BankFinancial(US:BFIN)2021-07-29 16:00Financial 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].