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): January 30, 2017
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 2.02 Results of Operations and Financial Condition
On January 30, 2017, BankFinancial Corporation (Nasdaq – BFIN) issued a press release announcing the results for the fourth quarter and year ended December 31, 2016 and issued the Fourth Quarter 2016 Quarterly Financial and Statistical Supplement for the latest five quarters. The press release and Quarterly Financial and Statistical Supplement are included as Exhibits 99.1 and 99.2 to this report.
BankFinancial Corporation will review fourth quarter 2016 results in a conference call and webcast for stockholders and analysts on Tuesday, January 31, 2017 at 9:30 a.m. Chicago, Illinois Time.
The conference call may be accessed by calling (844) 413-1780 using participant passcode 60249177. The conference call will be simultaneously webcast at www.bankfinancial.com, “Investor Relations” page. For those persons unable to participate in the conference call, the webcast will be archived through 11:59 p.m. Chicago Time on Friday, February 24, 2017 on our website. BankFinancial Corporation’s Quarterly Financial and Statistical Supplement is scheduled to be available on our website, under the “Investor Relations” section, on January 30, 2017.
Item 7.01. | Regulation FD Disclosure |
The press release referenced in Item 2.02, above, included certain predictions and other forward looking statements as to the Company’s performance for the years ending December 31, 2016 and 2017.
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 January 30, 2017
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: | January 30, 2017 | By: | /s/ F. Morgan Gasior | ||
F. Morgan Gasior | |||||
Chairman of the Board, Chief Executive Officer and President | |||||
EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release dated January 30, 2017
99.2 Quarterly Financial and Statistical Supplement
Exhibit No. 99.1
FOR IMMEDIATE RELEASE
BankFinancial Corporation Reports Financial Results for 2016 and
Will Host Conference Call and Webcast on January 31, 2017
Burr Ridge, Illinois - (January 30, 2017) BankFinancial Corporation (Nasdaq - BFIN) (the “Company”) announced today the Company recorded net income of $2.3 million and basic and dilutive earnings per share of common stock of $0.12 for the fourth quarter ended December 31, 2016.
Total loans increased by $71 million during the fourth quarter due to growth in commercial leases and multi-family loans, which was partially offset by reduced balances in commercial real estate loans and residential loans. Total commercial-related loan balances reached a new record level of $1.2 billion, and now comprise 89.6% of total loans. Loan payoffs increased primarily due to a payoff resulting from the sale of a commercial equipment lessor to another lessor customer at the end of 2016.
In addition to organic commercial loan and lease originations, the Company agreed to acquire a portfolio of investment-grade commercial leases from a competitor exiting the sector. The Company closed $55 million of the portfolio acquisition late in the fourth quarter of 2016, consisting of leases at an average rate of 2.31% and an average duration of approximately 26 months. The Company anticipates closing up to an additional $22 million of the remaining portfolio at a similar rate during the first quarter of 2017. The portfolio acquisition enables the Company to deepen relationships with the commercial equipment lessors and redeploy the rapidly amortizing portfolio proceeds into higher-yielding commercial leases during 2017 and 2018.
Total organic commercial-related loan originations (including commercial line of credit utilization) for the fourth quarter of 2016 were $146.6 million at an average 4.18% rate, compared to an average 3.86% rate for the third quarter of 2016. Combined with the commercial lease portfolio acquisition, total commercial-related loan originations for the quarter were $201.6 million at an average 3.67% rate. Because commercial-related loans have become the dominant part of its lending activities, the Company’s banking subsidiary, BankFinancial, NA, converted to a National Bank charter on November 30, 2016.
To ensure compliance with regulatory limits on commercial loan balances that existed before the national bank charter conversion, and to anticipate loan funding needs, the Company added $50 million of short-term borrowings during the fourth quarter of 2016. This growth in total assets and total liabilities contributed to a temporary dilution of net interest margin and net interest spread for the fourth quarter of 2016. Due to these actions and the timing and nature of the commercial lease portfolio acquisition, the average yield on loans, net interest margin and net interest spread declined for the fourth quarter of 2016.
Noninterest income increased modestly in the fourth quarter due primarily to slightly higher deposit account-related income and trust income. The Company expects to continue to make progress in increasing noninterest income in 2017 through new deposit account product offerings and commercial loan and lease participation or sale revenues related to new loan originations.
Noninterest expense increased modestly in the fourth quarter. Compensation expense increased by $419,000 primarily due to increased ESOP expense and to incentive compensation related to loan growth. Other expenses experienced seasonal fluctuations; however, the trends in noninterest expense remained intact.
Past due and classified loan trends remain favorable. The ratio of nonperforming loans to total loans was 0.25% and the ratio of nonperforming assets to total assets ratio was 0.44% at December 31, 2016. Nonperforming commercial-related loans represented 0.04% of total commercial-related loans. Nonperforming asset expenses decreased by $155,000 due to resolutions of nonperforming loans and assets. The Company continues to focus on proactive portfolio management and resolutions of nonperforming loans and assets to maintain asset quality and reduce nonperforming asset expense to the lowest practicable levels.
The Company's net income for the year 2016 was $7.5 million. Basic earnings per share of common stock were $0.40 and dilutive earnings per share of common stock were $0.39. The Company’s total loans increased by $79 million (6%), and its total commercial-related loans increased by $103 million (10%). The Company increased its commercial / industrial loan and lease portfolio by $111 million, and its multifamily loan portfolio by $37 million, partially offset by a $44 million reduction in its commercial real estate portfolio and a $25 million reduction in residential loans.
The Company’s total core deposits remained stable. The Company’s liquid assets exceeded 12% of total assets. The Company’s capital ratios remained strong with a Tier 1 capital ratio of 12% and a Tier 1 risk-based capital ratio of 16%.
“Our 2016 results reflect the successful execution of key business plan objectives, including accelerating our growth in commercial loans and leases following our conversion to a national bank charter in November, 2016, achieving exceptionally strong asset
quality and improving our overall efficiency. Building on our new capacities, we look forward to further improvements in these very positive trends in 2017,” said F. Morgan Gasior, the Chairman and CEO of the Company. He added that “We remain encouraged by the recent favorable trends in market yields on our commercial loan and lease originations and the ongoing flow of new opportunities at these yield levels.”
The Quarterly Financial and Statistical Supplement will be available today on BankFinancial's website, www.bankfinancial.com on the “Stockholder Information” page, and through the EDGAR database on the SEC's website, www.sec.gov. The Quarterly Financial and Statistical Supplement includes comparative GAAP and non-GAAP performance data and financial measures for the most recent five quarters.
BankFinancial's management will review fourth quarter 2016 results in a conference call and webcast for stockholders and analysts on Tuesday, January 31, 2017 at 9:30 a.m. Chicago, Illinois Time. The conference call may be accessed by calling (844) 413-1780 using participant passcode 60249177. The conference call will be simultaneously webcast at www.bankfinancial.com, “Investor Relations” page. For those unable to participate in the conference call, the webcast will be archived through 11:59 p.m. Chicago Time on Friday, February 24, 2017.
BankFinancial Corporation is the holding company for BankFinancial, NA, a full-service, community-oriented bank providing financial services to individuals, families and businesses through 19 full-service banking offices, located in Cook, DuPage, Lake and Will Counties, Illinois. BankFinancial Corporation's common stock trades on the Nasdaq Global Select Market under the symbol BFIN. Additional information may be found at the company's website, www.bankfinancial.com.
This release includes “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. A variety of factors could cause BankFinancial’s actual results to differ from those expected at the time of this release. For a discussion of some of the factors that may cause actual results to differ from expectations, please refer to BankFinancial’s most recent Annual Report on Form 10-K as filed with the SEC, as supplemented by subsequent filings with the SEC. Investors are urged to review all information contained in these reports, including the risk factors discussed therein. Copies of these filings are available at no cost on the SEC's web site at www.sec.gov or on BankFinancial’s web site at www.bankfinancial.com. Forward looking statements speak only as of the date they are made, and we do not undertake to update them to reflect changes.
For Further Information Contact: | ||
Shareholder, Analyst and Investor Inquiries: | Media Inquiries: | |
Elizabeth A. Doolan Senior Vice President – Finance BankFinancial Corporation Telephone: 630-242-7151 | Gregg T. Adams President – Marketing & Sales BankFinancial, NA Telephone: 630-242-7234 | |
Exhibit 99.2
BANKFINANCIAL CORPORATION
FOURTH QUARTER 2016
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 to 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)
2016 | 2015 | ||||||||||||||||||
IVQ | IIIQ | IIQ | IQ | IVQ | |||||||||||||||
PERFORMANCE MEASUREMENTS | |||||||||||||||||||
Return on assets (ratio of net income to average total assets) (1) | 0.57 | % | 0.66 | % | 0.22 | % | 0.50 | % | 0.58 | % | |||||||||
Return on equity (ratio of net income to average equity) (1) | 4.41 | 4.86 | 1.59 | 3.59 | 3.96 | ||||||||||||||
Net interest rate spread (1) | 3.01 | 3.23 | 3.21 | 3.30 | 3.35 | ||||||||||||||
Net interest margin (1) | 3.11 | 3.33 | 3.31 | 3.39 | 3.43 | ||||||||||||||
Efficiency ratio | 76.23 | 73.60 | 79.80 | 80.98 | 83.16 | ||||||||||||||
Noninterest expense to average total assets (1) | 2.59 | 2.62 | 2.78 | 2.89 | 3.08 | ||||||||||||||
Average interest–earning assets to average interest–bearing liabilities | 133.71 | 134.36 | 136.17 | 136.26 | 138.91 | ||||||||||||||
Number of full service offices | 19 | 19 | 19 | 19 | 19 | ||||||||||||||
Employees (full time equivalents) | 246 | 242 | 253 | 255 | 251 | ||||||||||||||
SUMMARY STATEMENT OF FINANCIAL CONDITION | |||||||||||||||||||
ASSETS | |||||||||||||||||||
Cash and due from other financial institutions | $ | 13,053 | $ | 9,499 | $ | 11,509 | $ | 10,238 | $ | 13,192 | |||||||||
Interest-bearing deposits in other financial institutions | 83,631 | 91,031 | 74,048 | 55,705 | 46,185 | ||||||||||||||
Securities, at fair value | 107,212 | 99,899 | 105,698 | 111,386 | 114,753 | ||||||||||||||
Loans receivable, net | 1,312,952 | 1,241,808 | 1,207,553 | 1,232,485 | 1,232,257 | ||||||||||||||
Other real estate owned, net | 3,895 | 4,381 | 5,373 | 5,629 | 7,011 | ||||||||||||||
Stock in Federal Home Loan Bank and Federal Reserve Bank, at cost | 11,650 | 6,257 | 6,257 | 6,257 | 6,257 | ||||||||||||||
Premises and equipment, net | 31,413 | 31,856 | 32,021 | 32,308 | 32,726 | ||||||||||||||
Intangible assets | 782 | 911 | 1,040 | 1,169 | 1,305 | ||||||||||||||
Bank owned life insurance | 22,594 | 22,538 | 22,484 | 22,438 | 22,387 | ||||||||||||||
Deferred taxes | 22,411 | 23,715 | 25,187 | 25,641 | 26,695 | ||||||||||||||
Other assets | 10,444 | 8,378 | 8,661 | 8,552 | 9,675 | ||||||||||||||
Total assets | $ | 1,620,037 | $ | 1,540,273 | $ | 1,499,831 | $ | 1,511,808 | $ | 1,512,443 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||
Deposits | $ | 1,339,390 | $ | 1,316,695 | $ | 1,268,602 | $ | 1,264,689 | $ | 1,212,919 | |||||||||
Borrowings | 51,069 | 1,406 | 1,469 | 17,621 | 64,318 | ||||||||||||||
Other liabilities | 24,798 | 18,505 | 23,053 | 20,010 | 22,842 | ||||||||||||||
Total liabilities | 1,415,257 | 1,336,606 | 1,293,124 | 1,302,320 | 1,300,079 | ||||||||||||||
Stockholders’ equity | 204,780 | 203,667 | 206,707 | 209,488 | 212,364 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,620,037 | $ | 1,540,273 | $ | 1,499,831 | $ | 1,511,808 | $ | 1,512,443 | |||||||||
(1)Annualized
Page 2
BANKFINANCIAL CORPORATION
SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA
Latest Five Quarters
(Dollars in thousands; except per share) – (Unaudited)
2016 | 2015 | For the years ended December 31, | |||||||||||||||||||||||||
IVQ | IIIQ | IIQ | IQ | IVQ | 2016 | 2015 | |||||||||||||||||||||
SUMMARY STATEMENT OF OPERATIONS | |||||||||||||||||||||||||||
Total interest income | $ | 12,743 | $ | 12,845 | $ | 12,581 | $ | 12,759 | $ | 12,411 | $ | 50,928 | $ | 48,962 | |||||||||||||
Total interest expense | 1,148 | 1,014 | 952 | 856 | 738 | 3,970 | 2,814 | ||||||||||||||||||||
Net interest income before recovery | 11,595 | 11,831 | 11,629 | 11,903 | 11,673 | 46,958 | 46,148 | ||||||||||||||||||||
Recovery of loan losses | (539 | ) | (525 | ) | 1,315 | (490 | ) | (1,038 | ) | (239 | ) | (3,206 | ) | ||||||||||||||
Net interest income | 12,134 | 12,356 | 10,314 | 12,393 | 12,711 | 47,197 | 49,354 | ||||||||||||||||||||
Noninterest income | 1,777 | 1,637 | 1,537 | 1,594 | 1,757 | 6,545 | 6,691 | ||||||||||||||||||||
Noninterest expense | 10,194 | 9,912 | 10,506 | 10,930 | 11,169 | 41,542 | 41,945 | ||||||||||||||||||||
Income before income tax | 3,717 | 4,081 | 1,345 | 3,057 | 3,299 | 12,200 | 14,100 | ||||||||||||||||||||
Income tax expense | 1,458 | 1,573 | 514 | 1,153 | 1,183 | 4,698 | 5,425 | ||||||||||||||||||||
Net income | $ | 2,259 | $ | 2,508 | $ | 831 | $ | 1,904 | $ | 2,116 | $ | 7,502 | $ | 8,675 | |||||||||||||
Basic earnings per common share | $ | 0.12 | $ | 0.13 | $ | 0.04 | $ | 0.10 | $ | 0.11 | $ | 0.40 | $ | 0.44 | |||||||||||||
Diluted earnings per common share | $ | 0.12 | $ | 0.13 | $ | 0.04 | $ | 0.10 | $ | 0.11 | $ | 0.39 | $ | 0.44 | |||||||||||||
NONINTEREST INCOME AND EXPENSE | |||||||||||||||||||||||||||
Noninterest Income | |||||||||||||||||||||||||||
Deposit service charges and fees | $ | 563 | $ | 583 | $ | 541 | $ | 567 | $ | 603 | $ | 2,254 | $ | 2,248 | |||||||||||||
Other fee income | 574 | 478 | 505 | 495 | 505 | 2,052 | 2,143 | ||||||||||||||||||||
Insurance commissions and annuities income | 122 | 53 | 72 | 55 | 169 | 302 | 386 | ||||||||||||||||||||
Gain on sales of loans, net | 16 | 38 | 3 | 18 | 10 | 75 | 102 | ||||||||||||||||||||
Gain on sale of securities | — | — | — | 46 | — | 46 | — | ||||||||||||||||||||
Gain (loss) on disposition of premises and equipment | 38 | — | — | — | — | 38 | (1 | ) | |||||||||||||||||||
Loan servicing fees | 62 | 66 | 75 | 73 | 83 | 276 | 354 | ||||||||||||||||||||
Amortization of servicing assets | (32 | ) | (28 | ) | (40 | ) | (28 | ) | (32 | ) | (128 | ) | (137 | ) | |||||||||||||
Recovery (impairment) of servicing assets | 16 | — | 3 | (3 | ) | (1 | ) | 16 | (3 | ) | |||||||||||||||||
Earnings on bank owned life insurance | 56 | 54 | 46 | 51 | 52 | 207 | 194 | ||||||||||||||||||||
Trust income | 182 | 167 | 165 | 160 | 183 | 674 | 712 | ||||||||||||||||||||
Other | 180 | 226 | 167 | 160 | 185 | 733 | 693 | ||||||||||||||||||||
Total noninterest income | $ | 1,777 | $ | 1,637 | $ | 1,537 | $ | 1,594 | $ | 1,757 | $ | 6,545 | $ | 6,691 | |||||||||||||
Noninterest Expense | |||||||||||||||||||||||||||
Compensation and benefits | $ | 5,734 | $ | 5,315 | $ | 5,713 | $ | 5,993 | $ | 6,034 | $ | 22,755 | $ | 22,222 | |||||||||||||
Office occupancy and equipment | 1,611 | 1,487 | 1,635 | 1,647 | 1,620 | 6,380 | 6,522 | ||||||||||||||||||||
Advertising and public relations | 252 | 144 | 252 | 222 | 208 | 870 | 991 | ||||||||||||||||||||
Information technology | 762 | 707 | 699 | 724 | 687 | 2,892 | 2,669 | ||||||||||||||||||||
Supplies, telephone, and postage | 346 | 345 | 297 | 376 | 397 | 1,364 | 1,586 | ||||||||||||||||||||
Amortization of intangibles | 129 | 129 | 129 | 136 | 136 | 523 | 550 | ||||||||||||||||||||
Nonperforming asset management | 99 | 89 | 127 | 84 | 239 | 399 | 681 | ||||||||||||||||||||
Loss (gain) on sales of other real estate owned | (113 | ) | (15 | ) | (38 | ) | 38 | 33 | (128 | ) | (58 | ) | |||||||||||||||
Valuation adjustments of other real estate owned | 70 | 115 | 10 | 119 | 81 | 314 | 548 | ||||||||||||||||||||
Operations of other real estate owned | 121 | 143 | 177 | 219 | 169 | 660 | 573 | ||||||||||||||||||||
FDIC insurance premiums | 64 | 238 | 236 | 217 | 205 | 755 | 904 | ||||||||||||||||||||
Other | 1,119 | 1,215 | 1,269 | 1,155 | 1,360 | 4,758 | 4,757 | ||||||||||||||||||||
Total noninterest expense | $ | 10,194 | $ | 9,912 | $ | 10,506 | $ | 10,930 | $ | 11,169 | $ | 41,542 | $ | 41,945 | |||||||||||||
Page 3
BANKFINANCIAL CORPORATION
SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA
Latest Five Quarters
(Dollars in thousands; except per share) – (Unaudited)
2016 | 2015 | ||||||||||||||||||
IVQ | IIIQ | IIQ | IQ | IVQ | |||||||||||||||
LOANS | |||||||||||||||||||
One–to–four family residential real estate loans | $ | 135,218 | $ | 142,130 | $ | 147,876 | $ | 154,588 | $ | 159,501 | |||||||||
Multi–family mortgage loans | 542,887 | 505,369 | 504,158 | 513,450 | 506,026 | ||||||||||||||
Nonresidential real estate loans | 182,152 | 186,504 | 191,685 | 219,339 | 226,735 | ||||||||||||||
Construction and land loans | 1,302 | 1,005 | 1,767 | 1,799 | 1,313 | ||||||||||||||
Commercial loans | 103,063 | 106,878 | 84,951 | 76,325 | 79,516 | ||||||||||||||
Commercial leases | 352,539 | 304,753 | 282,629 | 272,849 | 265,405 | ||||||||||||||
Consumer loans | 2,255 | 1,846 | 1,744 | 1,890 | 1,831 | ||||||||||||||
1,319,416 | 1,248,485 | 1,214,810 | 1,240,240 | 1,240,327 | |||||||||||||||
Net deferred loan origination costs | 1,663 | 1,657 | 1,658 | 1,661 | 1,621 | ||||||||||||||
Allowance for loan losses | (8,127 | ) | (8,334 | ) | (8,915 | ) | (9,416 | ) | (9,691 | ) | |||||||||
Loans, net | $ | 1,312,952 | $ | 1,241,808 | $ | 1,207,553 | $ | 1,232,485 | $ | 1,232,257 | |||||||||
LOAN ORIGINATIONS (1) | |||||||||||||||||||
One–to–four family residential real estate loans | $ | 1,426 | $ | 2,322 | $ | 2,279 | $ | 1,637 | $ | 2,657 | |||||||||
Multi–family mortgage loans | 54,954 | 25,062 | 18,017 | 24,385 | 43,110 | ||||||||||||||
Nonresidential real estate loans | 9,033 | 3,518 | 3,587 | 5,002 | 20,408 | ||||||||||||||
Construction and land loans | 359 | 92 | — | 198 | — | ||||||||||||||
Commercial loans | 49,385 | 67,919 | 54,149 | 35,771 | 44,293 | ||||||||||||||
Commercial leases (3) | 87,855 | 54,717 | 54,633 | 39,303 | 71,201 | ||||||||||||||
Consumer loans | 611 | 883 | 1,025 | 588 | 725 | ||||||||||||||
$ | 203,623 | $ | 154,513 | $ | 133,690 | $ | 106,884 | $ | 182,394 | ||||||||||
LOAN PAYMENTS and PAYOFFS (2) | |||||||||||||||||||
One–to–four family residential real estate loans | $ | 8,698 | $ | 7,245 | $ | 8,500 | $ | 6,413 | $ | 7,471 | |||||||||
Multi–family mortgage loans | 16,999 | 24,276 | 27,188 | 17,082 | 13,559 | ||||||||||||||
Nonresidential real estate loans | 12,697 | 8,740 | 30,024 | 11,878 | 12,748 | ||||||||||||||
Construction and land loans | 24 | 852 | 33 | 57 | 41 | ||||||||||||||
Commercial loans | 53,147 | 45,990 | 45,528 | 39,030 | 45,460 | ||||||||||||||
Commercial leases | 35,984 | 31,437 | 48,774 | 31,552 | 26,353 | ||||||||||||||
Consumer loans | 633 | 801 | 1,080 | 664 | 701 | ||||||||||||||
$ | 128,182 | $ | 119,341 | $ | 161,127 | $ | 106,676 | $ | 106,333 | ||||||||||
LOAN PAYMENTS and PAYOFFS (Loans rated 5 or higher) (2) | |||||||||||||||||||
One–to–four family residential real estate loans | $ | 350 | $ | 220 | $ | 778 | $ | 441 | $ | 363 | |||||||||
Multi–family mortgage loans | 1,131 | 1,155 | 4,163 | 5,117 | 2,199 | ||||||||||||||
Nonresidential real estate loans | 1,690 | 500 | 19,164 | 409 | 784 | ||||||||||||||
Construction and land loans | — | 828 | — | 24 | 8 | ||||||||||||||
Commercial loans | 5,681 | 6,037 | 12,243 | 7,861 | 4,873 | ||||||||||||||
Commercial leases | 177 | 203 | 197 | 194 | — | ||||||||||||||
$ | 9,029 | $ | 8,943 | $ | 36,545 | $ | 14,046 | $ | 8,227 | ||||||||||
(1) Loan originations include draws on revolving lines of credit and exclude loan renewals.
(2) Loan payments and payoffs exclude loan renewals.
(3) Fourth quarter 2016 originations include $55.0 million purchased investment grade commercial leases.
Page 4
BANKFINANCIAL CORPORATION
SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA
Latest Five Quarters
(Dollars in thousands; except per share) – (Unaudited)
2016 | 2015 | ||||||||||||||||||
IVQ | IIIQ | IIQ | IQ | IVQ | |||||||||||||||
CREDIT QUALITY: | |||||||||||||||||||
Nonperforming Assets: | |||||||||||||||||||
Nonaccrual loans (1): | |||||||||||||||||||
One–to–four family residential real estate loans | $ | 2,851 | $ | 2,691 | $ | 2,625 | $ | 3,370 | $ | 2,455 | |||||||||
Multi–family mortgage loans | 185 | 508 | 1,021 | 953 | 821 | ||||||||||||||
Nonresidential real estate loans | 260 | 717 | 754 | 295 | 296 | ||||||||||||||
Construction and land loans | — | — | — | 803 | — | ||||||||||||||
Nonaccrual loans | 3,296 | 3,916 | 4,400 | 5,421 | 3,572 | ||||||||||||||
Loans past due over 90 days, still accruing | — | — | 828 | — | — | ||||||||||||||
Other real estate owned: | |||||||||||||||||||
One–to–four family residential real estate loans | 1,565 | 2,281 | 2,433 | 2,619 | 2,621 | ||||||||||||||
Multi–family real estate | 370 | 393 | 737 | 737 | 951 | ||||||||||||||
Nonresidential real estate | 1,066 | 780 | 1,065 | 1,135 | 1,747 | ||||||||||||||
Land | 894 | 927 | 1,138 | 1,138 | 1,692 | ||||||||||||||
Other real estate owned | 3,895 | 4,381 | 5,373 | 5,629 | 7,011 | ||||||||||||||
Nonperforming assets | $ | 7,191 | $ | 8,297 | $ | 10,601 | $ | 11,050 | $ | 10,583 | |||||||||
Asset Quality Ratios | |||||||||||||||||||
Nonperforming assets to total assets | 0.44 | % | 0.54 | % | 0.71 | % | 0.73 | % | 0.70 | % | |||||||||
Nonperforming loans to total loans | 0.25 | 0.31 | 0.43 | 0.44 | 0.29 | ||||||||||||||
Nonperforming commercial-related loans to total commercial-related loans (2) | 0.04 | 0.11 | 0.24 | 0.19 | 0.10 | ||||||||||||||
Nonperforming residential and consumer loans to total residential and consumer loans | 2.08 | 1.87 | 1.75 | 2.15 | 1.52 | ||||||||||||||
Allowance for loan losses to nonperforming loans | 246.57 | 212.82 | 170.52 | 173.69 | 271.30 | ||||||||||||||
Concentrations of Credit | |||||||||||||||||||
Commercial Real Estate for FFEIC Concentration Limits | $ | 690,879 | $ | 658,887 | $ | 662,493 | $ | 685,732 | $ | 682,012 | |||||||||
% FFIEC Total Capital | 410.96 | % | 399.18 | % | 410.28 | % | 392.73 | % | 398.28 | % | |||||||||
Multi–family mortgage loans - 50% risk based capital qualified (included above) | $ | 305,436 | $ | 269,641 | $ | 246,117 | $ | 238,922 | $ | 233,409 | |||||||||
% FFIEC Total Capital | 181.68 | % | 163.36 | % | 152.42 | % | 136.84 | % | 136.31 | % | |||||||||
Commercial Leases - Investment Grade | $ | 268,022 | $ | 215,237 | $ | 199,020 | $ | 182,057 | $ | 170,100 | |||||||||
Commercial Leases - Other | 84,517 | 89,516 | 83,609 | 90,792 | 95,305 | ||||||||||||||
(1) | Purchased impaired loans are combined with nonaccrual loans in the above table. |
(2) | Commercial-related loans include Multi-family mortgage, Nonresidential, Construction, Land and Commercial loans and Leases. |
Page 5
BANKFINANCIAL CORPORATION
SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA
Latest Five Quarters
(Dollars in thousands; except per share) – (Unaudited)
2016 | 2015 | ||||||||||||||||||
IVQ | IIIQ | IIQ | IQ | IVQ | |||||||||||||||
SUBSTANDARD PERFORMING LOANS | |||||||||||||||||||
One–to–four family residential real estate loans | $ | 670 | $ | 475 | $ | 335 | $ | 440 | $ | 847 | |||||||||
Multi–family mortgage loans | 1,048 | 2,119 | 2,025 | 3,347 | 5,167 | ||||||||||||||
Nonresidential real estate loans | 1,845 | 2,407 | 3,194 | 4,981 | 4,981 | ||||||||||||||
Construction and land loans | — | — | 830 | — | 842 | ||||||||||||||
Commercial loans | 66 | 75 | 225 | 137 | 614 | ||||||||||||||
Consumer loans | — | — | 2 | — | — | ||||||||||||||
$ | 3,629 | $ | 5,076 | $ | 6,611 | $ | 8,905 | $ | 12,451 | ||||||||||
PERFORMING LOANS GREATER THAN 30 DAYS PAST DUE | |||||||||||||||||||
30 – 59 days past due | $ | 2,237 | $ | 685 | $ | 171 | $ | 3,012 | $ | 2,036 | |||||||||
60 – 89 days past due | 617 | 419 | 71 | 30 | 926 | ||||||||||||||
Matured Loans | 270 | 784 | 277 | 1,387 | 1,467 | ||||||||||||||
$ | 3,124 | $ | 1,888 | $ | 519 | $ | 4,429 | $ | 4,429 | ||||||||||
ALLOWANCE FOR LOAN LOSSES | |||||||||||||||||||
Beginning balance | $ | 8,334 | $ | 8,915 | $ | 9,416 | $ | 9,691 | $ | 10,081 | |||||||||
Charge offs: | |||||||||||||||||||
One–to–four family residential real estate loans | (30 | ) | (102 | ) | (355 | ) | (52 | ) | (59 | ) | |||||||||
Multi–family mortgage loans | (28 | ) | — | (6 | ) | (45 | ) | (9 | ) | ||||||||||
Nonresidential real estate loans | (3 | ) | (55 | ) | (1,657 | ) | (3 | ) | (102 | ) | |||||||||
Commercial loans | — | — | — | — | (54 | ) | |||||||||||||
Consumer loans | (1 | ) | (6 | ) | (2 | ) | (16 | ) | (5 | ) | |||||||||
(62 | ) | (163 | ) | (2,020 | ) | (116 | ) | (229 | ) | ||||||||||
Recoveries: | |||||||||||||||||||
One–to–four family residential real estate loans | 229 | 5 | 6 | 81 | 407 | ||||||||||||||
Multi–family mortgage loans | 6 | 10 | 9 | 137 | 5 | ||||||||||||||
Nonresidential real estate loans | — | 39 | 161 | — | 460 | ||||||||||||||
Construction and land loans | — | — | — | 35 | — | ||||||||||||||
Commercial loans | 159 | 45 | 28 | 77 | 5 | ||||||||||||||
Commercial leases | — | 7 | — | — | — | ||||||||||||||
Consumer loans | — | 1 | — | 1 | — | ||||||||||||||
394 | 107 | 204 | 331 | 877 | |||||||||||||||
Net (charge–offs) recoveries | 332 | (56 | ) | (1,816 | ) | 215 | 648 | ||||||||||||
Provision for (recovery of ) loan losses | (539 | ) | (525 | ) | 1,315 | (490 | ) | (1,038 | ) | ||||||||||
Ending balance | $ | 8,127 | $ | 8,334 | $ | 8,915 | $ | 9,416 | $ | 9,691 | |||||||||
Allowance for loan losses to total loans | 0.62 | % | 0.67 | % | 0.73 | % | 0.76 | % | 0.78 | % | |||||||||
Net (charge–off) recovery ratio (1) | 0.11 | (0.02 | ) | (0.60 | ) | 0.07 | 0.22 | ||||||||||||
(1) | Annualized |
Page 6
BANKFINANCIAL CORPORATION
SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA
Latest Five Quarters
(Dollars in thousands; except per share) – (Unaudited)
2016 | 2015 | ||||||||||||||||||
IVQ | IIIQ | IIQ | IQ | IVQ | |||||||||||||||
DEPOSITS | |||||||||||||||||||
Noninterest–bearing demand | $ | 249,539 | $ | 234,652 | $ | 231,928 | $ | 238,848 | $ | 254,830 | |||||||||
Savings deposits | 160,002 | 155,199 | 158,669 | 161,554 | 156,752 | ||||||||||||||
Money market accounts | 311,183 | 320,814 | 315,615 | 323,197 | 329,654 | ||||||||||||||
Interest–bearing NOW accounts | 267,054 | 263,286 | 258,083 | 247,434 | 248,982 | ||||||||||||||
Certificates of deposits - retail | 220,602 | 223,642 | 223,948 | 221,101 | 211,010 | ||||||||||||||
Certificates of deposits - wholesale | 131,010 | 119,102 | 80,359 | 72,555 | 11,691 | ||||||||||||||
$ | 1,339,390 | $ | 1,316,695 | $ | 1,268,602 | $ | 1,264,689 | $ | 1,212,919 | ||||||||||
SELECTED AVERAGE BALANCES | |||||||||||||||||||
Total average assets | $ | 1,576,345 | $ | 1,511,475 | $ | 1,510,115 | $ | 1,513,683 | $ | 1,448,857 | |||||||||
Total average interest–earning assets | 1,481,775 | 1,414,736 | 1,413,161 | 1,414,008 | 1,348,782 | ||||||||||||||
Average loans | 1,253,224 | 1,225,480 | 1,210,726 | 1,238,270 | 1,175,723 | ||||||||||||||
Average securities | 99,767 | 106,904 | 108,865 | 118,557 | 107,344 | ||||||||||||||
Average stock in FHLB & FRB | 8,133 | 6,257 | 6,257 | 6,257 | 6,257 | ||||||||||||||
Average other interest–earning assets | 120,651 | 76,095 | 87,313 | 50,924 | 59,458 | ||||||||||||||
Total average interest–bearing liabilities | 1,108,181 | 1,052,916 | 1,037,781 | 1,037,730 | 971,000 | ||||||||||||||
Average interest–bearing deposits | 1,088,265 | 1,050,935 | 1,034,674 | 962,823 | 951,631 | ||||||||||||||
Average borrowings | 19,916 | 1,981 | 3,107 | 74,907 | 19,369 | ||||||||||||||
Average stockholders’ equity | 205,071 | 206,237 | 209,231 | 212,322 | 213,858 | ||||||||||||||
SELECTED YIELDS AND COST OF FUNDS (1): | |||||||||||||||||||
Total average interest–earning assets | 3.42 | % | 3.61 | % | 3.58 | % | 3.63 | % | 3.65 | % | |||||||||
Average loans | 3.87 | 4.02 | 4.02 | 4.01 | 4.06 | ||||||||||||||
Average securities | 1.20 | 1.14 | 1.13 | 1.07 | 1.07 | ||||||||||||||
Average other interest–earning assets | 0.78 | 0.73 | 0.75 | 0.69 | 0.51 | ||||||||||||||
Total average interest–bearing liabilities | 0.41 | 0.38 | 0.37 | 0.33 | 0.30 | ||||||||||||||
Average interest–bearing deposits | 0.41 | 0.38 | 0.37 | 0.33 | 0.30 | ||||||||||||||
Average borrowings | 0.64 | 0.40 | 0.26 | 0.37 | 0.25 | ||||||||||||||
Net interest rate spread | 3.01 | 3.23 | 3.21 | 3.30 | 3.35 | ||||||||||||||
Net interest margin | 3.11 | 3.33 | 3.31 | 3.39 | 3.43 | ||||||||||||||
Page 7
BANKFINANCIAL CORPORATION
SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA
Latest Five Quarters
(Dollars in thousands; except per share) – (Unaudited)
2016 | 2015 | ||||||||||||||||||
IVQ | IIIQ | IIQ | IQ | IVQ | |||||||||||||||
CAPITAL RATIOS | |||||||||||||||||||
BankFinancial Corporation | |||||||||||||||||||
Equity to total assets (end of period) | 12.64 | % | 13.22 | % | 13.78 | % | 13.86 | % | 14.04 | % | |||||||||
Tangible equity to tangible total assets (end of period) | 12.60 | 13.17 | 13.72 | 13.79 | 13.97 | ||||||||||||||
Risk–based total capital ratio | 16.96 | 17.64 | 18.09 | 17.80 | 17.89 | ||||||||||||||
Common Tier 1 (CET1) | 16.25 | 16.87 | 17.26 | 16.95 | 17.01 | ||||||||||||||
Risk–based tier 1 capital ratio | 16.25 | 16.87 | 17.26 | 16.95 | 17.01 | ||||||||||||||
Tier 1 leverage ratio | 11.92 | 12.28 | 12.41 | 12.53 | 13.26 | ||||||||||||||
Tier 1 capital | $ | 185,718 | $ | 183,092 | $ | 184,695 | $ | 186,964 | $ | 189,044 | |||||||||
BankFinancial, NA | |||||||||||||||||||
Risk–based total capital ratio | 14.72 | % | 15.21 | % | 15.09 | % | 15.83 | % | 15.41 | % | |||||||||
Common Tier 1 (CET1) | 14.01 | 14.44 | 14.26 | 14.98 | 14.54 | ||||||||||||||
Risk–based tier 1 capital ratio | 14.01 | 14.44 | 14.26 | 14.98 | 14.54 | ||||||||||||||
Tier 1 leverage ratio | 10.27 | 10.51 | 10.25 | 11.08 | 11.33 | ||||||||||||||
Tier 1 capital | $ | 159,986 | $ | 156,725 | $ | 152,559 | $ | 165,183 | $ | 161,545 | |||||||||
COMMON STOCK AND DIVIDENDS | |||||||||||||||||||
Stock Prices: | |||||||||||||||||||
Close | $ | 14.82 | $ | 12.70 | $ | 11.99 | $ | 11.82 | $ | 12.63 | |||||||||
High | 15.12 | 12.80 | 12.89 | 13.29 | 13.22 | ||||||||||||||
Low | 12.15 | 11.75 | 11.38 | 11.42 | 12.10 | ||||||||||||||
Common shares outstanding | 19,233,760 | 19,271,211 | 19,678,697 | 19,939,500 | 20,297,317 | ||||||||||||||
Book value per share | $ | 10.65 | $ | 10.57 | $ | 10.50 | $ | 10.51 | $ | 10.46 | |||||||||
Tangible book value per share | $ | 10.61 | $ | 10.52 | $ | 10.45 | $ | 10.45 | $ | 10.40 | |||||||||
Cash dividends declared on common stock | $ | 0.06 | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.04 | |||||||||
Dividend payout ratio | 51.09 | % | 38.82 | % | 119.60 | % | 53.50 | % | 38.59 | % | |||||||||
Stock repurchases | $ | 520 | $ | 5,022 | $ | 3,280 | $ | 4,393 | $ | 2,582 | |||||||||
Stock repurchases – shares | 37,451 | 407,486 | 260,803 | 357,817 | 204,649 | ||||||||||||||
EARNINGS PER SHARE COMPUTATIONS | |||||||||||||||||||
Net income | $ | 2,259 | $ | 2,508 | $ | 831 | $ | 1,904 | $ | 2,116 | |||||||||
Average common shares outstanding | 19,257,435 | 19,460,022 | 19,827,581 | 20,155,541 | 20,428,979 | ||||||||||||||
Less: Unearned ESOP shares | (645,751 | ) | (670,351 | ) | (694,773 | ) | (719,109 | ) | (743,659 | ) | |||||||||
Unvested restricted stock shares | (940 | ) | (940 | ) | (2,690 | ) | (7,881 | ) | (7,932 | ) | |||||||||
Weighted average common shares outstanding | 18,610,744 | 18,788,731 | 19,130,118 | 19,428,551 | 19,677,388 | ||||||||||||||
Plus: Dilutive common shares equivalents | 170,683 | 323 | 317 | 2,939 | 25,141 | ||||||||||||||
Weighted average dilutive common shares outstanding | 18,781,427 | 18,789,054 | 19,130,435 | 19,431,490 | 19,702,529 | ||||||||||||||
Basic earnings per common share | $ | 0.12 | $ | 0.13 | $ | 0.04 | $ | 0.10 | $ | 0.11 | |||||||||
Diluted earnings per common share | $ | 0.12 | $ | 0.13 | $ | 0.04 | $ | 0.10 | $ | 0.11 | |||||||||
Number of anti–dilutive stock options excluded from the diluted earnings per share calculation | — | 536,459 | 536,459 | 1,752,156 | 536,459 | ||||||||||||||
Weighted average exercise price of anti–dilutive options | $ | — | $ | 12.99 | $ | 12.99 | $ | 12.30 | $ | 12.99 | |||||||||
Page 8
BANKFINANCIAL CORPORATION
NON–GAAP FINANCIAL MEASURES
BankFinancial Corporation, a Maryland corporation (“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, 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 of 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.
These measures include pre–tax pre–provision earnings from adjusted operations and pre–tax pre–provision earnings from adjusted operations to average total assets. Management believes that by excluding equity-based compensation expense, other real estate owned related income and expense items and nonperforming asset management expenses from noninterest expense, these measures better reflect our adjusted operating performance.
Page 9
BANKFINANCIAL CORPORATION
NON-GAAP FINANCIAL MEASURES
(Dollars in thousands, except per share) - (Unaudited)
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Pre–tax pre–provision earnings from adjusted operations | |||||||||||||||
Income before income taxes | $ | 3,717 | $ | 3,299 | $ | 12,200 | $ | 14,100 | |||||||
Recovery of loan losses | (539 | ) | (1,038 | ) | (239 | ) | (3,206 | ) | |||||||
3,178 | 2,261 | 11,961 | 10,894 | ||||||||||||
Adjustments: | |||||||||||||||
Equity-based compensation | 107 | 306 | 982 | 638 | |||||||||||
Nonperforming asset management | 99 | 239 | 399 | 681 | |||||||||||
Loss (gain) on sale of other real estate owned | (113 | ) | 33 | (128 | ) | (58 | ) | ||||||||
Valuation adjustments of other real estate owned | 70 | 81 | 314 | 548 | |||||||||||
Operations of other real estate owned | 121 | 169 | 660 | 573 | |||||||||||
Adjustments | 284 | 828 | 2,227 | 2,382 | |||||||||||
Pre–tax pre–provision earnings from adjusted operations | $ | 3,462 | $ | 3,089 | $ | 14,188 | $ | 13,276 | |||||||
Pre–tax pre–provision earnings from adjusted operations to average total assets (1) | 0.88 | % | 0.85 | % | 0.93 | % | 0.92 | % | |||||||
(1) | Annualized |
Page 10
BANKFINANCIAL CORPORATION
NON-GAAP FINANCIAL MEASURES
(Dollars in thousands, except per share) - (Unaudited)
FOR THE LATEST FIVE QUARTERS
2016 | 2015 | ||||||||||||||||||
IVQ | IIIQ | IIQ | IQ | IVQ | |||||||||||||||
Pre–tax pre–provision earnings from adjusted operations | |||||||||||||||||||
Income before income taxes | $ | 3,717 | $ | 4,081 | $ | 1,345 | $ | 3,057 | $ | 3,299 | |||||||||
Recovery of loan losses | (539 | ) | (525 | ) | 1,315 | (490 | ) | (1,038 | ) | ||||||||||
3,178 | 3,556 | 2,660 | 2,567 | 2,261 | |||||||||||||||
Adjustments: | |||||||||||||||||||
Equity-based compensation | 107 | 107 | 391 | 377 | 306 | ||||||||||||||
Nonperforming asset management | 99 | 89 | 127 | 84 | 239 | ||||||||||||||
Loss (gain) on sale of other real estate owned | (113 | ) | (15 | ) | (38 | ) | 38 | 33 | |||||||||||
Valuation adjustments of other real estate owned | 70 | 115 | 10 | 119 | 81 | ||||||||||||||
Operations of other real estate owned | 121 | 143 | 177 | 219 | 169 | ||||||||||||||
284 | 439 | 667 | 837 | 828 | |||||||||||||||
Pre–tax pre–provision earnings from adjusted operations | $ | 3,462 | $ | 3,995 | $ | 3,327 | $ | 3,404 | $ | 3,089 | |||||||||
Pre–tax pre–provision earnings from adjusted operations to average total assets (1) | 0.88 | % | 1.06 | % | 0.88 | % | 0.90 | % | 0.85 | % | |||||||||
(1) | Annualized |
Page 11