8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 5, 2009

BANKFINANCIAL CORPORATION

(Exact Name of Registrant as Specified in Charter)

Maryland	0-51331	75-3199276
(State or Other Jurisdiction of Incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)

15W060 North Frontage Road, Burr Ridge, Illinois	60527
(Address of Principal Executive Offices)	(Zip Code)

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

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01. Other Events.

On August 5, 2009, the Company issued a press release announcing the filing of its Quarterly Report on Form 10-Q for the three and six months ended June 30, 2009 and a Quarterly Financial and Statistical Supplement. The press release also reported earnings for the three and six months ended June 30, 2009. The press release and Quarterly Financial and Statistical Supplement are included as Exhibits 99.1 and 99.2 to this report.

The information in the preceding paragraph, as well as Exhibits 99.1 and 99.2, is considered to be “furnished” under the Securities Exchange Act of 1934, and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 9.01. Financial Statements and Exhibits.

(a) Not Applicable.

(b) Not Applicable.

(c) Not Applicable.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release dated August 5, 2009
99.2	Quarterly Financial and Statistical Supplement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	BANKFINANCIAL CORPORATION (Registrant)
Date: August 5, 2009	By:	/s/ F. Morgan Gasior
		F. Morgan Gasior Chairman of the Board, Chief Executive Officer and President

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

BankFinancial Corporation Reports Second Quarter 2009 Earnings and

Filing of Quarterly Report on Form 10-Q

and Quarterly Financial and Statistical Supplement

with the Securities and Exchange Commission

Burr Ridge, Illinois—(August 5, 2009) BankFinancial Corporation (Nasdaq – BFIN) (“BankFinancial”) announced that it filed its Quarterly Report on Form 10-Q for the three and six months ended June 30, 2009 and a Quarterly Financial and Statistical Supplement on Form 8-K with the U.S. Securities and Exchange Commission (the “SEC”) today.

BankFinancial reported a net loss of $665,000, or $0.03 per common share, for the three months ended June 30, 2009, compared to a net loss of $5.4 million, or $0.27 per common share, for the three months ended June 30, 2008. Net loss for the six months ended June 30, 2009 was $493,000, or $0.03 per common share, compared to a net loss of $2.2 million, or $0.11 per common share for the six months ended June 30, 2008.

At June 30, 2009, BankFinancial had total assets of $1.573 billion, total loans of $1.269 billion, total deposits of $1.212 billion and stockholders’ equity of $264 million.

The Quarterly Report on Form 10-Q and the Quarterly Financial and Statistical Supplement will be available today on BankFinancial’s website, www.bankfinancial.com on the “Stockholder Information” page, and through the EDGAR database on the SEC’s website, www.sec.gov.

BankFinancial’s management will review second quarter 2009 results in a conference call and webcast for stockholders and analysts on Friday, August 7, 2009 at 9:30 a.m. Chicago time. The conference call may be accessed by calling (866) 770-7129 and using participant passcode 41286832. The conference call will be simultaneously webcast at www.bankfinancial.com, on the Stockholder Information page. For those persons unable to participate in the conference call, the webcast will be archived through 5:00 p.m. Chicago time August 21, 2009 on our website.

BankFinancial Corporation is the holding company for BankFinancial, F.S.B., a full-service, community-oriented bank providing financial services to individuals, families and businesses through 18 full-service banking offices, located in Cook, DuPage, Lake and Will Counties, Illinois. BankFinancial Corporation became a publicly-traded company on June 24, 2005, and its common stock trades on the Nasdaq Global Select Market under the symbol BFIN. Additional information may be found at the company’s website.

This release includes “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. A variety of factors could cause BankFinancial’s actual results to differ from those expected at the time of this release. For a discussion of some of the factors that may cause actual results to differ from expectations, please refer to BankFinancial’s most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K as filed with the SEC. Investors are urged to review all information contained in these reports, including the risk factors discussed therein. Copies of these filings are available at no cost on the SEC’s web site at www.sec.gov or on BankFinancial’s web site at www.bankfinancial.com. Forward looking statements speak only as of the date they are made, and we do not undertake to update them to reflect changes.

For Further Information
Contact:	Shareholder, Analyst and Investor Inquiries:	Media Inquiries:
	Elizabeth A. Doolan Senior Vice President – Controller BankFinancial Corporation Telephone: 630-242-7151	Gregg T. Adams Executive Vice President – Marketing & Sales BankFinancial F.S.B. Telephone: 630-242-7234

EX-99.2

Exhibit 99.2

BANKFINANCIAL CORPORATION

SECOND QUARTER 2009

QUARTERLY FINANCIAL AND STATISTICAL SUPPLEMENT

FOR THE LATEST FIVE QUARTERS

Note: Certain reclassifications have been made in the prior period’s financial statements and reflected in the Selected Quarterly Financial and Statistical Data tables to conform with the current period’s presentation.

The information and statistical data contained herein have been prepared by BankFinancial Corporation and have been derived or calculated from selected quarterly and period-end historical financial statements prepared in accordance with accounting principles generally accepted in the United States. BankFinancial Corporation is under no obligation to update, keep current or continue to provide the information contained herein. This information is provided solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or establish any business relationships with BankFinancial Corporation or its subsidiary.

BANKFINANCIAL CORPORATION

SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA

Latest Five Quarters

(Dollars in thousands; except per share) – (Unaudited)

	2009						2008
PERFORMANCE MEASUREMENTS:	IIQ			IQ			IVQ			IIIQ			IIQ
Return on assets (ratio of net income (loss) to average total assets) (1)		(0.17	)%		0.04	%		2.14	%		(6.93	)%		(1.49	)%
Return on equity (ratio of net income (loss) to average equity) (1)		(1.00	)		0.26			11.81			(35.24	)		(7.46	)
Net interest rate spread (1)		3.34			3.36			3.49			3.29			3.31
Net interest margin (1)		3.66			3.74			3.90			3.80			3.88
Efficiency ratio		86.82			87.84			98.24			253.46			160.33
Noninterest expense to average total assets (1)		3.27			3.31			4.00			10.32			6.39
Average interest-earning assets to average interest-bearing liabilities		121.15			123.50			124.32			128.92			129.40
Number of full service offices		18			18			18			18			18
Employees (full time equivalents)		379			390			393			395			397
	2009						2008
SUMMARY STATEMENT OF OPERATIONS:	IIQ			IQ			IVQ			IIIQ			IIQ
Total interest income	$	18,713		$	18,906		$	19,082		$	18,749		$	19,387
Total interest expense		5,500			5,736			5,810			5,983			6,405
Net interest income before provision		13,213			13,170			13,272			12,766			12,982
Provision for loan losses		2,847			1,344			3,487			1,406			250
Net interest income		10,366			11,826			9,785			11,360			12,732
Noninterest income		1,719			1,389			1,789			1,968			1,521
Noninterest expense		12,964			12,789			14,796			37,345			23,253
Income (loss) before income tax		(879	)		426			(3,222	)		(24,017	)		(9,000	)
Income tax expense (benefit)		(214	)		254			(11,130	)		1,065			(3,593	)
Net income (loss)	$	(665	)	$	172		$	7,908		$	(25,082	)	$	(5,407	)
Basic earnings (loss) per common share	$	(0.03	)	$	0.01		$	0.40		$	(1.27	)	$	(0.27	)
Diluted earnings (loss) per common share	$	(0.03	)	$	0.01		$	0.40		$	(1.26	)	$	(0.27	)
	2009						2008
NONINTEREST INCOME AND EXPENSE:	IIQ			IQ			IVQ			IIIQ			IIQ
Noninterest Income:
Deposit service charges and fees	$	796		$	794		$	920		$	989		$	837
Other fee income		496			428			349			533			587
Insurance commissions and annuities income		111			177			188			158			202
Gain on sales of loans, net		180			256			32			—			17
Loss on disposition of premises and equipment		—			(4	)		—			—			(311	)
Loan servicing fees		161			175			184			190			184
Amortization and impairment of servicing assets		(25	)		(222	)		84			(119	)		(178	)
Operations of real estate owned		(83	)		(253	)		(121	)		(139	)		(163	)
Bank Owned Life Insurance income (loss)		(33	)		(59	)		29			153			187
Other		116			97			124			203			159
Total noninterest income	$	1,719		$	1,389		$	1,789		$	1,968		$	1,521
Noninterest Expense:
Compensation and benefits	$	6,948		$	7,865		$	7,265		$	7,544		$	7,506
Office occupancy and equipment		1,666			1,767			1,864			1,481			1,582
Advertising and public relations		317			366			515			373			309
Information technology		866			1,008			1,005			963			790
Supplies, telephone, and postage		459			424			506			545			497
Amortization of intangibles		422			429			440			446			446
Loss on impairment of securities available-for-sale		—			—			—			24,844			11,075
Loss on early extinguishment of borrowings		—			—			1,975			—			—
FDIC insurance premium		1,216			49			49			48			32
Other		1,070			881			1,177			1,101			1,016
Total noninterest expenses	$	12,964		$	12,789		$	14,796		$	37,345		$	23,253

(1) Annualized

Page 1

BANKFINANCIAL CORPORATION

SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA

Latest Five Quarters

(Dollars in thousands) – (Unaudited)

SUMMARY BALANCE SHEET	2009				2008
	IIQ		IQ		IVQ		IIIQ		IIQ
ASSETS:
Cash and due from other financial institutions	$	17,667	$	20,155	$	29,213	$	21,258	$	27,915
Interest-bearing deposits in other financial institutions		42,250		2,882		116		15,030		6,297
Securities available-for-sale, at fair value		112,468		119,417		124,919		75,865		78,030
Loans held-for-sale		2,194		1,729		872		1,264		702
Loans receivable, net		1,268,571		1,283,996		1,267,968		1,216,185		1,225,115
Stock in Federal Home Loan Bank, at cost		15,598		15,598		15,598		15,598		15,598
Premises and equipment, net		34,974		34,773		34,565		34,448		34,013
Intangible assets		27,700		28,122		28,551		28,991		29,437
Bank Owned Life Insurance		20,079		20,112		20,171		20,142		19,989
Other assets		31,296		31,125		32,728		19,908		19,716
Total assets	$	1,572,797	$	1,557,909	$	1,554,701	$	1,448,689	$	1,456,812
LIABILITIES AND EQUITY:
Deposits	$	1,211,756	$	1,153,738	$	1,069,855	$	1,046,104	$	1,080,986
Borrowings		78,819		123,995		200,350		101,935		70,633
Other liabilities		17,946		14,529		17,705		39,023		17,030
Total liabilities		1,308,521		1,292,262		1,287,910		1,187,062		1,168,649
Stockholders’ equity		264,276		265,647		266,791		261,627		288,163
Total liabilities and stockholders’ equity	$	1,572,797	$	1,557,909	$	1,554,701	$	1,448,689	$	1,456,812
	2009								2008
DEPOSITS:	IIQ		IQ		IVQ		IIIQ		IIQ
Noninterest-bearing demand	$	107,649	$	107,021	$	109,056	$	108,110	$	108,530
Savings		98,327		97,531		94,802		96,489		101,532
Money market accounts		271,982		246,443		205,768		196,050		183,180
Interest-bearing NOW accounts		282,484		274,560		285,737		309,482		364,106
Certificates of deposit—Retail		429,457		389,648		339,771		330,390		316,761
Certificates of deposit—Wholesale		21,857		38,535		34,721		5,583		6,877
Total certificates of deposit		451,314		428,183		374,492		335,973		323,638
Total deposits	$	1,211,756	$	1,153,738	$	1,069,855	$	1,046,104	$	1,080,986

Page 2

BANKFINANCIAL CORPORATION

SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA

Latest Five Quarters

(Dollars in thousands) – (Unaudited)

	2009						2008
LOANS:	IIQ			IQ			IVQ			IIIQ			IIQ
One-to-four family residential real estate loans	$	301,167		$	308,710		$	312,390		$	318,934		$	323,056
Multi-family mortgage loans		331,258			320,480			305,318			303,516			306,209
Nonresidential real estate loans		338,050			344,877			342,583			332,047			324,280
Construction and land loans		42,384			44,346			50,687			46,793			53,450
Commercial loans		88,853			99,497			92,679			78,742			78,312
Commercial leases		179,804			176,344			174,644			143,843			146,033
Consumer loans		2,495			2,605			2,655			2,757			2,809
Total loans		1,284,011			1,296,859			1,280,956			1,226,632			1,234,149
Loans in process		(200	)		(217	)		(154	)		(139	)		(165	)
Net deferred loan origination costs		1,898			1,912			1,912			1,957			2,031
Allowance for loan losses		(17,138	)		(14,558	)		(14,746	)		(12,265	)		(10,900	)
Loans, net	$	1,268,571		$	1,283,996		$	1,267,968		$	1,216,185		$	1,225,115
CREDIT QUALITY RATIOS:	2009						2008
	IIQ			IQ			IVQ			IIIQ			IIQ
Nonperforming Loans and Assets:
One-to-four family residential real estate loans	$	4,984		$	2,329		$	2,205		$	2,526		$	2,520
Multi-family mortgage loans		9,085			1,495			2,101			940			1,575
Nonresidential real estate loans		8,955			6,750			2,961			2,954			3,421
Construction and land loans		12,726			10,733			5,145			4,941			2,173
Commercial loans		2,963			1,323			1,141			1,021			1,437
Commercial leases		105			105			105			105			122
Consumer loans		8			8			—			10			—
Nonperforming loans		38,826			22,736			13,658			12,497			11,248
One-to-four family residential real estate loans		845			931			588			798			391
Multi-family mortgage loans		133			133			133			133			546
Construction and land loans		—			157			234			—			—
Commercial loans		—			—			—			—			—
Real estate owned		978			1,221			955			931			937
Nonperforming assets	$	39,804		$	23,957		$	14,613		$	13,428		$	12,185
Asset Quality Ratios:
Nonperforming assets to total assets		2.53	%		1.54	%		0.94	%		0.93	%		0.84	%
Nonperforming loans to total loans		3.02			1.75			1.07			1.02			0.91
Allowance for loan losses to nonperforming loans		44.14			64.03			107.97			98.14			96.91
Allowance for loan losses to total loans		1.33			1.12			1.15			1.00			0.88
Net charge-off ratio (1)		0.08			0.48			0.32			0.01			0.06
	2009						2008
ALLOWANCE FOR LOAN LOSSES:	IIQ			IQ			IVQ			IIIQ			IIQ
Beginning balance	$	14,558		$	14,746		$	12,265		$	10,900		$	10,830
Provision for loan losses		2,847			1,344			3,487			1,406			250
Loans charged off		(296	)		(1,536	)		(1,016	)		(42	)		(182	)
Recoveries		29			4			10			1			2
Ending balance	$	17,138		$	14,558		$	14,746		$	12,265		$	10,900

(1) Annualized

Page 3

BANKFINANCIAL CORPORATION

SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA

Latest Five Quarters

(Dollars in thousands) – (Unaudited)

	2009						2008
SELECTED AVERAGE BALANCES:	IIQ			IQ			IVQ			IIIQ			IIQ
Average total assets	$	1,584,397		$	1,544,395		$	1,478,893		$	1,447,499		$	1,454,496
Average interest-earning assets		1,449,040			1,426,864			1,354,221			1,337,304			1,346,496
Average total loans		1,286,698			1,285,125			1,251,180			1,224,472			1,233,586
Average securities available-for-sale		115,667			123,278			83,352			94,459			86,855
Average Stock in FHLB		15,598			15,598			15,598			15,598			15,598
Average other interest-earning assets		31,077			2,863			4,091			2,775			10,457
Average interest-bearing deposits		1,079,094			1,008,329			933,207			945,892			958,071
Average borrowings		116,935			147,068			156,107			91,452			82,502
Average interest-bearing liabilities		1,196,029			1,155,397			1,089,314			1,037,344			1,040,573
Average total stockholders’ equity		266,647			268,064			267,862			284,695			289,988
	2009						2008
SELECTED YIELDS AND COST OF FUNDS (1):	IIQ			IQ			IVQ			IIIQ			IIQ
Average interest-earning assets		5.18	%		5.37	%		5.61	%		5.58	%		5.79	%
Average total loans		5.44			5.54			5.74			5.86			5.98
Average securities available-for-sale		4.29			4.42			4.96			2.97			4.64
Average other interest-earning assets		0.36			—			—			2.01			2.01
Average interest-bearing deposits		1.83			2.06			2.13			2.15			2.36
Average borrowings		1.93			1.67			2.06			3.79			3.86
Average interest-bearing liabilities		1.84			2.01			2.12			2.29			2.48
Net interest rate spread		3.34			3.36			3.49			3.29			3.31
Net interest margin		3.66			3.74			3.90			3.80			3.88

(1) Annualized

Page 4

BANKFINANCIAL CORPORATION

SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA

Latest Five Quarters

(Dollars in thousands; except per share) – (Unaudited)

CAPITAL RATIOS:	2009						2008
	IIQ			IQ			IVQ			IIIQ			IIQ
BankFinancial Corporation:
Equity to total assets (end of period)		16.80	%		17.05	%		17.16	%		18.06	%		19.78	%
Tangible equity to tangible total assets (end of period)		16.47			15.39			15.48			16.47			17.99
Risk-based total capital ratio		19.07			18.60			18.57			20.06			21.12
Risk-based tier 1 capital ratio		18.07			17.66			17.67			19.21			20.33
Tier 1 leverage ratio		15.14			15.38			15.48			17.02			18.19
BankFinancial FSB:
Risk-based total capital ratio		15.48			14.95			14.69			15.72			16.59
Risk-based tier 1 capital ratio		14.48			14.01			13.79			14.87			15.79
Tier 1 leverage ratio		12.12			12.20			12.08			13.17			14.13
COMMON STOCK AND DIVIDENDS:	2009						2008
	IIQ			IQ			IVQ			IIIQ			IIQ
Stock Prices:
Close	$	8.86		$	9.97		$	10.19		$	14.68		$	13.01
High		11.10			11.10			14.99			15.98			16.16
Low		8.07			7.19			9.07			12.70			13.00
Book value per share	$	12.34		$	12.36		$	12.30		$	12.00		$	13.15
Tangible book value per share	$	11.05		$	11.05		$	10.98		$	10.67		$	11.81
Cash dividends declared and paid on common stock	$	0.07		$	0.07		$	0.07		$	0.07		$	0.07
Stock repurchases	$	691		$	1,800		$	1,272		$	1,404		$	1,162
Stock repurchases – shares		70,000			207,800			117,700			101,200			76,000
EARNINGS PER SHARE COMPUTATIONS:	2009						2008
	IIQ			IQ			IVQ			IIIQ			IIQ
Net income (loss)	$	(665	)	$	172		$	7,908		$	(25,082	)	$	(5,407	)
Average common shares outstanding		21,437,970			21,617,158			21,736,312			21,829,118			21,952,967
Less: Unearned ESOP shares		(1,574,268	)		(1,598,497	)		(1,622,932	)		(1,647,532	)		(1,679,927	)
Unvested restricted stock shares		(220,652	)		(239,100	)		(387,837	)		(434,550	)		(434,550	)
Weighted average common shares outstanding		19,643,050			19,779,561			19,725,543			19,747,036			19,838,490
Plus: Dilutive common shares equivalents		—			—			—			101,318			61,010
Weighted average dilutive common shares outstanding		19,643,050			19,779,561			19,725,543			19,848,354			19,899,500
Number of anti-dilutive stock options excluded from the diluted earnings per share calculation		2,322,603			2,334,803			2,334,803			2,336,803			2,336,803
Weighted average exercise price of anti-dilutive option shares	$	16.51		$	16.51		$	16.51		$	16.51		$	16.51
Basic earnings (loss) per common share	$	(0.03	)	$	0.01		$	0.40		$	(1.27	)	$	(0.27	)
Diluted earnings (loss) per common share	$	(0.03	)	$	0.01		$	0.40		$	(1.26	)	$	(0.27	)

Page 5

BANKFINANCIAL CORPORATION

NON-GAAP FINANCIAL MEASURES

BankFinancial Corporation, a Maryland corporation (“the Company”) utilizes a number of different financial measures, both GAAP and non-GAAP, in making operating, budgeting and planning decisions for future periods. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. The Company believes that the use of the non-GAAP financial measures described below provides the Board of Directors and management, and may provide some investors, with a more complete understanding of the Company’s operating results and trends, and facilitate comparisons to historical and peer performance. The Company’s non-GAAP financial measures should be considered supplemental in nature and should not be considered in isolation, or as superior to or a substitute for, financial measures that are prepared in accordance with GAAP. In addition, the Company’s non-GAAP financial measures may differ from similar non-GAAP financial measures that are used by other companies, thus limiting their usefulness as a comparative tool.

Equity-based Compensation. The Company believes that the exclusion of equity-based compensation expense from its net income (loss) facilitates the comparison of the Company’s operating results to the Company’s historical performance, including the prior periods in which it operated as a mutual institution and had no stock outstanding. In addition, the Company believes that this non-GAAP measure facilitates the comparison of the Company’s performance to the performance of other financial institutions that have different or more seasoned equity-based compensation plans, including plans pursuant to which stock option awards vested prior to the effective date of SFAS No. 123R.

Amortization of Intangibles Expense. The Company believes that the exclusion from its net income (loss) of expense for the amortization of the core deposit intangible assets resulting from its acquisition of Success Bancshares and University National Bank facilitates the comparison of the Company’s operating results to the Company’s historical performance and to the performance of other financial institutions with different acquisition histories. In addition, the level of amortization of core deposit intangible assets arising from an acquisition can vary significantly depending on the valuation methodology used and the interest rate environment that existed at the time of the acquisition.

Gain on sale of Visa stock and Gain on unredeemed Visa stock. The Company believes that the exclusion of these gains, related to the completion of Visa’s IPO in March of 2008, from its net income (loss) facilitates the comparison of the Company’s operating results to the Company’s historical performance.

Loss on Impairment of Securities. The Company believes that the exclusion from its net income (loss) of the impairment loss on our Freddie Mac preferred stocks, based on our determination that the unrealized loss that existed with respect to these securities constituted an other-than-temporary impairment, facilitates the comparison of the Company’s operating results to the Company’s historical performance. Any deferred tax valuation reserve related to the loss on impairment will also be excluded from net income (loss).

FDIC Special Assessment. The Company believes that the exclusion from its net income (loss) of the FDIC special assessment facilitates the comparison of the Company’s operating results to the Company’s historical performance.

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BANKFINANCIAL CORPORATION

NON-GAAP FINANCIAL MEASURES

(continued)

Core Return on Assets. The Company believes that adjusting the calculation of its return on assets to exclude the equity-based compensation expense, the amortization of intangibles expenses, the Visa gains and settlement expense, the loss on impairment, and the FDIC special assessment furthers the purposes described above. Thus, the Company calculates core return on assets by dividing net income (loss) for a period, adjusted to exclude these items, by its average assets for the period.

Core Return on Equity. The Company believes that adjusting the calculation of its return on equity to exclude the equity-based compensation expense, the amortization of intangibles expenses, the Visa gains and settlement expense, the loss on impairment, and the FDIC special assessment furthers the purposes described above. Thus, the Company calculates core return on equity by dividing average stockholders’ equity for a period by net income (loss), adjusted to exclude these items, for the period.

Core Dilutive Earnings per Share. The Company believes that adjusting the calculation of its dilutive earnings per share to exclude the equity-based compensation expense, the amortization of intangibles expenses, the Visa gains and settlement expense, the loss on impairment, and the FDIC special assessment furthers the purposes described above. Thus, the Company calculates core dilutive earnings per share by net income (loss), adjusted to exclude these items, for the period by the weighted average dilutive common shares outstanding, for the period.

Core Noninterest Expense to Average Total Assets. The Company believes that adjusting the calculation of its noninterest expense to average total assets to exclude the equity-based compensation expense, the amortization of intangibles expenses, the Visa settlement expense, and the loss on impairment, and the FDIC special assessment furthers the purposes described above. Thus, the Company calculates noninterest expense to average total assets by dividing noninterest expense, adjusted to exclude these expenses, by average total assets for the period.

Core Efficiency Ratio. The Company believes that adjusting the calculation of its efficiency ratio to exclude the equity-based compensation expense, the amortization of intangibles expenses, the Visa gains and settlement expense, the loss on impairment, and the FDIC special assessment furthers the purposes described above. Thus, the Company calculates core efficiency ratio by dividing noninterest expense, adjusted to exclude these expenses, by the sum of net interest income and noninterest income, adjusted to exclude these gains.

There are inherent limitations associated with the use of each of the above non-GAAP financial measures as an analytical tool. In particular, these non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and reflect the exclusion of items that are recurring and will be reflected in the Company’s financial results in the future. The Company has further highlighted these and the other limitations described above by providing a reconciliation of the GAAP amounts that have been excluded from these non-GAAP financial measures.

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BANKFINANCIAL CORPORATION

NON-GAAP FINANCIAL MEASURES

(Dollars in thousands; except per share) – (Unaudited)

FOR THE QUARTERS AND SIX MONTH PERIODS	Three months ended						Six months ended
ENDED JUNE 30, 2009 AND 2008	June 30,						June 30,
	2009			2008			2009			2008
Core operating income (loss):
Net loss	$	(665	)	$	(5,407	)	$	(493	)	$	(2,215	)
Adjustments:
Equity-based compensation and benefits		604			1,179			1,664			2,427
Amortization of core deposit intangible		422			446			851			898
Gain on sales of investment securities		—			—			—			(1,385	)
Gain on unredeemed Visa stock		—			—			—			(1,240	)
Loss on impairment of securities		—			11,075			—			11,075
FDIC special assessment		700			—			700			—
Tax effect on adjustments assuming 39.745% tax rate		(686	)		(5,047	)		(1,278	)		(4,680	)
Core operating income	$	375		$	2,246		$	1,444		$	4,880
Return on assets (ratio of net loss to average total assets) (1)		(0.17	)%		(1.49	)%		(0.06	)%		(0.30	)%
Core return on assets (ratio of core operating income to average total assets) (1)		0.09	%		0.62	%		0.18	%		0.67	%
Return on equity (ratio of net loss to average equity) (1)		(1.00	)%		(7.46	)%		(0.37	)%		(1.52	)%
Core return on equity (ratio of core operating income to average equity) (1)		0.56	%		3.10	%		1.08	%		3.35	%
Diluted loss per common share	$	(0.03	)	$	(0.27	)	$	(0.03	)	$	(0.11	)
Core dilutive earnings per common share	$	0.02		$	0.11		$	0.07		$	0.24
Core noninterest expenses:
Noninterest expenses	$	12,964		$	23,253		$	25,753		$	36,481
Adjustments:
Equity-based compensation and benefits		(604	)		(1,179	)		(1,664	)		(2,427	)
Amortization of core deposit intangible		(422	)		(446	)		(851	)		(898	)
Loss on impairment of securities		—			(11,075	)		—			(11,075	)
FDIC special assessment		(700	)		—			(700	)		—
Core noninterest expenses	$	11,238		$	10,553		$	22,538		$	22,081
Noninterest expense to average total assets (1)		3.27	%		6.39	%		3.29	%		4.99	%
Core noninterest expense to average total assets (1)		2.84	%		2.90	%		2.88	%		3.02	%
Efficiency ratio (ratio of noninterest expense to net interest income plus noninterest income)		86.82	%		160.33	%		87.32	%		112.31	%
Core efficiency ratio (ratio of core noninterest expense to net interest income plus core noninterest income)		75.26	%		72.77	%		76.42	%		73.95	%

(1) Annualized for the three-month periods.

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BANKFINANCIAL CORPORATION

NON-GAAP FINANCIAL MEASURES

(Dollars in thousands; except per share) – (Unaudited)

FOR THE LATEST FIVE QUARTERS	2009						2008
	IIQ			IQ			IVQ			IIIQ			IIQ
Core operating income (loss)
Net income (loss)	$	(665	)	$	172		$	7,908		$	(25,082	)	$	(5,407	)
Adjustments:
Equity-based compensation and benefits		604			1,060			824			1,350			1,179
Amortization of core deposit intangible		422			429			440			446			446
Loss on impairment of securities		—			—			—			24,844			11,075
FDIC special assessment		700			—			—			—			—
Tax effect on adjustments assuming 39.745% tax rate		(686	)		(592	)		(502	)		(10,588	)		(5,047	)
Deferred tax valuation reserve on loss on impairment of securities		—			—			(10,087	)		10,087			—
Core operating income (loss)	$	375		$	1,069		$	(1,417	)	$	1,057		$	2,246
Return on assets (ratio of net income (loss) to average total assets) (1)		(0.17	)%		0.04	%		2.14	%		(6.93	)%		(1.49	)%
Core return on assets (ratio of core operating income (loss) to average total assets) (1)		0.09	%		0.28	%		(0.38	)%		0.29	%		0.62	%
Return on equity (ratio of net income (loss) to average equity)(1)		(1.00	)%		0.26	%		11.81	%		(35.24	)%		(7.46	)%
Core return on equity (ratio of core operating income (loss) to average equity) (1)		0.56	%		1.60	%		(2.12	)%		1.48	%		3.10	%
Diluted earnings (loss) per common share	$	(0.03	)	$	0.01		$	0.40		$	(1.26	)	$	(0.27	)
Core diluted earnings (loss) per common share	$	0.02		$	0.05		$	(0.07	)	$	0.05		$	0.11
Core operating expense:
Noninterest expense	$	12,964		$	12,789		$	14,796		$	37,345		$	23,253
Adjustments:
Equity-based compensation and benefits		(604	)		(1,060	)		(824	)		(1,350	)		(1,179	)
Amortization of core deposit intangible		(422	)		(429	)		(440	)		(446	)		(446	)
Loss on impairment of securities		—			—			—			(24,844	)		(11,075	)
FDIC special assessment		(700	)		—			—			—			—
Core noninterest expense	$	11,238		$	11,300		$	13,532		$	10,705		$	10,553
Noninterest expense to average total assets (1)		3.27	%		3.31	%		4.00	%		10.32	%		6.39	%
Core noninterest expense to average total assets (1)		2.84	%		2.93	%		3.66	%		2.96	%		2.90	%
Efficiency ratio (ratio of noninterest expense to net interest income plus noninterest income)		86.82	%		87.84	%		98.24	%		253.46	%		160.33	%
Core efficiency ratio (ratio of core noninterest expense to net interest income plus core noninterest income)		75.26	%		77.61	%		89.85	%		72.66	%		72.77	%

(1) Annualized for the three-month periods.

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