BFIN - Earnings call transcript Q1 2022 | BankFinancial Corporation

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Operator

Good day, and thank you for standing by. Welcome to the BankFinancial Corp. Q1 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. today's being that advised be conference recorded. is Please like the today's conference Instructions] F. I to hand now would of [Operator over to our call, speaker Morgan Gasior, Chairman CEO. and go Please ahead.

F. Morgan Gasior

call. the our have statement read. XXXX Good like forward-looking first Welcome time, I'd to investor morning. conference At this to quarter

Unidentified Company Representative

provisions The at statements the XXXX. of We the may all forward-looking this in Safe include the these by statements within contained Act remarks of Securities Harbor Section Securities of purposes are harbor Act Exchange be Private made to safe covered XXXX meaning provisions. invoking of for XXE including conference Litigation forward-looking of the the intend statement the Reform and

occur. significant and plan by and uncertainties identifiable involve words assumptions the are use statements of that expressions. expect, similar risks project, are may estimate, They intend, anticipate, the often on Forward-looking not believe, or based may or

effects is may Our those the or plans actual ability results actual our and strategies predict to differ uncertain, of and predicted. results from inherently

For and statements. statements any risks be the These SEC. CEO, on Gasior. And and and not Morgan please the evaluating our obligation have to our in operation, impact forward-looking results now should and of uncertainties financial the consult future. and further in We included to considered in update uncertainties forward-looking undertake that the do any the statements Chairman risk factors condition declarations reports the we details forward-looking could risks

F. Morgan Gasior

with filings All activity March you. Thank complete. to XXXX, through XXst, respect are

like update some we everyone in we'd on. activity had to April that XX However,

growth of office well. the March chain delays transactions. line and billion. the we a nicely which in pleased quarter saw a transactions to The increased to the growth April. real on strong And have filings, in of our the commercial in timing of estate both just Finance into still supply some we as strong areas. division prepayment saw to the some to that people we've substantial also The $XX and million seeing of we had tied to loans month, But to But funding, volatility XXXX. XXXX, the is portfolio and an Those the in reduced on commercial documents. loans, XXXX loan also towards Equipment said little of in more and April than in We first growth drop labor see the we originated We we pleased growth ratio, some approximately we're execute we're the in during quarter. timing rather throughout in April did it's or the First foremost, quarter first area was or multifamily but that's more impact. of of whether balance all similar entire saw growth see tilting in some grew and also principally month. finally as just in year, considerably They like see expected. originations what finance first bit the we and in off balanced, bottom-line over $X.X month The again, reflective, expect they loan the were April,

$XX a quarter. goal million So, been our always has

first in our quarter. $X.X it for would beyond end and So roughly, that achieved quarter. by billion have the that gone been of now we've goal We've second

good to might payments pipelines estate. the goal some portfolio some We that in real have between have $X.XXX billion is scheduled we a billion billion. in equipment get governmental quarter $X.XX second our second annual bit make prepayments finance in the do to also $X.XXX quarter, challenging. So, somewhere But very

some finance, XXXX. the still over quarter of first pipelines and which carried good have equipment have We of from

in have seen commercial we think health it's good pipelines some still opportunities but new good smaller reach, finance. we it's And We've feasible. a care but So in pipelines finance.

topic-by-topic, degrees. department-by-department, department every in virtually varying contributions seeing from just we're So

in compared on originations. yield reflective of quarter. yield was of March. and increase the April terms And of One from first are X.XX% market the prime a in again, is to mix two X.XX% end activity, yields rate things. two, And the In getting little occurred in that's originations we of at the the bump the that

the swap would at second the at finance curve as booked to equipment due if mix. forward, again, going benefit partly delay so increase, on So moved up continue, originations we will originations has transactions One they much. see because look quarter, be considerably the continue yields we of to yields in higher

have in or been to on Xs even early So example, for closed the -- might transactions close where second Xs, they based in the curve going Xs to are the high they low have if quarter that closer if swap January in is. might the be

about X% the So portfolio forward. We pipelines the going commercial about year net-net, we our in loan up ended loans. related April for for good feel the

in it for put then second quarters growth row is a that, task up the the open next two and I of good up With Our to year. questions. set half of

Operator

Our comes Research. Martin Certainly. question Brian first from [Operator Instructions] [ph] of Equity

open. Your line is

Unidentified Analyst

Hey, good morning, Morgan.

F. Morgan Gasior

Brian. morning, Good

Unidentified Analyst

like to April. It start great a sounds

of talked you maybe kind then maybe originations on what's the versus pretty driving is and really for with been And the paydowns. was pipelines, think just the originations walk the minimal been of about you're through I of of of originations these can kind your just like you've So looking just just good. sounds back just it? couple have largely It like last what of some outlook kind kind it And quarters, payoffs.

that the the specifically in thus far drove is or kind that where on what seeing payoffs, color decline just in just April? And of unfold? how strength you're maybe So little you're seeing of a then and kind

F. Morgan Gasior

Okay. Well, let's, in just first activity. of payoffs recent do the most decline all, is twofold. The

their equipment lesser incredible of because the call, those in of a particularly gains. They new estate number fourth on realizing up in quarter people of has especially Obviously, real gone saw changes cannot to As first advantage equipment we extent, gains harvest get some had you properties, in we in the to coming. took the saw quarter, portfolio, paydowns in said we the a also potential They And easily. tremendously, and multi-family used rates positions. finance, as borrowers, positions. equipment due value residual they had

positions. harvested off And even gains sold in businesses they paid So some debt. had those their they you that were and

rather rates quarter, rate prepayments are normal paydowns real compressing. be The Obviously, those all true, is is So up, in first a tends refinance rate to much factors rising The going quarter. to opportunity rates in sensitive in in inverse environment. fourth now the more the we to and with declining estate run a saw rapidly. the are

cap things are And will up fewer two being true. is in maybe increasing right focused to And to was And are to they're rents the opportunities so got One they've some bit. a those rate two, while. the window have moving improving therefore, a the going closing -- on now. their offered start and rates that NOI the People are for harvest of and now gains. portfolio little market

support on in multi-family are -- continue be refinance to originations to still we're Our to able lock And people driven opportunities. that. by looking

is a of rate refinances volumes lock the pricing next where for lower their most a for where rate all in We years. to price in good is they markets. essentially term with we're service the helping we while solid costs thing and to important the the low-risk on to good have lock debt for have transactions in especially and accordingly. They're want can, good risk hanging several building. borrowers manage They seeing, planning just out rate across borrower the drive the just some that want And to market good to

they still borrowers the the a probably though in bank. many buildings. They the avoid They $X prepayments We're handful that buildings are wanted, of as had first prepayments, the off result could as purchases, about seeing paid find XXXX money million candidly, were loans And sitting spread. they in and specifically, attempted We the in find and estate seen. down not to quarter, to proceeds the the some real negative as portfolio. we've a took even not

we speaking, quarter pipelines about good into even second feel the now third but -- going So quarter. generally and

to million expect we did and the of quarter, April. We on a approximately $XX have $XX month We quarter second the originations. first strong in did in million

feel forward we quarter. second good pretty for about So going

the service Very, Same opportunities. was seeing for well-tenanted, the flow of one on was the This assets. the beneficiaries primary for in good further. continue is their their Our third of is family this selective priority the Chicago, western we're we commercial about location recently to involving in originations them. borrowers cash will debt stable marketing similar And suburbs priority here very a working, closed are about quarter. one lock way and and a trust. real more for but we in the just We've those estate, feel growing good it, looking

side, side. grateful stronger had bit of more September for Asia. based delivered we in with But growth just we're opportunity June little them, they finance might on to have transactions much equipment. with real the could But get pipelines delivery looking in growing. that that We some where other have installed We and a early The March forward example a are to out didn't estate that supply there card. on but obviously, equipment them. work it seeing the had in in We chain is the is still for transactions there's of as of March, happen been maybe equipment But of because continued time. result, April another even some a the equipment the the had demand we're principally pushed wild March. and they're So do to thought happened there, issues, off or

quarter more the feel the quarter Equipment right of in We in building quarter, Finance, in did and second the entire we're again, first we third we now. continue did actually than April in XXXX. in a will that pipeline So

quarter the equipment budgets. also is quarter Third last for full government

So or lose it it. use

strong quarter. to do expect we often some So third activity the as we in see

usually continues So the because, comes side, utilization spotty. is quite equipment. of at care. themselves also supply seen over drawn, Line those is dock, But increased chain draw lessor again, and issues in be it those is some the health time, in the and of unknot on for side, yet the a arrives dock. It demand the they some hopefully, to bit in spotty. there finance Cash equipment when commercial lines we've down bit a and activity not arrived back C&I at it's

on assets finance in were Australia they wound the that customer up side one that looking for. have finding equipment We the

changed. the here, It to to the in close And but want. take quarter. they're we they while instead a to supposed first originally It's second somewhere find circumstances on the going working so, export where that's like to get can it of quarter, Canada because Australia equipment expect from they but be was

we forward the going bottom-line, are real equipment finance. an and up-trend. estate that feel big C&I still So then showing contributors The be lines will generally

loans commercial opportunities are the recently asset-based in board, We seeing finance the and receivables. factored across most space,

push we're to going yields It's portfolios to smallest better. on the to So that. one, tend continue the X% average or to be X% those but

So when impact close they margin they a net fund. interest do can't have and

and then on especially given for results it. based seeing, pipeline, in think that in slightly amount up range. that's as interest in are better said, substantial, we over the quarter, those So And operating patiently -- based prepayment And $X.XXX the we're next third result, waiting portfolio loan to if interest put $X.XXX good net million our X% between excess I We we quarter, April, based see build the quarter. income $X.X on than year would been or how of activity $XX and a working a on is we time our everyone which originations fourth end. leverage here average, on by still we somewhere little on billion us if has picking get that's to the billion that that's scheduled for for. The the can contribution this billion, second have on X.XX% would quarter, a we're and towards that the seeking to been the

Unidentified Analyst

just April, comment, versus And said more about in multifamily. just, paydowns, your you. originations there was what's far as Got as Morgan, happened you

XX% of the just April? north of multifamily. in you're originations see the as far So as -- what did And total you in month

F. Morgan Gasior

April of just month the month that in originations million, in $XXX alone. were Total

Unidentified Analyst

XXX. Okay,

F. Morgan Gasior

…yield.

Unidentified Analyst

in and the mostly Got or equipment you. in multifamily mid-XXs of by was rest is And said and… bucket, the finance so, breakdown then it you the

F. Morgan Gasior

draw was Real but $XX was area, approximately was million. activity rest the million, paydowns finance also Equipment commercial and $XX estate area in the the there commercial, in C&I and were too.

in in big contributors equipment the last-minute a real So the actually of was paydowns bit the just were and lines. down April, finance, estate because C&I

Unidentified Analyst

Okay. Got of you. And so was any far the you that thus kind on thought far? April, in give paydowns? how the paydowns then what just Did -- what were

F. Morgan Gasior

were estate but than more than before. those us, hold probably have me million in less Paydowns million front side smaller those but don't were of nominal. numbers to were $XX finance less and equipment on probably the don't I paydowns paydowns, in $XX much side, scheduled the real than numbers. They but

Unidentified Analyst

appreciate Okay. and next about how it there. the on, color nice all And of picture, you're the just, kind thinking quarters, big I the sounds as far as opportunities of couple pretty just

think in how and on the Just, of that are I normalize, I should reasonable range, kind around you in rates of, if by year? $XXX an about XXX the what and the a the seen on April. settle that? just guess, kind kind of that mean, changing so impacting in, you've not paydowns that's right things how about far it based of you million seen are put now quarters, fence of $XXX kind as outlook a million think on bucket, where kind kind I the how you've what as of last of Just the consolidated payoffs payouts that in thinking but to commentary of over in balance we mean, of couple you your is kind basis.

F. Morgan Gasior

a that, now, somewhere probably that somewhere could number but million spike Right seems say $XX but Equipment $XX a real around around quarter would quarter, portfolio go Finance I decline. to a probably million But quarter, million with. does it bit. a little does to like could $XX the third estate conservative

is utilization One, least probably all the commercial $XX then more basis. predict One, time. at we up. the the This carrying use payoffs. overall liquidity, But of every rest and extraordinary starting is trend enormous there's rates. an greater some to fronts. on then periods where liquidity for us excess seeing lines. goes for And are are just borrowers amounts the percentages those start But Fed tighten earning a will frequently They rates they're of draws those are then time there's So balances million if that cash. And almost to more lines the that because on utilization a We're going intra-quarter happened sitting things really on the the C&I lines year. cycle. those two further, to has happen. longer And impossible going there utilization and some will helps then single It's on The on of of function that. an It's deposits the two been in of of up. in up, the line to lines are time should floating diminish. been they're

So balance path that but a helps the that goes down happens. us. the little bit, little smaller, ROA a to is because substantial if sheet earnings gets

Unidentified Analyst

Got you.

margin the yields picking just one, just and And one, kind helpful. just now on you're this. up on other That's Okay. maybe of

some the if the growth, bucket that curve, now, to later is from of and growth at one where it's the see which occurs like swap You here? curve bit the given of it swap benefit it little today the really a is delayed -- being the said going

F. Morgan Gasior

absolutely. Finance, over X%. five-year is We've treasury Equipment seen the just

asset Those take of deposit moved or as I And just high has those our add a now that's if the a just and mid-Xs we points. XXX then that mix, moved those into the to least obviously, with into you Xs or slower we has bit there. say, to And recovery at over higher. going and highest a a -- be sometimes average, that's up use And proxy as and to picked the a quickly quality the point for basis small risk low that -- right, a a increase then curve. certainly three ticket increase points months last move you mid-Xs XXX so, capabilities into And our would those So said, over XXX will -- Xs, government into low but remember, higher. is have to margin get higher. And right, yields, rate. XXX little is now even in sometimes and market the added to Middle swap little an take at different mid-Xs. are and the small why firmly Xs costs eventual advantage low bit on

as the get in on expansion swap might So are going of benefit goes run, short see market. those time slow in on deposits that as some spreads to we'll increased down catch but margin the up, the you

Unidentified Analyst

chunk good net you're pickup of talking about. real the the growth, That's leverage a the operating Right. that's is

of just about So, just rate you okay. Paul, on pickup a Can it bit just hikes just talk, outside And the, little benefits here. is from the the the to the get the pickup to is volume whether maybe from get you're Morgan guess, growth, just I your then as you're the how what the on going outside thinking you benefit do or on you're of highlighted thinking how just what as going of rates and margin to kind on growth. you're outlook your you far

F. Morgan Gasior

to turn me you over Let Paul.

Paul Cloutier

increase redeploying first we're currently quarter margin to increase because by with liquidity up $X the accounts. had closer to March, asset each with Yes, million least interest the about excess with that a XX you hike of additional to deposit into that that middle the equated sensitivity in net to allowed basis hike And $X interest hike that us tweaks margin, to million, some rate go some small rate the of at it to loans. points to Brian, over now little rate if we $X.X and our in million first of make probably have, annualized each of back coming we net some additional we expect

So with we've of already that picked the repositioning cash. up the

hikes. have of additional in we forward. somewhere going hike increase to the $X neighborhood less repricing rate immediately So million we're the Fed net rate margin expecting against million interest $X.X each with But to

Unidentified Analyst

that's are just growth to then, but rate a maybe of And there of that in Paul, kind of of the an kind XX% changed variable, moves around what's bit putting Okay. is on, you're with estimate little variable loans loan the balance now it a portfolio, immediately? XX% of XX% as it

Paul Cloutier

of we've tied got million portfolio, in And year at interest loans got reprice in loan over $XXX that we've Well, prime. end was then the at to Federal immediately the which changes just of rates are over Reserve, the $XXX the to cash that million. the

Now it's over $XXX million.

as So loan gets which we're or the it more loans, basis in impact, immediate portfolio. it's picking have won't it's the up XXX deployed redeployed, that into but points once

F. Morgan Gasior

We'll -- to about rate run, the have when that's change we'll in have going $XXX million do. short about rates

rate, floating we As of they'll to higher those even year. loans $XX million, going that flows loans, course into deploy be another deployed little cash off rates. be million, $XX maybe roll at bit during the more the But more maybe are a the the portfolio, some in of

pretty improvements plus growth to million or So cash. just on to get will see of you income. year, again, get if April achieve substantial this interest interest you And times the growth increase some forward of contribution enough million contribution million $X if another so carry The we're that you the lucky $XXX that income. in that, contribute you $XX of

Unidentified Analyst

you. Got

point and what quarter know flowing just stand today, opportunities second step like maybe Okay. talked just than into get obviously the a I But I too. operating the good the other and I'll -- That's just you here, to pretty guess, in helpful. but me the -- -- one looks out a get quarter, maybe the guys No, see where that you bit was expenses you thing lower that's back based of I when about great. as can if at hire you people. here? the quarter ask kind of kind me, more this were little from in at But look let general, -- And potentially last just stepping expense off base a we

F. Morgan Gasior

the impacts at had impacts a $XX comp seasonal going quarter of normalize million snow quarter removal payroll But couple give thinking and as next range, forward, or first Yes, it somewhere least take, and in around Brian, of for we will taxes it quarters. the benefits. we're

Unidentified Analyst

any Okay. include And hires. wouldn't that additional

and If the leverage you get have just but hires you'll people a expense, benefit just in produce? pick-up as than it's those operating a

F. Morgan Gasior

corporate a more with equipment and get had sheets interested agree side. that. would right of now in go strengthening conserving as finance up are cash, our finance We I balance the up, Yeah, rates equipment typically -- environment priorities this people in lot Corporate on cash. that

be to and also But been is know parallel setting dollar like that with. We'll to some closings, going ebbing. quarter, capabilities departments as responses to dollars So the market, some we our breakeven they expect leverage, sure wouldn't up different better much That commercial real finance what we products to I we more and strengthen going and configuration now reduction quarterly additional want to a in expenses. know we the They're is about new the those investment we're based in the in make can. the We've is adding innovative the substantial we where exactly want have point, modest it. for these and commercial they'll expect space. to need to out environment to now We're have keep origination finance. on an so data the leverage needs good there. market to there see we the the about did that product to those We're into steadily off impacts market, on as and and your We're We're operating of to capabilities wouldn't in I somewhat the marketing. are. help department commercial running put we our to money at communications, the add getting be people huge certainly it its the impact. estate But department. IT putting more parts not begin on to

right there. money be There we'll so, we also save just we in because see now. there'll actually than some where months I where benefit people some volatility some people aboard. be fewer say months get the replacements we will their will And have

so as numbers might other little bit of will add. things those well. And those be volatility I Two a in

putting have You'll strong in the and see for money the And quarter, money growth, mix, away had to expenses. to money to so thing to in growth we in to the quarter continue the loan we'll start some some quarter second be be some basis, incentives the second, volatility quarterly compensation from based on other loan expect fourth on obviously, for production loss reserves. we'll If third the performance. the on put we and would putting portfolio and is in with in away first -- loan a based continue We do the quarter. away we

Unidentified Analyst

you. Got

Okay.

deploying now loan the growth? given rates. ask were and into you're probably this, cash you're is to last back of I'll the jump liquidity it you opportunity get some -- out, assume Let to in. about it's what got -- in I'll in securities, just of fund now fair me the the buying volume the pickup But and really side, given far But what using that the as quarter lending investment just the and as portfolio that is, you've seeing on

F. Morgan Gasior

to securities. into continue risk. we to One, two, dimensions. rates increase than And wouldn't to want the of more two in price Yes, projected in course, And deploy you into contribute just is it take Fed up going in funds loans. the locking earnings

guidance not a time. So I rapidly at change at the of changing are unpredictably, the fairly I'd likely securities somewhat and that year. quarter obviously, next say would least is materially, conditions the rest for into and quarter the possibly so portfolio to take a But,

So It's right federal ride to -- the duration to the as was the will contributing But we'll our and continue the now. what Obviously, securities time continue portfolio we short at is going the focus point. of least it's purpose doing. have obviously this then that It's portfolio, loan it. goes decline. under to duration on, to just is funds do to now, going That curve, foreseeable is relatively earnings. probably circumstances a at be

Unidentified Analyst

you. Got

Okay.

back can me thank Morgan update, the Let and get Paul. I in let But and in. get someone you else for

Operator

comes Eric next Instructions] Bank Grubelich [Operator of Our [ph] question from Investor.

open. is line Your

Unidentified Analyst

Hi. Good morning.

a one helpful. asked Brian But very It lot thing. Just I to just on want questions, of thorough. was follow-up

You expected a a rate improvement improved XX that that of had in with are XX Was your talked increases. Fed income How interest and quarter kind the at in you the about? I produce -- -- you get involved or thing. mentioned those to you change, mentioned numbers million expectation numbers the remember, that? to looking

F. Morgan Gasio

have deposits, lines to not on next hikes less we past. based levels. our the of the That's historical to some expectation than the increasing been the But legs the along have we're do but of the XX basis will betas are few expecting they going points, in rate along be its of line been something to be going forward

XX we're basis point meetings. So next expecting the few hikes over

Unidentified Analyst

second you my question. that's Okay. just Thanks other clarifying No, And then almost on my fine. that. for answered

retail like you area market seeing pricing Just seeing the in local you movement of Chicago on the deposit right now it or commercial Are side, market not? products have? of your terms in on or looks any the are anything you that

F. Morgan Gasior

No.

As of paying did attention. sure not, make had though and they the know we're April, not. end of even and moved, March early expectations actually the -- meet customer We to customers we competitors

of growth. the very move start an expect almost slowly second XX points. it up does. up you we basis probably on we we interest for times up it quarter, $X top in picking will will for moving the we at keep for move would X Then that market slowly, you're to in income catch maybe But -- to deposit loan the example, rates point. -- picked points going basis if up So on goes there's immediately. million pick basis XX our million XX million that's and April to on We expect we'll third least conditions. market eye points, always will $XXX up And pick eventually, but $X the quarter, we're million Notionally, today, into

get we'll -- go So benefit ahead?

Unidentified Analyst

book that Thanks bought point. with the sharing and now really lastly, when like appetite And good buyback it's accretive it's stepping you doubly a looks then stock quarter. tangible is shares thought. for it That's just your I below below noticed book, your XX,XXX for you up where since tangible right outlook to the past What's in value?

F. Morgan Gasior

will We Russell hindsight, you just bit share could year little recently repurchases anticipation market repurchase updated where this sticking in we conditions. in us. a parameters opportunity, that's be say In bank, frustrating based raised on I conducted share that XXXX. we're we the of that published. it's within right perfect last to Yes. at. year last kept now, And and money say the the but we It's if the sub-debt would

a and substantial little share a I repurchases. going we're to for the by is and the on best results that's a though, share putting in frustrated an we Right wouldn't now, path managing the and the change be price. multiple to earnings, to best feel improved it. excess net earnings our work to The to cash get focus So expect getting up income the to approach forward interest ALM

Unidentified Analyst

complete. I'm Thanks Thank you. Great. much. Okay. very

F. Morgan Gasior

Thanks for your questions.

Operator

Research question have do Equity We follow-up Martin Montgomery [ph]. from from a of Brian Janney Instructions] -- a [Operator

Your line open. is

Unidentified Analyst

Guys.

Just two others one or for me.

government's about, with guess how the our equipment to you I just one provisioning we growth what on we just thought think a reserve allocation? the give be obviously when should Can to about expecting. you're on on Morgan the up think – now, the element, finance, how Just but based set the growth

F. Morgan Gasior

range, basis on XX seeing. a little be that a mix it's a based so higher say approximately Brian, the a It higher, on growth. higher, a principally we mix, range the lower, quarter million think, a good like points quarters. points a based I credits, be But a earnings average reasonable basis on reasonable that’s either in might reasonable Obviously, several because higher might it of that and be way we're put XX mix, little based growth news. reserve would on would I $XX what little in yield, seems it's over a but seems

government and bit commercial more quarter that to for reserve think we'll calls, like Therefore, XX%. strong I on we mix therefore, in be little might said little finance. see. ratio a second given But seeing be could we're decline the have a example, for quarter might higher, higher a previous the Third little

more I things and higher me to of XX, even see small ticket. see some market really a equipment commercial bit finance pop in it it and wouldn't side like higher yielding surprise middle might finance little the be thinking Now and we the if a

Unidentified Analyst

you. Got

volume of about your $XX that the one as or kind that Okay. outlook, pickup, kind where thought expenses for That’s far million that helpful. as does of does, -- with just be you… adding to up does just your like the think And mean I comp if as range pick the include other was, you should in it we the are, incentive expenses expense

F. Morgan Gasior

late lot that in now, Right on based comp going we incentive some to be. have growth. that growth we the on going of people say, includes what the think reasonable growth, a pay results a based We're Obviously, quarter. is to range of

might You improvement interest see right away. the the in income not

like we that. of quarter, in some but also had put away, fourth loan in growth the the payoffs. money because had see That the originations So anomalies some great happened for to didn't example. the We get quarter. you could We

has So going might It that, but by of volatility you'll working see million be range but to that, like we're a incentives. $XX a huge with be or something some number. reasonable the $XXX,XXX off it's like not number

Unidentified Analyst

Got you.

thought give can you things one, at the high of Okay. year, level when you Morgan, later in just if get And as you kind look then of the on kind profitability last any heading you’re about this unfold how way leading is kind where thinking here just of where ROE the or kind you're at moment… think toward roadmap expecting is the the of you today

F. Morgan Gasior

all of we’ve we as control on First things the Those the most. earnings focused said, are per we’re share.

add hopeful to So from portfolio improvements the in continued per see and improvements time. share see in the $X.XX $X.XX somewhere a second quarter neighborhood on $X.XX the income we're yields and we're us interest we'd the loan based growth $X.XX of Then over right in to now. like in to what quarter to on the based seeing liquidity

quite like now. that to notionally XXs into get for gets us get the sometime funded we’ve So

could bills because household they're concerned, excess as decline paying total entirely environment expenses it's and utilization. deposits business ROE six much decline that because assets the Customers months possible right? of far different is monthly bit. As a due a Commercial was to little up It's liquidity could spending wind it inflation, in line a could than ago.

So and to being the won the just burn business we could see household. liquidity some won

a XXs would quarter, in together, April into we're perform saying So a but quarter, third pipeline. to think growth it's based strength start then rate what the -- that But to range we're -- have somewhere starting and that do And second seeing in on to point. is we that feasible XXs in as all run XXXX, the we but the on we originations us to in in the hope with finally, run if requires perform good consistent put rate fourth quarter. the saw be a you it going

Unidentified Analyst

Yes.

great. sounds momentum the Well, Okay.

the the Thanks quarter. So questions. the update for for keep up good work, we'll taking in an look and next

F. Morgan Gasior

your insightful thanks it. And appreciate We for all time and questions.

Operator

[Operator question Henry comes [ph], investor. Our Walzak Instructions] private the from next

open is line Your

Unidentified Analyst

Hi, Morgan, [ph] It’s at Walzak Hank Pioneer

F. Morgan Gasior

Henry. Hi,

Unidentified Analyst

your I just believe us down have and value. value quarter, you A a now always can it And of we're comments value? of talk look book make. book to XXXX. at last was people I about lot to XXXX couple

in dropped outlook we So please? $X.XX me like on give like Can book you some value. that,

F. Morgan Gasior

that's the Treasury United market This in it. States portfolio. XX-Q, the of difference value the was change the entire in reduced in The and rates Sure. note

essentially that adjustment other securities credit. AOCI But the or that's X.X% comprehensive X%, portfolio. value mortgage-backed banks X% postpaid to and exposure It's as averaging it book even worse. by seen was known that loss in or treasuries, us, around unrealized are we’ve income your for we adjust government don't about accumulated have short-duration sometimes the US have You in portfolio. These

goes then to to grow tangible that then in also will to excess earnings maybe continue duration value to will time we portfolio of can rates that obviously, top stay that on the impact if as tangible extent of book as same, decline. the And the on, So add what up that, declines, as dividend of at value would a time. as minimal purchasing we overcome shares book some that. at given levels, have $X.XX wind that. and I some share these to see much But finally, expect this accretion that said from we of do earlier, more a contribution if you'll the And

Unidentified Analyst

more and curious of to And Last several circling why one of quarter, I'm advantage blocks of being able shares take big shares to we really repurchases. just offered? weren't traded. kind share Okay. question Morgan, those there just that were that

F. Morgan Gasior

We as -- the at we're far right pretty well now set as company. leverage holding

we aboard. we summer earlier, said stocks so. thought if we in I bank year of last we decline kept didn't a see But have Russell known we the rebalancing, sentiment when As think market would extra cash would that had change had some in nobody and notionally last certainly,

But make difference So of the this material environment year. company amount to is of debt, $XX subordinated year. in repurchases to already on somewhat has a already surprise the holding a fact cash sitting us. We're last it shares this that the with of not can't the sufficient anything, lose million on we opportunity absolutely given thought us. I share we time, and a sit how book do frustrating and it. on didn't below want At share to shares price, the and want year. purchase debt we'd If nothing improve tell same an last to the for is we you to didn't it repurchased

we're for recognition quiet the time now, going beyond right to in frustrating the that market. is So but be being why

purchased accumulate of are year worth we had do. Now reached we these we we restrictions. regulatory be also our trading can in can the least regulatory this cash we levels, we quarter, will but over last We be, so noting and that course what as time, are the at as we on had year, still that It's limitations if limit. first at there aggressive more many during shares

limits availability thing of bank time we for we'll But debt company, for We there financial and think company, our principal amount holding And debt that in management the and global a we or and to the economy, in And the overleveraged cash have word dialogue The jumped risk management. share for at sitting the that on to a our the here and a reset it next loan like don't months, a need We're – a XX is flexibility economic and good want limitation. potentially those States the that because engineering holding do frankly, also source especially moment, more feel be times, a leave decrease really at prudent risk the into the being, of three company certain to also be the all last has about perspective. activity, is in last but economic level Now holding have being recession will at even so. the months to transaction we position the careful from a is, adding the the be idea it's economy, possibility pipelines. United repurchases. has at we're about way. strength for we good a the

Unidentified Analyst

Is one just Morgan, guys correct? Hey, $XXX cash. that more, you of are on million sitting

F. Morgan Gasior

around $XXX right million. We're

Unidentified Analyst

X.XX%, that's $XXX with million it? income, mean I So full year my at Morgan, like a isn't

F. Morgan Gasior

-- if that's what today tangible value. it's in and tomorrow, but to that a up going we But to contribute decline bought went Sure. book rates

least XXX probably at see XXX increase federal and of between and as points as to funds going year-end. now also You're much in points

take in So whatsoever. you'll get and that pickup no risk price XXX income points

Unidentified Analyst

I know you'll some but does matter? hold Morgan, it really maturity

F. Morgan Gasior

much it It be It are to not much securities. into a on we end. does we just that to don't prudent. in held-to-maturity chew It's us. also, want to And commit that liquidity going other would up it have deposits, not the put – into want problem and we loans. drop creates can we If liquidity a

Unidentified Analyst

Thank Okay. Morgan. done. you, I’m

F. Morgan Gasior

you. Thank

Operator

further, now Morgan like I'm remarks. to Ladies Gasior for no gentlemen, closing Mr. and turn back the would showing I conference to

F. Morgan Gasior

your questions. for everyone Thanks

their and and we And spring to forward next everyone quarter. looking to are day enjoys talk We progress. We spring. continued will hope you

Operator

participating. conference. you for This Thank concludes today’s

now You may disconnect.

F. Morgan Gasior	Chairman & Chief Executive Officer
Paul Cloutier	Executive Vice President & Chief Financial Officer

BankFinancial (BFIN) 6 May 222022 Q1 Earnings call transcript