BankFinancial Corporation (NASDAQ:BFIN) Q4 2019 Earnings Conference Call February 19, 2020 10:30 AM ET Company Participants F. Morgan Gasior - Chairman and CEO Conference Call Participants Brian Martin - Jamie Montgomery Operator Ladies and gentlemen, thank you for standing by, and welcome to the BankFinancial Corp Fourth Quarter and Year-to-Date 2019 Review. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator ins ...

Loan and Asset Performance - Total loans decreased by $42.2 million (6.8%) in the multi-family mortgage loan portfolio due to increased prepayments[104] - Total assets decreased by $93.3 million, or 5.9%, to $1.492 billion as of September 30, 2019, primarily due to a decrease in loans receivable and securities[116] - Loans decreased by $109.8 million, or 8.3%, to $1.214 billion, while securities decreased by $22.7 million, or 25.8%[116] - Nonperforming assets decreased by $1.0 million to $1.7 million as of September 30, 2019, from $2.7 million at December 31, 2018[159] - Total nonperforming assets included $1,160,000 in one-to-four family residential real estate loans, a decrease of $237,000 from the previous quarter[158] Deposits and Liabilities - Total deposits declined by $41.4 million (3.1%) from June 30, 2019, attributed to seasonal factors[106] - Total liabilities decreased by $80.1 million, or 5.7%, to $1.318 billion, primarily due to decreases in total deposits and borrowings[120] - Total deposits decreased by $63.7 million, or 4.7%, to $1.289 billion, with retail certificates of deposit increasing by $12.3 million, or 3.7%[120] Income and Expenses - Net interest income before provision for loan losses was stable at $13.2 million for the quarter ended September 30, 2019[108] - Net interest income increased to $13.2 million, reflecting an 8.2% increase in interest income[123] - Noninterest income decreased by $96,000, or 6.1%, to $1.5 million for the three months ended September 30, 2019, compared to $1.6 million for the same period in 2018[133] - Total noninterest expense increased by $84,000, or 0.9%, to $9.5 million for the three months ended September 30, 2019, driven by increases in compensation and benefits, office occupancy, and equipment expenses[135] - Noninterest income decreased by $1.7 million, or 27.1%, to $4.5 million for the nine months ended September 30, 2019, from $6.2 million for the same period in 2018[148] - Total noninterest expense decreased by $520,000, or 1.8%, to $29.1 million for the nine months ended September 30, 2019, from $29.6 million for the same period in 2018[149] Capital and Ratios - The Tier 1 leverage ratio remained strong at 11.43%[109] - The Bank's total capital to risk-weighted assets ratio was 15.46% as of September 30, 2019, exceeding the required minimum of 8.00%[170] - Tier 1 capital to risk-weighted assets ratio was 14.76% as of September 30, 2019, above the required minimum of 6.00%[170] - The minimum capital conservation buffer (CCB) was 2.5% as of September 30, 2019, with the Company maintaining compliance with all capital ratios[169] - The allowance for loan losses as a percentage of nonperforming loans was 527.25% at September 30, 2019, up from 260.54% at June 30, 2019, reflecting a stronger reserve position[133] Net Income and Earnings - Net income for the quarter was $3.9 million, an increase of $187, compared to $3.7 million in the previous quarter[113] - Net income for the three months ended September 30, 2019, was $3.9 million, compared to $3.7 million for the same period in 2018[122] - The company reported net income of $8.3 million for the nine months ended September 30, 2019, down from $11.9 million for the same period in 2018, with earnings per share decreasing to $0.53 from $0.68[137] Interest Rate Sensitivity - As of September 30, 2019, a 100 basis point decrease in interest rates is expected to result in a 1.57% decrease in NPV and a $1.7 million decrease in net interest income[179] - A 200 basis point increase in interest rates is projected to lead to a 1.42% decrease in NPV and a $1.9 million increase in net interest income[180] - The table indicates that a 400 basis point increase in interest rates would result in a $16.4 million decrease in NPV, equating to a 7.78% decline[179] - The methodology for measuring interest rate risk has inherent shortcomings, as it relies on assumptions that may not accurately reflect actual market responses[181] - The sensitivity measurements provided are not intended to serve as precise forecasts of actual results from interest rate changes[181] Shareholder Returns - The company repurchased 1,107,550 common shares, representing 6.7% of the common shares outstanding at December 31, 2018[109] - The Company declared cash dividends of $0.30 per share for the nine months ended September 30, 2019, compared to $0.27 per share for the same period in 2018[170]

Financial Data and Key Metrics Changes - The company reported a significant improvement in net interest margin, driven by a combination of a growing commercial loan portfolio and prepayment income [8][11] - The expected net interest margin for 2020 is projected to be between 3.40% and 3.60%, contingent on optimizing the loan mix and deposit re-pricing [11][49] Business Line Data and Key Metrics Changes - The commercial loan portfolio is targeted to grow to between $200 million and $225 million by the end of 2020, with new business opportunities identified [20][32] - The multifamily portfolio is projected to range from $600 million to $625 million by year-end 2020, with challenges due to prepayment risks [21][22] Market Data and Key Metrics Changes - The company anticipates modest movement in retail deposit pricing, which will help reduce deposit interest expenses [9] - The yield environment for new originations is expected to stabilize around 4% for multifamily loans and 4.25% for commercial real estate [38] Company Strategy and Development Direction - The company is focusing on expanding its commercial and industrial (C&I) loan portfolio and enhancing its product offerings to capture market opportunities [33][36] - There is a cautious approach towards M&A activity, with a preference for organic growth and share repurchase programs to enhance earnings per share [41][42] Management's Comments on Operating Environment and Future Outlook - Management expects one or two more rate cuts from the Federal Reserve, but deposit yields are more influenced by local competition than by rate changes [14] - The overall credit quality remains stable, with a focus on lower-risk assets to mitigate potential economic downturns [51][52] Other Important Information - The company is investing in marketing and technology to support loan growth and improve customer engagement [46] - There are currently 638,463 shares remaining in the share repurchase plan, which is set to mature on March 31, 2020 [45] Q&A Session Summary Question: What drove the significant jump in loan yields? - The increase was attributed to a mix of growing the commercial loan portfolio and prepayment income, which is expected to continue in the short term [8] Question: What are the expectations for loan growth in 2020? - The company aims to reach a loan portfolio of approximately $1.3 billion by the end of the second quarter of 2020, with potential growth to $1.375 billion by year-end [28] Question: How does the company view the current credit environment? - The portfolio is stable, and management is cautious about taking large risks, preferring to focus on lower-risk assets [51][52]

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 Large accelerated filer ¨ Accelerated filer x Non-accelerated filer ¨ Smaller reporting company x Emerging growth company ¨ FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period ended June 30, 2019 or ¨ TRANSITION RE ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period ended March 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 0-51331 BANKFINANCIAL CORPORATION (Exact Name of Registrant as Specified in Charter) Maryland 75-3199276 (State or Other Jurisdiction of Incorporat ...

Financial Data and Key Metrics Changes - The company reported a strong linked quarter NIM (Net Interest Margin) expansion without any unusual items affecting the results [8][9] - The company anticipates a cautious optimism regarding NIM expansion in the second quarter, driven by a shift towards C&I (Commercial and Industrial) loans [9][10] Business Line Data and Key Metrics Changes - Loan growth is projected to be around 5% year-over-year, with C&I leading the growth despite a slower start in the first quarter [12][14] - Multifamily loan opportunities are becoming thinner due to market maturity, impacting growth potential [13][14] - Leasing is expected to grow modestly, with a projected growth of 10% to 15% at maximum for 2019, influenced by amortization rates [24][28] Market Data and Key Metrics Changes - The company is experiencing a shift in line utilization, with expectations for longer duration projects to increase utilization rates in the future [16][17] - The competitive landscape in capital markets is intense, with some transactions occurring at zero fees, complicating the fee income outlook [52] Company Strategy and Development Direction - The company is focusing on growing the C&I portfolio while managing risks associated with leasing and multifamily loans [20][21] - There is an ongoing evaluation of smaller community bank acquisition opportunities to enhance the earning asset base and improve efficiency ratios [59] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding asset yields and funding costs, particularly with the Fed's current pause on interest rate changes [41][42] - The company expects to see improvements in asset quality and a potential recovery in ALLL (Allowance for Loan and Lease Losses) due to favorable changes in loss ratios [55][56] Other Important Information - The company plans to continue share repurchases, aiming to buy back approximately 15 million shares over the next 12 months, contingent on market conditions [57][58] - Management indicated that expenses are expected to normalize in the second quarter, with a target of around $9.5 million for the quarter [46][47] Q&A Session Summary Question: NIM expansion and its drivers - Management confirmed that there were no unusual items affecting NIM in the first quarter and expressed optimism for C&I growth in the second quarter [8][9] Question: Loan growth outlook - Management reiterated a 5% growth target for loans, with C&I expected to lead despite challenges in leasing and multifamily sectors [12][14] Question: Line utilization trends - Management noted that line utilization was lower in the first quarter but expects longer duration projects to improve utilization going forward [16][17] Question: Fee income outlook - Management acknowledged a decline in fee income but expects some recovery from line usages and capital markets transactions [52] Question: Share repurchase strategy - Management indicated that there are limited shares left under the current buyback authorization and expects the board to review and potentially expand it soon [60][61]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 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, 2018 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 0-51331 BANKFINANCIAL CORPORATION (Exact Name of Registrant as Specified Its Charter) Maryland 75-3199276 (State or Other Jurisdiction of Incorporation) ...

BankFinancial Corporation (NASDAQ:BFIN) Q4 2018 Earnings Conference Call January 23, 2019 10:30 AM ET Company Participants Morgan Gasior - Chairman and Chief Executive Officer Conference Call Participants Brian Martin - FIG Partners, LLC Operator Good day, ladies and gentlemen, and welcome to the BankFinancial Corp., Q4 and Year-to-Date 2018 Review Conference Call. Currently at this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will f ...