Exhibit 99.3

Dated as of February 5, 2021

1311-A Dolley Madison Boulevard

Suite 2A

McLean, Virginia 22101

703.528.1700

rpfinancial.com

Exhibit 99.3

February 5, 2021

Board of Directors

Blue Foundry, MHC

Blue Foundry Bancorp

Blue Foundry Bank

19 Park Avenue

Rutherford, New Jersey 07070

Members of the Boards of Directors:

At your request, we have completed and hereby provide an independent appraisal (“Appraisal”) of the estimated pro forma market value of the common stock which is to be issued in connection with the mutual-to-stock conversion transaction described below.

This Appraisal is furnished pursuant to the requirements stipulated in the Code of Federal Regulations and has been prepared in accordance with the “Guidelines for Appraisal Reports for the Valuation of Savings and Loan Associations Converting from Mutual to Stock Form of Organization” (the “Valuation Guidelines”) of the Office of Thrift Supervision (“OTS”) and accepted by the Federal Reserve Board (“FRB”), the Office of the Comptroller of the Currency (“OCC”), the Federal Deposit Insurance Corporation (“FDIC”) and the New Jersey Department of Banking and Insurance (the “Department”), and applicable regulatory interpretations thereof.

Description of Plan of Conversion

On January 20, 2021, the Board of Directors of Blue Foundry, MHC (the “MHC”), a mutual holding company that owns all of the outstanding shares of common stock of Blue Foundry Bancorp, a New Jersey corporation (“Blue Foundry – NJ”), and Blue Foundry – NJ adopted the plan of conversion whereby the MHC will convert to stock form. As a result of the conversion, Blue Foundry – NJ, which currently owns all of the issued and outstanding common stock of Blue Foundry Bank, Rutherford, New Jersey (the “Bank”) will be succeeded by a Delaware corporation with the name of Blue Foundry Bancorp (the “Company”). Following the conversion, the MHC will no longer exist. For purposes of this document, the existing consolidated entity will hereinafter be referred to as Blue Foundry Bancorp or the Company.

Blue Foundry Bancorp will offer its common stock in a subscription offering to Eligible Account Holders, Tax-Qualified Plans including Blue Foundry Bank’s employee stock ownership plan (the “ESOP”), Supplemental Eligible Account Holders and Other Depositors, as such terms are defined in the Company’s prospectus for purposes of applicable federal regulatory guidelines governing mutual-to-stock conversions. To the extent shares remain available for purchase after satisfaction of all subscriptions received in the subscription offering, the shares may be offering for sale to members of the general public in a community and

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February 5, 2021

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syndicated community or firm commitment underwritten offerings. A portion of the net proceeds received from the sale of the common stock will be used to purchase all of the then to be issued and outstanding capital stock of Blue Foundry Bank and the balance of the net proceeds will be retained by the Company.

At this time, no other activities are contemplated for the Company other than the ownership of the Bank, a loan to the newly-formed ESOP and reinvestment of the proceeds that are retained by the Company. In the future, Blue Foundry Bancorp may acquire or organize other operating subsidiaries, diversify into other banking-related activities, pay dividends or repurchase its stock, although there are no specific plans to undertake such activities at the present time.

The plan of conversion provides for the establishment of a new charitable foundation (the “Foundation”). The Foundation contribution will total $9.0 million and will be funded with 750,000 shares of Blue Foundry Bancorp common stock and $1.5 million in cash. The purpose of the Foundation is to provide financial support to charitable organizations in the communities in which Blue Foundry Bank operates and to enable those communities to share in the Bank’s long-term growth. The Foundation will be dedicated completely to community activities and the promotion of charitable causes.

RP^® Financial, LC.

RP^® Financial, LC. (“RP Financial”) is a financial consulting firm serving the financial services industry nationwide that, among other things, specializes in financial valuations and analyses of business enterprises and securities, including the pro forma valuation for savings institutions converting from mutual-to-stock form. The background and experience of RP Financial is detailed in Exhibit V-1. We believe that, except for the fee we will receive for the Appraisal, we are independent of the Company, the Bank, the MHC and the other parties engaged by the Bank or the Company to assist in the stock conversion process.

Valuation Methodology

In preparing our Appraisal, we have reviewed the regulatory applications of the Company, the Bank and the MHC, including the prospectus as filed with the FRB, the FDIC, the Department and the Securities and Exchange Commission (“SEC”). We have conducted a financial analysis of the Company, the Bank and the MHC that has included a review of audited financial information for the fiscal years ended April 30, 2016 through April 30, 2020 and the years ended December 31, 2019 and December 31, 2020, and a review of various unaudited information and internal financial reports through December 31, 2020, and due diligence related discussions with the Company’s management; Crowe LLP, the Company’s independent auditor; Luse Gorman, PC, the Company’s conversion counsel and Keefe Bruyette & Woods, Inc., the Company’s marketing advisor in connection with the stock offering. All assumptions and conclusions set forth in the Appraisal were reached independently from such discussions. In addition, where appropriate, we have considered information based on other available published sources that we believe are reliable. While we believe the information and data gathered from all these sources are reliable, we cannot guarantee the accuracy and completeness of such information.

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February 5, 2021

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We have investigated the competitive environment within which Blue Foundry Bancorp operates and have assessed Blue Foundry Bancorp’s relative strengths and weaknesses. We have kept abreast of the changing regulatory and legislative environment for financial institutions and analyzed the potential impact on Blue Foundry Bancorp and the industry as a whole. We have analyzed the potential effects of the stock conversion on Blue Foundry Bancorp’s operating characteristics and financial performance as they relate to the pro forma market value of Blue Foundry Bancorp. We have reviewed the economic and demographic characteristics of the Company’s primary market area. We have compared Blue Foundry Bancorp’s financial performance and condition with selected publicly-traded thrifts in accordance with the Valuation Guidelines, as well as all publicly-traded thrifts and thrift holding companies. We have reviewed the current conditions in the securities markets in general and the market for thrift stocks in particular, including the market for existing thrift issues and initial public offerings by thrifts and thrift holding companies. We have excluded from such analyses thrifts subject to announced or rumored acquisition, and/or institutions that exhibit other unusual characteristics.

The Appraisal is based on Blue Foundry Bancorp’s representation that the information contained in the regulatory applications and additional information furnished to us by Blue Foundry Bancorp and its independent auditor, legal counsel and other authorized agents are truthful, accurate and complete. We did not independently verify the financial statements and other information provided by Blue Foundry Bancorp, or its independent auditor, legal counsel and other authorized agents nor did we independently value the assets or liabilities of Blue Foundry Bancorp. The valuation considers Blue Foundry Bancorp only as a going concern and should not be considered as an indication of Blue Foundry Bancorp’s liquidation value.

Our appraised value is predicated on a continuation of the current operating environment for Blue Foundry Bancorp and for all thrifts and their holding companies. Changes in the local, state and national economy, the legislative and regulatory environment for financial institutions and mutual holding companies, the stock market, interest rates, and other external forces (such as natural disasters or significant world events) may occur from time to time, often with great unpredictability and may materially impact the value of thrift stocks as a whole or the value of Blue Foundry Bancorp’s stock alone. It is our understanding that there are no current plans for selling control of Blue Foundry Bancorp following completion of the conversion. To the extent that such factors can be foreseen, they have been factored into our analysis.

The estimated pro forma market value is defined as the price at which Blue Foundry Bancorp’s common stock, immediately upon completion of the stock offering, would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.

Valuation Conclusion

It is our opinion that, as of February 5, 2021, the estimated aggregate pro forma market value of the shares to be issued immediately following the conversion, including shares to be issued to the Foundation, equaled $217,500,000 at the midpoint, equal to 21,750,000 shares offered at a per share value of $10.00. Pursuant to conversion guidelines, the 15% valuation range indicates a minimum value of $186,000,000 and a maximum value of $249,000,000. Based on the $10.00 per share offering price determined by the Board, this valuation range

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February 5, 2021

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equates to total shares outstanding of 18,600,000 at the minimum and 24,900,000 at the maximum. In the event the appraised value is subject to an increase, the aggregate pro forma market value may be increased up to a super maximum value of $285,225,000 without a resolicitation. Based on the $10.00 per share offering price, the super maximum value would result in total shares outstanding of 28,522,500. Based on this valuation range, the offering range is as follows: $178,500,000 at the minimum, $210,000,000 at the midpoint, $241,500,000 at the maximum and $277,725,000 at the super maximum. Based on the $10.00 per share offering price, the number of offering shares is as follows: 17,850,000 at the minimum, 21,000,000 at the midpoint, 24,150,500 at the maximum and 27,722,500 at the super maximum.

Limiting Factors and Considerations

The valuation is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing shares of the common stock. Moreover, because such valuation is determined in accordance with applicable regulatory guidelines and is necessarily based upon estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons who purchase shares of common stock in the conversion offering will thereafter be able to buy or sell such shares at prices related to the foregoing valuation of the estimated pro forma market value thereof. The appraisal reflects only a valuation range as of this date for the pro forma market value of Blue Foundry Bancorp immediately upon issuance of the stock and does not take into account any trading activity with respect to the purchase and sale of common stock in the secondary market on the date of issuance of such securities or at anytime thereafter following the completion of the stock offering.

RP Financial’s valuation was based on the financial condition, operations and shares outstanding of Blue Foundry Bancorp as of December 31, 2020, the date of the financial data included in the prospectus.

RP Financial is not a seller of securities within the meaning of any federal and state securities laws and any report prepared by RP Financial shall not be used as an offer or solicitation with respect to the purchase or sale of any securities. RP Financial maintains a policy which prohibits RP Financial, its principals or employees from purchasing stock of its client institutions.

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This valuation will be updated as provided for in the conversion regulations and guidelines. These updates will consider, among other things, any developments or changes in the financial performance and condition of Blue Foundry Bancorp, management policies, and current conditions in the equity markets for thrift shares, both existing issues and new issues. These updates may also consider changes in other external factors which impact value including, but not limited to: various changes in the legislative and regulatory environment for financial institutions, the stock market and the market for thrift stocks, and interest rates. Should any such new developments or changes be material, in our opinion, to the valuation of the shares, appropriate adjustments to the estimated pro forma market value will be made. The reasons for any such adjustments will be explained in the update at the date of the release of the update. The valuation will also be updated at the completion of Blue Foundry Bancorp’s stock offering.

Respectfully submitted,

RP® FINANCIAL, LC.

William E. Pommerening

Chief Executive Officer and

Managing Director

Gregory E. Dunn

Director

TABLE OF CONTENTS

BLUE FOUNDRY BANCORP

BLUE FOUNDRY BANK

Rutherford, New Jersey

TABLE OF CONTENTS

BLUE FOUNDRY BANCORP

BLUE FOUNDRY BANK

Rutherford, New Jersey

(continued)

LIST OF TABLES

BLUE FOUNDRY BANCORP

BLUE FOUNDRY BANK

Rutherford, New Jersey

I. OVERVIEW AND FINANCIAL ANALYSIS

Introduction

Blue Foundry Bank (the “Bank”), chartered in 1939, is a New Jersey chartered stock savings bank headquartered in Rutherford, New Jersey. In 1999, the Bank reorganized into the mutual holding company structure, forming Blue Foundry, MHC, a New Jersey mutual holding company (the “MHC”). The MHC owns 100% of the outstanding common stock of Blue Foundry Bancorp, a New Jersey corporation (“Bancorp”). The Bank is the wholly owned subsidiary of Bancorp. The Bank serves northern New Jersey through the administrative headquarters office and 16 full service branch offices. A map of the Bank’s office locations is provided in Exhibit I-1. The Bank is a member of the Federal Home Loan Bank (“FHLB”) system and its deposits are insured up to the maximum allowable amount by the Federal Deposit Insurance Corporation (“FDIC”). As of December 31, 2020, Bancorp had consolidated total assets of $1.943 billion, total deposits of $1.356 billion and total equity of $205.6 million equal to 10.58% of total assets. The MHC’s audited financial statements are included by reference as Exhibit I-2.

Plan of Conversion

On January 20, 2021, the Board of Directors of the MHC adopted a plan of conversion, incorporated herein by reference, whereby the MHC will convert to stock form. As a result of the conversion, Bancorp, which currently owns all of the issued and outstanding common stock of the Bank will be succeeded by Blue Foundry Bancorp, a newly formed Delaware stock holding company (“Blue Foundry Bancorp” or the “Company”). Following the conversion, the MHC will no longer exist. For purposes of this document, the existing consolidated entity will hereinafter also be referred to as Blue Foundry Bancorp or the Company.

Blue Foundry Bancorp will offer its common stock in a subscription offering to Eligible Account Holders, Tax-Qualified Employee Plans including the Bank’s employee stock ownership plan (the “ESOP”), Supplemental Eligible Account Holders and Other Depositors, as such terms are defined for purposes of applicable federal regulatory guidelines governing mutual-to-stock conversions. To the extent that shares remain available for purchase after satisfaction of all subscriptions received in the subscription offering, the shares may be offered for sale to members of the general public in a community offering and a syndicated community

offering or a firm commitment underwritten offering. A portion of the net proceeds received from the sale of the common stock will be used to purchase all of the then to be issued and outstanding capital stock of the Bank and the balance of the net proceeds will be retained by the Company.

At this time, following the conversion no other activities are contemplated for the Company other than the ownership of the Bank, funding a loan to the newly-formed ESOP and reinvestment of the proceeds that are retained by the Company. In the future, Blue Foundry Bancorp may acquire or organize other operating subsidiaries, diversify into other banking-related activities, pay dividends or repurchase its stock, although there are no specific plans to undertake such activities at the present time.

The plan of conversion provides for the establishment of a new charitable foundation (the “Foundation”). The Foundation contribution will total $9.0 million and will be funded with 750,000 shares of Blue Foundry Bancorp common stock and $1.5 million in cash. The purpose of the Foundation is to provide financial support to charitable organizations in the communities in which the Bank operates and to enable those communities to share in the Bank’s long-term growth. The Foundation will be dedicated completely to community activities and the promotion of charitable causes.

Strategic Overview

Blue Foundry Bancorp maintains a community banking emphasis, with a primary strategic objective of meeting the borrowing and savings needs of its local customer base. The Company is pursuing a strategy of strengthening its community bank franchise dedicated to meeting the banking needs of business and retail customers in the communities that are served by the Company. To facilitate implementation of new strategic initiatives, the Company added senior management including the appointment of a new President and Chief Executive Officer in April 2018. Pursuant to implementation of new strategic initiatives, the Company invested in infrastructure, personnel and platforms. These investments included modernizing the Company’s technology architecture for purposes of facilitating innovation and promotion of new products, services and technology.

Growth strategies are emphasizing increased lending diversification that is primarily targeting growth of commercial real estate and commercial business loans. The Company’s objective is to fund asset growth primarily through deposit growth, emphasizing growth of lower cost core deposits. Core deposit growth is expected to be in part facilitated by growth of commercial lending relationships, pursuant to which the Company is seeking to establish a full service banking relationship with its commercial loan customers through offering a full range of commercial loan products that can be packaged with lower cost commercial deposit products.

Investments serve as a supplement to the Company’s lending activities and the investment portfolio is considered to be indicative of a low risk investment strategy. Mortgage-backed securities guaranteed by government sponsored enterprises (“GSEs”) constitute the largest portion of the Company’s investment portfolio, followed by corporate bonds. Other investments held by the Company consist of U.S. Treasury securities, U.S. Government agency obligations, municipal bonds and collateralized loan obligations.

Deposits have consistently served as the primary funding source for the Company, supplemented with borrowings as an alternative funding source for purposes of managing funding costs and interest rate risk. Certificates of deposit (“CDs”) constitute the largest portion of the Company’s deposit base. Borrowings currently held by the Company consist of FHLB advances.

Blue Foundry Bancorp’s earnings base is largely dependent upon net interest income and operating expense levels. The Company has experienced net interest margin compression in recent years, as the result of a decline in yield earned on interest-earning assets and an increase in the cost of funds paid on interest-bearing liabilities. Operating expense ratios have been maintained at relatively low levels as a percent of assets, although operating expense ratios have increased in recent years as the Company has invested in infrastructure to facilitate implementation of its strategic plan. Historically, non-interest operating income has been a limited contributor to earnings, reflecting the Company’s traditional thrift operating strategy that has provided for only a modest earnings contribution from fee-based products and services. Growth of non-operating income is a strategic initiative for the Company, pursuant to which the Company is seeking to build full service banking relationships with its retail and commercial customers that will generate increased revenues derived from fee-based products and services. The amount of loan loss provisions established has increased in recent periods, which has been largely related to an increase in non-performing loans and for 2020 to also address the continued economic uncertainty resulting from the Covid-19 pandemic. With the exception of 2020, non-operating income and losses have not been a significant factor in the Company’s earnings. In 2020 the Company recorded a significant non-operating loss, which was largely due to goodwill impairment and the write-down of a Bank office property that was reclassified as held for sale.

The post-offering business plan of the Company is expected to continue to focus on implementing strategic initiatives to develop and grow a full service community banking franchise. Accordingly, Blue Foundry Bancorp will continue to be an independent full service community bank, with a commitment to meeting the retail and commercial banking needs of individuals and businesses in northern New Jersey.

A key component of the Company’s business plan is to complete a public stock offering. The Company’s strengthened capital position will increase operating flexibility and facilitate implementation of planned growth strategies. Additionally, in the near term, the stock offering will serve to substantially increase regulator capital and liquidity and, thereby, facilitate building and maintaining loss reserves while also providing the Company with greater flexibility to work with borrowers affected by the Covid-19-induced recession. The Company’s strengthened capital position will also provide more of a cushion against potential credit quality related losses in future periods. Blue Foundry Bancorp’s higher capital position resulting from the infusion of stock proceeds will also serve to reduce interest rate risk, particularly through enhancing the Company’s interest-earning assets/interest-bearing liabilities (“IEA/IBL”) ratio. The additional funds realized from the stock offering will serve to raise the level of interest-earning assets funded with equity and, thereby, reduce the ratio of interest-earning assets funded with interest-bearing liabilities as the balance of interest-bearing liabilities will initially remain relatively unchanged following the conversion, which may facilitate a reduction in Blue Foundry Bancorp’s funding costs. Blue Foundry Bancorp’s strengthened capital position will also position the Company to pursue expansion opportunities. Such expansion would most likely occur through the establishment or acquisition of additional banking offices that would increase market penetration in the markets currently served by the Company or to gain a market presence into nearby complementary markets. The Company will also be bettered position to pursue growth through acquisition of other financial service providers following the stock offering, given its strengthened capital position and ability to offer stock as consideration. At this time, the Company has no specific plans for expansion through an acquisition, but will continue to evaluate expansion through acquisition as such opportunities arise. The projected uses of proceeds are highlighted below.

Overall, it is the Company’s objective to pursue growth that will serve to increase returns, while, at the same time, growth will not be pursued that could potentially compromise the overall risk associated with Blue Foundry Bancorp’s operations.

Balance Sheet Trends

Table 1.1 shows the Company’s historical balance sheet data from fiscal yearend April 30, 2016 through December 31, 2020. The Company switched to a December 31 fiscal yearend in 2020. From fiscal yearend 2016 through December 31, 2020, Blue Foundry Bancorp’s assets increased at a 4.99% annual rate. Asset growth was funded by a combination of deposit growth and increased utilization of borrowings. A summary of Blue Foundry Bancorp’s key operating ratios over the past six fiscal years is presented in Exhibit I-3.

Blue Foundry Bancorp’s loans receivable portfolio decreased at a 0.15% annual rate from fiscal yearend 2016 through December 31, 2020, which consisted of loan growth from fiscal yearend 2016 through fiscal yearend 218 followed by loan shrinkage in 2019 and 2020. The Company’s loan shrinkage during a period of balance sheet growth provided for a reduction in the loans-to-assets ratio from 82.42% at fiscal yearend 2016 to 65.23% at December 31, 2020. Loan portfolio shrinkage in 2019 and 2020 was primarily due to the accelerated paydown of the 1-4 family loan portfolio, as homeowners took advantage of historically low interest rates to refinance their mortgages.

Trends in the Company’s loan portfolio composition over the past two years show that the concentration of 1-4 family permanent mortgage loans comprising total loans decreased from 54.39% at yearend 2019 to 48.27% at yearend 2020. Comparatively, commercial real estate/multi-family loans, which constitute the primary type of lending diversification for the Company, increased from 41.62% of total loans at yearend 2019 to 43.84% of total loans at yearend 2020. Other areas of lending diversification for the Company have been fairly limited, consisting primarily of commercial business loans, construction/land loans and home equity

Table 1.1

Blue Foundry Bancorp

Historical Balance Sheet Data

Sources: Blue Foundry Bancorp’s prospectus tables, audited and unaudited financial statements and RP Financial calculations.    

loans and lines of credit. As of December 31, 2020, commercial business loans equaled 4.27% of total loans, construction/land loans equaled 2.66% of total loans and home equity loans and lines of credit equaled 1.88% of total loans. The Company also held a nominal balance of consumer loans at yearend 2020.

The intent of the Company’s investment policy is to provide adequate liquidity and to generate a favorable return within the context of supporting Blue Foundry Bancorp’s overall credit and interest rate risk objectives. It is anticipated that proceeds retained at the holding company level will primarily be invested into short-term liquid funds held as a deposit at the Bank. Over the past six fiscal years, the Company’s level of cash and investment securities (inclusive of FHLB/FNBB stock) ranged from a low of 10.19% at fiscal yearend 2018 to a high of 30.11% at yearend 2020. Mortgage-backed securities totaling $130.8 million comprised the most significant component of the Company’s investment portfolio at December 31, 2020. Other investments held by the Company at December 31, 2020, consisted of corporate bonds ($59.3 million), municipal bonds ($24.8 million), U.S. Government agency obligations ($19.7 million), U.S. Treasury securities ($10.0 million) and collateralized loan obligations ($7.0 million). As of December 31, 2020, investments maintained as available for sale and held to maturity totaled $244.6 million and $7.0 million, respectively. Investments maintained as available for sale had a net unrealized gain of $5.7 million at December 31, 2020. As of December 31, 2020, the Company also held $316.4 million of cash and cash equivalents and $16.9 million of FHLB stock. Exhibit I-4 provides detail of the Company’s investment portfolio.

The Company also maintains an investment in bank-owned life insurance (“BOLI”) policies, which cover the lives of certain key individuals. The purpose of the investment is to provide funding for the benefit plans of the covered individuals. The life insurance policies earn tax-exempt income through cash value accumulation and death proceeds. As of December 31, 2020, the cash surrender value of the Company’s BOLI equaled $21.2 million.

Blue Foundry Bancorp’s funding needs have been addressed through a combination of deposits, borrowings and internal cash flows. From fiscal yearend 2016 through yearend 2020, the Company’s deposits increased at a 3.26% annual rate. Following a decline in deposits during fiscal year 2019, deposits increased in 2020. Recent deposit growth trends reflect that deposit growth has been driven by growth of core deposits, with interest-bearing checking account deposits accounting for the largest portion of the core deposit growth. Core deposits comprised 47.10% of total deposits at December 31, 2020, versus 39.17% of total deposits at December 31, 2019.

Borrowings serve as an alternative funding source for the Company to address funding needs for growth and to support management of deposit costs and interest rate risk. Over the period covered in Table 1.1, borrowings ranged from a low of $147.0 million or 9.50% of assets at fiscal yearend 2016 to a high of $329.4 million or 16.96% of assets at yearend 2020. Borrowings held by the Company at December 31, 2020 consisted entirely of FHLB advances.

The Company’s equity decreased at a 0.93% annual rate from fiscal yearend 2016 to yearend 2020, as retention of earnings during fiscal years ended 2017 through 2019 was more than offset by the net loss reported for 2020. Asset growth combined with a slight decline in equity provided for a decrease in the Company’s equity-to-assets ratio from 13.87% at fiscal yearend 2016 to 10.58% at December 31, 2020. The Company recorded a goodwill impairment charge in the first quarter of 2020, which eliminated goodwill from its balance sheet and, therefore, as of December 31, 2020, the Company’s equity equaled tangible equity. The Bank maintained capital surpluses relative to all of its regulatory capital requirements at December 31, 2020. The addition of stock proceeds will serve to strengthen the Company’s capital position, as well as support growth opportunities. At the same time, the significant increase in Blue Foundry Bancorp’s pro forma capital position will initially depress its return on equity (“ROE”).

Income and Expense Trends

Table 1.2 shows the Company’s historical income statements for the past six fiscal years. The Company’s reported earnings ranged from a net loss of $31.5 million or 1.63% average assets during 2020 to net income of $10.5 million or 0.62% of average assets during 2019. The net loss reported for 2020 was largely due to non-operating losses, which consisted of a charge for goodwill impairment, the write-down of a Bank office property that was reclassified as held for sale and the write-down of real estate owned (“REO”). Net interest income and operating expenses represent the primary components of the Company’s earnings. Non-interest operating income has been somewhat of a limited source of earnings for the Company. Loan loss provisions have become a more significant earnings factor during the past two years, particularly in 2020 as the Company increased loan loss provisions to address the ongoing economic uncertainty resulting from the Covid-19 pandemic. Except for 2020, non-

Table 1.2

Blue Foundry Bancorp

Historical Income Statements

Sources: Blue Foundry Bancorp’s prospectus tables, audited & unaudited financial statements and RP Financial calculations.

operating income and losses have not been a significant factor in the Company’s earnings over the past six fiscal years.

During the period covered in Table 1.2, the Company’s net interest income to average assets ratio ranged from a low of 2.02% during 2020 to a high of 2.88% during fiscal year 2016. The decrease in the Company’s net interest income ratio from fiscal year 2016 through fiscal year 2019 was largely due to interest rate spread compression that resulted from a more significant increase in the cost of interest-bearing liabilities relative to the yield earned on interest-earning assets. The more significant increase in the interest expense ratio was mostly attributable to a shift in the Company’s funding composition towards a higher concentration of higher costing borrowings relative to lower costing deposits. Comparatively, the decline in the Company’s net interest income ratio during 2020 was due to interest rate spread compression that resulted from a more significant decrease in the yield on interest-earnings assets relative to the decrease in the cost of interest-bearing liabilities. During 2020, the decline in yield earned on interest-earning assets reflects a shift in the Company’s interest-earning asset composition towards a higher concentration of comparatively lower yielding investments and interest-earning deposits. The Company’s net interest rate spreads and yields and costs for the past six fiscal years are set forth in Exhibits I-3 and I-5.

Non-interest operating income has been somewhat of a limited contributor to the Company’s earnings over the past six fiscal years, reflecting the Company’s limited diversification into products and services that generate non-interest operating income. For the period covered in Table 1.2, sources of non-interest operating income ranged from a low of $935,000 or 0.06% of average assets during fiscal year 2016 to a high of $2.5 million or 0.13% of average assets during 2020. Fees and service charges and income earned on BOLI constitute the major sources of the Company’s non-interest operating revenues.

Operating expenses represent the other major component of the Company’s earnings, ranging from a low of $34.0 million or 2.25% of average assets during fiscal year 2016 to a high of $48.9 million or 2.53% of average assets during 2020. The increase in the Company’s operating expenses during 2020 includes investment in infrastructure to facilitate implementation of the Company’s strategic plan. Upward pressure will be placed on the Company’s operating expense ratio following the stock offering, due to expenses associated with operating as a publicly-traded company, including expenses related to the stock benefit plans. At the same time, the increase in capital realized from the stock offering will increase the Company’s capacity to leverage operating expenses through implementation of current growth strategies.

Overall, the general trends in the Company’s net interest income and operating expense ratios since fiscal year 2016 reflect a decrease in core earnings, as indicated by the Company’s expense coverage ratios (net interest income divided by operating expenses). Blue Foundry Bancorp’s expense coverage ratio equaled 1.28 times during fiscal year 2016, versus a ratio of 0.80 times during 2020. The decrease in the expense coverage ratio since fiscal year 2016 was the result of a decrease in the net interest income ratio and an increase in the operating expense ratio. Similarly, Blue Foundry Bancorp’s efficiency ratio (operating expenses as a percent of the sum of net interest income and other operating income) of 76.53% during fiscal year 2016 was more favorable compared to its efficiency ratio of 117.67% during 2020.

Over the past six fiscal years, loan loss provisions established by the Company have ranged from a recovery of $648,000 or 0.04% of average assets during fiscal year 2019 to loan loss provisions of $3.7 million or 0.20% of average assets during the fiscal year ended April 30, 2020. For the twelve months ended December 31, 2020, loan loss provisions amounted to $2.5 million or 0.13% of average assets. The higher loan loss provisions established during 2020 were largely related to the potential negative impact that the Covid-19 pandemic may have on the Company’s financial condition and results of operations. As of December 31, 2020, the Company maintained an allowance for loan losses of $17.0 million, equal to 1.33% of total loans outstanding and 131.92% of non-performing loans (non-performing loans do not include accruing troubled debt restructurings). Exhibit I-6 sets forth the Company’s loan loss allowance activity during the past two years.

With the exception of 2020, non-operating income and losses over the past six fiscal years have been fairly limited. For 2020, the Company reported a net non-operating loss of $29.6 million or 1.53% of average assets. The net non-operating loss for 2020 consisted of a $12.8 million write-down of a Bank property that was reclassified as held for sale, a $15.5 goodwill impairment charge, a $1.4 loss on the write-down of REO and a $68,000 gain on the sale of securities. Overall, the non-operating gains and losses recorded by Company were viewed as non-recurring income items.

The Company effective tax rate ranged from a tax benefit of 19.98 % during 2020 to a tax expense of 49.33% during fiscal year 2018. The relatively high effective tax rate recorded for fiscal year 2018 includes a reduction in the value of Blue Foundry Bancorp’s deferred tax

assets and a corresponding charge to income tax expense of $1.8 million as a result of the enactment of the Tax Cuts and Jobs Act of 2017, which reduced the maximum federal corporate income tax rate to 21% from 35%. As set forth in the prospectus, the Company’s effective marginal tax rate is 31.0%.

Interest Rate Risk Management

The Company’s balance sheet is liability sensitive in the short-term (less than one year). The Company’s interest rate risk analysis as of December 31, 2020 indicates that in the event of a 200 basis point increase in interest rates over a one year period, assuming a parallel and immediate shift across the yield curve over such period, net portfolio value would decrease by 4.5%, which was within Board approved policy limits (see Exhibit I-7).

The Company pursues a number of strategies to manage interest rate risk, particularly with respect to seeking to limit the repricing mismatch between interest rate sensitive assets and liabilities. The Company manages interest rate risk from the asset side of the balance sheet through underwriting originations 1-4 family loans to conform to secondary market standards that would facilitate the sale of those loans as warranted, maintaining most of the investment portfolio as available for sale, investing in securities with maturities of five years or less, emphasizing commercial real estate and commercial business lending as the primary areas of lending emphasis, which consists primarily of adjustable rate or shorter term fixed rate loans. As of December 31, 2020, of the Company’s total loans due after December 31, 2021, adjustable rate loans comprised 71.22% of those loans (see Exhibit I-8). On the liability side of the balance sheet, management of interest rate risk has been primarily pursued through emphasizing growth of lower costing and less interest rate sensitive transaction and savings account deposits and utilizing fixed rate FHLB advances with maturities extending out to 2025. Transaction and savings accounts comprised 47.10% of the Company’s total deposits at December 31, 2020.

The Company also utilizes interest rate swap agreements as part of its asset-liability management strategy. Interest rate swaps with notional amounts totaling $109.0 million at December 31, 2020 were designated as cash flow hedges of certain FHLB advances and were determined to be fully effective during 2020. As of December 31, 2020, the interest rate swaps had an unrealized loss of $5.5 million.

The infusion of stock proceeds will serve to further limit the Company’s interest rate risk exposure, as most of the net proceeds will be redeployed into interest-earning assets and the increase in the Company’s capital position will lessen the proportion of interest rate sensitive liabilities funding assets.

Lending Activities and Strategy

Pursuant to the Company’s strategic plan, the Company is pursuing a diversified lending strategy emphasizing commercial real estate loans and commercial business loans as the primary areas of targeted loan growth. Other areas of lending for the Company include 1-4 family permanent mortgage loans, construction and land loans, home equity loans and lines of credit and consumer loans. Exhibit I-9 provides historical detail of Blue Foundry Bancorp’s loan portfolio composition for the past two years and Exhibit I-10 provides the contractual maturity of the Company’s loan portfolio by loan type as of December 31, 2020.

1-4 Family Residential Loans. Blue Foundry Bancorp offers fixed rate and adjustable rate 1-4 family permanent mortgage loans with terms of up to 30 years. Loans are generally underwritten to secondary market guidelines, so as to allow for the sale of such loans if such a strategy is warranted for purposes of interest rate risk management. ARM loans offered by the Bank have initial repricing terms ranging from three to ten years and then reprice annually for the balance of the loan term. ARM loans are indexed to corresponding U.S. Treasury securities rate. As of December 31, 2020, the Company’s outstanding balance of 1-4 family loans totaled $611.6 million equal to 48.27% of total loans outstanding.

Commercial Real Estate and Multi-Family Loans. Commercial real estate and multi-family loans consist largely of loans originated by the Company, which are generally collateralized by properties in the Company’s primary market area. On a limited basis, the Company supplements originations of commercial real estate and multi-family loans with purchased loan participations from local banks. Loan participations are subject to the same underwriting criteria and loan approvals as applied to loans originated by the Company. Blue Foundry Bancorp generally originates multi-family loans up to a loan-to-value (“LTV”) ratio of 80% and originates commercial real estate loans up to a LTV ratio of 75%. The Company generally requires a minimum debt-coverage ratio of 1.25 times for multi-family and commercial real estate loans. Commercial real estate and multi-family loans are originated with maximum terms of up to 15 years based on amortization periods between 25 and 30 years. Commercial real estate and multi-family loans are offered as fixed rate loans. Properties securing the the

commercial real estate and multi-family loan portfolio include office buildings, industrial facilities, retail facilities and apartments. At December 31, 2020, the Company’s largest commercial real estate or multi-family loan had an outstanding balance of $21.8 million and is secured by a multi-family property. At December 31, 2020, this loan was performing in accordance with its original terms. As of December 31, 2020, the Company’s outstanding balance of commercial real estate and multi-family loans totaled $555.69 million equal to 43.84% of total loans outstanding and included $427.4 million of multi-family loans.

Commercial Business Loans. The commercial business loan portfolio is generated through extending loans to businesses operating in the local market area. Expansion of commercial business lending activities is a desired area of loan growth for the Company, pursuant to which the Company is seeking to become a full service community bank to its commercial loan customers through offering a full range of commercial loan products that can be packaged with lower cost commercial deposit products. Commercial business loans offered by the Company consist of floating lines of credit indexed to The Wall Street Journal prime rate and fixed rate term loans. Commercial business loans are generally secured by business assets, and the Company generally obtains personal guarantees with respect to all commercial business lines of credit. As of December 31, 2020, the Company’s outstanding balance of commercial business loans totaled $54.1 million equal to 4.27% of total loans outstanding.

Construction and Land Loans. Construction loans originated by the Companyconsist of loans to finance the construction of 1-4 family residences and commercial real estate and multi-family properties. Construction loans are interest only loans during the construction period, which is usually up to 12 to 24 months, and are generally offered up to a maximum LTV ratio of 80% of the appraised market value of the completed property. Land loans consist of properties acquired for development, as well as unimproved land. Land loans are typically extended up to a LTV ratio of 65% of the lesser of the appraised value or the purchase price of the property. Land loans are generally offered as fixed rate loans with terms of up to 15 years. As of December 31, 2020, the Company’s outstanding balance of construction and land loans totaled $33.7 million equal to 2.66% of total loans outstanding.

Home Equity Loans and Lines Credit. The Company’s 1-4 family lending activities include home equity loans and lines of credit. Home equity loans and lines of credit are originated with terms up to 20 years. Home equity lines of credit are tied to the prime rate as published in The Wall Street Journal. The Company will generally originate home equity loans

and lines of credit up to a maximum loan-to value (“LTV”) ratio of 80%, inclusive of other liens on the property, on owner occupied properties. As of December 31, 2020, the Company’s outstanding balance of home equity loans and lines of credit totaled $23.8 million equal to 1.88% of total loans outstanding.

Consumer Loans. Consumer lending other than home equity loans and lines of credit has been a limited area of lending diversification for the Company, with such loans consisting of personal loans and installment loans. As of December 31, 2020, the Company’s outstanding balance of consumer loans was $98,000 equal to 0.01% of total loans.

Asset Quality

The Company experienced an increase in non-performing loans during 2020, which was due to an increase in non-performing 1-4 family loans. Over the past two years, Blue Foundry Bancorp’s balance of non-performing assets increased from $$6.9 million or 0.37% of assets at yearend 2019 to $13.5 million or 0.69% of assets at yearend 2020. As shown in Exhibit I-11, non-performing assets at December 31, 2020 consisted of $12.9 million of non-accruing loans and $623,000 of REO. Non-accruing loans held by the Company at December 31, 2020 were concentrated in 1-4 family permanent mortgage loans totaling $11.8 million.

To track the Company’s asset quality and the adequacy of valuation allowances, Blue Foundry Bancorp has established detailed asset classification policies and procedures which are consistent with regulatory guidelines. Classified assets are reviewed monthly by senior management and the Board. The loan portfolio is also reviewed by an independent third party. Pursuant to these procedures, when needed, the Company establishes additional valuation allowances to cover anticipated losses in classified or non-classified assets. As of December 31 2020, the Company maintained loan loss allowances of $17.0 million, equal to 1.33% of total loans receivable and 131.92% of non-performing loans.

Funding Composition and Strategy

Deposits have consistently served as the Company’s primary funding source and at December 31, 2020 deposits accounted for 80.46% of Blue Foundry Bancorp’s combined balance of deposits and borrowings. Exhibit I-12 sets forth the Company’s deposit composition for the past two years. Transaction and savings account deposits constituted 47.10% of total deposits at December 31, 2020, as compared to 39.17% of total deposits at December 31, 2019. The increase in the concentration of core deposits comprising total deposits from yearend 2019 to yearend 2020 was the result of growth of core deposits and a decrease in CDs. As of December 31, 2020, checking accounts comprised the largest concentrations of the Company’s core deposits equaling 56.70% of core deposits.

The balance of the Company’s deposits consists of CDs, which equaled 52.90% of total deposits at December 31, 2020 compared to 60.83% of total deposits at December 31, 2019. Blue Foundry Bancorp’s current CD composition reflects a higher concentration of short-term CDs (maturities of one year or less). The CD portfolio totaled $717.4 million at December 31, 2020 and $581.0 million or 80.98% of the CDs were scheduled to mature in one year or less. As of December 31, 2020, jumbo CDs (CD accounts with balances of $250,000 or more) amounted to $47.5 million or 13.39% of total CDs.

Borrowings serve as an alternative funding source for the Company to facilitate management of funding costs and interest rate risk. The Company maintained $329.4 million of FHLB advances at December 31, 2020 with a weighted average rate of 1.49%. FHLB advances held by the Company at December 31, 2020 had laddered terms extending out to 2025.

Subsidiary Activity

Upon completion of the conversion, the Bank will be the sole and wholly owned subsidiary of Blue Foundry Bancorp.

Blue Foundry Bank has six wholly owned subsidiaries. Rutherford Center Development Corp., a New Jersey corporation, Blue Foundry Service Corporation, a New Jersey corporation, and Blue Foundry, LLC, a New Jersey limited liability company, hold certain real estate owned. 116-120 Route 23 North, LLC, a New Jersey limited liability company, and TrackView LLC, a New Jersey limited liability company, were each formed to hold certain real estate owned but are currently inactive. Blue Foundry Investment Company, a New Jersey company, was formed to hold certain of our investment securities for tax purposes.

Legal Proceedings

The Company is not currently party to any pending legal proceedings that the Company’s management believes would have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

II. MARKET AREA

Introduction

Headquartered in Rutherford, New Jersey, Blue Foundry Bancorp serves northeastern New Jersey through the administrative headquarters office and 16 full service branch offices. The Company’s branch network covers a four-county market area of Bergen County, Morris County, Essex County and Passaic County, which is adjacent to southern New York. The headquarters office and 10 branch offices are maintained in Bergen County, four branches are maintained in Morris County, two branches are maintained in Essex County and one branch is maintained in Passaic County. Exhibit II-1 provides information on the Company’s office properties.

The primary market area served by the Company is a part of the New York metropolitan area and, therefore, is suburban and urban in nature. With operations in a densely populated metropolitan area, the Company’s competitive environment includes a significant number of thrifts, commercial banks and other financial services companies, some of which have a regional or national presence. The regional economy is highly diversified, which includes a large commuter population with jobs in New York City. Accordingly, the local economy has felt the impact of the coronavirus-induced national recession.

Future growth opportunities for Blue Foundry Bancorp depend on the future growth and stability of the national and regional economy, demographic growth trends and the nature and intensity of the competitive environment. These factors have been examined to help determine the growth potential that exists for the Company, the relative economic health of the Company’s market area, and the resultant impact on value.

National Economic Factors

The future success of the Company’s operations is partially dependent upon various national and local economic trends. In assessing national economic trends over the past few quarters, July 2020 manufacturing activity increased to an index reading of 54.2 and July service sector activity accelerated to an index reading of 58.1. U.S. employers added 1.8 million jobs in July and the July unemployment rate fell to 10.2%.    In late-July, economic data suggested that the economic recovery was stalling, as filings for initial unemployment claims rose for two consecutive weeks after nearly four months of declining weekly unemployment

claims and second quarter GDP contracted at a record annual rate of 32.9%. July existing home sales increased 24.7%, while new home sales in July rose 13.9%. At the same time, the number of homeowners that were at least 90 days delinquent soared to a 10-year high in July. August manufacturing activity accelerated to an index reading of 56.0. Comparatively, August service sector activity slowed to an index 56.9. The U.S. economy added 1.4 million jobs in August and the August unemployment rate declined to 8.4%. Record low mortgage rates helped to fuel a 2.4% increase in August existing home sales and a 4.8% increase in August new home sales. August retail sales increased 0.6%, while durable-goods orders for August increased 0.4%. The consumer confidence index for September surged to 101.8, which was its highest level since March. September manufacturing activity increased to an index reading of 55.4, while September service sector activity accelerated to an index reading of 57.8. The U.S. economy added 661,000 jobs in September and the September unemployment rate dropped to 7.9%. Existing home sales for September increased 9.4%, versus a 3.5% decline in September new home sales. Third quarter GDP rebounded from the pandemic-induced slump, increasing at a 33.1% annualized pace.

Manufacturing activity for October 2020 expanded at its quickest pace in more than two years with an index reading of 59.3, while October service sector activity declined to an index reading of 56.6. U.S. employers added 638,000 jobs in October and the October unemployment rate dropped to 6.9%. October existing home sales rose to a 14-year high with an increase of 4.3% from September existing home sales, as low borrowing costs and a shift in living preferences during the pandemic fueled a surge in home purchases. November manufacturing and service activity slowed to respective index readings of 57.5 and 55.9. The U.S. economy added 245,000 job in November, which was less than expected, and the November unemployment rate dropped to 6.7%. November retail sales dropped 1.1%, amid a surge in coronavirus infections and new business restrictions. Existing home sales declined 2.5% in November, versus an 11.0% decline in November new home sales. Manufacturing activity for December accelerated to an index reading of 60.7, while service sector activity for December accelerated to an index reading of 57.2. U.S. payrolls for December declined by 140,000 which was the first decline since April. The December unemployment rate remained at 6.7%. Retail sales for December were down 0.7%. Existing and new home sales for December increased by 0.7% and 1.6%, respectively. Fourth quarter GDP increased at a 4.0% annualized rate, while GDP for all of 2020 contracted 3.5%.

January 2021 manufacturing activity slowed to an index reading of 58.7, while service sector activity for January accelerated to an index reading of 58.7. U.S. employers added 49,000 jobs in January and the January unemployment rate fell to 6.3%.

In terms of interest rates trends over the past few quarters, a stable interest rate environment prevailed at the start of the third quarter of 2020. Long-term Treasury yields edged lower going into the second half of July, as a surge in coronavirus cases forced a number of states to reimpose lockdown measures. In mid-July, the average rate on a 30-year fixed rate mortgage fell to 2.98%, its lowest level on record. The 10-year Treasury yield edged below 0.60% going into late-July. At the conclusion of its late-July policy meeting, the Federal Reserve left its benchmark rate near zero and reiterated that it would continue to support the economy. The 10-year Treasury yield remained below 0.60% heading into mid-August and then trended up slightly to above 0.70% in late-August after the Federal Reserve dropped its long-standing practice of pre-emptively lifting interest rates to head off higher inflation. At the start of September, the 10-year Treasury yield fell below 0.70% and then edged back up over 0.70% with the release of the August employment report. For the balance of September, the 10-year Treasury yield stabilized in a range between 0.64% and 0.71% as the Federal Reserve signaled that it would keep its benchmark rate near zero through 2023.

Economic reports indicating the U.S. economy was continuing to improve and hopes of a new coronavirus relief deal pushed the 10-year Treasury yield above 0.75% in early-October 2020, which was followed by long-term Treasury yields stabilizing through mid-October. After increasing to a yield of 0.85% heading into late-October, the 10-year Treasury edged lower at the beginning of the last week of October as a surge in coronavirus cases added to worries about the economic outlook in the absence of a stimulus deal. Stronger-than-expected third quarter GDP growth pushed the 10-year Treasury yield up to 0.88% at the end of October. After edging lower with the release of the October employment report, long-term Treasury yields surged higher in the second week of November on news that a coronavirus vaccine being developed was 90% effective. Long-term Treasury yields edged lower going into the second half of November, as states implemented new lockdown measures amid a resurgence of coronavirus infections. Promising results for multiple Covid-19 vaccines and signs that U.S. lawmakers were committed to completing a new Covid-19 relief package contributed to long-term Treasury yields edging higher in early-December, which was followed by interest rates stabilizing for the balance of 2020. At its final meeting of the year in mid-December, the Federal Reserve left its benchmark at near zero and made no changes to its asset purchase program.

Interest rates remained stable at the start of 2021 and then edged higher following the Georgia Senate election run-offs in early-January, as the 10-year Treasury yield climbed above 1.0% on expectations that additional fiscal stimulus would be forthcoming with Democrats taking control of the Senate. The 10-year Treasury yield stabilized around 1.10% going into the last week of January and then edged lower at the end of January, amid concerns of delays in distribution of the Covid-19 vaccine and the ability to end lockdowns or other restrictions. The Federal Reserve concluded its late-January meeting leaving its benchmark rate near zero and keeping its easy money policies in place. Expectations of more stimulus pushed long-term Treasury yields higher at the end of January and the first week of February, which provided for some steepening of the yield curve. As of February 5, 2021, the bond equivalent yields for U.S. Treasury bonds with terms of one and ten years equaled 0.06% and 1.19%, respectively, versus comparable year ago yields of 1.49% and 1.66%. Exhibit II-2 provides historical interest rate trends.

Based on the consensus outlook of economists surveyed by The Wall Street Journal in January 2021, GDP growth was projected to increase 4.3% in 2021 and then decrease to 3.0% in 2022. The U.S. unemployment rate was forecasted to equal 6.1% in June 2021 and then decrease to 5.3% in December 2021. An average of 419,000 jobs were projected to be added per month over the next four quarters. On average, the economists forecasted the federal funds rate to equal 0.13% in June 2021 and then edge up to 0.14% in December 2021. On average, the economists forecasted that the 10-year Treasury yield would equal 1.24% in June 2021 and then increase to 1.44% in December 2021. The surveyed economists also forecasted home prices would rise by 5.5% in 2021 and 2020 housing starts were forecasted to increase from 1.38 million in 2020 to 1.49 million in 2021.

The January 2021 mortgage finance forecast from the Mortgage Bankers Association (the “MBA”) was for 2021 existing home sales to increase by 10.2% from 2020 sales and new home sales were forecasted to increase by 18.1% in 2021 from sales in 2020. The 2021 median sale prices for existing and new homes were forecasted to increase by 3.2% and 0.4%, respectively. Total mortgage production was forecasted to decrease in 2021 to $2.719 trillion, compared to $3.573 trillion in 2020. The forecasted decrease in 2021 originations was based on a 10.5% increase in purchase volume and a 46.7% decrease in refinancing volume. Purchase mortgage originations were forecasted to total $1.574 trillion in 2021, versus refinancing volume totaling $1.145 trillion. Housing starts for 2021 were projected to increase by 7.2% to total 1.481 million.

Market Area Demographics

Demographic and economic growth trends, measured by changes in population, number of households, age distribution and median household income, provide key insight into the health of the market area served by Blue Foundry Bancorp. Demographic data for Bergen, Morris, Passaic and Essex Counties, as well as for New Jersey and the U.S., is provided in Table 2.1.

The primary market area counties are densely populated markets, ranking among the largest populations in New Jersey. Bergen County has the largest population among the four primary market area counties and is the largest county in the state, while Essex County maintains the third largest population in New Jersey. Passaic County and Morris Count maintain the fifth and ninth largest populations out of the 21 counties that comprise New Jersey. The primary market area counties served by Blue Foundry Bancorp experienced relatively slow demographic growth during the 2016 to 2021 period, a characteristic typical of mature densely populated urban markets located throughout the Northeast Corridor. In fact, with the exception of Essex County, the primary market area counties experienced declines in population and household during the past five years. Population and household growth rates for the primary market area counties have been and are projected to remain well below the comparable U.S. measures, while approximating the comparable New Jersey growth rates.

Income measures show Bergen County and Morris County are relatively affluent markets, characterized by relatively high concentration of white-collar professionals. Comparatively, income measures for the counties of Essex and Passaic, which have a comparatively broader socioeconomic spectrum, were below the Bergen and Morris Counties measures and lower than the New Jersey income measures as well. The primary market area counties generally experienced income growth rates that were in line with the state and national growth rates for the 2016 through 2021 period. Consistent with the projected income growth rates for New Jersey and the U.S., income growth rates for the primary market area counties are projected to be less over the next five years. The affluence of Bergen County and Morris County is further evidenced by a comparison of household income distribution measures, as Bergen County and Morris County maintain a lower percentage of households with incomes of less than $25,000 and a much higher percentage of households with incomes over $100,000 relative to Essex County and Passaic County as well as the U.S. and New Jersey. Essex County and Passaic County also maintained higher percentages of households with incomes

Table 2.1

Blue Foundry Bancorp

Summary Demographic Data

Source: S&P Global Market Intelligence.

above $100,000 compared to the U.S. and were at a lower percentage compared to New Jersey. Essex County maintained a higher percentage of households with incomes less than $25,000 compared to the U.S. and New Jersey, while Passaic County maintained a lower and higher percentage of households with incomes less than $25,000 compared to the respective U.S. and New Jersey measures.

Age distribution measures for the primary market area counties were fairly similar to the comparable U.S. and state measures, with Bergen and Morris County exhibiting slightly older populations and Essex County and Passaic County exhibiting slight younger populations among the four primary market area counties as well as in comparison to the U.S. and New Jersey.

Regional Economy

Comparative employment data shown in Table 2.2 shows that, jobs in services and education/healthcare/social services accounted for the two largest employment sectors in all of the primary market area counties, as well as New Jersey. Finance/insurance/real estate jobs followed by wholesale/retail jobs were the third and fourth employment sectors for all of the primary market counties and New Jersey, with the exception of Passaic County which maintained a slightly higher concentration of wholesale/retail jobs compared to finance/insurance/real estate jobs. Overall, the distribution of employment exhibited in the primary market area is indicative of a fairly diversified economy.

Table 2.2

Blue Foundry Bancorp

Primary Market Area Employment Sectors

(Percent of Labor Force)

Source: S&P Global Market Intelligence.

The market areas served by the Company, characterized primarily as the New York metropolitan area, has a highly developed and diverse economy. Financial services, professional services and healthcare related companies are among the largest employers in the New York metropolitan area. Table 2.3 lists the largest companies in the primary market area counties served by the Company’s branches.

Table 2.3

Blue Foundry Bancorp

Largest Employers in Local Market Area

Source: Fortune, May 2020

Unemployment Trends

Comparative unemployment rates for the primary market area counties, as well as for the U.S. and New Jersey, are shown in Table 2.4. December 2020 unemployment rates for the primary market area counties ranged from a low of 5.9% for Morris County to a high of 9.8% for Passaic County. Comparative unemployment rates for the U.S. and New Jersey equaled 6.5% and 7.4%, respectively. Pursuant to the coronavirus-induced recession, the December 2020 unemployment rates for the primary market area counties New Jersey and the U.S. were all significantly higher compared to a year ago.

Table 2.4

Blue Foundry Bancorp

Unemployment Trends(1)

(1) Unemployment rates are not seasonally adjusted.

Source: S&P Global Market Intelligence.

Market Area Deposit Characteristics and Competition

The Company’s deposit base is closely tied to the economic fortunes of northern New Jersey and, in particular, the areas that are nearby to one of Blue Foundry Bancorp’s branches. Table 2.5 displays deposit market trends from June 30, 2015 through June 30, 2020 for all commercial bank and savings institution branches located in the market area counties, as well as New Jersey. Consistent with New Jersey, commercial banks maintained a larger market share of deposits than savings institutions in all the primary market area counties. Overall, from June 30, 2015 to June 30, 2020, bank and thrift deposits increased in all of the primary market area counties.

Table 2.5

Blue Foundry Bancorp

Deposit Summary

Source: FDIC.

The Company maintains its largest balance and market share of deposits in Bergen County, where the Company is headquartered and maintains its largest branch presence. Based on June 30, 2020 deposit data, Blue Foundry Bancorp’s $1.033 billion of deposits provided for a 1.6% market share of bank and thrift deposits in Bergen County. The Bank’s deposit market share in the primary market area counties ranged from 0.2% in Essex County to 1.6% in Bergen County. Five year annual deposit growth rates for the primary market area counties ranged from 1.5% for Essex County to 7.2% for Passaic County. Comparatively, deposit growth rates for the Company ranged from 2.9% in Essex County to 8.1% in Morris County. During the five-year period covered in Table 2.5, the Company’s deposit market share increased slightly in Morris County, decreased slightly in Bergen and Passaic County, and stayed flat in Essex County.

As implied by the Company’s relatively low market shares of deposits in the primary market area counties, competition among financial institutions in the Company’s market area is significant. Among the Company’s competitors are much larger and more diversified institutions, which have greater resources than maintained by Blue Foundry Bancorp. Financial institution competitors in the Company’s primary market area include other locally based thrifts and banks, as well as regional, super regional and money center banks. From a competitive standpoint, Blue Foundry Bancorp has sought to emphasize its community orientation in the markets served by its branches. Table 2.6 lists the Company’s largest competitors in the market area counties, based on deposit market share.

Table 2.6

Blue Foundry Bancorp

Market Area Deposit Competitors