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 ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period ended June 30, 2022 or ☐ TRANSITION RE ...

Financial Data and Key Metrics Changes - The loan portfolio increased to just over $1.1 billion, with a growth of approximately $45 million in April 2022, reflecting a 6% year-to-date increase in commercial-related loans [7][15][31] - The yield on originations in April was 4.68%, up from 4.56% at the end of the first quarter, indicating a positive trend in yield activity [13][14] Business Line Data and Key Metrics Changes - The Equipment Finance division originated more loans in April than in the entire first quarter of 2022, indicating strong growth despite supply chain delays [8][26] - Multifamily loans and commercial real estate loans saw strong originations, contributing significantly to the overall loan growth [7][20] - The commercial finance area experienced some volatility but is expected to contribute positively moving forward [9][30] Market Data and Key Metrics Changes - The company is seeing increased activity in healthcare finance, although it remains spotty, with cash drawn and returned in lessor finance also being inconsistent [28] - The demand for equipment remains strong, but delivery issues continue to impact transaction timing [25][29] Company Strategy and Development Direction - The company aims for loan growth of $40 million per quarter, with a target of reaching between $1.125 billion to $1.150 billion in the second quarter [10][31] - There is a focus on strengthening capabilities in equipment finance and commercial finance to leverage market opportunities [51][52] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the pipelines for the second and third quarters, expecting strong originations and improved yields [22][31] - The company anticipates that rising interest rates will compress refinancing opportunities, leading to fewer prepayments and a more stable loan portfolio [19][20] Other Important Information - The company expects to maintain operating expenses around $10 million per quarter, with potential fluctuations based on hiring and performance incentives [49][70] - The book value decreased from $11.90 to $11.68 due to market rate changes affecting the value of the Treasury note portfolio [76] Q&A Session Summary Question: Can you walk through the outlook on pipelines and originations versus paydowns? - Management noted that the decline in payoffs is due to fewer refinancing opportunities as rates rise, with a more normal run rate expected in the first quarter [18][19] Question: What are the expectations for payoffs over the balance of the year? - Management estimates around $20 million to $25 million in payoffs per quarter for the real estate portfolio and similar figures for equipment finance, with C&I being more variable [37] Question: How is the company planning to manage operating expenses? - Management indicated that expenses are expected to normalize around $10 million per quarter, with some variability based on performance incentives [49][70] Question: What is the outlook for interest income with upcoming Fed rate hikes? - Management expects an increase of $1 million to $1.5 million in net interest margin with each additional rate hike, as the company redeploys excess liquidity into loans [45][62] Question: What is the company's stance on share repurchases given the current stock price? - Management stated that while there is frustration over the stock price being below tangible book value, the focus remains on deploying excess cash into loans rather than share repurchases at this time [64][80]

Financial Performance - The company reported net income of $1.3 million, or $0.10 per common share for the quarter ended March 31, 2022[94]. - Net income for the three months ended March 31, 2022, was $1.3 million, compared to $1.5 million for the same period in 2021, with earnings per share remaining at $0.10[116]. - Net interest income decreased by $612,000, with a $276,000 provision for loan losses recorded[98]. - Net interest income increased by $195,000 to $10.8 million for the three months ended March 31, 2022, compared to $10.6 million for the same period in 2021[117]. - Income tax expense was $386,000 for the three months ended March 31, 2022, compared to $517,000 for the same period in 2021, with an effective tax rate of 23.3%[129]. Asset and Liability Management - Total assets decreased by $40.5 million, or 2.4%, to $1.660 billion at March 31, 2022, from $1.701 billion at December 31, 2021[109]. - Total liabilities decreased by $37.0 million (2.4%) to $1.506 billion at March 31, 2022, primarily due to a decrease in total deposits, which fell by $26.8 million (1.8%) to $1.462 billion[114]. - Total stockholders' equity was $153.9 million at March 31, 2022, down from $157.5 million at December 31, 2021, mainly due to a $3.0 million net loss on the U.S. Treasury Note portfolio and the repurchase of 50,000 shares of common stock[115]. Loan and Deposit Activity - Total net loans increased by $10.9 million during the quarter, with total commercial loans and leases rising by $6.7 million (1.4%)[95]. - Total deposits decreased by $26.8 million during the three months ended March 31, 2022[97]. - The company's ratio of nonperforming loans to total loans was 0.18% at March 31, 2022, up from 0.07% at December 31, 2021[101]. - The allowance for loan losses to total loans ratio remained stable at 0.64%[137]. Income and Expense Analysis - Noninterest income decreased by $187,000 primarily due to lower non-usage fees on commercial lines of credit[100]. - Noninterest income increased by $186,000, or 14.8%, to $1.4 million for the three months ended March 31, 2022, compared to $1.3 million for the same period in 2021[126]. - Noninterest expense increased by $102,000, or 1.0%, to $10.3 million for the three months ended March 31, 2022, compared to $10.2 million for the same period in 2021[128]. - Information technology expenses increased by $141,000, or 19.9%, to $851,000 for the three months ended March 31, 2022[128]. Capital Adequacy and Risk Management - The Tier 1 leverage ratio remained strong at 9.32% at March 31, 2022[102]. - As of March 31, 2022, the Bank's Community Bank Leverage Ratio was 10.05%, exceeding the required minimum of 9.00% for capital adequacy[149]. - The Bank targets a Tier 1 leverage ratio of at least 7.5% and a total risk-based capital ratio of at least 10.5%[148]. - The minimum capital conservation buffer (CCB) is set at 2.5%[148]. - The Bank's regulatory capital policies will be adjusted as necessary to maintain compliance with capital requirements[148]. Interest Rate Risk - In the event of a 200 basis point increase in interest rates, the Bank expects a 7.96% increase in net portfolio value (NPV) and an $8.1 million increase in net interest income[158]. - A 25 basis point decrease in interest rates would result in a 2.38% decrease in NPV and a $1.3 million decrease in net interest income[158]. - The Bank has de-emphasized residential mortgage loans and increased focus on nonresidential real estate loans and commercial loans[153]. - The Bank's interest rate risk management involves shortening the average maturity of interest-earning assets to reduce exposure to interest rate changes[153]. - The Bank's dynamic GAP analysis identifies mismatches in the timing of asset and liability repricing[156]. Nonperforming Assets - Nonperforming assets increased by $1.5 million to $2.9 million at March 31, 2022, primarily due to a government lease that was past due over 90 days[138]. - Total nonperforming loans included $330,000 in one-to-four family residential real estate and $101,000 in commercial loans and leases as of March 31, 2022[136]. - The allowance for loan losses as a percentage of nonperforming loans was 345.87% at March 31, 2022, down from 895.33% at December 31, 2021[125].

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 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 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 ...

BankFinancial Corporation (NASDAQ:BFIN) Q3 2021 Earnings Conference Call November 1, 2021 10:30 AM ET Company Participants F. Morgan Gasior - Chairman and CEO Conference Call Participants Manuel Navas - D.A. Davidson Brian Morgan - Janney Montgomery Operator Good day and thank you for standing by. Welcome to the BankFinancial Corp Q3 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator ...

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 ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period ended September 30, 2021 or ☐ TRANSITI ...

Financial Data and Key Metrics Changes - The company reported a tangible book value per share increase from $11.58 to $11.79 over the past 12 months, indicating a positive trend in shareholder value [21] - The company achieved a quarter-over-quarter growth of approximately 3%, with end-of-May balances reaching $1.57 billion [33] Business Line Data and Key Metrics Changes - The multifamily loan generation has shown consistent growth, with originations settling around $30 million per quarter, marking the fourth consecutive quarter of increases [12][29] - Equipment finance has experienced its fourth consecutive quarter of growth, with a better mix in commercial and small ticket contributing positively [16][31] - The company expects to maintain a growth target of $40 million at a 4% growth rate, with potential for stronger performance in the fourth quarter [34] Market Data and Key Metrics Changes - The company is observing a potential increase in sales due to capital gains legislation, which could impact the multifamily portfolio's performance in the second half of the year [14] - The healthcare sector is expected to lag in growth, with liquidity levels remaining high among clients, indicating a cautious outlook for the third quarter [32] Company Strategy and Development Direction - The company is focusing on expanding its commercial asset generation capabilities, particularly in equipment finance and government contracting [10][26] - There is an emphasis on organic growth through talent acquisition in commercial finance and real estate, with a goal to enhance product offerings [36][38] - The company is open to opportunistic acquisitions, particularly in non-bank sectors, while being cautious about community bank acquisitions that may dilute earnings [60][64] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for margin expansion as origination rates exceed payoff rates, indicating a positive trend for interest income [44] - The company is actively managing expenses, with expectations for a reduction in one-time costs in the upcoming quarters [19][66] - The management remains cautious about the impact of external factors, such as interest rates and legislative changes, on loan growth and portfolio performance [14][42] Other Important Information - The trust department is expanding its assets under management, focusing on closely held businesses, which presents a unique market opportunity [51] - Treasury services are set to launch new technology, with initial customers expected to generate significant fee income [52] Q&A Session Summary Question: Trends on the expense line - Management acknowledged higher expenses due to one-time costs related to asset resolution and transitioning to a new data platform, expecting expenses to stabilize around $9.6 million to $10 million per quarter [7][9] Question: Loan growth driven by commercial payoff trends - Management noted steady origination rates in real estate and expressed concerns about potential sales impacting growth, particularly due to capital gains legislation [11][14] Question: Share repurchase strategy - The company has repurchased 650,000 shares this year and plans to continue, with a focus on maintaining a tier one leverage ratio [19][20] Question: Expectations for equipment finance growth - Management expects to sustain and potentially increase growth in equipment finance, with a focus on government and renewable energy sectors [26][31] Question: Credit quality and reserving outlook - Management indicated a stable credit quality with zero deferrals in the real estate portfolio, expecting some recovery of reserves while maintaining a cautious approach to new originations [45][47] Question: Recent M&A activity - Management is open to evaluating M&A opportunities that align with their growth strategy but is currently focused on organic growth [57][64] Question: PPP program status - The company reported over $100,000 in flow-through income from PPP forgiveness in Q2, expecting this trend to continue for the next few quarters [67][68]

Financial 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].

Financial 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].

Financial Data and Key Metrics Changes - The net interest margin (NIM) decreased to 2.81%, with expectations of potential growth in net interest income (NII) as loan growth accelerates [7][8] - First quarter expenses are projected to be between $9.5 million and $9.75 million, with a midpoint estimate of around $9.7 million for the second quarter [9][10] Business Line Data and Key Metrics Changes - Equipment finance portfolio showed growth of approximately $37 million in the first quarter, marking the third consecutive quarter of growth [21][24] - Real estate originations have started to pick up, with expectations of reaching $40 million growth per quarter in the second and third quarters [25][27] Market Data and Key Metrics Changes - The company is seeing a robust pipeline for both equipment finance and real estate, although the pace of turning the pipeline into closed deals is slower than usual due to supply chain issues [22][27] Company Strategy and Development Direction - The company plans to increase share repurchase authorization to over 500,000 shares, indicating a proactive approach to capital management [28][29] - There are ongoing discussions about optimizing branch operations without significantly reducing the number of branches, focusing on cost savings [19][20] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about loan growth, with expectations of continued positive trends in the second and third quarters [21][24] - The company aims to achieve earnings per share (EPS) in the low 20s by the end of the year, contingent on growth in the credit portfolio [44] Other Important Information - A $4 million asset related to a commercial customer went into foreclosure, but management does not expect a material financial impact from this situation [14][15] - The company has made significant provisional reserves in 2020 due to COVID-19, particularly in the multifamily and commercial real estate portfolios [35] Q&A Session Summary Question: Outlook on NII and NIM - Management indicated that NII is expected to grow with loan growth, but NIM may fluctuate based on the mix of loans [7][8] Question: Expense Outlook - Management expects first quarter expenses to be seasonally high but anticipates a slight decrease in the second half of the year [9][10] Question: Asset in Foreclosure - A $4 million asset related to a long-term customer went into foreclosure, but management does not expect a significant financial impact [14][15] Question: Loan Growth Outlook - Management is optimistic about loan growth, particularly in equipment finance and real estate, with strong pipelines for both [21][24] Question: Share Repurchase Plans - The company plans to be more active in share repurchases starting in the second quarter, especially in light of the upcoming Russell 2000 rebalancing [28][32] Question: Reserve Outlook - Management expects reserves to remain flat or potentially increase slightly depending on the mix of originations [36][37] Question: PPP Fees and EPS Expectations - Management noted that PPP fees are difficult to quantify but remains hopeful for EPS to reach the low 20s by year-end [41][44]