Blue Foundry Bancorp

Blue Foundry Bancorp (the "Company") is a Delaware corporation that became the holding company for Blue Foundry Bank (the "Bank") on July 15, 2021, following a mutual-to-stock conversion ¹. The Company's common stock began trading on July 16, 2021, on the Nasdaq Global Select Market under the symbol "BLFY" ². As of December 31, 2025, the Company had total assets of $2.17 billion ³, net loans of $1.68 billion ⁴, and deposits of $1.51 billion ⁵. The Company has entered into a definitive merger agreement with Fulton Financial Corporation ("Fulton") on November 24, 2025, in an all-stock merger, with an implied total transaction value of approximately $243.0 million based on closing prices on November 21, 2025 ⁶. The merger is expected to be completed on or around April 1, 2026 ⁷.

The Company's core business model involves originating residential, multifamily, and commercial real estate mortgages, construction loans, commercial and industrial (C&I) loans, and home equity loans and lines of credit ⁸. Revenue is primarily derived from interest on loans and, to a lesser extent, interest on mortgage-backed and other investment securities ⁹. Primary funding sources include deposits, principal and interest payments on loans and securities, and borrowings ¹⁰. The Company attracts retail deposits from the general public, borrowers, and through its online presence, offering a variety of deposit products ¹¹.

The Company's lending activities have historically focused on residential and multifamily housing loans, which still constitute the largest portion of the loan portfolio ¹². However, there has been a strategic shift towards more commercial-like lending, including commercial mortgage loans, construction loans, and C&I loans, to diversify the portfolio and increase overall yield ¹³. During 2025, the Company also increased its portfolio of purchased unsecured consumer loans ¹⁴.

At December 31, 2025, residential real estate loans totaled $510.6 million ¹⁵, representing 30.2% of the total loan portfolio ¹⁶. Multifamily loans amounted to $641.0 million ¹⁷, or 37.9% of the total loan portfolio ¹⁸, with approximately $86.5 million, or 5.1% of total loans, in New York multifamily loans subject to rent stabilization or control ¹⁹. Commercial real estate loans were $306.1 million ²⁰, comprising 18.1% of the total loan portfolio ²¹, with $113.8 million, or 37.2%, being owner-occupied ²². Construction loans totaled $51.4 million ²³, or 3.0% of the total loan portfolio ²⁴. Junior liens, primarily home equity loans and lines of credit, were $31.0 million ²⁵, or 1.8% of the total loan portfolio ²⁶. Commercial and industrial loans stood at $24.2 million ²⁷, representing 1.4% of the total loan portfolio ²⁸. Consumer and other loans, primarily purchased from a national company specializing in loans to professionals, totaled $126.3 million ²⁹, or 7.5% of the total loan portfolio ³⁰.

For the year ended December 31, 2025, the Company reported a net loss of $10.0 million ³¹, an improvement from a net loss of $11.9 million in 2024 ³². Basic and diluted loss per share was $(0.51) ³³ for 2025, compared to $(0.55) for 2024 ³⁴. Net interest income increased by $9.8 million, or 26.2%, to $47.4 million ³⁵ in 2025 from $37.6 million in 2024 ³⁶. The net interest margin expanded by 40 basis points to 2.30% ³⁷ in 2025 from 1.90% in 2024 ³⁸. A provision for credit losses of $2.1 million ³⁹ was recorded in 2025, contrasting with a release of provision of $1.4 million in 2024 ⁴⁰. Non-interest income was $1.7 million ⁴¹ in 2025, a slight decrease from $1.8 million in 2024 ⁴². Non-interest expense increased by $4.4 million, or 8.3%, to $57.0 million ⁴³ in 2025 from $52.6 million in 2024 ⁴⁴, including $1.3 million in merger-related expenses ⁴⁵. Total assets increased by $107.3 million to $2.17 billion ⁴⁶ at December 31, 2025. Cash and cash equivalents were $53.1 million ⁴⁷ at December 31, 2025, up from $42.5 million at December 31, 2024 ⁴⁸. Total shareholders' equity decreased by $19.5 million, or 5.9%, to $312.7 million ⁴⁹ at December 31, 2025, from $332.2 million at December 31, 2024 ⁵⁰.

During 2025, loan fundings totaled $192.6 million ⁵¹, including originations of $154.0 million in commercial real estate loans and $17.7 million in commercial and industrial loans ⁵². The Company acquired $137.8 million in consumer loans and purchased $46.5 million of conforming residential mortgages in New Jersey during the year ⁵³. The Company repurchased 1,707,864 shares of its common stock at a cost of $16.3 million ⁵⁴. The Company also increased its interest rate hedges to an aggregate notional amount of $526.0 million ⁵⁵ at December 31, 2025, from $349.0 million at December 31, 2024 ⁵⁶.

Management's specific revenue, margin, or EPS guidance for the upcoming period is not explicitly stated in the filing. However, the Company's goal is to position itself to prosper in an evolving financial services landscape and enhance its position as one of the leading community banking institutions in its market ⁵⁷. This involves offering a broad array of banking and other financial services to retail, commercial, and small business customers while growing its presence and expanding its franchise ⁵⁸.

A major growth vector for the Company is the continued focus on commercial real estate and traditional C&I lending ⁵⁹. This strategy aims to diversify the loan portfolio and increase the overall yield earned on loans, subject to market conditions and asset-liability analysis ⁶⁰. The Company also plans to continuously evaluate its products and service offerings to remain competitive in its market area ⁶¹.

Operationally, the Company continues to analyze its expenses and achieve efficiencies where available ⁶². The efficiency ratio was 116.11% for the year ended December 31, 2025, compared to 133.71% for the year ended December 31, 2024 ⁶³. The Company has invested heavily in technology and infrastructure to improve delivery channels and create competitive products and services ⁶⁴. The administrative offices of the Company and Bank are located at 7 Sylvan Way, Suite 200, Parsippany, New Jersey 07054 ⁶⁵. At December 31, 2025, the Company employed 189 employees ⁶⁶.

Planned capital allocation includes a stock repurchase program, with 735,741 shares remaining available to repurchase in the sixth plan as of December 31, 2025 ⁶⁷. The Company has not declared any dividends to holders of its common stock and does not currently anticipate paying dividends in the near future ⁶⁸. The Board of Directors has the authority to declare dividends in the future, subject to financial condition, results of operations, tax considerations, industry standards, economic conditions, and statutory and regulatory requirements ⁶⁹.

Management explicitly flagged several structural headwinds and execution risks. The pending merger with Fulton Financial Corporation introduces risks related to the timing and completion of the merger, the ability to successfully integrate with Fulton, and the impact of the merger on Fulton's future condition and results of operations ⁷⁰. There are also risks of incurring substantial costs related to the merger and integration, which may be greater than anticipated ⁷¹. The combination may be more difficult, costly, or time-consuming than expected, potentially failing to realize anticipated benefits and cost savings ⁷². The future results of Fulton may suffer if expanded operations are not effectively managed ⁷³. Furthermore, there is a risk of being unable to retain legacy Blue Foundry personnel successfully after the merger ⁷⁴. If the merger is not completed, there could be various adverse consequences, including negative reactions from financial markets, customers, and employees, and Blue Foundry may be required to pay a termination fee of $9,694,662 to Fulton under certain circumstances ⁷⁵.

Geographic, regulatory, or macro factors identified as constraints include the geographic concentration of the loan portfolio primarily in northern New Jersey, making the Company vulnerable to a downturn in the local economy and real estate markets ⁷⁶. A worsening of economic conditions in the market area could reduce demand for products and services and/or increase non-performing loans ⁷⁷. Inflationary pressures and rising prices may affect results of operations and financial condition ⁷⁸. Interruption of customers' supply chains and federal funding could negatively impact their business and ability to repay loans ⁷⁹. The failure to address the Federal debt ceiling in a timely manner, downgrades of the U.S. credit rating, and uncertain credit and financial market conditions may affect the stability of securities issued or guaranteed by the Federal government ⁸⁰. Severe weather, acts of terrorism, geopolitical, and other external events could impact the ability to conduct business ⁸¹. Strong competition within the market area may limit growth and profitability ⁸². Changes in laws, regulations, and regulatory policies, and the cost of regulatory compliance, may adversely affect operations and/or increase costs ⁸³. The New York State multifamily loan portfolio could be adversely impacted by changes in legislation or regulation, such as the Housing Stability & Tenant Protection Act ⁸⁴.

The Company faces material risks including the potential for future changes in interest rates to reduce profits, as net interest income is highly sensitive to market rate movements, with an instantaneous 200 basis point increase in market interest rates estimated to decrease net portfolio value by $65.2 million ⁸⁵. The allowance for credit losses on loans may be insufficient to cover actual loan losses, which could decrease earnings and capital, especially given that the allowance was 0.85% of total loans and 126.56% of non-performing loans at December 31, 2025 ⁸⁶. An increase in non-performing assets, which were $11.4 million or 0.55% of total assets at December 31, 2025 ⁸⁷, would adversely affect earnings. Lending activities, particularly adjustable-rate, multifamily, commercial real estate, construction, junior lien, and commercial and industrial loans, carry inherent risks of increased delinquencies and defaults, and reliance on borrower cash flow and collateral values that can be impacted by economic conditions. The geographic concentration of the loan portfolio in northern New Jersey makes the Company vulnerable to local economic downturns and real estate market fluctuations ⁸⁸. Operational risks are significant due to the high volume of transactions, and cyber-attacks or security breaches could adversely affect operations, net income, or reputation ⁸⁹. The inability to stay current with technological change or the failure of third-party vendors to perform could negatively impact the business ⁹⁰. Changes in laws, regulations, and regulatory policies, including stringent capital requirements, may adversely affect operations or increase costs ⁹¹. Non-compliance with acts like the USA PATRIOT Act or Bank Secrecy Act could result in fines or sanctions ⁹². Furthermore, the pending merger with Fulton Financial Corporation introduces risks related to integration, unexpected costs, and the potential for the merger not to be completed, which could result in a termination fee of $9,694,662 ⁹³.

Management's overall tone to shareholders emphasizes a commitment to positioning the Company for prosperity in an evolving financial services landscape and enhancing its standing as a leading community banking institution ⁹⁴. They highlight significant investments in technology and infrastructure to improve delivery channels, create competitive products and services, build a strong workforce, and enhance brand awareness ⁹⁵. A key strategic priority is the shift in lending focus towards commercial real estate and traditional C&I loans to diversify the portfolio and increase overall yield ⁹⁶. Management also stresses the continuous evaluation of products and service offerings to remain competitive ⁹⁷. The Company is currently engaged in a definitive merger agreement with Fulton Financial Corporation, which is expected to be completed on or around April 1, 2026 ⁹⁸. Management acknowledges the importance of attracting and retaining key employees, and the Board of Directors actively oversees cybersecurity risk management ⁹⁹.