BankFinancial — Debt Investor Presentation (April 2021)
36 slides from BankFinancial's debt investor presentation, Apr 14, 2021
Slide 1: BankFinancial Corporation
BankFinancial” ' Corporation
Slide 2: Offering Disclaimers
Corporation Offering Disclaimers Keto, Bruyette & Woods, Inc. CKBM) has baen relaned by BarkFinancat Corporation (logether vi is affilates and subsidies, “BFIN", “Seller or the “Company/) to sarve a the lead placement agent in connacton wih a polenial sale of subordinated notes by BFIN (the ‘Potenti
Slide 3: Forward Looking Statements
Corporation Forward Looking Statements This Presentation contains, and the periodic and current reports we fle with the SEC, press releases and other public stockholder communications of BankFinancial Corporation may contain forward-looking statements within the meaning of Section 21E of the Securit
Slide 4: Table of Contents
Table of Contents Franchise Overview and Credit Highlights Financial Highlights Loan and Deposit Portfolios Risk Management Appendix
Slide 5: Offering Term Sheet
BankFinancial = Corporation Offering Term Sheet seein ores ( Suhotinaed Deb Dus 20 fone ( aH ar op ari RORY } =e ( Facute oe ( ( porate purposes } Seen ( inh rt Wid St Conny | (1)A rating is nota recommendation fo buy, sel, oF hold securities. Ratings may be subject to revision oF withdrawal at anyt
Slide 6: Franchise Overview and Credit Highlights
Corporation | 1 f Franchise Overview and Credit Highlights
Slide 7: Today's Presenters
Corporation Today’s Presenters F. Morgan Gasior Chairman, CEO & President = Has served in this role for the Company since 2004, and for the Bank since 1989 + Has been employed by the Bank in a variety of positions since 1984 = Previously served as a Director and Officer with Financial Assurance Serv
Slide 8: Company Overview
Corporation Company Overview enn HE wonnfydyite Ges ny 7 ID south Libetvite Total Gross Loans (Sm) s1010 Lincolnshire II IM Deertieid Deposits (Sm) $1,384 BE Noshbrook Lwans / Deposits (%) 725 Performance Ratlos (Q4 Annualized) ] Core RORA() rrr) Schaumburg IIE ahiwooe fp NON ae Net interest Margin
Slide 9: Key Business Lines
Corporation Key Business Lines Multi-Family Real Estate $452MM, 45%% of loans Focus on stabilized Class B & C apartment buildings 50% Chicago / 50% nationwide Wtd. avg. LTV —- 50% Wtd. avg. DSCR — 2.0x Commercial Finance $79MM, 8% of loans Direct Lessor Finance ($37MM) Chicago MSA Commercial Banking
Slide 10: Credit Highlights
BankFinancial” —_— Corporation Credit Highlights Franchise and Management Strength = Nationwide business model that results in a geographically diverse loan portfolio = Strong risk management culture with robust governance and experienced credit personnel "Minimal borrower concentration — Top 5 loan
Slide 11: Historically Strong Credit Culture
BankFinancial” causa: Corporation Historically Strong Credit Culture NPLs/ Loans NCOs / Average Loans ia Acquistion of caerged OG Bancorp in 2011, rested inthe \. “Tatetor of mpaied ane, As management expected and" jeter tole puichaee pico, SEN reales poo ‘levated NEL lovee ana cubsoquon charge-of,
Slide 12: 2021 Priorities
BankFinancial” en 2021 Priorities Continue growth & diversification of loan portfolio Expanded capabilities and capacity in Commercial Finance Lending and Equipment Finance now enable additional yield ‘supportienhancement Continue progress towards goal of 50% Commercial Finance 150% Multi-Family and
Slide 13: Financial Highlights
Corporation | 2 f Financial Highlights
Slide 14: Historical Balance Sheet Growth
BankFinancial” Corporation Historical Balance Sheet Growth Total Assets ($mm) Total Loans ($mm) 51,20 $1625 $1,885. 7” susor I I | [ T l l | I I [ 206 au 2oisy aoiov roy 2ovey row roy Total Deposits ($mm) Common Equity (mm) @® BIN is managing capita through a share repurchase as it monitors its loan
Slide 15: Historical Earnings Performance
BankFinancial” a. Corporation Historical Earnings Performance Core ROAA (%) \) Core ROATCE (%) 091% 063% 525% I J i f I i pose 700001207007 700003 207aMK rims 202001 m2 2or0s ao Efficiency Ratio (%) Net Interest Margin ( nae a3 8% 350% a l j l [| I [| i powas 292001202007 202005202008 rower MME MD —
Slide 16: Stable, Low-Cost Core Deposit Franchise
BankFinancial” a. Corporation Stable, Low-Cost Core Deposit Franchise Decreasing Cost of Funds Lower cost eriven by a foous ‘on cal reall and commercial deposits combined with a lack of rlance on wholesale funding 042% Th J 3020 Decreasing Cost of Total Deposits 0.95% 0.85% 056% 022% | = 4019 1026 2
Slide 17: Historical Asset Quality
Corporation Historical Asset Quality NPAs / Loans + OREO (%) 056% 036% i x 2016" 2017 aosy Net Charge-offs / Average Loans (%) ‘One-off $44 milion oss recorded on he sale of a ‘raudulent Chicago comm. creat exposure oa |_| some (0.00%) 2016 201" 2owey Reserves / Total Loans (%) or 06% 06% GO. 0% 0.0
Slide 18: Historical Capital Position
BankFinancial” Corporation Historical Capital Position Tangible Common Equity / Tangible Assets (%) Tier | Leverage Ratio (%) Tier | Risk-Based Ratio (%) Total Risk-Based Capital Ratio (%) = 2% of mtiFamiy porto 1% of somone porto) quis oS ak Sand cpl anton ‘Source: S&P Global Market Inteligence & c
Slide 19: Loan and Deposit Portfolio
Corporation | 3 f Loan and Deposit Portfolio
Slide 20: Loan Portfolio Composition
BankFinancial” Corporation Loan Portfolio Composition 12/31/20 Loan Composition Commercial Loan Industry Concentrations 4am 11.13% 2.90% 40.11% 1070% += Commercial Loars and Loates (S405HtM) q 2 | Loars and Leases (S405HtN) + Real Estat, Rental and Leasing (S619) * Public Adminstration ($03MM) ‘+ Mu
Slide 21: Equipment Finance
Equipment Finance Corporation Commercial Loan Portfolio + Government (103MM) + Investment Grade ($37MM) + Other Corporate, Middle Market ‘and Smal Ticket ($13614M) 32% 2% 21% Direct originati lessors us, including several ELFA Top 25 Independent Lessors CRE / Total Risk-based Capital Non-Owner Occup
Slide 22: Multi-Family Loan Portfolio
Multi-Family Loan Portfolio 15% Focus on Stabilized Class B & C Apartment Buildings + Chicago MSA and selected geographic markets with strong macroeconomic and : employment growth trends 3% + “Rent By Necessity” / Affordable Housing tenants — no Class A luxury properties + Tenant base and geographic
Slide 23: Non-Residential Real Estate Loan Portfolio
BankFinancial” Corporation Non-Residential Real Estate Loan Portfolio Top Three Portfolios — Non-Owner Occupied + Retail - $45MM + Mixed Use Building - $13MM * Office Building - $12MM 19% Strong Underwriting Metrics + Weighted Average DSCR - 2.12x 81% + Weighted Average LTV - 48% Concentrated in Chi
Slide 24: Family and Consumer Loan Portfolio
BankFinancial” poh tL. & Corporation 1 —4 Family and Consumer Loan Portfolio 4% Concentrated in Chicago MSA 19% Legacy Portfolio Status + 57% decline in Residential / Home Equity loan portfolio balances since 2017 11% 91% of the 1 — 4 Family Loans are 1st Liens Portfolio Status = 1-4 Family - Owner
Slide 25: Loan Origination Priorities
— Corporation Loan Origination Priorities 1 Commercial Finance/Healthcare + Chicago MSA commercial lending to small and lower-middle market companies + Working Capital finance to Equipment Finance lessors + Working Capital finance to commercial and governmental borrowers nationwide + Working Capital
Slide 26: Loan Portfolio Trends
BankFinancial” Corporation Loan Portfolio Trends Given recent market uncertainty, management elected to hold back on loan originations in an effort to appropriately mitigate risk. 12/31/20 12/31/13 7-Year (000’s) (000’s) CAGR% TARGETED LOAN TYPES Commercial Loans & Leases $405,057 $241,367 7.7% Mult
Slide 27: COVID-19 Update
Corporation COVID-19 Update Loan Deferrals Currently Below 1% P + CARES Act 4013 Modifications ~ 10/$1.4MM 1-4 Family + Outstanding Deterred Balances ~ $8,000 Ilinois: any + CARES Act 4013 Modifications ~ 8 /$3.1MM + Outstanding Deferred Balances ~ $17,000 Other: + CARES Act 4013 Mos + Outstanding D
Slide 28: Funding Composition
Corporation Funding Composition 92% Core Funded = Retail Core ($835MM) Retail: Cote Transactional ($835MM) Certificates of Deposit ($246MM) = Commercial Core ($305MM) Core Transactional ($305MM) = Retail Certificates of Deposit (246MM) Other: Wholesale Certificates of Deposit ($7MM) Other Borrowings
Slide 29: Risk Management
Corporation | 4 f Risk Management
Slide 30: Risk Assessment Overview
——— Corporation Risk Assessment Overview 1 Enterprise Risk Assessment + Incorporates specific Risk Assessments for Multi-Family Real Estate Lending, Equipment Finance and Commercial Finance + Enterprise Risk Assessment & Business Pian thus align with market conditions and opportunities: ® Credit Ris
Slide 31: Loan Portfolio - Lending Overview
BankFinancial” poh tL. & Corporation Loan Portfolio - Lending Overview Multi-Family Real Estate Lending + Geographic diversity in markets with strong economic and employment growth (TX, FL, NC, SC, CO) + Focused on rent-by-necessity apartment tenant market + Demand for units typically exceeds supply
Slide 32: Loan Portfolio - Controls Overview
BankFinancial” poh tL. & Corporation Loan Portfolio — Controls Overview ‘+ Standard conforming products defined for all commercial credit originations + Centralized underwriting — no inaividual lender authority + Dual-signature or Management Committes approval/disbursement controls + Board Asset Qua
Slide 33: +400bps +300bps +#200bps +100bps -100bps:
6.2% $2,930 +400bps +300bps +#200bps +100bps -100bps: mn ($000s) 0% ‘Source: Company 10. ing 33
Slide 34: Appendix
Corporation
Slide 35: Non-GAAP reconciliation
For the three months endin 6/3020 T3072 ‘Non-Recurring Revenue (25) @) o oO (3) Non-Recurting Expense O (18) (104) (219) (110) ‘Amortization Expense & Goodwill impairment (14) (14) a) (6) @ Pro-Tax Excluded items ($39) (634) st) (6225) (6120) Non-Recurring Revenue (620) (92) $0 $0 2) [Non-Recurring
Slide 36: Interest Coverage & Double Leverage
BankFinancial” causa: Corporation Interest Coverage & Double Leverage Yoar ended De: 2020 Investment in Subsidiaries S Wess § 168873 5 a0 § te4e47 § T6678 161.676 Consolidated Equity 204760 197.634 187.180 174.572 172830 172990 Double Leverage Ratio 86.3% 95.6% 82.8% 94.5% 93.5% 93.5% Interest Cover
BankFinancial — Debt Investor Presentation (April 2021) on 6ix