BankFinancial(US:BFIN)2022-10-31 17:58Financial Data and Key Metrics Changes - The company reported a loan growth of approximately 14% for 2022, with a target of reaching $1.2 billion by the end of the year, which is considered a solid achievement [46] - The company aims to maintain its margin in the range of 350 to 360 basis points, with potential for expansion depending on deposit trends and asset repricing [27][39] Business Line Data and Key Metrics Changes - The commercial and industrial portfolio showed growth, with expectations for continued activity in the healthcare and commercial finance portfolios [11][12] - The equipment finance portfolio is expected to ramp up funding activity in the fourth quarter, with a target of around $60 million for growth [14] Market Data and Key Metrics Changes - The company observed a slight decline in deposits, attributed to seasonal activities and customers shopping for better rates [19] - There is an expectation of broader trends in liquidity decreasing as customers consume liquidity, particularly with real estate taxes being paid in the fourth quarter [20] Company Strategy and Development Direction - The company plans to focus more on commercial finance, healthcare finance, and government finance portfolios to maintain and potentially grow margins [22][41] - The strategy includes consolidating branches to reduce costs, with an expected annual saving of about $800,000 from branch closures [40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan growth in 2023, projecting around 10% growth, particularly in equipment finance due to rising interest rates making financing more attractive [47][49] - The company is cautious about potential economic slowdowns but believes demand for equipment finance will remain strong as companies seek to modernize operations [48] Other Important Information - The company is preparing for the implementation of CECL (Current Expected Credit Loss) accounting standards, which may affect reserve ratios [52] - Share repurchases are expected to continue, with a focus on taking advantage of current valuation levels before the introduction of an excise tax in 2023 [43][44] Q&A Session Summary Question: Can you provide insights on loan growth trends? - Management noted that loan growth was in line with expectations, with a significant payoff in the multi-family portfolio impacting overall growth [9] Question: What are the trends in deposit pricing competition? - Management acknowledged that some customers are shopping for better rates, but they are maintaining a competitive position in the market [19] Question: How do you expect to manage margin in the coming quarters? - The focus will be on protecting the margin, with potential for expansion depending on the cost of funds and asset mix [27][28] Question: What is the outlook for loan growth next year? - Management is targeting around 10% growth for 2023, with a focus on commercial finance and equipment finance [47][49] Question: How will branch closures impact expenses? - The closures are expected to yield about $800,000 in annual savings, allowing for better allocation of resources [40] Question: What are the expectations for share repurchases? - Management plans to continue share repurchases, particularly in the fourth quarter, while being mindful of the upcoming excise tax [43][44]