SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 1, 2007
BANKFINANCIAL CORPORATION
(Exact Name of Registrant as Specified in Charter)
| Maryland | 0-51331 | 75-3199276 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File No.) | (I.R.S. Employer Identification No.) |
| 15W060 North Frontage Road, Burr Ridge, Illinois | 60527 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (800) 894-6900
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 8.01. | Other Events. |
On November 1, 2007, the Company issued a press release announcing the filing of its Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2007 and a Quarterly Financial and Statistical Supplement. The press release also reported earnings for the three and nine months ended September 30, 2007. The press release and Quarterly Financial and Statistical Supplement are included as Exhibits 99.1 and 99.2 to this report.
The information in the preceding paragraph, as well as Exhibits 99.1 and 99.2, is considered to be “furnished” under the Securities Exchange Act of 1934, and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.
| Item 9.01. | Financial Statements and Exhibits. |
| (a) | Not Applicable. |
| (b) | Not Applicable. |
| (c) | Not Applicable. |
| (d) | Exhibits. |
| Exhibit No. | Description | |
| 99.1 | Press Release dated November 1, 2007 | |
| 99.2 | Quarterly Financial and Statistical Supplement |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| BANKFINANCIAL CORPORATION | ||||
| Date: November 1, 2007 | By: | /s/ F. MORGAN GASIOR | ||
| F. Morgan Gasior | ||||
| Chairman of the Board, Chief Executive Officer and President | ||||
3
Exhibit 99.1
 |
FOR IMMEDIATE RELEASE
BankFinancial Corporation Reports Third Quarter 2007 Earnings and
Filing of Quarterly Report on Form 10-Q
and Quarterly Financial and Statistical Supplement
with the Securities and Exchange Commission
Burr Ridge, Illinois - (November 1, 2007) BankFinancial Corporation (Nasdaq – BFIN) (“BankFinancial”) announced that it has filed its Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 and a Quarterly Financial And Statistical Supplement on Form 8-K, with the U.S. Securities and Exchange Commission (the “SEC”).
BankFinancial reported net income of $2.2 million, or $0.11 per common share, for the three months ended September 30, 2007, compared to $2.8 million, or $0.12 per common share, for the three months ended September 30, 2006. Net income for the three months ended September 30, 2007 includes $790,000, net of taxes, or $0.04 per common share, of stock-based compensation expense, compared to $600,000, net of taxes, or $0.03 per common share, for the three months ended September, 2006.
Net income for the nine months ended September 30, 2007, was $6.2 million, or $0.30 per common share, compared to $8.8 million, or $0.39 per common share, for the nine months ended September 30, 2006. Net income for the nine months ended September 30, 2007 includes $2.3 million, net of taxes, or $0.11 per common share, of stock-based compensation expense, compared to $1.1 million, net of taxes, or $0.05 per common share, for the nine months ended September, 2006. During the nine months of 2007, BankFinancial repurchased 1,742,023 shares at an aggregate cost of approximately $28.7 million.
At September 30, 2007, BankFinancial had total assets of $1.505 billion, total loans of $1.276 billion, total deposits of $1.099 billion and stockholders’ equity of $304 million.
The Quarterly Report on Form 10-Q and the Quarterly Financial And Statistical Supplement is available at BankFinancial’s Internet site, www.bankfinancial.com under Stockholder Information and at the SEC’s Internet site, www.sec.gov. Management will review third quarter 2007 results in a conference call and webcast for stockholders and analysts on Friday, November 2, 2007 at 9:30 a.m. Chicago Time. The conference call may be accessed by calling (800) 573-4754 and using participant passcode 81149243. The conference call will be simultaneously webcast at www.bankfinancial.com, on the “Stockholder Information” page. For those persons unable to participate in the conference call, the webcast will be archived through 5:00 p.m. Chicago Time on November 16, 2007 on our website.
BankFinancial Corporation is the holding company for BankFinancial, F.S.B., a full-service, community-oriented bank providing financial services to individuals, families and businesses through 18 full-service banking offices, located in Cook, DuPage, Lake and Will Counties, Illinois. BankFinancial Corporation became a publicly-traded company on June 24, 2005, and its common stock trades on the Nasdaq Stock Market under the symbol BFIN.
“Forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 may be included in this release. A variety of factors could cause BankFinancial Corporation’s actual results to differ from those expected at the time of this release. Investors are urged to carefully review and consider the various disclosures made by BankFinancial Corporation in its periodic reports filed with the Securities and Exchange Commission, including the risk factors and other information disclosed in BankFinancial Corporation’s Annual Report on Form 10-K for the most recently ended fiscal year. Copies of these filings are available at no cost on the SEC’s web site at http://www.sec.gov or on BankFinancial’s web site at http://www.bankfinancial.com.
| For Further Information | ||||||||
| Contact: | Shareholder, Analyst | |||||||
| and Investor Inquiries: | Media Inquiries: | |||||||
| Elizabeth A. Doolan | Gregg T. Adams, | |||||||
| Senior Vice President –Finance | Executive Vice President – Marketing & Sales | |||||||
| BankFinancial Corporation | BankFinancial Corporation | |||||||
| Telephone: 630-242-7151 | Telephone: 630-242-7234 | |||||||
Exhibit 99.2
BANKFINANCIAL CORPORATION
THIRD QUARTER 2007
QUARTERLY FINANCIAL AND STATISTICAL SUPPLEMENT
FOR THE LATEST FIVE QUARTERS
Note: Certain reclassifications have been made in the prior period’s financial statements and reflected in the Selected Quarterly Financial and Statistical Data tables to conform with the current period’s presentation.
The information and statistical data contained herein have been prepared by BankFinancial Corporation and have been derived or calculated from selected quarterly and period-end historical financial statements prepared in accordance with accounting principles generally accepted in the United States. BankFinancial Corporation is under no obligation to update, keep current or continue to provide the information contained herein. This information is provided solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or establish any business relationships with BankFinancial Corporation or its subsidiary.
BANKFINANCIAL CORPORATION
SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA
Latest Five Quarters
(Dollars in thousands; except per share) – (Unaudited)
| PERFORMANCE MEASUREMENTS: | 2007 | 2006 | ||||||||||||||||||
| IIIQ | IIQ | IQ | IVQ | IIIQ | ||||||||||||||||
| Return on assets (ratio of net income to average total assets) (1) |
0.59 | % | 0.61 | % | 0.42 | % | 0.30 | % | 0.68 | % | ||||||||||
| Return on equity (ratio of net income to average equity) (1) |
2.90 | 3.01 | 2.03 | 1.48 | 3.34 | |||||||||||||||
| Net interest rate spread (1) |
2.91 | 2.88 | 2.98 | 2.91 | 2.86 | |||||||||||||||
| Net interest margin (1) |
3.76 | 3.74 | 3.84 | 3.74 | 3.71 | |||||||||||||||
| Efficiency ratio |
77.38 | 80.79 | 81.66 | 93.01 | 75.37 | |||||||||||||||
| Noninterest expense to average total assets (1) |
3.26 | 3.28 | 3.31 | 3.82 | 3.14 | |||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities |
130.11 | 131.30 | 132.31 | 131.53 | 133.87 | |||||||||||||||
| Offices |
18 | 18 | 18 | 18 | 18 | |||||||||||||||
| Employees (full time equivalents) |
416 | 418 | 425 | 438 | 452 | |||||||||||||||
| SUMMARY INCOME STATEMENT: | 2007 | 2006 | ||||||||||||||||||
| IIIQ | IIQ | IQ | IVQ | IIIQ | ||||||||||||||||
| Total interest income |
$ | 23,124 | $ | 23,111 | $ | 23,793 | $ | 23,867 | $ | 24,244 | ||||||||||
| Total interest expense |
9,899 | 9,760 | 9,765 | 9,854 | 9,792 | |||||||||||||||
| Net interest income before provision |
13,225 | 13,351 | 14,028 | 14,013 | 14,452 | |||||||||||||||
| Provision (credit) for loan losses |
460 | (354 | ) | 581 | (537 | ) | 49 | |||||||||||||
| Net interest income |
12,765 | 13,705 | 13,447 | 14,550 | 14,403 | |||||||||||||||
| Noninterest income |
2,777 | 2,327 | 2,042 | 2,533 | 2,658 | |||||||||||||||
| Noninterest expense |
12,383 | 12,666 | 13,122 | 15,390 | 12,895 | |||||||||||||||
| Income before income tax |
3,159 | 3,366 | 2,367 | 1,693 | 4,166 | |||||||||||||||
| Income tax expense |
922 | 1,028 | 716 | 486 | 1,371 | |||||||||||||||
| Net income |
$ | 2,237 | $ | 2,338 | $ | 1,651 | $ | 1,207 | $ | 2,795 | ||||||||||
| Basic earnings per common share |
$ | 0.11 | $ | 0.11 | $ | 0.08 | $ | 0.06 | $ | 0.12 | ||||||||||
| Diluted earnings per common share |
$ | 0.11 | $ | 0.11 | $ | 0.08 | $ | 0.06 | $ | 0.12 | ||||||||||
| NONINTEREST INCOME AND EXPENSE: | 2007 | 2006 | ||||||||||||||||||
| IIIQ | IIQ | IQ | IVQ | IIIQ | ||||||||||||||||
| Noninterest Income: |
||||||||||||||||||||
| Deposit service charges and fees |
$ | 938 | $ | 918 | $ | 835 | $ | 1,022 | $ | 1,142 | ||||||||||
| Other fee income |
495 | 499 | 461 | 507 | 466 | |||||||||||||||
| Insurance commissions and annuities income |
251 | 225 | 244 | 378 | 363 | |||||||||||||||
| Gain on sales of loans |
43 | 1 | 48 | 61 | 95 | |||||||||||||||
| Gain (loss) on sales of investment securities |
399 | — | — | (43 | ) | 89 | ||||||||||||||
| Gain on disposition of premises and equipment |
— | 7 | 6 | 1 | — | |||||||||||||||
| Loan servicing fee income |
182 | 214 | 211 | 227 | 230 | |||||||||||||||
| Amortization and impairment of servicing assets |
(131 | ) | (106 | ) | (95 | ) | (121 | ) | (120 | ) | ||||||||||
| REO operations |
(4 | ) | — | — | 1 | (15 | ) | |||||||||||||
| Earnings on bank-owned life insurance |
219 | 135 | — | — | — | |||||||||||||||
| Other |
385 | 434 | 332 | 500 | 408 | |||||||||||||||
| Total noninterest income |
$ | 2,777 | $ | 2,327 | $ | 2,042 | $ | 2,533 | $ | 2,658 | ||||||||||
| Noninterest Expense: |
||||||||||||||||||||
| Compensation and benefits |
$ | 7,773 | $ | 7,860 | $ | 8,437 | $ | 10,674 | $ | 8,241 | ||||||||||
| Office occupancy and equipment |
1,428 | 1,399 | 1,507 | 1,416 | 1,530 | |||||||||||||||
| Advertising |
409 | 455 | 228 | 243 | 396 | |||||||||||||||
| Data processing |
821 | 823 | 749 | 855 | 873 | |||||||||||||||
| Supplies, telephone and postage |
485 | 484 | 568 | 560 | 583 | |||||||||||||||
| Amortization of intangibles |
469 | 469 | 477 | 489 | 496 | |||||||||||||||
| Other |
998 | 1,176 | 1,156 | 1,153 | 776 | |||||||||||||||
| Total noninterest expenses |
$ | 12,383 | $ | 12,666 | $ | 13,122 | $ | 15,390 | $ | 12,895 | ||||||||||
| (1) | Annualized |
Page 2
BANKFINANCIAL CORPORATION
SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA
Latest Five Quarters
(Dollars in thousands; except per share) – (Unaudited)
| SUMMARY BALANCE SHEET: | 2007 | 2006 | ||||||||||||||||||
| IIIQ | IIQ | IQ | IVQ | IIIQ | ||||||||||||||||
| ASSETS: |
||||||||||||||||||||
| Cash |
$ | 30,694 | $ | 32,071 | $ | 35,357 | $ | 38,286 | $ | 34,515 | ||||||||||
| Interest-bearing deposits and short-term investments |
14,003 | 33,887 | 30,947 | 29,051 | 2,964 | |||||||||||||||
| Securities available for sale, net |
67,686 | 69,085 | 106,884 | 117,853 | 157,396 | |||||||||||||||
| Loans held for sale |
2,031 | 620 | 143 | 298 | 605 | |||||||||||||||
| Loans receivable, net |
1,276,129 | 1,282,522 | 1,298,319 | 1,329,915 | 1,312,114 | |||||||||||||||
| Federal Home Loan Bank stock |
15,598 | 15,598 | 15,598 | 15,598 | 18,911 | |||||||||||||||
| Premises and equipment |
34,171 | 34,437 | 34,571 | 35,005 | 35,069 | |||||||||||||||
| Intangible assets |
30,799 | 31,268 | 31,750 | 32,227 | 32,727 | |||||||||||||||
| Other assets |
33,511 | 32,317 | 13,382 | 14,889 | 15,676 | |||||||||||||||
| Total assets |
$ | 1,504,622 | $ | 1,531,805 | $ | 1,566,951 | $ | 1,613,122 | $ | 1,609,977 | ||||||||||
| LIABILITIES AND EQUITY: |
||||||||||||||||||||
| Deposits |
$ | 1,098,541 | $ | 1,105,237 | $ | 1,105,846 | $ | 1,129,585 | $ | 1,106,249 | ||||||||||
| Borrowings |
81,138 | 100,862 | 134,300 | 138,148 | 165,082 | |||||||||||||||
| Other liabilities |
21,322 | 18,794 | 17,218 | 19,374 | 12,763 | |||||||||||||||
| Total liabilities |
1,201,001 | 1,224,893 | 1,257,364 | 1,287,107 | 1,284,094 | |||||||||||||||
| Stockholders’ equity |
303,621 | 306,912 | 309,587 | 326,015 | 325,883 | |||||||||||||||
| Total liabilities and stockholders’ equity |
$ | 1,504,622 | $ | 1,531,805 | $ | 1,566,951 | $ | 1,613,122 | $ | 1,609,977 | ||||||||||
| CAPITAL RATIOS: | 2007 | 2006 | ||||||||||||||||||
| IIIQ | IIQ | IQ | IVQ | IIIQ | ||||||||||||||||
| BankFinancial Corporation: |
||||||||||||||||||||
| Equity to total assets (end of period) |
20.18 | % | 20.04 | % | 19.76 | % | 20.21 | % | 20.24 | % | ||||||||||
| Tangible equity to tangible total assets (end of period) |
18.51 | 18.37 | 18.10 | 18.58 | 18.59 | |||||||||||||||
| BankFinancial FSB: |
||||||||||||||||||||
| Risk-based total capital ratio |
19.07 | 20.26 | 20.64 | 20.09 | 19.91 | |||||||||||||||
| Risk-based tier 1 capital ratio |
18.22 | 19.43 | 19.74 | 19.26 | 19.05 | |||||||||||||||
| Tier 1 leverage ratio |
15.16 | 15.94 | 15.51 | 15.05 | 14.95 | |||||||||||||||
| Stock repurchases - $ (000’s) |
$ | 5,643 | $ | 3,780 | $ | 19,261 | $ | 3,960 | $ | 13,330 | ||||||||||
| Stock repurchases - shares |
377,406 | 232,643 | 1,131,974 | 226,600 | 750,700 | |||||||||||||||
| COMMON STOCK AND DIVIDENDS: | 2007 | 2006 | ||||||||||||||||||
| IIIQ | IIQ | IQ | IVQ | IIIQ | ||||||||||||||||
| Stock Prices: |
||||||||||||||||||||
| Close |
$ | 15.82 | $ | 15.45 | $ | 16.27 | $ | 17.81 | $ | 17.49 | ||||||||||
| High |
16.39 | 16.75 | 17.98 | 18.50 | 18.11 | |||||||||||||||
| Low |
13.01 | 15.45 | 16.10 | 17.23 | 16.31 | |||||||||||||||
| Cash dividends paid |
$ | 0.07 | $ | 0.07 | $ | 0.07 | $ | 0.06 | $ | 0.06 | ||||||||||
| DEPOSITS: | 2007 | 2006 | ||||||||||||||||||
| IIIQ | IIQ | IQ | IVQ | IIIQ | ||||||||||||||||
| Non-interest-bearing demand |
$ | 111,772 | $ | 126,304 | $ | 122,422 | $ | 134,097 | $ | 130,491 | ||||||||||
| Interest-bearing NOW |
297,589 | 282,300 | 277,683 | 274,391 | 251,938 | |||||||||||||||
| Money market |
266,737 | 262,265 | 258,400 | 260,796 | 250,767 | |||||||||||||||
| Savings |
101,176 | 107,030 | 114,793 | 114,851 | 118,898 | |||||||||||||||
| Certificates of deposit—Retail |
314,450 | 317,946 | 321,444 | 323,957 | 330,794 | |||||||||||||||
| Certificates of deposit—Wholesale |
6,817 | 9,392 | 11,104 | 21,493 | 23,361 | |||||||||||||||
| Total certificates of deposit |
321,267 | 327,338 | 332,548 | 345,450 | 354,155 | |||||||||||||||
| Total deposits |
$ | 1,098,541 | $ | 1,105,237 | $ | 1,105,846 | $ | 1,129,585 | $ | 1,106,249 | ||||||||||
Page 3
BANKFINANCIAL CORPORATION
SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA
Latest Five Quarters
(Dollars in thousands; except per share) – (Unaudited)
| 2007 | 2006 | |||||||||||||||||||
| IIIQ | IIQ | IQ | IVQ | IIIQ | ||||||||||||||||
| LOANS: |
||||||||||||||||||||
| One- to four-family residential real estate |
$ | 373,830 | $ | 381,447 | $ | 391,759 | $ | 397,545 | $ | 409,288 | ||||||||||
| Multi-family mortgage loans |
288,883 | 291,963 | 299,566 | 297,131 | 292,100 | |||||||||||||||
| Nonresidential real estate |
326,368 | 321,943 | 314,275 | 320,729 | 307,619 | |||||||||||||||
| Construction and land loans |
61,482 | 68,024 | 68,742 | 85,222 | 83,526 | |||||||||||||||
| Commercial loans |
80,358 | 84,410 | 90,103 | 89,346 | 84,947 | |||||||||||||||
| Commercial leases |
145,761 | 134,217 | 134,327 | 139,164 | 135,019 | |||||||||||||||
| Consumer loans |
3,835 | 4,574 | 3,361 | 3,869 | 3,989 | |||||||||||||||
| Other loans (including municipal) |
4,544 | 4,544 | 4,752 | 4,959 | 4,959 | |||||||||||||||
| Total loans |
1,285,061 | 1,291,122 | 1,306,885 | 1,337,965 | 1,321,447 | |||||||||||||||
| Loans in process |
(63 | ) | (87 | ) | 154 | 148 | 113 | |||||||||||||
| Net deferred loan origination costs |
2,211 | 2,266 | 2,402 | 2,424 | 2,478 | |||||||||||||||
| Allowance for loan losses |
(11,080 | ) | (10,779 | ) | (11,122 | ) | (10,622 | ) | (11,924 | ) | ||||||||||
| Loans, net |
$ | 1,276,129 | $ | 1,282,522 | $ | 1,298,319 | $ | 1,329,915 | $ | 1,312,114 | ||||||||||
| CREDIT QUALITY RATIOS: | 2007 | 2006 | ||||||||||||||||||
| IIIQ | IIQ | IQ | IVQ | IIIQ | ||||||||||||||||
| Nonperforming Loans and Assets: |
||||||||||||||||||||
| Nonperforming loans |
$ | 9,557 | $ | 9,720 | $ | 8,759 | $ | 9,226 | $ | 8,469 | ||||||||||
| Real estate owned |
252 | — | — | — | — | |||||||||||||||
| Nonperforming assets |
$ | 9,809 | $ | 9,720 | $ | 8,759 | $ | 9,226 | $ | 8,469 | ||||||||||
| Asset Quality Ratios: |
||||||||||||||||||||
| Nonperforming assets to total assets |
0.65 | % | 0.63 | % | 0.56 | % | 0.57 | % | 0.53 | % | ||||||||||
| Nonperforming loans to total loans |
0.74 | 0.75 | 0.67 | 0.69 | 0.64 | |||||||||||||||
| Allowance for loan losses to nonperforming loans |
115.94 | 110.90 | 126.98 | 115.13 | 140.80 | |||||||||||||||
| Allowance for loan losses to total loans |
0.86 | 0.84 | 0.85 | 0.79 | 0.90 | |||||||||||||||
| Net charge-off ratio (1) |
0.05 | 0.00 | 0.02 | 0.23 | 0.03 | |||||||||||||||
| ALLOWANCE FOR LOAN LOSSES: | 2007 | 2006 | ||||||||||||||||||
| IIIQ | IIQ | IQ | IVQ | IIIQ | ||||||||||||||||
| Beginning balance |
$ | 10,779 | $ | 11,122 | $ | 10,622 | $ | 11,924 | $ | 11,969 | ||||||||||
| Allowance of acquired bank |
— | — | — | — | — | |||||||||||||||
| Provision (credit) for loan losses |
460 | (354 | ) | 581 | (537 | ) | 49 | |||||||||||||
| Loans charged off |
(159 | ) | (3 | ) | (97 | ) | (767 | ) | (96 | ) | ||||||||||
| Recoveries |
— | 14 | 16 | 2 | 2 | |||||||||||||||
| Ending balance |
$ | 11,080 | $ | 10,779 | $ | 11,122 | $ | 10,622 | $ | 11,924 | ||||||||||
| (1) | Annualized |
Page 4
BANKFINANCIAL CORPORATION
SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA
Latest Five Quarters
(Dollars in thousands; except per share) – (Unaudited)
| SELECTED AVERAGE BALANCES: | 2007 | 2006 | ||||||||||||||||||
| IIIQ | IIQ | IQ | IVQ | IIIQ | ||||||||||||||||
| Average total assets |
$ | 1,518,670 | $ | 1,543,985 | $ | 1,584,765 | $ | 1,611,689 | $ | 1,644,304 | ||||||||||
| Average earning assets |
1,397,286 | 1,432,238 | 1,481,465 | 1,486,033 | 1,544,356 | |||||||||||||||
| Average total loans |
1,291,593 | 1,297,583 | 1,323,345 | 1,328,482 | 1,320,016 | |||||||||||||||
| Average investment securities |
73,370 | 98,791 | 112,206 | 110,033 | 193,081 | |||||||||||||||
| Average FHLB stock |
15,598 | 15,598 | 15,598 | 18,299 | 18,911 | |||||||||||||||
| Average other earning assets |
16,725 | 20,266 | 30,316 | 29,219 | 12,348 | |||||||||||||||
| Average interest-bearing deposits |
986,113 | 978,601 | 981,956 | 980,771 | 982,859 | |||||||||||||||
| Average total borrowings |
87,782 | 112,209 | 137,715 | 149,001 | 170,804 | |||||||||||||||
| Average interest-bearing liabilities |
1,073,895 | 1,090,810 | 1,119,671 | 1,129,772 | 1,153,663 | |||||||||||||||
| Average total stockholders’ equity |
308,041 | 310,219 | 325,806 | 326,010 | 335,015 | |||||||||||||||
| SELECTED YIELDS AND COST OF FUNDS (1): | 2007 | 2006 | ||||||||||||||||||
| IIIQ | IIQ | IQ | IVQ | IIIQ | ||||||||||||||||
| Average earning assets |
6.57 | % | 6.47 | % | 6.51 | % | 6.37 | % | 6.23 | % | ||||||||||
| Average total loans |
6.67 | 6.60 | 6.66 | 6.52 | 6.50 | |||||||||||||||
| Average investment securities |
5.90 | 5.66 | 5.51 | 5.43 | 4.62 | |||||||||||||||
| Average FHLB stock |
2.77 | 2.75 | 3.72 | 3.21 | 3.99 | |||||||||||||||
| Average other earning assets |
5.08 | 5.30 | 5.15 | 5.28 | 5.75 | |||||||||||||||
| Average interest-bearing deposits |
3.55 | 3.48 | 3.42 | 3.33 | 3.22 | |||||||||||||||
| Average total borrowings |
4.81 | 4.51 | 4.38 | 4.29 | 4.19 | |||||||||||||||
| Average interest-bearing liabilities |
3.66 | 3.59 | 3.54 | 3.46 | 3.37 | |||||||||||||||
| Interest rate spread |
2.91 | 2.88 | 2.98 | 2.91 | 2.86 | |||||||||||||||
| Net interest margin |
3.76 | 3.74 | 3.84 | 3.74 | 3.71 | |||||||||||||||
| EARNINGS PER SHARE COMPUTATIONS: | 2007 | 2006 | ||||||||||||||||||
| IIIQ | IIQ | IQ | IVQ | IIIQ | ||||||||||||||||
| Net income |
$ | 2,237 | $ | 2,338 | $ | 1,651 | $ | 1,207 | $ | 2,795 | ||||||||||
| Average common shares outstanding |
22,692,613 | 23,124,955 | 23,924,011 | 24,384,369 | 24,556,236 | |||||||||||||||
| Less: Unearned ESOP shares |
(1,753,480 | ) | (1,777,881 | ) | (1,802,198 | ) | (1,826,679 | ) | (1,851,346 | ) | ||||||||||
| Less: Unvested restricted stock |
(619,385 | ) | (618,600 | ) | (637,882 | ) | (730,208 | ) | (210,082 | ) | ||||||||||
| Weighted average common shares outstanding |
20,319,748 | 20,728,474 | 21,483,931 | 21,827,482 | 22,494,808 | |||||||||||||||
| Plus: Dilutive common shares equivalents |
97,765 | 26,049 | 53,611 | 12,994 | 12,294 | |||||||||||||||
| Weighted average dilutive shares outstanding |
20,417,513 | 20,754,523 | 21,537,542 | 21,840,476 | 22,507,102 | |||||||||||||||
| Number of antidilutive stock options excluded from the diluted earnings per share calculation |
1,576,200 | 1,557,500 | 1,301,000 | 1,301,000 | 1,140,000 | |||||||||||||||
| Weighted average exercise price of anti-dilutive option shares |
$ | 17.34 | $ | 17.36 | $ | 17.63 | $ | 17.63 | $ | 17.62 | ||||||||||
| Earnings per basic share |
$ | 0.11 | $ | 0.11 | $ | 0.08 | $ | 0.06 | $ | 0.12 | ||||||||||
| Earnings per diluted share |
$ | 0.11 | $ | 0.11 | $ | 0.08 | $ | 0.06 | $ | 0.12 | ||||||||||
| N.A. = Not Applicable |
||||||||||||||||||||
| (1) | Annualized |
Page 5
BANKFINANCIAL CORPORATION
NON-GAAP FINANCIAL MEASURES
The Company utilizes a number of different financial measures, both GAAP and non-GAAP, in making operating, budgeting and planning decisions for future periods. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. The Company believes that the use of the non-GAAP financial measures described below provides the Board of Directors and management, and may provide some investors, with a more complete understanding the Company’s operating results and trends, and facilitate comparisons to historical and peer performance. The Company’s non-GAAP financial measures should be considered supplemental in nature and should not be considered in isolation, or as superior to or a substitute for, financial measures that are prepared in accordance with GAAP. In addition, the Company’s non-GAAP financial measures may differ from similar non-GAAP financial measures that are used by other companies, thus limiting their usefulness as a comparative tool.
Amortization of Intangibles Expense. The Company believes that the exclusion from its net income of expense for the amortization of the core deposit intangible assets resulting from its acquisition of Success Bancshares and University National Bank facilitates the comparison of the Company’s operating results to the Company’s historical performance and to the performance of other financial institutions with different acquisition histories. In addition, the level of amortization of core deposit intangible assets arising from an acquisition can vary significantly depending on the valuation methodology used and the interest rate environment that existed at the time of the acquisition.
Equity-based Compensation. The Company believes that the exclusion of equity-based compensation expense from its net income facilitates the comparison of the Company’s operating results to the Company’s historical performance, including the prior periods in which it operated as a mutual institution and had no stock outstanding. In addition, the Company believes that this non-GAAP measure facilitates the comparison of the Company’s performance to the performance of other financial institutions that have different or more seasoned equity-based compensation plans, including plans pursuant to which stock option awards vested prior to the effective date of SFAS No. 123R.
Core Return on Assets. The Company believes that adjusting the calculation of its return on assets to exclude the equity-based compensation expense and the amortization of intangibles expense described above furthers the purposes described above. Thus, the Company calculates core return on assets by dividing net income for a period, adjusted to exclude these expenses, by its average assets for the period.
Core Return on Equity. The Company believes that adjusting the calculation of its return on equity to exclude the equity-based compensation expense and the amortization of intangibles expenses described above furthers the purposes described above. Thus, the Company calculates core return on equity by dividing average stockholders’ equity for a period by net income, adjusted to exclude these expenses, for the period.
Core Dilutive Earnings per Share. The Company believes that adjusting the calculation of its dilutive earnings per share to exclude the equity-based compensation expense and the amortization of intangibles expenses described above furthers the purposes described above. Thus, the Company calculates core dilutive earnings per share by net income, adjusted to exclude these expenses, for the period by the weighted average dilutive common shares outstanding, for the period.
Core Noninterest Expense to Average Total Assets. The Company believes that adjusting the calculation of its noninterest expense to average total assets to exclude the equity-based compensation expense and the amortization of intangibles expenses described above furthers the purposes described above. Thus, the Company calculates noninterest expense to average total assets by dividing noninterest expense, adjusted to exclude these expenses, by average total assets for the period.
Core Efficiency Ratio. The Company believes that adjusting the calculation of its efficiency ratio to exclude the equity-based compensation expense and the amortization of intangibles expense described above furthers the purposes described above. Thus, the Company calculates core efficiency ratio by dividing noninterest expense, adjusted to exclude these expenses, by the sum of net interest income and noninterest income.
There are inherent limitations associated with the use of each of the above non-GAAP financial measures as an analytical tool. In particular, these non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and reflect the exclusion of items that are recurring and will be reflected in the Company’s financial results in the future. The Company has further highlighted these and the other limitations described above by providing a reconciliation of the GAAP amounts that have been excluded from these non-GAAP financial measures.
Page 6
BANKFINANCIAL CORPORATION
NON-GAAP FINANCIAL MEASURES
(Dollars in thousands; except per share) – (Unaudited)
| FOR THE QUARTERS AND NINE MONTH PERIOD ENDED SEPTEMBER 30, 2007 AND 2006 |
Three months ended September 30, |
Nine months ended September 30, |
||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| Core Operating Income: |
||||||||||||||||
| Net Income |
$ | 2,237 | $ | 2,795 | $ | 6,226 | $ | 8,839 | ||||||||
| Adjustments: |
||||||||||||||||
| Equity-based compensation and benefits |
1,311 | 996 | 3,866 | 1,835 | ||||||||||||
| Amortization of core deposit intangible |
469 | 496 | 1,415 | 1,384 | ||||||||||||
| Tax effect on adjustments assuming 39.745% tax rate |
(707 | ) | (593 | ) | (2,099 | ) | (1,280 | ) | ||||||||
| Core Operating Income |
$ | 3,310 | $ | 3,694 | $ | 9,408 | $ | 10,778 | ||||||||
| Return on assets (ratio of net income to average total assets) (1) |
0.59 | % | 0.68 | % | 0.54 | % | 0.71 | % | ||||||||
| Core return on assets (ratio of core operating income to average total assets) (1) |
0.87 | % | 0.90 | % | 0.81 | % | 0.87 | % | ||||||||
| Return on equity (ratio of net income to average equity) (1) |
2.90 | % | 3.34 | % | 2.64 | % | 3.53 | % | ||||||||
| Core return on equity (ratio of core operating income to average equity) (1) |
4.30 | % | 4.41 | % | 3.99 | % | 4.30 | % | ||||||||
| Dilutive earnings per common share |
$ | 0.11 | $ | 0.12 | $ | 0.30 | $ | 0.39 | ||||||||
| Core dilutive earnings per common share |
$ | 0.16 | $ | 0.16 | $ | 0.45 | $ | 0.48 | ||||||||
| Core Noninterest Expenses: |
||||||||||||||||
| Noninterest Expenses |
$ | 12,383 | $ | 12,895 | $ | 38,171 | $ | 36,980 | ||||||||
| Adjustments: |
||||||||||||||||
| Equity-based compensation and benefits |
(1,311 | ) | (996 | ) | (3,866 | ) | (1,835 | ) | ||||||||
| Amortization of core deposit intangible |
(469 | ) | (496 | ) | (1,415 | ) | (1,384 | ) | ||||||||
| Core Noninterest Expenses |
$ | 10,603 | $ | 11,403 | $ | 32,890 | $ | 33,761 | ||||||||
| Noninterest expense to average total assets (1) |
3.26 | % | 3.14 | % | 3.29 | % | 2.99 | % | ||||||||
| Core noninterest expense to average total assets (1) |
2.79 | % | 2.77 | % | 2.83 | % | 2.73 | % | ||||||||
| Efficiency ratio (ratio of noninterest expense to net interest income plus noninterest income) |
77.38 | % | 75.37 | % | 79.94 | % | 73.14 | % | ||||||||
| Core efficiency ratio (ratio of core noninterest expense to net interest income plus noninterest income) |
66.26 | % | 66.65 | % | 68.88 | % | 66.77 | % | ||||||||
| (1) | Annualized |
Page 7
| FOR THE LATEST FIVE QUARTERS | 2007 | 2006 | ||||||||||||||||||
| IIIQ | IIQ | IQ | IVQ | IIIQ | ||||||||||||||||
| Core Operating Income: |
||||||||||||||||||||
| Net Income |
$ | 2,237 | $ | 2,338 | $ | 1,651 | $ | 1,207 | $ | 2,795 | ||||||||||
| Adjustments: |
||||||||||||||||||||
| Equity-based compensation and benefits |
1,311 | 1,294 | 1,261 | 3,542 | 996 | |||||||||||||||
| Amortization of core deposit intangible |
469 | 469 | 476 | 489 | 496 | |||||||||||||||
| Tax effect on adjustments assuming 39.745% tax rate |
(707 | ) | (701 | ) | (690 | ) | (1,602 | ) | (593 | ) | ||||||||||
| Core Operating Income |
$ | 3,310 | $ | 3,400 | $ | 2,698 | $ | 3,636 | $ | 3,694 | ||||||||||
| Return on assets (ratio of net income to average total assets) (1) |
0.59 | % | 0.61 | % | 0.42 | % | 0.30 | % | 0.68 | % | ||||||||||
| Core return on assets (ratio of core operating income to average total assets) (1) |
0.87 | % | 0.88 | % | 0.68 | % | 0.90 | % | 0.90 | % | ||||||||||
| Return on equity (ratio of net income to average equity) (1) |
2.90 | % | 3.01 | % | 2.03 | % | 1.48 | % | 3.34 | % | ||||||||||
| Core return on equity (ratio of core operating income to average equity) (1) |
4.30 | % | 4.38 | % | 3.31 | % | 4.46 | % | 4.41 | % | ||||||||||
| Dilutive earnings per common share |
$ | 0.11 | $ | 0.11 | $ | 0.08 | $ | 0.06 | $ | 0.12 | ||||||||||
| Core dilutive earnings per common share |
$ | 0.16 | $ | 0.16 | $ | 0.13 | $ | 0.17 | $ | 0.16 | ||||||||||
| Core Operating Expenses: |
||||||||||||||||||||
| Noninterest Expenses |
$ | 12,383 | $ | 12,666 | $ | 13,122 | $ | 15,390 | $ | 12,895 | ||||||||||
| Adjustments: |
||||||||||||||||||||
| Equity-based compensation and benefits |
(1,311 | ) | (1,294 | ) | (1,261 | ) | (3,542 | ) | (996 | ) | ||||||||||
| Amortization of core deposit intangible |
(469 | ) | (469 | ) | (476 | ) | (489 | ) | (496 | ) | ||||||||||
| Core Noninterest Expenses |
$ | 10,603 | $ | 10,903 | $ | 11,385 | $ | 11,359 | $ | 11,403 | ||||||||||
| Noninterest expense to average total assets (1) |
3.26 | % | 3.28 | % | 3.31 | % | 3.82 | % | 3.14 | % | ||||||||||
| Core noninterest expense to average total assets (1) |
2.79 | % | 2.82 | % | 2.87 | % | 2.82 | % | 2.77 | % | ||||||||||
| Efficiency ratio (ratio of noninterest expense to net interest income plus noninterest income) |
77.38 | % | 80.79 | % | 81.66 | % | 93.01 | % | 75.37 | % | ||||||||||
| Core efficiency ratio (ratio of core noninterest expense to net interest income plus noninterest income) |
66.26 | % | 69.54 | % | 70.85 | % | 68.65 | % | 66.65 | % | ||||||||||
| (1) | Annualized |
Page 8