BankFinancial(BFIN) - 2024 Q4 - Annual Results

Financial Performance Overview A significant increase in credit loss provisions led BankFinancial Corporation to a net loss in Q4 2024, reversing prior quarter's profitability Q4 2024 Key Performance Metrics | Performance Metric | IVQ 2024 | IIIQ 2024 | IVQ 2023 | | :--- | :--- | :--- | :--- | | Return on assets (ROA) | (0.49)% | 0.56% | 0.56% | | Return on equity (ROE) | (4.43)% | 5.03% | 5.37% | | Net interest margin (TEB) | 3.49% | 3.47% | 3.48% | | Efficiency ratio | 84.54% | 76.73% | 77.39% | Summary Statement of Operations ($ thousands) | Account | IVQ 2024 | IIIQ 2024 | IVQ 2023 | | :--- | :--- | :--- | :--- | | Net interest income | $11,677 | $11,661 | $12,432 | | Provision for credit losses | $4,650 | $485 | $317 | | Noninterest income | $1,570 | $1,482 | $1,625 | | Noninterest expense | $11,199 | $10,084 | $10,879 | | Net income (loss) | $(1,764) | $1,993 | $2,079 | - The company recorded a diluted loss per share of ($0.14) in Q4 2024, compared to earnings per share of $0.16 in Q3 2024 and $0.17 in Q4 2023[8] - For the full year 2024, net income was $4.07 million, a significant decrease from $9.39 million in 2023, primarily due to a higher provision for credit losses ($5.03 million in 2024 vs. $313 thousand in 2023) and lower net interest income[8] Financial Condition (Balance Sheet) Total assets reached $1.435 billion in Q4 2024, reflecting a strategic shift with decreased net loans and significantly increased securities holdings Statement of Financial Condition Highlights ($ thousands) | Account | IVQ 2024 | IIIQ 2024 | IVQ 2023 | | :--- | :--- | :--- | :--- | | Total Assets | $1,434,814 | $1,417,660 | $1,487,384 | | Cash and equivalents | $118,985 | $160,283 | $207,997 | | Securities, at fair value | $360,530 | $264,905 | $153,203 | | Loans receivable, net | $887,586 | $923,939 | $1,050,761 | | Total Liabilities | $1,278,437 | $1,258,552 | $1,332,001 | | Deposits | $1,217,541 | $1,199,412 | $1,261,623 | | Stockholders' Equity | $156,377 | $159,108 | $155,383 | - The company has been actively reducing its loan portfolio, which decreased by 15.5% year-over-year, while more than doubling its securities portfolio (up 135.3% YoY) in a strategic balance sheet repositioning[5] Loan Portfolio Analysis The total loan portfolio decreased to $887.6 million in Q4 2024, driven by reduced originations and significant payoffs, particularly in commercial loans Loan Portfolio Composition ($ thousands) | Loan Type | IVQ 2024 | IIIQ 2024 | IVQ 2023 | | :--- | :--- | :--- | :--- | | Multi–family residential real estate | $521,957 | $524,340 | $527,460 | | Nonresidential real estate | $108,153 | $109,799 | $118,016 | | Commercial loans and leases | $248,595 | $280,218 | $393,321 | | Total Loans (Gross) | $895,157 | $931,838 | $1,059,106 | - Loan originations decreased to $144.2 million in Q4 2024 from $165.9 million in Q3 2024 For the full year, originations totaled $671.2 million, down from $760.4 million in 2023[10] - Loan payments and payoffs totaled $175.9 million in Q4 2024, exceeding new originations and contributing to the overall decline in the loan portfolio[10] Credit Quality and Risk Management Nonperforming assets decreased to $18.3 million in Q4 2024, despite a significant $5.0 million net charge-off primarily from commercial loans Nonperforming Assets ($ thousands) | Category | IVQ 2024 | IIIQ 2024 | IVQ 2023 | | :--- | :--- | :--- | :--- | | Nonaccrual loans | $16,934 | $22,331 | $21,331 | | Foreclosed assets, net | $1,391 | $1,966 | $2,777 | | Total Nonperforming Assets | $18,325 | $24,297 | $25,115 | - The ratio of nonperforming assets to total assets improved to 1.28% in Q4 2024 from 1.71% in Q3 2024[14] Allowance for Credit Losses Activity ($ thousands) | Activity | IVQ 2024 | IIIQ 2024 | | :--- | :--- | :--- | | Beginning balance | $7,899 | $8,142 | | Net charge–offs | $(4,974) | $(715) | | Provision for credit losses | $4,646 | $472 | | Ending balance | $7,571 | $7,899 | - A significant charge-off of $5.0 million in commercial loans and leases occurred in Q4 2024, leading to a high annualized net charge-off ratio of (2.19)% for the quarter[18] Deposits, Funding, and Margin Analysis Total deposits increased to $1.218 billion in Q4 2024, contributing to a slight widening of the net interest margin to 3.49% due to lower deposit costs Deposit Composition ($ thousands) | Deposit Type | IVQ 2024 | IIIQ 2024 | IVQ 2023 | | :--- | :--- | :--- | :--- | | Noninterest–bearing demand | $238,826 | $226,882 | $260,851 | | Interest–bearing NOW accounts | $277,059 | $276,551 | $306,548 | | Money market accounts | $305,538 | $306,679 | $297,074 | | Certificates of deposit - retail | $234,979 | $228,485 | $222,391 | | Total Deposits | $1,217,541 | $1,199,412 | $1,261,623 | Yields and Cost of Funds | Metric | IVQ 2024 | IIIQ 2024 | IVQ 2023 | | :--- | :--- | :--- | :--- | | Yield on interest–earning assets | 4.88% | 4.94% | 4.71% | | Cost of interest–bearing liabilities | 1.96% | 2.04% | 1.70% | | Net interest rate spread | 2.92% | 2.90% | 3.01% | | Net interest margin (TEB) | 3.49% | 3.47% | 3.48% | Capital Adequacy and Shareholder Returns BankFinancial Corporation maintained robust capital ratios in Q4 2024, including a 18.70% CET1 ratio, while declaring a $0.10 cash dividend despite a net loss BankFinancial Corporation Capital Ratios | Ratio | IVQ 2024 | IIIQ 2024 | IVQ 2023 | | :--- | :--- | :--- | :--- | | Common Tier 1 (CET1) | 18.70% | 18.53% | 17.66% | | Risk–based total capital ratio | 21.79% | 21.56% | 20.70% | | Tier 1 leverage ratio | 10.90% | 11.11% | 10.54% | Common Stock Data | Metric | IVQ 2024 | IIIQ 2024 | IVQ 2023 | | :--- | :--- | :--- | :--- | | Book value per share ($) | $12.55 | $12.77 | $12.45 | | Cash dividends declared ($) | $0.10 | $0.10 | $0.10 | | Basic and diluted EPS ($) | $(0.14) | $0.16 | $0.17 | - The company did not repurchase any stock in the second half of 2024, after repurchasing 15,203 shares in Q1 2024[23]