BankFinancial(US:BFIN)2021-04-29 16:00Financial 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].