, etc. Again, between the fourth quarter, but 2026 as well, what do you think is a reasonable level of expense growth to expect for the company?

Our next question comes from David Koning from K B W. You line is open David. Please go ahead.

Yes. Thank you good morning, just a couple of quick.

Between that and just as we look out to next year.

I guess, you'll see the normal merit increases et cetera.

Question, one on the follow up just on the loan growth outlook you did have some really good.

Again between the fourth quarter, but 26 as well what do you think is a reasonable level of expense growth to expect for the company.

Loan growth and the kind of a structured consumer loan book I think youre around 7% of loans.

So I think at this point for fourth quarter as we look we're going to be in that high <unk> low <unk> range again, you know as you noted expenses were a little bit elevated some on the compensation front and then also as we look at the professional services. There's all these initiatives that we.

Chris O'Connell: At this point for fourth quarter as we look, we're going to be in that high 13, low 14 range. Again, as you noted, expenses were a little bit elevated, some on the compensation front, and then also as we look at the professional services, there's always initiatives that we're doing here. Those don't come in smooth over a time period. It all depends on what we're doing at the institution, and we are not really prepared at this time to give guidance on 2026 as we're working through our initiatives and our strategic planning process.

Is 7% to 8% kind of the still the range that youre thinking about for that portfolio.

Yes, David.

Okay and then.

Capital remains really strong you're trading below tangible book so.

Real good buyback activity.

We're doing here so those don't come in smooth over a time period. It all depends on what we're doing at.

Is this a pretty good run rate for us to think of going forward or how you think about the buyback now.

At the institution.

We are.

We had a.

Not really prepared at this time to give guidance on 2006, as we're working through our initiatives and our strategic planning process.

Transaction that we called out in the quarter. So I don't think Thats, a usable run rate I don't think youre going to see us put up another number at that level, but Kelly.

Okay got it very helpful. I'll leave it there thanks so much.

Justin Crowley: Okay. Got it. Very helpful. I'll leave it there. Thanks so much.

And I think as you look at you know we definitely believe the buybacks had been a very good use of capital as we're looking at our structure here.

Chris O'Connell: Thanks, Justin.

Okay.

Our next question comes from David Koning from K B W.

Operator: Our next question comes from David Conrad from KBW. Your line is open, David. Please go ahead.

Did at the end of the quarter still have another 730000 shares under our current plan.

David Please go ahead.

David Conrad: Yes. Thank you. Good morning. Just a couple of quick questions. One on the follow-up just on the loan growth outlook. You did have some really good loan growth in the kind of the structured consumer loan book. I think you're around 7% of loans. Is 7% to 8% kind of still the range that you're thinking about for that portfolio?

Yes. Thank you good morning, just a couple of quick.

Toy purchases.

Questions one on the follow up just on the loan growth outlook you did have some really good.

Okay. Thank you I appreciate it.

Loan growth and the kind of a structured consumer loan book.

Okay.

We currently have no further questions sort of tying back to Jim for some closing remarks.

Around 7% of loans.

Is 7% to 8% kind of the still the range that youre thinking about for that portfolio.

Thank you and thank you for the question David I appreciate it.

Yes, David.

Chris O'Connell: Yes, David.

I want to thank all of our shareholders our employees for dialing in today and all of the communities that listen into our call and we appreciate it and we look forward to speaking to you again soon in the next quarter. Thank you.

Yeah.

David Conrad: Okay. Capital remains really strong. You're trading below tangible book, so real good buyback activity. Is this a pretty good run rate for us to think of going forward? How do you think about the buyback now?

Okay and then.

Capital remains really strong you're trading below tangible book so.

Real good buyback activity.

Is this a pretty good run rate for us to.

This concludes today's call. We thank everyone for joining you may now disconnect your lines.

Going forward or how you think about the buyback.

We had a.

James Nesci: We had a transaction that we called out in the quarter. I don't think that's a usable run rate. I don't think you're going to see us put up another number at that level. You know, Kelly.

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Transaction that we called out in the quarter. So I don't think that's a usable run rate I don't think you're going to see us put up another number at that level, but Kelly.

Yeah.

Chris O'Connell: Yeah. I think as you look at, you know, we definitely believe the buyback could have been a very good use of capital, as we're looking at our structure here. We did, at the end of the quarter, still have another 730,000 shares under our current plan to repurchase.

And I think as you look at you know we definitely believe the buybacks had been a very good use of capital as we're looking at are structured.

Did at the end of the quarter still have another 730000 shares under our current plan.

Perfect.

Okay. Thank you I appreciate it.

David Conrad: Okay, thank you. Appreciate it.

Okay.

We currently have no further questions sort of tying back to Jim for some closing remarks.

Operator: We currently have no further questions. I'd like to hand back to Jim for some closing remarks.

Thank you and thank you for the question David I appreciate it.

James Nesci: Thank you. Thank you for the question, David. Appreciate it. I want to thank all of our shareholders and employees for dialing in today and all of the communities that listened in to our call. We appreciate it, and we look forward to speaking to you again soon in the next quarter. Thank you.

I want to thank all of our shareholders our employees for dialing in today and all of the communities that listen into our call. We appreciate it and we look forward to speaking to you again soon in the next quarter. Thank you.

This concludes today's call. We thank everyone for joining you may now disconnect your lines.

Operator: This concludes today's call. We thank everyone for joining. You may now disconnect your lines.

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