BankFinancial(BFIN) - 2025 Q3 - Quarterly Report

Financial Performance - The company reported net income of $2.4 million, or $0.19 per common share, for the quarter ended September 30, 2025[90]. - Net income for the three months ended September 30, 2025, was $2.4 million, an increase of 18.4% compared to $2.0 million for the same period in 2024[111]. - Net income for the nine months ended September 30, 2025, was $4.1 million, down from $5.8 million for the same period in 2024[125]. Assets and Liabilities - Total assets as of September 30, 2025, were $1.455 billion, with total loans of $759.8 million and total deposits of $1.242 billion[90]. - Total assets increased by $19.7 million, or 1.4%, to $1.455 billion at September 30, 2025, from $1.435 billion at December 31, 2024[106]. - Total deposits increased by $26.4 million, with core deposits representing 79% of total deposits as of September 30, 2025[100]. - Total deposits increased by $24.5 million, or 2.0%, to $1.242 billion at September 30, 2025[109]. - Total stockholders' equity increased to $157.4 million at September 30, 2025, from $156.4 million at December 31, 2024[110]. Income and Expenses - Net interest income increased by $375,000, driven by a 24.8% increase in average securities, totaling $100.7 million, and a net interest margin of 3.45%[91]. - Noninterest income decreased by $256,000, attributed to declines in trust department income and a prior quarter's bank-owned life insurance benefit[93]. - Noninterest expense decreased by $1.1 million due to the receipt of a $1.4 million Employee Retention Tax Credit, partially offset by a $405,000 increase in professional fees related to the proposed merger[94]. - Noninterest income increased by $1.1 million, or 25.5%, to $5.3 million for the nine months ended September 30, 2025[111]. - Noninterest expense rose by $694,000, or 6.9%, to $10.8 million for the three months ended September 30, 2025, primarily due to increased office occupancy and professional fees[122]. - Total noninterest expense rose by $553,000, or 1.7%, to $33.5 million for the nine months ended September 30, 2025, primarily due to increased professional fees[137]. Loan Portfolio - The loan portfolio declined by $36.1 million in the third quarter of 2025, primarily due to scheduled repayments[96]. - Loans receivable decreased by $127.8 million, or 14.4%, to $759.8 million at September 30, 2025[106]. - The provision for credit losses on loans was $1.8 million for the nine months ended September 30, 2025, compared to $435,000 for the same period in 2024[132]. - The allowance for credit losses as a percentage of nonperforming loans was 76.74% at September 30, 2025, compared to 79.65% at June 30, 2025[120]. Nonperforming Assets - The ratio of nonperforming assets to total assets improved to 0.79%, with a specific reserve of $2.1 million recorded for a U.S. Government equipment finance exposure[97][98]. - Nonperforming assets decreased by $652,000 to $11.5 million as of September 30, 2025, compared to $12.2 million at June 30, 2025, and $18.3 million at December 31, 2024[143]. - The ratio of nonperforming assets to total assets was 0.79% as of September 30, 2025, down from 0.85% at June 30, 2025, and 1.28% at December 31, 2024[143]. - Total nonperforming loans amounted to $9.24 million as of September 30, 2025, a decrease of $7.69 million from the previous year[142]. Mergers and Acquisitions - The company entered into a merger agreement with First Financial Bancorp, subject to regulatory approvals and stockholder approval[88][89]. Interest Rate Risk Management - The company primarily invests in shorter-duration securities, which generally have lower yields compared to longer-term investments, to better manage interest rate risk[161]. - The dynamic GAP analysis identifies mismatches in the timing of asset and liability repricing, which is crucial for understanding interest rate risk[164]. - Management considers various projected forward interest rate scenarios when evaluating strategies for managing interest rate risk[167]. - The estimated changes in NPV and net interest income are based on numerous assumptions, including market interest rates and loan prepayment rates, and should not be relied upon as indicative of actual results[165]. Tax and Dividends - The effective tax rate for the three months ended September 30, 2025, was 16.6%, compared to 22.6% for the same period in 2024[124]. - The company declared cash dividends of $0.30 per share for each of the nine months ended September 30, 2025, and September 30, 2024[158].