Financial Data and Key Metrics Changes - The company reported a tangible book value per share increase from $11.58 to $11.79 over the past 12 months, indicating a positive trend in shareholder value [21] - The company achieved a quarter-over-quarter growth of approximately 3%, with end-of-May balances reaching $1.57 billion [33] Business Line Data and Key Metrics Changes - The multifamily loan generation has shown consistent growth, with originations settling around $30 million per quarter, marking the fourth consecutive quarter of increases [12][29] - Equipment finance has experienced its fourth consecutive quarter of growth, with a better mix in commercial and small ticket contributing positively [16][31] - The company expects to maintain a growth target of $40 million at a 4% growth rate, with potential for stronger performance in the fourth quarter [34] Market Data and Key Metrics Changes - The company is observing a potential increase in sales due to capital gains legislation, which could impact the multifamily portfolio's performance in the second half of the year [14] - The healthcare sector is expected to lag in growth, with liquidity levels remaining high among clients, indicating a cautious outlook for the third quarter [32] Company Strategy and Development Direction - The company is focusing on expanding its commercial asset generation capabilities, particularly in equipment finance and government contracting [10][26] - There is an emphasis on organic growth through talent acquisition in commercial finance and real estate, with a goal to enhance product offerings [36][38] - The company is open to opportunistic acquisitions, particularly in non-bank sectors, while being cautious about community bank acquisitions that may dilute earnings [60][64] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for margin expansion as origination rates exceed payoff rates, indicating a positive trend for interest income [44] - The company is actively managing expenses, with expectations for a reduction in one-time costs in the upcoming quarters [19][66] - The management remains cautious about the impact of external factors, such as interest rates and legislative changes, on loan growth and portfolio performance [14][42] Other Important Information - The trust department is expanding its assets under management, focusing on closely held businesses, which presents a unique market opportunity [51] - Treasury services are set to launch new technology, with initial customers expected to generate significant fee income [52] Q&A Session Summary Question: Trends on the expense line - Management acknowledged higher expenses due to one-time costs related to asset resolution and transitioning to a new data platform, expecting expenses to stabilize around $9.6 million to $10 million per quarter [7][9] Question: Loan growth driven by commercial payoff trends - Management noted steady origination rates in real estate and expressed concerns about potential sales impacting growth, particularly due to capital gains legislation [11][14] Question: Share repurchase strategy - The company has repurchased 650,000 shares this year and plans to continue, with a focus on maintaining a tier one leverage ratio [19][20] Question: Expectations for equipment finance growth - Management expects to sustain and potentially increase growth in equipment finance, with a focus on government and renewable energy sectors [26][31] Question: Credit quality and reserving outlook - Management indicated a stable credit quality with zero deferrals in the real estate portfolio, expecting some recovery of reserves while maintaining a cautious approach to new originations [45][47] Question: Recent M&A activity - Management is open to evaluating M&A opportunities that align with their growth strategy but is currently focused on organic growth [57][64] Question: PPP program status - The company reported over $100,000 in flow-through income from PPP forgiveness in Q2, expecting this trend to continue for the next few quarters [67][68]

Financial Performance - The company reported a net income of $1.9 million, or $0.13 per common share for the quarter ended June 30, 2021[110]. - Net income for the three months ended June 30, 2021, was $1.9 million, compared to $2.4 million for the same period in 2020[128]. - Net income was $3.4 million for the six months ended June 30, 2021, compared to $4.8 million for the same period in 2020[142]. - Net interest income was $21.4 million for the six months ended June 30, 2021, compared to $23.3 million for the same period in 2020, reflecting an 18.3% decrease in interest income[143]. - Noninterest income increased by $263,000, or 22.6%, to $1.4 million for the three months ended June 30, 2021, compared to $1.2 million for the same period in 2020[138]. - Noninterest income rose by $123,000, or 4.8%, to $2,684,000 for the six months ended June 30, 2021, compared to $2,561,000 for the same period in 2020[152]. Assets and Liabilities - Total assets increased to $1.657 billion, with total loans at $1.032 billion and total deposits at $1.439 billion[110]. - Total assets increased by $59.8 million, or 3.7%, to $1.657 billion at June 30, 2021, from $1.597 billion at December 31, 2020[123]. - Total liabilities increased by $66.3 million, or 4.7%, to $1.490 billion at June 30, 2021, from $1.424 billion at December 31, 2020[127]. - Total deposits rose by $16.5 million, primarily due to a $28.2 million increase in core retail and business deposits[112]. - Total deposits increased by $45.0 million, or 3.2%, to $1.439 billion at June 30, 2021, from $1.394 billion at December 31, 2020[127]. Loan Performance - Total net loans increased by $3.3 million, with commercial loans and leases rising by $24.8 million (5.6%) compared to the previous quarter[111]. - The company's ratio of nonperforming loans to total loans was 0.09%, with nonperforming assets to total assets decreasing to 0.16%[115]. - The allowance for loan losses as a percentage of nonperforming loans was 775.68% at June 30, 2021, compared to 634.81% at December 31, 2020[137]. - The company recorded a recovery of loan losses of $678,000 for the three months ended June 30, 2021, compared to a provision for loan losses of $42,000 for the same period in 2020[136]. - The provision for loan losses recorded a recovery of $1,000,000 for the six months ended June 30, 2021, compared to a provision of $513,000 for the same period in 2020[150]. Interest Income and Expenses - Net interest income increased by $195,000, while noninterest income rose by $168,000 due to higher fees on retail deposit accounts and loans[114]. - Net interest income decreased by $0.5 million, or 4.4%, to $10.8 million for the three months ended June 30, 2021, compared to $11.3 million for the same period in 2020[129]. - The yield on interest-earning assets decreased by 67 basis points to 2.93% for the three months ended June 30, 2021, from 3.60% for the same period in 2020[130]. - The net interest rate spread decreased by 23 basis points to 2.67% for the three months ended June 30, 2021, from 2.90% for the same period in 2020[130]. - The company’s net interest margin decreased by 48 basis points to 2.78% for the six months ended June 30, 2021, from 3.26% for the same period in 2020[145]. Capital and Ratios - The Tier 1 leverage ratio remained strong at 10.05% as of June 30, 2021[116]. - The Community Bank Leverage Ratio was 10.03% as of June 30, 2021, exceeding the minimum requirement of 8%[172]. - The Bank maintained a Tier 1 leverage ratio of at least 7.5% and a total risk-based capital ratio of at least 10.5% as per its Regulatory Capital Plans[175]. - The effective tax rate for the six months ended June 30, 2021, was 26.6%, compared to 26.2% for the same period in 2020[155]. Shareholder Returns - The company repurchased 504,939 common shares during the quarter, increasing the book value per common share to $11.79[116]. - The Company declared cash dividends of $0.20 per share for both the six months ended June 30, 2021, and June 30, 2020[177]. Interest Rate Risk Management - The Bank has shifted focus from residential mortgage loans to nonresidential real estate loans, multi-family mortgage loans, and commercial loans to better manage interest rate risk[182]. - In the event of a 25 basis point decrease in interest rates, the Bank expects a 2.81% decrease in net portfolio value (NPV) and a decrease of $174 thousand in net interest income[187]. - A 200 basis point increase in interest rates would result in a 5.08% increase in NPV and an increase of $7.0 million in net interest income[187]. - The dynamic GAP analysis indicates mismatches in the timing of asset and liability repricing, which is crucial for assessing interest rate risk[185]. - The Bank actively monitors interest rate risk through various analyses, including economic value of equity analysis and net interest income analysis[183].

Financial Performance - The company reported net income of $1.5 million, or $0.10 per common share, for the three months ended March 31, 2021, down from $2.4 million, or $0.16 per common share, for the same period in 2020[103]. - Net income for the three months ended March 31, 2021, was $1.5 million, a decrease from $2.4 million for the same period in 2020, with earnings per share dropping to $0.10 from $0.16[121]. - Noninterest income decreased by $140,000, or 10.0%, to $1.3 million for the three months ended March 31, 2021, compared to $1.4 million for the same period in 2020[131]. - Income tax expense decreased to $517,000 for the three months ended March 31, 2021, compared to $850,000 for the same period in 2020[134]. Asset and Loan Growth - Total assets increased by $23.5 million, or 1.5%, to $1.620 billion at March 31, 2021, primarily due to an increase in loans[115]. - Total net loans increased by $26.3 million, or 2.6%, to $1.029 billion at March 31, 2021, driven by strong originations in commercial equipment finance[104]. - Commercial loans and leases increased by $37.6 million, or 9.3%, during the quarter, with significant contributions from government equipment finance originations[116]. - Total average interest-earning assets increased by $127.9 million, or 9.1%, to $1.528 billion for the three months ended March 31, 2021[123]. Deposit and Liability Changes - Total deposits rose by $28.5 million, primarily due to a $44.9 million increase in core retail and business deposits[105]. - Total liabilities increased by $25.0 million, or 1.8%, to $1.449 billion as of March 31, 2021, driven by a $28.5 million, or 2.0%, increase in total deposits to $1.422 billion[119]. Interest Income and Expenses - Net interest income declined by $952,000, with the average yield on interest-earning assets dropping from 3.27% to 2.98%[106]. - Net interest income decreased to $10.6 million for the three months ended March 31, 2021, down from $12.0 million in the same period of 2020, reflecting a $3.4 million, or 23.2%, decrease in interest income[122]. - The yield on interest-earning assets decreased by 123 basis points to 2.98% for the three months ended March 31, 2021, compared to 4.21% for the same period in 2020[123]. - The net interest margin decreased by 63 basis points to 2.81% for the three months ended March 31, 2021, from 3.44% for the same period in 2020[123]. Nonperforming Loans and Allowance - The ratio of nonperforming loans to total loans was 0.07%, while nonperforming assets to total assets increased to 0.33%[108]. - Nonperforming loans decreased by $541,000 to $680,000 as of March 31, 2021, from $1.2 million at December 31, 2020[142]. - Total nonperforming assets increased by $3.9 million to $5.3 million at March 31, 2021, from $1.4 million at December 31, 2020[143]. - The allowance for loan losses decreased to 0.71% of total loans as of March 31, 2021, down from 0.77% at December 31, 2020[114]. Capital and Ratios - The company's Tier 1 leverage ratio was 10.67% at March 31, 2021, indicating a strong capital position[109]. - The Bank's Community Bank Leverage Ratio was 10.19% as of March 31, 2021, exceeding the minimum requirement of 8.5%[151]. - The Bank is classified as well-capitalized, with all capital ratios exceeding the required levels[154]. - The company had $4.0 million of FHLB advances outstanding at March 31, 2021, unchanged from December 31, 2020[146]. Expenses and Efficiency - The efficiency ratio increased to 86.05%, compared to 72.03% in the previous year, reflecting higher noninterest expenses[113]. - Noninterest expense increased by $559,000, or 5.8%, to $10.2 million for the three months ended March 31, 2021, from $9.6 million for the same period in 2020[133]. - Office occupancy and equipment expense increased by $338,000, or 18.8%, primarily due to increased snow removal and COVID-19 cleaning expenses[133]. Dividends and Future Projections - The Company declared cash dividends of $0.10 per share for both the three months ended March 31, 2021, and March 31, 2020[155]. - In the event of an immediate 200 basis point increase in interest rates, the Bank would expect a $6.2 million increase in net interest income[165]. - A 25 basis point decrease in interest rates would result in a $598,000 decrease in net interest income[165]. - The estimated change in net portfolio value (NPV) for a 400 basis point increase in interest rates would be an increase of $8.59 million[167]. Liquidity and Risk Management - The Company has no known trends or events that would materially impact its liquidity as of March 31, 2021[148]. - The Company has emphasized the origination of nonresidential real estate loans and commercial loans to manage interest rate risk[160]. - The Bank's Tier 1 leverage ratio must be maintained at a minimum of 7.5% as per its Regulatory Capital Plans[153].

Financial Data and Key Metrics Changes - The net interest margin (NIM) decreased to 2.81%, with expectations of potential growth in net interest income (NII) as loan growth accelerates [7][8] - First quarter expenses are projected to be between $9.5 million and $9.75 million, with a midpoint estimate of around $9.7 million for the second quarter [9][10] Business Line Data and Key Metrics Changes - Equipment finance portfolio showed growth of approximately $37 million in the first quarter, marking the third consecutive quarter of growth [21][24] - Real estate originations have started to pick up, with expectations of reaching $40 million growth per quarter in the second and third quarters [25][27] Market Data and Key Metrics Changes - The company is seeing a robust pipeline for both equipment finance and real estate, although the pace of turning the pipeline into closed deals is slower than usual due to supply chain issues [22][27] Company Strategy and Development Direction - The company plans to increase share repurchase authorization to over 500,000 shares, indicating a proactive approach to capital management [28][29] - There are ongoing discussions about optimizing branch operations without significantly reducing the number of branches, focusing on cost savings [19][20] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about loan growth, with expectations of continued positive trends in the second and third quarters [21][24] - The company aims to achieve earnings per share (EPS) in the low 20s by the end of the year, contingent on growth in the credit portfolio [44] Other Important Information - A $4 million asset related to a commercial customer went into foreclosure, but management does not expect a material financial impact from this situation [14][15] - The company has made significant provisional reserves in 2020 due to COVID-19, particularly in the multifamily and commercial real estate portfolios [35] Q&A Session Summary Question: Outlook on NII and NIM - Management indicated that NII is expected to grow with loan growth, but NIM may fluctuate based on the mix of loans [7][8] Question: Expense Outlook - Management expects first quarter expenses to be seasonally high but anticipates a slight decrease in the second half of the year [9][10] Question: Asset in Foreclosure - A $4 million asset related to a long-term customer went into foreclosure, but management does not expect a significant financial impact [14][15] Question: Loan Growth Outlook - Management is optimistic about loan growth, particularly in equipment finance and real estate, with strong pipelines for both [21][24] Question: Share Repurchase Plans - The company plans to be more active in share repurchases starting in the second quarter, especially in light of the upcoming Russell 2000 rebalancing [28][32] Question: Reserve Outlook - Management expects reserves to remain flat or potentially increase slightly depending on the mix of originations [36][37] Question: PPP Fees and EPS Expectations - Management noted that PPP fees are difficult to quantify but remains hopeful for EPS to reach the low 20s by year-end [41][44]

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.01 per share BFIN The NASDAQ Stock Market LLC UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Comm ...

Financial Data and Key Metrics Changes - The company aims for non-interest income to be between $6 million and $7 million for 2021, with a normal run rate closer to $6 million based on 2019 figures [6][10] - The company has submitted over $7 million of its original $10 million for PPP loan forgiveness, receiving less than 15% back so far [7] - The company achieved approximately $6 million in PPP round two loans in process, which have started to fund [6][10] Business Line Data and Key Metrics Changes - Equipment finance originations for 2020 were just under $200 million, compared to $127 million in 2019, with expectations for growth in 2021 [13] - Commercial finance originations in 2020 were about $95 million, with hopes to exceed that in 2021 [14] - Real estate originations are expected to see growth of $65 million to $75 million in multifamily [15] Market Data and Key Metrics Changes - The company noted that 90% of prepayment income came from markets outside of Chicago, primarily due to property appreciation [8] - The company is focusing on low and moderate-income census tracts to drive more PPP loan volume [7] Company Strategy and Development Direction - The company plans to add resources to the trust department in 2021 to build assets under management [9] - The Treasury services department was added in 2020 and is expected to contribute additional interest income in the latter half of 2021 [10] - The company is focused on maintaining a strong asset quality position and is not anticipating significant problems in the portfolio [24][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth in 2021, citing strong momentum in originations and a positive forward look in terms of operating leverage [16][33] - The company is cautious about the pace of PPP loan forgiveness and its impact on income [7] - Management noted that deferrals are not an issue, with minimal amounts deferred and a strong focus on asset quality [24] Other Important Information - The company is undergoing a complete revamp of its technology infrastructure, which is expected to incur some expenses in the first half of the year [32] - The company is mindful of the Russell 2000 rebalancing and its potential impact on share repurchase activities [30][36] Q&A Session Summary Question: Can you provide insights on NII and PPP fee income? - Management indicated that PPP fees are included in non-interest income, with expectations for normalization in loan prepayment fees [11][12] Question: What is the outlook for balance sheet growth in 2021? - Management expects growth in equipment finance and commercial finance, with a target of $200 million in total growth across segments [14][15] Question: How are deferrals impacting the company? - Management reported that deferrals are minimal and not a concern, with a strong focus on asset quality [24] Question: What is the company's strategy regarding liquidity and excess resources? - Management stated that deploying excess liquidity remains a priority, although yields on those assets are low [23] Question: How does the company view its capital deployment and reserves? - Management plans to maintain reserve levels while focusing on growth opportunities in equipment finance and commercial finance [27][28] Question: What are the expectations for expenses in 2021? - Management anticipates expenses to trend around $9.75 million for the first half of the year, with efforts to reduce costs in the latter half [32][33]

Financial Ratios and Capital Adequacy - As of September 30, 2020, the company had a Tier 1 leverage ratio of 10.66% and a Tier 1 risk-based capital ratio of 17.84%[98] - The Bank's Community Bank Leverage Ratio was 10.13% as of September 30, 2020, exceeding the minimum requirement of 8%[169] - The total capital to risk-weighted assets ratio was 16.38%, significantly above the required 8% for capital adequacy[173] - The minimum capital conservation buffer (CCB) is set at 2.5%[171] - The Bank is subject to regulatory restrictions on dividend declarations without prior approval, ensuring compliance with capital requirements[172] Loan Performance and Allowance for Loan Losses - The ratio of nonperforming loans to total loans was 0.22% and the ratio of nonperforming assets to total assets was 0.15%[98] - The allowance for loan losses (ALLL) decreased by $145,000 (1.8%) compared to the previous quarter, with required reserve ratios for multi-family residential and nonresidential real estate loans increasing by 21.5% and 58.2%, respectively[110] - The company expects additional increases to the ALLL if loan balances rise as business conditions normalize[111] - A recovery of loan losses of $187,000 was recorded for the three months ended September 30, 2020, compared to a recovery of $134,000 for the same period in 2019[136] - The portion of the allowance for loan losses attributable to loans collectively evaluated for impairment decreased by $165,000, or 2.0%, to $8.0 million at September 30, 2020[136] - The allowance for loan losses as a percentage of nonperforming loans was 343.08% at September 30, 2020, down from 901.06% at December 31, 2019[149] Income and Expenses - Net income for Q3 2020 was $1.948 million, a decrease from $3.924 million in Q3 2019[121] - Noninterest income increased to $1.3 million in Q3 2020, compared to $1.2 million in Q2 2020[115] - Noninterest expense rose to $9.8 million in Q3 2020, up from $9.5 million in Q2 2020[117] - Net interest income decreased by $2.2 million, or 16.7%, to $11.0 million for the three months ended September 30, 2020[130] - Noninterest income decreased by $210,000, or 14.2%, to $1.3 million for the three months ended September 30, 2020, compared to $1.5 million for the same period in 2019[137] - Net income for the nine months ended September 30, 2020, was $6.7 million, a decrease from $8.3 million for the same period in 2019[142] - Net interest income was $34.3 million for the nine months ended September 30, 2020, down from $39.6 million for the same period in 2019, reflecting an 18.8% decrease in interest income[143] - Noninterest expense increased by $278,000, or 2.9%, to $9.8 million for the three months ended September 30, 2020, compared to $9.5 million for the same period in 2019[140] - Noninterest expense decreased by $415,000, or 1.4%, to $28.7 million for the nine months ended September 30, 2020, from $29.1 million for the same period in 2019[151] Deposits and Liquidity - Total deposits increased by $14.1 million (1.0%) in Q3 2020, with core transaction account balances increasing by $53.5 million[112] - Total deposits increased by $117.5 million, or 9.1%, to $1.402 billion at September 30, 2020[127] - The company anticipates greater volatility in deposit balances for the remainder of 2020 due to government stimulus impacts[112] - As of September 30, 2020, the Company had liquid assets of $8.0 million and an unsecured line of credit of $5.0 million with no outstanding balance[165] Asset Management - Total assets increased by $116.9 million, or 7.9%, to $1.605 billion at September 30, 2020, from $1.488 billion at December 31, 2019[124] - Cash and cash equivalents rose by $239.3 million, or 125.8%, to $429.7 million at September 30, 2020[124] - Total liabilities increased by $118.9 million, or 9.1%, to $1.433 billion at September 30, 2020, primarily due to an increase in total deposits[127] Interest Rates and Risk Management - The average yield on the loan and lease portfolio decreased to 4.43% for Q3 2020 from 4.57% in Q2 2020[114] - The average cost of retail and commercial deposits fell to 0.48% in Q3 2020, down from 0.63% in Q2 2020[114] - The yield on interest-earning assets decreased by 137 basis points to 3.24% for the three months ended September 30, 2020[131] - The net interest margin decreased by 82 basis points to 2.85% for the three months ended September 30, 2020[131] - In the event of a 25 basis point decrease in interest rates, the Bank would expect a 2.48% decrease in net portfolio value (NPV) and a $328,000 decrease in net interest income[182] - A 200 basis point increase in interest rates would result in a 2.39% increase in NPV and a $4.5 million increase in net interest income[182] - The Company has de-emphasized residential mortgage loans and increased focus on nonresidential real estate loans and commercial loans to manage interest rate risk[177] Shareholder Returns - The Company declared cash dividends of $0.30 per share for both the nine months ended September 30, 2020, and September 30, 2019[173] - The company repurchased 66,000 shares at an average cost of $7.82 during Q3 2020[119]

Financial Ratios and Capital Adequacy - As of June 30, 2020, the Company had a Tier 1 leverage ratio of 11.06% and a Tier 1 risk-based capital ratio of 17.03%[104] - The Bank's Community Bank Leverage Ratio was 10.54% as of June 30, 2020, exceeding the minimum requirement of 8%[176] - Total capital to risk-weighted assets was $170,203 thousand, with a ratio of 16.38%, well above the required capital adequacy ratio of 8%[180] - The Tier 1 (core) capital to risk-weighted assets ratio stood at 15.63%, exceeding the required 6.00%[180] - The Common Tier 1 (CET1) capital was $162,455 thousand, with a ratio of 15.63%, well above the required 4.50%[180] - The company is subject to regulatory capital requirements, with all capital ratios exceeding the well-capitalized requirement as of June 30, 2020[179] Loan and Deposit Performance - Total loans decreased by $65.4 million (5.7%) in Q2 2020 compared to Q1 2020, with commercial loans declining by $31.4 million (19.9%) due to reduced line of credit usage[108] - The Company originated 305 loans totaling $11 million under the U.S. Small Business Administration Paycheck Protection Program (PPP) in Q2 2020, with 300 loans having an outstanding principal balance of $10.9 million as of June 30, 2020[109] - Total deposits increased by $134.4 million (10.7%) in Q2 2020, net of a $16.3 million reduction in wholesale deposit balances, primarily due to COVID-19 fiscal stimulus[119] - Total deposits rose by $103.4 million, or 8.0%, to $1.388 billion at June 30, 2020, compared to $1.285 billion at December 31, 2019[134] - Core deposits represented 75.5% of total deposits at June 30, 2020, compared to 68.7% at December 31, 2019[134] Interest Income and Margin - The average yield on the loan and lease portfolio decreased to 4.57% in Q2 2020 from 4.72% in Q1 2020, while the average cost of retail and commercial deposits decreased to 0.63%[121] - The net interest margin decreased to 3.09% in Q2 2020, down from 3.44% in Q1 2020, due to the abrupt decline in interest rates[121] - Net interest income after provision for loan losses was $11.283 million in Q2 2020, up from $9.146 million in Q2 2019[129] - Net interest income decreased to $11.3 million for the three months ended June 30, 2020, down from $13.1 million in the same period of 2019, reflecting a 20.1% decrease in interest income[137] - The yield on interest-earning assets decreased by 94 basis points to 3.60% for the three months ended June 30, 2020, from 4.54% for the same period in 2019[138] - The net interest margin decreased by 51 basis points to 3.09% for the three months ended June 30, 2020, from 3.60% for the same period in 2019[139] Nonperforming Loans and Asset Quality - The non-performing loans to total loans ratio was 0.16% as of June 30, 2020, with nominal past due loan balances despite COVID-19 disruptions[116] - Nonperforming assets to total assets increased to 0.12% from 0.07% at the end of 2019[130] - Nonperforming loans increased to $1.8 million at June 30, 2020, from $764,000 at December 31, 2019, representing an increase of $1.0 million[168] - The ratio of nonperforming loans to total loans increased to 0.16% at June 30, 2020, compared to 0.07% at December 31, 2019[168] - The allowance for loan losses as a percentage of nonperforming loans was 457.43 at June 30, 2020, down from 901.06 at December 31, 2019[158] Income and Expenses - Net income for the three months ended June 30, 2020, was $2.4 million, compared to $807,000 for the same period in 2019, resulting in earnings per share of $0.16[136] - Noninterest income decreased to $1.2 million in Q2 2020 from $1.4 million in Q1 2020, reflecting the impact of "Stay-At-Home" orders[122] - Noninterest expense declined to $9.2 million for the quarter ended June 30, 2020, with compensation and benefits down by $350,000[125] - Total noninterest expense decreased by $223,000, or 2.4%, to $9.2 million for the three months ended June 30, 2020, from $9.5 million for the same period in 2019[149] - Noninterest income decreased by $263,000, or 18.4%, to $1.2 million for the three months ended June 30, 2020, compared to $1.4 million for the same period in 2019[147] Strategic Initiatives and Future Outlook - The Company developed several loan forbearance programs to assist borrowers affected by COVID-19, with 100 borrowers executing agreements totaling $94.0 million in outstanding loan principal balances[112] - The Company expects greater volatility in deposit balances for the remainder of 2020 due to government stimulus providing additional liquidity to depositors[119] - The company plans to leverage cost savings from improved efficiencies to offset declines in interest income and maintain business generation priorities[124] - The Company anticipates sufficient funds to meet current loan commitments and lines of credit[171] - The dynamic GAP analysis indicates mismatches in the timing of asset and liability repricing, which is crucial for assessing interest rate risk[187] Interest Rate Risk Management - The company has de-emphasized residential mortgage loans and increased focus on nonresidential real estate loans and commercial leases to manage interest rate risk[184] - The Asset/Liability Management Committee (ALCO) evaluates interest rate risk and modifies strategies accordingly to protect net interest income[183] - The investment portfolio is classified as available-for-sale to enhance liquidity management flexibility[184] - In the event of an immediate 25 basis point decrease in interest rates, the Bank would expect a 2.41% decrease in net portfolio value (NPV) and a $659,000 decrease in net interest income[191] - A 200 basis point increase in interest rates would result in a 0.55% decrease in NPV and a $3.8 million increase in net interest income[191]

Financial Ratios and Capital Adequacy - As of March 31, 2020, the company reported a Tier 1 leverage ratio of 11.67% and a Tier 1 risk-based capital ratio of 16.56%[93] - The Bank's total capital to risk-weighted assets ratio was 16.53%, exceeding the required minimum of 8.00%[171] - The Bank's Tier 1 capital to risk-weighted assets ratio was 15.75%, well above the required minimum of 6.00%[171] - The Common Tier 1 (CET1) capital ratio was 15.75%, significantly higher than the required minimum of 4.50%[171] - The minimum capital conservation buffer (CCB) is set at 2.5%[168] - The Bank's total capital as of March 31, 2020, was $170,270,000, compared to $170,203,000 as of December 31, 2019[171] - The Bank's Tier 1 capital as of March 31, 2020, was $162,158,000, an increase from $162,455,000 as of December 31, 2019[171] - The company is subject to regulatory restrictions on dividend declarations without prior approval, ensuring compliance with capital adequacy requirements[169] Loan and Asset Performance - The ratio of nonperforming loans to total loans was 0.07%, and the ratio of nonperforming assets to total assets was 0.06%[93] - Total loans declined by $19.8 million (1.7%) compared to the fourth quarter of 2019, with commercial loan balances increasing by $12.3 million (8.5%) and multi-family mortgage loans decreasing by $21.3 million (3.8%)[96] - Total assets decreased by $37.7 million (2.5%) to $1.450 billion as of March 31, 2020, from $1.488 billion at December 31, 2019[128] - Loans decreased by $20.4 million (1.7%) to $1.148 billion as of March 31, 2020, from $1.168 billion at December 31, 2019[128] - Total nonperforming loans decreased to $764,000 at March 31, 2020, from $847,000 at December 31, 2019[158] - Nonperforming assets decreased by $159,000 to $874,000 at March 31, 2020, from $1.0 million at December 31, 2019[159] - The allowance for loan losses increased by $480,000, or 6.3%, to $8.1 million at March 31, 2020, from $7.6 million at December 31, 2019[146] - The allowance for loan losses as a percentage of nonperforming loans was 1,061.78% at March 31, 2020, compared to 901.06% at December 31, 2019[146] Income and Expenses - Net interest income decreased by $1.25 million (9.5%) to $11.969 million for the first quarter of 2020, compared to $13.219 million for the same period in 2019[125] - Noninterest income declined by $226,000 (13.9%) to $1.398 million for the first quarter of 2020, compared to $1.624 million for the same period in 2019[125] - The average yield on the loan and lease portfolio decreased to 4.72% for the quarter ended March 31, 2020, from 4.82% for the quarter ended December 31, 2019[115] - The net interest margin decreased to 3.44% for the quarter ended March 31, 2020, compared to 3.50% for the quarter ended December 31, 2019[115] - Noninterest expense decreased by $470,000, or 4.7%, to $9.6 million for the three months ended March 31, 2020, from $10.1 million for the same period in 2019[149] - Compensation and benefits increased by $380,000 due to seasonally higher payroll taxes and the addition of new business development resources[120] - Compensation and benefits expense decreased by $185,000, or 3.2%, due to lower incentive and severance expenses as well as decreased payroll taxes[149] - Information technology expenses increased by $130,000, or 18.8%, to $822,000 for the three months ended March 31, 2020, primarily due to equipment upgrades and cybersecurity prevention expenses[149] Dividends and Shareholder Equity - Total stockholders' equity decreased to $173.0 million at March 31, 2020, from $174.4 million at December 31, 2019, primarily due to share repurchases and cash dividends totaling $3.7 million[133] - The Bank declared cash dividends of $0.10 per share for both the three months ended March 31, 2020, and 2019[171] - The company repurchased 206,196 shares at an average cost of $10.65 during the first quarter of 2020[122] Loan Forbearance and Government Programs - As of April 17, 2020, 73 borrowers with $65.5 million in outstanding loan principal balances executed a Qualified Limited Forbearance Program agreement[109] - The company allocated $10 million to the Paycheck Protection Program (PPP) and began accepting applications on April 3, 2020[107] - Approximately 90% of the pending loan pipeline at March 31, 2020, met the revised product and underwriting requirements[100] - The company expects fluctuations in commercial loan volumes based on specific industry and business conditions, with a focus on asset-based working capital credit facilities[105] - The deposit portfolio consists almost entirely of core transaction accounts, with expectations of greater volatility in deposit balances due to government stimulus[112] Interest Rate Sensitivity - In the event of an immediate 200 basis point increase in interest rates, the Bank would expect a 5.49% decrease in net present value (NPV) and a $713,000 increase in net interest income[178] - A 25 basis point decrease in interest rates would result in a 0.44% decrease in NPV and a $19,000 increase in net interest income[178]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.01 per share BFIN The NASDAQ Stock Market LLC FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Commission File Number ...