BankFinancial (BFIN) 30 Jan 232022 Q4 Earnings call transcript

Company Profile

Participants

F. Morgan Gasior	Chairman and CEO
Manuel Navas	Davidson
Brian Martin	Janney

Call transcript

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Operator

Good day and thank you for standing by. Welcome to the BankFinancial Corporation Q4 and 2022 Year End Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions]

conference being today’s advised be call recorded. is Please the now to would like over turn to I Mr. call CEO. Gasior, Please go ahead.

F. Morgan Gasior

Good morning. conference call. And XXXX quarter welcome to the BankFinancial fourth investor

for would time, forward-looking Sorry read. At have statement to our we delay. the like this

Unidentified Company Representative

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

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

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

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

to CEO, Mr. and call F. Chairman And over now the will I Gasior. turn Morgan

F. Morgan Gasior

you. Thank

will The ready earnings filed Our for last XX-K schedule be and completed Friday. week, are questions. release on we now was

Operator

you. Thank Instructions] [Operator

F. Morgan Gasior

getting question. a Moderator, not we are

Operator

Please is line line. open. your Participant your unmute

Manuel Navas

This Navas morning. Davidson. Manuel is Good Hey. Oh! from

F. Morgan Gasior

morning. Good

Manuel Navas

Hey.

next growth year. question first my is I So loan about for guess

Any finance strong. You are expected. of What for great? your of about quarter. the year. extra year? You had a as color strong there really be Multifamily kind talked would last next was expectations XX% kind quite have of Equipment end

F. Morgan Gasior

the quarter the good good had entire shown. fourth of and as quarter even average had numbers the were fundings between the year, But for of Well, kind in actually growth thank We gap question. last we fourth year-end delayed the you year-over-year. a quarter the the for for part the though outstanding the a

So that. pleased were we with

As of curve a inverted environment middle Federal obviously, dropping even has the concerned, and the dictate in the curve. is a which that last operating Reserve an an is in weeks, XXXX far we five-year in of we have part unusual interesting. several the part more actually yield going to been curve, of policy, the the somewhat as makes to three-year are planning little lot noticed

for to But our to finance to equipment -- We speaking, XXXX, like finance C&I see at the that the is commercial growth. through come, the areas. of strength XX% higher again, generally level. focus primarily range will going of then for in But, X% end XX% be our the and the would between loan

of the the the various That’s spend side going finance sense, and the so be are side. expansion the the marketing commercial we -- finance from classes, given finance side equipped and that the most asset side commercial returns make to on equipment those and and time the relative finance areas will focus are most the in attention attention, most

the end million between the estate growth, $X then $XX $XX low was side million million and finance of at C&I high the equipment to were and real multifamily a you of on if up was to side year to somewhere the that $XX on gets the to So, commercial year. million XX% million range for $XX XX%

continuing healthcare some have opportunities and portfolio, good dimensions. into to utilization pipeline in saw quarter, of of going we into portfolio. two has In on part a the already XXXX, it commercial which of greater strongest fund first fourth quarter the be terms now and of the We had portfolio the healthcare finance, will the new particularly very in started

Our are using liquidity. their excess customers

is continuing. felt line decline, will seeing means deposits commercial that something that demand that started we and it’s But the would utilization are ago also improve. happen you their So which and a it year

where half in the see growth bulk that So from in the right area of the bulk. also we will what finance, we now. be have C&I that’s right Community healthcare we on and and see now. even based growth But up in make will we of the Chicago opportunities the finance, probably government, commercial about But see Finance finance what lessor

category will categories other opportunities. other The the be on individual own their based half

Manuel Navas

finance the growth year for Is commercial clarify? that half of for just half or side kind the

F. Morgan Gasior

question Say that again, please?

Manuel Navas

the Is for alone? in is that that finance or healthcare half growth growth of in commercial the year the half

F. Morgan Gasior

commercial in growth the Half finance.

Manuel Navas

Okay.

F. Morgan Gasior

roughly other commercial finance about categories. and million be rest $XX $XX $XX $XX million would -- million the would to million million the it So to to $XX be of healthcare in

So about X% to X%...

Manuel Navas

Okay. Got it.

F. Morgan Gasior

… total of healthcare, within of the finance. is commercial half it

Manuel Navas

just thought focus, the a of driven. on You being you CRE there? the a of have seeing process demand it. end less Got great in multifamily? your Are Okay. multifamily, -- kind slower already did quarter rate And of

F. Morgan Gasior

pricing Yeah. reallocating flows. are of cash -- One A things. couple is cash we are we

picking So a perspective, yield seems continue a up to the some profitability. duration bit from asset and in shorter now to and profitability right liability perspective important improvement continuing an maintain improvement also in

from equipment flows is we are flexibility And at So cash liability give the most side perspective. allocating the again, the for looking side and year. an finance finance asset the us doing really commercial

will assets XXXX, in greater the in $XXX of bulk we over example, the portion for Just, half. in million the of it re-pricing, have second

and cash is doing So what we are flows. assets really reallocating

portfolio multifamily in significantly are and of because For right now. in conditions expected part market rates, of where example, part prepayment because rates reduced to have the is

coming we will off cash that less flow to reinvest. see So portfolio

to off Equipment finance, have $XXX the we will close probably portfolio. of coming million

able excess securities take finance. We finance, might flows the it into of reinvest put into to back or that we will have expect be equipment we some cash equipment from multifamily,

securities at an we will as X.XX%. million off of finance, quarter, commercial portfolio mentioned last of year, $XX about in have then this And average we the coming

is goal an average put commercial into X.X%. finance Our of that to at about

priority. that’s contribution strong pretty growth So our of there it’s why and

Manuel Navas

asset that going re-pricing yield having in just of improved At your thoughts bit what but are kind of and outlook? kind NIM the on a deposit what are costs, forward. you So of little kind with time, are the increase NIM the same on thoughts performance, your

F. Morgan Gasior

the with Well, interest expect all observations re-pricing. margin in uncertainties net stable caution deposit stay we would to relatively want these half. of to I the first

are are a as base market But have customers we maintain to reactions more the pricing watch far far. good with what So have yields. seek to so funding we able we higher

see be on during rates the -- have customer then And Reserve expectations on their also communications We rates. that Federal does of the for for what some year. will seeking should deposit from they perceptions our those drive

wildfires is So to interest be deposit our this big going expense. year

more stable. margin, So stay half to especially yields have in equipment the first the when in deployment margin interest in we get in we relatively In finance. better flows especially we finance half, second net opportunity have to expect as an re-pricing, we higher cash net interest commercial the expand and

in half. strong securities flows second of that time in then if see at expansion opportunity we the a net for commercial cash into margin year, The half of the time, interest the finance those the you deployment re-price second

Manuel Navas

would I savings believe, What’s had and a planned the than expenses. rate little have year. Switching then run thought good over kind next branch to that. It a for, I did expense in better appreciate you I XXXX? of this quarter

F. Morgan Gasior

comfortable with expense. are the We

just million If are $XX to just between you million, look we million. generally $XX.X under say, where at expenses say, right we $XX framed would over, now, at around will run so

operations. We back To finance that the extent into branch commercial want the assets we to from deposit liabilities. the especially and and for see marketing, savings some plow commercial

interest a on the two the branches. just now sale We issue. weeks fell it. in ago. had a There are couple branches contract It of of The had still branches is of through closed. The one some

process we that are XXX-day facility actually reopened we has told up XX-day the a are buyer working they that, of the starting to So acquisition we an the through. larger process second negotiate are have branch, to and that and

both have and by conceivable sold buildings the closed we end it’s second of So that quarter. could

estimated cost branches both saves $XXX,XXX. are from The those roughly

will cents expenses first to think the have We the of be couple this, report material share to second a a that’s So us where based in I the of but is whatever costs when the it closed think financial it that could on we in. about cost half. at on facilities. see contract we $XXX,XXX going likely here disposition period statements, settling do quarter most an improvement we some don’t in since would there’s be for the

a benefit the see impact could bit then actually bulk sold little and the are the we quarter, once on that. first after of and closed is facilities of So

$XXX,XXX. approaching for facilities, has example, the tax of annual an of bill One

the key to sooner facilities. achieving cost as the of disposition But to So the that’s are. it’s we gone, the the saves better

Manuel Navas

is, the year a that marketing Is environment you that the of the thinking spend economy where the it and little can any where the half increased if shift depending about -- you possible back kind is weaker? an of half bit of year shift how is are second changes? if could Like the area on places

F. Morgan Gasior

to side allocate finance presence. we that relatively that Well, to a needs the need to be that, would say marketing something is expenses I commercial consistent and

marketing that, how to going would are I see to and we commit see So once a we in through plan the say, it effective is.

finance have ways, are we some capabilities strong and government in finance lessor very product within the even unique. in a finance, The market, commercial

and a we very likely we much. of So the word need gets to expense that make fundamental is are so not level to sure that change out

objectives funds based if bring does how And our One, the point, your a it of our little effective. expenditures deposit to things. side, the a marginal overall down we effective. funded deposit the is the especially is are might commercial and bit. two we cost marketing two, meter for well bit On marketing if on can That marketing

predict are new what to is would number. measure we is marketing are I going now, right more it. it say, the going to spend try relatively what on We it’s to to But going try to and of do we us. so we So do know to the to fluid we some are hard effectiveness and a of

Focusing been done the something loan within commercial credit on marketing deposit that’s has the areas. --

our Now total treasury total we are we to can both services, the level, we a central can. if organization, to see best improve are and commercial to going within those deposits plans percentage business branch to that as of going focus contribute make

we So of have into works what sense to But a numbers. work. doesn’t we it’s predict and once will hard get better those it,

Manuel Navas

it. question step last Got into back it. guess queue. Got I the my before I

buyback, I quarter, just fourth know on kind some year, this forward? concerned are Just shares that tax did little you thoughts in that you of but thoughts the going the get updated bit about here your a bought on

F. Morgan Gasior

last plan of repurchase -- and say have put share the fourth week, We some Board to approved seen lower an increase that volume to level do were given I quarter, the we we volume. the would the that, able in

would say I lower. I baseline. it bit. But down It probably a little a be doubt it use will quarter probably slow would as that XX,XXX much I be higher. a could would

point, that up at XX,XXX roughly million or so end you minus. plus And would year shares, the around

use price better estimate. have share in a If So than we minimum a is I I a reasonable historically. lower better, less it’s Hopefully, bit that’s bit would we think trade-up baseline. start a place but quarter than But good think, baseline XX,XXX little bit and still, I a it’s to little accretive. its a a little

Manuel Navas

I into you. queue. hop Thank will back the

Operator

[Operator we while moment, question. from Next of One Martin question Brian you. is for prepare Janney. the next coming Thank Instructions]

is ahead. open. Please go line Your

Brian Martin

guys. morning, Good Hey.

F. Morgan Gasior

Good morning.

Brian Martin

It of it’s Morgan. loan just of the fund or, size cash the about bit maybe that is down balance obviously the growth I on this the I but Hey, little like how just you $XXX next you talked know re-pricing months. the million. about year, a thought pretty kind over XX substantially, talk just you also the balance Can sheet. guess, sounds

XX% higher just kind at So you loan about the end. in $XXX you if at maybe of growth, talking with look connection million the are

deposit along so? with trying about quarter, it just just you how of the are the you balance So just saw this contraction some to of sheet and thinking kind -- understand funding

F. Morgan Gasior

Yeah.

to money growth thing minus. the the at will look loan the in and simplest funding, retail funding, probably, of run the are CDs if is, to go The we plus markets, now think securities million $XX and to million out in new I retail or of $XX it, and we through new seem would CDs. we will you And that that be with need especially but shorter the take portfolio seems working fund direction right customers done for to be us. working want that

the don’t attention then it, whether And some be from DDAs MMDAs next commercial year deposit going commercial earlier, deposit, some it’s new We customers, CDs. much new as commercial that to on, and on have said we goes commercial marketing, the are try then would as I commercial but and component. of focus

or come cost million let’s for lower half funds for that we result us, assume, $XX would. the also are retail. our are funding in of half a a franchise than deposit in commercial a side it growing franchise commercial be of example, and do way. that in core will it retail would new So to our requirement take we would and because good banking in able at mean commercial finance core That And meaningful and

Brian Martin

Got you.

playing deposits contraction and loan-to-deposit that kind out kind as ratio. What far do are contraction you it’s And how see some that the is managing -- as see deposit bit feel -- given in do with rates in Okay. a like and... of you you contraction on you -- here of just see mix of where -- little of the potentially the the stabilizing or more do

F. Morgan Gasior

question. expect economy you looking drained the see on the retail components would contraction has seen to some customers fact I some for Well, just and inflationary higher side that’s the that course, have on based yields. of more that especially liquidity, see the big

play We XXX% to have good retention been but able there’s not there. pretty defense,

do see further we some declines So deposits. the to commercial expect

certain run and simple. to are just liquidity start use utilization. going the requirements see earlier, first, said there have liquidity are have they diminishes are they to and is and cash maintain. they draw through expenses, you lives, available, I it their impact then they going again, cash cash next on first their against is As will minimum going If to as choice obviously, will to they But customers use before their operating But greater that off. borrowing line

we did then markets XXXX, consumed and in to also year the of XXXX, it have $XX one expect the that not we transaction It’s large DDA of depositor the of end repeat. million us $XX case the at that, a about during capital dropped do of million course on

that slowdown commercial large in is delta. So a I would say depositor given deposits more likely

the bit since timing our customers the different still I a pay. taxes But greater inflation side, especially some than coming it through be will the say, run-off is The real still is of just economy, to retail to little used we would that here estate possible, that in see market. have Chicago

bracing there. little on as runoff course stable that’s are franchise bit commercial we and XXXX some and for and why going planning the a we growth additional to CDs can to are are a much retail in of we growing during with try focus replacement build we So of deposit ahead as

Brian Martin

Got you. No. That’s helpful.

maybe So loan-to-deposit -- net-net change the not not to much ratio.

is I that that think area, or XX% it’s in how are... around today you

F. Morgan Gasior

Yeah.

that deposit down XX% that. we maintain first to XX%, the obviously it both range, the half bring if an a think of the to flows year we the get ratio half we the environment that want do cash loan for that’s think side, But the and mix the if bit, year. speaks can the expanding side a second in environment stable on and right. of we I to that have little we I it that in feel about And need then

Brian Martin

of you. finance. Got it’s just growth and kind earlier, the And said like both commercial the just the equipment your the about, maybe bulk comments you finance of sounds

just of us, to said, -- one be equipment Just a about the or maybe you over here? are kind in today. getting finance expect you was it I you side, you but as just the understand Can you to X.X% what on was just buckets think, are the trying commercial, pickup seeing remind yields those not thinking

F. Morgan Gasior

four volatile. Well, average, years, anywhere can to rates bat But go again, the an years moderate say, swap about a finance, in you off three gets it X, five little between of somewhat think there if at X. to years and variable the a duration X.X right equipment then around

So, is reasonable million a say, number. $XXX

million looking or and could -- profitability Xs right now, is depending us targets. kind reasonable the so to Then at go for X corporate middle a where of floor think we ticket, class, $XXX asset whether seem million high on We it’s funding market given we small $XXX other, around are there. costs

assets to But the a this swap go where million things go. yielding lock relatively might rate low is plus It $XXX a mix, depending are trying given reasonable into little might uncertainty not the higher proxy. the we moment but at on ourselves of

Brian Martin

finance the And side, think, I the... commercial on Okay. then

F. Morgan Gasior

Yeah. There you...

Brian Martin

…with higher?

F. Morgan Gasior

on anywhere side. rate side. the bump Prime in high the low a in between X gets looking plus side, the can X.XX% if Prime here you, at here you rate you low and there’s funds see on half Prime on then modest are And Fed the first that’s There which quarter, the plus the

if the we kind So the that, to depending again get you which mix trying in weighted mid-Xs, the can where portfolio, are in it. yourself target of on is you average

Brian Martin

Got you.

-- talking okay. said, outlook outlined kind you of guess, of I -- that targeting seems And today general in growth, on about just like general in guess, just but Okay. you pipelines guess, you just I here are the, the today the And kind jumping support, fair? it where are, pipeline are sounds that the you kind your of I then

F. Morgan Gasior

Yeah.

better do than million commitments. portfolio it million, quite greater probably think based But are and it right? for are utilization. on I $XX now, explains the $XX a assume growth in plus There’s that the utilization, we line have by of that line we grow is will greater there to the strongest. out bit foreseeable opportunity trying healthcare quite think we of pipelines let’s activity we So with

to are now. marketing finance. right finance come thin the commercial some growth, predict on The usually line lines where That Lessor discount quarter, there. next to tends from. and pipelines is area you utilization That’s but hardest that in it during to Those the there’s don’t quarter-over-quarter the have to portfolio. is end, see growth much they from relatively transactions opportunities because has got government and period focus one the the financed,

community need are will for consumption. got finance ERTC, product who customers year. now. we that’s more the more intended credit course some PPP, the rolling right out side, the support new That’s finance, just then probably of have liquidity more so some No no business our seeing no small some And also development business EIDL. They during

we growth So will some modest see there.

about, we healthcare, strongest to are marketing of going and feel the But a the be others really growth. function

So that’s of efficacy why we we have prove those until the can the of marketing. kind up underweighted

Brian Martin

Got you.

Okay. or general, of you bit what maybe has maybe talked be down the this just of I we mentioned. least payoffs kind last you guess, I in the trying you expect the the to payments gauge been should two in on the bit or And definitely guess, a there kind at But the in one one lower quarters to of mean, payoffs kind coming in one have in payoffs they just expecting just XXXX or I quarter, trend, the trend about was a are were than XXXX lower. area,

expect that’s trend is. like to kind trying just of understand It to you continue? sounds it So if a

F. Morgan Gasior

amount now dimensions. certainly, portfolio, lead expect -- portfolio. to right of from the environment our One, prepays rate that’s itself significant Well, would XXXX to in doesn’t really a real two refinances and in lend lower we estate the compared

requirements rates, the debt higher multifamily lower a markets new NOIs. purchases, cap service of transition Two, somewhat maybe somewhat with in maybe bit higher on

of NOIs out couple taxes a estate real almost bite all take to seeing markets in are We compared years. last the of

might valuations relative the XXXX. alter values during bit So those a building and trading

what’s some do in payoff would probably them some rates market, were driven change quarter I rate happen purchase for proxy see the fourth say We a absent So opportunities XXXX, going reasonable XXXX material by in the a to exchanges. the environment. in of

environment for us. So that’s a credit good

can. deferring getting and are taxes just they the profits taking and the best people asset themselves Some into

drive will that activity. So prepayment some

XXXX -- one But concentrations portfolio the and muted to pay several portfolios, the for we third and this be case customers considerably expect that like down not the portfolio entire they those other that estate see a sold off where it’s real customer also There’s that were we in us the their paid that. example, don’t in time massive in lenders. completely paid we would quarter, than prepayments in off at more

concentrations, and prepayment in market lower fewer rates slower two, one, XXXX. equals So activity

terminations. Equipment cases finance In we cash that probably is that’s stable, case, in environment. do higher us more gives to early in principally But from amortization. almost redeploy yield time-to-time, favorable. a It at relatively see all some our

much little And down in of million same get so volatility is then commercial not to $X us later $XX a line the amount weeks a isn’t $X million, see $X in It’s a more. question of it pay for finance or unusual prepayments of as million, two usage. to a the a million, week, draw

matter, and expect it’s But that predict liquidity there still line we commitments out somewhat for So see extreme. utilization greater those hard week-by-week, in fire utilization. [ph], to walls month-by-month, higher along to overall with the lower

Brian Martin

is back still it or level kind And it kind of pre-pandemic? running utilization a below normal of well Okay. is was where to

F. Morgan Gasior

where before. quite it about not retraced probably XX%. It’s It’s was

And of their level. labor especially though at of in a as somewhat liquidity Their so workforce. too, And space, many in even going also, states in reimbursement expenses organized that up, of healthcare some state ahead why higher there’s environment. our more the think are runway the are enjoying normalized part that’s we have us rates customers

will utilization. utilization see margins draws expenses saying, million retraced their million $XXX then, now, if therefore, it matter intra-period which somewhat up at level, the plan. of what. are business up stable. official basis, relatively going $XX But Right say, expecting pick higher going in are the on back retraced would credits, we up, and an are almost So are those all XXXX remain no their our we If to, means the we we it way will we -- shall in that’s what least

Brian Martin

you. Got

think, just me. be maybe for of and type helpful. may one past, in about the half I last it’s anything a margin And Morgan, upper in is X.XX talked we there? peaking the the changed your or to outlook color the Has know X I maybe in event. margin, That back X.XX, two Okay. level.

peaks quarter when there’s Just a difference understand today versus margin the level real ago? if trying and your on to in outlook any that

F. Morgan Gasior

think I year. margin. being earlier, said of as to commercial an a second particularly we it on finance I mix in half successful, in are I us net and depend that, the we have actually interest No. peak margin call opportunity depend It will the necessarily on successful expand the to the will wouldn’t growth. But if

I part expense. of Obviously, are stable, we deposit is bring deposits the remain to again, to And the base funds, overall interest and there’s too, the see of commercial that margin maintain opportunity cost we able things able in at the expansion. Then, for if some levels yet another talking are reduce marginal opportunity margin. expand are funding to If we about. relatively

the and upper trying the would I what us we finance necessarily seems year the in the a commercial deposit be. if be are are in we of side higher It isn’t range say the for that, the Xs. for But the commercial successful peak. end that So second side, half place on the to do in to would reasonable

off the time, funding of because will the be take concerned. costs pressure it If all funding then what Fed’s going we there cash expand part to happens the as with the of are a some maintain to a of costs. might repositioning the But But, year, same we pivot half see the sudden, rates be even to far of what have flows. first again, are margins, able in communications year, is or latter the as core we during at are

Brian Martin

you. Got

last profitability talk are the of Morgan, -- you just context the two, least level by are levels and in in CECL? anticipating can the And just And you you was thinking you growth of reserve you have kind about know about the are I targeting. with bucket, how -- or about just the Okay. of the -- then just at just outlining of kind past it talked

the Just thinking or of about, past, in I kind ROA. kind X% the a XXs of mid-XXs think, low in it’s

and outlook to So just with regard kind the the profitability be CECL great? Thank you. of reserve, would

F. Morgan Gasior

Okay. Well, upon Yeah, is us. first, reserves. on CECL

obviously, we model We And the ratio is the overall the analysis final finance area, somewhat of market, to those credits CECL, risk of in in validation, the go higher commercial are as ticket in higher ratio expect small impact we put do going consistent stages are equipment equipped but finance, and with credits. that, middle reserve up. reserve finance,

we and we one impact So you and because to both will growth day some provisioning. of the additional expect would be the see in some commercial reserves, of finance, CECL as there further pivot portfolio to equipment higher

commercial a But -- finance better a you greater have will greater X%. right reserve next reserve call. greater than more Probably reserve ratio our have will ratio specifics -- X%. bat, off market, The able give portfolios than to on just the the middle small ratio portfolios ticket

both So bring are on up and therefore, the higher those a ratio. weighted of reserves, going average credits to basis, reserve require average

but the able this we half. the the expect being given do hopefully low-to-mid to the ourselves year, XXs half, timing for we XXs mid-to-high profitability, first the into On in cash see second push of flows

pushing at bank be and XX point basis end The XXX points, the that basis even of XX basis end between at would somewhere right maybe points, points,XXX end. basis points year high on XXX points the the basis to low basis the on XX points

work been to achieve, and the like are we key within it range, what in The second first just right which then getting expand pretty we to half. close. looks to have is is half that again, X% stable So keep trying in the

Brian Martin

the I it. appreciate Perfect. questions. Thank taking you for all

F. Morgan Gasior

you. Thank good. Very

Operator

moment. One Instructions] [Operator you. Thank

Next question comes from Henry Walzak [ph] HCW. of

open. is line Your

Unidentified Analyst

in wondering increase Good since gone -- since all that morning, there. ratio has dividend help Good Morgan. an will up, you special was dividend would Thank our consider earnings if improved us the dividend coverage a just really have or quarter drastically I timers? you.

F. Morgan Gasior

our we Well, are now But let I dividend very comparative look the favor a of and even with personally higher me of are significant an a If at competitive all interest be both timer in say in actually dividend when looks to right during overall. as shareholder dividend. they coming rates year, as also generally market want yield yields, that, the the happens what going they course the to better. see and down you

rule right the is both, of dividend nothing to the at well holding recognition at So coverage. I we at And capitalized out and appreciate company company the point, now. level The bank the your level. better would

I get the to we policy a quarter we would So the sure net earnings, But a about floor we margin in take remain that, another July. It that look we at and roll are make first say dividend going on Reserve two, while to or and at out another that put right the I least would would expect that at are nothing and also look under now. for handle policy interest in same. Federal April able

component a necessarily component return, anything shareholder been is would have rule It’s and right it key now. I return last shareholder these of total not path important better several out of Dividends that an to years. if a

Unidentified Analyst

That Morgan. helpful. you, was Thank

in comment one neighborhood. Just area? Chicago the you Thank a of you. your on did quick the Do one or guess more have competitors area a comment, in acquisition the field merger I major Chicago deal

F. Morgan Gasior

time. I -- over a period great have conversation of be this. a I to address plans, our longer say to would that particular But would

proven organic results. now, basis executing business think, I right plan good has have on our to First, an

starting XXXX, in to the As continuing on originations improvements you in XXXX. look even at

results we we have in XXXX improve to of towards to an want and stay can. as here opportunity as that focused We further

it helpful for Having a said this the higher base XXXX the where year. and can contributes if we that, leverage base it a that’s to capital it improves threshold good if meet inclusion to operating point funding the later may if thing, growth contributes us, Russell be

to are offered It year and do. our made almost So aspects I later something would the would to but not help that us and be we we to it’s sense, would us, somebody not seek out certainly focus. something broader not it do go do it out going have thought that perspectives. really People want But of see in on an if comment Chicago. own that, the we I to may think opportunity something their

It think more earnings going earnings. and the to base does the and that appear more will multiple forward. market stable We the commercial strength, higher that therefore, pivot helps respect earnings earnings

that’s again, our focus. So,

Unidentified Analyst

earnings you, perspective. Morgan. good growth the Thank up you. rate Thank Keep

F. Morgan Gasior

you. Thank

Operator

would Thank I you. to to the turn back management remarks. the [Operator in call for Instructions] no closing There questions queue. more over are like

F. Morgan Gasior

Thank to we can the good the and We you. appreciate and XXXX to improve results -- interest. will you the building in Enjoy very and forward if our best of the you to we very for all stabilize improve continued our our talk do results the shareholders. we winner XXXX Well, questions will spring. on and rest look

Operator

call. conference the Thank today’s all day. of concludes you This for Enjoy rest joining. your

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