BankFinancial CORP [BFIN] Filings

10-Q 1 bfin20230630_10q.htm FORM 10-Q bfin20230630_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended June 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For transition period from to

Commission File Number 0-51331

BANKFINANCIAL CORPORATION

(Exact Name of Registrant as Specified in Charter)


Maryland	75-3199276
(State or Other Jurisdiction of Incorporation)	(I.R.S. Employer Identification No.)

60 North Frontage Road, Burr Ridge, Illinois 60527
(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (800) 894-6900

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

BFIN

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date. At July 26, 2023, there were 12,600,478 shares of Common Stock, $0.01 par value, outstanding.

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BANKFINANCIAL CORPORATION

Form 10-Q

June 30, 2023

Table of Contents

		Page Number
PART I

Item 1.	Financial Statements	2

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosure about Market Risk	34

Item 4.	Controls and Procedures	35

PART II

Item 1.	Legal Proceedings	36

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 3.	Defaults Upon Senior Securities	36

Item 4.	Mine Safety Disclosures	36

Item 5.	Other Information	36

Item 6.	Exhibits	37

Signatures		38

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BANKFINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In thousands, except share and per share data) - Unaudited

	*June 30, 2023*			*December 31, 2022*
Assets
Cash and due from other financial institutions	$	20,401		$	12,046
Interest-bearing deposits in other financial institutions		94,930			54,725
Cash and cash equivalents		115,331			66,771
Securities, at fair value		169,647			210,338
Loans receivable, net of allowance for credit losses: June 30, 2023, $9,226 and December 31, 2022, $8,129		1,170,767			1,226,743
Foreclosed assets, net		950			476
Stock in Federal Home Loan Bank ("FHLB") and Federal Reserve Bank ("FRB"), at cost		7,490			7,490
Premises held-for-sale		540			—
Premises and equipment, net		22,957			24,956
Accrued interest receivable		8,499			7,338
Bank-owned life insurance		18,644			18,815
Deferred taxes		5,476			5,480
Other assets		6,395			7,035
Total assets	$	1,526,696		$	1,575,442

Liabilities
Deposits
Noninterest-bearing	$	278,170		$	280,625
Interest-bearing		1,025,550			1,094,309
Total deposits		1,303,720			1,374,934
Borrowings		25,000			—
Subordinated notes, net of unamortized issuance costs		19,656			19,634
Advance payments by borrowers for taxes and insurance		11,102			8,674
Accrued interest payable and other liabilities		14,915			20,529
Total liabilities		1,374,393			1,423,771

Stockholders’ equity
Preferred stock, $0.01 par value, 25,000,000 shares authorized, none issued or outstanding		—			—
Common stock, $0.01 par value, 100,000,000 shares authorized; 12,600,478 shares issued at June 30, 2023 and 12,742,597 shares issued at December 31, 2022		126			127
Additional paid-in capital		84,603			85,848
Retained earnings		72,492			71,808
Accumulated other comprehensive loss		(4,918	)		(6,112	)
Total stockholders’ equity		152,303			151,671
Total liabilities and stockholders’ equity	$	1,526,696		$	1,575,442

See accompanying notes to the consolidated financial statements.

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BANKFINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data) - Unaudited

	*Three Months Ended*					*Six Months Ended*
	*June 30,*					*June 30,*
	*2023*			*2022*		*2023*			*2022*
Interest and dividend income
Loans, including fees	$	14,345		$	11,683	$	28,738		$	22,496
Securities		841			432		1,955			731
Other		992			769		1,645			1,075
Total interest income		16,178			12,884		32,338			24,302
Interest expense
Deposits		2,761			555		5,061			1,000
Borrowings and Subordinated notes		474			199		834			397
Total interest expense		3,235			754		5,895			1,397
Net interest income		12,943			12,130		26,443			22,905
(Recovery of) provision for credit losses - loans		(180	)		459		(95	)		735
Recovery of credit losses - unfunded commitments		(8	)		—		(45	)		—
(Recovery of) provision for credit losses		(188	)		459		(140	)		735
Net interest income after (recovery of) provision for credit losses		13,131			11,671		26,583			22,170
Noninterest income
Deposit service charges and fees		830			826		1,646			1,607
Loan servicing fees		141			190		270			291
Trust and insurance commissions and annuities income		276			262		643			600
Losses on sales of securities		—			—		(454	)		—
Gain on sale of premises and equipment		13			—		9			—
Valuation adjustment on bank premises held-for-sale		(32	)		—		(585	)		—
(Loss) earnings on bank-owned life insurance		(87	)		11		(171	)		39
Bank-owned life insurance death benefit		—			446		—			446
Other		98			104		194			300
Total noninterest income		1,239			1,839		1,552			3,283
Noninterest expense
Compensation and benefits		5,629			5,489		11,184			10,969
Office occupancy and equipment		2,031			1,933		4,069			4,067
Advertising and public relations		269			208		459			350
Information technology		965			895		1,814			1,746
Professional fees		348			412		665			785
Supplies, telephone, and postage		295			362		654			709
FDIC insurance premiums		282			106		436			222
Other		1,401			794		2,231			1,640
Total noninterest expense		11,220			10,199		21,512			20,488
Income before income taxes		3,150			3,311		6,623			4,965
Income tax expense		838			744		1,678			1,130
Net income	$	2,312		$	2,567	$	4,945		$	3,835
Basic and diluted earnings per common share	$	0.18		$	0.19	$	0.39		$	0.29
Basic and diluted weighted average common shares outstanding		12,667,129			13,165,023		12,694,334			13,184,424

See accompanying notes to the consolidated financial statements.

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BANKFINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands) - Unaudited

	*Three Months Ended*						*Six Months Ended*
	*June 30,*						*June 30,*
	*2023*			*2022*			*2023*			*2022*
Net income	$	2,312		$	2,567		$	4,945		$	3,835
Unrealized holding (loss) gain on securities arising during the period		(480	)		(1,042	)		1,161			(5,107	)
Tax effect		125			279			(302	)		1,367
Unrealized holding (loss) gain on securities, net of tax		(355	)		(763	)		859			(3,740	)
Reclassification adjustment for loss included in net income		—			—			454			—
Tax effect, included in income tax expense		—			—			(119	)		—
Reclassification adjustment for loss included in net income, net of tax		—			—			335			—
Other comprehensive (loss) gain, net of tax		(355	)		(763	)		1,194			(3,740	)
Comprehensive income	$	1,957		$	1,804		$	6,139		$	95

See accompanying notes to the consolidated financial statements.

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BANKFINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands, except per share data) - Unaudited

										*Accumulated*
				*Additional*						*Other*
	*Common*			*Paid-in*			*Retained*			*Comprehensive*
	*Stock*			*Capital*			*Earnings*			*Income (Loss)*			*Total*
For the three months ended

Balance at April 1, 2022	$	132		$	90,170		$	66,490		$	(2,897	)	$	153,895
Net income		—			—			2,567			—			2,567
Other comprehensive loss, net of tax effect		—			—			—			(763	)		(763	)
Repurchase and retirement of common stock (25,000 shares)		(1	)		(253	)		—			—			(254	)
Cash dividends declared on common stock ($0.10 per share)		—			—			(1,315	)		—			(1,315	)
Balance at June 30, 2022	$	131		$	89,917		$	67,742		$	(3,660	)	$	154,130

Balance at April 1, 2023	$	127		$	85,346		$	71,449		$	(4,563	)	$	152,359
Net income		—			—			2,312			—			2,312
Other comprehensive loss, net of tax effect		—			—			—			(355	)		(355	)
Repurchase and retirement of common stock (93,515 shares)		(1	)		(743	)		—			—			(744	)
Cash dividends declared on common stock ($0.10 per share)		—			—			(1,269	)		—			(1,269	)
Balance at June 30, 2023	$	126		$	84,603		$	72,492		$	(4,918	)	$	152,303

For the six months ended

Balance at December 31, 2021	$	132		$	90,709		$	66,545		$	80		$	157,466
Net income		—			—			3,835			—			3,835
Other comprehensive loss, net of tax effect		—			—			—			(3,740	)		(3,740	)
Repurchase and retirement of common stock (75,000 shares)		(1	)		(792	)		—			—			(793	)
Cash dividends declared on common stock ($0.20 per share)		—			—			(2,638	)		—			(2,638	)
Balance at June 30, 2022	$	131		$	89,917		$	67,742		$	(3,660	)	$	154,130

Balance at December 31, 2022	$	127		$	85,848		$	71,808		$	(6,112	)	$	151,671
Cumulative effect of change in accounting principle		—			—			(1,719	)		—			(1,719	)
Net income		—			—			4,945			—			4,945
Other comprehensive income, net of tax effect		—			—			—			1,194			1,194
Repurchase and retirement of common stock (142,119 shares)		(1	)		(1,245	)		—			—			(1,246	)
Cash dividends declared on common stock ($0.20 per share)		—			—			(2,542	)		—			(2,542	)
Balance at June 30, 2023	$	126		$	84,603		$	72,492		$	(4,918	)	$	152,303

See accompanying notes to the consolidated financial statements.

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BANKFINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) - Unaudited

	*Six Months Ended*
	*June 30,*
	*2023*			*2022*
Cash flows from (used in) operating activities
Net income	$	4,945		$	3,835
Adjustments to reconcile net income to net cash from (used in) operating activities
(Recovery of) provision for credit losses - loans		(95	)		735
Recovery of credit losses - unfunded commitments		(45	)		—
Depreciation and amortization		644			888
Net change in net deferred loan origination costs		(110	)		(369	)
Losses on sales of securities		454			—
Valuation adjustment on bank premises held-for-sale		585			—
Gain on disposal of premises and equipment		(9	)		—
Loss (gain) on sale of foreclosed assets		15			(15	)
Foreclosed assets write down		70			—
Foreclosed assets valuation adjustments		—			(27	)
Loss (earnings) on bank-owned life insurance		171			(39	)
Net change in:
Accrued interest receivable		(1,161	)		(2,012	)
Other assets		847			(492	)
Accrued interest payable and other liabilities		(5,986	)		(6,680	)
Net cash from (used in) operating activities		325			(4,176	)
Cash flows from (used in) investing activities
Securities:
Proceeds from maturities		1,488			2,480
Proceeds from principal repayments		378			509
Proceeds from sale of securities		42,631			—
Purchases of securities		(2,232	)		(81,196	)
Net change in loans receivable		53,322			(99,254	)
Proceeds from sale of foreclosed assets		362			244
Proceeds from sale of premises and equipment		690			—
Purchase of premises and equipment, net		(830	)		(1,065	)
Net cash from (used in) investing activities		95,809			(178,282	)
Cash flows used in financing activities
Net change in:
Deposits		(71,214	)		(43,681	)
Advance payments by borrowers for taxes and insurance		2,428			2,879
Proceeds from Federal Home Loan Bank advances		35,000			—
Repayments of Federal Home Loan Bank advances		(10,000	)		(5,000	)
Repurchase and retirement of common stock		(1,246	)		(793	)
Cash dividends paid on common stock		(2,542	)		(2,638	)
Net cash used in financing activities		(47,574	)		(49,233	)
Net change in cash and cash equivalents		48,560			(231,691	)
Beginning cash and cash equivalents		66,771			502,162
Ending cash and cash equivalents	$	115,331		$	270,471

Supplemental disclosures of cash flow information:
Interest paid	$	5,754		$	1,396
Income taxes paid		2,260			707
Income taxes refunded		20			8
Assets transferred to premises held-for-sale		1,799			—
Loans transferred to foreclosed assets		921			319
Bank-owned life insurance death benefit		—			275

See accompanying notes to the consolidated financial statements.

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BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands, except share and per share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation: BankFinancial Corporation, a Maryland corporation headquartered in Burr Ridge, Illinois, is the owner of all of the issued and outstanding capital stock of BankFinancial, National Association (the “Bank”). The interim unaudited consolidated financial statements include the accounts and transactions of BankFinancial Corporation, the Bank, and the Bank’s wholly-owned subsidiaries, Financial Assurance Services, Inc. and BFIN Asset Recovery Company, LLC (collectively, “the Company”), and reflect all normal and recurring adjustments that are, in the opinion of management, considered necessary for a fair presentation of the financial condition and results of operations for the periods presented. Such adjustments are the only adjustments reflected in the accompanying financial statements. All significant intercompany accounts and transactions have been eliminated. The results of operations for the six-month period ended June 30, 2023 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2023 or for any other period.

Certain information and note disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

Use of Estimates: The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates and assumptions are based on the best available information, actual information and actual results could differ from those estimates.

Factored Receivables: The Company purchases invoices from its factoring customers in schedules or batches. These receivables are included in loans receivable on the Consolidated Statements of Financial Condition, and as commercial loans and leases in Note 4 - Loans receivable. The face value of the invoices purchased or amount advanced is recorded by the Company as factored receivables, and the unadvanced portions of the invoices purchased, less fees, are considered customer reserves. The customer reserves are held to settle any payment disputes or collection shortfalls, may be used to pay customers’ obligations to various third parties as directed by the customer, are periodically released to or withdrawn by customers, and are reported as noninterest-bearing deposits in the Consolidated Statements of Financial Condition. The unpaid principal balances of these receivables were $7.2 million and $7.0 million at June 30, 2023 and December 31, 2022, respectively, and are included in commercial loans and leases. The customer reserves associated with the factored receivables were $1.7 million and $1.4 million at June 30, 2023 and December 31, 2022, respectively.

Factoring fees are recognized in interest income as incurred by the customer and deducted from the customer's reserve balances. Other factoring-related fees, which include wire transfer fees, broker fees, and other similar fees, are reported by the Company as loan servicing fees in noninterest income.

Allowance for Credit Losses: On January 1, 2023, the Company adopted Accounting Standards Update (“ASC 326”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments. ASC 326 amends guidance on reporting credit losses for financial assets held at amortized cost basis and available-for-sale debt securities. ASC 326 eliminates the probable initial recognition threshold in current US GAAP and instead, requires an entity to reflect its current estimate of all expected credit losses based on historical experience, current conditions and reasonable and supportable forecasts. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. ASC 326 also expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the reserve for credit losses. In addition, entities need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination.

The Company adopted ASC 326 using the modified retrospective approach. Results for the periods beginning after January 1, 2023 are presented under Accounting Standards Codification 326 while prior period amounts continue to be reported in accordance with previously applicable US GAAP. The Company recorded a net reduction of retained earnings of $1.7 million upon adoption. The transition adjustment includes an increase in credit related reserves of $1.9 million and the recording of an unfunded commitment reserve of $417,000, respectively, net of the corresponding increase in deferred tax assets of $604,000.

	*January 1, 2023*
	*Post ASC 326 Adoption*		*Pre-ASC 326 Adoption*		*Pre-tax impact of ASC 326 Adoption*
Assets:
Allowance
One-to-four family residential real estate	$	380	$	281	$	99
Multi-family mortgage		4,647		4,017		630
Nonresidential real estate		1,300		1,234		66
Commercial loans and leases		3,670		2,548		1,122
Consumer		39		49		(10	)
Total allowance for credit losses	$	10,036	$	8,129	$	1,907

Liabilities:
Unfunded commitment reserve	$	417	$	—	$	417

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BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands, except share and per share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The allowance for credit losses (“ACL”) is evaluated on a regular basis and established through charges to earnings in the form of a provision for credit losses. When a loan or portion of a loan is determined to be uncollectible, the portion deemed uncollectible is charged against the allowance and subsequent recoveries, if any, are credited to the allowance. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

Portfolio Segmentation (“Pooled Loans”)

Portfolio segmentation is defined as the pooling of loans based upon similar risk characteristics such that quantitative methodologies and qualitative adjustment factors for estimating the allowance for credit losses is constructed for each segment. The allowance for credit losses for Pooled Loans estimate is based upon periodic review of the collectability of the loans quantitatively correlating historical loan experience with reasonable and supportable forecasts using forward looking information. Adjustments to the quantitative evaluation may be made for differences in current or expected qualitative risk characteristics such as changes in: underwriting standards, delinquency level, regulatory environment, economic condition, Company management and the status of portfolio administration including the Company’s Loan Review function.

Individually Evaluated Loans

The Company establishes a specific loss reserve for individually evaluated loans which do not share similar risk characteristics with the loans included in the forecasted allowance for credit losses. These individually evaluated loans are removed from the pooling approach discussed above for the forecasted allowance for credit losses, and include nonaccrual loans and other loans deemed appropriate by management.

Accrued Interest Receivable

Upon adoption of ASC 326 and its related amendments on January 1, 2023, the Company made the following elections regarding accrued interest receivable:

●

Presenting accrued interest receivable balances separately within another line item on the Consolidated Statements of Financial Condition.

●

Continuing our policy to fully reserve accrued interest receivable by reversing interest income. For commercial loans, the reserve is established upon becoming 90 days past due. For consumer loans, the charge-off typically occurs upon becoming 120 days past due. Historically, the Company has not experienced uncollectible accrued interest receivable on its investment securities.

●

Not measuring an allowance for credit losses for accrued interest receivable due to the Company’s policy of fully reserving uncollectible accrued interest receivable balances in a timely manner, as described above.

Reserve for Unfunded Commitments

The reserve for unfunded commitments (the “Unfunded Commitment Reserve”) represents the expected credit losses on off-balance sheet commitments such as unfunded commitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments unconditionally cancellable by the Company. The Unfunded Commitment Reserve is recognized as a liability (other liabilities on the Consolidated Statements of Financial Condition), with adjustments to the unfunded commitment reserve recognized as a provision for credit loss expense in the Consolidated Statements of Income. The Unfunded Commitment Reserve is determined by estimating expected future fundings, under each segment, and applying the expected loss rates. Expected future fundings are based on historical averages of funding rates (i.e., the likelihood of draws taken). To estimate future fundings on unfunded balances, current funding rates are compared to historical funding rates.

Troubled Debt Restructurings and Vintage Disclosures: ASU 2022-02 “Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” eliminates the Troubled Debt Restructurings (“TDR”) accounting model for creditors that have already adopted ASC 326. In lieu of the TDR accounting model, loan refinancing and restructuring guidance in ASC Subtopic 310-20 “Investments—Debt Securities” will apply to all loan modifications, including those made for borrowers experiencing financial difficulty. This standard also enhances disclosure requirements related to certain loan modifications. Additionally, this standard introduces new requirements to disclose gross write-off information in the vintage disclosures of financing receivables by credit quality indicator and class of financing receivable by year of origination. The Company adopted the standard on January 1, 2023.

Reclassifications: Certain reclassifications have been made in the prior period’s financial statements to conform them to the current period’s presentation.

These unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission.

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BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands, except share and per share data)

NOTE 2 - EARNINGS PER SHARE

Amounts reported in earnings per share reflect earnings available to common stockholders for the period divided by the weighted average number of shares of common stock outstanding during the period.

	*Three Months Ended*				*Six Months Ended*
	*June 30,*				*June 30,*
	*2023*		*2022*		*2023*		*2022*
Net income available to common stockholders	$	2,312	$	2,567	$	4,945	$	3,835
Basic and diluted weighted average common shares outstanding		12,667,129		13,165,023		12,694,334		13,184,424
Basic and diluted earnings per common share	$	0.18	$	0.19	$	0.39	$	0.29

NOTE 3 - SECURITIES

The fair value of securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income is as follows:

	*Amortized Cost*		*Gross Unrealized Gains*		*Gross Unrealized Losses*			*Fair Value*
Available-for-Sale Securities

June 30, 2023
Certificates of deposit	$	2,977	$	—	$	—		$	2,977
Municipal securities		240		—		(14	)		226
U.S. Treasury Notes		128,231		—		(6,204	)		122,027
U.S. government-sponsored agencies		40,000		—		(273	)		39,727
Mortgage-backed securities - residential		3,730		20		(153	)		3,597
Collateralized mortgage obligations - residential		1,115		—		(22	)		1,093
	$	176,293	$	20	$	(6,666	)	$	169,647
December 31, 2022
Certificates of deposit	$	2,233	$	—	$	—		$	2,233
Municipal securities		240		—		(15	)		225
U.S. Treasury Notes		170,906		—		(7,803	)		163,103
U.S. government-sponsored agencies		40,000		—		(301	)		39,699
Mortgage-backed securities - residential		3,997		27		(143	)		3,881
Collateralized mortgage obligations - residential		1,223		—		(26	)		1,197
	$	218,599	$	27	$	(8,288	)	$	210,338

Mortgage-backed securities and collateralized mortgage obligations reflected in the preceding table were issued by U.S. government-sponsored entities and agencies, Freddie Mac, Fannie Mae and Ginnie Mae, and are obligations which the government has affirmed its commitment to support.

The amortized cost and fair values of securities available-for-sale by contractual maturity are shown below. Securities not due at a single maturity date are shown separately. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	*June 30, 2023*
	*Amortized Cost*		*Fair Value*
Due in one year or less	$	86,502	$	84,770
Due after one year through five years		84,946		80,187
		171,448		164,957
Mortgage-backed securities - residential		3,730		3,597
Collateralized mortgage obligations - residential		1,115		1,093
	$	176,293	$	169,647

Table of Contents

BANKFINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands, except share and per share data)

NOTE 3 - SECURITIES (continued)

Securities available-for-sale with unrealized losses not recognized in income are as follows:

	*Less than 12 Months*							*12 Months or More*							*Total*
	*Count*		*Fair Value*		*Unrealized Loss*			*Count*		*Fair Value*		*Unrealized Loss*			*Count*		*Fair Value*		*Unrealized Loss*
June 30, 2023
Municipal securities		—	$	—	$	—			1	$	226	$	(14	)		1	$	226	$	(14	)
U.S. Treasury Notes		1		3,652		(103	)		180		118,375		(6,101	)		181		122,027		(6,204	)
U.S. government-sponsored agencies		9		39,727		(273	)		—		—		—			9		39,727		(273	)
Mortgage-backed securities - residential		8		752		(20	)		10		2,118		(133	)		18		2,870		(153	)
Collateralized mortgage obligations - residential		—		—		—			7		1,093		(22	)		7		1,093		(22	)
		18	$	44,131	$	(396	)		198	$	121,812	$	(6,270	)		216	$	165,943	$	(6,666	)

December 31, 2022
Municipal securities		1	$	225	$	(15	)		—	$	—	$	—			1	$	225	$	(15	)
U.S. Treasury Notes		147		104,439		(4,104	)		53		58,664		(3,699	)		200		163,103		(7,803	)
U.S. government-sponsored agencies		9		39,699		(301	)		—		—		—			9		39,699		(301	)
Mortgage-backed securities - residential		18