BankFinancial(US:BFIN)2021-02-04 06:34Financial Data and Key Metrics Changes - The company aims for non-interest income to be between $6 million and $7 million for 2021, with a normal run rate closer to $6 million based on 2019 figures [6][10] - The company has submitted over $7 million of its original $10 million for PPP loan forgiveness, receiving less than 15% back so far [7] - The company achieved approximately $6 million in PPP round two loans in process, which have started to fund [6][10] Business Line Data and Key Metrics Changes - Equipment finance originations for 2020 were just under $200 million, compared to $127 million in 2019, with expectations for growth in 2021 [13] - Commercial finance originations in 2020 were about $95 million, with hopes to exceed that in 2021 [14] - Real estate originations are expected to see growth of $65 million to $75 million in multifamily [15] Market Data and Key Metrics Changes - The company noted that 90% of prepayment income came from markets outside of Chicago, primarily due to property appreciation [8] - The company is focusing on low and moderate-income census tracts to drive more PPP loan volume [7] Company Strategy and Development Direction - The company plans to add resources to the trust department in 2021 to build assets under management [9] - The Treasury services department was added in 2020 and is expected to contribute additional interest income in the latter half of 2021 [10] - The company is focused on maintaining a strong asset quality position and is not anticipating significant problems in the portfolio [24][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth in 2021, citing strong momentum in originations and a positive forward look in terms of operating leverage [16][33] - The company is cautious about the pace of PPP loan forgiveness and its impact on income [7] - Management noted that deferrals are not an issue, with minimal amounts deferred and a strong focus on asset quality [24] Other Important Information - The company is undergoing a complete revamp of its technology infrastructure, which is expected to incur some expenses in the first half of the year [32] - The company is mindful of the Russell 2000 rebalancing and its potential impact on share repurchase activities [30][36] Q&A Session Summary Question: Can you provide insights on NII and PPP fee income? - Management indicated that PPP fees are included in non-interest income, with expectations for normalization in loan prepayment fees [11][12] Question: What is the outlook for balance sheet growth in 2021? - Management expects growth in equipment finance and commercial finance, with a target of $200 million in total growth across segments [14][15] Question: How are deferrals impacting the company? - Management reported that deferrals are minimal and not a concern, with a strong focus on asset quality [24] Question: What is the company's strategy regarding liquidity and excess resources? - Management stated that deploying excess liquidity remains a priority, although yields on those assets are low [23] Question: How does the company view its capital deployment and reserves? - Management plans to maintain reserve levels while focusing on growth opportunities in equipment finance and commercial finance [27][28] Question: What are the expectations for expenses in 2021? - Management anticipates expenses to trend around $9.75 million for the first half of the year, with efforts to reduce costs in the latter half [32][33]